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3/26/2010
Montgomery: Learning a Valuable Lesson from Iowa’s Green Energy Efforts
Wisconsin is not the only state in the nation contemplating changes to its existing “green energy” policies. In fact, many of the provisions included in Governor Doyle’s Global Warming bill are very similar to initiatives championed by Iowa’s Democrat Governor, Chet Culver. As our state’s green energy debate continues perhaps we can learn a valuable lesson from Iowa’s recent experience.
On February 25, 2008, Governor Culver announced his plan for Iowa to be “the national leader when it comes to securing a clean energy future.” The plan’s cornerstone is a requirement that 25% of the state’s energy to be derived from renewable resources by 2025. Like Governor Doyle, Governor Culver championed the cause of reducing global warming and extolled the virtues of this new green energy policy. Meaningful debate over the cost to utility customers took a back seat -- that is until the bill came due. Allow me to explain.
Late last year, the Interstate Power and Light Company (IPL), the Iowa subsidiary of the Wisconsin-based Alliant Energy Corporation, began operating a 200-megawatt Whispering Willow Wind Farm in Franklin County, Iowa. IPL indicated this new wind farm “aligns squarely with Governor Culver’s vision that 25 percent of all the energy produced in Iowa comes from renewable resources by 2025.”
Earlier this month, IPL sent a letter to the Iowa Utilities Board (IUB), Iowa’s counterpart to the Wisconsin Public Service Commission (PSC), asking for a 13.8% annual electric rate increase to offset the company’s costs of building the new wind farm and its associated clean energy investments. According to a Cedar Rapids Gazette article, the average residential utility customer would see about a $10 a month increase in their utility bill if the request were approved.
Within days of the filing, Governor Culver sent a terse letter to IPL requesting that the company “delay any implementation of its recently announced and very substantial electricity-rate increase request until such time as the public is given a full and reasonable opportunity to be heard on the matter in a proceeding before the IUB.” Other legislators quickly followed the Governor’s lead with one Iowa State Senator going so far as to call the rate increases “uncalled for” and “just absolutely devastating.” An IPL spokesman replied that the company has “done what we’ve been asked to do, to build renewable energy and clean up emissions. We’re just trying to reconcile how we pay for it.”
Make no mistake about it, if Governor Doyle’s Global Warming bill is enacted into law, the issue currently playing out in Iowa will become commonplace in Wisconsin. Our PSC will be bound by law to ensure that utilities comply with the 25% by 2025 renewable energy standard. In turn, utilities will seek approval for higher electric rates to pay for the costs of building or purchasing renewable energy. The open question is who picks up the tab for the decision. I think we both know the answer to that question – it’s the utility customers. Hopefully, Governor Doyle and his fellow advocates of the Global Warming legislation are paying close attention to what’s happening in Iowa.
Phil Montgomery is a Republican, represents the residents of the 4th Assembly District and serves as a minority member of the Committee on Energy and Utilities.
COMMENTS
So, you take this as evidence that wind energy is too expensive.
Quote below (from Wind Wire):
A March 29, 2009 New York Times article quoted a Black & Veatch study that compared the cost of energy from new installations:
A modern coal plant of conventional design, without technology to capture carbon dioxide before it reaches the air, produces at about 7.8 cents a kilowatt-hour; a high-efficiency natural gas plant, 10.6 cents; and a new nuclear reactor, 10.8 cents. A wind plant in a favorable location would cost 9.9 cents per kilowatt hour.
Dean Weichmann (Sat Mar 27 09:29:55 2010)
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