Topic: Alliant sheds Minnesota
started by: Expatriate
Posted by Expatriate on Sep. 13 2013,8:52 am
Alliant Energy Corp. ( LNT ) inked agreements to shed its Minnesota electric and natural gas distribution operations for a total consideration of $128.0 million < http://www.nasdaq.com/article...m272580 >
What’s the real story here, has that White Elephant (Bent Tree} dragged Alliant under?
Posted by Alfy Packer on Sep. 13 2013,10:04 am
In the last rate case that went before the PUC it became apparent the Alliant had made several bad deals, that had gone against the utility, which they wanted the public to pay for. Unfortunately the PUC didn't agree entirely with Alliant and after first agreeing to interim rates that Alliant had requested, rolled those rates back substantially.If you read the press release, one will see that although the distribution business will be sold to a group of co-ops, Alliant will still wholesale electricity to the group distributing electricity to our homes, schools, and businesses. I think this mean that being that Freeborn Mower is a co-op, and Alliant will become a wholesaler the PUC will no longer have a say in the rates we pay. I think as electric consumers we all should be worried!
Posted by Expatriate on Sep. 13 2013,10:46 am
Alliant has given Southern Minnesota Energy Cooperative (SMEC) a ten year contract for firm power. load undisclosed.SMEC is an REA cooperative without any meaningful generation capability although they hold rights on Government Subsidized
power they purchase power through Heartland Power.
Every time the temperature hits 85 degrees the REA is flooding the radio with energy alerts, this tells me they’ve surpassed their purchase
agreement and are forced to buy on the open market, Midwest ISO (MISO) the grid saw thousand dollar Megawatts
in August!
Heartland Power Resources
QUOTE
In order to meet the growing needs of our customers, Heartland maintains a diverse power supply portfolio. Our baseload resources include coal-fired generation from Whelan Energy Center Unit 2 near Hastings, Nebraska, and Laramie River Station near Wheatland, Wyoming. Renewable energy generated at Wessington Springs Wind Energy Center near Wessington Springs, South Dakota, accounts for 16% of Heartland's power supply, surpassing South Dakota's voluntary renewable energy standard of 10% by 2014. Other resources include nuclear power generated at Cooper Nuclear Station near Brownville, Nebraska, and peaking sources located in our customer communities.
Our power is delivered over the Integrated System (IS), a high-voltage transmission system that covers a seven-state area and consists of over 9,300 miles of line. Heartland jointly owns the IS with Western Area Power Administration and Basin Electric Power Cooperative.
Our power is delivered over the Integrated System (IS), a high-voltage transmission system that covers a seven-state area and consists of over 9,300 miles of line. Heartland jointly owns the IS with Western Area Power Administration and Basin Electric Power Cooperative.
Posted by Expatriate on Sep. 13 2013,10:12 pm
I don’t think the REA will Enron Albert Lea but I do see it as missed opportunity for Albert Lea to take charge of it’s own electrical and gas utilities.
Posted by nzeroesc on Sep. 14 2013,10:55 am
So you are suggesting a format similar to Austin, or any other city owned utility, where the "profits" of a not-for-profit entity are transferred directly to the general fund of the controlling city, specifically Albert Lea in this case? 
Are you nuts? Give them one more avenue to milk us dry. Or in the current proposed situation, your new utility provider would be a not-for-profit entity where the profits are returned to you the member owner, lowering your electric costs in the most direct way possible. And also it is you who has a voice and a say in the direction and operation of the cooperative.
Last year Austin retained $1.6 million dollars "profit" to their general fund from utility operation. If you take that and divide it out by the census numbers of households, which is artificially high due to multi-unit housing, using the number of 10398 occupied households in the city of Austin, that gives you ~$154 of individual household profits to the utility. Compare that with property tax numbers for Mower and Freeborn County. Median real estate taxes paid over a 5 year average from 2006-2010 for Freeborn County were $1,127 +/- 36, and Mower was $948 +/- 28. Add the $154 dollars of property taxes back to Austins numbers and you end up well within the margin of error for the differences between the two. So are Austins property taxes really that much lower than ours or are the numbers just shifted somewhere else?
