Ask Mr. Answer Person: Your complete guide to the municipal electric utility referendum

(Mary Ann e-mails: "Dear Mr. Answer Person, I apologize for being a 'Johnny come lately' to this electric party, but I have a few questions and was wondering if you knew the answers.  It may have already been discussed, but many of my friends and co-workers do not know the answers either--hence I am turning to you.  This turned out to be more than a few questions.  If you can help out with some of these answers, we'd appreciate it."):

Mr. Answer Person says: "Since you have many questions, we'll try to tackle these one at a time:

1.  What (or who) prompted this push for a municipal power company?  Was there a problem?  Has Alliant threatened to leave us without power?  Mr. A.P. says: "Let's take your last question first--Alliant Energy CANNOT turn off the electricity to Decorah because it's mad!  I can't imagine them doing this, but the Iowa Utilities Board wouldn't allow this, anyway.  The referendum on a municipal power company comes from the citizens group "Decorah Power," which is a group of local people interested in energy issues.  Decorah Power would say they brought forth this issue because a municipal electric utility would save customers money and could do more to promote solar energy and other renewables.  Alliant Energy would say rates would rise 30 percent under a municipal electric utility and Alliant is already doing plenty to promote renewable energy.

2.  What are the advantages for Alliant customers? disadvantages?  I have read wildly varying amounts of money being thrown around by both Decorah Power and Alliant.  Does either side have a handle on the real costs?  Will benefits outweigh this cost?  Mr. A.P. says: "You're right about "wildly varying amounts of money"--Decorah Power is saying it would cost $5 million to take over Alliant's Decorah operations, while Alliant says that figure is $50 million.  The Iowa Utility Board will eventually weigh in on buyout costs (if the referendum passes and the City of Decorah makes an application for a municipal utility), but at this point there aren't any third-party cost estimates.

3.  How will Decorah Power handle day to day running of the utility?  outages?  If subcontracted, will this increase the amount of time people are without power?  How about adding, subtracting new/old accounts?  replacement of aging equipment?  Who pays for all of this?  Will there be new employees?  Will Alliant employees be hired, laid off, transferred?  How will our electric bills be impacted?  Mr. A.P, says: "Decorah Power says its feasibility study covers all these issues--using contracted labor at first, but probably transitioning to city utility employees.  Alliant says its record of delivering electricity in Decorah without outages is better than figures from municipal utilities--a claim Decorah Power disputes.  As for electric bills, the theme continues--Decorah Power says the municipal electric utility could offer electric rates that would be significantly lower than Alliant's, while Alliant says charges would increase 30 percent under a municipal electric utility.

4.  Why can't people outside the city limits, who would be impacted, vote?  Is it because the residents of Decorah pay so much more in taxes?  Why should that matter if Decorah Power will not be run on tax dollars?  Why are Luther students even involved in this?  Mr. A.P. says: "The State of Iowa, through the Iowa Utilities Board and the Secretary of State's office, has a big role to play in how the election will be handled.  Because the Decorah City Council is the governmental body calling for the special election, the election covers people living inside the city limits--including Luther College students, who are counted in Decorah's official census and vote in Decorah's city council elections (assuming they have registered to vote in Winneshiek County--many have not).

The issue of people living outside the city limits has come up because Decorah Power is recommending a new municipal electric utility take over ALL of Alliant Energy's customers served by the Decorah substation.  Alliant Energy power lines cross over the city limits nine times to serve some rural residents, so Decorah Power says it would be cheaper for a new utility to serve rural customers as well as city customers instead of having to spend money for new power lines and substations.  But whether rural residents are included in a municipal electric utility would be a decision made first by the Decorah City Council if it submitted an application and then by the Iowa Utilities Board, when it would rule on such an application.

Finally, if the Decorah City Council decides to make an application to the Iowa Utilities Board and the board rules against the city, the legal costs and other costs associated with bringing the application would have to be paid with city property taxes, instead of through a loan the municipal electric utility would secure to pay start-up costs.  In other words, while rural residents might have their electrical service affected by a municipal electric utility, the would NOT have their property taxes affected.

OK--Mr. Answer Person hopes this has answered some of the basic questions about municipal electric utilities.  For more information, you can visit the Alliant Energy or Decorah Power websites.  The referendum is May 1st and Mr. Answer Person has got to believe there will be one or more public forums ("fora?") sponsored by an impartial third party."