Plan would end utilities tax that funds Iowa energy research

IOWA CITY, Iowa (AP) - A tax on utilities that has funded renewable energy and environmental research for decades at Iowa State University and the University of Iowa would be eliminated in 2022 under a Republican plan unveiled Thursday.

The plan would end the tax that raises $5 million per year for the Iowa Energy Center in Ames and the Center for Global and Regional Environmental Research in Iowa City. It comes as the Republican-controlled Legislature faces backlash over plans to slash funding for the University of Iowa’s flood research center and a sustainable agriculture research center at ISU.

Lawmakers enacted the assessment - 0.1 percent of the annual operating revenues of Iowa’s gas and electric utilities - as part of the landmark 1990 Energy Efficiency Act that created the centers. Eighty-five percent goes to the Iowa Energy Center, which promotes energy efficiency and alternative energy. The rest flows to the center that promotes climate change research.

The plan calls for transferring the Iowa Energy Center from Iowa State to the Iowa Economic Development Authority and giving it a new, industry-friendly mission.

Instead of promoting energy efficiency, the center would be directed to help expand the energy sector’s workforce, work with manufacturers to commercialize technologies, build the market for electric vehicles, advise utilities on cybersecurity preparedness and grow the state’s natural gas infrastructure. Its core funding source would disappear in five years without legislative action.

About a dozen ISU employees would be laid off under the move, although the center’s existing grants and pledges would be honored.

Sen. Mark Lofgren, R-Muscatine, said the tax’s repeal would force lawmakers to determine whether the funding should continue in 2022. He said the transfer would potentially cut the amount spent on overhead, freeing up money for research.

Democratic Sen. Bill Dotzler of Waterloo said he was disappointed that Republicans were pushing the “major change” without debate, predicting the centers will go away if their funding stream ends.

“Iowa is really rated as one of the best energy states as far as energy efficiency and alternative fuels,” Dotzler said. “The fact that we’re changing the mission of the energy center and that we’re going to eliminate the funding source is all problematic.”

Supporters said both centers use their state funding to generate tens of millions of dollars in additional grants from the federal government and other sources.

Jerry Schnoor, co-director of the environmental research center at the University of Iowa, denounced the plan. He said researchers have made major discoveries that create knowledge, jobs and protect human health and the environment.

“We hope to appeal to the economic and environmental interests of the state to reconsider this funding decision,” Schnoor said.

Gary Steinke, a member of the Iowa State center’s advisory council, said he was “completely flabbergasted” that lawmakers would consider overhauling the highly successful center.

Iowa State announced March 6 that it was supporting the transfer, which caught many of its own staff off guard and angered environmentalists. The university suspended a search for the center’s director and ordered staff not to award new grants, even though legislation to accomplish the move wasn’t public.

Supporters say the transfer will prevent duplication with other state energy programs and align its goals with recommendations of a state energy plan recently unveiled by Lt. Gov. Kim Reynolds.

But critics said the transfer could jeopardize research independence by putting it in the executive branch. Utilities have sought to exert more control over the center in recent years.

Emails released Thursday show Iowa State lobbyist Kristin Failor was privately working with MidAmerican Energy on the plan in early March - even as Iowa State administrator Wolfgang Kliemann, who helps oversee the center, had no idea.

“Can we catch up today? The rumor mill has started really running on site and I need to put some sort of plan in motion to ease and institute the calm before the storm,” Failor wrote to MidAmerican’s Andrew Davis March 2.