Energy policy in Iowa
Energy • Environment • Fracking • Public education • Higher education • School choice • Charter schools • Public pensions • State budget and finances • Taxes • Voting • Ballot access • Redistricting
- 1 Energy overview
- 2 Energy policy
- 3 In the news
- 4 See also
- 5 External links
- 6 References
Energy policy in Iowa depends on geography, natural energy resources, how electricity is generated, how much energy consumers use, politics and the influence of groups such as environmental and industry organizations. Decisions by policymakers, such as state and local governments, utilities and regulatory agencies, affect all citizens economically and environmentally, and are generally geared toward providing reliable, affordable energy. The cost of energy affects not only home heating and electricity bills, and thus disposable income, but also economic growth, including jobs, investment and the cost of doing business in the state.
How energy is produced and consumed also has an impact on the environment and pollution. Energy policy in Iowa, and many other states, focuses on decreasing emissions and dependence on fossil fuels by increasing energy efficiency and the use of renewable energy. As the infrastructure for producing and delivering renewable energy sources is not as advanced as it is for energy generation from traditional sources, these policies often require subsidies to make the produced energy affordable, and their effects are difficult to measure.
Energy policy involves trade-offs between providing an affordable, consistent energy supply on the one hand, and limiting pollution and protecting the environment, on the other. How states attempt to balance these two differs between states, and often boils down to costs to consumers versus costs to the environment. This article provides general energy information about the state as the context within which energy policy is made, as well as information about major legislation and public and private groups that play a role in setting energy policy in the state.
- See also: Energy policy in the United States for more information on energy policy.
Below are quick facts about Iowa’s energy climate.
- is a net electricity importer.
- has limited fossil fuels in the form of coal, but does not have natural gas or petroleum resources.
- has renewable energy in the form of biomass and biofuels, hydroelectric energy and wind power.
- ranks first in the nation for ethanol production, producing 27 percent of the nation’s fuel ethanol.
- ranked third in non-hydroelectric renewable energy resources in 2011.
- has one nuclear plant, located just northwest of Cedar Rapids.
- produces 19 percent of its electrical generation from wind.
- natural gas supplies about 20 percent of total energy demand.
- coal consumption for electricity generation ranked in the top third of U.S. states, even though its population is relatively small.
- hydropower only makes up 2 percent of the state’s net electrical generation.
- there are several energy efficiency standards and a Mandatory Utility Green Power Option, meaning utilities must provide green power options to their customers.
- industry is the largest energy-consuming sector in the state.
Available energy resources
Iowa has very few traditional energy resources such as oil, coal or natural gas. Iowa does not currently produce any petroleum. Approximately 135 exploration wells were drilled in Iowa, but only two produced any oil, and their production was very minimal. Iowa does not have any natural gas production, but several natural gas pipelines are located in the state. Iowa also has four natural gas storage fields that have a total capacity of almost 300 billion cubic feet. Iowa had several hundred coal mines in the late 1800s and early 1900s. Coal mining continued until 1994, but there are no active coal mines today. The state still has considerable coal resources. There are 2.2 billion tons of demonstrated reserves and an estimated total possible resource of over 7 billion tons. Coal production may have been discontinued because it was becoming too costly to invest in coal mines.
Iowa has renewable energy resources, especially wind power. Wind is the dominant renewable resource used in the state, and it falls only behind Texas in wind electricity generation. The northwestern portion of the state is where most of the wind energy is harnessed. Hydropower is also used for electricity generation, but it contributes a very small portion of the state’s net generation (about 2 percent). Some electricity is also generated from biomass. Iowa is the number one ethanol-producing state in the U.S. and is the second-highest biodiesel producer after Texas. There are 40 ethanol plants across the state. Several cellulosic ethanol plants are under development, which will use agricultural waste. Other renewable energy sources include solar energy and biomass, but they represent only a small portion of Iowa's energy economy.
Consumption and prices
|Energy consumption in Iowa|
Transportation Residential Industrial Commercial
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As shown on the pie chart in 2011, roughly one-fifth of Iowa’s energy use was for transportation. Nearly one-half of the state’s energy consumption was used in industry. The rest was used mostly in residential and commercial buildings--for heating, cooling, lighting and other functions. Most of the energy used in the state is in the form of coal, followed by natural gas and biomass. Generally the price of gasoline in the state tracks closely to the national average. Iowa has a total gasoline tax of 22 cents per a gallon, meaning Iowa has the 33rd highest tax in the nation.
