Group Proposes ‘Electric Choice’ Concept for Big Energy Users in Iowa

(Radio Iowa) A new group is proposing that businesses that use the most energy in Iowa be able to buy electricity from other sources. Under current rules, customers must use the utility assigned to both maintain the power grid in their area AND provide the electricity for it. R.G. Schwarm is executive director of the new Iowa Economic Alliance.

“We’re not advocating for a one size fits all approach,” Schwarm says. “This is just for large energy users that are sophisticated market participants with the financial wherewithal and the resources to assess the market and take risks that smaller users may not be in a position to do.” The concept called electric choice is up and running in some other states, like Illinois and Ohio, and customers can compare electricity prices from different providers — but still are required to pay fees to the company that maintains the electric lines in their area. Schwarm says electric rates are a factor businesses evaluate when deciding where to locate or expand.

“Competition can help drive down prices,” Schwarm says. Schwarm is not revealing the names of the businesses that are part of the Iowa Economic Alliance, but he says the coalition’s members have seen electric rates sharply increase over the past couple of years.

“That’s why we came together to try to identify what can be done,” Schwarm says, “and this was expedited or increased given the current state of inflation and increased costs across the board.” The group recently commissioned a statewide survey to gauge public sentiment about the concept of electric choice. The poll found about 70 percent of Iowans prefer the idea of choosing from among electric providers rather than being restricted to the one company state regulators have designated to serve their area.