Downtown West Union, Iowa, above the geothermal network. Image credit: Green Streetscapes.
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“There is a national spotlight now on this technology, and West Union was a real pioneer.”
Joleen Jansen, Clean Energy Districts of Iowa
West Union’s Green Opportunity
In 2006, the Iowa Economic Development and Finance Authority designated West Union a “Main Street Iowa” community. This recognized the city’s unique historical downtown character, and gave the city a mission to invest in community-driven revitalization efforts.
An opportunity to do just that arose in 2008. West Union needed downtown street rehabilitation; meanwhile, the Iowa Economic Development Authority sought a pilot “Green Streetscapes” community to showcase urban sustainability solutions. West Union’s street repaving project expanded to include improved town squares, LED street lighting, permeable paving, stormwater-filtering bioswales, a civic plaza, and a downtown geothermal network.
It was a leap, acknowledges West Union City Administrator Amie Johansen: “We had many nights of full City Council chambers, with people both in support of and against the project. Several people from Main Street Iowa partnered with us, and they helped Council become comfortable with the fact that there were grants out there to support this work. When we began learning more about what the project could do, Council approved moving forward.”
In 2010, the groundbreaking ceremony kicked off. By 2014, the first buildings were connected to the geothermal network.
Funding Construction, Improvements, and Connection
West Union hired a grant writer specifically to secure funds for the Green Streetscapes project. While the entire scope of the project cost $10.2 million, the geothermal network portion totaled $2.2 million, and was fully covered by grants:
- Department of Energy grant: $1 million
- Housing and Urban Development Community Development Block Grant: $1 million
- Environmental Protection Agency grant: $500,000
- Main Street Iowa grant: $100,000
Building retrofits were separate from the construction costs. Downtown property owners who wanted to connect to the network purchased their own geothermal heat pump equipment using USDA Rural Energy for America Program (REAP) grants and loans, plus available incentives from their electric utility, Alliant Energy.
“We did 70 energy audits on the buildings downtown,” says Johansen. “The first thing that was recommended: ‘Let’s close up your envelope so you can right-size your equipment. Fix that before you buy a geothermal unit.’ Alliant, Black Hills Energy, the Department of Energy, and HUD helped improve the buildings first.”
Alliant provides customer rebates for electrification, including geothermal space heating and cooling. Typically, geothermal rebates apply to both the geothermal boreholes and heat pumps. In West Union’s case, Alliant gave the well field rebates to the City — the owner of the ground loop — while individual users received the heat pump rebates.
Construction on the system in West Union. Image credit: Amie Johansen.
Meet the System
West Union’s downtown system includes 132 geothermal boreholes, each 300 feet deep, installed beneath the courthouse square. The system provides 264 tons of heating and cooling capacity. Pumps and controls are in the Fayette County Courthouse basement. There is no central backup system, but individual buildings may have their own backup boilers for the coldest days.
All underground buried pipes are high density polyethylene (HDPE). A technical analysis by MEP Associates (now part of Salas O’Brien) noted that the pipe “has an 80-year asset life expectancy by other utilities (gas and water) that also use this pipe. Its theoretical life, however, is 200+ years, as there are no known soil types that adversely affect the pipe and degrade or shorten its life.”
Currently, 12 downtown buildings are connected, including the Fayette County Courthouse, the Chamber of Commerce, a café, two banks, the West Union Public Library, and various shops and apartments. Geothermal pipes have been installed up to the curb line for 58 other prospective users.
West Union also planned ahead for network expansion. A pump house and distribution line vault were installed in Lion’s Park, which has potential for an additional 504 tons of capacity.
Leasing the System: West Union District Energy, LLC
The city owns the ground loop, but West Union taxpayers did not, and still do not, cover any system costs. Instead, the city leases the network on a month-to-month basis to West Union District Energy LLC (WUDE), a user group that formed in 2012 after the city expressed concerns about operating a new utility.
In its early years, WUDE met irregularly, leading to confusion about the system and lapses in communication with the city government. In 2019-2021, Joleen Jansen, a senior coach with Clean Energy Districts of Iowa, led community engagement for an initiative and study named Green Up West Union. With Jansen and Green Up West Union’s support, WUDE reorganized, revised its bylaws, launched a competitive bidding process for a new system operator, and reestablished a positive partnership with the city.
Green Up West Union reopened the question of ownership, explains Jansen, and confirmed that WUDE is not legally a utility under Iowa law; the Iowa Utilities Board had previously determined it has no jurisdiction over geothermal heating and cooling. So despite operating like a utility, WUDE is not technically classified as one.
WUDE members include all of the geothermal network users. Each member has the right to vote annually on system tonnage fees and may attend biannual meetings with the City. WUDE oversees user outreach, billing, and its lease agreement, but contracts system monitoring and maintenance to a third-party geothermal operator.
