Decorah’s “can do attitude” and a broad spectrum of support make members of Decorah Power optimistic about what a municipal electric utility (MEU) could mean for the city.
Decorah Power is the citizens group that raised nearly $100,000 for a feasibility study of establishing a MEU in Decorah. Except for $14,000 from a United States Department of Agriculture rural development grant, all the funds for the study were donations.
Decorah Power’s feasibility study concluded a MEU could provide electricity to the city for about $5 million less a year than current provider Alliant Energy. Those investments could translate to lower rates and improved infrastructure, Decorah Power maintains.
The group has hosted numerous meetings with guest speakers addressing the topic of municipalization and created a website devoted to the topic.
“It’s been a huge effort, almost entirely volunteer. There have been hundreds of donors and hundreds of volunteers involved, generating a great deal of excitement, enthusiasm and hope – not just among a certain segment. There’s great diversity between homeowners and businesses, with the support of some industries and many larger users -- all sectors of the economy,” said Decorah Power Board Treasurer Andy Johnson.
“I tend to trust our community and the capabilities of this community. There are professional people both in government and the private sector. If we’re going to place trust in a monopoly to serve us and prioritize the interests of the community, we should seriously consider local ownership and control,” he said.
“I do think we can run our own show.”
Alliant charged the state’s sixth highest rate for residential customers in 2016, based on U.S. Energy Information Administration data that included about 90 Iowa utilities, the Des Moines Register reported Sunday.
Johnson said a MEU would keep rates lower than Alliant’s or stable, while Alliant raises rates every three years. A municipal would also mean more employment for the community, he said.
Jobs would include not only the technical line crew, but also management and administrative positions currently handled through Alliant’s headquarters in Madison, Wis.

Community solar
Talks about pursuing a MEU began a few years ago when Winneshiek Shared Solar, a collaboration of the city, county, Winneshiek Medical Center, Luther College and Northeast Iowa Community College, wanted to establish a locally owned community solar project that would have kept its profits local.
“Alliant did not respond. Their business model is to own it,” said Decorah Power Board President Larry Grimstad during an interview last summer when Decorah Power was just beginning to raise funds for its feasibility study.
“We had local investors lined up. We know we have local investors that will step up (for future renewable energy projects),” he said.
“When we realized the Alliant franchise was coming up for renewal, we thought we should be checking alternatives here. We saw an opportunity to do something different,” Grimstad said.
Although the last Iowa community to establish a municipal was Aurelia in 1974, a trend toward municipalization is occurring across the country, according to Decorah Power Board Vice President Tim Wagner.
“We’re not lone wolves,” he said.
There are 136 MEUs in Iowa.
“There is a renewed interest in looking at municipals because of the economic opportunity around new technologies. We have an opportunity to build a municipal and keep the economic impact local,” Johnson said.

Reliability, security
By establishing a MEU, Decorah could not only save money, but move toward energy independence and a future with opportunities for clean energy, microgrids and small-scale generation, according to Decorah Power.
If a MEU were established in Decorah, a volunteer board, appointed by the mayor and approved by the Decorah City Council, would oversee the utility. That Board would decide how the energy savings Decorah Power is projecting would be used. Options would include lowering rates, investing into infrastructure improvements, investing in clean energy generation and storage, or any combination of those things, Decorah Power members said.
Infrastructure improvements could include burying power lines to prevent outages, Johnson said.
“Municipals are more active in doing that (burying lines) than Alliant has been. They (municipals) are becoming much more resistant to power outages,” he said.
All MEUs have mutual aid pacts through state, regional and national organizations to respond to disasters.
“Small utilities working together are just as robust as one big utility,” Johnson said.
Weather is not the only thing that can impact the power supply, he said.
“Cyber threats are starting to affect the electrical grid. In both cases (weather and cyber attacks), municipals have invested in the resilience of their systems and backup,” Johnson said.
“Municipal utilities build with the capability to disconnect from the regional transmission grid (that connects all utilities -- municipal and investor owned -- with their customers) and run by themselves independently. If something happens, communities like New Hampton and Waverly can disconnect and run independently with their own generation. Micro grids can operate independently. It’s not something investor-owned utilities are looking to do because it’s not cost effective,” he continued.
Being able to operate independently would be an investment that would be made over time at the discretion of the local board overseeing the municipal, Johnson said.

Yes vote
If voters authorize the city to establish a MEU, the city takes the leadership role in the process of building an application to the Iowa Utility Board (IUB), Johnson said.
The IUB ultimately decides whether a MEU is in the city’s best interest.
“The IUB will be taxed with analyzing the value of the (electrical) system,” he said.

Decorah Power’s study estimated it would cost about $7.6 million to acquire Alliant’s infrastructure and start a MEU, while the feasibility study Alliant completed estimated it would cost about $51 million.
The IUB will consider both feasibility studies and have access to Alliant’s financial data.
“The real numbers will be available to both parties at the IUB and the Board itself will make the final determination on buyout costs,” Johnson said.
“The (Iowa) Utility Board is the backstop to this decision. If we can’t provide our business case to the Utility Board, they won’t grant the utility to us. The job of the city is to do its homework and make its application to the Board,” said Decorah Power Board Secretary Joel Zook.
“We need to present a strong case,” Johnson said.