Coe, St. Luke’s first victors in local scrap to land U.S. Commerce Department diaster-related funds

Coe College and St. Luke’s Hospital are the first victors in the local competition to secure disaster-related funds from the U.S. Department of Commerce’s Economic Development Administration (EDA).

Iowa’s senators, Tom Harkin and Chuck Grassley, have announced that the college and hospital will use a $4.65 million EDA grant to build a steam heating plant that the two local institutions will share.

This week’s announcement was little surprise.

Coe College and St. Luke’s Hospital were two of eight large users of cheap steam produced by Alliant Energy’s Sixth Street Generating Plant, which was destroyed in last June’s flood.

Last week, the City Council discussed how it would dispense $21 million in federal and state funds to help about 200 steam users covert (or help pay those who already have converted) from the Alliant system to their own steam systems. The council left out Coe College and St. Luke’s in their calculations on the expectation that EDA money was coming for them.

Harkin and Grassley this week confirmed that it is.

The council also left out another of the Sixth Street plant’s eight large steam users, Mercy Medical Center, and for the same reason that it left out Coe and St. Luke’s. Mercy, too, has applied for EDA money, and that now is apparently the next anticipated announcement from EDA.

Several other local projects are competing for the funds. The City Council has said it most would like the EDA to support a proposal to upgrade the U.S. Cellular Center and to add a convention center to it. The city’s Facilities Commission is seeking a $39-million EDA grant to help finance the $52-million project.

Patrick DePalma, chairman of the Facilities Commission, said he and other community representatives met recently with representatives of the EDA, and he said he came away optimistic that EDA is interested in the project.

On its priority list for EDA funding, the City Council placed a proposed recreation center/community center second behind the U.S. Cellular Center proposal.

The Cedar Rapids Area Chamber of Commerce also is seeking an EDA grant for a new Regional Commerce Center and the community also is seeking money for downtown rail study as a prelude to redirecting freight train switching maneuvers from the downtown.

Can City Council ‘steam team’ solve steam issue for industries near downtown, the hospitals, Coe College and the downtown? Is a city power plant in the offing?

At council member Monica Vernon’s urging, the City Council last week created a four-member “steam team” to try to see if City Hall might help salvage a low-cost steam utility for industries near the downtown, the downtown itself, the city’s two hospitals and Coe College.

The council has expressed worry about the future of steam system before, but has little action to show for it.

Vernon – fresh off a lobbying trip to Washington, D.C., with council colleagues Justin Shields and flood victim Jerry McGrane – said more action than talk would be in the offing.

But it was McGrane, known as a specialist in neighborhood and housing issues, not utility issues, who stepped out and provided a glimpse of what might be coming.

McGrane reported last week and repeated at the council meeting that federal officials told the Cedar Rapids contingent during their visit to D.C. that federal dollars might be available for a new city-owned municipal steam power operation, particularly one that might be on the cutting edge environmentally.

Let’s wait and see.

It was back in September that the council first commented publicly about steam when some members contemplated subsidizing steam rates. The council had learned then that Alliant Energy had told steam customers dependent on the utility’s flood-damaged Sixth Street Generating Station that it would provide steam from temporary boilers this winter for four to five times the previous cost.

Suffice to say the customers can’t endure such a price hike for long. Some building owners in the downtown already have abandoned Alliant’s steam system, installing their own boilers to provide heat.

In early January, Alliant announced that it had not reached an agreement with its eight large customers – which include Quaker, Cargill, the two hospitals and Coe College — to provide steam for next winter. Steam is used for heat, sterilization and industrial processing.

However, last week, Alliant announced to the City Council that it had met with the eight big customers again with a new offer that was now under consideration by the customers. The new offer would provide steam for the next three to five years at rates significantly lower than the current ones but still significantly higher than the rates that the customers had paid prior to the June flood.

At the same time last week, though, Coe College and St. Luke’s Hospital told the council that they both were considering Alliant’s new offer even as they were heading out to try to secure $4.65 million in federal money to build their own steam operation.

