MidAmerican Energy announces $1.9 billion wind generation expansion
Investment said to be largest in state's history
DES MOINES – MidAmerican Energy Co. plans to add 656 wind turbines that will generate up to 1,050 megawatts of power in Iowa by the end of 2015 – a $1.9 billion project that Gov. Terry Branstad said represents the largest economic development investment in state history.
“It’s another great day in Iowa,” Branstad said Wednesday at a Statehouse news conference with MidAmerican officials.
That’s because the project, which MidAmerican said would start late this year and is scheduled to be completed in 2015, will create 460 construction jobs over a two-year period with an estimated payroll of $30 million, Lt. Gov. Kim Reynolds said, and an estimated 48 permanent jobs in Iowa with a $2.4 million payroll.
The economic benefits don’t stop there. Greg Abel, chairman, president and CEO of MidAmerican Energy Holdings Co. – the parent company of MidAmerican Energy – said the wind expansion will provide in excess of $360 million in additional property tax revenues over the next 30 years. Landowner payments totaling $3.2 million per year also are expected as a result of the expansion.
In addition, the expansion is planned to be built at no net cost to the company’s customers and will help stabilize long-term electric rates by providing a rate reduction totaling $10 million per year by 2017, commencing with a $3.3 million reduction in 2015, Abel added.
The project will be built without state economic development assistance or tax credits, according to William Fehrman, president and CEO of MidAmerican Energy. It which will result in 39 percent of MidAmerican’s Iowa retail generation output customers getting their electricity from wind.
The expansion of MidAmerican’s wind farms already is having an impact on other economic development, Branstad said.
“Iowa leadership in wind industry is a great selling point in conversations we’re having with high-tech companies,” Branstad said, referring to Facebook, which recently announced a $300 million investment at Altoona, Google, which is investing $1.5 billion in Iowa, and Microsoft, which has a Des Moines area data center. “They want to have a green portfolio. They want to say a lot of the energy for these data centers comes from renewable sources.”
The expansion’s impact could benefit Iowa manufacturers of wind energy components, according to Fehrman. Although MidAmerican hasn’t selected its turbine manufacturers yet, he noted its turbine fleet is predominantly Siemens and GE. Siemens blades are made in Fort Madison and towers for both Siemens and GE are built in Newton.
Abel praised the Branstad administration for a continued focus “focus on creating an environment that allows for significant investment in Iowa, and we are pleased to be working hand in hand with them to grow our state and create good jobs.” He also thanked Iowa’s congressional delegation for supporting the production tax credit extension that made the investment possible. To qualify for the credit, “continuous construction” involving at least 5 percent of the project cost must begin before the end of the year
Since 2004, MidAmerican has installed 1,267 wind turbines in Iowa representing a total investment of about $4 billion.
The expansion will reduce the company’s carbon footprint by 10 percent, Fehrman added.
“We love wind. You can tell,” he said
However, the wind expansion won’t affect the possibility MidAmerican will seek approval to build a small-scale nuclear reactor somewhere in Iowa, Fehrman said. Nor will it affect plans for upgrades to existing power plants.
If the expansion is approved by the Iowa Utilities Board, MidAmerican Energy will own and operate about 3,335 megawatts of wind generation capacity in Iowa by the end of 2015. Currently, MidAmerican Energy owns and operates about 2,285 megawatts of wind generation capacity in Iowa and is No. 1 in the U.S. for ownership of wind generation capacity among rate-regulated utilities.
MidAmerican Energy Company, Iowa’s largest energy company, provides electric service to 734,000 customers and natural gas service to 714,000 customers in Iowa, Illinois, Nebraska and South Dakota. It is headquartered in Des Moines.
Reaction to MidAmerican’s Announcement:
U.S. Sen. Tom Harkin: “We have long known the benefit of the production tax credit for wind in states like Iowa – not just to increase our domestic energy supply, but to create manufacturing jobs as well. With Iowa leading the way in this innovation, today’s announcement brings the benefit of the wind production tax credit into focus with a major investment that was made possible in part by extending the tax credit.”
U.S. Sen. Chuck Grassley: “Continued investment in wind-energy production emphasizes the value and success of the federal production tax credit. Wind energy has proven that it’s a force in America’s energy supply, providing clean, renewable, and home-grown power. Wind energy comes from local farms, it’s for local customers and, most often, it adds investment value to local communities.”
U.S. 1st District Rep. Bruce Braley: “This investment reinforces how critically important the wind energy production tax credit is to wind energy investments in Iowa. The tax credit makes investments like MidAmerican’s possible and is quickly turning Iowa into a world leader in wind energy production. A long-term extension of the wind energy tax credit would only encourage further investments like this and create untold possibilities for Iowa’s renewable energy economy.
U.S. 2nd District Rep. Dave Loebsack: “Today’s announcement by MidAmerican Energy that they will be investing an additional $1.9 billion is great news for the state. The wind industry creates good paying jobs in local communities and this announcement will create new jobs in addition to the over 7,000 Iowans who are already employed in the industry. I am pleased this investment will help strengthen not only Iowa's leadership in wind energy but also create homegrown and affordable energy for Iowans and continue to grow our manufacturing sector in the state.”
Iowa Environmental Council: “The Iowa Environmental Council and our supporters across the state welcome the announcement that MidAmerican Energy will add 1,050 megawatts of new wind energy capacity in Iowa. Governor Branstad is correct that wind energy brings new economic opportunities to Iowa not only from the manufacturing, installation, and operations of wind turbines, but also because the availability of renewable energy in our state makes Iowa a more attractive place to locate a business.”
Rep. Tyler Olson, chairman of the Iowa Democratic Party: “Today is a great day for the state of Iowa and would not have been possible without the forward thinking of Govs. Tom Vilsack and Chet Culver and Democrats in the state legislature. Democrats years ago had the vision of making Iowa the wind energy capital of the world, and today’s announcement is just one more example of this dream becoming a reality.”Iowa Policy Project Executive Director David Osterberg: “This addition should move Iowa to above 30 percent if its electricity being generated by clean wind power. As an organization that has been writing about the advantages of renewable energy since 2002, we applaud this direction in economic development for the state.