Power struggle: Iowa muni campaign heats up ahead of public vote

In a northeastern Iowa community, voters will weigh in on whether to replace its investor-owned electric company with a municipal utility.

Voters in Decorah, Iowa, will decide May 1 whether they want the city to move ahead with a proposal to leave their current electricity provider and create a city-owned utility to take its place.

Campaigns on both sides are in high gear. Yard signs declare “Municipalization = Higher Rates. Vote No” in blue and “Vote Yes! For Public Power” in red. Interstate Power & Light, the incumbent utility, has purchased a billboard along a highway leading into town and large ads in local newspapers.

According to municipalization advocates, the utility, which is based 100 miles south in Cedar Rapids, has hired a community liaison to represent it at community gatherings. “He comes to all of our meetings, and even tried to come to one of our volunteer trainings,” said Emily Anne Neal, who is coordinating the pro-municipalization Decorah Power campaign. “We knew who he was, and we told him to leave.”

Nevertheless, she added, “He’s a very nice guy.”

An Interstate spokesman did not respond to an emailed question about the community liaison, but issued a brief statement: “Our focus has always been on helping our customers make the most informed decision they can on Election Day… ” Mike Wagner wrote. “We’re delivering on commitments to reliability and renewable energy that outpace anything a startup city-owned utility can promise to provide.”

Decorah Power lacks the budget for billboard ads and is counting instead on volunteers, urging supporters to talk to 10 of friends, neighbors or co-workers, and to urge each of them to do the same.

“We’re pretty confident that it’s happening,” Neal said. “We keep in pretty close contact with people. We believe the vote will be won by relationships, so we’re trying to connect voters to people they know through house parties and more-focused volunteerism. It’s a very personal thing.”

Both sides have Facebook pages and have urged people to register, including at a retirement community and at Luther College. The “vote yes” on municipalization camp also organized a series of nine talks last fall with operators of municipal and cooperative utilities, an activist and policy experts.

Ben Steines, the auditor in Winneshiek County where Decorah is located, said the level of activity “is more than any school district or city election generally would be. It’s more like a general election campaign.”

The debate has come to Sunday morning coffee hours. Steines said at his Lutheran church recently, an Interstate employee was talking to other church members about whether there would be a savings in electric rates.

And at the church he attends, Decorah city councilor Steve Luse, who supports municipalization, said he offered during fellowship time “to talk to anyone about the referendum if they have questions. I got feedback. One lady said, ‘We don’t want to bring any politics into the church.’”

Luse’s response: “I was trying to offer some clarity.”

Both camps developed feasibility studies, with vastly differing conclusions. Interstate’s study found that creating a municipal utility would be very costly and raise bills for customers using the 8,100 meters in the Decorah area. Decorah Power’s consultant concluded that a city utility would serve the community well and through 2023 charge at least 4 cents less per kilowatt hour than Interstate has projected.

Estimates of what the city would have to pay for Interstate’s assets and startup and application fees were similarly at odds. Interstate put the price at about $51 million. Decorah Power’s consultant estimated it at $7.6 million. (Luse said the difference is due to an incorrect assumption on Interstate’s part.)

The election’s outcome won’t have a binding impact but will convey the thoughts of the city’s 5,250 registered voters, including some of the 2,000 Luther College students, whose election participation is once again the source of contention.

“This isn’t new,” said Jim Martin-Schramm, a religion professor at the school who also is involved in developing more renewable generation there. “People complain to me all the time about Luther College students swaying elections. They have a right to participate in electoral politics – end of story.”

Luther College is one reason the community is more engaged than most on energy issues. One of the city’s largest institutions, the school has a Climate Action Plan, a zero-waste goal and a Center for Sustainable Communities. Renewable sources on campus provide more than one-third of the electricity used on campus, and the school aims to be carbon neutral by 2030.

The college has consistently run up against Interstate policies that restrict its renewable ambitions. About three years ago, Luther College joined with Decorah’s Winneshiek Energy District, a nonprofit aiming to reach 100 percent local renewable power by 2050, on a “shared solar” project. The idea was to install a solar array that would provide power to five large educational and government entities in town. It would have required virtual net metering, and a large degree of cooperation from Interstate. It didn’t happen.

The resulting frustration in large part prompted the energy district and other clean-energy proponents in town to look for a way around Interstate’s policies by creating an alternative electrical utility, according to Luse.

Similar attempts have been made elsewhere with varying results. About 20 municipal utilities nationwide have been created since 2000, according to the American Public Power Association. The largest was Jefferson County, Washington in 2013 with 18,000 customers.

Boulder, Colorado is in the process of creating a municipal utility. Voters last November barely approved continuing to fund the effort, and a week ago the city announced the hiring of a new electric utility development director.

Minneapolis abandoned its effort to go municipal in 2014 after utilities that provide the city with electricity and natural gas agreed to a “clean energy partnership.”

Luse said Decorah could seek a similar a deal with Interstate to allow more leeway in developing renewable energy. The city’s franchise agreement with Interstate expires at the end of May, giving it some leverage.

Even if the referendum passes, it would not commit the city to pursue creating a municipal utility. And should it decide to go ahead, the city would need to file an application with the Iowa Utilities Board, which would make the final determination. Litigation in the courts could follow.

“The road is long and hard,” Tobias Sellier, spokesman for the American Public Power Association  wrote in an email. “As you’d imagine, few investor-owned utilities are quick to give up their service territory. The path to municipalization requires a dedicated community that is willing to spend the funds to conduct feasibility studies – and usually an organized grassroots campaign.”