Brattle Experts Examine the Potential Impacts of Large Loads on Transmission Investment Needs and Electricity Prices in Iowa and Wisconsin
In a recent white paper commissioned by Alliant Energy, Brattle energy experts identify system conditions, ratemaking approaches, and contractual structures that utilities can leverage to address electricity affordability concerns related to demand growth from large new electricity customers, including data centers and other energy-intensive facilities.
The Potential Impacts of Large Loads on Electricity Prices: Analysis for Alliant Energy Utilities explores how accelerating demand from large electricity users such as data centers intersects with transmission investment needs and retail electricity prices in the Iowa and Wisconsin communities served by Alliant’s Interstate Power and Light Company (IPL) and Wisconsin Power and Light Company (WPL) utilities. The analysis finds that IPL and WPL are relatively well-positioned to navigate the risks associated with large-load growth due to existing contractual protections, substantial owned generation resources, and limited exposure to wholesale capacity market volatility.
Among the paper’s findings:
Among the paper’s findings:
- Between 2010 and 2025, electricity price growth in Iowa and Wisconsin remained below or near inflation levels, comparing favorably with national trends.
- Historically, nominal increases in Alliant Energy’s average retail electricity price have been driven primarily by investments in aging transmission and distribution infrastructure, regional transmission expansion to support reliability, and new generation capacity planned for coal plant replacement.
- Alliant Energy’s ratemaking framework is designed to ensure that large load customers pay at least the incremental cost of serving them, reducing the risk of cost shifts to existing customers.
- Future transmission investments across the Midwest will likely increase regardless of data center growth due to aging infrastructure replacement and regional reliability requirements; the long-term impact of load growth on retail electricity prices will depend in part on whether revenue from load growth outpaces the cost of new infrastructure investment.
The Potential Impacts of Large Loads on Electricity Prices: Analysis for Alliant Energy Utilities was authored by Managing Energy Associate Dr. Long Lam, Principals Ryan Hledik and Dr. Sanem Sergici, Energy Research Associate Adam Bigelow, and Energy Analyst Tina Zhang. The full paper and two-page summary are available below.
