Luther College Chips

Luther gives 15K grant to nonprofit for electricity facility study

Natalie Nelson, Staff Writer

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As the biggest user of energy in Decorah, Luther recently contributed a $15 thousand grant to the local nonprofit Decorah Power. This grant will go toward a feasibility study regarding the possibility of a municipal electricity facility. 

By contributing this grant and forming a partnership with Decorah Power, Luther is making an investment toward the institution’s carbon neutrality goal.

“We have a carbon neutrality goal we stated [to reach] at 2030,” Luther’s Vice President for Finance and Administration Eric Runestad said. “We will get to 70 percent by 2020. We’re at just about 50 percent right now, and so we’ve got some work to do. As we think about how we might accomplish those goals, learning more about municipalization could be an option.”

Runestad also said that changes to the cost of electricity is a motivation for Luther to explore other options.

“Just for round numbers, the college’s electricity bill is around one million dollars a year and rates are going up next year about 13 percent,” Runestad said. “That’s a significant increase for us.”

Decorah is not the first community in Iowa to explore the idea of a municipal utility. Over one hundred other communities in Iowa have transitioned to municipal electricity facilities. Director at Winneshiek Energy District and a member of the Board for Decorah Power Andy Johnson stated that there could be many benefits to follow in their footsteps. This includes keeping investments and decision-making processes local as well as supporting clean energy. Decorah Power was formed earlier this year for the purpose of running this feasibility study.

“It’s not a matter of left vs. right,” Johnson said. “There are really fundamental things that are good for the community and for all of us. Those things include clean environments. We can transition to owning our energy systems, and this can be tremendously important.”

Johnson continued to say that the biggest risk involved cost. If the feasibility study is successful, Decorah Power would need to buy out Alliance, the current investor-owned utility. The cost would be significant. The exact amount is unknown, but it is part of what the study will investigate.

“Decorah Power has made it clear that its first goal is to learn,” Johnson said. “There are a lot of questions still to answer.”

The grant was written for Decorah Power by community member Kristine Jepsen, who explained the implications of the transition to a municipal electric.

“The project is huge,” Jepsen said. “The proposed transition to a municipal electric would involve a lot of people and a lot of dedicated hours, and I think it’s smart to have an organization that is positioning itself to make it happen. It’s going to take that organizing effort to help the city transition.”

If the feasibility study proves that a municipal utility is possible, the city would be in charge of putting it to a vote and the Iowa Utilities Board would have to approve the transition. Jepsen said the transition would be long and involved, but that she has faith in the ability of Decorah Power. This transition will also involve Luther.

“The transition to municipal electric would mean that you need big customers, like Luther, to be on board and to be fully supportive of what they need to do to make that transition, because it’s not easy,” Jepsen said. “It takes a lot of time and is expensive to buy out existing infrastructure and to potentially transition it to what I think a lot of the founding members of Decorah Power envision: more sustainable energy.”

Runestad conceded that this was the first step of what would be a long project for Luther.

“I would call it kind of a long uphill climb,” Runestad said. “But sometimes long uphill climbs are worth doing and we feel like this is one that we’d like to see through.”

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