I personally look forward to this and hope it is approved. I want to be in control of my utility usage and have the transparency and knowledge that my usage impacts my returns more directly, and I am not paying for our cities repeated bungled decisions.
*Sources:
< Property Tax Lookup - taxfoundation.org > - The Tax Foundation is a non-partisan tax research group based in Washington, D.C.
< US Census 2007-2011 American Community Survey 5-Year Estimates >
Posted by Expatriate on Sep. 14 2013,12:26 pm
I would rather see decisions about Albert Lea’s future power needs made by a public utility under the city’s jurisdiction and not subject to 12 member REA association’s decision that holds no allegiance to Albert Lea.Albert Lea is dead in the water, once smaller communities who have control over their Utilities have left Albert Lea in the dust Owatonna, Faribault, New Ulm to name a few!
Posted by nzeroesc on Sep. 14 2013,1:23 pm
And again I ask that are you really considering who you are placing that trust in by saying you want the city to make those decisions?While I think you are right to be distrusting of any "new" company or market approach, I think you may be mis-coloring the facts a bit. While the Tribune and other articles about the sale painted the FMCS as being in a group of other southern MN cooperatives, my understanding is that was for no other purpose than to close the sale of Alliant to each separate cooperative service area. You are right that they don't have an interest in Albert Lea alone, but primarily Freeborn and Mower counties, and with the completed sale, Albert Lea alone will make up a large percentage of their overall customer interests.
Posted by Expatriate on Sep. 15 2013,11:27 am
Electricity prices can be volatile, these co-ops have band together for monetary reason, they will approach Heartland with their new megawatt load and try to negotiate a long term contract.Purchasing Alliant Energy and forming the electricity-buying partnership will give the co-ops the ability to cut cost and spread risk.
Here’s Albert lea’s problem, let’s say Dorman lucks out and hooks up with a heavy industry looking to build in Minnesota requiring a 4 or 5 MWH load, the City can’t say sure thing no problem to the prospective industry they have to call Freeborn-Mower, well they have call a meeting of the 12 co-ops, IF they agree they have to call a meeting with Heartland or Alliant to renegotiate their long-term contract, maybe this contract isn’t as favorable because of increased electrical price do you think these co-ops some a hundred miles away will vote for or against Albert Lea’s interests. This whole process could take months to give the prospective industry an answer.
At the same time this prospective industry is looking at Austin, Owatonna, Rochester, Faribault that all give the prospective at the initial meeting five megawatts an hour no problem.
If the REA could beat the price of the other Utilities that would be a plus, but the REA is a retailer not a wholesaler, they don’t own any real generation just a little peaking (spendy power)!
Time will tell I hope it proves me wrong!
The 12 co-ops include Brown County REA, BENCO Electric Cooperative, Federated Rural Electric, Freeborn-Mower Cooperative Services, Minnesota Valley Electric Cooperative, Nobles Cooperative Electric, People’s Energy Cooperative, Redwood Electric Cooperative, Sioux Valley Energy, South Central Electric Association, Steele-Waseca Cooperative Electric, and Tri-County Electric Cooperative.
Posted by nzeroesc on Sep. 15 2013,8:47 pm
Except here is the rub in your theory. FMCS purchases the bulk of thier power from Dairyland and will probably continue to do so as far as the majority of the customer base is concerned. Dairyland is wholly owned by the same member cooperatives that it serves. Seems kind of defeatest to screw your owners for short term gains. Yes I understand about double profiting but thats only going to get you so far. I am sure the agreement to purchase only concerns the absorbed service areas and will be amortized over the entire service area. Now to touch on your comparison between us and other cities in the region with public utilities that can give such a quick answer as you say.
Owatonna, per their own information... Owatonna Public Utilities is a member of the Southern Minnesota Municipal Power Agency (SMMPA) from which it purchases all of its electricity. Learn more about SMMPA on their website.
Austin, per the annual statement... The Austin Utilities purchases power from Southern Minnesota Municipal Power Agency (SMMPA) under a power sales contract, which extends to April 1, 2030. Under the terms of this contract, the Utilities is obligated to buy all the electrical power and energy needed to operate the electric utility.
