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Claim: A city-run utility will save residents money. In fact, the rates of municipal utilities are lower than Iowa's investor-owned utilities.
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Claim: A city utility will take the pressure off our cash-strapped local budget. On average, city utilities in Iowa transfer 6 percent of operating revenues to other city funds, reducing property taxes or paying for swimming pools, community centers and other projects.
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Claim: Service will be better and more responsive when we have local control.
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Claim: The city will have no problem finding experienced workers because it can just hire the employees of the incumbent private utility.
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Claim: After a storm, the city will be able to get mutual aid from other cities with their own utilities.
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Claim: After mergers and consolidation, private utilities have closed many small-town service centers. To get good service, cities need local offices and utility employees living in town.
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Claim: MidAmerican is pushing legislation that would prevent the formation of new municipal utilities.
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Claim: Investor-owned utilities are fighting the establishment of more city utilities because of all the profits they are taking out of our community and sending out of state.
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Claim: Long-term electricity contracts are available that will allow a new city utility to lock in low prices. As an example, Indianola has a long-term contract with MidAmerican and residential rates there are lower than the private utility's.
Response: The long-term contracts that some government utilities have for power supply have been expiring and more will expire in the next few years. New contracts will reflect today's market prices and will be for shorter duration because of the market volatility today. Many municipal utilities are now raising their rates as a result of these new market conditions. If long-term contracts are available with attractive pricing, they come with higher risk, such as an interruptible clause. This means the supplier can shut off power during periods of peak demand. Those contracts are feasible only for cities that own generation facilities. That's the situation with Indianola, which has 55 megawatts of standby generation - enough for more than 50,000 homes. Indianola's power contract with MidAmerican Energy expires in 2004 and that city could be facing the same competitive wholesale market that has caused other utilities to increase their rates. |
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Claim: Municipal utilities in California, including those in such cities as Anaheim, Los Angeles, Pasadena and Sacramento, escaped most of the rate increases and service outages that hit customers of the state's private utilities in 2000 and 2001.
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Claim: A city utility would be more able to provide renewable energy.
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Claim: A municipal utility provides local control over rates, policies and generation resources.
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Claim: Public power would encourage economic development by keeping money in town.
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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.
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