Who will build Iowa’s grid?

Gazette columnist Althea Cole recently discussed the proposed “Right of First Refusal,” a part of Gov. Kim Reynolds’ energy legislation package.

Apparently, Cole has been given incorrect information regarding “ROFR.” As a locally elected director for Central Iowa Power Cooperative (CIPCO) and Linn County REC, I’m compelled to set the record straight.

Cole asserts that this is a battle between “Big Power” and smaller transmission builders, a “David and Goliath” story. She is correct in this. But she misses the mark on who is portraying David and who is Goliath.

Two of the largest infrastructure investors in the country are pushing our lawmakers to vote against ROFR at the expense of Iowa taxpayers and consumers. These Coastal companies like LS Power, a New York-based private equity firm are the “Goliaths,” while Iowa-based utilities including not-for-profit Rural Electric Cooperatives (RECs) and Municipal Utilities and yes, even the Iowa-based investor-owned utilities (like MidAmerican and ITC Midwest), are the “Davids.”

With ROFR, Iowa’s “Davids” have the first right to build critical transmission lines that will connect to the system they have already built and invested in. The “Goliaths” from outside Iowa will undoubtedly be motivated by profits. They don’t reside in this state and may not employ instate contractors, suppliers and staff for these generational projects. Will they hold themselves to the same standard that Iowa utilities have in securing voluntary easements? Will they do right by landowners in the same manner as CIPCO? Should a line fail, who does the New York private equity group send to fix it? The Iowa “Davids” call on their local crews just as they do every day. The Iowa “Davids” live, work, and pay taxes here. Their families are raised here.

Legislators can proudly vote for a bill that will drive improvements to the State’s energy infrastructure. A “yes” vote supports the goals of safe, reliable and affordable electric power by putting Iowa consumers first.

The perception that ROFR stifles competition and free market principles is simply wrong. Just the opposite; ROFR codifies the competitive bidding requirements for construction of large transmission projects. Bidding takes place after landowners are aware of the projects and routes have been set. Landowners won’t be surprised by Iowa-based utilities with land restoration requirements for the life of the project. The “Davids” will live with, maintain and use these projects every day. It’s a long way to Marion from New York.

Transmission lines are profitable investments. They must be. They will be around much longer than most of us. The key is about how and where these profits are used? The cooperatives would use this revenue to lower their cost of electricity to their member-owners by paying patronage to their local consumers. The investor-owned utilities use these profits to invest in the next project to further stabilize the grid which benefits all of us. These “Davids” employ your neighbors, buy Iowa products, and pay Fair Market Value for their easements and pay Iowa taxes. I can’t speak for what the “Goliaths” do with their money. I haven’t seen their offices, trucks, or line crews in town lately.

The Governor’s Energy bill, including ROFR, ensures that all Iowans will have safe, reliable, and dependable electricity. ROFR will grow Iowa. Future transmission projects will be built by Iowa-based utilities, employing thousands of Iowans, equipped with materials and equipment from Iowa vendors and suppliers.

In fact, perhaps the better story to be told is that the governor’s energy bill, and particularly the ROFR provisions, helps turn us Iowans into “Goliaths” to determine our own economic and energy destiny for generations to come.

Kirk Hiland is board director for the Central Iowa Power Cooperative.