Iowa

Des Moines Register: Rate Agreement Moves MidAmerican Closer to $3.6 Billion Wind Project

 

By Donnelle Eller

MidAmerican Energy, environmental groups and large tech companies reached a rate agreement over the Des Moines-based utility’s plan to invest $3.6 billion in wind energy.

The settlement, which goes to the Iowa Utilities Board for consideration, lowers from 11.5 percent to 11 percent the return MidAmerican would receive from its investment in 2,000 megawatts of wind energy generation.

Among other changes in the settlement, MidAmerican Energy agreed to not sell to other states, utilities or businesses renewable energy credits from the large project when customers choose to claim green energy use.

That’s important to companies like Google, Microsoft and Facebook, all of which have large data centers in Iowa that are large energy users. Environmentalists have pushed big social media, software and internet search companies to reduce their reliance on power generated from fossil fuels.

“We are pleased that all of MidAmerican’s customers will benefit from this settlement,” said Doug Gross, a Des Moines attorney representing Google, Facebook and Microsoft. “We look forward to continuing to work with MidAmerican to ensure that customers have a voice in decisions that affect Iowa’s energy future.”

The project, MidAmerican said, “will bring significant environmental and economic benefits to our customers and the state of Iowa without the need to ask for a rate increase.”

Iowa Environmental Council and Environmental Law & Policy Center, also involved in settlement discussions, applauded the agreement as well.

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News: Clean Energy Advocates Commend Alliant Energy Announcement in Iowa

FOR IMMEDIATE RELEASE
July 27, 2016
Contact:

David Jakubiak, ELPC

Katy Heggen, IEC

IEC, ELPC Comment Alliant Energy Plans for New Wind

 

Des Moines – Two of Iowa’s leading environmental policy groups have expressed strong support for a proposal announced by Alliant Energy today that would add up to 500 megawatts (MW) of new wind energy to Iowa’s energy mix.

“Alliant Energy’s new wind project will continue Iowa’s strong momentum on clean energy leadership. Across the state, utilities and developers are placing 10,000 MW of wind by 2020 – a major milestone – within reach,” said Nathaniel Baer, energy program director at the Iowa Environmental Council.

The recent extension of the federal wind energy production tax credit was a significant factor in Alliant Energy’s timing of this project. By moving forward before the end of 2016 to develop wind projects, Alliant Energy can capture the full value of this important tax incentive. Both the Council and ELPC supported long-term extensions of the federal PTC.

“We continue to reap the benefits of the extension of the federal PTC,” said Josh Mandelbaum, staff attorney at the Environmental Law and Policy Center. “This project further cements Iowa’s position as a national renewable energy leader.”

At the end of 2015, Iowa had 6,212 MW of installed wind accounting for 31.3 percent of Iowa’s electricity mix – more than any other state in the country according to the American Wind Energy Association. Iowa is expected to have up to 7,000 MW of wind installed before pending wind proposals are built. Those proposals include MidAmerican’s 2,000 MW Wind XI and Alliant Energy’s project announced today. If these projects are approved and constructed on time, Iowa will have over 9,000 MW of wind installed before 2020.

Alliant Energy’s wind project will provide significant economic and environmental benefits. Iowa wind energy already provides between 6,000 and 7,000 direct jobs and supports approximately 75 companies in the wind supply chain. Wind energy also provides over $17M annually in land lease payments to rural landowners, generates significant property tax revenue for counties, and attracts additional business to the state. Wind energy is also the lowest cost new source of electricity generation available in Iowa.

To learn more about this announcement, visit AlliantEnergy.com/whisperingwillow

Midwest Energy News: Biggest Wind Project in Iowa History Back on Track

By Karen Uhlenhuth, Midwest Energy News

The largest proposed wind energy project in Iowa’s history appears to be back on track this week after a tense period when it seemed the deal might fall apart over differences between a utility and large energy users.

On Tuesday, MidAmerican Energy — the utility pursuing the $3.6 billion Wind XI project — reached an accord with several major customers that objected to the plan, including tech giants Google, Microsoft and Facebook and a group of large industrial customers known as the Iowa Business Energy Coalition (IBEC).

MidAmerican President Bill Fehrman said in testimony filed with state regulators that, based on the companies’ objections, he found it “hard to conclude that the Data Centers and IBEC want MidAmerican to develop Wind XI.”

