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What I learned at the October 4 public meeting

October 27, 2017
Jared Bauch - Traer, Iowa , Traer Star-Clipper

1. All gas utility services are strictly regulated by federal and state agencies. These regulations apply to Alliant, MidAmerican, as well as to a local municipal utility operated by Traer.

A. All gas employees must pass a written and practical test to be certified to work for a gas utility.

B. All gas utilities must keep the same log book recording anything that is done on the system. This book is checked by state inspectors annually to be sure it is kept up to date.

C. Any time a gas pipe is replaced the old pipe must be cross-sectioned and examined inside and out to see if there is any rust. Rust is prevented by an exterior coating and wrapping to protect against groundwater and the inside of the pipe is protected from rust by a small electric current. Alliant has done these things and all the pipes from Traer that have been cross-sectioned are free of rust. It is fair to conclude that gas pipes in Traer are in excellent condition and will not need replacement.

2. Gas is a commodity bought and sold on the open market. The man who has bought gas for 43 of the Iowa gas municipalities over the last 28 years told us that because of the superabundance of natural gas obtained from "fracking," the gas supply and prices are stable through the year 2040. He said this is all new since 2012. Prior to 2012 gas prices were constantly going up. He now is contracting gas supplies 6 years into the future. He acquires gas for Iowa municipalities from the same sources as Alliant Energy.

3. The gas transmission pipeline representative informed us that there is no issue about pipeline "space" and Traer will continue to get its gas from its supplier just as it does now.

4. Gas rates charged to homeowners are set by the community. Representatives of Alton (population 1,250) and Mapleton (population 1,200) spoke of their experience taking over their gas franchises. Each said their towns were glad they did it and wished they had done it sooner. Each said they used the same gas rates as set by MidAmerican and those rates had enough built-in profit that those towns could pay for the extra office and maintenance expense plus pay the principal and interest on the debt to buy out the franchise.

Each said they had to get to "yes" before they could find out the cost. One town said their appraisers said the value was $350,000. MidAmerican put the estimate at $900,000. The three judge panel listened to expert testimony and came back at a value of $390,000 which was a price that would cashflow for that community.

Each already had an electric utility so they already had the equipment, vehicles and manpower to share across town, electric and water - and expanded to include the gas work. This is the same position as Traer is in.

5. Traer Utility employees and representatives stated no capital spending would be needed to run a gas system as we already have the equipment for water and electrical work. We would send three employees to be certified in gas service and maintenance. We already have an automatic on-call system for electrical emergencies after hours where the call goes to the first person on call. If she is not available the call automatically goes to the second person. If he is not available then the call goes to the third person. This system has worked very well for our electrical issues. The same thing would apply to a gas utility.

Since Alliant has done a good job taking care of the gas pipes, we see no unexpected expenses in operating this system and would maintain the rates set by Alliant and the rebate programs for energy efficient appliances, etc.

Purchase of a gas system would come from the payments we each make for usage. None of the cost will come from real estate taxes. All profits from this operation would stay in Traer instead of going to Madison, Wisconsin to be distributed as dividends to Alliant shareholders.

Conclusion: Let us vote YES so we can learn the value of the gas system. Once we know that we can discuss financing with a bonding company to be sure it will work financially. If it will, it makes long term sense to make this investment in Traer's future.

Sincerely,

Jared Bauch

Traer, Iowa

 
 

 

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