City renews electric franchise with Alliant Energy

Newton is continuing its electric franchise agreement with Alliant Energy.

Upon the Newton City Council’s unanimous decision to approve the third reading of the ordinance, staff has granted Interstate Power and Light Company (operating in Newton as Alliant Energy), its successors and assigns a nonexclusive 25-year agreement.

This means Alliant Energy will “acquire, construct, erect, maintain and operate an electric system” and “furnish and sell electric energy to the city and its inhabitants” during that time period. However, there are limited rights of cancellation added in the contract at the 6-, 12- and 18-year anniversaries.

Alliant Energy is also required to complete restoration work to city standards. Prior to beginning any work, Alliant Energy must obtain no-cost right-of-way excavation permits from the city. Tree removals by the electric franchise must also be approved by the city. The City of Newton must comply with Alliant Energy processes to handle promotional banners or flags on poles.

With the electric franchise in place, Alliant Energy is expected to replace the old, overhead structures and wires located in alleyways throughout downtown Newton with new facilities within the next five years. The replacement of these facilities is expected to finish by Dec. 31, 2024.

Before the Newton City Council took action on the ordinance, Alliant Energy Key Account Manager Amanda Accola shared the results of the Community Annual Partnership Assessment, which she distributed amongst council members.

According to the assessment, Alliant Energy has invested $6,750 towards economic development efforts through program support of the Newton Development Corporation and Newton Chamber of Commerce. The company also granted $2,956 to IMPACT Homeless Prevention Program and MercyOne Newton Medical Center.

Alliant Energy has also issued about 341 rebates in Newton, equating to roughly $360,000. From Jan. 1, 2018, to Dec. 31, 2018, Alliant Energy has invested $746,840 of electrical infrastructure in Newton.

At past readings, some citizens requested the city change its electric franchise entirely, citing MidAmerican Energy as a possible replacement. Staff took those concerns to the Iowa Utilities Board, which reported to the city that it initiated exclusive services areas for electric utilities as far back as 1976.

“And to this day they regulate the industry,” Newton City Administrator Matt Muckler said during a July city council meeting. “Normally, the service areas do not change except by the request of the utilities.”

Theoretically, Muckler added, the city could make a request to the Iowa Utilities Board, but he doesn’t know if staff would be successful in such an attempt. City councilperson Mark Hallam asked Accola some of the questions citizens had about Alliant Energy and higher pricing, which was a major complaint.

Accola said, “Any time we have our rate increase, the Utilities Board has to approve it. We don’t get to just increase rates when we feel like we need to. They have to approve everything. And that’s typically not based on the cost of energy per se but more so the capital investments that we’ve made.

“This latest one was on the wind infrastructure investments — over a billion dollars of wind … Capital costs have gone up, causing the base rates to go up. Fuel costs should be going down because wind obviously doesn’t have any fuel. So they’re hoping that the reduction of coal and gas will go down.”

Hallam mentioned a citizen presented to the council a data comparison chart of sorts to juxtapose Alliant Energy rates and MidAmerican Energy rates. Accola said MidAmerican, which is owned by Berkshire Hathaway, has a different model than Alliant.

“So their appetite for tax credits is much higher than what ours would be,” she said. “That’s just a small portion. They’re also much more urban than we are. We have a much more rural base … We have longer distances we need to cover with our infrastructure than they would.”

Contact Christopher Braunschweig at 641-792-3121 ext. 6560 or cbraunschweig@newtondailynews.com