Iowa ‘large energy users’ want competition among utilities

A secretive group of large energy users — which could include social media data centers, food processors, manufacturing plants and cryptocurrency mining sites — said they should be able to buy electricity on the open market rather than from Iowa utilities.

The Iowa Economic Alliance released results of a poll Thursday showing 64 percent of Iowans support competition among utilities, rather than a territory-based system where customers just have one provider choice. But under an Alliance proposal, only large energy users would be able to choose their provider by purchasing electricity through a market like the Midcontinent Independent System Operator (MISO), which manages generation and transmission of high-voltage electricity across 15 states including Iowa.

These large users would agree to pay the costs of “stranding” a utility so small energy users — like individuals — would not see their rates increase, R.G. Schwarm, executive director of the Iowa Economic Alliance, said Thursday.

“In our proposal there would be a plan to mitigate that cost,” he told The Gazette. “That amount would hold harmless other customers.”

Chaz Allen, executive director of the Iowa Utility Association, which represents investor-owned utilities including MidAmerican Energy and Alliant Energy, said a proposal like this would ultimately put more of the costs on smaller customers nonetheless.

“We don’t believe they will have the best interest of Iowans with this proposal,” Allen said Thursday. “Anytime you take the big user off the network, the costs put into that have to be borne by other customers.”

Allen said he tried to listen into the news conference Thursday, but was not allowed to join the virtual meeting.

“We don’t know who the Iowa Economic Alliance is or who they represent,” he said, adding Schwarm and lobbyists representing the group all work for Des Moines law firm BrownWinick, “which represents Big Tech firms, like Facebook, Google and Microsoft.”

One of the group’s lobbyists registered with the Iowa Legislature is Paige Thorson, Gov. Kim Reynolds’s deputy chief of staff until September 2021.

Schwarm would not say Thursday which firms are part of the Alliance, but said the coalition includes “large retail, manufacturing, agriculture and technology.”

The Alliance, which became a registered nonprofit in 2021, is based in Des Moines, has assets of $224,000 and lists its subject area as “business promotion,” according to Guidestar.org.

The Alliance hired top pollster J. Ann Selzer to poll 807 Iowa adults in September 2021 and again last month about whether they favor competition in utility service. Selzer gave an overview of the results in a virtual news conference Thursday, but the detailed results were not provided to reporters.

Schwarm said electricity bills have been rising, which causes a big impact for a large energy users.

The Alliance provided information showing how the cost to provide electricity to the State Capitol Complex in Des Moines has increased since fiscal 2007, while energy use there generally has declined.

“Energy prices and energy loss continue to be one of the most determinant factors for a lot of businesses,” Schwarm said at the news conference. “This might be a tool to develop and retain and recruit businesses if they have a different landscape of energy use.”

Schwarm said the proposal does not call for deregulation and would not change energy transmission. The Iowa Utilities Board still would have regulatory oversight of the process, he said.

The group said it will continue to meet with stakeholders and “participate in the Iowa Economic Development Authority’s working group to explore energy-related policy.”

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