June 30–CLINTON — Fielding complaints is a regular part of Mark Schuling’s job.
It doesn’t encompass all of his responsibilities within the Iowa Consumer Advocate office, but it’s part of his duties when representing the other side in utility rate cases.
When Alliant Energy proposed a natural gas rate increase in May for Iowa customers, Schuling’s office went to work. His office, composed of attorneys, economists, accountants, engineers and finance experts, began the process right away, combing through documentation to see if the proposed 8.4 percent increase was justifiable.
The process, which is ultimately decided by the Iowa Utilities Board, is lengthy. From beginning to end, Schuling estimates the normal hearing process lasts six to eight months. With almost two months completed, Schuling and his office wrapped up attending all six public informational meetings this week, with the final meeting held in Ames on Tuesday.
“We don’t want to imply we’re against the utility,” said Schuling, who has overseen the Iowa Consumer Advocate office since 2011. “We’re just the other side of the case. Our office was created for that purpose. If our office didn’t participate, nobody would be representing the consumers.”
Part of the investigation into the rate increase validity actually is shaped by consumer complaints. In Clinton, during the first information meeting in May, dozens of people attended. While some local leaders spoke in favor of the recent improvements made by Alliant Energy, a handful of residents voiced displeasure with the rate hikes.
That’s not uncommon for those proceedings, and Alliant Energy spokesman Justin Foss understands that perception. He’s not only an Alliant Energy employee, he’s also a consumer.
“We hear from customers that they don’t appreciate the increase,” Foss said. “We get it. I’m a customer, too. Nobody likes an increase. What we feel, though, is that costs haven’t gone up in six years and the total bill has actually gone down. It’s not often any commodity does that.”
The price of natural gas is aiding the decrease in recent bills. In 2012, the typical bill for an Alliant Energy gas customer was $66. If the Iowa Utilities Board grants the full request, the typical bill for an Alliant Energy customer would be about $60 per month. The reason for the decrease is that Alliant Energy doesn’t actually produce the gas. Alliant buys the gas from pipeline companies and sends it to customers. That cost is reflected as 60 percent of a customer’s bill.
The other 40 percent, for which Alliant is seeking the rate hike, is to help cover distribution costs, featuring installation of pipes, employee costs and more. That cost has not been adjusted in the last six years.
“Each community that we see has different projects that we’ve done,” Foss said. “We’ve done a lot in the time since we last adjusted the natural gas rates.”
If the full increase is improved by the board, it would raise an additional $19 million annually for the company that serves approximately 220,000 Iowans, including several cities in Southeast Iowa.
Knoxville, Centerville, Pella and Eldora would be affected by the proposed natural gas hike, with Centerville also being on the receiving end of a recent electric hike, too. While Ottumwa and other smaller cities in Wapello County won’t have to deal with the natural gas hike, they are serviced by Alliant Energy for electric, meaning that Smart Meters are going to be installed in those communities.
Foss estimates the company has invested hundreds of millions of dollars into projects, including major projects in the Clinton area. Some of that work happened in 2016-17, with a $28 million project for a new supply line built to come into Clinton from the west. That line reduces the capacity demanded through the use of the Hoophole pipeline that runs under the Mississippi River and brings in natural gas from Illinois. That pipeline is aging and needs assessment, Alliant officials said.
A project also now underway is the $19 million expansion of the Hawkeye lateral pipeline near Clinton, in which 12-inch and 14-inch pipe is being replaced with 16-inch pipe to increase capacity.
Recouping some of the money spent on those investments is why the rate hike is being proposed.
Enhancements for natural gas and electric service require a balancing act, though, Foss said.
“It’s always a fine line,” Foss said. “The bigger the pipe you install, the more expensive it gets. You may say ‘why not just install the biggest pipe you could and hope in the future you use them enough?’ The problem with that is that you’re spending a whole lot of money that you may not recoup. We want to be mindful of that.”
It also works on the other side of the issue, too, Foss said.
“You could wait to the last minute and keep the capacity at zero extra,” Foss said. “It could be built perfectly to size, but if a new company comes to town and it would take two years to build, they may try and find a new place. It’s a balance between having enough capacity for growth but also not raising costs to customers that are unnecessary.”
