In the decades following the Second World War, the rapidly growing demand for electricity in the United States led the Federal Power Commission (FPC) to encourage joint action by electric utilities to meet the supply challenges of the future. In 1964, then-FPC Chairman Joseph Swidler, made the case that utilities working together to achieve economies of scale in power generation would make electricity not only more widely available, but at ever declining unit cost. With federal encouragement, the American Public Power Association and other public power leaders traveled around the nation in the late 1960s actively promoting the formation of state-authorized joint action agencies. Some of the earliest joint action ventures were also spurred by battles over exorbitantly high and inconsistent wholesale power rates charged by investor-owned utilities.
As a result of these national efforts, municipal electric utilities around the U.S. began banding together into regional agencies that allowed individual utilities to participate in power pools, to buy wholesale power as a group, and to jointly finance generating plants. Twenty-nine joint action agencies across the country were established in the 1970s, and another 23 in the 1980s. Following electricity industry restructuring in the 1990s, these joint action agencies evolved rapidly to provide a wider range of services, from meeting new reliability standards and environmental policies to purchasing, planning, program administration, training, and contract negotiation.
For small public power entities, joint action can provide the best of both worlds. It allows them to retain their core mission of community service—being responsive to the needs of residents and local businesses—while extending their reach. Joint action allows them to capture the economies of scale in power generation technology, power management, and other important services.
As the electricity business has grown more complex over the last 30 years, joint action agencies have flourished in the U.S. They have allowed public power to remain competitive with large investor-owned utilities, and increasingly serve as a model for innovation in clean energy.
Established through state legislation, joint action agencies give municipal utilities and other public entities the statutory authority to create a voluntary, inter-governmental body to coordinate and implement projects of mutual interest. They are not-for-profit entities, governed by and for their members, with each member having representation and a voice. They have no taxing authority but can issue tax-exempt revenue bonds to finance the construction or acquisition of capital-intensive facilities, such as power generation plants. The primary function of most joint action agencies is to assist members in their resource planning and to bring economies of scale to key functions, ranging from wholesale power supply to risk management. Joint action does not constrain the independence of members. Typically each member maintains control over its own power supply portfolio and has the freedom to enter into power supply contracts with other suppliers. Some agencies, such as the Northern California Power Agency, offer a wide and growing array of services of mutual benefit, and provide a brain-trust of valuable professional and technical resources for members to draw upon.