Will rates be lower with a municipal utility?
There’s no guarantee rates will be lower with a municipal utility. In fact, because municipal utilities are not subject to Iowa Utilities Commission oversight, they can adjust rates with limited notification and oversight. In contrast, investor-owned utilities, like Alliant Energy, must go through a stringent approval process for rate changes.
A new preliminary feasibility study found that the initial costs to start up a municipal electric utility (MEU) in Decorah are estimated to be $85.6 million. The study also forecasts ongoing costs to operate the MEU would total $16.5 million per year, assuming a 2029 start date, escalating to $31.1 million per year by 2049.
The study was conducted by Concentric Energy Advisors and released on February 5, 2025.
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How are rates adjusted under Alliant Energy and how would they be adjusted under a municipal utility?
Alliant Energy invests hundreds of millions of dollars every year to continue improving reliability, protecting the grid, and expanding renewable energy. When those investments are made and adjustments to rates are necessary, a year-long transparent process gets underway. It starts with a filing with the Iowa Utilities Commission (IUC) and is followed by notifying customers, meeting with stakeholders and hosting public meetings. There’s public testimony and stringent review to determine fairness before the IUC issues an order stating the approved rates Alliant Energy can charge.
There’s no guarantee rates will be lower with a municipal utility. In fact, because municipal utilities are not subject to Iowa Utilities Commission oversight, they can adjust rates with limited notification and oversight. In contrast, investor-owned utilities, like Alliant Energy, must go through a stringent approval process for rate changes.
How often does Alliant Energy adjust their rates?
Over a 10-year period (2019-2029), Alliant Energy will have raised rates twice. According to the IUC’s ruling in 2024, we cannot raise rates again until the end of the decade, ensuring rate stability and predictability for all customers in Iowa.
How does Alliant Energy support businesses in the community and economic development across Decorah?
Nearly 60% of industrial customers prefer investor-owned utilities like Alliant Energy because we offer many advantages including the reliability and regulatory stability they require. Our rates are rigorously reviewed and approved, giving businesses predictable costs. Municipal utilities can raise rates with limited notice, which creates uncertainty for businesses. When it comes to relocating, the decision of where to locate elsewhere is based on a number of factors, including local regulations, zoning and the business climate—not solely based on utility rates. For example, in recent years, when Menards was looking to expand in Decorah, their reasons for not selecting the city were included in the following news stories:
- Your Menards questions answered (decorahnews.com)
- Decorah is officially out of the running for a proposed Menards store (decorahnews.com)
Who regulates Alliant Energy’s rates and operations? Who regulates the rates of a municipal utility?
Alliant Energy’s rates and operations are reviewed and approved by the Iowa Utilities Commission. This ensures transparency and accountability in everything we do. At this time, however, there is a limited review and oversight outlined for municipal utilities. In other words, when Alliant Energy determines it necessary to raise rates, we work through a year-long process, providing clear and accurate information.
What is the process to municipalize?
It’s a lengthy process. Some efforts even exceed a decade. The long length of the process can cause escalating acquisition and transaction costs. In addition, the actual costs of municipalization often exceed initial estimates, as acquisition costs for the system are refined throughout the municipalization process.
