Elkader Council approves new Alliant franchise agreement with a 4-1 vote

By Willis Patenaude, Times-Register

The Elkader Council last week passed an ordinance renewing the franchise agreement with Alliant Energy by a 4-1 vote. Members Daryl Koehn, Peggy Lane, Bob Hendrickson and Randy Henning voted for the ordinance, despite opposition from community members and council member Tony Hauber, who made one last plea for the council to seek a better deal before voting against it. 

The deal Hauber cited is the one West Union has with Alliant, which is a 15-year franchise agreement with outs every five years. 

“It is the model of the deal I set out to originally get. I’ve read many electric franchise ordinance’s in my research, and this one is the most favorable to the citizens, and they are just one county over. I never got an answer from an Alliant rep as to why they are entitled to this franchise agreement and we are not. We deserve a deal like West Union has,” Hauber said. “The current writing of the ordinance we do not even have an out for 15 years, and the term of the contract is 25 years, meaning we will be celebrating Elkader’s 200th anniversary before this contract expires.” 

In an email exchange, Hauber also noted the number of citizens who showed up at meetings to voice their opposition to the current deal, including the eight people who attended the July 26 meeting but were unable to talk about the issue because the council only had three members in attendance that night. At the Aug. 9 meeting, at least three community members sought a better deal. 

“Not a single citizen I’ve talked to except for the other city council members have been in support of this deal. Every single person who has come into office hours, every single person who has approached me on the street, every single person who has messaged me or emailed me, has agreed that 15 years is too long of a term for a franchise without any opportunity for renegotiation,” Hauber said. “When questions are still being asked, and routes that citizens want to undertake still being pursued, we need to slow down and address them. We should not rush into a deal just so the city can make a quick buck at the expense of the county and other cities in our county.” 

Lane and Hendrickson justified their reasoning in separate interviews. 

Lane said, “I believe rewriting the franchise agreement provides for reliable power for our community while giving us the option to opt out if something better comes along. The council pursued changing the terms of the franchise agreement to take full advantage of the money being paid by our citizens and having it come back to our community instead of having it spread throughout the county.”

Hendrickson stated the city wanted to sign the new agreement with the 15-year out option so it could move forward with collecting the franchise fee, at no cost to residents. 

“My understanding is we swap out the LOST fee for a franchise fee, but with the franchise fee, more of those funds stay in our local community,” he said.

But Hendrickson had to amend that statement, since the franchise fee comes at a cost to the residents, as they are the ones paying it. 

He added, “I should have said no ‘additional’ cost…they are funds that can stay in our local community and I believe they should.” 

However, as previously reported, the council can raise that fee from 1 percent to 5 percent, which would be an additional cost to the residents. 

On this point, Hendrickson stated, “I am in favor of a 1 percent franchise fee, not a 5 percent.”  

When it comes to the future of energy in Elkader, Hendrickson stated, “I hope the city pursues other forms of energy opportunities starting now, so there are actual viable options at the 15-year opt out opportunity. But this isn’t only a city opportunity; individuals can pursue options as well.” 

Lane also addressed the opt-out date, the future of energy and why the franchise fee is important.

“We have a window to get out of this agreement. I have heard no plan for anything other than what we have currently, but if an effort is made to that end, I believe it will take several years to be successful. In the meantime, we can have more of our money coming back into the community,” she said.

Hauber however, continues to believe the city could have—and should have—gotten better from the deal. 

“This is about options, and contract health. There is a reason they want this agreement and there is a reason we want this agreement, and every five years those reasons need to still align. That’s healthy for us to have the option to revisit that,” Hauber said. “Take this franchise fee for example. We want to add franchise fee language; Alliant will not let us amend our contract to do so, even though they have amended other city franchise agreements to go from no franchise fee to a franchise fee of 1 percent. If we had an out, we could have used that as leverage to get a franchise fee amendment without signing another 25-year contract with very little optionality. We are currently five years out from the end of the previous agreement, and I think the city would have fared better if we had options when we asked for a franchise fee amendment.”

It should be noted that no residents attended the Aug. 23 meeting to either oppose or support the ordinance.