IOWA CITY — A new Iowa Policy Project report claims Iowa’s electricity prices, which are lower than the national average, can be attributed to the state’s growing wind industry.
David Osterberg, a professor in the Department of Occupational and Environmental Health at the University of Iowa and Iowa Policy Project’s lead environmental researcher, said energy price data finds the cost per kilowatt-hour in Iowa remains lower than the national average and that the gap has been increasing.
Osterberg said he believes Iowa’s nearly two-decade investment in wind energy — about 36 percent of the electricity generated in Iowa now comes from wind — has played a huge role in the state’s lower energy costs.
“In terms of cost per kilowatt-hour, for the average cost of electricity in Iowa, it is lower now than it was in 1998 and 1999, the years when we began building wind turbines in the state,” he said. “That really surprised me.”
According to the report, the cost of energy in Iowa for residential, commercial and industrial use went from 6.04 cents per kilowatt-hour in 1998 — before Iowa began connecting wind farms to the power grid — to 8.35 in 2015. Meanwhile, the national average increased from 6.74 cents per kilowatt-hour in 1998 to 10.33 cents in 2015.
When adjusted for inflation, Iowans spent about .43 cents less per kilowatt-hour in 2015 than they did in 1998, the report states. In the same span, national energy costs increased by about .53 cents per kilowatt-hour, when adjusted for inflation.
“We’re lower now than when we started this wind industry, and I don’t think anybody would have predicted it,” Osterberg said.
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“Opponents of clean and renewable energy claim we cannot afford to do the right thing,” Osterberg added. “Iowa data show they are probably wrong. ... Iowa Renewable Energy is a success story we should be proud of. And, it has benefited our pocketbooks.”
Future growth in the industry looks to further strengthen the wind industry. Last year, the state’s biggest utility companies announced plans to invest a collective $4.6 billion — $3.6 billion by MidAmerican Energy and $1 billion by Alliant Energy — into wind farms.
Alliant officials have said such investments into wind provide for cost savings over time, but do come with some upfront investment, which could impact customer rates.
Alliant earlier this month announced plans for a 10 to 12 percent rate increase, due to upgrades to the power grid and the utility’s new Marshalltown natural gas generating station.
Osterberg said Iowa policymakers should take the report’s data into account when considering the future of the solar industry.
“Tax incentives for solar and net metering are policy instruments that have the potential to pay off for all electric utility customers, just as wind power has,” he said.
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