Ann Lenzen and Terry Kouba of Alliant Energy, IUB Board members Nick Wagner, Geri Huser and Richard Lozier, and Jeff Cook, of the Iowa Departmment of Justice’s Office of Consumer Advocate. (Decorah Newspapers photo by Sarah Strandberg)
Ann Lenzen and Terry Kouba of Alliant Energy, IUB Board members Nick Wagner, Geri Huser and Richard Lozier, and Jeff Cook, of the Iowa Departmment of Justice’s Office of Consumer Advocate. (Decorah Newspapers photo by Sarah Strandberg)
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Alliant Energy took heavy criticism and the Iowa Utility Board (IUB) got an earful during a public comment meeting last Thursday night on Alliant Energy’s proposed rate increase.
About 150 people attended the meeting at Decorah’s Hotel Winneshiek and speakers all asked the IUB to reject the increase. Last May’s defeat – by a three-vote margin -- of a referendum on whether to establish a municipal electric utility (MEU) in Decorah was fresh on the minds of many in attendance. They reminded Alliant representatives of broken campaign promises and accused the company of knowing at the time of the vote that a double-digit rate increase was in the works.
Speakers also complained about Alliant’s rates being among the highest in the state and that the company is guilty of “mismanagement and plain-old fashioned corporate greed.”
Jody Enos Berlage posed a question to Alliant Energy President Terry Kouba: “Given your record profits and based on the loyalty to your shareholders and not to your customers, and given the extraordinary hardship this proposal will cause to rural communities already stressed, and based on your behavior over the past year, have you no shame?”

Rate increase
Alliant has proposed a residential base rate increase of 24.45 percent. However, Anne Lenzen, Alliant’s director of regulatory affairs, said a customer’s total bill also includes fees for fuel, energy efficiency and transmission, which are expected to decrease.
“The impact on a total bill will be less than the 25 percent increases shown in customer notices. Base rates are only one part of the total,” she said.
Lenzen said a residential customer with a typical bill of $116 per month in 2018 would see an $8 increase this year, or seven percent, and an additional $21 per month increase, or 20 percent, in 2020, if the proposed rate increase is approved.
According to Alliant officials, the company is making long-term investments to advance clean energy, and enhance customer service and reliability while minimizing the cost to customers and communities.
Before the May 1, 2018, referendum on the MEU, Alliant conducted its own feasibility study of a municipal utility that concluded it would be risky and expensive for Decorah, said Eric Runestad, vice president for finance and administration at Luther College, Decorah’s largest employer and Alliant’s largest customer in the city.
The study also said Alliant’s rate increases would average 1 percent a year from 2021 through 2027.
“How can it be that just 12 months after the referendum we can be here responding to their proposed 25 percent rate increase? To the IUB, I say give them their 1 percent. I will support that fully. It’s exactly what they told rate-payers in Decorah to expect,” he said.
“To make matters worse, it seems that at the same time Alliant was lobbying against a possible municipal utility using the Concentric feasibility study as their backstop, they were, in some other division of Alliant Energy, working on the modeling for this 25 percent rate increase. Alliant maintains that they didn’t know what the rate increase would be until late 2018. I just don’t buy that,” Runestad continued.
“If Luther College works five years out on financial modeling, and is able to make assumptions about expenses and revenues at a highly detailed level, you can be sure that a for-profit company 30 times our size is doing a lot more of this than we are,” he said.
“If, as they contend, Alliant wasn’t working on these rates last spring during their push against municipalization, this reflects poorly on their responsibility to investors and customers to conduct rigorous and thoughtful long-range planning. And, if Alliant was working on the rate case last spring and didn’t tell this community about it, then this reflects poorly on their leadership. Either way, I find this corporate behavior unacceptable and do not believe that Alliant should be rewarded for it by being granted higher rates and increased profits,” Runestad said.

MidAmerican
Under the proposed increase, Runestad said Luther’s annual electrical costs will increase by $250,000 to $1,250,000. If Luther were in MidAmerican’s service territory, the college would be spending roughly $780,000 annually on electricity, 60 percent less than it will be paying Alliant after the increase, Runestad said.
Alliant’s increase will create economic hardship for students, faculty and staff in Decorah, at a time when the college’s business model is stressed and its budget is in deficit, he added.
“Alliant booked over $500 million in profit last year. And while I don’t begrudge investors an adequate return on their investment, I also argue to the IUB that a 25- percent rate hike at a time of record profitability is neither just nor reasonable,” Runestad said.
Th estimated impact of the rate increase on Northeast Iowa Community College (NICC) is $86,119, according to Dave Dahms, vice president of finance and administration at NICC.
It’s been more than five years since NICC has received an increase in state aid and Governor Kim Reynolds has proposed a $235,000 raise in support to NICC for fiscal 2019-2020, he said. The Alliant increase would consume 37 percent of NICC’s potential increase in state aid, according to Dahms.
Electricity is already 70 percent of NICCs total utility expense, and NICC does not want to burden students with the “huge Alliant increase” because their family’s electric bill also will be increasing, he said.
“This irresponsible proposal will make it more difficult for Iowans to afford education and to live in Iowa. NICC prepares our students for the workforce needed by our business and industry including Alliant. About 85 percent of students live in our 5,000 square-mile-service district and 96 percent of our graduates are employed or continue on their education one year after graduation.
“It is absolutely irresponsible for any entity, not to mention a financially sound entity as Alliant Energy, to propose such an egregious rate increase that will have devastating impacts to their business and residential customers, which will diminish the vitality of our communities,” Dahms said.