Maintaining the infrastructure still doesn’t warrant the rate hikes, according to the seven complaints and objections filed with the Iowa Utilities Board, along with the objections raised at the public meetings.
For Jerome Pinkerton, he’s wondering if the rate hikes will ever stop.
“How many more rate increases are we going to have to endure before everything is satisfied?” asked Pinkerton during Clinton’s information meeting. “I understand the cost of doing business…This just seems a little bit ludicrous.”
Clinton residents aren’t immune to rate hikes by public utilities. The Iowa Utilities Board in February approved a 7.8 percent increase for Alliant Energy’s electric rates. That request was filed in April 2017, with an 11.6 percent ask. The rate hike translated to a $130 million increase for Alliant Energy.
Unlike the majority of Iowa residents with municipal-run water operations, Clinton has endured multiple water rate hikes in recent years by Iowa American Water, which last upped the rates by more than 10 percent in April 2017.
Making improvements is necessary in the changing landscape of the utilities marketplace, Iowa Environmental Council representative Kerri Johannsen said. However, the council, which focuses a majority of its efforts on renewable energy capabilities, would like to see companies make investments based on consumer input and better flexibility within the renewable energy market.
“We want to see the utility company be much more focused on delivering the services that their customers are asking for, instead of making investments that earn a return on that investment that they are making,” Johannsen said. “It’s not just about polls, wires and generation in the traditional sense anymore. It’s moving forward to a clean, responsive energy system.”
These most recent increases haven’t attracted the same kind of dissension as another portion of Alliant Energy’s request.
The comments and objections regarding the natural gas rate hike pale in comparison with Alliant’s desire to enact a tariff on equipment, specifically with Smart Meters.
At issue is the desire from some consumers to avoid having a Smart Meter installed near their home. However, according to Alliant’s request, if the customers want to keep that from happening, they will face a fee of $15 per month. A similar request was made regarding gas readings.
As of June 21, objections and comments relating to Smart Meter installation measure more than 50. And that doesn’t include the statements made at the public meetings.
“When we’ve, in the past, changed out a meter and put in something new, it’s standard utility equipment,” Foss said. “Smart Meters are the next standard. It’s pretty much the industry standard. We’ve used them in Wisconsin for our utility there for the last 10 years. There are tens of millions of Smart Meters installed across the United States.”
However, having Smart Meters located outside of homes doesn’t sit well with some Iowa residents, with a group called Fairfield Smart Meters leading a charge against the equipment.
Detractors claim Smart Meters show an increase in utility bills, cause RF radiation impacting health and are a violation of privacy rights.
Alliant Energy claims the new meters collect total electric or gas usage, voltage, meter temperature and momentary outages. The Smart Meters do not have access to customer identifying information, like name and address. The company also claimed that it is not capable, nor will it ever be capable, of determining what is using the energy (i.e. computer, AC, etc.).
RF is fixed at a 2-watt transmission, which signals back to Alliant every four hours for .15 seconds. When the meter isn’t sending updates, it stands in “listening mode,” which has no output wattage. A Smart Meter’s frequency is a low-energy RF similar to a cellphone or microwave. The Federal Communications Commission regulates the frequency levels; Alliant’s meters are “many times lower” than the standard, it stated in an FAQ sheet.
Of the more than 170,000 meters already installed in Iowa, less than 1 percent of customers have requested to opt out or had concerns, Alliant officials said.
Taking all that into account, along with the work being done in the Iowa Consumer Advocate office, will be Schuling’s focus for the months to come.
“We pay attention to all of the comments,” Schuling said. “Customers can file comments, either in writing, email or an electronic comment section on the (Iowa Utilities Board) webpage. All of those go to our office and board, and we take those into account additionally.”
Written comments can be filed by completing and submitting the electronic comment form, or sending by email to email@example.com, or through a letter by postal mail and addressed to the Iowa Utilities Board, Chief Operating Officer, Docket No. RPU-2018-0002, or TF-2018-0029 or TF-2018-0030, 1375 E. Court Avenue, Des Moines, IA 50319-0069.
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