Alliant Energy likes to tout its state-mandated and customer-funded energy efficiency programs in quarter-page ads in this paper and via brochures mailed directly to homes. In fact, the feasibility study the company paid for says “Alliant spends an average of $364,980 annually on energy efficiency programs that benefit Decorah customers.”
I found it interesting, then, that Alliant didn’t emphasize energy efficiency programs in a presentation to the Decorah City Council on Feb. 5. The last presentation slide, titled “Conclusions,” made several claims regarding things like costs, reliability and renewable energy, but energy efficiency was notably absent.
Perhaps this was because, in late January, Alliant lobbyists had already declared their support for two bills in the Iowa Legislature that, among other things, would radically reduce or eliminate their obligation to provide energy efficiency programs to their customers. Fortunately, the bill in the Iowa House, Study Bill 595, never made it out of committee. But the Senate bill, File 2311, advanced, was amended and was recently approved by the chamber. It awaits possible action in the House.
This 20-page bill makes several drastic changes to current law regulating the utility sector. For example, one change basically cuts energy efficiency funding in half because it limits funding to a small percentage of the annual revenues of utilities like Alliant.
Another change requires the use of a utility-favored cost/benefit test that will rule out many current energy efficiency measures approved by the Iowa Utilities Board and providing benefits to customers.
The killer, however, is a provision allowing every customer to opt-out of a utility’s energy efficiency plan. Given the largest (industrial) energy users in the state have been lobbying for this option for years, it is a virtual certainty they will opt out, which means funds for energy efficiency will be reduced even further.
Why should large energy users who pay the lowest rates be able to opt-out of energy efficiency? Why should anybody be able to opt-out of energy efficiency when it is the least expensive source of energy in the state?
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It’s no wonder many organizations vigorously opposed SF 2311, including the Office of the Consumer Advocate, AARP, the Iowa Pork Producers as well as the cities of Des Moines, Iowa City and Waukee.
Iowa’s Energy efficiency programs are a great value. According to Alliant’s most recent annual report, their suite of energy efficiency plans for electricity and natural gas produced societal net benefits of $947.4 million in 2016, and generated $3 in savings for every $1 spent.
These significant savings are quite valuable for Alliant customers who currently pay 25-35 percent more for their electricity compared to customers of Iowa’s other investor-owned electric utility, MidAmerican Energy.
Iowa’s energy efficiency programs also pay their own way. All of the costs associated with designing, marketing, implementing, administering and reporting results for these programs are paid for by Alliant customers through a small volumetric charge on their monthly bill.
For example, residential customers currently pay $0.0053/kWh. These programs help Alliant customers save money while also increasing the amount of least-cost energy in our state. These are two of the reasons why energy efficiency is one of the four pillars in Governor Reynolds’ new Iowa Energy Plan.
We need to tell our legislators there is nothing wrong with our energy efficiency programs. Collectively, they are saving us money and reducing the need to build expensive new power plants.
Alliant doesn’t like energy efficiency programs because they reduce sales and thus profits, but the company seems to be doing quite well. Alliant Energy just reported a 50 percent increase in profits for the fourth quarter of 2017 and a 130 percent return to shareholders over the past five years.
Meanwhile our rates are going up.
All of this is food for thought as the Decorah community prepares to vote May 1 to authorize the Decorah City Council to consider filing a petition with the Iowa Utilities Board to form a municipal electric utility. I am encouraged that the other feasibility study about municipalization assumes approximately $600,000 would be made available by the new municipal utility to support energy efficiency and other energy programs in our community.
• Jim Martin-Schram is a professor at Luther College and a resident of Decorah.
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Editor’s Note: SF2311 was amended just before the funnel deadline. In its current version, which may not be the final version, the energy efficiency program was capped at 2 percent of a customer’s electric or natural gas bill. The Iowa Utilities Board estimates, for customers of rate-regulated electric utilities, the program would be significantly cut from $162 million to $66 million a year if the cap is implemented.