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Building More Wind Will Add $240 Per Year To Electric Bills For Alliant Energy Customers in Iowa

Alliant Energy, an electric utility company that serves parts of Iowa and Wisconsin, is asking the Iowa Public Utilities Commission to raise the price of electricity by 17 percent over two years to help pay for a growing wind portfolio and transmission line build-out. The Gazette reports:

According to the release, a typical residential customer with a monthly electric bill of $116 would see a total increase of approximately $8 per month starting April 1, 2019.

And, if the Iowa Utilities Board approves the rate increase request, a second projected increase of roughly $12 additional dollars per month would start on January 1, 2020.

This means in total, the customer with the current monthly bill of $116 per month could see their 2020 monthly bills at $136. This would represent a $240 annual increase in 2020 over the current rate, which is a 17.24% increase.

This is a massive increase in the cost of electricity, and it shows that those who argue that wind and solar save customers money are dead wrong.

Of course, the utility is arguing that the up front costs of building the wind will result in long-term savings. The Gazette writes:

But while customer base rates — which are one component of an energy bill — are expected to increase, utility officials say company investments in renewable energy and a resilient grid ultimately will bring customer costs down in the long run.

“Usually when you have projects like that they’re going to have a slight increase in base rates, but a lot of times that is offset by the benefits,” Terry Kouba, president of Iowa Power and Light and senior vice president of Alliant Energy, said Wednesday. “They’re important projects that the customers will take advantage of for a long time.”

Only a utility company executive could call a 17 percent increase in electricity rates, resulting in Iowa families spending $240 more per year for the same electricity service they had previously, a “slight increase in base rates.”  Furthermore, the idea that wind can result in long-term savings is incredibly disingenuous, and also incorrect.

According to the National Renewable Energy Laboratory, wind turbines only last 20 years, which means there is never a “sweet spot” where the fully-depreciated asset is generating the lowest-cost energy, optimizing the benefits to ratepayers. Instead, wind is a perpetual ATM machine for utility companies because the turbines need to be rebuilt or repowered every 20 years. Ratepayers never see the so-called benefits.

Additionally, the intermittency of wind means Alliant Energy will still need to pay for natural gas or coal plants to provide “backup” electricity when the wind is not blowing or the sun is not shining, which is often. This means Iowa electricity consumers will be forced to pay for two electric grids, one that provides electricity when the wind is blowing, and one that provides electricity when it does not.

In short, Iowans are paying twice for electricity they use once. This is the opposite of a buy-one-get-one sale.

So who benefits from adding wind to the grid if not Iowa ratepayers? That would be Iowa utility companies, who aren’t private companies, but rather government-sanctioned monopolies that are guaranteed to make a profit on every dollar they spend on infrastructure. As you can imagine, this gives them a powerful, and perverse, incentive to build as many power plants as possible, because it doesn’t even matter if they are inefficient. In fact, it’s better if they’re inefficient, because then they get to build more of them.

This strategy, used by monopoly utilities to increase their profits, is called padding their ratebase in industry lingo. I imagine it looks something like this:

If adding wind to the grid is so affordable, as renewable energy advocates claim, why do utility companies need to charge Iowa families an additional $240 per year for their electricity?




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