DES MOINES — Advocates for renewable energy and the environment hoped state regulators would strengthen rules that, those advocates say, allow energy companies that do business in Iowa to mislead consumers about the company’s energy portfolio.
The Iowa Utilities Commission’s first draft of proposed rule changes instead would further weaken what advocates believe are regulations that already lack accountability, those groups said Tuesday during a public hearing.
Energy companies can ask the commission to verify the percentage of the company’s retail sales that were served using renewable generation during the previous year.
The Iowa Environmental Council and Environmental Law & Policy Center have argued that the rule lacks accountability.
The groups point to MidAmerican Energy’s public claims last year, after seeking verification from the commission, that in 2022 it delivered “100 percent renewable energy to serve its Iowa customers’ electricity usage” — even though some of its overall energy production came from coal.
State regulations allow for such a statement because it allows energy companies to calculate its energy production by dividing renewable generation by retail sales. In other words, MidAmerican produced enough renewable energy in 2022 to serve its Iowa customers’ electricity usage. But its overall energy production included fossil fuels — it reported 23 percent of the overall energy it produced in 2023 came from coal.
When the Iowa Utilities Commission earlier this year began reviewing its renewable energy verification process — in response to an executive order from Gov. Kim Reynolds for all state agencies to review all state regulations — the clean energy and environmental groups hoped the commission would strengthen the verification process by requiring more robust reporting by the energy companies.
Initially, the governor-appointed, three member commission considered removing the rule completely — which the clean energy and environmental groups supported with hopes the panel would write a new, stronger rule.
Instead, the commission Tuesday revealed a draft proposal that amends the rule, stating energy companies would file a statement “asserting” the percentage of the company’s retail sales that were served using renewable generation in the prior year.
“Rather than improving that language or clarifying, it takes that language out altogether. So to us, it looks like a verification program with even less accountability,” Josh Mandelbaum, a Des Moines-based lawyer with the Environmental Law & Policy Center, said in an interview after Tuesday’s public hearing.
“We’re concerned that the verification program isn’t providing sufficient accountability and transparency today, and so to create a verification program with even less accountability, that’s problematic.”
What MidAmerican says
A representative for MidAmerican Energy at the public hearing pushed back on the assertion that the company misled Iowans about its energy production.
The clean energy and environmental groups’ concerns focused on MidAmerican’s Sept. 25, 2023, news release that claimed in a headline “MidAmerican served Iowa customers’ electricity demand with 100 percent renewable energy in 2022.” The news release went on to say the company delivered “100 percent renewable energy to serve its Iowa customers’ electricity usage” in 2022, and boasted about the company’s “diversified portfolio of resources, including wind, solar and thermal assets.” The 1,000-plus-word news release makes no mention of MidAmerican’s coal production.
Arick Sears, a representative for MidAmerican who spoke Tuesday, said the news release contained links to online documents that provided a more full picture of the company’s energy portfolio.
In a May filing with the Iowa Utilities Commission, MidAmerican said it was inappropriate for the advocacy groups to argue the accuracy of the company’s previous news releases during a process to reconsider this state rule. But the company also addressed the criticism, arguing is has been transparent with its customers.
“MidAmerican has clearly stated that its renewable energy percentage is based on annual calculations — that is, MidAmerican generates an amount of renewable energy over a given year and retires those renewable energy credits on behalf of customers. The annual amount is compared to how much electricity MidAmerican’s Iowa customers used during that same 12-month period, and the result is an annual percentage,” the filing says.
“MidAmerican also clearly communicates to its customers and regulators that while MidAmerican has made tremendous progress to reduce emissions in a relatively short amount of time, thanks to investments in wind and solar energy, MidAmerican continues to use thermal resources during those times when other resources can’t meet customers’ needs.”
On the page of MidAmerican’s website that breaks down its different energy sources, the company says it continues to rely in part upon fossil fuels to assure customers have a reliable energy source and keep the cost to consumers down.
“While we transition to cleaner energy sources, we also must ensure that we provide energy that is reliable and affordable. As technologies evolve to be proven and cost effective, we will utilize a variety of energy sources, including fossil fuels,” the company’s website says.
After a cursory review of the Iowa Utilities Commission’s proposed changes, Sears said MidAmerican “is comfortable with the understanding” that the proposal is to move away from commission verification toward a more straightforward information reporting process.
The Office of Consumer Advocate, housed in the Iowa Attorney General’s Office, also commented throughout Tuesday’s public hearing. The office advocated for keeping the existing rule until there is another process in place for energy companies to report the amount of its renewable energy generation.
What comes next
The Iowa Utilities Commission set a Sept. 13 deadline for the parties involved to file comments on the proposed changes and left two more weeks for the parties to respond to those initial comments.
Comments: (515) 355-1300, erin.murphy@thegazette.com
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