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January 6, 2011

Forum: TCL&P still can't get it right

By JIM CARRUTHERS ----

Traverse City Light & Power can't seem to market itself, evidenced by its twin failures of the biomass plant and the 30 percent renewable-energy goal by 2020. Despite two full-time marketing and communication specialists on staff, plus outside marketing consultants under contract, L&P still can't seem to get it right.

Even though Light & Power has no competition for services, it continues to market itself through television, radio and print advertising. Yet a half-million-dollar marketing budget has done little to repair L&P's disconnect with the community.

Basic marketing functions (press releases, website management and monthly utility-bill inserts) aren't handled in-house. Executive Director Ed Rice claims L&P doesn't have the staff capabilities. So why doesn't L&P hire staff that does? Instead, well-compensated staff hire expensive consultants to do the work they should be doing themselves. Let's not forget this is a small utility with only 11,000 customers.

Recently, L&P staff, without board input or approval, decided to terminate an existing marketing consultant contract and hire a new firm (cost: $75,000 to $120,000 annually). This is in addition to its two full-time in-house marketing employees.

L&P's failures in communication have reached such heights that two citizen-led referenda were placed on the November 2010 ballot in an attempt to rein in the utility. This small municipal power company lacks accountability, doesn't listen to its customers, and continues to spend money like it grows on trees.

In the meantime the board continues to ignore input from the community, the Michigan Energy Alternatives group and the Michigan Land Use Institute's "20 by 20" renewable plan that supports a Feed-In Tariff solar opportunity for its ratepayers.

Why is so much marketing needed for a utility with no competition and that produces very little power, especially when the city is reducing budgets to create savings for its citizens? This seems excessive, especially as distribution and energy-production costs are increasing.

Considering the depressed economy, it is prudent to seriously evaluate L&P's marketing budget. We could cut $500,000 in expenditures and give it back to the ratepayers as a reduction in monthly energy bills. The savings would average more than $45 per year (based on 11,000 ratepayers).

If Light & Power feels it's OK to give perks to some of its board members and staff, and make charitable donations throughout the community, it very well can cut back and be charitable to its own ratepayers through a rate reduction.

As a public utility without competition, this just makes sense. It's time L&P becomes more fiscally accountable to its ratepayers and provides service at a lower rate. If Light & Power refuses, citizens seriously should weigh the benefits of owning a public utility.

About the author: Jim Carruthers is a Traverse City commissioner and one of two City Commission representatives on the Traverse City Light & Power Board of Directors. Light & Power is a publicly owned and operated municipal electric utility.

About the forum: The forum is a periodic column of opinion written by Record-Eagle readers in their areas of interest or expertise. Submissions of 500 words or less may be made by e-mailing letters@record-eagle.com. Please include biographical information and a photo.

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