By Ethan Hohenadel, director of policy & advocacy for the Iowa Association of Electric Cooperatives
At the Iowa Association of Electric Cooperatives, the start of a new year also means the start of a new legislative session as we advocate for our member cooperatives and the member-consumers they serve.
Iowa’s 91st General Assembly began on January 13 and our policy & advocacy team is already hard at work. Protecting electric service territory is our top legislative priority this session.
In Iowa, your location determines which electric utility will serve your home, farm or business under the defined electric service territory law. For almost 50 years, these electric service areas have benefited electric co-op member-consumers as the law provides certainty to electric cooperatives so we can safeguard affordable rates, support a resilient electric grid and invest in economic development.
Service territory changes jeopardize economic development
Weakening Iowa’s electric service territory law jeopardizes electric cooperatives’ investments in rural economic development, which would negatively impact the communities we serve.
For the 5 years ending in 2022, Iowa electric co-ops had an impressive $4.7 billion impact in economic development projects. These investments supported more than 7,300 Iowa jobs (retained, attracted or expanded) during that same time period.
In 2023 alone, Iowa electric co-ops secured more than $41 million in federal economic development funds, resulting in more than $111 million of new capital investment in the state.
Decades of robust economic development efforts from electric cooperatives have improved quality of life throughout rural Iowa through local job creation, providing needed services and adding valuable tax revenue. Without electric service territory protections, these rural economic development efforts will be severely diminished.
Reduced electric service territory protections will increase rates
The realities of eroding electric service territory protections are sobering. In other states where service territories have been eliminated, consumers have experienced higher electric rates and decreased reliability.
According to a 2023 New York Times investigation, electric rates have increased in deregulated states. The report concludes, “Deregulation has resulted in increased rates/fees in every state where it has been introduced.” And, “On average, residents living in a deregulated market pay $40 more per month for electricity…” Referencing an American Public Power Association 2021 report, “The average electric rate is 28% higher in deregulated states, as compared to traditionally regulated states.”
Reduced electric service territory protections will decrease reliability
Our analysis of publicly available industry data shows that electric reliability is lower in deregulated Midwestern states compared to Iowa. From 2018-2023, electric outages in Iowa are 65% shorter on average compared to deregulated Midwestern states. During that same time period, Iowans experienced 20% fewer outages than deregulated Midwestern states. This analysis comes from EIA-861 SAIDI (System Average Interruption Duration Index) and SAIFI (System Average Interruption Frequency Index) data from Illinois, Iowa, Michigan and Ohio and includes major weather events.
Protecting the interests of co-op member-consumers
Weakening service territory protections is unacceptable for Iowa’s electric cooperatives and the members we serve. Your locally owned electric co-op supports Iowa’s defined electric service territory law and opposes efforts to undermine it, which reduces consumer protections. Learn more about this important issue at www.ProtectRuralIowa.com.
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