The table below compares Iowa’s consumption and spending for energy, as well as prices for gas and electricity, and carbon emissions to those of Nebraska, which has similar population, resources and consumption needs because of climate and geography. Also given are the U.S. averages and the state rankings. All rankings are from highest to lowest, so, for example,
- Iowa’s rank of 25th in carbon emissions means that carbon emissions are higher in Iowa than in Nebraska, which has a ranking of 37th.
- Per capita income in Nebraska is slightly higher than the national average, but about the same as Iowa, which at 23rd ranks only two places behind Nebraska’s ranking of 21st in per capita income.
- These two states are very similarly placed in the mid-rank on population, overall consumption and overall spending. Per capita energy consumption in Iowa (at fifth) is slightly higher than in Nebraska (at seventh), but per capita spending in Iowa is somewhat higher because it ranks sixth to Nebraska’s ranking of 11th.
- Natural gas prices are only slightly higher in Iowa than Nebraska, but electricity prices are somewhat higher in Iowa, which was ranked at the 34th highest price.
|Consumption and Expenditures Comparisons Summary|
|Figure||U.S. Rank*||Figure||U.S. Rank*||Totals|
|Population||3.1 million||30||1.9 million||37||313.9 million|
|Per Capita Income Average||$42,126||23||$43,143||21||$42,693|
|Total Consumption||1,513 trillion BTU||24||871 trillion BTU||33||97,301 quadrillion BTU|
|Per Capita Energy Consumption||494 million BTU||5||473 million BTU||7||312 million BTU|
|Total Spending on Energy||$17,164 million||28||$9,971 million||35||$1,394,088 million|
|Per Capita Spending on Energy||$5,602||6||$5,413||11||$4,474|
|Price of Residential Natural Gas, dollar per thousand cubic feet||$8.90||34||$8.73||35||$12.48|
|Price of Electricity, cents per kWh||10.88||32||9.93||42||12.31|
|Total Carbon Dioxide Emissions, million metric tons (2010)||88.7||25||48.0||37||5,631|
|*Rank is from highest to lowest.|
Natural gas heats almost 64 percent of homes in Iowa. Electricity heats 19 percent, followed by liquid petroleum gas at 13.5 percent, other and fuel oil.
- See also: State Energy Rankings to compare all 50 states
|Consumption of energy for heating homes in Iowa|
|Source||Iowa 2011||U.S. average 2011|
|Liquid Petroleum Gases (LPG)||13.5%||5%|
Production and transmission
Iowa produced 700.5 trillion BTUs of energy in 2011. Of that 8 percent came from nuclear and just over 72 percent came from biofuels. The remaining 20 percent came from what the U.S. Energy Information Administration classifies as ‘other’ renewable energies.
|Energy production by type in Iowa, 2011|
|% of State||% of USA|
The five largest power plants in Iowa are all coal-fired, and coal is the most common means of electricity generation in the state, producing about two-thirds of its electricity. The second most common source of electricity is wind-powered turbines, constituting about one-fourth of net generation. There is one nuclear plant in Iowa, which produces less than one-tenth of the state's electricity. The amount of electricity generated from natural gas is not consistent from year to year, but it is generally less than 5 percent.
In Iowa, several natural gas pipelines cross the state. There are also four natural gas storage fields with a combined capacity of almost 300 billion cubic feet. Natural gas from Canada comes into Iowa by pipeline through Minnesota. Other natural gas comes from Texas, Oklahoma, Louisiana and Kansas. Most of the natural gas that comes into Iowa is shipped on to other states. Roughly 75 percent of the natural gas entering Iowa goes on to Illinois. Over 50 percent of natural gas used in Iowa is utilized by the industrial sector. Approximately two-thirds of Iowa households use natural gas as their primary home heating fuel.
|Where electricity comes from in Iowa|
|Type||Amount generated (MWh)||% of state**||% of U.S.**|
|Total net electricity generation||4,453,000||100%||0.11%|
|**Note: Because the U.S. Energy Information Administration (EIA) does not include all of a state's energy production in these figures, the EIA totals do not equal 100 percent. Instead, we have generated our own percentages.|
The interstate natural gas pipelines companies that have pipelines in Iowa include Alliance Pipeline Co., ANR Pipeline Co., Natural Gas Pipeline Company of America, Northern Border Pipeline Co. and Northern Natural Gas Co.
