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Want to attract Amazon? Try winning the wind race

REUTERS/Carlos Jasso
Iowa has created a culture at the Iowa Utilities Board that gives major wind companies like MidAmerican, Alliant Energy and others confidence to invest resources, and gives customers like Apple, Google and Amazon the incentive to build in Iowa.

Last week, Minneapolis-St. Paul signaled its intention to join the race to entice Amazon to locate its new headquarters in the Twin Cities. While local officials pull together a package they hope will win the day, it’s worth considering how our friendly neighbors to the south have managed to persuade so many companies to set up shop in Iowa.

Mike Franklin

Iowa, it turns out, can offer one thing more and more major corporations want: easy access to low-cost, renewable energy.

In a recently published national opinion piece, “The red state with an energy blueprint,” Iowa’s Republican Gov. Kim Reynolds extolled Iowa’s burgeoning wind industry and the 37 percent of Iowa’s electricity provided by homegrown wind power.

Read that again – 37 percent. I’m old enough to remember when Minnesota grabbed eye-popping headlines for requiring just 25 percent by 2020 – a feat not yet fully accomplished in our state.

Jobs, investments — and low electricity rates

In addition to having created thousands of jobs and $13.5 billion in economic investments, Iowa residents enjoy some of the lowest electricity rates in the country.

Thanks to its wind power, Iowa has attracted major corporations like Apple, whose CEO recently explained that access to wind was paramount to Apple’s decision to site two major data centers in Iowa.

In fact, Iowa has built out over twice as much wind capacity as Minnesota:

  • Wind powers 17 percent of Minnesota’s electricity, compared to 37 percent in Iowa.
  • Minnesota enjoys roughly 4,000 wind energy jobs, compared to 9,000 in Iowa.
  • The total capital investment in wind in Minnesota through 2016 was $6.8 billion, compared to $13.5 billion in Iowa.

Not bad for Minnesota, to be sure. But everything is relative, and Iowa’s kicking our tails.

Once a national leader

When the Next Generation Energy Act passed in Minnesota in 2007, our state was hailed as a national leader. And so we were. But what is it that is causing so many clean energy developers to bypass Minnesota, and set up shop in Iowa instead?

Well, for one thing, wind developers report that it’s easier to permit and build a wind project in Iowa than in Minnesota.

Take the Freeborn Wind Project, originally slated to be built entirely in Minnesota, but was moved to northern Iowa. In that case, wind developers found a friendlier and more responsive regulatory environment across the border.

Another difference between Iowa’s approach and Minnesota is the very strong, bipartisan support for wind development coming from the highest levels of government in Iowa.

Before Gov. Reynolds was pitching Iowa as a great place to develop wind, her predecessors – governors Branstad (R), Vilsack (D) and Culver (D) – were doing everything they could to attract wind development.

A culture that inspires confidence

Iowa has created a culture at the Iowa Utilities Board that gives major wind companies like MidAmerican, Alliant Energy and others confidence to invest resources, and gives customers like Apple, Google and Amazon the incentive to build in Iowa. Gov. Reynolds and her predecessors have been strong advocates for developing the in-state supply chains to provide the manufacturing might needed to power a strong wind industry — thereby revitalizing their manufacturing sector.

Contrast that to Minnesota, where beyond a 10-year-old state mandate, our monopoly-centric and burdensome regulatory model has created very few incentives for customers or developers to invest here. Our state seems more intent on maintaining regulators’ and monopolies’ control over energy markets than allowing a marketplace to grow, to everyone’s benefit.

The result of all this is that Iowa is the best state in the country in which to buy energy, from the customers’ perspective. In early 2017, the Retail Industry Leaders Association and Information Technology Industry published its “Corporate Clean Energy Procurement Index” Rankings, listing Iowa at No. 1 – with Minnesota at a disappointing No. 31.

I think it’s high time Minnesota’s leaders develop a plan to transform Minnesota’s ancient, bureaucratic energy system into something that attracts renewable energy developers and customers alike. Then, we too can enjoy the new jobs and economic activity from this growing industry, the lower electricity rates enjoyed by our Iowa brethren, and we can be in the best possible position to attract companies like Amazon.

Mike Franklin is the president of the Minnesota Conservative Energy Forum.

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Comments (1)

The Best Path to Increase Renewables

In addition to Mr. Franklin's suggestions of faster permitting of renewable energy, and bipartisan support for renewable energy projects, Minnesota should move towards economy-boosting renewable energy by levying a fee on fossil fuels, putting all fee revenue into a trust fund, and using the fund to pay equal dividends to every Minnesotan. Folks who use more than the average amount of fossil fuels will end up paying more than they do now, but the majority of us will come out ahead financially, or break even.

This approach is called "carbon fee and dividend," and it will create market forces that achieve the transformation we want, without increasing the overall tax burden or the size of government. That's the sort of policy that can achieve bipartisan support.