Iowa has long been known as an energy innovation leader with a clean energy blueprint for other states to follow. However, the new 2018 State Energy Efficiency Scorecard from the American Council for an Energy-Efficient Economy showed Iowa fell the most in rankings out of any state in the country, moving down five spots to 24th.
According to the report, Iowa’s drop in rankings was due mostly to a bill signed by the governor earlier this year (Senate File 2311) that imposes restrictive caps on efficiency programs. The country was watching this year as the Legislature debated SF 2311, and people were wondering, “What is Iowa thinking?”
Similar to Iowa’s early investments in wind energy, these successful energy efficiency programs have been a direct contributor to Iowa’s energy leadership and have helped keep rates low for Iowa businesses and residents. Rolling back these programs disrupts Iowa’s proven clean energy blueprint that so many states have been trying to replicate. Now other states are moving ahead.
Iowa’s history of state support for energy efficiency is very common-sense, given that Iowa must import 100 percent of the coal, 100 percent of the natural gas, and 100 percent of the oil and petroleum products it consumes from other states and countries. The dollar drained for importing those fuels is easily more than $6 billion per year leaving the state. Energy efficiency of all types is one of the smartest things Iowa can do to help the state economy.
Energy efficiency also is the least expensive resource for the utility system, typically costing one-half to one-third the cost of electricity from a new power plant. Utilities often don’t like to promote energy efficiency because selling less power might reduce their profits (hence the apparent utility support for SF 2311). But energy efficiency is very good for consumers. The data show every dollar spent on energy efficiency programs in Iowa has produced more than two dollars in benefits. Many Iowans have significantly reduced their energy bills using these programs, but even consumers who don’t directly participate in programs benefit because the utility is able to spend less on other more expensive sources of supply and save money for all ratepayers.
Utilities in Iowa refiled their five-year energy efficiency plans with the Iowa Utilities Board in July, after passage of SF 2311. The updated plans slash energy efficiency programs by 50 percent or more, eliminating some programs entirely and rendering many others ineffective. The energy efficiency industry employs 20,000 Iowans, and these cuts will likely lead to job losses at small businesses across Iowa. It is expected that Iowa’s future ACEEE rankings will drop much more when the full impacts of the recent legislative changes are reflected in plan implementation.
So for state pride as well as the state economy, one hopes common sense will prevail, and Iowa will find its way back to the path of innovation and progress with strong energy efficiency policies instead of heading backward.
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• Martin Kushler is a senior fellow with the American Council for an Energy-Efficient Economy, a non-partisan, nonprofit organization.