- See also: Fracking in Iowa
Energy policy is made, executed and influenced by many organizations, both public and private, and is codified in the laws and regulations of the state. Each state’s energy policy involves trade-offs in which energy production and prices are weighed against environmental concerns and efficiency. The free-market Institute for Energy Research asserts that Iowa’s relatively low energy prices can be ascribed partially to its regulatory situation. Iowa does not cap greenhouse gas emissions, but legislation from 2007 set up the Climate Change Council, which reports and monitors greenhouse gas emissions and is developing means for greenhouse gas reduction.
In 1983, Iowa became the first state to adopt renewable portfolio standards (RPS). Following Iowa’s example, thirty states have passed similar laws for higher renewable energy standards. Some groups within Iowa are advocating for the repeal of the standards because they say that renewable power is more costly than traditional power sources.
The Iowa Utilities Board (IUB) and the Office of Consumer Advocate determine how Iowa’s utility companies administer energy efficiency programs. Iowa Code 476.6.16 stipulates that utilities which are rate-regulated must offer energy efficiency programs through cost-effective energy efficiency plans. Iowa ranked 12th on the Energy Efficiency Scorecard produced by the American Council an Energy-Efficient Economy. There are differing estimates about the economic impact of these mandates in terms of costs that may affect prices and jobs, as well as the impact on the environment and pollution. Thus, for example, there are many new studies of what is called the "rebound effect" which refers to the fact that "some of the theoretically estimated gains in energy efficiency will be eroded as consumers consume additional goods and services."
- Iowa Alternate Energy Law (AEL) is a law that requires the two investor-owned utilities in Iowa to own or contract for a total of 105 megawatts of renewable generating capacity and energy production. These two utilities are MidAmerican Energy and Alliant Energy Interstate Power and Light. Solar, wind, waste management, resource recovery, refuse-derived fuel, agricultural crops or residues, wood-burning facilities, or small hydropower facilities are eligible resources under this law.
- Iowa House File 2754 (2006) stipulates that by 2025, 25 percent of petroleum used in gasoline come from biofuels. This law also incentivizes the creation of infrastructure to store and dispense renewable fuel.
- The Midwest Greenhouse Gas Reduction Accord (MGGRA) is an agreement between several states and Canadian provinces to limit greenhouse gas emissions through a cap and trade program throughout the region. The accord was adopted in 2007. It has not been suspended formally, but the participatory states are no longer actively participating in the program.
- Senate Bill 2386 (2008) requires the Iowa Utilities Board to create energy savings performance standards. These standards are made for each regulated electric and natural gas utility, which must file plans in order to meet goals cost-effectively. Utilities that are not regulated, such as municipal utilities and rural cooperatives, must also set energy efficiency savings goals. However, non-regulated utilities are not reviewed or approved by the Iowa Utilities Board.
- The Ethanol Blend Retailer Tax Credit is available to any fuel retailer for up to $0.08 per gallon of pure ethanol blended into gasoline. However, the retailer must sell a certain percentage of renewable fuels, including ethanol and biodiesel, as part of their total motor fuel sales. There are specific fuel goals that retailers must meet annually to be eligible for the credit.
Government agencies and committees
- With in the Iowa State Legislature there are three committees that deal with state energy and environmental issues. The Senate has the Natural Resources & Environment Committee. The Iowa House of Representatives has two committees to deal with these issues, the Natural Resources Committee and the Environmental Protection Committee.
- The Office of Energy Independence (OEI) is the division of the Iowa Department of Natural Resources that is concerned with energy. It was established in 2007 by the state legislature to lead an effort in energy independence and to administer the Iowa Power Fund. The OEI formulates direction for Iowa’s clean energy future by setting goals. A main function of the OEI is to bring the state government together with business, industry, community leaders, public agencies and other stakeholders through partnerships.
- The Iowa Economic Development Authority, Energy Office (IEDA) is the governmental office that seeks to create long-term economic growth opportunities in Iowa. The office does this through technical and financial assistance to the private sector, specifically energy efficiency improvements and investments in clean energy and biofuels.
- The Iowa Utilities Board regulates the rates and services of electric, natural gas and water utilities. It also supervises all pipelines and the transmission, sale and distribution of electricity. One of the board’s main responsibilities is to regulate the rates and services of MidAmerican Energy Company and Interstate Power and Light Company, which are Iowa’s two investor-owned electric companies.
- The Department of Natural Resources is responsible for conserving and enhancing Iowa’s natural resources. The department is headed by the Iowa Director of Natural Resources.
- The Iowa Energy Center is an organization that was created by the Iowa General Assembly in 1990. It is administered through Iowa State University. The center’s goal is to serve the people of Iowa by giving them information about energy production and consumption. The center provides workshops and trainings, information about renewable energy and energy efficiency, and tools for obtaining energy-related grants.
