MidAmerican Energy will invest $1.9 billion in wind projects in Iowa

Source: by William Petroski, Des Moines Register • Posted: Thursday, May 9, 2013

Gov. Terry Branstad announced Wednesday that MidAmerican Energy will make a $1.9 billion investment in Iowa for wind energy projects that will be the biggest single economic investment ever in the state.

“As wind energy goes, so does Iowa’s economy,” said Branstad, who spoke enthusiastically about the plans. He added, “Remember, once they make this investment it will be here for the next 40 or 50 years.”

MidAmerican officials said no sites have been selected yet, but they hinted the sites would be in northwest Iowa and south of Interstate Highway 80 in western Iowa.

Generators from MidAmerican Energy’s 123-megawatt project near Pomeroy. (Rodney White/Register file photo)

Generators from MidAmerican Energy’s 123-megawatt project near Pomeroy. (Rodney White/Register file photo)

Branstad, speaking at a late afternoon news conference, said MidAmerican Energy Co. will add up to 1,050 megawatts of wind generation, consisting of up to 656 new wind turbines, in Iowa by year-end 2015.

The wind expansion will enhance economic development and provide in excess of $360 million in additional property tax revenues over the next 30 years, officials said. Landowner payments totaling $3.2 million per year also are expected as a result of the expansion.

In addition, the expansion is planned to be built at no net cost to the company’s customers and will help stabilize electric rates over the long term by providing a rate reduction totaling $10 million per year by 2017, commencing with a $3.3 million reduction in 2015, MidAmerican officials said.

“As a leader in wind generation, the state of Iowa welcomes the opportunity to expand our renewable energy portfolio. MidAmerican Energy’s proposed project will be the largest economic development investment in the history of the state, bringing needed jobs to Iowa, as well as significant economic benefits,” Branstad said.

Lt. Gov. Kim Reynolds said in a prepared statement: “MidAmerican Energy has been a long-standing partner with the state of Iowa, and we look forward to working with them on this wind proposal. In addition to helping boost our state and local economies, the expansion would create approximately 460 construction jobs over a two-year period and an estimated 48 permanent jobs in our state.”

Greg Abel, chairman, president and CEO of MidAmerican Energy Holdings Company – the parent company of MidAmerican Energy – thanked Branstad and Reynolds for their support of renewable energy in Iowa.

“The administration has continued its focus on creating an environment that allows for significant investment in Iowa, and we are pleased to be working hand in hand with them to grow our state and create good jobs,” Abel said.

Abel added, “Iowa’s congressional delegation created the opportunity for this investment through their support at the federal level and continued an environment that makes this type of investment possible.”

MidAmerican Energy began building wind projects in 2004. To date, 1,267 wind turbines have been installed in Iowa, representing a total investment of approximately $4 billion. In light of the recent federal wind production tax credit extension, the company said it is asking to expand its wind generation capacity to enhance its renewable energy portfolio, officials said.

MidAmerican Energy estimates that by January 2016, when all new wind generation is expected to be operating, it may be capable of generating approximately 39 percent of its retail generation output through wind generation during that month.

“The proposed wind expansion will not only add to MidAmerican Energy’s and Iowa’s position as a national leader in wind generation capacity, it will help reduce future rates to our customers by as much as $10 million per year and further enhance our corporate principle of environmental respect by reducing our carbon footprint by 10.3 percent,” said Bill Fehrman, president and chief executive officer of MidAmerican Energy.

If the expansion is approved by the Iowa Utilities Board, MidAmerican Energy will own and operate approximately 3,335 megawatts of wind generation capacity in Iowa by year-end 2015, officials said.. Currently, MidAmerican Energy owns and operates approximately 2,285 megawatts of wind generation capacity in Iowa and is No. 1 in the U.S. for ownership of wind generation capacity among rate-regulated utilities.

Iowa Senate Majority Leader Michael Gronstal, D-Council Bluffs, said MidAmerican’s announcement on Wednesday was rooted in a push by former Gov. Tom Vilsack in support of legislation approved in 2003 that allowed utility companies to own wind energy themselves. In working on earlier legislation regarding utility plant sites, Vilsack developed a strong relationship with MidAmerican Chairman Greg Abel, which prompted a recommendation to change the state’s law.

“That is what led to Iowa’s renaissance in wind,” Gronstal said. “It really had nothing to do with this (Branstad) administration. It all had to do with the previous administration. Tom Vilsack led the way on that. We are really glad to hear that we are going to be expanding wind in Iowa and proud of the record that 12 years of Democrats in the executive branch helped to lead the way on wind energy in this state.”

Iowa House Speaker Kraig Paulsen, R-Hiawatha, called MidAmerican’s announcement an exciting development that will mean more jobs for Iowans. He said MidAmerican officials had not made any special requests from state lawmakers prior to making Wednesday’s announcement.

Asked if Iowa is becoming too reliant on wind energy, Paulsen said, “I think wind is part of the mix … We always have to keep our eye on making sure we have solid, reliable, low-cost base load power” such as coal and natural gas. “I am supportive of those as well, but I think a balanced portfolio make a lot of sense.”

Senate Minority Leader Bill Dix, R-Shell Rock, said he felt everything about MidAmerican’s announcement was positive for Iowa’s economy and for future job growth. “This is home-grown energy coming from right here in Iowa. It is renewable. It is clean, and that is all a good thing for Iowans,” he said.

Harold Prior, executive director of the Iowa Wind Energy Association, learned of the project from a reporter.

“That is marvelous news,” said Prior, of Milford. “MidAmerican is one of the top utilities in the country as far as embracing wind energy.”

Prior said companies such as Facebook and Google want clean energy, so the move also could attract new developments. He added that the project will keep Iowa on track to generate 10,000 megawatts of wind power by 2020, and will help support jobs at turbine-component businesses and blade manufacturers.

David Osterberg, executive director of the liberal-leaning think tank Iowa Policy Project, applauded the utility’s move.

“As an organization that has been writing about the advantages of renewable energy since 2002, we applaud this direction in economic development for the state,” Osterberg said in a statement.

“The advantage of being the first state in the nation to pass a requirement that utilities try renewable energy is paying off,” he added.

Nathaniel Baer, who follows energy issues for the nonprofit Iowa Environmental Council, said MidAmerican’s announcement is encouraging, but there is room for far more wind energy in Iowa than the utility proposed. He added he hopes MidAmerican will make it easier for Iowans to install their own wind turbines in the utility’s territory, by paying more for the power.

“I think it is a welcome development for wind energy, the Iowa environment and the economy,” Baer said.

The utility’s project will boost Iowa’s overall nameplate wind generation, from all sources, by 20 percent, to 6,000 megawatts from 5,000 megawatts currently, Baer said.

The U.S. Department of Energy has estimated that Iowa would have to produce 10,000 megawatts of wind energy by 2020, and 20,000 by 2030 to meet environmental groups’ goal to have the country produce 20 percent of its power from wind by 2030.

Baer said Congress should extend the production tax credit long-term to help make that happen.

MidAmerican Energy Company, Iowa’s largest energy company, provides electric service to 734,000 customers and natural gas service to 714,000 customers in Iowa, Illinois, Nebraska and South Dakota, officials said. The firm has its headquarters in Des Moines.