Three environmental groups are calling on MidAmerican Energy to retire its coal-fired power plants and replace them with renewable energy, in order to save ratepayers millions of dollars. As the cost of renewable energy has declined across the country, coal plants are becoming less competitive.
By retiring two coal plants in Sioux City by 2023, MidAmerican Energy could save $92 million, according to a Sierra Club analysis of the company’s own data.
The Sierra Club, the Environmental Law and Policy Center, and the Iowa Environmental Council are urging the investor-owned utility to do just that, saving ratepayers millions of dollars and avoiding the public health and climate impacts of the plants.
“There are a lot of utilities that, once they crunch the numbers, they found that the better option for customers is closing down these expensive old plants and replacing them with renewables,” said Kerri Johannsen, Energy Program Director for the Iowa Environmental Council.
The environmental groups are making the arguments to the Iowa Utilities Board, which is currently reviewing MidAmerican’s latest emissions plan, which rate-regulated utilities are required to update every two years.
Under Iowa Code, investor-owned utilities are required to meet state and federal environmental standards while operating in a cost-effective manner. By not contemplating the cost-benefit analysis of closing its coal plants, the environmental groups argue MidAmerican is not meeting that standard.
“The argument we’re making is that MidAmerican’s plan does not meet that standard of managing these emissions cost-effectively because shutting down the plants would be more cost effective,” Johannsen said.
In its filings with the IUB, MidAmerican argues the plan does meet state requirements, saying “[t]he Environmental Plan and Budget Update is reasonably expected to achieve cost-effective compliance with applicable state environmental requirements and federal ambient air quality standards” and that it “reasonably balances costs, environmental requirements, economic development potential, and reliability of the electric generation and transmission systems.”
In a statement to IPR, MidAmerican spokesman Geoff Greenwood said the company has made considerable investments in renewable energy over the past two decades and has retired four coal units since 2015. But Greenwood said that “traditional fuel types” are still needed to diversify the company’s energy generation.
“We project that wind energy will comprise in excess of 80% of the energy we delivered to our Iowa customers in 2020,” Greenwood’s statement reads in part. “We will continue to invest in renewable energy, adopt new technologies as they evolve to be proven and cost effective for our customers and will adjust our generating fleet in a balanced fashion.”
The company’s plan outlines investments for operating and maintaining technologies meant to keep the company’s plants in line with emissions standards, and a staffer with the Iowa Department of Natural Resources testified the plan does appear to meet those regulatory requirements.
But in addition to the environmental groups, a staffer with the Iowa Department of Justice Office of the Consumer Advocate alsoargued that MidAmerican's plan does not meet state standards for cost effectiveness and urged the IUB to order the utility to provide a cost-benefit analysis that includes retiring the plants.
“MidAmerican should, at minimum, provide a cost-benefit analysis of its entire coal fleet including options such as fuel switching, retirements, seasonal operation, capacity purchases, plus building new wind, solar, or natural gas generation,” testified OCA staffer Scott Bents.
Johannsen noted that retiring a coal plant ahead of schedule is not unprecedented.
“That exact thing actually happened here in Iowa earlier this spring when Alliant announced that they would be retiring the Lansing generating station and replacing it with 400 megawatts of solar,” Johannsen added. “So it’s happening in other places and it’s happening in Iowa too.”
The Iowa Utilities Board can choose to approve or reject MidAmerican’s plan. A hearing in the case is slated for February.
Editor's note: a previous version of this story mischaracterized testimony by OCA staffer Scott Bents. This post has been updated.
