Author: Energy District

The Electric Monopoly’s Company Store

by Andy Johnson, Executive Director

Editor’s note: since this article was written, the Iowa Legislature passed SF 198. The other bills, including the opportunity to study these issues and bring better legislation next session, remain alive.

You load sixteen tons, what do you get?

Another day older and a deeper in debt

Saint Peter don’t you call me ‘cause I can’t go

I owe my soul to the company store.

Tennessee Ernie Ford may have topped the charts in 1955 with Sixteen Tons, but Merle Travis wrote the song based on real life in the coal mines of Muhlenberg County, Kentucky. 

According to Travis, the first two lines of the chorus came from his brother, and the last two from his father; both were miners. 

Just as Big Coal indebted Kentucky miners to the company store, so now MidAmerican Energy (and parent Berkshire Hathaway) is indebting Iowa’s hard-working ratepayers to the company store of investor profits.

There is great moral hazard in the state granting monopoly control of the power sector to a single company, with over 680,000 captive Iowa customers. There is even greater moral hazard in that company pressuring politicians into removing the last remaining pillars of public oversight, accountability, and transparency of that state granted monopoly behemoth.

Legislators: MidAmerican rate increases are coming one way or another. Do you really want to write a blank check of “deregulation” to a power monopoly with no competition and over 680,000 captive Iowa customers? Maybe it’s time to stop and think, to do the work first, and revisit these issues in the future.

The Illusion of a Squeaky Clean Utility

MidAmerican Energy has been very effective at promoting the illusion that it’s serving Iowa ratepayers by keeping rates down and advancing rapidly towards 100% renewables.

In reality, MidAmerican’s business decisions have been and continue to be designed to maximize benefits to out-of-state investors, while running up ratepayer debt at the company store for coming generations of hard-working Iowans. 

Yes, they’ve built a great deal of wind energy and that’s mostly good for Iowa. But they’ve also been rigging the system to maximize tax benefits and perpetually guaranteed profits to investors, even as built-in rate pressures mount and ratepayers may be in for sticker shock in coming years. 

MidAmerican also appears hell-bent on running a large fleet of uneconomical coal plants for decades into the future, at outrageously high cost and health/environmental impact to ratepayers but at quite a nice profit to Berkshire investors, who also own the coal trains. 

But MidAmerican’s chickens are coming home to roost, and the company is desperately seeking a bailout from legislators to protect their wealth extraction business model from public accountability. 

Dismantling Public Accountability

Two important pieces of regulatory oversight help keep behemoth monopolies like MidAmerican honest. The company is working hard to kill both, this session, at the People’s House.

SF 198 would take all teeth out of a mandatory bi-annual regulatory exercise called an emissions plan and budget (EPB) docket. These dockets look at emissions of fossil fuel plants, but also, importantly, at the economics of those plants and their benefits and costs to ratepayers. The bill has passed the House and is awaiting action in the Senate.

MidAmerican has been fighting tooth and nail in a current EPB docket to keep the true economics of their Iowa coal plants secret. They just lost in court, and the company’s own studies show those plants are an increasingly costly burden on Iowa ratepayers (though likely highly profitable to Berkshire investors).

SF 198 would effectively kill the ability of regulators to hold MidAmerican accountable, and indebt Iowa ratepayers to the uneconomical MidAmerican coal plants for at least another generation.

Rate dockets are another critical piece of regulatory oversight that keeps monopoly, investor-owned utilities at least partially accountable. 

When an investor-owned utility wants to raise rates on Iowans, they need to come before the Iowa Utilities Board, lift the hood on books and operations, and prove the case for both an overall revenue increase, and a fair distribution of that increase between classes of ratepayers.

MidAmerican hasn’t lifted that hood in a decade, and is due for a rate case in coming years. So the company is promoting SSB 1173 that would – under the guise of “flexible” or “innovative” rate-making – allow it to skirt the existing rate docket process and instead, offer preferential rates to favored customers on a case-by-case basis, with less transparency and oversight.

The Iowa Legislature should know the factual impact to ratepayers before allowing MidAmerican Energy to feed at the public trough of pro-monopoly deregulation. 

Or Better Yet, Dismantling the Company Store

Iowa’s regulation of investor-owned utilities isn’t perfect, but it sure as heck isn’t in need of MidAmerican’s proposed fixes.

It could be improved, though. HF 617 asks the Iowa Utilities Board to conduct a participatory study of “code provisions and ratemaking procedures” that best serve customers. Legislators should press pause on SF 198 and SSB 1173, do the work together with the IUB to truly understand the potential impact of the monopoly utility lobbying campaigns, and return to the issues in the future if necessary.

The study bill should be enlarged to include Integrated Resource Planning (IRP). Most states utilize common-sense IRP to ensure that monopoly utility investments are actually in the long-term best interests of ratepayers and the state’s grid, rather than simply maximizing profits to investors.

