Iowa Governor Accused Of Passing Up $1 Million For New Solar

Iowa Gov. Terry Branstad (R). CREDIT: AP PHOTO / MARK HUMPHREY
Iowa Gov. Terry Branstad (R). CREDIT: AP PHOTO / MARK HUMPHREY

Iowa recently missed out on a $1 million federal grant to beef up its use of solar power — and State Sen. Jack Hatch, the Democratic gubernatorial candidate for governor, took Gov. Terry Branstad (R) to task over the loss on Monday.

The Iowa Economic Development Authority (IEDA) announced back in November that its energy office had acquired the three-year grant, which was designed and provided by the U.S. Department of Energy. The purpose was to speed up solar installations across the state by updating the rules regarding permitting, inspections, and connections to the grid. A press release at the time quoted Branstad as saying that “Iowa should be at the front of the pack” in solar energy. But after months of wrangling over the terms of the project between the two offices, negotiations fell apart in April and both sides agreed to terminate the grant.

On Monday, Hatch held up the grant as evidence that “the current governor is giving in to special interests in the utility industry,” the Cedar Rapids Gazette reported.

“That’s the only reason Iowa is giving up the federal solar energy grant, and I believe we can do better.”

According to a story by the Associated Press, the failure of the grant was due at least in part to a successful lobbying campaign the Iowa Utility Association brought to bear on officials in Branstad’s administration. After the initial grant announcement, the Association’s president, Mark Douglas, described himself as caught off guard, and added that it was inappropriate for the IEDA to study unsettled issues around solar policy and financing.

At the time, the Iowa Supreme Court was considering a case brought by some Iowa utilities, arguing that it was illegal for smaller solar companies to sell power directly to consumers through power purchase agreements, and that under state law only the larger utilities could sell electricity in defined territories.

In December, one month after the grant announcement, the IEDA’s director wrote a letter to the Department of Energy, which was obtained by the Associated Press under a public records law. The letter echoed Douglas’ concerns, saying it would be inappropriate to make policy recommendations that could be impacted by the pending case. The letter said there should be “greater participation by Iowa’s investor-owned utilities,” and noted that both the Iowa Environmental Council and the Iowa Association of Municipal Utilities — which were subcontractors for the grant — had intervened in the case to support the utilities.

One month later, in January, the IEDA’s general counsel inserted language into the grant concerning the “limitations” of solar, along with other changes sought by Douglas. Those changes were opposed by a Department of Energy analyst, who said they “seem to suggest a significant scaling back of the ambition of the award and a generally adverse/suspicious viewpoint towards solar, which is not acceptable.” The analyst added it was essential to study policy, which every other grant team was doing.

Once the differences between the IEDA and the Energy Department couldn’t be hashed out, the grant was terminated in April. The decision was not announced.

Earlier this month, the Iowa Supreme Court ruled against the utilities, saying the power purchase agreements were legal. The result will most likely be more affordable solar power for schools, government agencies, nonprofits, and cities throughout the state.

According to the Des Moines Register, Hatch also called on Branstad to embrace the Court’s ruling, adding that he would not have given back the $1 million grant.

“The governor needs to rethink his authority,” Hatch continued. “To be controlled by special interests of the utility companies that pressured his department to return a million-dollar grant; that in itself shows the interests of this governor; not so much in renewable energy, but in protecting the larger corporations and the larger interests of this state at the expense of the smaller producers and the individual homeowners who could benefit dramatically from this.”

“Gov. Branstad has been a champion for renewable energy in Iowa and has the results to prove it,” shot back Tommy Schultz, Branstad’s campaign spokesman. “Jack Hatch can continue to bloviate from the sidelines, but all Iowans know that the Branstad-Reynolds administration has fought to expand and protect American energy resources so that Iowans have cheaper costs at the pump, their homes and their businesses.”

Hatch has $183,000 in his war chest for the gubernatorial campaign, way behind Branstad’s $4 million.

Branstad has been pressed on climate change before, and acknowledges it’s occurring — though his administration has also expressed concern that the Environmental Protection Agency’s “latest unilateral, ideological action” to cut carbon emissions from power plants will hurt Iowa consumers and cost jobs. Branstad is also a keen supporter of wind energy, which is becoming a major economic force in the state.

Solar power, however, remains an up-and-comer in Iowa. And the recent Iowa Supreme Court case is just the latest example of how solar’s distributed nature is igniting something of a policy panic among major utilities across the country.