Four Iowa business groups want state lawmakers to change the way its largest utilities raise rates, saying rising energy costs are hurting small businesses' ability to compete.
The groups — the Iowa Economic Alliance, the Iowa Business Energy Coalition, Iowa Business for Clean Energy and a large energy group that represents industrial users — say the state’s process is flawed and has led to Alliant Energy’s energy charges being among the highest nationally.
Four Iowa business groups are advocating for a reform of how both residential and business electric rates are set in the state.
The groups — the Iowa Economic Alliance, the Large Energy Group, the Iowa Business Energy Coalition and Iowa Business for Clean Energy — released a statement this week saying it is “important to assess how legislative initiatives could meaningfully improve future utility infrastructure deployment, ensure reasonable energy costs, and give the (Iowa Utilities) Commission additional tools to adjudicate future rate requests by Iowa’s utilities.”
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.
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.”
Four different business groups are calling on state utility regulators to adopt a series of reforms to address both the cost and the supply of power for Iowa consumers.
Bob Rafferty represents Iowa Business for Clean Energy, one the groups that participated in a recent study that he says asked a basic question: “How do we evolve the way we regulate this electric grid so we can have the most reliable, lowest cost and cleanest electric grid 10 and 20 years from now?”
Four Iowa business groups want state lawmakers to change the way its largest utilities raise rates, saying rising energy costs are hurting small businesses' ability to compete.
The groups — the Iowa Economic Alliance, the Iowa Business Energy Coalition, Iowa Business for Clean Energy and a large energy group that represents industrial users — say the state’s process is flawed and has led to Alliant Energy’s energy charges being among the highest nationally.
Four Iowa business groups are advocating for a reform of how both residential and business electric rates are set in the state.
The groups — the Iowa Economic Alliance, the Large Energy Group, the Iowa Business Energy Coalition and Iowa Business for Clean Energy — released a statement this week saying it is “important to assess how legislative initiatives could meaningfully improve future utility infrastructure deployment, ensure reasonable energy costs, and give the (Iowa Utilities) Commission additional tools to adjudicate future rate requests by Iowa’s utilities.”
Four organizations have formed a an advocacy group calling for reform in the way utility companies set rate increases. The entities that make up the group are Iowa Business Energy Coalition, Iowa Economic Alliance, Iowa Business for Clean Energy, and Large Energy Group. Although the coalition doesn’t have a group name.
The group cited Alliant Energy’s most recent rate increase as a concern for both residents and businesses. Alliant’s increase was approved by the Iowa Utilities Commission back in Sept. In a news release, the group called Alliant a monopoly.
The Iowa Economic Alliance, the Large Energy Group, the Iowa Business Energy Coalition, and Iowa Business for Clean Energy jointly call for the adoption of the reforms recommended by the rate review study done by the Iowa Utilities Board (now Iowa Utilities Commission), “Review of Current Iowa Code Provisions and Ratemaking Procedures” (the “Study”)*.
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.
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.
MidAmerican Energy’s generation of renewable energy equivalent to 88.5% of its customers’ use is a great win for Iowa, but that achievement is not a reason for customers to write a blank check on their request to the Iowa Utilities Board to invest an additional $3.9 billion in new generation and other spending.
MidAmerican did not invest in wind for the purpose of reducing its carbon output; company executives did it because they saw a promising business opportunity. And while this new proposal may be good for MidAmerican, the utilities board needs to ensure it is also good for consumers.
While customers have been winners in MidAmerican’s wind investment so far, the objections to this new spending by Google, Facebook and Microsoft, which have sophisticated experts to analyze these matters, raise the question whether MidAmerican’s proposal achieves the goal of getting to 24/7 clean energy at the lowest cost. Let’s look at five important factors that need to be explored to determine if the proposal truly delivers 100% clean energy for Iowans at the lowest cost:
