DES MOINES, IOWA (February 26, 2021) — A report issued this week by the US Energy Information Administration (EIA), shows Iowa had the 24th-highest commercial electric rate in the nation and the 18th-highest residential rate for the 2020 calendar year.
The EIA is the statistical and analytical agency within the US Department of Energy. The February 2021 Electric Power Monthly report contains the full 2020 average per kWh price for each state, which shows Iowa’s average kWh rate of 10.24 for commercial customers for the full 2020 calendar year. The report can be downloaded at https://www.eia.gov/electricity/monthly/ (see Table 5.6.B for Year-To-Date State Averages through December 2020).
“While the perception exists that Iowa has low electric rates, low rates is a myth for many businesses in the state,” noted Bob Rafferty, Executive Director of Iowa Business for Clean Energy.
Iowa’s commercial rates are 14% higher than neighbor Illinois and nearly 17% higher than Missouri. Of the surrounding states, only Minnesota and Wisconsin had higher rates at 10.57 kWh and 11.5 kWh respectively. Iowa has a large percentage of its energy used for industrial purposes, compared to other states. Because industrial rates are much lower, it gives Iowa a low overall average electric rate — but high rates for the average business or residence.
Iowa’s commercial rate was higher than:
Not all Iowans pay this higher rate. For example, MidAmerican’s average rate from a 2019 Iowa Utility Board document shows their commercial rate quite a bit lower. (2020 data is not yet available.)
“MidAmerican Energy’s investment in wind energy has really paid off, helping them keep costs affordable for Iowa’s businesses, while striving for a lower carbon footprint.” Rafferty added. “If the data shows anything, Iowa needs to double down on policies that will encourage adoption of lower-cost clean energy.”
A poll recently commissioned by Iowa Business for Clean Energy found that 61% of Iowans believe renewable resources will drive down the cost of electricity. (www.iowacleanenergy.org/polling-results)
“As more and more Iowans look at the average cost of electricity in our state and realize MidAmerican’s wind generated energy is so much less expensive — support will grow to increase our investment in renewable energy,” said Rafferty. “And renewable energy will not just drive down prices, but given that it is produced here, it helps drive our economy.”
In the poll, 70% of Iowans view renewable energy as good for the economy.
And it is not just commercial customers paying high electric rates. Residential customers actually paid the 18th-highest rates in the country. (see Table 5.6.B referenced above).
Iowa Business for Clean Energy was launched in 2020 to foster policy discussions that will enable Iowa businesses to access the cleanest energy at a competitive price, ensuring a brighter future forward. Visit us at www.iowacleanenergy.org.