 |
 |
Claim: Even though MidAmerican recently raised its contract price to the Carlisle municipal utility by 47 percent, the city still provides electricity to residents at rates 11.9 percent lower than MidAmerican and to businesses at rates 4.3 percent lower than MidAmerican.
Response: It's worth noting that Carlisle explored several alternatives for providers and found that MidAmerican offered the best deal. Carlisle proves our points that because of market factors today, government utilities buying electricity from outside providers will face significantly higher contract prices going forward than the historical price data that the Iowa Association of Municipal Utilities is citing.
We contend that a startup government utility - facing many new costs that Carlisle does not - would end up with higher rates than MidAmerican's, while exposing its customers to a higher level of risk and lower reliability. As a long-established government-owned utility, Carlisle is free of the heavy, long-term debt that a new government takeover of the electrical system would require. Also, it has no requirement to replace the property taxes that MidAmerican pays. It has no need to recruit and train a workforce, establish billing, meter reading, customer call service, a control center or any of the other startup costs of a new government utility. If it needs to call in outside help in an emergency, Carlisle will have to pay extra for that. Even so, it can sell electricity only slightly below MidAmerican's rates, and under the rate plan it recently announced it will charge more. |
