The electric grid is changing – and Iowa’s regulatory approach based on the 1920’s needs to be updated. We need a roadmap for Iowa’s future.

Future Energy Iowa is focused on reforming how Iowa’s investor-owned electric utilities are incentivized and regulated to ensure the most efficient and reliable grid of the future. 

Iowa, similar to many other states, gives private, investor-owned electric providers, Alliant and MidAmerican Energy, guaranteed monopolies in given areas of the state. They are the only ones that a resident or business can buy electricity from in these areas. Electric utilities also get a virtually guaranteed return on investment of up to 13% on any investments that are made.

The trade-off for guaranteeing the monopoly is that the Iowa Utility Board was given the ability to closely regulate and to set rates.

This task is becoming ever more complicated – and crucial with the energy sectors rapidly changing technologies, economics, and opportunities. In the future, the most cost-effective electric grid will require effectively leveraging a variety of utility and non-utility owned energy sources, including:

• Emerging generation, such as solar and ag-based bioreactors

• Storage

• Demand response capabilities (controlling when energy is used)

• Grid Enhancing Technologies (software and smart equipment that expands existing transmission capacity) and

• Energy efficiency opportunities.

The challenge – each of these resources will require investment by the utility to fully leverage the benefits, but such investments will reduce the overall investment that is needed in utility-owned generation, transmission, and distribution. This creates a strong financial disincentive for investor-owned utilities to leverage these resources.

Reform is needed. The answers will not be easy, but Future Energy Iowa proposes the following blueprint as a path for policy makers and stakeholders.