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On Jan. 9, 134 state legislators were sworn into office at the start of Iowa’s 90th General Assembly. Our citizen legislature looks a lot different following the redistricting process that follows our country’s decennial census. It is a year of new beginnings, with about one-third of the representatives and senators starting their first term. Iowa’s electric co-ops welcomed our lawmakers back to Des Moines at various events last month. We look forward to continuing our advocacy on March 15 with our annual “REC Day on the Hill” event in the Capitol Building Rotunda.

Electric service territories provide stability

We hope that Iowa lawmakers don’t have the wool pulled over their eyes as some special interests attempt to fix something that isn’t broken this session. In Iowa, electric utilities work within defined service territories; where you live determines who provides you with electricity. If you live in rural Iowa, you are most likely a member-owner of your local electric cooperative. Nearly 90 years ago, when for-profit power companies provided service in cities across America, they refused to serve rural areas because it wasn’t profitable. Farmers and ranchers in Iowa and across America worked together to form locally owned electric cooperatives to power their lives and communities.

In the 1970s, Iowa set boundaries for electric service territories to provide stability for all consumers. Energy providers still adhere to those rules today, which are governed by the Iowa Utilities Board. Every so often, there are calls to “deregulate” the service territories in Iowa. So far, Iowa policymakers haven’t fallen for the “competition is good” tagline. That’s fortunate, and here is why: Rural Iowa can’t risk what’s at stake in a “free-for-all” energy market.

Today, one mile of municipal electric line will connect to nearly 60 meters. Investor-owned utilities will connect to nearly 30 meters over the same distance. Electric co-ops will only connect to four meters per mile on average. A lot has changed since the 1930s, but rural areas continue to be sparsely populated, which means the revenue received per mile of power lines is extremely low compared to towns and cities. Remember, it was this low revenue that prevented investor-owned utilities from serving rural areas so many decades ago in the first place.

Electric service deregulation is bad for Iowa

Full or even partial deregulation of electric service territory is bad for rural Iowa. Period. And if you don’t believe me, look at deregulated states like California, Illinois, Nevada and Oregon. The promises of lower energy bills haven’t come to fruition. In fact, deregulated states are seeing rates rise faster than in states like Iowa, which are territory protected. A recent investigation by The New York Times concluded that on average, residents living in a deregulated market pay $40 more per month for electricity.

We hope lawmakers won’t be fooled by secretive groups that wrap their arguments in a “free market” flag when their proposals will leave rural Iowans holding the bag.

Kevin Condon is the director of government affairs for the Iowa Association of Electric Cooperatives.

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