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Iowa Supreme Court upholds decision on MidAmerican Energy wind farms
Credit: Platts | www.platts.com 8 June 2012 ~~
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The Iowa Supreme Court on Friday upheld a decision by state regulators to allow MidAmerican Energy to build 1,001 MW of wind generation, although the utility does not need new capacity until around 2019.
In late 2009, the Iowa Utilities Board approved Des Moines, Iowa-based MidAmerican Energy’s request for “advanced ratemaking principles” for its proposal. The approval gave the utility the financial certainty – including a 12.2% return on equity – to move ahead with utility-owned wind projects.
NextEra Energy Resources asked an Iowa court to overturn the IUB’s decision, in part because the developer said MidAmerican Energy did not need the wind power to serve customer load. Earlier, NextEra had asked the IUB to require MidAmerican Energy to contract for the wind generation from wind farms that NextEra would build or allow NextEra to sell the wind farms to MidAmerican Energy.
The state Supreme Court found that the state’s “need requirement” for new power plants included other considerations like fuel diversity, the supply of less-expensive energy to consumers and compliance with future environmental regulations.
NextEra also argued the IUB was unfairly subsidizing MidAmerican Energy’s activities in the wholesale market, in violation of the Equal Protection Clause of the 14th Amendment of the US Constitution and a similar clause in the Iowa Constitution.
NextEra also said the decision violated the US Constitution’s Commerce Clause. The Iowa Supreme Court rejected both arguments.
MidAmerican Energy is on track to add 1,001 MW to its system this year, which will give it 2,285 MW of utility-owned wind generation, the most among US utilities.
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