MidAmerican Energy took a step closer to getting its next major wind project in Iowa approved on Friday. The Iowa Utilities Board issued an order approving settlement with modification and requiring reports regarding MidAmerican Energy’s proposed “Wind X” Iowa electric generation project of up to 552 megawatts.
In modifying the settlement agreement, the board’s order sets the cost cap for Wind X at $1.61 million per megawatt, including allowance for funds used during construction, which is down from $1.638 million per megawatt for the completed project as a whole. The board said in a release, “This lower cap reduces the risk to customers and provides an incentive to MidAmerican to keep costs low while still providing a contingency for unanticipated changes that could increase costs above that shown by MidAmerican’s economic analysis.”
The settlement agreement for the more than $888 million project provides that MidAmerican’s allowed return on the common equity portion of Wind X that will be included in Iowa electric rate base will be 11.35 percent, down from 11.5 percent proposed by MidAmerican. The board stated, “The agreed-upon ROE is lower than that awarded in any prior MidAmerican advance ratemaking proceeding including Wind IX, the most recent docket.”
Before the board could determine applicable ratemaking principles for Wind X, two statutory conditions had to be met under Iowa code. First, MidAmerican has to have in effect a board-approved energy-efficiency plan. Second, MidAmerican must demonstrate that it has considered other sources for long-term energy supply and that the facility is reasonable when compared with other feasible alternative sources of supply.
MidAmerican will have 30 days from Friday’s decision to notify the board whether it accepts the ratemaking principles awarded. If accepted, the ratemaking principles would be effective for the regulated life of the facilities.