A response to Klocke

I’d like to correct some gross inaccuracies in Kent Klocke’s recent letter to the editor. Klocke begins by referring to the feasibility study commissioned by Decorah Power in 2017. He rightly asserts that the Decorah Power feasibility study included a proposed rate increase by Alliant Energy, with an estimated rate increase of 2.1 pecent per year over the study period. But he fails to mention that neither the Decorah Power study nor Alliant’s study included information about Alliant’s intention to file for another $204 million rate increase in 2019, because Alliant did not share this information with the city of Decorah, Decorah Power and not even with the firm doing its feasibility study. However, testimony in the rate case revealed that within Alliant’s strategic planning documents, the company had planned back in 2017 to file another rate increase in 2019.

So yes, Alliant withheld vital information from the people of Decorah, and the Iowa Utilities Commission took note:

“. . . In addition, the actions taken by IPL [Alliant Energy] in opposition to the Decorah municipalization effort demonstrate a lack of management efficiency by withholding from and not providing to the citizens of Decorah accurate information about anticipated rate increases. Because a rate-regulated electric utility is a monopoly in its service territory, it has a duty to be transparent and to provide accurate information to customers and communities in that service territory. The evidence in this case regarding IPL’s behavior during the Decorah municipalization campaign shows that IPL did not fulfill this responsibility and failed to meet the expected standard of conduct for a regulated monopoly.” – Final Decision and Order, RPU-2019-0001, Jan. 8, 2020

In the above order, the Iowa Utilities Commission further said ‘[t]he lack of transparency and misrepresentation in the Decorah municipalization vote is of significant concern to the board.”

On Klocke’s next point, he is correct that the city could do a feasibility study before the vote. However, any feasibility study done by the city or Alliant Energy without the oversight of the Iowa Utilities Commission would be based only on estimations and assumptions. A yes vote ensures participation by the Iowa Utilities Commission to hold Alliant to the facts and allows the city to gain actual numbers, not estimates. This is important, as Alliant may produce another feasibility study before the election, and voters should be wary as it will only be based on assumptions and estimations.

Klocke also makes a pitch to convince voters that the city can borrow $700,000 without public oversight. But that is simply not true. Suppose the city attempts to take out obligation bonds without a referendum. In that case, it is well within the rights of the public to get the signatures needed to force a referendum — usually about 50 – 75 signatures are required. He is attempting to make voters feel disenfranchised in this process, but the truth is that people have a strong voice in local decisions. All meetings are open to public comment; every two years, there is a council election with numerous seats open. The city can’t issue obligation bonds without a voice from the people.

Klocke shares some other misleading commentary, suggesting that $400,000 worth of sustainability funds are purposefully set aside to go after Alliant Energy. First, there isn’t $400,000, and many sustainability dollars have already been committed to projects. We are routinely spending the funds to achieve the city’s goals. Recent examples include contributions to the Sunflower Daycare Center, creating a downtown building investment grant, electrification of vehicles/equipment for city departments, etc. In addition, we have used these funds and anticipate using them again to support solar and energy efficiency projects within the city as we strive to meet our 2040 carbon neutrality goal.

That said, some of these dollars could be used for a feasibility study if the voters of Decorah chose to explore their energy options by voting yes in March. Sustainability funds would be a good source for this, as the goal behind these funds is to invest in a manner that will save money in the long run, which could very well be the case with a MEU.

Next, let’s get clear on revenue bonds. If the Iowa Utilities Commission agreed that a Decorah MEU would be in the best interest of Decorah ratepayers, they would designate the service territory and set the buy-out price. The infrastructure purchase would have already been baked into the proposed rate structure of a MEU and included in the business plan proposal as part of a formal petition. No city tax dollars would be used to support or pay off any MEU loans; the energy dollars we already spend would be put towards purchasing the infrastructure.

And finally, to Klocke’s point about Alliant’s service center in Decorah and their ability to respond to our needs: Alliant Energy is an out-of-state investor-owned utility with a regional service center in Decorah. However, over 80 percent of the customers served by this service center live outside of Decorah in the following communities and on farms near Fayette, West Union, Monona, Lansing, Cresco, Elkader, Calmar, Postville and Waukon. Meanwhile, a Decorah MEU would only be responsible for serving Decorah 24/7. Like Alliant, Decorah will have access to additional line workers and resources through mutual aid agreements if a disaster happens. Interestingly, mutual aid networks, on average, have greater reliability than investor-owned utilities. 

Join me in voting yes on March 4, with facts, not fears.