Rochester... same thing, same supplier, same situation.
Faribault - I think you left the reservation at this point. Xcel serves the City of Faribault. Unless you are referring to the < Faribault Energy Park > there. Yeah that's owned by yet another municipal power cooperative. < MMPA >. They sell power to most cities north and west of the Metro, and South St Paul.
Pretty sure none of the cities you named are going to have a magic 5 minute answer for anyone in any meeting. And going back to the original proposal of Albert Lea having their own control instead of FMCS. I suppose we could build a power plant on the Blazing Star Landing and really light that puppy up. Otherwise we would be in the same boat every other city is in, still buying wholesale and selling retail to residents. Aside from the fact that we own a giant water treatment plant we built for a non-existent employer. Anyone remember how long the city dicked around Mrs. Gerrys and Select Foods on their expansions when it came to increased waste water discharge? Or care to recall the pleasant changes we all experienced when the city "adjusted" water and sewer rates to absorb the maintenance costs of the underused facility? See them going down again anytime soon?
Posted by Expatriate on Sep. 15 2013,11:46 pm
It’s a moot point, it’s the REA or candles, the city will rollover as usual.Whenever the REA runs short of power which is frequently they advertise using Heartlands name, Heartland is a bigger player than Dairyland, but they may well have contracts with both. Don’t believe what you read in bios they’re often incomplete.
Those are city owned utilities those plants were bought and paid for by the city, or should I say profits made by those plants, they may have united under SMMPA, they maybe contracted for a certain load but they can and do make decisions independently! I thought Faribault owned a piece of that gas turbine but I could be wrong.
Posted by nzeroesc on Sep. 16 2013,12:17 am
Still curious to know which plants you are talking about really that think so independently. The Austin plant is up for < Minnesota Pollution Control Agency renewal > this month. Last year they operated a grand total of 24 days. Proposed load is the same for the foreseeable future.
Owatonna < completely decommissioned their plant > and the proposed $25m replacement isn't in the cards. Even the 10kw solar grid on the repurposed old plant isn't being built.
Rochester voted last summer to < decommission the Silver Lake plant > in 2015 in favor of purchasing on the open market at better rates.
< Faribault Energy Park >
Posted by Expatriate on Sep. 16 2013,9:11 am
These communities are still in charge of their utilities, if it makes economical sense to Idle a plant, keep it for peaking or even decommission the plant all of these cities still own and operate as viable Utilities.The Minnesota Municipal Utilities Association (MMUA) lists 125 members in Minnesota, these are Minnesota cities that control
their own Electric Utility and some 31 also control Gas Utility. Membership in this association is not mandatory so there’s probably more.
I doubt many of these community owned Utilities generate much, they are buying on contract from a larger utility, privately owned or co-op owned Utilities.
Posted by Expatriate on Sep. 18 2013,9:35 am
"Abandon hope all ye who enter here."
Posted by Santorini on Sep. 22 2013,11:35 am
Haven't paid attention to this topic...news to me. When is this suppose to transpire? Expected raise in customer rates?
Posted by nzeroesc on Sep. 22 2013,12:47 pm
They expect state regulatory approval sometime next year and final close of sale shortly thereafter. I think rates will stay somewhat stable if not slightly decrease, based on the change in philosophy, but apparently if you ask Expat craps dun gonna get ugly. 
< Birdcage Liner Article >
< FMCS Press Release >
Posted by Expatriate on Sep. 22 2013,2:03 pm
What I see is a missed opportunity for Albert Lea to take charge of its own utilities and not put future economic development in the hands of a third party.You’ve got an experienced line crew and gas dept. available with Alliant’s employees, why not go for the gold buy wholesale rather than retail.
Posted by alcitizens on Sep. 23 2013,1:26 am
(Expatriate @ Sep. 22 2013,2:03 pm)
QUOTE
What I see is a missed opportunity for Albert Lea to take charge of its own utilities and not put future economic development in the hands of a third party.
You’ve got an experienced line crew and gas dept. available with Alliant’s employees, why not go for the gold buy wholesale rather than retail.
