If you’ve thought of buying a new house, car or simply looked at your grocery receipt, you know that prices have increased in recent years. In fact, from 2000 to 2022, buying a house increased 172%. Purchasing a car increased by 290%. And the cost of everyday items like milk increased 47% and the cost of eggs increased 214%.
The question is why?
A variety of factors caused this trend, including inflation, challenges in sourcing products and disruptions to the supply chain, new regulatory requirements, and more.
Impact on Our Energy System
Our energy system is also being impacted by these trends, resulting in increases in energy rates and monthly electric and natural gas bills. Even as energy companies confronted these wide-ranging challenges, they continued to make necessary investments across the United States – critical to enhancing reliability, improving grid security, delivering a balanced energy mix and more. From 2000 to 2019, major energy companies invested more than $800 billion across the United States.
Unlike the purchase of a car or other consumer good (where the company determines the price), energy companies seeking to increase energy rates are subject to a lengthy and rigorous regulatory process where the public has multiple opportunities to participate. Here in Iowa, that process is overseen by the Iowa Utilities Board who review evidence, testimony, and more for approximately a year before determining whether a proposed increase is appropriate. All of this provides consumers and businesses with greater protections and a greater voice in the regulatory process associated with setting prices.
Those investments, provide meaningful and ongoing benefits to families, businesses, and communities across Iowa and beyond, including:
Reliable Electricity for Iowa Families and Businesses:
Investments in our infrastructure help ensure residential homes and businesses of all types and sizes have the energy they need, when they need it. Examples of these investments include the development of new generating facilities that diversify our energy mix, the utilization of new technologies and innovations to improve energy delivery, upgrades to substations and power lines, responsibly expanding renewable energy, and more.
Supporting a Strong Economy:
A reliable energy system in Iowa helps attract businesses to locate here and create new, high-quality jobs in the process. Ensuring that reliability requires ongoing investments from energy companies which can influence energy rates.
Providing Security of the Energy Grid and Protection of Iowa’s Infrastructure:
In a digital age, the threats to our energy system continue to grow and evolve. As a result, energy companies need to stay ahead of the curve, anticipating new and emerging threats and providing meaningful protections to our infrastructure, all of which require new investments year after year.
A Balanced, All-of-the-Above Energy Mix:
Most energy companies continue to embrace an all-of-the-above approach that utilizes a wide range of sources from natural gas to wind to solar to coal. In the process, those companies make additional investments based on market trends to ensure customers receive the best overall value for each dollar spent – investing in natural gas when prices are low, investing in wind when tax credits are available, and more.
Responsible Increases in Renewable Energy:
Energy companies are always looking for cost-effective ways to expand renewable energy, provide consumers with cleaner, no-fuel cost energy sources and diversifying their energy mix, which can help manage energy rates. Iowa is a national leader in wind energy and utility scale solar projects, which continue to expand across the state. When the wind is blowing and sun is shining, more wind and solar is utilized, but more traditional sources like natural gas can be quickly ramped up to ensure energy needs continue to be met.