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APNewsBreak: Iowa nixes solar grant after lobbying

Published on NewsOK Modified: July 17, 2014 at 3:04 pm •  Published: July 17, 2014
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IOWA CITY, Iowa (AP) — Gov. Terry Branstad's administration surrendered a $1 million grant designed to make Iowa a nationwide leader in solar energy after electric utilities lobbied for major changes, emails show.

The Iowa Economic Development Authority and the U.S. Department of Energy terminated the grant after months of negotiations over what work would be required to meet its goal of helping cut costs and regulations to speed solar adoption.

The sticking point came when Iowa officials amended an original proposal and insisted the grant not be used to evaluate solar energy policies — a change that utility lobbyists sought, according to emails obtained by The Associated Press under the public records law.

"In order to be completely responsible to potential solar customers, the (proposal) should also reference the 'limitations' of solar whenever it speaks of the benefits," Iowa Utility Association president Mark Douglas wrote to IEDA general counsel Rita Grimm in January when suggesting changes that were incorporated into a revised plan sent the next day to the federal agency. Douglas' association includes Iowa's dominant utilities, MidAmerican Energy and Alliant Energy.

Department of Energy official Joshua Huneycutt criticized the changes, saying all other grant recipients were investigating solar policies because that's "an integral part of the work."

"Many of the edits I've encountered 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 in the context of an award made explicitly to promote solar energy adoption," he wrote Jan. 30.

IEDA Director Debi Durham, a Branstad appointee, approved the decision to negotiate the grant's termination April 8 after a stalemate developed, emails show. The termination wasn't publicly announced.

The next day, Branstad told advocates gathered at the Capitol for Solar Day that Iowa would lead the way on solar power as it has on wind "by working together." He didn't mention the grant, but indicated he supported a plan to expand solar tax credits, which he signed in May.

Branstad, who had sent a letter last year lobbying for the grant, supported its cancellation after the state couldn't agree with the federal agency, spokesman Jimmy Centers said. He said IEDA's changes were meant to "prevent duplication of efforts."

The changes sought by Iowa "deviated beyond the original intent of the award," a Department of Energy spokesperson said.

Solar energy advocates say the grant termination marks a missed opportunity to reduce burdensome costs and regulations that prevent Iowa residents from adopting solar. They say the episode illustrates the influence of Iowa's largest utilities.

"It's embarrassing, especially for the energy team at IEDA," said Anne Kimber of the Iowa Association of Municipal Utilities, whose members had hoped the grant would illustrate the best practices to install and price solar energy. "They are not supposed to be a political body and they should be able to act independently to carry out policy that they think is important."

IEDA announced in November its energy office landed the three-year grant to work with communities to reduce barriers to solar installation and evaluate "policy options at the local and state jurisdictions to reduce soft costs" that make installation more expensive.

IEDA signed a $170,000 subcontract with the Iowa Environmental Council. Its executive director Ralph Rosenberg said the council was told to slow research into solar financing in December, when utilities raised concerns.

Douglas said the utility association was surprised by the grant announcement and that he started suggesting changes to Durham, Grimm and energy office officials.

"We wanted to make sure it was not moving forward on policy issues that have yet to be sorted out," Douglas said.

At Douglas' suggestion, Grimm added language repeatedly referring to solar power's limitations and eliminated a plan to track state policies. Federal officials balked, but negotiations continued.

IEDA argued in April that it needed to revise the proposal because "it would be premature and inappropriate" to review solar policy issues that are under investigation by the Iowa Utilities Board. IEDA also said it didn't want to appear to take sides in an Iowa Supreme Court case in which utilities were seeking to bar solar companies from selling energy to customers. The court ruled last week that so-called power purchase agreements are legal, a boost for solar adoption.

Rosenberg said those weren't compelling reasons for ending the grant, calling it disappointing.

IEDA now plans to spend $150,000 to study solar planning, zoning and permitting processes in Des Moines, Cedar Rapids, Dubuque and Linn and Floyd counties as called for under the grant proposal.