MidAmerican: Excess capacity kept rates low
Friday, April 20, 2012 7:00 AM
2010, MidAmerican Energy Co. exported approximately 30 percent of the electricity it generated. That excess capacity has been a major factor in why MidAmerican hasn’t had to raise electric rates for the past 16 years, and keeping rates competitive in the state is a major imperative for economic development in the future, said Dean Crist, the company’s vice president of regulation.
“What we’ve told regulators is that if we can sell that energy for a profit, we’ll bring those dollars back and use it to provide rate stability. So it’s not a negative that we’re exporting power.” MidAmerican currently charges the sixth-lowest electric rates in the country among investor-owned utilities, he said.
Sen. Rob Hogg, a Cedar Rapids Democrat who opposes the nuclear legislation as “fundamentally flawed,” said he believes that the reason for higher electricity rates in many other states is a failed nuclear power plant in their past. “There’s one thing about paying money for electricity that you’re likely to get,” he said. “It’s another to pay for a plant that’s speculative. Florida had a similar law and consumers were left holding the bag for about $1 billion in costs, and the plant hasn’t even gotten to the construction phase.”
Hogg also said he thinks that Iowa has “enormous” options for alternative energy and does not need another nuclear plant. “The future for Iowa is biorenewables,” he said.
Crist said that given the increasingly strict environmental regulations on coal, electric rates have nowhere to go but up as the oldest coal-fired plants are shut down and costly upgrades to newer plants are made.
“There’s no question about it,” he said. “With the environmental protection rules on coal and shutting down what is essentially cost-effective coal, electric rates are going to rise. What we’re trying to do is manage that to a very modest level to keep us at a competitive level so that this state can continue to grow.”