Six Iowa Communities Move on Municipal Electricity

Type: Ballot Initiatives

Status: Passed on various dates

Summary:

After passing referendums, six small communities in Iowa have filed regulatory petitions with the Iowa Utilities Board to drop their current electric supplier and form municipally-owned electric utilities.

The six cities are Everly, Kalona, Rolfe, Terril, Titonka and Wellman. They currently get their electricity services from Interstate Power and Light (Alliant Energy) but their residents voted to sever the ties with the incumbent utility.

The American Public Power Association reported that in Everly (pop. 650), summer electric rates are about 13.9 cents per kilowatt-hour and that nearby cities that own their electric utilities have rates around seven cents per kWh. Everly will use its prior experience in taking control of its natural gas utility service from an incumbent utility in the 1990s. The process took nearly a decade.

If successful in their bids to uncouple from their utility, the cities will have to purchase the distribution lines and equipment from Interstate Power and then find a supplier of electricity or develop their own power plants.

Interstate Power and Light spokespersons say that the efforts of the cities to municipalize their electric services are a mistake. The utility says that it appears to be a move by the cities to raise additional revenues to supplement ongoing state budget cuts to local governments. Interstate says that the economic assumptions that the cities are relying on are flawed and that a take over may create unforeseen reliability issues on the grid.