MidAmerican ordered to release studies, reaches settlement on $4 billion plan
Iowa environmental groups and tech giants Google, Facebook and Microsoft, which have questioned MidAmerican Energy's proposed $4 billion expansion of its renewable energy capacity, have won a fight for the release of two company internal studies that the groups say will provide critical insight on the project.
The Iowa Utilities Board said it will release redacted versions of a MidAmerican zero emissions study and coal plant economics assessment by early February unless the Des Moines-based utility seeks a court injunction to stop them from becoming public.
Josh Mandelbaum, a Des Moines City Council member and attorney for the Environmental Law & Policy Center, which helped lead the challenge, said the studies will help Iowans understand "what MidAmerican’s own analysis shows about the clean energy transition and if that analysis is consistent" with the utility's proposed $4 billion investment.
The board's decision comes as MidAmerican reached a settlement agreement the Iowa attorney general's consumer advocate and the Iowa Business Energy Coalition, a group representing Deere & Co., Cargill and other large businesses, on the utility's proposal to build 2,042 megawatts of wind generation capacity and 50 megawatts of solar.
The utility also plans to study modular nuclear energy generation, battery storage and other technology.
More on MidAmerican:Renewable sources powered 88.5% of MidAmerican Iowa customers' energy in 2021
Groups: WindPrime needs more solar, battery in energy mix
MidAmerican’s WindPrime project would enable the utility to generate enough renewable energy to meet 100% of its annual power demand needs at no additional cost to Iowa customers, according to the company, owned by Warren Buffett’s Berkshire Hathaway.
But the Iowa environmental groups say WindPrime leans too heavily on the company's wind generation. They’ve urged MidAmerican to build more solar and battery capacity to store energy while scaling back wind and more aggressively retiring coal-fired power plants.
That strategy would save customers $120 million, the groups’ analysis shows.
At the same time, the tech companies, with large, power-hungry data centers in Iowa, have questioned whether MidAmerican’s project is a money grab, aimed at collecting lucrative production tax credits that benefit Berkshire Hathaway shareholders. They've urged MidAmerican to look at buying energy from other providers within the Midcontinent Independent System Operator, or MISO, the multistate grid of which it is a member.
“MidAmerican only considered self-build options to provide carbon-free energy,” Jeffry Pollock, a St. Louis energy expert, said in a filing on behalf of the tech companies. “There are many more ways that MidAmerican can achieve the same decarbonization objectives without having to invest in large, capital-intensive projects.”
But MidAmerican CEO Kelcey Brown said Iowa is best suited to wind development, providing customers with the most cost-effective renewable energy. And customers wouldn’t reap federal tax credit benefits if the wind energy is purchased from developers.
MidAmerican now gets nearly 90% of Iowa’s annual energy needs from renewable energy, mostly wind.
Brown said the company plans to reach net-zero emissions, including retiring five coal-fired power plants, by 2050. She said the environmental groups’ proposal to retire coal plants earlier “makes zero sense from a reliability perspective.”
More:Wind blade manufacturer TPI plans to reopen Newton plant. But new jobs might be months away
And batteries would fail to store energy long enough to support demand through extended cold snaps and heat waves, Brown said.
Mandelbaum counters that his call for retirement of MidAmerican's coal plants by 2035 is reasonable, while adding solar and battery storage would help diversify the utility's generation portfolio and support its reliability.
Iowa Utilities Board hearing scheduled on settlement
The Iowa Utilities Board will weigh the settlement, beginning with a hearing scheduled for Feb. 20-23. The agreement proposes that:
$100 million would go toward lowering Iowans' utility bills this year, reducing pass-through costs tied to fluctuating energy costs and other expenses. The agreement also would provide reductions in the energy expense in future years and outlines additional revenue sharing and consumer protections.
MidAmerican would accelerate its plan to pay down the cost of existing generation assets. That makes earlier-than-planned retirement of coal plants feasible, Mandelbaum said.
MidAmerican would receive an 11% return on its investment in the project.
MidAmerican would complete a resource evaluation study within 24 months, if WindPrime is approved. Environmental, tech and other groups had unsuccessfully pushed MidAmerican to provide a resource analysis along with the WindPrime proposal.
Brown said about two dozen Iowa business, economic development groups and communities have supported the project through filings with the Iowa Utilities Board. Steel maker SSAB Muscatine, for example, said MidAmerican's wind generation has helped make Iowa is "home to the most sustainable steel producer in the United States." That steel is used to make the turbines as well as Deere and Caterpillar equipment.
"Every new investment means manufacturing jobs and economic growth in the state," the company said in its filing.
In the Iowa Utilities Board order allowing MidAmerican’s studies to be released, regulators wrote that the reports would allow environmental, tech and business groups and the “public generally to evaluate and opine regarding the Wind PRIME proposal."
“This is particularly relevant since MidAmerican has argued that other parties’ testimony regarding similar analysis of long-term capital investment and/or coal economics is inadequate and insufficient,” the board said.
MidAmerican said it's evaluating the order to determine its next steps.
"We've provided this information in multiple ways and multiple times," said Tina Hoffman, MidAmerican's spokesperson.
Donnelle Eller covers agriculture, the environment and energy for the Register. Reach her at deller@registermedia.com or 515-284-8457.
This article originally appeared on Des Moines Register: MidAmerican gains agreement with business group on $4 billion project