- The Iowa Environmental Council is an alliance of several organizations and individuals who seek to make sure that Iowa has a safe and healthy environment. The council works in public policy, education and coalition-building. The council was formed in 1995 when environmentalists, business leaders and lawmakers came together in order to exert a greater influence on environment.
- The Environmental Law & Policy Center is a public interest environmental legal advocacy and eco-business innovation organization for the Midwest. The center campaigns to improve environmental quality and protect natural resources. A large number of the members of the center are environmental entrepreneurs who seek environmental progress and economic development together.
- The Iowa Industrial Energy Group is made up of 15 industrial companies in Iowa and other Midwestern states. Members of the group communicate and network among one another regarding issues regarding energy regulation and public policy. The group also advocates with decision makers and legislators on energy issues important to industrial energy users.
In the news
This section displays the most recent stories in a Google news search for the term "Iowa+Energy+Policy"
- All stories may not be relevant to this page due to the nature of the search engine.
- Iowa Profile at the U.S. Energy Information Administration
- Iowa Profile at National Association of State Energy Officials
- These figures come from the U.S. Energy Information Administration (EIA), State Profiles and Energy Estimates, Iowa Overview. Statistics for population and per capita income are for the year 2012; consumption and spending estimates are for 2011; and prices are for October 2013. Updated pricing information is available on the state's EIA profile. Prices will be updated on this page biannually.
- U.S. Energy Information Administration, "Iowa Overview," accessed March 3, 2014
- U.S. Energy Information Administration, "Iowa Profile Analysis," December 18, 2013
- Midwest Energy News, "‘Saudi Arabia of coal’? Study says peak may already be past," November 21, 2013
- This chart depicts the state's energy consumption as reported by the EIA for 2011. Click the image to enlarge.
- Gas Buddy, "Historical Gas Charts," accessed March 6, 2014
- To compare current gasoline prices in Iowa to the U.S averages, go to GasBuddy.com
- Tax Foundation, "State Gasoline Tax Rates, 2009-2013," March 21, 2013," accessed February 19, 2014
- These figures come from the EIA State Profiles and Energy Estimates U.S. Energy Information Administration, "Iowa Profile Data" accessed February 5, 2014
- Institute for Energy Research, "Iowa," An Energy and Economic Analysis," posted August 7, 2013
- According to a report called "The Status of Renewable Electricity Mandates in the States," by the free-market Institute for Energy Research, the cost of electricity in states with RPS were on average 38 percent higher in 2010 than in states without a RPS.
- Institute for Energy Research, "The Status of Renewable Electricity Mandates in the States," accessed March 24, 2014
- Manhattan Institute, "The High Cost of Renewable-Energy Mandates," February 2012
- American Council for an Energy-Efficient Economy, "Iowa Utility Policies," August 13, 2013 (dead link)
- For a full explanation of how the ACEEE calculates this ranking see the executive summary of their report here: 
- International Risk Governance Council, "The Rebound Effect: Implications of Consumer Behavior for Robust Energy Policies," accessed March 3, 2014
- Scientific American, "How Bad Is the Rebound from Energy Efficiency Efforts?," May 21, 2013, accessed March 3, 2014
- Database of State Incentive for Renewables and Efficiency, "Alternative Energy Law," accessed March 7, 2014
- Institute for Energy Research, "Iowa: An Energy and Economic Analysis," August 7, 2013
- Center for Climate and Energy Solutions, "The Midwest Greenhouse Gas Reduction Accord," accessed March 7, 2014
- American Council for an Energy-Efficient Economy, " Iowa Utility Policies," updated August 13, 2013, accessed March 7, 2014 (dead link)
- Alternative Fuels Data Center, "Iowa Laws and Incentives for Ethanol," accessed March 7, 2014
- This website contains the specific annual renewable fuels goals that are needed for the tax credits
- Iowa State Legislature, "The Iowa Office of Energy Independence," accessed March 7, 2014
- Iowa Economic Development Authority, "Energy," accessed March 7, 2014
- Iowa Utilities Board, "Jurisdiction and Regulatory Authority of the Iowa Utilities Board," accessed March 7, 2014
- Iowa DNR "About DNR" accessed February 1, 2013
- Iowa Energy Center, "About," accessed March 7, 2014
- Iowa Environmental Council, "Who We Are," accessed March 7, 2014
- Environmental Law & Policy Center, "About Us," accessed March 7, 2014
- Iowa Industrial Energy Group, "Homepage," accessed March 5, 2014
State of Iowa
Des Moines (capital)
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