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- Letters -

February 25, 2009
Traer Star-Clipper

To the Editor:

About one year ago, I started getting calls from Traer. Several citizens called and asked if Alliant Energy would support their effort to submit a petition for vote. The vote would direct the City Council to sign a new natural gas franchise with our company. Their petition, not any action from Alliant Energy triggered Tuesday's vote and Alliant Energy's only payment for the election, as required by state law, is to cover the county's expenses including poll workers and ballot printing.

This vote is confusing in many ways: The wording on the ballot (which is determined by the county and perhaps the city), the switch from No to YES, and all the contradictory information being publicized. On top of that, a vote on a new utility always brings strong internal discord to a community. It often pits city and utility staff and boards, who are most likely to benefit from the takeover, against taxpayers and those on a fixed income who will see little benefit and would be hurt most if the promises of big profits don't come through.

We understand that the city is interested in collecting more revenue. The flow of cash coming to communities has been squeezed in recent years. Our concern is that taking over a natural gas utility in today's economy will put more of a squeeze on the city's revenues.

Yes, in the years we're not running campaigns in Traer, Alliant Energy will make a profit. But, we do it through economies of scale sharing equipment, training costs, manpower and other expenses between customers in several communities rather than one. Plus, our system is mostly paid for. The only capital costs are the upkeep and periodic replacement of parts of our system. Those costs, before being included in customer bills, are reviewed by utility experts at the state's utility board and an office of the State Attorney General. A brand new natural gas utility with huge capital debt will not be able to make money without raising rates.

When we provided data showing that the city, TMU and Traer citizens were bound to lose around $870,000 over the first 25 years of natural gas ownership, we used industry standard data and information from studies TMU's consultant had completed. In fact, recent changes made to the TMU feasibility study seem supportive of our numbers.

While a few municipal utilities in Iowa have taken over natural gas systems, most did that several years ago when natural gas was cheap. Today, the price of natural gas is two to six times higher. The margins to pay off a system early just aren't there. And, while a few communities took over utilities, many more such as Waverly and Maquoketa investigated the option and said, "No, thank you." In the past five years, Alliant Energy has signed nearly 250 new franchise agreements with communities in Iowa and Minnesota.

One thing is clear, Traer residents have a deep concern for its future. We hope you'll consider letting us take on the future risks of a natural gas utility for another 20 years. We've offered a window in our franchise after ten years if the community wants to reevaluate their position, so future flexibility is built in.

Please vote YES Tuesday for the Traer franchise with Alliant Energy Interstate Power and Light. If you have questions before you vote, please stop in and see me Monday night at the North Tama Community Center from 4-9 p.m. where I will be available to chat with you one-on-one.

With respect,

Scott Drzycimski

Community Relations Manager

Alliant Energy Interstate Power and Light Company



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