Iowa’s move to embrace renewable wind energy has been, by most accounts, a smooth one. For Iowans Greg and Beverly Swecker, it hasn’t.
“It’s been a nightmare,” Beverly said.
Greg Swecker, a farmer from Dana, a town west of Ames with a population of about 250, has fought for 10 years to get what he consider a fair rate for the electricity he produces.
Swecker built a $45,000, 65 kilowatt-hour wind turbine in 1998 to supplement the cost of running his farm, where he grows corn and soybeans, and raises pigs. He expected Midland Power Cooperative, his local utility company, to hook him up to the grid and buy back any excess energy he produced.
Midland initially said it would purchase Swecker’s electricity, but on its own terms. Swecker wanted to use the power he generated and sell the excess — in a process called net metering — but Midland wanted to buy all the power, and then sell the Sweckers back what they used. This, according to the Sweckers, would have made their enterprise much less profitable.
Iowa now ranks fourth among the states in wind energy production. But primary beneficiaries of Iowa’s wind-energy boom are not average Iowans like the Sweckers. Rather, they are large utility companies like MidAmerican Energy, which currently operates 466 wind turbines across the state, and Midland Power Cooperative.
In Iowa, MidAmerican’s near monopoly on production has both stymied independent wind-energy production and diminished the benefit locals receive from the new technology.
“The big utilities said they didn’t need [wind power]; they said it was too expensive,” said engineer and renewable energy consultant Rich Dana of Grinnell.
“But after the small developers did the heavy lifting and managed to bring the price down, the big utilities walked into the governor’s office and changed the law so they could own their own facilities and take advantage of the ground work.”
Bypassed by bill
Dana is talking about Iowa House File 659, a bill passed in 2003, which allowed utilities to count energy produced by wind turbines toward their required renewable energy quota of 105 megawatts.
While a positive step for the environment, it left local wind farmers twisting in the wind.
Big utility companies began creating their own wind farms, and they didn’t need power from small producers to meet their quota (an amendment that would have required the utility companies to buy from independent producers was narrowly defeated due to utility companies’ lobbying, Dana said). This allowed utilities to offer below-market prices for energy purchased from small scale sources, according to Dana, and lowered the incentive for local farmers to put up wind turbines.
“Some big electric co-ops have worked with local groups of farmers to put them on the grid,” said Dana. “But some companies have done everything they can to avoid it.”
Between 1998 and 2003, Midland and Swecker debated mainly over the issue of net metering while the farmer’s turbine blades remained motionless.
The standoff became so heated, Swecker says, that for 28 days in 1998 Midland cut his power off.
In 2003, while the Sweckers were involved in cases with the Iowa Utility Board and the Iowa Supreme Court, the Federal Regulatory Commission stepped in and ruled in favor of the Iowa couple. Midland was forced to hook the Sweckers to the grid and use net metering.
Still in conflict
But the conflict between the Sweckers and Midland remains unresolved. Now, five years later, the disagreement between the two parties centers on the price at which the Sweckers’ power is purchased.
Midland buys the Sweckers energy at a much lower cost than it buys it from other suppliers.
Midland doesn’t actually produce power, but rather purchases it from larger companies such as Southern Illinois Power Cooperative, or SIPCO, then resells it to its own customers.
Budget documents indicate Midland pays SIPCO just under 6 cents for each kilowatt of energy, while paying the Sweckers just 3.5 cents.
The Public Utility Regulatory Policies Act of 1978 makes it illegal for an utility company to pay different rates to different producers, so the Sweckers have once again filed suit in the Iowa Supreme Court. A representative from Midland said the Sweckers are asking for a rate that would be unfair to other members of the co-op.
Meanwhile, the couple has yet to cash a check from Midland in the five years they have been on the grid, afraid it would constitute an agreement to the below-market rate.
“It’s unbelievable,” Beverly Swecker said.
“They’re really trying to discourage the individual from doing this. Or, if he does do it, he’s not going to derive as much benefit out of it, it’s going to go to the utility company. It’s really corrupt,” she said.
Fight for fairness?
The individual farmers like the Sweckers aren’t the only ones hurt by big energy producers’ domination of wind power. Local Iowa communities also feel the pain when large-scale corporate wind-energy projects are built instead of small-scale, locally owned ones.
The advantages of local wind power should be creating an economic cycle that keeps money in small-town Iowa, said Teresa Welsh Galluzzo of the public-interest group Iowa Policy Project.
“The banker who finances the farmer [who puts up the turbine], the accountant who keeps his books, and the steel mills and electrical manufacturers and other suppliers that provide him with materials are all compensated,” Galluzzo said.
In a report, Galluzzo cites a study by Wind Utility Consulting in Jefferson, Iowa, which shows that locally owned wind generation creates 10 times more economic activity in the community and state than wind projects owned by larger companies.
Galluzzo echoes Dana’s concern about price-negotiating obstacles to small-scale wind energy policies.
“It can be hard to negotiate, that has been a disadvantage,” Galluzzo said. “We need some sort of standard interconnection agreement that local land owners can use, so that they each don’t have to fight this battle every time with their utility.”
Iowa is trying to set a standard rate but, for now, small energy producers are left to negotiate by themselves, something many are unable or unwilling to do.
The Sweckers say they know people who have shied away from plans to put up wind turbines after witnessing their friends’ ordeal.
A representative from Midland said that the Sweckers are asking for a rate that would be unfair to other members of the co-op.
The Sweckers say they will keep fighting for the rights of small-scale power producers, no matter how long it takes.
“We’re setting the precedent on how much people should get paid,” Beverly Swecker said.“Midland has spent millions and millions of dollars to fight this one little turbine, and they keep hoping we’re going to give up,” she said. “But we keep saying, ‘We’re not gonna give up.’ ”