HomeMy WebLinkAboutA001 - Council Action Form dated April 23, 2024 ITEM#: 40
DATE: 04-23-24
DEPT: ELEC
COUNCIL ACTION FORM
SUBJECT: FIRST PASSAGE OF ORDINANCE AMENDING CHAPTER 28 ESTABLISHING
GEOTHERMAL SERVICES AND RULES AND CHARGES THEREFORE
BACKGROUND:
The City of Ames Electric Services has established geothermal wells within public utility easements in
the Baker Subdivision of the city to provide low-cost, environmentally friendly, and sustainable heating
and cooling to the single-family homes in that subdivision. The geothermal wells are owned and
maintained by the City of Ames. The proposed ordinance commits the City to maintain the geothermal
wells for a period of 50 years allowing for cost-recovery of the City's investment as well as ongoing
maintenance and repair, and costs relating to future replacement or abandonment of the wells at the end
of their useful life.
The geothermal wells serving the single-family lots in the Baker Subdivision are 300' deep vertical
wells. The piping in the geothermal system is HDPE piping with thermally bonded joints with an
expected lifespan of 50+ years. All geothermal piping, including the wells and their service lines are a
minimum of 6' below grade.
In April 2023, Council authorized the Legal Department to draft an ordinance to allow the collection of
charges from geothermal users and to set rules delineating ownership of geothermal service
connections. The proposed ordinance commits Electric Services to maintain the geothermal wells
for 50 years. Fifty years is an adequate period of time that will give future homeowners confidence to
continue utilizing the geothermal wells and invest in new geothermal equipment when replacing their
heating and cooling systems at the end of their useful life. In addition, the the ordinance specifies
that property owner will be responsible for repairs to the geothermal service lines between the
public utility easement and the building. Finally, the ordinance calls for customers to pay a $15
monthly fee to offset costs associated with initial construction of the wells, annual operation and
maintenance, and costs of eventual replacement or abandonment.
The separate restrictive covenants for the Baker Subdivision further require that all homes in the
Baker subdivision utilize and connect to the geothermal wells serving their parcel at least through
2034 after which customers can continue to utilize the geothermal wells or choose another heating
and cooling source. The City has the option to remove and abandon a well if it is not being utilized
by the homeowner.
ALTERNATIVES:
1. Approve the proposed of Ordinance amending Chapter 28 establishing Geothermal Services and rules and
charges therefore for single-family homes in the Baker Subdivision(321 State Avenue).
2. Do not approve the proposed Ordinance and refer back to staff for additional information.
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CITY MANAGER'S RECOMMENDED ACTION:
The proposed ordinance commits the City to maintain the geothermal wells for a period of 50 years allowing for
cost-recovery of the City's investment as well as ongoing maintenance and repair, and costs relating to future
replacement or abandonment of the wells at the end of their useful life. Therefore, it is the recommendation of the
City Manager that the City Council adopt Alternative No. 1.
ATTACHMENT(S):
DRAFT-Geothermal ordinance.docx
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ORDINANCE NO.
AN ORDINANCE TO AMEND THE MUNICIPAL CODE
OF THE CITY OF AMES, IOWA, BY AMENDING
CHAPTER 28, DIVISION I, ELECTRIC AND ENACTING
A NEW SECTION 28.111 THEREOF,FOR THE PURPOSE
OF ESTABLISHING GEOTHERMAL SERVICES,
REPEALING ANY AND ALL ORDINANCES OR PARTS
OF ORDINANCES IN CONFLICT TO THE EXTENT OF
SUCH CONFLICT; AND ESTABLISHING AN
EFFECTIVE DATE.
BE IT ENACTED,by the City Council for the City of Ames, Iowa,that:
Section One. The Municipal Code of the City of Ames, Iowa shall be and the same is
hereby amended by enacting a new Division XI Geothermal Services as follows:
"Sec.28.111. GEOTHERMAL SERVICES
The City of Ames Electric Services has established geothermal wells within public utility
easements in the Baker Subdivision of the city to provide low-cost, environmentally friendly, and
sustainable heating and cooling to the single-family homes in that subdivision. The geothermal
wells are owned and maintained by the City of Ames and the customers will pay a monthly fee to
support the initial and ongoing costs to maintain the wells.
(1) Geothermal Rate Policy. It is determined and declared to be necessary and
conducive to the protection of the public health, safety, welfare, and convenience of the City of
Ames to collect fees from all users who use the City's geothermal wellfields to help cover expenses
relating to initial construction, ongoing maintenance and repair, and replacement. Any fees will
be placed in the Ames Electric Utility's general fund.
(2) Geothermal Utility Rates and charges. The rates and charges to consumers
utilizing the City's geothermal wells,to be billed on or after June 1,2024 are as follows:
(a) Single Customer Residential Rates.
(i) Availability. The residential rate shall apply to all single-family customer
accounts within the Baker Subdivision.
(ii)Rate per billing period.For each monthly billing period,a residential rate
customer shall be charged a rate of$15.00 per month,or a different rate if established by resolution
of the City Council.
(3) Ownership and Repair,Geothermal Service Connections.
(a) The ongoing upkeep and maintenance of the geothermal wells will be the
responsibility of the City of Ames through May 31, 2074; thereafter, the City may continue to
operate the wells and charge for their use or may choose to abandon the wells at the City's expense.
If,after 10 years,a homeowner discontinues the use of the geothermal wells serving their property,
the City reserves the right to abandon its geothermal wells that serve that property. At any time,
the City reserves the right to abandon a well and install a new well if it is deemed necessary or
convenient.
(b) All service connections with the City geothermal wells shall be installed and
maintained at the expense of the property to be served. Ownership of the entire service connection
remains with the title holder of the property. The City is responsible for the wells and all piping
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located within the geothermal utility easement, the homeowner is responsible for the service line
located on their property, outside the geothermal utility easement.
(c) Whenever any part of the geothermal service lines between public utility
easement and the building served becomes out of repair, it shall be the duty of the property owner,
to repair the defect,and if needed to refill the geothermal system with the proper water glycol mix.
To prevent or reduce damage to public or private property,the City Manager or his designee shall,
if the owner does not act to correct the defect within fourteen(14)calendar days after notice, cause
the discontinuance of geothermal service to the premises. The City Manager or his designee is
authorized to repair service leaks without prior notice to the property owner or tenant in emergency
situations to prevent service interruption, damages, or injury to others. Any costs incurred by the
city for excavation and replacement, and repair of damages to property caused by such, shall be
charged to the owner, and may be assessed as a lien against the property as provided in Sections
384.62 and 364.12 Code of Iowa.
Section Two. All ordinances, or parts of ordinances, in conflict herewith are hereby
repealed to the extent of such conflict, if any.
Section Three. This ordinance shall be in full force and effect from and after its passage
and publication as required by law.
Passed this day of 12024.
Renee Hall, City Clerk John A. Haila,Mayor
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