Put ratepayers first in cost study

Energy is not a luxury, but a necessity in our modern world. From powering our homes to keeping our businesses running, energy is the lifeblood of the 21st century. Most of us don’t think about our energy each day and where it comes from. However, for low-income Iowans and those on a fixed income, the choice between paying the energy bill or buying groceries can be tough.

As world events have caused the cost of natural gas and fossil fuels to fluctuate greatly the past few years, the energy burden has become a major economic factor for Iowans and the cost of electricity can be a key factor in ensuring economic stability for families.

As executive director of the Iowa Community Action Association, I have had a front row seat to see how the cost of energy impacts Iowans. For example, of the Iowans served by the Low-Income Home Energy Assistance Program (LIHEAP) in 2022, the highest energy burden households (top 25 percent) had a main heating bill that was 23 percent higher on average than the remaining 75 percent of customers. Given the average LIHEAP benefit amount of $805 per household that year, it is estimated that approved households experienced an approximate 39.5 percent reduction in their annual energy burden last year (main fuel and electric).

We need to find solutions to make energy bills more stable and affordable for Iowans. Spurred by the passage of House File 617 earlier this year, the Iowa Utilities Board (IUB) recently hosted the first of three public input and discussion sessions to review state laws related to how utilities set their energy rates.

The goal of the IUB process is to focus on "ensuring safe, adequate, reliable, and affordable utility services provided at rates that are nondiscriminatory, just, reasonable, and based on the utility's cost of providing service to its customers within Iowa." This is an important conversation to have because utilities have complete monopolies of their service territories in Iowa.

The ratemaking study at the IUB is especially important to low-income Iowans. Ensuring utilities are considering the least-cost generation options, like wind and solar energy, is important for keeping rates affordable. We also need to restore the state’s energy efficiency programs because these investments help not only save energy, but also help improve the quality of life for Iowans and help lower energy bills. We also must ensure utilities have fair disconnection policies and a clear process for dispute resolution.

Perhaps most important of all, the IUB process will help provide greater utility transparency for Iowans. More transparency will help provide ratepayers accessible information about their utility’s energy usage, its generation sources, and associated costs. If the right policies are in place, more Iowans can be empowered to make informed decisions about their energy consumption, promoting efficiency and sustainability.

I look forward to the results of the IUB process and potential legislative priorities that could result from it. We need to ensure Iowa is putting ratepayers first in the energy conversation.

Katherine Harrington is executive director of the Iowa Community Action Association.