You’ve got an experienced line crew and gas dept. available with Alliant’s employees, why not go for the gold buy wholesale rather than retail.
I like what you're talking.. I just don't know what the rate difference would be compared to Freeborn-Mower Coop..
Posted by Expatriate on Sep. 23 2013,5:46 pm
In the past the REA may have had better rates but Dairyland lost a court battle with the EPA, they had to eat a million dollar fineand close some of their coal plants and agree to put hundreds of millions into their remaining aging coal plants.
I believe this what led Freeborn/Mower to associate with Heartland, the problem here their recourses are states away.
The REA seems to be big on interruptible, customers they can cut off at peak hours, heat pumps will see a rate reduction,
City hall, the Court House with their small generators could see an interruptible rate.
Alliant is probably in the same mess as Dairyland, rates will increase if the REA buys the power or the City takes over it’s own utilities.
I hope the leadership of the City has a contingency plan if things go south for the REA deal.
Posted by alcitizens on Oct. 28 2013,5:42 pm
The Alliant Energy customers will go from being considered customers to being considered members because they will join a cooperative, Freeborn-Mower Cooperative. That means, said Freeborn-Mower spokeswoman Mary Nelson, they are owners of the utility. There is a board of directors filled with members.< http://www.albertleatribune.com/2013...n-mower >
Posted by Expatriate on Oct. 29 2013,12:57 pm
Freeborn Mower is a retailer, a middleman, the city of Albert Lea should be the retailer, take command of their own utilities!When Albert lea takes command of their own lines and substations the next step should be to run their own Cable/internet service.
Albert Lea could purchase a used single cycle gas turbine set it on one of the substation sites and cut a better deal with Heartland Power than than the REA could ever get!
If the City Manager, Mayor, City Council don’t see this as an opportunity I see them as a liability to Albert Lea’s future.
There’s a viable opportunity to reduce tax and attract industry while turning city utilities into profitable entities.
Posted by alcitizens on Oct. 29 2013,4:05 pm
Vote tonight..
Posted by alcitizens on Oct. 29 2013,4:15 pm
(Expatriate @ Oct. 29 2013,12:57 pm)
QUOTE
Freeborn Mower is a retailer, a middleman, the city of Albert Lea should be the retailer, take command of their own utilities!
When Albert lea takes command of their own lines and substations the next step should be to run their own Cable/internet service.
Albert Lea could purchase a used single cycle gas turbine set it on one of the substation sites and cut a better deal with Heartland Power than than the REA could ever get!
If the City Manager, Mayor, City Council don’t see this as an opportunity I see them as a liability to Albert Lea’s future.
There’s a viable opportunity to reduce tax and attract industry while turning city utilities into profitable entities.
When Albert lea takes command of their own lines and substations the next step should be to run their own Cable/internet service.
Albert Lea could purchase a used single cycle gas turbine set it on one of the substation sites and cut a better deal with Heartland Power than than the REA could ever get!
If the City Manager, Mayor, City Council don’t see this as an opportunity I see them as a liability to Albert Lea’s future.
There’s a viable opportunity to reduce tax and attract industry while turning city utilities into profitable entities.
Don't you think their increased influence would allow for expansion? Turbines etc..
Posted by Expatriate on Oct. 29 2013,5:11 pm
The guy running Freeborn Mower is an accountant, what he's seeing is a profit margin at Albert lea's expense.If he knows a megawatt from a kilowatt or how make them is questionable, he's retailing for profit.
Posted by alcitizens on Nov. 02 2013,9:52 pm
(Expatriate @ Oct. 29 2013,5:11 pm)
QUOTE
The guy running Freeborn Mower is an accountant, what he's seeing is a profit margin at Albert lea's expense.
If he knows a megawatt from a kilowatt or how make them is questionable, he's retailing for profit.
If he knows a megawatt from a kilowatt or how make them is questionable, he's retailing for profit.
What makes a cooperative different?
Owned by the customers it serves
Operated by local management and employees
Is a not-for-profit organization
Members contribute to and control the capital of the organization
Returns profits above expenses to its members
Helps develop our communities through policies accepted by members
< http://www.fmcs.coop/index.php/about-us/your-cooperative >
Sounds pretty good to me..
