House File 2256 - Introduced HOUSE FILE BY BERRY and KRESSIG Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act specifying conditions for the issuance of a certificate of 2 public convenience, use, and necessity by the Iowa utilities 3 board to a coal=fired merchant power plant. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 6374YH 82 6 rn/rj/14 PAG LIN 1 1 Section 1. NEW SECTION. 476A.16 COAL=FIRED MERCHANT 1 2 POWER PLANTS == ALLOCATION OF REVENUE. 1 3 1. For purposes of this section, "coal=fired merchant 1 4 power plant" means a power plant located in this state that 1 5 burns coal and is not owned or operated by a public utility, 1 6 municipally owned utility, municipal power agency, or electric 1 7 cooperative corporation or association and which is not 1 8 subject to rate regulation pursuant to chapter 476. 1 9 2. As a condition for issuance of a certificate by the 1 10 board pursuant to this chapter, the board shall require an 1 11 owner or operator of a coal=fired merchant power plant to 1 12 allocate revenue derived from the operation of the facility as 1 13 follows: 1 14 a. Provide one=tenth of one percent of gross revenue for 1 15 the support of the Iowa energy center established in section 1 16 266.39C and the university of Iowa center for global and 1 17 regional environmental research established by the state board 1 18 of regents. 1 19 b. Provide two percent of gross revenue for an energy 1 20 management improvement grant program to be administered by the 1 21 center for energy and environmental education at the 1 22 university of northern Iowa. 1 23 3. As a condition for issuance of a certificate by the 1 24 board pursuant to this chapter, the owner or operator of a 1 25 coal=fired merchant power plant shall develop a multiyear plan 1 26 and budget for managing regulated emissions from the facility 1 27 in a cost=effective manner, as follows: 1 28 a. The initial multiyear plan and budget shall be filed 1 29 with the board when an application for a certificate pursuant 1 30 to section 476A.3 is submitted by the owner or operator, with 1 31 an additional copy provided to the department of natural 1 32 resources. The plan shall, at a minimum, meet the electric 1 33 power generating facility emissions criteria and standards 1 34 applicable to plans approved by the board for rate=regulated 1 35 utilities pursuant to section 476.6, subsection 22. If the 2 1 board determines the plan to be deficient or inadequate in any 2 2 way, a certificate shall not be issued. 2 3 b. Updates to the plan and budget, incorporating the most 2 4 up=to=date technological developments relating to emissions 2 5 regulation, shall be filed with the board at least every 2 6 twenty=four months, with a copy provided to the department of 2 7 natural resources. 2 8 c. Updates shall be considered in a contested case 2 9 proceeding pursuant to chapter 17A. The department of natural 2 10 resources and the consumer advocate shall participate as 2 11 parties to the proceeding. 2 12 d. The department of natural resources shall state whether 2 13 the plan or update meets applicable state environmental 2 14 requirements for regulated emissions. If the plan does not 2 15 meet these requirements, the department shall recommend 2 16 amendments that outline actions necessary to bring the plan or 2 17 update into compliance with the environmental requirements. 2 18 e. The board shall not approve a plan or update that does 2 19 not meet applicable state environmental requirements and 2 20 federal ambient air quality standards for regulated emissions 2 21 from electric power generating facilities located in this 2 22 state. 2 23 f. The board shall issue an order approving or rejecting a 2 24 plan, update, or budget within one hundred eighty days after 2 25 the utility's filing is deemed complete; however, upon good 2 26 cause shown, the board may extend the time for issuing the 2 27 order as follows: 2 28 (1) The board may grant an extension of thirty days. 2 29 (2) The board may grant more than one extension, but each 2 30 extension must rely upon a separate showing of good cause. 2 31 (3) A subsequent extension must not be granted any earlier 2 32 than five days prior to the expiration of the original 2 33 one=hundred=eighty=day period, or the current extension. 2 34 g. If the plan is rejected by the board, the board shall 2 35 issue an order to the owner or operator of the coal=fired 3 1 merchant power plant to cease generation of power within 3 2 thirty days. 3 3 4. The board, after consultation with the department of 3 4 natural resources, may waive all or part of the requirements 3 5 of subsection 2 upon finding that the coal=fired merchant 3 6 power plant has achieved other methods to offset its 3 7 production of greenhouse gases and other pollutants. 3 8 5. The board shall adopt rules pursuant to chapter 17A 3 9 prescribing the regulatory standards and implementation 3 10 procedures relating to application of the requirements of this 3 11 section. 3 12 EXPLANATION 3 13 This bill specifies conditions which must be satisfied by 3 14 the owner or operator of a coal=fired merchant power plant in 3 15 order to be issued a certificate of public convenience, use, 3 16 and necessity by the Iowa utilities board. 3 17 The bill defines a coal=fired merchant power plant to refer 3 18 to a plant located in Iowa that burns coal and is not owned or 3 19 operated by a public utility, municipally owned utility, 3 20 municipal power agency, or electric cooperative corporation or 3 21 association, and which is not subject to rate regulation 3 22 pursuant to Code chapter 476. 3 23 The bill provides that to be issued a certificate, an owner 3 24 or operator of a coal=fired merchant power plant must allocate 3 25 one=tenth of 1 percent of gross revenue from the plant's 3 26 operation for the support of the Iowa energy center and the 3 27 center for global and regional environmental research, and 3 28 allocate 2 percent of gross revenue for an energy management 3 29 improvement grant program to be administered by the center for 3 30 energy and environmental education at the university of 3 31 northern Iowa. These allocations may be waived if it is 3 32 determined that such a power plant has achieved other methods 3 33 to offset its production of greenhouse gases and other 3 34 pollutants. 3 35 The bill also requires for issuance of a certificate that 4 1 the owner or operator develop a multiyear plan and budget for 4 2 managing regulated emissions from the power plant in a 4 3 cost=effective manner. The plan and budget is required to be 4 4 submitted to the board together with the application for 4 5 issuance of the certificate, with a copy of the plan and 4 6 budget provided to the department of natural resources. The 4 7 bill references emissions criteria and standards which must be 4 8 met by the plan, requires updates every two years 4 9 incorporating the most up=to=date emissions regulation 4 10 technology, indicates that updates shall be considered in 4 11 contested case proceedings, and directs the department of 4 12 natural resources to determine if a plan or update meets 4 13 applicable state environmental requirements for regulated 4 14 emissions and provide recommendations for compliance. If the 4 15 plan does not meet these requirements, the department shall 4 16 recommend amendments that outline actions necessary to bring 4 17 the plan or update into compliance with the environmental 4 18 requirements. Additionally, provisions relating to time 4 19 frames for plan approval or rejection are contained in the 4 20 bill, and for rulemaking by the board. 4 21 LSB 6374YH 82 4 22 rn/rj/14