Brattle Analysis: Large Energy Users in Iowa, Wisconsin Can Support Grid Affordability with Proper Cost Allocation
Event summary
- Brattle Group's analysis examines how data centers and large energy users impact electricity prices in Iowa and Wisconsin.
- Study finds that Alliant Energy's utilities are well-positioned to manage risks from large-load growth due to existing contractual protections.
- Between 2010 and 2025, electricity price growth in Iowa and Wisconsin remained below or near inflation levels.
- Alliant Energy's ratemaking framework ensures large load customers pay at least the incremental cost of serving them.
- Future transmission investments across the Midwest will likely increase due to aging infrastructure and regional reliability requirements.
The big picture
The Brattle Group's analysis highlights the growing importance of managing electricity demand from large energy users, particularly data centers, in maintaining grid affordability. The study underscores the need for utilities to structure rates, contracts, and cost allocation mechanisms carefully to protect existing customers while benefiting from economic development. This issue is particularly relevant in states like Iowa and Wisconsin, where rapid electricity demand growth has historically led to lower inflation-adjusted electricity prices.
What we're watching
- Regulatory Framework
- How Alliant Energy's ratemaking framework will evolve to address affordability concerns tied to rapid load growth.
- Transmission Investment
- Whether revenue from load growth will outpace the cost of new infrastructure investment in the Midwest.
- Contractual Protections
- The effectiveness of minimum billing commitments, take-or-pay provisions, and other contractual structures in mitigating affordability risks.
Related topics