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Iowa Supreme Court reverses Utilities Board decision on MidAmerican
Court said board should have considered whether coal plants were most cost-effective option
The Iowa Supreme Court has reversed a lower court’s decision and sent a case back to the Iowa Utilities Board over approving an air emissions plan that did not consider retiring coal-fired power plants.
The Supreme Court said the board should have considered evidence and arguments about whether retiring four coal-fired power plants in Iowa was the cheapest way for MidAmerican to meet state and federal environmental standards. The board’s 2021 decision said the evidence “was outside the scope” of its review.
“An agency is entitled to reconcile relevant evidence, not ignore relevant evidence,” according to the court’s 17-page ruling written by Justice Christopher McDonald. “Where the agency fails to consider relevant evidence, the agency’s action is unreasonable, arbitrary, capricious, an abuse of discretion, and the product of illogical reasoning.”
The decision was joined by all other justices except for Justice David May, who did not take part in the consideration.
Utilities in Iowa that use coal have to file an emissions plan and budget to the Utilities Board every two years. MidAmerican, an investor-owned utility based in Des Moines that serves customers in Iowa, Illinois, Nebraska and South Dakota, filed a plan with the Iowa board in April 2020.
The board is supposed to balance costs, environmental requirements, economic development potential and the reliability of service. If the plan is approved, the utility can raise customer rates to recover costs of these operations, the ruling states.
Among testimony submitted in the case, Steve Guyer, an energy and climate policy specialist with the Iowa Environmental Council, said the board should not approve the plan because continuing to operate two of the coal-fired facilities wasn’t cost-effective. Other evidence showed the plants were operating below capacity.
In early 2021, the board approved MidAmerican’s plan, saying the evidence from the environmental groups was “outside the scope of an EPB [Emissions Plan and Budget] proceeding under Iowa Code.”
A Polk County judge affirmed the decision.
But the Supreme Court disagreed with the board’s legal interpretation and said the board had previously considered this type of evidence in another case when it was submitted by MidAmerican.
“If facility retirement was a relevant means of ‘managing regulated emissions from its facilities in a cost-effective manner’ when MidAmerican proposed it, it must also be relevant when offered into evidence by Environmental Parties and OCA [Office of Consumer Affairs],” the ruling states. “We see no basis for determining relevance of this evidence in this proceeding based on the identity of the party offering the evidence.”
The Supreme Court’s decision sends the case back to the district court with instructions to remand it to the Iowa Utilities Board with instructions for “further proceedings not inconsistent with this opinion.”
The Iowa Utilities Board on Thursday approved MidAmerican’s $3.9 billion Wind PRIME project, which includes 2,042 megawatts of new wind electrical generation and up to 50 megawatts of solar generation in Iowa.
To approve such a project, the board must find the facilities are needed to provide reliable long-term electrical supply and reasonable compared with other alternatives, the board said in a news release.
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