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Municipalization is the takeover of an investor-owned utility's local distribution system, operations and customer service by local government. Cities explore this possibility primarily because of the expectation it will generate revenue for the city and lower rates for citizens. If a city forms a municipal utility, it would be required to pay a fair price for the investor-owned utility's system, and then it would assume responsibility for system operations, energy management and customer service.
Investor-owned utilities have franchise agreements with the cities they serve, which are formal agreements that authorize them to utilize the streets, alleys and public areas of the city for the infrastructure necessary to deliver utility services to citizens and businesses. The Iowa Utilities Board has final authority for approving the establishment of an electric municipal system. |
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