After initial denial, Iowa Utilities Board preapproves Duane Arnold Solar projects

After its initial denial, the Iowa Utilities Board has preapproved the Duane Arnold Solar projects in Linn County — marking a first for solar projects in Iowa.

“They've done it for wind a bunch of times,” said Michael Schmidt, an Iowa Environmental Council staff attorney. “I think this is showing that we are transitioning away from just having wind be the economic renewable option. … It's a shift in the expansion of renewables across the state.”

Interstate Power and Light Co., an Alliant subsidiary, originally asked the IUB for preapproval of 400 megawatts of solar and 75 megawatts of battery storage, along with their associated lifetime costs and rates. The application included the Duane Arnold Solar projects, the two industrial-scale solar projects that NextEra plans to develop and build near Palo.

In November, the IUB initially denied the application, known as an application for advance ratemaking principles. The board said Interstate Power and Light didn’t adequately consider alternative energy generation options that could make projects cheaper for both the utility and its customers, as required by Iowa Code.

Upon Interstate Power and Light’s request, the IUB announced in December it would partially reconsider the application with additional information about the 200-megawatt Duane Arnold Solar facilities. The board said it found no basis for fully reversing its decision regarding the additional 200 megawatts of solar and 75 megawatts of battery storage.

Interstate Power and Light filed additional evidence to the IUB on Jan. 30, including project comparisons to alternatives like power purchase agreements.

In its additional evidence, Interstate Power and Light also provided an updated economic analysis of the Duane Arnold Solar projects. The company said the projects wouldn’t directly benefit customers on their energy bills; instead, the company could avoid more expensive options that could add to costs.

“Adding solar will add capacity, but that capacity is not a dollar value that Interstate Power and Light customers get,” Schmidt said. “It's indirect because, by having this added capacity, it means Interstate Power and Light does not have to purchase as much (energy) on the market. So, it saves customers money.”

The IUB’s latest decision came last week: It found that Interstate Power and Light’s additional evidence met the requirements set by Iowa Code, showing that company ownership of the Duane Arnold Solar facilities is reasonable when compared to other alternatives.

The board didn’t grant all of Interstate Power and Light’s requests for advance ratemaking principles, though.

For instance, the board did not grant the utility’s desired rate of return on equity, which is the amount of money the utility can recover from its customers through energy bills. At this point, it’s unclear what this would mean for the Duane Arnold Solar projects.

“If Interstate Power and Light thinks that it can't build the projects, recover the costs and have this work for itself and for customers, then it can choose not to build the project,” Schmidt said. “But you'd have to ask Interstate Power and Light if they think this can work for them.”

Alliant spokesperson Morgan Hawk said the company is reviewing the IUB’s order for the 200 megawatts of solar for the Duane Arnold location.

The remaining 200 megawatts of solar — which have since been identified as the Creston Solar Project and Wever Solar Project — and the 75 megawatts of battery energy storage is being reviewed by the district court.

“As outlined in our Clean Energy Blueprint, accelerating our transition to renewable energy benefits our customers and the communities we serve,” Hawk said in an email. “At the same time, investing in a diverse energy mix enhances customer value and demonstrates our commitment to building a more sustainable, resilient, cost-effective energy future.”

Brittney J. Miller is the Energy & Environment Reporter for The Gazette and a corps member with Report for America, a national service program that places journalists in local newsrooms to report on under-covered issues.

Comments: (319) 398-8370; brittney.miller@thegazette.com