Municipal Utility District
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What is a Municipal Utility District?

A Municipal Utility District (MUD) is a special-purpose districts which are created to provide public utilities, which may include one or more of the following services, to the homeowners and businesses within the MUD;

• ambulance

• electricity

• fire

• garbage & waste collection

• natural gas

• sewage/wastewater treatment

• water

• wholesale telecommunications

MUDs are created by an election of the voters within the proposed MUD, and by board of directors who are voted on by the local people. As governmental entities, they operate as a nonprofit.

Public Utility Districts (PUDs) are similar to MUDs but created by a local governmental body such as a city or a county, but has no authority to levy taxes.

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More about Municipal Utility Districts

A Municipal Utility District, or "MUD" is a district that has been created and authorized by a developer that may provide for one or more utilities or services, to those residing within the MUD.  Examples of utilities or services that may be provided to resident and businesses within the MUD may include one or more of the following; energy and renewable energy in the form of natural gas, electricity, solar power/energy, water, wastewater treatment plants, storm water drainage, telecommunications, as well as other services deemed necessary within that specific MUDs boundaries that could include police, fire and ambulance services.

How is a MUD created?

This depends upon the state that the proposed MUD is located in.  Typically, a majority of the property owners in the proposed MUD's boundaries district petition that state's respective governing body for creating the MUD.  The regulating body that provides the oversight for MUDs will evaluate the petition, conduct one or more public hearings, and then determine whether to grant or deny the petition. If the MUD is approved, a temporary MUD Board of Directors (or Commissioners, again, dependingon the state) is established that may be comprised of three to five temporary members to the MUD's Board of Directors.  This is only until an election is called to permanently elect the MUDs Board of Directors, and to confirm/ratify the MUD's creation. After which time, the MUD may authorize bonds and levy taxes for the repayment of the bond(s). 

How does a MUD work?

The publicly elected Board of Directors of a MUD manages and controls all of the affairs within that MUD as it relates to the charter for that MUD.  The Board of Directors will establish policies, rules and other guidelines on behalf of the residents and utility customers of their MUD.  A MUD will adopt and enforce all necessary charges, fees and taxes in order to provide for the MUDs facilities and services it was created for providing.

How do MUDs provide for parks and recreation facilities?

In addition to their common functions of water and wastewater service, MUDs may be empowered to engage in conservation, electrical power generation, irrigation, firefighting, solid waste collection and disposal, stormwater drainage, as well as recreational activities such as parks, bicycle/jogging paths, swimming pools, tennis courts and basketball courts/gymnasiums. 

What are the developer's responsibilities to the MUD they helped create?

This will depend on the state that the MUD is located in.  In general, a developer petitions the appropriate governing body for that state, to create the MUD. 

Developers are usually prevented from serving or placing employees, business associates, or family members on the MUD's Board of Directors that the help create. 

Developers must pay for or put up a letter of credit equal to 30% of the cost of subdivision utilities. This requirement ensures against "fly-by-night operators" who are not committed to the success of the MUD. The "30% rule" also offers protection to MUD residents in the event that a subdivision is not built according to schedule. Unless they are voting residents within a MUD, developers have no authority or control over the MUD's Board of Directors. If they are voting members of a district, they have the same power to vote and attend Board meetings as any other resident. 

What is a Public Utility District?

A Public Utility District, or "PUD" is a special-purpose district or a jurisdiction established by a governmental body that provides for public utilities (such as electricity, natural gas, water, sanitary sewers/waste water treatment plants, municipal solid waste collection, and more recently, wholesale telecommunications) for the residents of that Public Utility District.

PUDs are created by a local government body, such as a city, county, or metropolitan service area (two or more communities joining together for public utility purposes). Normally the districts are non-profit.

PUDs are often governed by a commission, which may be appointed or elected.

Again, a "Municipal Utility District" or "MUD" is very similar to a PUD, but MUDs are created by private developers instead of government.

In the past, some of the Public Utility Districts in the Pacific Northwest were created with the purpose of taking over the electric power service territory served by investor-owned utilities - and then serving those customers within that newly-created PUD's territory. The creation of many of these Public Utility Districts were possible due to favorable laws in those states at the time and with the direct assistance of individuals in various federal agencies that were strong proponents of public ownership of electric utilities such as Dr. Paul J. Raver of the Bonneville Power Administration.


More About Municipal Utility Districts and Public Utility Districts 

Introduction

As electric utilities continue to raise electric rates on their ratepayers/customers - citizens, cities, and municipalities are asking companies such as ours to assist them in building their own power generation plants and distributing the electricity to themselves. For most cities and municipalities, the creation of a Municipal Utility District (MUD) or a Public Utility District (PUD) will quickly enable a city or municipality to send the "dis-connect" notice to their respective electric utility. 

A Municipal Utility District (MUD), and a Public Utility District (PUD) are very similar in that they are both like a school district, and are governmental entities, which are created under State law. Each state has its' own laws regarding MUD or PUD creation, and the requirements vary from state to state. MUD's and PUD's may also supply water and wastewater treatment systems.

As a public entity, a MUD or PUD can exercise certain governmental powers, including the levy and collection of property taxes, charging for authorized services, the issuance of bonds for water, sewer, wastewater and electrical power facilities, and the adoption and enforcement of rules and regulations as appropriate to accomplish the purposes for which the district was created.

A MUD or PUD may also be a customer-owned utility, committed to providing electricity on a cost of service basis as a customer service -- not to make a profit for stockholders or shareholders of Independently-Owned Utilities, which have a responsibility to make a profit, and then share those profits to their shareholders, via dividends. This only occurs after they pay their enormous overhead costs and along with overly-generous, and even outrageous salaries to their top management - whose responsibilities are to generate as much of a profit for their shareholders, at the expense of their customers, or ratepayers, that are paying these increasingly greater electric rates. 