When combined with a requirement for all-source competitive sourcing and performance incentive mechanisms, a robust IRP process brings not only greater accountability, but also greater competitive pressure to monopoly utilities. It’s no wonder MidAmerican/Berkshire pulled out all stops to block an IRP bill this session (SSB 1059), and to promote their own bills to dismantle existing accountability mechanisms.

Iowa legislators have a clear choice this session. They can ignore moral hazard and allow MidAmerican and Alliant lobbyists and investors to short-circuit public accountability, or they can protect the rights and freedoms of Iowa ratepayers and communities from the growing power of the electric monopoly company store. 

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IPCC Releases Major Climate Change Report

by Andy Johnson, Executive Director

The Intergovernmental Panel on Climate Change recently released its AR6 Synthesis Report: Climate Change 2023. It is represents the best science in the world, and it is sobering. Good coverage including enlightening graphics can be found at The Conversation, World Resources Institute, CNBC, and elsewhere. There’s no sugar-coating the conclusions:

“Widespread and rapid changes in the atmosphere, ocean, cryosphere and biosphere have occurred. Human-caused climate change is already affecting many weather and climate extremes in every region across the globe. This has led to widespread adverse impacts and related losses and damages to nature and people. …Climate change is a threat to human well-being and planetary health. There is a rapidly closing window of opportunity to secure a liveable and sustainable future for all.”

Also, “Policies and laws addressing mitigation have consistently expanded since AR5. Global GHG emissions in 2030 implied by nationally determined contributions (NDCs) announced by October 2021 make it likely that warming will exceed 1.5°C during the 21st century and make it harder to limit warming below 2°C.”

This is true, and yet major policies have been adopted even since 2021. The Inflation Reduction Act in the U.S. is the most significant climate and clean energy legislation in our history, and is already accelerating change. Globally, renewable energy is being built faster than predicted, solar will produce more power than coal by 2027, and over half of electricity production will be carbon-free this decade.

Decades ago, Donella Meadows said “we have just enough time, starting now”. While we are losing the race against time, we are also rapidly gaining ground. Your Energy District is working hard to lead local implementation, and advocate for ever stronger policy. Join us, vote, share the IPCC report with policymakers and your networks, and THANK YOU to all those doing their part and leading the way.

Nonprofits and the IRA

by Paul Cutting, Energy Planner

On March 21st, WED hosted an Energy Lunch to discuss how the new direct pay option allows non taxable entities to take advantage of the 30% federal renewable energy refundable tax credit! Organizations like schools, nonprofits, churches and local governments are now able to capture the full value of the 30% federal tax credit, putting renewable energy projects like PV solar, geothermal, wind, EV vehicle purchases and battery storage within reach for your nonprofit!

We gathered on zoom and at the Lingonberry to discuss about all the ways the Inflation Reduction Act can benefit your nontaxable organization. We also discussed the option of using a Power Purchase agreement to allow non taxable entities to work with a taxable investor to capture the value of the tax credit.

Click below to view the recording or scroll down to get the slides.

Click here to see the slides from the presentation

 

Green Iowa Americorps Team Offers Free Tree Seedlings – Winneshiek Energy District

In partnership with Winneshiek Energy District members, Kevin and Leslie Sand, our Green Iowa Americorps team created the Tiny Trees Initiative to make Decorah a little greener and help reduce the energy bills of Decorah residents through natural shade.

A large shade tree should be planted 20 feet or more from the house to maximize the shade benefit and ensure the safety of your home (source).  If you think you have the space for a tree, the team will come to your home to help you pick a planting spot. Then we’ll come back and plant a tree in May.

If you are interested in having a juvenile tree planted in your front yard that will one day grow large enough to shade your house in the warm months, please fill out this form or call us at (563)-382-4207, ext 2

Everything EV-Related You Hadn’t Already Thought Of – Winneshiek Energy District

by Paul Cutting, Energy Planner

Electric Vehicles (EVs) have improved by leaps and bounds over the past five years. The 2017 Nissan Leaf—then one of only a few EVs on the market—had a range of just 107 miles. Today that same vehicle has a range of 215 miles. In fact, most new entry level EVs, like the Chevy Bolt (259 miles range), the upcoming Chevy Equinox (300 miles), the upcoming Blazer (300 miles), VW’s ID.4 (275 miles) and the Kia Niro (253 miles) all have ranges approaching their equivalent internal combustion engine counterparts. In fact, the number of 2022 models with ranges of at least 300 miles grew to fourteen as compared to five from the year before. But beyond improvements in range and ever-increasing access and availability to public charging infrastructure, there are several other lesser known considerations one should take into account when contemplating an EV, including cold weather range reduction, vehicle charging speed, how the vehicle is heated, and whether the vehicle will be stored in a heated garage. 