The large customers testified about a range of concerns with the proposal, including MidAmerican’s approach to modeling, the amount of power the utility projected its turbines would produce, the return on equity that MidAmerican was requesting and the treatment of environmental credits resulting from the production of renewable energy.

In the settlement, the customers and MidAmerican agreed to an 11 percent return on equity, slightly less than the 11.5 percent that MidAmerican initially had requested. The customers wanted a 9.5 percent return. And the two sides agreed to assign the environmental benefits of Wind XI to the various classes of customers, based on each class’ kilowatt-hour sales.

Like MidAmerican, the Iowa Environmental Council had expressed concerns that the changes proposed by the industrial customers and data centers could prove fatal to the project.

In a blog post late last month, the council’s energy program director, Nathaniel Baer, wrote: “While no party appears to have explicitly opposed Wind XI, the changes recommended by several interveners, including the data centers and IBEC, could cause Wind XI to be smaller or, at worst, not to be built at all.”

In written testimony, Fehrman said he was surprised that large customers challenged the project, given that they never expressed opinions in any of the 10 previous wind projects developed by MidAmerican.

The objections also appeared to fly in the face of the companies’ history of supporting renewable energy. All three companies have made significant investments in renewable power, including in Iowa, and have indicated they eventually intend to power all of their operations with renewable electricity.

In 2014, Google signed a deal with MidAmerican to purchase 407 megawatts of wind energy to power a new data center in Iowa. A year ago, Facebook announced that it was expanding with a third data center in Altoona, Iowa. The company cited several reasons for the decision, including access to wind energy.

In April, Iowa Gov. Terry Branstad attended the announcement of the 2,000-MW Wind XI installation, which MidAmerican claims is the biggest economic development project in the state’s history.

Wind XI would increase MidAmerican’s substantial wind portfolio to the point that wind would provide energy equal to 85 percent of the electricity sold by the company in a year’s time.

A final decision from state regulators is expected in September. MidAmerican has said it would need to start construction on the project before Dec. 31 in order to receive the maximum amount of federal production tax credits. The credit will gradually decrease over several years, beginning on Jan. 1, 2017.

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Ecosystem Marketplace: ELPC’s Brad Klein Weighs in on Water Quality Trading Programs

Water Quality Trading: What Works? What Doesn’t? And Why Don’t We Know This Already?

By Kelli Barrett

July 22, 2016

Water utilities and NGOs around the world are using market-based mechanisms to clean regional water bodies and restore surrounding watersheds, but critics say the programs are unproven. Proponents counter: yes, they are, and the data exists to prove it!

For years now, North American cities like Denver and New York have been diverting water fees into forest conservation, while Kenyan flower-growers have been voluntarily paying upland farmers to develop terraces that slow runoff. Just this week, legislators in the Peruvian Capital of Lima authorized a program that will divert some of the city’s water fees into the restoration of ancient, pre-Incan canals high in the Andes to capture floodwater for the dry season. In addition to these “investments in watershed services” (IWS) programs, water authorities in the United States, New Zeeland, and Australia are experimenting with something called “water quality trading” (WQT), which aims to keep levels of fertilizer at scientifically acceptable levels by helping farmers implement conservation practices that reduce their agricultural runoff.

Each program is uniquely its own, but they all hinge on the premise that market-based mechanisms deliver better results and more flexibility by focusing on quantifiable, verifiable outcomes – either in terms of water quality or regularity of supply – rather than the rigid edicts of “command-and-control” regulation.

Last autumn, an organization called Food and Water Watch (FWW) challenged that assumption, at least as far as WQT is concerned, in a paper that re-labeled WQT as “pollution trading” and charged that it undermines the Clean Water Act (CWA) and puts US waterways at great risk – a contention that was promptly dismissed by WQT proponents like Brent Fewell and Bobby Cochran.

Fewell, a one-time senior official at the US Environmental Protection Agency (EPA) and founder of the law firm Earth and Water Group, penned a piece entitled “Food & Water Lies – FWW Stands in the Way of Environmental Protection” which derided the organization as being ideologically anti-market and anti-public private partnership, while Cochran, the Executive Director of the Oregon-based nonprofit Willamette Partnership, was a bit more forgiving.

“FWW did not do an independent assessment on water quality trading,” said Cochran, whose organization is active in the WQT space and often acts as an advocate for trading.

However, Cochran adds that proponents of trading aren’t producing objective content either.

And while the pro and con camps continue to argue, reams of hard data from dozens of pilot projects are sitting around just begging for a disinterested, scientific evaluation. Cochran, among other practitioners, suggest a third-party, independent review of this data to settle the debate over whether WQT is effective.

