IUB takes action to protect customers from risks with MidAmerican Energy's Wind PRIME proposal

posted on Monday, May 1, 2023 in Energy News

May 1, 2023 — Des Moines, IA — The Iowa Utilities Board issued an order on April 27 setting conditions for MidAmerican Energy’s ability to move forward with the Wind PRIME project, which includes 2,042 megawatts of new wind and 50 MW of new solar development. Importantly, the Board found solar generation is better situated to meet MidAmerican’s reliability needs and that the utility’s application did not adequately consider whether more solar and storage would have been better for customers. Further, the Board found that while the project would help meet the state's goals of reducing carbon intensity, the lack of coal plant retirements limits that benefit.

The Board approved the project only because the utility promised the project would provide significant economic benefits to customers. As a result, the Board found that MidAmerican should bear the risk of the $3.9 billion project underperforming and thus placed strict conditions on the utility’s right to recover the project costs from customers. 

If MidAmerican decides to proceed with the Wind PRIME project under the Board’s new conditions, it must also conduct a public planning process before any future clean energy development. MidAmerican must let the Board know whether it plans to proceed with Wind PRIME in the next 20 days.

The Iowa Environmental Council, Environmental Law & Policy Center, and Sierra Club Beyond Coal provided independent expert testimony based on a detailed modeling analysis of how MidAmerican could best achieve its "net zero" carbon emissions goal. That modeling found that customers would save money if MidAmerican planned for a phased retirement of its coal plants and invested in battery storage and solar to round out its wind fleet. In contrast, the modeling found that Wind PRIME does little to advance the transition to carbon free electricity due to its continued reliance on coal burning.

In addition to the planning process, the order requires that in future proceedings, MidAmerican must provide "a robust analysis of the need for the project" similar to the one presented by the environmental groups' experts that compares the proposal to clean alternatives like solar and battery storage, and shows how the new resources affect the rest of MidAmerican’s portfolio. This was because the IUB found "testimony submitted by MidAmerican is noticeably deficient" in assessing the impact on its other generation resources. 

"MidAmerican should plan for -- and its new projects should reflect -- the path to a zero emission future and fully retiring its increasingly uneconomic coal fleet," said Josh Mandelbaum, Senior Attorney for ELPC. "The planning analysis the Board required for future advance ratemaking proceedings will make sure that MidAmerican’s future investments move us down that path."

While the environmental groups generally support the addition of wind in Iowa, their experts’ analysis showed that a combination of solar and battery storage was needed to accelerate the retirement of coal plants and deliver truly 100% carbon free electricity. It would also save customers millions compared to MidAmerican’s proposal.

Environmental groups criticized MidAmerican’s proposal for not addressing the need to retire and replace any of MidAmerican’s six coal plants, the last of which will not be retired until 2049, even though MidAmerican’s own internal studies showed that several of the coal plants are already losing money. A plan proposed by the environmental groups’ independent modeling experts would have retired coal plants more quickly. The IUB found that “MidAmerican does not meaningfully show how or why the Wind PRIME project would be better than feasible alternatives, including for example the Environmental Intervenors’ proposal for less wind and more solar and storage.” 

"We need a real path to a 100% carbon free electricity future for Iowa, which requires planning for the clean energy additions needed to responsibly transition away from burning coal. Our experts' analysis showed what that path could be,” said Laurie Williams, Senior Attorney for Sierra Club Beyond Coal. "MidAmerican’s coal plants are expensive and polluting, and ultimately, customers are the ones who will pay for the utility’s failure to plan for the plants’ retirement. The Board's order means that MidAmerican can no longer dodge its responsibility to plan going forward."

The order pointed to MidAmerican’s Zero Emissions Study, which MidAmerican sought to keep confidential. Environmental groups argued to make the conclusions of the study public, which MidAmerican released on the eve of the hearing only after ordered to do so by the IUB. That study revealed that the company knows solar is the most affordable way to increase renewable energy and that its coal plants were uneconomic.

"We are hopeful that the Board's order will set MidAmerican on a better path going forward. We know that adding solar and battery storage to transition away from coal will save customers money and deliver the carbon free electricity they expect from MidAmerican," said Michael Schmidt, staff attorney for IEC. 

Key quotes from the IUB order:

  • "The testimony submitted by MidAmerican is noticeably deficient with respect to how the proposed 2,092 MW of generation would be integrated into MidAmerican’s existing generation portfolio." (Order p. 31)
  • The Board finds that the ZES is a persuasive piece of evidence in the record as to what generation assets would improve reliability. The Board also finds the quantitative analysis of reliability performance offered by Ms. Glick to be useful and persuasive. The analysis provides meaningful information regarding the need for solar generation as a more appropriate renewable resource to support reliability, and the potential for battery storage to bolster the reliability of MidAmerican’s current wind[1]centric electric generation fleet. (Glick Supplemental Direct, p. 48). (Order p. 34)
  • MidAmerican does not meaningfully show how or why the Wind PRIME project would be better [from a reliability perspective] than feasible alternatives, including for example the Environmental Intervenors’ proposal for less wind and more solar and storage. (Order p. 45)
  • "The Board finds that the Wind PRIME proposal fails to demonstrate its reasonableness compared to feasible alternatives under a traditional utility review." (Order p. 48)
  • "In any future ratemaking principle proceedings, MidAmerican shall provide in its prefiled testimony not only a robust analysis of the need for the project and comparison of the proposed generation facility with other feasible long-term sources of supply, but additional analysis regarding interaction of the proposed resources with the remainder of MidAmerican’s generation portfolio, in particular reliability and impact on meeting peaking requirements and availability of baseload resources." (Order p. 95)
  1. clean energy
  2. coal
  3. solar power
  4. wind power