As the Iowa Legislature considers SSB 3093, a bill with a number of important impacts on energy efficiency programs and updates to utilities regulation, it’s easy to miss some of the changes that aren’t generating a lot of discussion. For example, the first section of the bill would really help small towns bring natural gas service to their communities.
As the governor highlighted in the state energy plan, many parts of the state lack access to natural gas service despite ample supplies and pipeline infrastructure. Rural areas that are underserved by natural gas service usually rely on liquid propane which, as a commodity, is subject to acute seasonal shortages and wild swings in price.
As the federal General Accounting Office noted in a 2003 report to Congress, such price spikes are generally caused by the inability of propane supplies to adjust to unusual demand increases, such as those caused by especially cold winters. In addition, the lack of local propane storage and the constrained capacity of the distribution system can create bottlenecks in moving propane to consumers in periods of high demand. It’s no wonder that frustrated communities are looking for ways to bring better service to town.
But when it doesn’t pencil out for big providers to provide service to small towns, sometimes the best way is to create a municipal gas utility and do it themselves. SSB 3093 would help city utilities partner on the financing needed to build middle mile projects from a community that has natural gas service to one that doesn’t. There’s nothing new about such financing, which cities have long used to build water and electric projects. It’s time to allow cities to use this for gas projects, too.
It’s not the biggest item in the bill, but it will make a difference in bringing economic development and stable heating prices to areas of the state that aren’t well-served today. - Tim Whipple, general counsel, Iowa Association of Municipal Utilities