‘Outright lies’
Alliant used “outright lies” in its campaign against municipalization last year, Emily Neal of Decorah said. She said it’s a “sick joke” that less than a year after Alliant said a municipal utility would charge 25 percent more than Alliant, Alliant is asking for a rate increase of 25 percent.
She urged the IUB to hold Alliant accountable to the rate increases it pledged in its campaign last year. Neal said MidAmerican Energy customers currently pay 50 percent less than Alliant customers and the gap will widen with Alliant’s proposed rate increase.
Kevin Sand said Alliant has lost the trust of the community, which means a lot in a small town. He said Decorah needs to “relook” at a feasibility study on establishing a municipal electric utility.
Mayor Lorraine Borowski read from a resolution approved by the Decorah City Council recently opposing the rate increase that said the increase “represents a significant breach of trust and accountability between Alliant Energy, the city of Decorah and Decorah customers.”

More than RECs
Dennis Potratz asked how Decorah can endure a rate increase when Alliant’s rates are higher than other electrical providers around the state.
“Even the rural electric cooperatives charge less than Alliant,” Potratz said.
He proposed a rate decrease to “fall in line” with what other electric utilities charge.
“We should not be forced to pay for Alliant’s bad business practices” he said.
David Jacobson of Lansing said he’d inherited Alliant stock from his grandparents. He said that stock has seen a 221 percent increase in the last five years.
“That’s great for the shareholder, great for the strength of the company. I’m questioning whether that’s great for the customer who buys the electricity,” Jacobson said.
Jacobsen said Alliant’s CEO makes $6.5 million a year and non-employee board members receive $210,000 per year.
Lyle Otte of Decorah said his Social Security payments have not increased 25 percent. He said his electrical bill in February was $360, and with the proposed rate increase, it would have been $80 higher.
“Alliant is way out of line in making this increase request. I urge you to completely deny it,” Otte said.
Dick Janson of Decorah said Alliant is paying increasing dividends mostly to shareholders outside of Iowa, on the backs of Iowa rate-payers. He called for the IUB to limit Alliant’s rate to 1 percent annually -- the amount the company said it would charge prior to the MEU vote. He also asked the Board to authorize a MEU vote in Decorah in three to six months.
Winneshiek Medical Center (WMC) Board of Trustee Karl Jacobsen said the proposed rate is “greedy and uncalled for” and should be “defeated.”
WMC Trustee Karen McClean said she was “flabbergasted” by the proposed rate increase.
“To now request a base rate increase of 24.5 percent for residential customers after suggesting only a 1 percent increase a year ago is a classic example of bait and switch … they (Alliant) clearly knew they would impose a rate increase last year,” McClean said.
Jim Martin-Schramm, director of Luther’s Center for Sustainable Communities, said Decorah is not the only city objecting to the rate increase.
“So too have the city councils of Clinton, Columbus Junction, Everly, Ferguson and Thornburg. They know this rate hike will impose additional financial hardship for their citizens and that it will make it even harder for the businesses in their communities to be competitive. It is no coincidence that Apple, Amazon, Facebook and Google have all built data centers in MidAmerican’s service territory. It is because MidAmerican’s power is cheaper and cleaner,” Martin-Schramm said.
MidAmerican customers pay 25-35 percent less than Alliant customers, he added.
Steve Luse, a member of the Decorah City Council, asked the Board to reduce Alliant’s rates to make them competitive with the rates other utilities charge.

IUB adjudicates
John Jensen of Decorah asked if the IUB’s role is to represent the people of Iowa and to ensure their electrical service is fair, just and reliable.
Board Chair Gerry Huser said the IUB serves as adjudicator and the Iowa Office of Consumer Advocate represents the customers.
Jensen also asked whether the IUB could reduce Alliant customer rates and whether it could adjust utility service territories.
“The people in this territory would be better served by almost any other utility,” Jensen said.
IUB Board member Nick Wagner said the IUB makes decisions based on evidence. IUB decisions may be challenged in District Court.
Wagner also said utility service territories are set by Iowa Code and there is no provision for the Board to change them.

Response
Alliant’s Kouba said, historically, Alliant’s rates have been comparable to most Midwest utilities, although he noted MidAmerican’s rates are “very, very low” when compared to other Midwestern utilities.
Kouba said Alliant also understands, with the proposed rate increase, the company’s job going forward will be to “work hard and hold the line” to be comparable to other utilities.
He said he understands the hardship of rate increases, but that he sees “all kinds of costs rising in society. Kouba said Alliant is making an investment to make sure its electric and gas programs are reliable and to manage future cost increases.
The requested increase in annual revenues for all of Alliant’s customer classes combined is about $203.6 million or 11.7 percent. The IUB is holding customer comment meetings throughout the state on the proposed rate increases.