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Energy takes center stage in FD

MidAmerican hosts local Empower U

October 25, 2012

The potential future shut-down of coal-fired power plants, and the subsequent impact on energy costs, got listeners' attention Wednesday at a Fort Dodge seminar focusing on energy.

About 100 people attended the Empower U seminar, hosted by MidAmerican at the Best Western Starlite Village Inn & Suites. Its aim was to educate local business leaders, and city and county officials not only on the future of electricity generation, but on rates, energy policy and planning.

Bill Fehrman, president and chief executive officer of Des Moines-based MidAmerican Energy, talked about the company and how it is viewing the future.

MidAmerican operates five main plants in Iowa, which are fueled by coal, he said. New environmental regulations on coal-fired power plants could potentially shut some of them down in coming years, a prospect which could leave power companies to find other sources of power, such as natural gas.

"Coal-fired is your least expensive power generating source, but that could be shut down by 2015," said Fehrman. "There is no way rates wouldn't be affected by that.

"We have more than 7,000 megawatts of generating capacity," said Fehrman. "The average rate is 6 cents per kilowatt hour."

According to Fehrman, with the introduction of wind energy in Iowa in the past decade, MidAmerican has seen a change from nearly 70 percent of its power generation being coal-fired and zero percent wind to 45 percent coal-fired and 31 percent wind energy in 2012.

"Wind energy means decreased carbon emissions," he said.

If the federal wind production tax credit is not continued at the end of the year, it could affect wind energy production, he said.

"There is an interesting debate over wind," Fehrman said. "From everything we know, if the production tax credit doesn't continue there will be a significant impact on production and construction for wind without it."

Fehrman said the debate on nuclear power is an ongoing one that MidAmerican has taken into consideration. Although it's unlikely a nuclear power plant would be constructed in Iowa anytime in the near future, the company has identified potential sites for plants in Fremont County in western Iowa and Muscatine County in eastern Iowa.

"We haven't made any decisions on whether or not we should build a plant," he said. "There are two potential sites we will continue to study. It may make sense to have nuclear power. It appears we should at least keep studying it. In the long term, it may make sense, but in the short term it would be tough to sell."

Natural gas could be an option for power in the future, but its price would be a driving factor.

"We will have to make a decision in the next couple years as to what direction we will be taking," Fehrman said.

If coal-fired plants were to shut down, he said the majority of power would likely come from natural gas.

"There is a large population of gas plants that run very little, and they would run a lot if that were to happen," he said.

As energy prices are expected to rise, Fehrman said changes to MidAmerican rates would likely be gradual.

"We don't want to have a huge one-time rate increase," he said. "We still have a significant headwind against us in regards to costs."

Jonathan Weisgall, vice president for legislative and regulatory affairs for MidAmerican Energy, also spoke on prices and government regulations that could affect the industry.

"Congress can tax, spend and regulate when it comes to energy," Weisgall said. "The dilemma is the simple fact that we spend more than we take in."

"There is a huge uncertainty in the political arena," he said.



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