June 15, 2021
The lawsuit in Polk County District Court filed by the Iowa Environmental Council, the Environmental Law & Policy Center, and Sierra Club explains how the Iowa Utilities Board (IUB) erred and abused its discretion by refusing to consider evidence on the need to retire two coal plants. The IUB ruled consideration of coal plant retirements was beyond the scope of the case, but past cases under the same law have frequently considered and approved coal plant retirements.
Iowa law requires a biennial review of plans to manage coal plant emissions. The plans must manage the emissions cost-effectively, but MidAmerican’s plan ignored the option of retiring the coal plants to best meet emissions requirements.
Testimony to the IUB showed that closing two coal plants and replacing them with renewable energy is the most cost-effective way for MidAmerican Energy to meet its emissions requirements. Retiring Neal North (also called Neal 3) by the end of 2022 would lower the cost of energy by as much as 10% over ten years. Neal South (also known as Neal 4) costs customers even more; retiring it by 2022 could lead to a 23% savings over 10 years. MidAmerican did not dispute the conclusions.
“We know that coal plants are dirtier and more expensive than clean alternatives. Utilities have often addressed coal retirements as part of their emissions plans, and there is no reason this case should have been different,” said Josh Mandelbaum, Senior Attorney at the Environmental Law & Policy Center. “MidAmerican claims to be making progress toward its 100% renewable vision, but MidAmerican cannot be 100% renewable until it retires its uneconomic coal plants.”
By concluding the coal plant retirement evidence was outside the scope of the case, the IUB avoided making any findings about whether the coal plants are unnecessarily costing customers more money. The environmental groups have raised the issue of coal plant costs in other recent cases before the IUB, but the IUB has repeatedly refused to address the issue.
“In this case, the Board pre-approved MidAmerican’s spending to keep coal plants running even though expert testimony showed it does not make sense for ratepayers,” said Kerri Johannsen, IEC Energy Program Director. “It is the IUB’s job to balance the interests of ratepayers against the profits of monopoly utilities. The Board’s decision in this case simply did not strike that balance.”
MidAmerican is the single largest carbon polluter in the state of Iowa. The company operates five coal plants in Iowa and is the majority owner of a sixth, and unlike other major utilities across the nation, has announced no plans to retire any of its coal plants in Iowa. The recently-filed case focuses on the two plants that financial analysis shows are the most expensive and least economic to operate.
“Operating the Neal Plants, which MidAmerican does not need to meet demand, has forced customers to pay millions in unnecessary costs,” said Katie Rock, the Sierra Club Beyond Coal Campaign Representative. “While the market and high operating costs are driving other utilities to retire their coal plants, MidAmerican is sticking to coal to put money in the pockets of shareholders, no matter what it costs their ratepayers. Iowans deserve better.”