IUB to reconsider Duane Arnold solar project application

IUB rules that Interstate hasn't provided evidence that projects are 'reasonable' compared to alternate energy sources

An Alliant Energy subsidiary might still receive the Iowa Utilities Board’s approval for advance ratemaking principles for two utility-scale solar facilities near the former Duane Arnold Energy Center near Palo.

However, that approval wouldn’t include the rest of the proposed project, the board decided Dec. 29.

Interstate Power and Light Company, an Alliant subsidiary based in Madison, Wisc., applied in November 2021 for advance ratemaking principles, waiver of reorganization requirements and limited waiver of energy adjustment clause for a 475 MW solar and battery energy storage system (BESS) project, which includes Duane Arnold Solar I and Duane Arnold Solar II. Both projects would be built by NextEra Energy, with plans to transfer ownership to Alliant Energy upon the projects’ completion.

The IUB denied the company’s application on Nov. 9, 2022. The IUB said in background information included in the Dec. 29 order that Interstate didn’t prove it had considered other sources for long-term electric supply. It also didn’t demonstrate that the project is reasonable compared with other electric supply sources. Therefore, Interstate didn’t meet the statutory threshold for advance ratemaking principles, according to the IUB.

Interstate on Nov. 29 asked the board to reconsider its decision or allow it to present evidence. Iowa’s Office of Consumer Advocate objected to Interstate’s motion for reconsideration but stated it didn’t oppose a rehearing, if the IUB requires IPL to provide specific additional evidence to prove its case, like an updated Iowa Clean Energy Blueprint analysis, request for proposal results and information on power purchase agreement economics. The Environmental Law & Policy Center and the Iowa Environmental Council supported reconsideration or rehearing.

“There is no question that IPL needs additional capacity and these two solar facilities, which have been approved for generation certificates by the Board, will provide some of the needed capacity,” the order said. “The cost of the facilities is set by contract and the availability of the existing interconnection with the transmission grid is known. Granting reconsideration or rehearing to allow IPL to provide updated evidence could allow IPL to meet the statutory requirement that the two Duane Arnold Solar facilities are reasonable when compared to other feasible alternative sources of supply.”

BESS costs have fluctuated, and it might not be at the most reasonable site under Inflation Reduction Act changes, the board said. BESS hasn’t been tested in a large-scale application for long-term use. Interstate also hasn’t finalized the size, location, interconnection or cost of facilities that would provide 200 MW of solar.

“The Board is not convinced that IPL could produce evidence to show on rehearing that these two aspects are reasonable in light of other feasible sources of supply,” the order said.

IUB’s order said that Interstate must provide the following documentation:

  • An updated economic analysis based upon updated costs and market prices
  • An analysis of cost-per-unit of accredited capacity
  • An economic analysis of IPL building and owning a natural gas simple-cycle combustion turbine
  • Availability and pricing of a power purchase agreement with NextEra Energy Resources, LLC, for generation from the Duane Arnold Solar facilities
  • An economic analysis of available power purchase agreements from sources of electric supply other than solar that IPL could enter to meet capacity needs
  • An analysis of how the Inflation Reduction Act will impact the electric market and other sources of supply

Other parties will then have 20 days to respond. Then, the board will consider whether the additional evidence demonstrates that the two facilities are reasonable compared with other supply sources.

Documents regarding the projects are filed in the IUB’s Docket No. RPU-2021-0003.

This story was originally published by The Center Square.