Posted by Expatriate on Nov. 03 2013,1:44 pm
You can believe that printed propaganda if you want, but the REA is merely a retailer, one more layer of bureaucracy between Albert lea and it’s economic future.
Opportunities like this come once in a lifetime and the city administration sat on their hands.
We’ll spend ourselves into the poorhouse on revitalizing downtown buildings/infrastructure
schools courthouses city hall, library updates, dredging the lake but when the opportunity to
take control of the real economic driver (utilities) came along we dropped the ball.
Posted by alcitizens on Nov. 03 2013,2:02 pm
(Expatriate @ Nov. 03 2013,1:44 pm)
QUOTE
You can believe that printed propaganda if you want, but the REA is merely a retailer,
one more layer of bureaucracy between Albert lea and it’s economic future.
Opportunities like this come once in a lifetime and the city administration sat on their hands.
We’ll spend ourselves into the poorhouse on revitalizing downtown buildings/infrastructure
schools courthouses city hall, library updates, dredging the lake but when the opportunity to
take control of the real economic driver (utilities) we’ve dropped the ball.
one more layer of bureaucracy between Albert lea and it’s economic future.
Opportunities like this come once in a lifetime and the city administration sat on their hands.
We’ll spend ourselves into the poorhouse on revitalizing downtown buildings/infrastructure
schools courthouses city hall, library updates, dredging the lake but when the opportunity to
take control of the real economic driver (utilities) we’ve dropped the ball.
We will need people like you on the Board of Directors next year when the co-op takes over.. We get to vote for the watchdogs of our power company..
Posted by Expatriate on Nov. 04 2013,1:47 pm
As a Public Utility owned by the people of the City of Albert Lea a Public Utilities Commission made up of local residents of the city would have made decisions about Albert Lea’s future, not someone living in the next county who’s unwilling to put up venture capital for Albert Lea’s economic future.
Posted by alcitizens on Nov. 04 2013,8:19 pm
(Expatriate @ Nov. 04 2013,1:47 pm)
QUOTE
As a Public Utility owned by the people of the City of Albert Lea a Public Utilities Commission made up of local residents of the city would have made decisions about Albert Lea’s future, not someone living in the next county who’s unwilling to put up venture capital for Albert Lea’s economic future.
First thing I want brought up for a vote when you are elected to the Board of Directors is an ONLINE discussion over a week and a FINAL VOTE ONLINE with our account number..
We could have the discussion here at < www.albertlea.com > about issues concerning our utility company and place our vote on a scheduled date with < www.fmcs.coop >
Posted by Self-Banished on Nov. 05 2013,4:08 am
Posted by Expatriate on Nov. 05 2013,12:14 pm
(alcitizens @ Nov. 03 2013,2:02 pm)
QUOTE
We will need people like you on the Board of Directors next year when the co-op takes over.. We get to vote for the watchdogs of our power company..
AL you’re under the misconception that there’s some kind of local control by citizens, this is not a city owned public utility, it’s 12 different farmer owned coops united for profit, believe me they see this venture as a cash cow, one thing farmers are good at is milking!
You now have a 12 headed dragon (Rural Electrical Association) setting your rates and determining future local investment.
Another nail in the coffin of a dying city, rather then six pallbearers Albert lea has twelve.
BENCO Electric Cooperative
Brown County Rural Electrical Association
Federated Rural Electric
Freeborn-Mower Cooperative Services
Minnesota Valley Electric Cooperative
Nobles Cooperative Electric
People’s Energy Cooperative
Redwood Electric Cooperative
Sioux Valley Energy
South Central Electric Cooperative
Steele-Waseca Cooperative Electric
Tri-County Electric Cooperative
Posted by Self-Banished on Nov. 05 2013,12:39 pm
Heaven forbid they make a profit.
Posted by Expatriate on Nov. 05 2013,1:02 pm
Freeborn Mower Cooperative Services presents themselves as a nonprofit 501©(12)nonprofits are some of the most profitable businesses around they couldn't do better if they called themselves a church!