All EVs exhibit reduced performance in cold weather. If you’re a current hybrid driver, you know what I’m talking about. My small hybrid truck consistently gets 45-48 mpg during the warm months, but struggles to achieve 32 mpg during the winter. Battery performance, and the systems meant to protect batteries from freezing during cold weather, greatly affect winter mileage. This is true whether you’re driving a hybrid, plug-in hybrid, or pure EV. Some EVs have reported cold weather performance losses of 30% of rated range. EPA range calculations are complex, but the short end of it is that they don’t accurately account for real-world winter driving conditions. 

Some EVs suffer more range loss during cold weather driving than others, and much of this variation is due to how the vehicle’s cabin is heated. A normal internal combustion engine vehicle siphons heat from the engine and uses this byproduct to heat the vehicle. That advantage doesn’t exist for a vehicle without a gas engine, and instead heating is achieved through either an electric resistance element or the combination of a heat pump coupled with an auxiliary electric resistance element. 

The combination heat pump/electric resistance heater uses less electricity than a sole resistance element, and as a result has less effect on cold weather performance. For example, the Ford Mustang Mach-E with its resistance heater suffers a roughly 30% cold weather range hit, whereas the Tesla 3 with its hybrid heat pump/resistance heater suffers a range hit about half that. When comparing heating systems between EVs, keep in mind that not all trim levels of the same model use the same method of cabin heating. Some entry level trims may utilize resistance heating while the seemingly same higher end trims may utilize a hybrid system.

A related consideration is how the vehicle is stored, or whether the vehicle can be preheated while still connected to electrical supply. An EV stored in a heated garage will have a much lessened cold weather range and performance hit. Before going any further, I’m not implying that having a heated garage is a requirement of EV ownership in our climate, or that anyone should heat their garage for the sole purpose of making their EV happy in the winter. That said, an EV stored well above freezing with its battery and cabin preheated close to room temperature will operate much better than one stored outside in freezing temperatures. Similarly, some models have features that allow for either scheduled or keyfob activated preheating while the vehicle is connected to external power. 

EV ownership will become more compelling for more people as public charging becomes widely available. EV charging is done at three speeds: Level 1, 2 and 3. Level 1 charging utilizes a standard wall outlet operating at 120 volts and achieves a rate of charge of about 2-4 miles of range per hour, depending on vehicle efficiency. Level 2 charging utilizes 240 volt power, and is what’s most widely available at public chargers. Level 2 charging achieves a rate of charge anywhere from 18 to 50 miles of range per hour and is really the only option for public charging currently available in Northeast Iowa. 

Level 2 charging speeds vary greatly by vehicle. For example, the Nissan Leaf is capable of charging at a rate of about 23 miles per hour of charge while the Chevy Bolt can achieve a rate of about 44 miles per hour. Keep in mind, level 2 charging speed varies depending on both the capability of the vehicle and the capability of the charger (or outlet) the vehicle is plugged into. Most EV owners charge at home at level 1 or 2, and with adequate time spent charging overnight, consideration of level 2 charging speeds, in practice, really doesn’t matter all that much. With level 3 DC fast charging still scarce for the foreseeable future, level 2 charging speeds become important for those who need a charge to get home.

Some day relatively soon, level 3 charging will be available at commercial locations in Northeast Iowa. Some slow level 3 chargers allow for a rate of charge of about 75 miles per hour, whereas the fastest level 3 chargers (350 kW in speed), can fully charge (from about 10% capacity to 80% capacity) in as short as 15 minutes.  (Lithium-based batteries are not designed to be fully discharged or charged, and instead operate in that sweet spot between 10-80% of charge.) But not all vehicles can accept 350kW level 3 charging, and some only allow for level 3 charging speeds of up to 50kW. For example, the Chevy Bolt can be charged from 10% to 80% capacity in about an hour (at a rate of 50kW), whereas higher-end EVs like the Hyundai Ioniq 5 can charge in as short as 18 minutes (at a rate of 350kW).

As Level 3 charging rolls out more widely throughout the country, especially along interstate corridors, which was prioritized in the Bipartisan Infrastructure Law, a level 3 rate of charge will become increasingly important. The challenges for  those taking their EVs on road trips cross countryare widely documented.

If you’re in the market for a new vehicle or are EV-curious, now might be the time to take the plunge. Ranges of EVs have increased tremendously over the last few years, more entry level models with fantastic ranges are coming to market every year, and the nationwide network of Level 3 DC fast chargers is currently being built. Despite the fact that some changes in the EV tax credit that will make some models ineligible (see our prior newsletter post here), many vehicles still qualify for the $7,500 credit, which in some cases puts EVs at cost parity to their gas equivalents. 

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