Iowa’s electric costs blowing downward, group says

Source: By Donnelle Eller, Des Moines Register • Posted: Monday, April 3, 2017

MidAmerican Energy constructed in Adams County the tallest land-based wind turbine in the nation. The added height was created by building the tower from concrete instead of steel, and makes it 100 feet taller and better able to harness wind energy.MidAmerican/Special to the Register

Iowa’s electric rates are lower now than nearly two decades ago, says an Iowa City group, pointing to wind energy for helping to keep costs low.

Iowa power users paid an average of 8.35 cents per kilowatt hour in 2015, that when adjusted for inflation is about 5 percent less than 1998, when wind energy got its start in the state, said David Osterberg, who founded the Iowa Policy Project and released a study Thursday looking at energy costs.

Osterberg credits wind for lowering real energy costs, but he acknowledges it’s difficult to say definitively.

“As the wind industry has grown, the price per kilowatt hour continues to be significantly lower than the U.S. average,” he said.

Coal provided the fuel for 47 percent of Iowa’s electricity generation last year, according to the U.S. Energy Information Administration. Wind drove 36.6 percent of the state’s electric generation, the largest share nationally.

Iowa ranks second in the nation for the amount of wind generation capacity, trailing only Texas, industry reports show.

U.S. consumers paid an average of 10.33 cents per kilowatt hour in 2015, 5.4 percent more than 1998, when prices are adjusted for inflation, the group said.

“Contrary to some of the warnings we heard two decades ago, the growth of wind power to 36 percent of the electricity we use in Iowa has not hurt our competitiveness in attracting businesses,” Osterberg said. And “it has not hurt our efforts to keep household spending for electricity under control.”

Osterberg expects utilities to continue investing in wind and other renewable energy, despite President Trump’s action this week to dismantle the Clean Power Plan.

The Obama initiative was designed to reduce greenhouse gas emissions that contribute to climate change.

Iowa’s two large investor-owned utilities said last year they plan to expand wind generation: MidAmerican Energy is investing $3.6 billion and Alliant Energy, $1 billion.

“It may well be that wind power is an important economic development tool for Iowa at the moment, because we know companies pay attention to what they pay for energy,” Osterberg said.

Given Iowa’s success with wind, he said the state should push for adoption of another renewable energy — solar.