MUD's and PUD's are typically governed by a Board of Commissioners. The board sets MUD/PUD policy, employs the General Manager and guides the district's operations. Members serve a term from 2-4 year terms, and normally elected by voters in that district. The General Manager is directly responsible to the Board of Commissioners. In carrying out the policies of the Board of Commissioners and in conducting the business operations of the district, the General Manager is supported by a trained staff, which includes approximately 45 employees. 

Purpose of the Electric Power Generation, Transmission and Distribution District 

The chief purpose of electric power MUD's or PUD's is to generate, transmit and distribute electrical power for the citizens and ratepayers of that specific district. The district owns and operates an electric distribution system serving its' ratepayers. 

Overview on California Municipal Utility Districts (MUD) 

California cities are increasingly turning towards “Municipal Utility Districts” (MUD) as a way to lower utility costs and increase energy efficiencies. This is because a Municipal Utility District is an independent agency – or a public power agency -- that provides for one or more essential public services, such as electricity, to residents and businesses. 

Environmental responsibility 

Municipal Utility Districts and public power agencies can rely more on renewable sources of energy than investor-owned utilities. If a community is environmentally aware, MUD’s will explore alternative energies such as cogeneration and trigeneration. 

Accountability

As public-owned agencies, Municipal Utility Districts must comply with state open-meetings and public-records laws. Public power systems are governed democratically at the local level. Most -- especially the smaller ones -- are governed by a city council, while others are governed by an independently elected board. Control stays in the hands of the community. 

Savings for customers

Municipal Utility Districts charge less than private enterprise. On a national average, private power company residential customers pay about 18% more for electricity than public power customers. Public power utilities, on average, return to state and local governments in-lieu-of tax payments and other contributions that are equivalent to state and local taxes paid by private power companies. 

To establish a Municipal Utility District, the developer or community must strictly follow their respective state's regulations. 

The Steps and Process How We Help Communities and Developers and Establish a MUD or PUD

Again, each state is unique, and have their own respective laws and regulations relating to the establishment of MUDs and PUDs.  

In general, we follow the following steps: 

1. Commission a feasibility study to:

* Evaluate a community's needs for services after which we will design a solution which is better, more efficient, environmentally-friendly and sustainable.

* Determine whether the public entity should be a Municipal Utility District (MUD) or a Municipal Utility (the latter can be created exclusively by an action of the City Council or County Board of Supervisors). 

2. Assuming community opts for a MUD, draft a qualifying petition seeking the creation
of a MUD in accordance with that state's MUD regulations. 

3. Coordinate governmental agencies, including the Board of Supervisors, the Office of the Clerk of the Board, the Department of Elections and the Office of the City Attorney, if there is one. 

4. Obtain enough signatures to equal 10 percent of the total votes (or whatever the state's requirements are) that were cast in the last general election to enable placement of a ballot measure for the creation of a utility district.

5. Sponsor election and elect the temporary Board of Directors.

6. Create “wards” of equal apportionment in the community (or City).  For some states they may be referred to as districts. 

7. Assist the Board of Directors and a newly appointed General Manager for the MUD to handle operations and necessary approvals. 

8. Determine the benefits of incur indebtedness, issuing bonds and investing funds. 

9. Implement all aspects of conversion and installation of new "clean" power generation system. 

As it relates to Solar Power and Energy Services we have an interest in providing communities, MUDs and PUDs, we provide the following services:

I. Concept of Distributed Generation and Dispersed Generation of Solar Power and Energy

a. Problems with central power plants
b. Future power constraints
c. Transmission & Distribution constraints
d. High Voltage Direct Current
e. Smart Grid

II. Solar Power & Energy generation - electricity only or total energy solution required?

a. Straight PV power generation system

b.  Solar Cogeneration - generation of power and hot water.

c. Solar Trigeneration - generation of "cooling, heating and power.

d. Overall system efficiencies increased through:

i. elimination of transmission line losses
ii. valuable thermal energy is recovered
iii. enormous amount of pollution is eliminated

III. Methods for implementation

a. Parallel with utility company - keep utility, stay connected
b. Island mode - utility is no longer providing any power - total self-generation
c. Problems - standby charges and fees, no more utility company but system needs
to be larger for redundancy

IV. Other Renewable Energy Technologies that we will consider include;

a. Gas turbines - fueled by clean B100 Biodiesel or Biomethane or "renewable natural gas."
b. Reciprocating engines - fueled by clean B100 Biodiesel or Biomethane or "renewable natural gas."
c. Hydrogen fuel cells
d. Solar
e. Geothermal
f.  Biomass Gasification

V. Risks and Rewards

a. The City and community benefits through lower costs of energy
b. Increased power reliability
c. Projections of Present and Future natural gas prices and electric power prices
d. Maintenance costs - can be controlled and guaranteed through maintenance contracts

VI. Selecting the Best Course of Action... How Do We Move Forward?

a. Supply us with past 12 months energy costs for municipal buildings to provide
initial analysis and economic feasibility
b. Maps of facilities
c. Community or City simply flips the switch and we will take care of everything else.
d.  We provide your community or city with flexibility, options and attractive alternatives.

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How we make and distribute electricity is changing! 

The electric power generation, transmission and distribution system (the electric "grid") is changing and evolving from the electric grid of the 19th and 20th centuries, which was inefficient, highly-polluting, very expensive and “dumb.”  

The "old" way of generating and distributing energy resembles this slide:

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