News-Press Now: Energy Efficiency, Spending Headed for Big Drop

September, 23 2018
Energy Efficiency, Spending Headed for Big Drop
by Erin Murphy

DES MOINES — Proposed energy efficiency plans offered by Iowa utility companies would be a shell of what they had been in recent years.

The new and scaled-back energy efficiency plans are a result of legislation passed this spring and signed into law by Gov. Kim Reynolds. The new law caps the percentage of a customer’s utility bill that can be put toward energy efficiency programs.

Iowa’s utility companies this summer detailed to the state’s regulatory board new 5-year energy efficiency plans starting with 2019. Some of the proposals show a dramatic reduction in energy efficiency program spending and energy savings.

The utility companies say the new plans will result in lower bills for customers, which they can use to invest in energy efficiency if and in any way they choose, and that advancements in technology have rendered some programs unnecessary.

Critics say it is just as they warned during debate over the legislation: that it would gut the state’s energy efficiency programs, and that customers will pay more in the long run.

The state board must act on the proposals by March 31.

“It’s a huge cut and we’re really disappointed,” said Kerri Johannsen, energy program director with the Iowa Environmental Council, a nonpartisan coalition of organizations dedicated to preserving Iowa’s environment.

“The Iowa Environmental Council has a vision of 100 percent renewable energy for the state of Iowa, and we think that that goal is entirely achievable. But we need a wide variety of resources to get there,” Johannsen said. “We just think (the new law and new energy efficiency plans are) a deviation from the path that Iowa has been on toward a really clean energy grid.”

MidAmerican Energy, the Des Moines-based utility company that serves more than 750,000 customers in Iowa, Illinois, Nebraska and South Dakota, in 2018 spent nearly $80 million on electric energy efficiency programs and nearly $31 million on gas energy efficiency programs.

Under their new proposal, MidAmerican in 2019 would spend less than $43 million on electric energy efficiency programs, a cut nearly in half, and just more than $6 million on gas energy efficiency programs, a drop by more than 85 percent.

MidAmerican’s energy savings would drop as well: their gas efficiency plan would save 80 percent less than 2017 and their electricity plan will save nearly 50 percent less, according to calculations made by the Iowa Environmental Council. Spokespeople for the utilities did not dispute the figures.

“Utilities have had really robust energy efficiency programs for many years in Iowa. Since 2009 alone the programs have saved the equivalent of building two-and-a-half baseload power plants,” Johannsen said. “The customers pay for the energy efficiency programs, but they’re paying less (overall). They haven’t had to pay for that generation.”

Johannsen said on the new trajectory under the utilities’ reduced energy efficiency plans, Iowans could have to pay more in the long run because less energy efficiency will lead to a need for more energy production to meet customers’ needs.

“Load growth in Iowa has been pretty flat for a number of years. Electric demand just hasn’t grown because of our efficiency programs,” Johannsen said. “So what we’re going to see is, without doing efficiency we’re going to see load growth and utilities will be forced to invest in new (power) generation.”

Josh Mandelbaum, an attorney with the Environmental Law and Policy Center, said the reduced programs also could threaten the jobs of more than 20,000 Iowans working in energy efficiency-related jobs across the state.

“In the past, Iowa has been a clean energy leader with strong energy efficiency plans, but this is a major step backward,” Mandelbaum said in a statement.

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