Traer lands natural gas utility

Nearly 15 years in the making, the city of Traer this week completed the purchase and has taken possession of the natural gas utility from Alliant Energy.

As most residents will remember, in the mid 2000s electric utility rates in the state were unstable and prone to spiking. At the time, the Traer Municipal Utility (TMU) board sought a way to combat the volatility in the utility wholesale market and commissioned a feasibility study that would investigate ways TMU could better control their prices.

Results from the study done in 2006 suggested the city of Traer pursue the purchase of the natural gas utility from Alliant Energy.

An election was held in September of 2007. The vote passed and TMU was cleared to move ahead with the gas utility purchase project.

Shortly after the election TMU announced they would need to raise rates as the wholesale prices in the electric utility had spiked.

A second election was called and held in March of 2009. The second election turned out in favor of Alliant Energy maintaining control of the gas utility.

Alliant Energy and the city were soon embroiled in a legal battle following the 2009 election to try and resolve the matter. The temporary injunction brought against the city by Alliant Energy was eventually dropped by the court in late 2016 and a third election was called in November 2017.

TMU’s position in the 2017 election passed by a margin of seven votes, 269 in favor and 262 opposed. A recount was held shortly after the election but no change in the vote total was found.

For the next two years TMU and Alliant Energy were in negotiations to determine fair market value pricing for the system.

After four sessions and many months of negotiations the two sides settled on a purchase price in December of last year.

Local Control

Now finally the day has come for TMU to take possession of the natural gas system. On September 15 TMU began operating the natural gas utility for the city of Traer.

“The fact that we have the natural gas utility means that we are now supplying all of the utilities to the citizens of Traer,” TMU General Manager Pat Stief said. “It gives us a broader base to spread our fixed costs and that’s where the vision of being able to either maintain or lower rates in the future comes from.”

As the transition occurs the only thing natural gas customers in Traer will need to do differently is to contact the TMU office for any natural gas related questions or concerns rather than contacting Alliant Energy. Natural gas customers in Traer will also expect to see their gas bill arrive as a line item within their TMU bill instead of from Alliant Energy.

To begin, gas rates will be adopted from what Alliant Energy was charging, although Stief hopes to have the opportunity to lower rates once enough time elapses where they can accurately forecast utility revenues and expenses.

The after hours phone line will be available in the same manner as electric, water, and sewer customers are used to.

The metering system that was in use by Alliant Energy was purchased by TMU, eliminating the need to replace or change gas meters. Gas metering will continue to be conducted remotely using radio read capabilities. TMU hopes to slowly transition the city’s electric and water metering systems to radio read in the future as well.

TMU currently employs 11 individuals including one person brought on earlier this summer specifically for the gas utility service. Additionally, three TMU employees have been attending gas utility training through the Iowa Association of Municipal Utilities in preparation for the service takeover.

Looking back over the past 14 years, Stief was encouraged to see the project moving forward and expressed optimism about the potential impact of local control across city utilities.

“Operating our utilities in this way gives us local control over not only the utility rates but also how the utilities are run,” Stief said. “We have the option to hire local people to work locally. The money that is paid to those utilities stays in town and is reinvested here. It’s a win-win situation.”

For questions or concerns about public utilities services including water, electric, wastewater, internet, and natural gas utility customers in Traer are encouraged to call 319-478-8760. TMU can be reached after hours for emergency service by calling 319-478-2525.