Alliant Energy-Marion, Iowa Municipalization Brochure

A233-23728 8.5x11-Insert_v05_al.pdf
MARION
I O WA
1
11/22/13
4:12 PM
We want you, the citizens, to make an
informed decision if the city council asks you
to vote to municipalize the electric system.
MUNICIPALIZATION – WHAT IS IT?
• Municipalization occurs when the city takes over the ownership, management, costs and all risk
associated with operation of a public utility, such as electric service, from a private company.
• The City of Marion is currently exploring operating our electric system within the Marion city limits.
• For this to happen, the citizens of the community must vote to approve it. In addition, state regulators
must find the city’s plans to be in the public interest for all customers.
WHAT IS THE IMPACT ON MARION?
• The costs of municipalization to Marion residents and businesses are significant.
 Additional costs beyond purchase of electricity include the cost of purchasing the system and
equipment, and the salaries of additional municipal employees to manage the system.
 An independent third party review performed by Concentric Energy Advisors, an experienced
municipalization consultation firm, estimates that the City of Marion and citizens could
pay $40 million more in electric costs over 20 years if they municipalize.
 Marion has done a feasibility study on municipalizing, but our company’s analysis indicates that
the Marion study has overestimated benefits and underestimated future costs and risks as well
as the value of our electric system in the community.
 On average, about 75% of municipal electric utilities in Iowa charge more than Alliant Energy
does for their average electric rate, based on data filed with the Iowa Utilities Board.
 Customers lose the rate stability that working with a regulated company offers. Our rates
are set by the Iowa Utilities Board. This provides customers protection when the
utility requests a price increase. This process does not exist for municipal utilities.
In fact, there is no state oversite of rates if a community municipalizes.
A233-23728 8.5x11-Insert_v05_al.pdf
2
11/22/13
4:12 PM
HOW COULD MUNICIPALIZATION AFFECT THE RELIABILITY
OF ELECTRIC SERVICE?
• The city would no longer have Alliant Energy’s expertise in safety standards and reliability. Staffing and
operating the electric system would add cost for Marion citizens.
• Electric customers in Marion lose the protections currently provided through oversight by energy
experts at the Iowa Utilities Board and the Office of Consumer Advocate, meaning there’s no expert
oversight of service quality and reliability.
WHAT IS THE PROCESS OF MUNICIPALIZATION?
• The timeline to municipalize is typically 3-5 years.
• This includes time for feasibility studies to be completed, public referendums held, regulatory
proceedings before the Iowa Utilities Board, appeals and the actual start-up of the city-owned
electric utility.
• In Iowa, the last successful government takeover of an electric utility was in 1976.
 Since that time, a number of other cities have completed feasibility studies for municipalization
and almost all have decided to remain with their utility provider.
 A small number have continued through the process of municipalization, with significant costs
incurred by the citizens of these communities, but none have completed formation of a new
electric utility.
QUESTIONS?
• Contact Mary Meisterling at [email protected] or 786-8131
Please let your city staff and
council representatives know
you want to keep Alliant Energy
serving your community!