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News: ELPC, Iowa Environmental Council Commend Agreement on Iowa Wind

FOR IMMEDIATE RELEASE
July 26, 2016

Contact:
David Jakubiak, ELPC
Katy Heggen, IEC

Environmental Groups Commend Agreement on MidAmerican Wind Project
Wind XI Extends Iowa’s National Clean Energy Lead

Des Moines – Two of Iowa’s leading environmental policy groups continued to express their support for MidAmerican’s Wind XI project after several parties filed a settlement Tuesday with the Iowa Utilities Board to move the project forward. If approved and built, Wind XI would add 2,000 megawatts (MW) of wind energy to Iowa’s energy mix, making it the largest wind project in Iowa:

“This settlement continues the Iowa tradition of adding significant renewable energy in a manner that provides benefits to Iowa customers, the Iowa economy and the environment,” said Joshua Mandelbaum, staff attorney with the Environmental Law & Policy Center.

“We are pleased to see MidAmerican come to agreement with the Office of Consumer Advocate, Facebook, Microsoft, Google and the Iowa Business Energy Coalition,” added Nathaniel Baer, energy program director of the Iowa Environmental Council. “We applaud this showing of clean energy leadership, and look forward to continuing to work with the involved parties to advance affordable, reliable renewable energy in Iowa.”

The settlement now goes to the Iowa Utilities Board for consideration.

Midwest Energy News: ELPC’s Mandelbaum Discusses Open Door to More Net Metering

Net metering will be available to more electricity customers in Iowa as a result of a decision made on Tuesday by state regulators.

As part of a long-running discussion about distributed generation, the Iowa Utilities Board ruled that the state’s two major utilities – MidAmerican and Alliant Energy – must increase their net metering cap from 500 kilowatts to 1 megawatt. Also, the new tariffs will have to make net metering available to all classes of customers but will change some rules for compensation.

“They’ve left the structure of net metering in place, and focused on how to expand that in a very narrow way that is on the whole positive,” said Josh Mandelbaum, an attorney in Des Moines with the Environmental Law & Policy Center. “They didn’t invite any of the changes you’ve seen in the utility pilot project. They could have, but they kept the pilot projects separate, and to me, that is a positive.”

As part of the board’s distributed-generation docket, the board last October asked MidAmerican and Alliant to submit pilot projects to encourage the development of distributed generation in the state. For the most part, the utilities did the opposite: proposing rate changes that would penalize solar customers.

The new rules regarding net metering will be adopted on a temporary basis. At the end of three years, the board will assess the experiment and decide whether to make the changes permanent. Customers of the two utilities who currently have solar panels can choose to continue in their current net metering arrangement, or can opt to try the new net metering tariff. Those choosing the new tariff may not return to the former tariff.

Any customer installing solar panels after the new tariffs are adopted will be required to operate under the new rules. Under existing rules, net meterers can roll over excess credits indefinitely, to be applied against future bills. There is no option for trading credits for cash.

The new tariffs will institute a yearly true-up. Early in the year, excess credits will be removed from the books, compensated at the avoided-cost rate and the proceeds divided in two: half will go to a utility fund to aid low-income customers, and half will return to the customer.

Although he praised the board’s directive overall, Mandelbaum said the cashout piece “could potentially be losses and gains. I don’t think the cashout is going to make much difference on most projects, but there is some potential for it to impact some projects.”

The ruling will eliminate any incentive a solar customer might have felt to overproduce. The increased cap of 1 megawatt will apply only up to 100 percent of the solar customer’s load. And while the new rules will extend net metering to a couple of groups of customers who are currently excluded, the rules stipulate that each customer’s generation will only offset the energy charge and will not apply to demand or customer charges.

One class that now will gain access is customers who obtain solar power through third-party power-purchase agreements or lease arrangements. After a customer filed a complaint, Alliant changed its policy a year ago to allow third-party customers – generally public and non-profit entities – to net meter. While Alliant extended net metering to that group, MidAmerican did not, according to Mandelbaum. The ruling made yesterday requires that MidAmerican adopt the same standard.

The other class that now will be able to net meter is the large general service category, such as manufacturing plants and wastewater-treatment facilities. Barry Shear, a solar developer in Iowa, went to the utilities board because Alliant’s policy stymied one city’s attempt to install a solar array at its water treatment plant.

