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Iowa City could join that list of cities that operate publicly owned electric utilities, if voters approve a ballot measure to pursue municipal energy this fall.

On Nov. 8, Iowa City voters will answer a two-part ballot question asking whether the city should establish a municipal utility and whether a five-member board of trustees will oversee the municipal utility.

If voters decide to sever ties with MidAmerican Energy Co., the city could join the more than 2,000 community-owned electric utilities that serve more than 43 million Americans, according to the American Public Power Association.

While operating in some of the nation's largest cities, publicly owned systems also serve communities as small as 3,000 or fewer people.

In the past decade, 16 communities have taken over investor-owned utilities, said Ursula Schryver, spokeswoman for American Public Power Association, based in Washington, D.C.

With 136 public power systems, Iowa has more than any other state. Municipal utilities were originally driven because it wasn't profitable for privately owned utilities to serve smaller communities, Schryver said. The last public power utility was formed in 1976 in Anthon.

While 20 Iowa communities have recently expressed interest in public power, pulling the plug on an investor-owned utility is no small task. The public power question initiated by local grassroots group Citizens for Public Power has fueled an early public relations campaign by MidAmerican.

"The investor owned utility puts out a lot of publicity against public utilities and it makes it harder in the smaller communities," Schryver said.

Florida city's experience

In Winter Park, Fla., officials recently fought four legal battles against Progress Energy Florida before gaining municipal energy operations June 1.

"We had some really bad reliability problems," said Randy Knight, Winter Park assistant city manager. "It wasn't so much the rates. The key issue was reliability, the frequency of outages and poor customer service."Winter Park, a suburb of Orlando, has about 25,000 residents. Voters approved the issuance of nearly $50 million in bonds so the city could buy the distribution system from the investor-owned utility, Knight said. The city purchases power on the open market because it doesn't have its own power plant.

Ironically, Winter Park signed a contract with Progress Energy to supply bulk power at fixed rates to the city for the next five years, Knight said. ENCO Utility Service, a firm that also operates a utility in California and Arizona, has a contract to operate and maintain the Winter Park system.

"The process took us about 4½ years from when the franchise expired to flipping the switch," Knight said. "Progress Energy fought us all the way."

While Winter Park had its share of lawsuits, it didn't have the obstacle Iowa City might face if it approves the referendum. The state utility in Florida isn't required to approve the formation of municipal utilities; it only oversees the rate structure.

As established by state law, the Iowa Utilities Board is charged with reviewing and investigating petitions for municipal energies.

According to Bob Hillesland, Iowa Utilities Board information specialist, the state board examines public interest factors, including the city's ability to:* provide*adequate energy.

• not duplicate facilities.

• promote an efficient and economical use of energy.

Iowa's most famous municipalization effort -- the only one to petition to the Iowa Utility Board-- involved the northwest Iowa town of Sheldon in 1990.

Residents voted in 1987 to establish a municipal electric system but were blocked when the Iowa Utilities Board rejected the petition.

"The board issued a $13.1 million price tag for the facilities in Sheldon at that time," Hillesland said. "In that order (to deny the petition) the board said Sheldon would not promote economical and efficient electrical service to the public."

The board stated concerns about the ability to serve the public because of the costs associated with municipalization, he said. The potential of less efficient service and duplication of a facility was also a concern, he said.

American Public Power Association records show Sheldon's preliminary feasibility study indicated a savings of about $29.2 million over a 20-year period. When the city began going forward with municipalization, Iowa Public Service Co., the city's utility company which later became MidAmerican, reduced its rates by 17 percent over two years, Schryver said. The large decrease in rates lowered the possible savings available to Sheldon."At the time, the industry was being consolidated through mergers and acquisitions and the Iowa Utility Board was hostile to the formation of new municipal utilities," Schryver said. "This situation has changed dramatically. Savings promised through mergers and deregulation have not materialized."

Hillesland declined comment.

While MidAmerican claims the city of Sheldon spent almost $500,000 in an unsuccessful effort to form a municipal utility, city officials said that number couldn't be verified.

"We've tried to go back and track that number and we can't verify that far back," said City Manager Scott Winja. "Fees were paid from various areas, but we didn't find figures that high."

Winja said the consultants' and lawyers' fees to study the issue were reviewed as recently as last year when city voters defeated a measure to obtain municipal gas.

Ray Youngers, Sheldon mayor at the time, said expenses have been blown out of proportion.

"What MidAmerican is saying is all wrong," Youngers said. "Our costs were closer to $100,000 than $500,000."

Despite Sheldon's futile efforts, 18 cities statewide, including Iowa City, participated in a joint feasibility study in 2003. Seven cities have passed referendums and plan to present petitions to the Iowa Utilities Board.

Bob Haug, executive director of the Iowa Association of Municipal Utilities, declined to answer any questions about the current drive for municipalization in Iowa, including Iowa City.The state association made a deal with MidAmerican Energy in April to no longer assist cities working toward municipally owned energy. The deal was made so MidAmerican would back down from its support of a House study bill that would have forced existing municipal utilities to pay property taxes, Haug said.