In 1983, Iowa became the first state in the U.S. to adopt a renewable portfolio standard (RPS) by enacting the Alternative Energy Production law. The Iowa RPS requires its two investor-owned utilities (MidAmerican Energy and Alliant Energy Interstate Power and Light) to own or to contract for a combined total of 105 megawatts (MW) of renewable generating capacity and associated energy production.
As of the end of 2017, Iowa had more than 7,312 MW of wind capacity installed and ranked the third in the U.S. with 36.9% of the state’s electricity generation coming from wind.
Eligible resources include solar, wind, waste management, resource recovery, refuse-derived fuel, agricultural crops or residues, wood-burning facilities, or small hydropower facilities.
The Iowa Utilities Board (IUB) has allocated the 105 MW requirement between the two utilities based on each utility's percentage of their combined estimated Iowa retail peak demand in 1990:
MidAmerican Energy: 55.2 MW (52.57% of demand) and
Alliant Energy Interstate Power and Light (IPL): 49.8 MW (47.43% of demand).
A utility must meet its RPS obligation by either owning renewable energy production facilities located in Iowa or entering into long-term contracts to purchase or wheel electricity from renewable energy production facilities located in the utility's service area.
The IUB issued an order in November 2007 (in Docket No. AEP-07-1) approving specific generating facilities designated by MidAmerican and IPL for satisfying the utilities’ RPS requirements. This order cleared the way for the utilities to participate in renewable energy credit (REC) trading programs by differentiating between renewable electricity production capacity used to comply with Iowa law and that which remains uncommitted.