Although the new rules will allow large general service customers to net meter, the presence of a large demand fee as part of their bill may continue to interfere with the economics of net metering.

The board’s Tuesday ruling did something else: it seemed to bypass much of the pilot projects that Alliant and MidAmerican submitted in March. Although the board instructed the utilities to devise pilot projects that would experiment with ways to expand rooftop solar, clean-energy supporters in the state mostly viewed the pilots as designed to discourage people from generating their own power. Alliant proposed paying less to solar customers, and MidAmerican suggested imposing a demand charge on them. Both of them, however, also said they wanted to experiment with community solar.

The message in Tuesday’s ruling, as Mandelbaum sees it, was, “You can continue working on community solar projects,” he said, “The rate-design pilots – it essentially rejects those.”

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Midwest Energy News: ELPC’s Mandelbaum Discusses Incentives Generation & Transmission Co-Ops Gain from FERC Ruling

Rural electric cooperatives and municipal utilities are better-positioned to obtain power from renewable sources in the wake of a decision last month by the Federal Energy Regulatory Commission.

And some clean-energy advocates believe that as a result, renewable sources will be a larger part of the generation mix for the small utilities that serve a significant proportion of Midwestern electricity customers.

In a case from Colorado, the FERC ruled that the generation and transmission co-ops that provide power to the nation’s retail power coops may not impose surcharges on members to compensate for revenue lost when member co-ops purchase renewable power as required by the federal Public Utility Regulatory Policies Act (PURPA).

The ruling elaborates on a decision the FERC made a year ago regarding the “all-requirements” contracts that many retail co-ops and municipal utilities have signed with their suppliers.

The contracts typically commit them to purchase all – or nearly all — of their power from that supplier for several decades into the future. These restrictive contracts can prevent those utilities from investing in renewable projects.

The Rudd-Rockford-Marble Rock Community School District in Iowa, for example, began planning a large solar project a couple of years ago as a means of reducing its increasingly burdensome power bills. The district planned an array that would produce about twice the energy it expected to use, with the aim of selling excess power back to the local municipal utility.

The wholesale supplier, the Municipal Energy Agency of Nebraska, warned the district and the utility that it would require the utility to continue paying for power it no longer would be selling to the school district.

The school district has put the project aside for the time being, and negotiated a lower rate from the local utility. District superintendent Keith Turner said he hopes eventually to resurrect the idea of a solar array.

The FERC made clear, in the first of the two rulings, that retail co-ops are required by PURPA to buy power from “qualifying facilities” that wish to sell renewable energy to them. Their obligation under PURPA supersedes an “all-requirements” contract with a supplier.

According to Tracy Warren of the National Rural Electric Cooperative Association, one important and overlooked point is that contracts actually are made between one co-op and all of the other co-ops that together are members of the generation and transmission, or G and T, co-op.

If the implication there is that one co-op’s renewable power would come at the expense of its fellow co-op members, it’s “similar to the net metering argument – but on a larger scale,” said Josh Mandelbaum, an attorney for the Environmental Law & Policy Center. “They’re saying that if one co-op or muni gets less power from the G and T, then that G and T won’t be able to recover their fixed costs. You can make that assertion, but it might not be at all true from an actual cost perspective.”

Will co-ops be interested?

So how much will this latest ruling increase access to renewable power for customers of co-ops and municipal utilities that are bound by all-requirements contracts?

Allison Clements, senior attorney with the Sustainable FERC Project for the Natural Resources Defense Council, believes that co-ops and municipal utilities will seize this opportunity to invest in renewable power.

“The signals we are getting from small entities is that they want to buy clean power and diversify their fuel mix,” she said. “They are absolutely interested. There is a whole host of progressive munis and co-ops that want to purchase clean power.”

John Farrell, director of the energy democracy initiative at the Institute for Local Self-Reliance in Minneapolis, is less confident — at least in the near-term.

“The co-ops that already have been agitating for some flexibility – which is a small number – are really going to start to use this to their greatest advantage,” he said. “They may start to look like Farmers Electric Cooperative in Iowa. That’s a very small co-op that doesn’t have one of these contracts, so they have had a lot more flexibility.”

More broadly, Farrell said, “I don’t think we will see a lot of renewables.”

A couple of factors could get in the way, as Farrell sees it. One, quite simply, is “the conservative nature of most co-op boards,” he said.

The other is the change in rural coop culture that is a consequence of the long-term contracts themselves.

