The Register’s Editorial

Iowa long ago committed to moving aggressively toward encouraging development of renewable energy, and it seemed Iowa's regulated utilities had embraced this movement. Recent events suggest otherwise, however.

Regulated utilities have lately exhibited concern that this enthusiasm for alternative energy may threaten their monopoly status. And they have asserted themselves in defense of their turf.

The Associated Press reported that the Branstad administration pulled the plug on a $1 million federal grant to develop policies to speed adoption of solar energy. Electric utilities lobbied for changes in the grant in an effort to prevent the money being used to promote the benefits of solar energy without pointing out the limitations. After the U.S. Department of Energy objected to the changes, state and federal officials agreed to end the grant.

Earlier, two Iowa public utilities and a power cooperative association sought to block Dubuque from entering into an agreement to buy electricity generated by a private company that installed photovoltaic solar collectors on a city maintenance facility. That argument, which was endorsed by the Iowa Utilities Board, was rejected by the Iowa Supreme Court in a July 11 ruling.

These signs of protectionism by Iowa utilities that have a state-approved monopoly raise questions about whether this state may run into a brick wall in encouraging free-market development of alternative energy production.

Solar, wind and other renewal fuels by definition offset electricity generated by coal and natural gas. So utility companies that rely heavily on those fuels are understandably concerned about protecting their investment in power generation and distribution. But that should not come at the expense of developing clean and renewable energy sources.

The withdrawal of the solar grant is troubling because it suggests some utility companies may be quietly working to undermine development of solar power, which would not be in the state's interests. The Iowa Environmental Council estimates Iowa has the potential to produce up to 20 percent of its electric needs with energy from the sun using rooftop collectors alone. Nothing should stand in the way of achieving that goal.

The issue before the Iowa Supreme Court cut to the heart of the regulated utilities' challenge in the face of growing alternatives. Iowa law grants monopoly status to large producers and distributors of energy to avoid duplication of huge investments in power plants, transmission lines and gas pipelines.

In the Dubuque case, Eagle Point Solar agreed to install solar panels on the city building and sell electricity to the city. Interstate Power and Light, the Iowa Association of Electric Cooperatives and MidAmercian Energy argued that by selling power rather than just solar collectors Eagle Point was in effect a "public utility," encroaching on Interstate Power's territory.

It is fair for regulated utilities to defend against encroachment by competitors acting as "public utilities," but it was a stretch to see a serious threat in an agreement that provided only part of the energy needs of one building.

For the foreseeable future, this state will need to grant monopolies to public utilities that have the resources to invest in infrastructure and generating capacity to serve the bulk of energy demand. But at the margins, the free market will continue to chip away at the amount of energy produced by fossil fuels and replace it with conservation and renewable fuels.

The challenge for the Iowa Legislature, Iowa Utilities Board and the courts is to protect public utilities that provide base load energy while encouraging transition to alternative energy sources that do not pollute the air and water or generate greenhouse gases.