Here’s how we can achieve that …
Residents across the City of Cleveland are frustrated with the current state of Cleveland Public Power (CPP). We face expensive bills, unreliable service, and power purchased from environmentally damaging sources. But even amongst its problems, CPP is a unique asset for Cleveland that holds the promise of thriving as a citizen-owned utility with lower cost, better service, and sustainable energy sources. This stands in contrast to for-profit monopoly utilities like FirstEnergy that rip off their ratepayers through corruption and spread disinformation throughout our community.
While shining the light on corruption and disinformation produced by FirstEnergy is critical, CPP must get its house in order to build trust and credibility in our neighborhoods. CPP must significantly reduce power outages, lower its prices, and continuously improve customer service. CPP must also clean up its power supply so Clevelanders benefit from cleaner air and elimination of pollution that harms human health, puts mercury into Lake Erie, and fuels the global climate crisis.
CPP has the potential to do all of this. By their nature, municipal utilities can be more responsive to customer preferences and quicker to employ new technologies such as smart thermostats, energy efficient equipment, and clean, distributed generation. In doing this, CPP would drive Ohio innovation in a way that investor-owned utilities such as FirstEnergy have been slow to do.
But in pursuing this vision, CPP faces a major obstacle that is driving up monthly bills and sapping dollars badly needed for maintenance and upgrades: the 50-year power supply contracts Cleveland signed in 2007 with American Municipal Power (AMP), a multistate association of more than 134 municipal utilities. These contracts lock Clevelanders into purchasing power from the Midwest’s largest coal plant and Ohio River hydro plants.
When proposed, these decades-long commitments were presented as money-savers to help CPP survive and compete. AMP predicted costs would be stable and cheaper than purchasing electricity from competitive wholesale markets—and said so in presentations at Cleveland City Council hearings.
Actual experience has been far worse: an analysis by the Institute for Energy Economics and Financial Analysis (IEEFA) shows the AMP contracts have already cost CPP ratepayers $106 million more for power (2012 to 2019) than customers would have paid if CPP had purchased electricity on the market. Clevelanders paid 90 percent more for coal and 269 percent more for hydro than AMP predicted—and we are stuck in these contracts for another 36 years.
Without action, CPP customers will continue overpaying and CPP itself will find it difficult to compete and invest in upgrades to improve reliability and service. In fact, these contracts threaten to financially strangle CPP to death because it competes directly with FirstEnergy, whose rates are now lower in Cleveland. Bringing rates down literally has become a matter of survival for CPP.
The next mayor of Cleveland and the next City Council must tackle these contracts head on. They are too expensive, they impose costs inequitably, and they financially block investment in smart technology, low-cost renewables, and other innovations.
Those contracts may be challenged on multiple grounds. Cleveland’s Department of Law must thoroughly review them and lay out a legal strategy to protect Clevelanders from further financial harm. And as AMP’s largest member, Cleveland must also reach out to dozens of other local governments who are stuck in the same harmful 50-year contracts to find ways for us to work together. We must release ourselves and our ratepayers from these unfair and unaffordable contracts.
When we free CPP from these excessive costs, it can lower bills for residents, purchase power that is cheaper and cleaner, and invest in infrastructure to reduce power outages. The only way to do this is to immediately address the AMP contact, not overpay for another 36 years. The next mayor of Cleveland must do this in partnership with City Council.
Paid for by Friends of Kerry McCormack, Josh Harrell, Treasurer