The Iowa Utilities Board (IUB) gave conditional approval of a settlement agreement filed by MidAmerican Energy Co. (MEC) and the Office of Consumer Advocate to establish advance ratemaking principles for the company’s proposed Wind VII Iowa electric generation project, the board announced in a written decision Monday.

The proposed Wind VII project could build as much as 1,001 megawatts of new wind-powered electric generation capacity in Iowa in addition to the approximately 1,285 megawatts that MEC currently owns and operates in the state. The new electric generation could happen between 2010 and 2012.

The written order allows the company to move forward with the project under conditions imposed by the board.

In the decision order, the board said the wind project stands to benefit MEC customers because it would provide an additional renewable source of electricity to the company’s electric generation portfolio. The IUB also said the project would be a reasonable long-term source of electricity.

To address concerns that MEC would have market power to “chill” wind development by independent power producers, the company is required to make a future compliance filing with the IUB before making any substantial investment beyond the first 750 megawatts of new wind generation capacity. MEC must also update the market power analysis in the record for this case to demonstrate that the additional wind generation wouldn’t give it too much control over the wind-driven electric generation market.

MEC must notify the board within 30 days if it accepts the advance ratemaking principles in this rate case and will be required to file biannual status reports to the IUB until the project is operational.

The order is available at https://efs.iowa.gov, under Docket No. RPU-2009-0003.