City Council moves 2 ways on downtown energy; it readies to hand out money to convert from downtown steam system as it spends half-a-millon on new downtown energy study

City Hall seems to be moving in two directions at the same time on downtown energy.

On the one hand, city officials are helping oversee a program to help businesses convert from the downtown steam system. And on the other hand, the City Council has agreed to spend $487,113 to conduct a study called the “Downtown District Energy Feasibility Study.”

At its meeting Wednesday evening, the City Council is expected to hire Transitions Made Better Inc. of Cedar Rapids to administer the city’s financial-assistance program for those who had used the downtown steam system. The system had depended on Alliant Energy’s Sixth Street Generating Station, which was damaged by the June 2008 flood and won’t be rebuilt.

The city program will divvy up $21 million, $16 million from the Iowa Department of Economic Development and $5 million from the state’s I-JOBS economic stimulus program.

In late May, the City Council voted to use $8 million to help five large users of the steam system – including the Quaker Co. and Cargill plants near downtown – convert to another system; $8 million for a group of some 200 smaller users to help them convert; and $5 million to help offset higher steam costs for all the users.

Two other of the system’s large users, Coe College and St. Luke’s Hospital, have obtained a $6.5 million grant from the U.S. Department of Commerce to help them convert to their own steam system, and another large user, Mercy Medical Center, also has applied for such a grant.

Transitions Made Better Inc. has told the city it will begin to process steam claims on Thursday if the firm wins the city contract on Wednesday evening.

According to a City Hall memo to the City Council, Transitions Made Better Inc. was the only firm to bid on the city’s contract to administer the steam claims. Transitions Made Better Inc. also is administering a city contract to dispense state funds for flooded landlords.

A week ago, the council awarded a contract to Sebesta Blomberg & Associates Inc., Roseville, Minn., for a downtown energy feasibility study.

The study will look at creating a “new downtown district energy system” that may use renewable fuels or fossil fuels.

The council has talked about the prospects of burning sewage sludge and municipal garbage to produce energy.

Funding for the study is coming from the state of Iowa, according to city documents.

Steam committee suggests splitting $21 million this way: $8 million for five of eight big users; $8 million for little users; and $5 million to lower bills

The City Council this week will decide how it wants to dispense $21 million in federal and state dollars to help users of the downtown steam system convert to their own replacement systems.

A city review team — which includes city staff members, downtown business representatives, state leaders and large and small steam customers — is proposing a reimbursement program that devotes $8 million of the $21 million in aid for large customers, $8 million for smaller customers and $5 million to help “buy down” the cost of higher steam bills.

Of the $5 million, 70 percent will go to big users, though they represented 86 percent of overall steam usage from Alliant Energy’s flood-wrecked Sixth Street Generating Station, according to a memo to the City Council.

The plant, which had provided cheap steam for eight large customers and about 200 smaller ones, won’t be rebuilt because of cost. One plan to try to find federal and state money to rebuild the plant as it was — as a coal plant — was nixed by the City Council as spending too much public money on an old plant and an old technology.

According to this week’s council memo, the assumption is that a portion of the $8 million designated for the large customers — the Quaker and Cargill plants next to downtown are among the eight — won’t go to customers Coe College and the two hospitals because it is anticipated they will receive federal funds from the U.S. Department of Commerce’s Economic Development Administration.

City Council ‘steam team’ leader Vernon says work underway to create an equitable way to dispense $21 million in steam conversion funds

City Council member Monica Vernon, the City Council’s “steam team” chief, reports that the city’s Pat Ball, utilities director, and Mike Sable, a special assistant to the city manager, are helping to work up an approach to dispense $21 million in state funds to help those in the downtown steam network convert to their own systems.

ernon said the effort involves devising an “equitable” way to hand out the funds. She said a proposal may be coming in front of the council as soon as next week.

The money consists of $5 million in state I-JOBS funds and $16 million in money set aside by the Iowa Department of Economic Development.

The City Council brought absolute clarity to the lingering downtown steam issue two weeks ago when the council voted unanimously not to allow public funds to be used to rebuild Alliant Energy’s flood-destroyed Sixth Street Generating Plant as a coal plant.

There had been a push to find federal and state money to rebuild the Alliant plant –which provided low-cost steam power to the key industries Quaker and Cargill, the two hospitals, Coe College and the downtown and near downtown — as a coal plant. Alliant, a private entity, cannot directly receive public money, and so it would have had to be allocated to the City Council for use.

The council, though, concluded that burning coal and environmental issues associated with it represented the past, not the future. Council members said a new era of taxing emissions from coal plants will make mean that coal may not be as much of a bargain as some now think it is.