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DECORAH — Residents of Decorah are once again preparing to vote on a proposal to create a municipal electric utility (MEU), a move supporters argue would give the city more control over its energy system but which detractors warn could be financially and logistically complex. At a public meeting on Wednesday evening hosted by Alliant Energy, Community Development Manager Mike Wagner and Director of Operational Resources Randy Bauer provided information about the intricacies of municipalization. Their presentation outlined potential benefits and risks while also addressing attendees' questions about the effort. The March 4 vote marks the second time in recent years that Decorah voters will weigh in on this issue. In 2018, a similar effort narrowly failed by only three votes. Advocates for the MEU say this renewed push reflects community interest in local control, renewable energy development, and potentially lower utility rates. Opponents, including Wagner and Bauer, emphasized the financial uncertainties and logistical challenges involved. The Municipalization Process Municipal utilities, which are locally owned and operated, serve more than 130 communities in Iowa. Proponents of creating one in Decorah argue that it would allow the city to prioritize local interests in energy decisions, including rates, sustainability efforts, and infrastructure improvements. However, municipalizing an energy system is a rare and complicated process. The last successful effort in Iowa occurred nearly 50 years ago, in 1974. At Wednesday's meeting, Bauer offered his perspective on the multiple steps involved in forming an MEU, which include conducting feasibility studies, filing petitions with the Iowa Utilities Commission (IUC), and negotiating the purchase of infrastructure. He noted that the process could take three to five years—and would likely involve significant upfront costs. According to Bauer, feasibility studies for similar efforts in Iowa have cost between $80,000 and $100,000, while legal and regulatory expenses to petition the IUC could cost an additional $150,000 to $250,000. These costs, he added, come before any funds are spent on acquiring infrastructure or operational expenses. "It's a 'taking of private property.' In this case, it's the city trying to take ownership of the electric system within the city limits of Decorah, and of course, if they were to successfully create a municipal electric utility, they'd be responsible for all operations. [They would] procure power supply, set rates, [and all of those] things... that we do in Decorah. It'd just be the city to do that," Bauer shared. "It's a complex undertaking with significant financial commitments." Be the reason your community stays informed—give to local journalism now! Financial and Governance Considerations One of the central questions for Decorah voters is whether creating an MEU would result in lower utility rates. A 2018 feasibility study conducted by Decorah Power, a local advocacy group, suggested potential savings for residents. However, Bauer argued that previous municipalization efforts in other Iowa communities found the cost of operating a municipal utility exceeded that of staying with an incumbent provider. Bauer spoke to public concerns about how the city would finance the initiative and that Decorah "would likely" need to issue revenue bonds or other forms of debt to fund the purchase and startup costs of the utility. He stressed that revenue bonds—which do not require voter approval—could allow the city to borrow without limits beyond what lenders are willing to provide. "There would not have to be a second vote," Bauer expanded. "If you vote 'yes' on March 4, you've given the [city] council everything they need to go ahead and file a petition with The Utilities Commission and borrow as much money as they need to buy the system…There could be a second vote if the city would choose to use general obligation bonds to finance a portion of it, but there doesn't have to be. So, one vote gives the city everything they need to move ahead." An attendee raised a question about the cost of electricity in Winneshiek County compared to other counties in Iowa, specifically asking Bauer if Winneshiek County's rates were among the highest in the state. "I see a comment regularly that we pay the highest rate in the state," the attendee probed. "Is there validity to that statement or not? And if so, could you list some of the reasons why?" Bauer acknowledged that Decorah's residential rates are on the higher end. "If we look at residential rates, we're on the high side," Bauer said. "I don't know exactly where we are, but we're on the upper end. If we look at industrial rates, we tend to be on the lower end." He emphasized that rates can vary significantly depending on how they are structured. Bauer also noted that rate comparisons across communities can be misleading, because they often fail to account for factors such as geography, infrastructure and the specific energy mix of each utility. He also pointed out that franchise fees enacted by local governments, like Decorah's 4% fee, directly impact customers' bills. This, he shared, could explain some differences between rates in Decorah and other areas. Bauer went on to acknowledge the frustration these figures cause but reiterated that they reflect complex cost structures. "I'm not trying to dodge the question," Bauer said, adding, "It's just not a simple one to answer." Wagner interjected, noting that "if you go to AlliantEnergy.com, and find the additional resources tab, there is a document titled 'Understanding Alliant Energy's Rates' that can spell some of that out." Another potential issue is governance. While municipal utilities provide local control, they are not regulated by the IUC in the same way as investor-owned utilities like Alliant. Rate-setting decisions would fall to the city council, raising questions about how future rate changes might affect residents and businesses. "City councils can set rates at any meeting after providing public notice," Bauer said. Renewable Energy and Net Metering Sustainability has been a key focus of the MEU effort, with proponents envisioning greater opportunities to expand renewable energy and local generation. Decorah currently has one of the highest rates of solar energy adoption in the state, with approximately 8-10% of local energy use coming from solar, compared to the statewide average of 2%. However, questions remain about how an MEU would handle policies like net metering, which allows solar customers to sell excess power back to the grid. According to research presented at the meeting, only five of Iowa's 136 municipal utilities offer net metering, raising concerns among some solar advocates about the future of this program in Decorah. Bauer noted that proponents of the MEU have not yet committed to whether net metering would remain in place. Reliability and Emergency Response Reliability and service response times have also been central to the debate. Decorah's current system is served by Alliant Energy, which operates a network of employees, inventory, and contractors to respond to outages and emergencies. Bauer emphasized Alliant's ability to mobilize quickly during major events, citing the 2020 derecho as an example. The event saw thousands of line workers deployed across Iowa. Some attendees questioned how a newly formed MEU would address emergencies. While MiEnergy, a cooperative utility based in northeast Iowa, has been discussed as a potential operations partner, opponents noted that MiEnergy's resources may be limited compared to a larger utility like Alliant. The Road Ahead The MEU debate has revealed significant divisions within the Decorah community. Many residents and businesses support the idea of local control and renewable energy but remain concerned about financial risk and the complexity of the transition. Decorah's rocky terrain, which increases the cost of burying power lines and maintaining infrastructure, adds another layer of uncertainty. As the March 4 vote approaches, both sides are working to educate the public. The city council recently approved new educational materials to address questions from residents, while Alliant will continue to hold informational meetings such as the one held on Wednesday evening. Don't miss out on important updates! 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