Coe and St. Luke’s both said they still were interested in a solution that would provide reasonably priced steam and that would keep the existing group of steam users together.

Alliant representatives said the value of the utility’s latest offer to the large customers is that it would keep them together and the steam infrastructure in place to buy some time for a longer-term solution to be found.

One idea that the City Council wants to investigate is the burning of municipal solid waste and sludge from its waste-water treatment plant to generate energy.

The council has given approval for a $1-million study to see if it makes sense to burn solid waste and sewage sludge to generate power.

As for the council’s steam team, its members are Vernon, McGrane, Shields and Pat Shey.

McGrane says federal funds might be available for city to get into the steam utility business

The city of Cedar Rapids already has city-owned utilities -– a water plant, a waste-water treatment facility and a sanitary sewer and storm sewer system. It also considers its garbage pickup and recycling operation as a utility.

Council member Jerry McGrane on Tuesday suggested he might be pushing his council colleagues in the direction of creating another utility, one that would create steam for heat and other uses in and near the downtown.

McGrane made note of his lobbying trip to Washington, D.C., last week with council colleagues Justin Shields and Monica Vernon to talk to Iowa’s Congressional delegation and some federal agencies about federal funds to help Cedar Rapids with its flood recovery.

McGrane said the Cedar Rapids delegation was told that federal money might be available to support the reestablishment of a downtown steam system if the city itself actually was involved in the ownership of such a utility. The thought is the city could have a private entity run the operation and ultimately buy out the city’s investment after a number of years.

It remains to be seen: McGrane is more of a decisive voice on matters concerning neighborhoods and housing.

However, council member Monica Vernon said on Tuesday, too, that the city had to figure out a solution to the steam problem.

The problem exists because the June flood damaged Alliant Energy’s aged Sixth Street Generating Station, which had produced electricity and inexpensive steam and ran it through a network of Alliant steam pipes to Quaker and Cargill and other industries near downtown, to Coe College, the city’s two hospitals and the buildings downtown.

This winter, Alliant has created a temporary setup to provide the steam, but at a price four to five times the previous price with no promise of rebuilding to prior more reasonably priced steam again.

This week, Coe College and St. Luke’s Hospital announced plans to seek federal funds to build their own steam system, and they will be in front of the City Council tonight to talk about the plan.

The two entities, though, said this week they are still open to a broader solution to the steam issue, though Pat Ball, the city’s utility director, on Tuesday forewarned the council not to expect any big news at its meeting tonight.

An Alliant spokesman said the same.

Alliant customers Coe and St. Luke’s seek federal disaster funds for their own steam plant

Coe College and St. Luke’s Hospital are preparing to build their own operation to produce steam now that Alliant Energy has signaled it does not plan to rebuild its flood-damaged Sixth Street Generating Plant.

 

In a memo to City Hall, Coe and St. Luke’s said they will be seeking the City Council’s backing as the two entities pursue federal funds in the $4-million range from the U.S. Department of Commerce for a replacement steam system.

 

The memo, signed by Ted Townsend, president and CEO of St. Luke’s Hospital, and James Phifer, president of Coe College, states that proposed charges to customers that Alliant said were needed to rebuild the Sixth Street Generating Plant “were not economically viable” for either Coe or the hospital.

 

Using a temporary steam setup this winter, Coe is facing energy costs of $1 million more than they had been paying a year when the Alliant plant was making electricity and also steam for the downtown and near downtown, Coe’s Phifer says.

 

St. Luke’s and Coe are among a small group of larger users of the Alliant steam operation that includes Quaker and Cargill while a larger group of smaller users in and near downtown also have depended on the cheap steam from the Alliant plant.

 

The City Council has talked for a few months now about wanting to play a role in keeping a viable steam system in place downtown even if Alliant is not involved.

 

Both Coe and St. Luke’s say they are still open to a collective solution with other partners. At the same time, they need to get something more affordable in place by next winter, the entities’ executives say in their memo to the city.