Mayor to Propose Transformation Plan for Cleveland Public Power: Here’s What to Watch For

Mayor Bibb’s administration is preparing a transformation plan for the city’s electric utility, Cleveland Public Power (CPP). The plan is expected to address CPP’s aging infrastructure at an estimated cost of $70-100 million to replace and upgrade transformers, substations, facilities, and utility poles throughout the service area. The administration has indicated a plan to roll out the strategy in the coming weeks.

CPP’s challenges are not new. A leaked 2020 consultant’s report characterized the system as an outlier compared to peer utilities and that it faced a competitive disadvantage. The report noted that CPP faced challenges due to its rates, reliability, and infrastructure. The Mayor announced the forthcoming plan in response to a resident concerned about service reliability, a concern that many residents, businesses and developers have voiced over the years.  A transformation plan that delivers a more efficient, reliable, and cost-effective utility is critical to changing that narrative and, I’d argue, to CPP’s future.

Here’s what Cleveland businesses should be watching for.

CPP’s Competitive Challenges

CPP has operated for decades in a complicated position: a city-owned utility competing in the same geography as FirstEnergy, a large investor-owned utility. CPP’s service area covers much of the City’s downtown, east side and near west side, but does not cover the West Park neighborhood. With a limited service area and strong competition, CPP’s performance, capitalization and rate structure have always been under scrutiny and driven operational and political challenges.

As in many cases, when organizations face cost pressures, maintenance gets deferred, but deferred maintenance has consequences. Businesses in CPP’s service territory know this firsthand as reliability concerns have factored into site selection and operational planning for years. These downstream effects were a recurring part of conversations that I have had with developers and businesses evaluating Cleveland sites.

What We Expect About the Proposal

In an interview with Signal Cleveland, City Council Utilities Committee Chair Brian Kazy described the scope of needed work to include transformers, substations, utility poles, and CPP’s physical facilities, based on a 2024 CPP infrastructure assessment. Chair Kazy gave an estimate of $70 million to $100 million to execute on this plan.

The mayor’s office has indicated that a full plan will be released within weeks. Until that document is public, the critical financing and implementation questions remain open.

What to Look for:

The transformation plan’s success will hinge less on the diagnosis — which is well-established — and more on the answers to a short list of practical questions:

1. How will the City finance it? A $70–$100 million capital program requires a funding plan. Revenue bonds, utility rate increases, federal infrastructure grants, or some combination are all possibilities, but in most cases, the burden eventually falls upon the ratepayers. The financing plan is critical: the terms of the financing, the anticipated ratepayer base, and growth in load all impact the potential increase in rates to finance this project.  Businesses with significant power loads should assess their exposure to further rate adjustments at the earliest opportunity for future planning.
2. What is the phasing and timeline? Construction and infrastructure replacement at scale can cause temporary service disruptions, as well as impact traffic and operations in the vicinity of the improvements. Businesses with operational continuity requirements — manufacturing, data operations, healthcare, hospitality — will want to understand project sequencing once it is announced. Sequencing also impacts cost and reliability.
3. How will procurement be structured? A project of this scale will generate substantial public contracting opportunities. Contractors, suppliers, and electrical infrastructure vendors should monitor solicitations from the City and CPP. The City of Cleveland’s Community Benefits process may apply to this procurement, creating non-traditional opportunities and pathways.
4. Will CPP’s service territory expand? The plan raises the question of whether CPP will extend service into areas currently served exclusively by FirstEnergy or generate additional capacity in its current market footprint.  This can generate more options for developers and businesses.
5. What does improved infrastructure do to development economics? Reliable, modernized electrical infrastructure is a site selection factor, particularly for energy-intensive uses. Improved CPP performance in specific neighborhoods or corridors could shift development feasibility assessments in ways that are worth building into project underwriting.

Next Steps

KJK will monitor the release of the transformation plan and subsequent City Council action and will provide a follow-up alert when material details are available.  Businesses with specific concerns about rate exposure, service continuity planning, procurement participation, or regulatory compliance should consult counsel and be attentive to the plan as it proceeds through the City’s approval process.

To discuss further, contact KJK’s Director of Economic Development & Incentives practice group David Ebersole at DME@kjk.com.