“In many cases,” he said, “it’s been 30 or 40 years since the co-op owned a power plant. The problem now is you have that inertia in terms of the culture of the organization. Maybe there’s not even expertise in terms of how to build and own a power plant or to make a (power purchase agreement). I don’t expect huge growth in co-ops from this ruling in the next 12 months.”

He pointed out that there is also the question of debt. When wholesale power providers invest in generation and transmission assets, they generally tap their member co-ops to pay the bill. Although the FERC’s ruling gives retail coops some wiggle room as to how much power they must buy, they remain obligated to pay their share of any outstanding debt, according to Farrell. And if there is a lot of debt to be paid, he said, retail co-ops may decide they can’t afford to add on the cost of power from another source.

Farrell and Clements see another possible path to more renewables, though. Retail co-ops and municipal utilities could press their wholesale providers to invest in renewable energy on their behalf. A couple of Midwestern wholesale co-ops — Dairyland Power Cooperative and Great River Energy — are doing that now.

Mandelbaum of the ELPC said the FERC rulings “give those G and Ts an incentive to be forward-looking and more responsive not just to member coops, but to individual community members interested in renewable options.”

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Cedar Rapids Gazette: ELPC’s Mandelbaum Warns Proposed Rule Changes Will Weaken Iowa’s Water Quality Standards

Iowa Panel Weighs Changes to Clean-water Rules
Industry, Municipal Groups at Odds with Environmentalists Over Issue

By Orlan Love

The Iowa Department of Natural Resources’s Environmental Protection Commission is considering proposed changes to rules that govern anti-degradation standards included in the state’s clean-water regulations.

Groups representing municipal governments and industries, who proposed the changes, say those changes are needed to clarify the state’s anti-degradation rules after a court ruling in March created uncertainty.
Environmental groups say the changes would undermine a recent Iowa District Court ruling, weaken water quality protections and undercut the state’s Nutrient Reduction Strategy.

That district court ruling in a case involving the city of Clarion leaves industry members “in limbo regarding what is now required in an anti-degradation review, and potentially facing a much more complex and costly anti-degradation process,” Myron Linn, public policy counsel for the Iowa Association of Business and Industry, said in written comments to the commission.

Adopted in 2010, Iowa’s anti-degradation standards, an augmentation of the Clean Water Act, were designed to prevent unnecessary new water pollution. The Iowa Supreme Court upheld the rules in 2014 after a Farm Bureau challenge.

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Des Moines Business Record: ELPC’s Mandelbaum Argues with Industry Groups Over Proposed Water Quality Rule Change

ABI, Cities, Utilities Fight Environmentalists Over Water Quality Rule

By Business Record Staff

Several of Iowa’s top business groups this week sparred over a proposed state rule intended to make it easier for cities and industries to complete sewage treatment plants and other developments while protecting the environment.

The Iowa Association of Business and Industry, the Iowa Association of Municipal Utilities and the Iowa League of Cities petitioned for setting a firm rule for reviewing the economics of less-polluting options. That came after a court ruling questioned the DNR’s approach on a sewage treatment plant project in Clarion.

Basically, the new rule would say that if a less-polluting option costs 115 percent or more of the base cost of the project, it can be thrown out of contention. If it’s under 115 percent, it should be analyzed.

The business groups said the rule would give them “regulatory certainty” and protect ratepayers in small towns from excessive sewage bills.

Environmentalists countered that the standard is arbitrary, doesn’t properly protect the environment and shows a misunderstanding of requirements under the U.S. Clean Water Act.

Jon Tack, the DNR’s water quality chief, said the rule means that if the alternative costs less than 115 percent of the base cost, the cost is worth it given the reduced pollution. If it is above 115 percent of the base, it isn’t worth it.

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Des Moines Register: ELPC’s Mandelbaum, Allies & Business Leaders Debate Water Quality Rule

Environmentalists, business leaders debate water quality rule
By Donnelle Eller

Imagine buying a home-security system and weighing only the costs — and not the safety benefits — of each product, said Josh Mandelbaum, an attorney at the Environmental Law & Policy Center.

That’s what the state is doing, Mandelbaum said: It’s considering only costs that expanding cities, towns and businesses face when investing in new wastewater treatment facilities, and it’s failing to weigh the environmental benefits.

Mandelbaum was among about 30 residents who attended a public hearing Wednesday about a proposed rule change that would cap the cost increases cities, towns and businesses would face at 115 percent when implementing improvements that would boost environmental benefits.

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