Finding the Right Operator
WUDE initially struggled to find a third-party operator. Few local HVAC businesses were interested, forcing the LLC to look further afield to find their first operator. From 2014-2021, their first operator handled in-person system management, supervised new connections, installed most building equipment, and printed monthly invoices—which were then hand-delivered by a local user. User fees covered the operator’s services at $14 per ton, plus a $15 monthly bookkeeping fee.
But analysis by Green Up West Union and MEP Associates identified that user costs were higher than expected, partly due to the operator expenses. There were also technical issues: the Chamber of Commerce experienced pipe problems, and the original operator suspected a leak in the system.
In 2020, WUDE initiated a competitive bidding process for a new operator. The selected company, Geothermal Eco Options, brought “substantial savings,” says WUDE chair Steve Fate. The rumored leak in the system turned out to be an accumulation of air, which was successfully purged. The new operator resolved technical issues, implemented electronic bookkeeping, and closely monitored glycol in the ground loop. Simultaneously, WUDE took bids for system equipment management that could handle remote monitoring; Winona Controls won the bid, which “made a big difference,” says Fate.
WUDE now provides prospective users with a list of local contractors for in-building installations. Over time, more contractors have gained experience with geothermal heat pumps, says Fate: “A lot weren’t interested before, but they are now. So it’s up to the users. They pick who they want to work with.” After installation, Geothermal Eco Options inspects the equipment and finalizes the connection.
These improvements have reduced concerns about system reliability: “It’s close to being indestructible,” says Fate.
“I’ve been monitoring through a -17°F cold snap this winter, and the system is performing really well, holding its ground loop temperatures,” says Larry Leliefeld, president of Geothermal Eco Options. “Each year, there has been less service work and fewer disruptions. WUDE is able to maintain its expense buffer and decrease their dollars per ton. Those reductions in monthly costs are being passed on to users.”
“Our goal always is to minimize costs, and not necessarily to maximize profits, but to ensure a sustainable business. And now we’re sitting on some profits—we have three years of operating costs in reserve.”
Steve Fate, Chair, West Union District Energy LLC
Increasing Users, Decreasing Costs
User costs have decreased each year, says Derek Heins, WUDE’s treasurer. Careful management and a growing user base have dropped tonnage fees from $14 in 2021 to $12 in 2022, $11 in 2023, and $10 in 2024. “This year, we hope to drop another dollar,” says Heins.
The only raw material cost to users is electricity, says Fate. Otherwise, the loop itself “is a shared cost in a shared system. Each time we have a new user join, they contribute — more users lower the cost.”
The owner of every building that hooks up to the system becomes a member of the LLC, with all of the benefits and tax consequences that come with an LLC membership, Fate says. “Our goal always is to minimize costs, and not necessarily to maximize profits, but to ensure a sustainable business. And now we’re sitting on some profits—we have three years of operating costs in reserve.”
To encourage more connections and unlock further economies of scale, WUDE has begun offering incentives to offset the upfront cost of geothermal heat pumps. “We want those purchases to be close enough in cost that people say, ‘OK, it may cost more to put in a geothermal unit, but the savings over the years are going to be worth it,’” says Fate.
One of the newest users replaced both of their building’s gas boilers with geothermal. “It was forward-thinking,” says Fate. “Because a geothermal unit is great: You set it at 70° year round, it maintains humidity levels that are just perfect, and you don’t have to dehumidify in the summer or humidify in the winter—both of which get expensive.”
And financial benefits extend beyond just the system users, says Leliefeld. “When you have a City Hall, or fire department, or – in West Union’s case — the county courthouse hooked up to a system like this, it reduces the overall cost for heating and cooling for everyone in the county, as expenses for heating and cooling are covered by tax dollars.”
The geothermal system in the Courthouse basement. Image credit: Amie Johansen.
A Source of Pride
As an early adopter of community-scale, locally-owned geothermal networks, West Union offers key lessons to the cities nationwide that are considering similar systems. Bringing on as many users as possible from the very beginning will create a “snowball effect” for success, says Heins; a reliable operator helps dramatically, as does early buy-in from city officials, says Johansen. Leliefeld emphasizes the need to improve building envelopes before installing geothermal systems to maximize cost, while Jansen points to the “winning” savings that some users gained when they stacked their geothermal systems with solar panels.
Part of Green Up West Union’s mission was for city residents to feel pride in the geothermal network, says Jansen. “West Union’s system went in and operated at a high caliber even when there was not a lot of information on district geothermal. It started with their streets, and they ended up doing a big project that is unique to the state. And thank God they did, because there is a national spotlight now on this technology, and West Union was a real pioneer.”
Thank you to Joleen Jansen, Amie Johansen, Steve Fate, Derek Heins, and Larry Leliefeld for your contributions to this case study.