Iowa PURPA Law Comes Under Firet

Fortnightly Magazine - July 15 1995
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Midwest Power Systems Inc. (MPS) has asked the Federal Energy Regulatory Commission (FERC) to void the Iowa law requiring Iowa utilities to pay six cents per kilowatt-hour for electricity generated by qualifying facilities (QFs). MPS

argues that the Iowa price is more than twice what federal law imposes under a market-based rate. MPS and the three other investor-owned utilities (IOUs) in Iowa had asked the state legislature earlier this year to make the Iowa law conform to federal law, but the bill was not passed. The Iowa law imposes the higher price only on IOUs, not on rural co-ops or municipal utilities.

Although it currently purchases electricity from three alternative energy producers, MPS is not asking the FERC to invalidate those contracts, but merely to find the Iowa law invalid for future contracts. Under the Iowa law as it now stands, a long-term contract proposed by Windfarm developers would cost an additional $7.2 million for the first year, and more than $100 million by 2002.

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