Iowa’s business community was well represented on August 30th and 31st as the Iowa Utilities Board held its first meetings, referred to as charrettes, for its study of ratemaking initiated by the passage of House File 617. A few key themes emerged.

Theme # 1: Integrated Resource Planning is a Critical Need

If there was one theme that came out – Iowa suffers from a lack of Integrated Resource Planning ("IRP"). For those reading the comments submitted by the participants leading up to the event – this was not a surprise.

The business advocates for Integrated Resource Planning include the Iowa Business Energy Coalition (“IBEC”), which represents many of Iowa’s largest industrial energy users, the Iowa Economic Alliance ("IEA"), which represents large energy users including large technology ratepayers, and the Large Energy Group (“LEG”), which represents another group of Iowa’s largest energy users. As LEG noted, “Resource plans should be transparent, part of a stakeholder process which includes customers, and filed with the Board on a reoccurring basis to reflect changes in economics, the capacity of energy markets, customer demands, and the costs of potential resource additions.”

In February, the Iowa Utilities Board ordered the public release of a redacted Zero Emission Study that MidAmerican Energy had commissioned for its internal use. MidAmerican’s own study concluded that solar was the best option to meet summer peak demand needs in 2040. The company had fought against sharing this internal report as a part of its $3.9 billion proposal known as WindPrime (the proposal contained just 2% of new solar generation). The study also highlighted the expensive nature of maintaining its existing large coal fleet.

The internal study’s findings were not surprising. Iowa’s peak energy use is on hot summer afternoons, as air conditioning is cranking up. Solar produces its greatest power on these hot days, while wind slows down. Iowa Business for Clean Energy had intervened in this case and highlighted this fact in our submittals to the Board.

On June 14, 2020, a provision was inserted into an appropriations bill at 1:35am on the last night of the Iowa legislative session.  The provision granted sole right to the incumbent transmission provider to build any approved new transmission line, eliminating any competition for transmission in Iowa. 

This past Friday, the IA Supreme Court issued its ruling on a challenge to the law by LS Power (“LSP”), a national transmission line developer. Justice Waterman, writing for the majority, in commenting on the passage of what is known as the Right of First Refusal (“ROFR”), stated:

“We are not surprised the ROFR lacked enough votes to pass without logrolling. The provision is quintessentially crony capitalism. This rent-seeking, protectionist legislation is anti-competitive.”

You may have seen the recent Des Moines Register headline that this region’s electric grid operator Midcontinent Independent System Operator (MISO), is at risk of “energy emergencies” this winter if hit by an extreme cold weather event. On December 1, the Iowa Utilities Board, in response to the concern, scheduled a conference for the utilities to discuss how they will handle any emergencies. 

And the risk to the grid will continue as climate change leads to more extreme weather events, utilities retire costly coal plants, the grid relies on more intermittent power sources, and transportation and heating electrify.

To address the growing risk, we need to start planning now. The decisions we make today need to ensure that the grid of 2030 and 2035 can handle future demands. It means our decisions today should not be based on today’s reality – but on tomorrow’s opportunities.