S.F. 315 Section 1. NEW SECTION . 476.49 Distributed generation —— 1 purchase requirements —— penalties. 2 1. Notwithstanding section 476.44 or any other provision 3 of law to the contrary, the board shall require rate-regulated 4 public utilities and generation and transmission electric 5 cooperatives to purchase specified amounts of their required 6 electrical output from distributed generation facilities. For 7 purposes of this section, “distributed generation facility” 8 means a biomass conversion facility, a solar energy conversion 9 facility, or a wind energy conversion facility, as those 10 terms are defined in section 476C.1, which is located on 11 farm property and meets the requirements of section 476C.1, 12 subsection 6, paragraph “a” , and section 476C.1, subsection 6, 13 paragraph “b” , subparagraph (2) or (6). For purposes of this 14 section, “generation and transmission electric cooperatives” 15 means the same as defined in section 437A.3, subsection 10. 16 2. An electric utility or generation and transmission 17 electric cooperative subject to this section shall submit 18 filings to the board documenting the following: 19 a. (1) That by July 1, 2018, the utility or cooperative 20 is purchasing a minimum of two percent of their required 21 electrical output from distributed generation facilities. 22 The utility or cooperative shall submit a filing by January 23 1, 2014, and by each January 1 through January 1, 2018, 24 demonstrating proportional progress toward attainment of this 25 requirement. 26 (2) That the electricity is purchased from distributed 27 generation facilities in the following percentage amounts: 28 (i) Sixty percent from wind energy conversion facilities. 29 Of this sixty percent, fifteen percent shall be purchased 30 from facilities with a nameplate generating capacity or the 31 energy production capacity equivalent of each of the following: 32 between zero and ten kilowatts; between ten and one hundred 33 kilowatts; between one hundred and one thousand kilowatts; and 34 between one thousand and twenty thousand kilowatts. 35 -1- LSB 2299SS (14) 85 rn/nh 1/ 4

S.F. 315 (ii) Twenty percent from solar energy conversion 1 facilities. Of this twenty percent, five percent shall be 2 purchased from facilities with a nameplate generating capacity 3 or the energy production capacity equivalent of each of the 4 following: between zero and ten kilowatts; between ten and 5 twenty kilowatts; between twenty and one hundred kilowatts; and 6 between one hundred and twenty thousand kilowatts. 7 (iii) Twenty percent from biomass conversion facilities. 8 Of this twenty percent, five percent shall be purchased from 9 facilities with a nameplate generating capacity or the energy 10 production capacity equivalent of each of the following: 11 between zero and one hundred kilowatts; between one hundred and 12 five hundred kilowatts; between five hundred and one thousand 13 kilowatts; and between one thousand kilowatts and twenty 14 megawatts. 15 (3) If the utility or cooperative fails to document 16 purchasing of the required amounts and percentages of 17 electricity from distributed generation facilities pursuant 18 to this lettered paragraph “a” , it shall be subject to the 19 penalty provisions of section 476A.14, and possible suspension 20 or revocation of a license or permit as determined by the board 21 by rule. 22 b. That the utility or cooperative is in compliance with all 23 applicable rules relating to distributed generation adopted by 24 the board. 25 3. a. The board shall utilize existing standard offer 26 contract forms to facilitate interconnection between the 27 utility or cooperative and a distributed generation facility 28 as required pursuant to this section. The standard offer 29 contracts shall continue in effect for a twenty-year period, 30 subject to termination provisions for failure to perform, to 31 be established by the board by rule. The board shall ensure 32 that the contracts are calculated at reasonable and competitive 33 rates determined by the board and sufficient to facilitate 34 distributed generation facility financing. The forms shall be 35 -2- LSB 2299SS (14) 85 rn/nh 2/ 4

S.F. 315 made available for utilization by July 1, 2013. 1 b. The contracts shall be made available to any distributed 2 generation facility of up to twenty megawatts of nameplate 3 generating capacity. 4 c. The standard offer contracts shall not contain any 5 provision or impose any requirement which could create 6 or constitute an unreasonable barrier to or burden on the 7 development of distributed generation in this state. 8 Sec. 2. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 9 immediate importance, takes effect upon enactment. 10 EXPLANATION 11 This bill directs the Iowa utilities board to require 12 rate-related public utilities and generation and transmission 13 electric cooperatives to purchase specified amounts of 14 electricity from farm-owned distributed generation facilities. 15 The bill defines a “distributed generation facility” to mean 16 a biomass conversion facility, a solar energy conversion 17 facility, or a wind energy conversion facility, as those terms 18 are defined in Code section 476C.1, which is located on farm 19 property and meets specified ownership requirements contained 20 in Code section 476C.1, subsection 6. 21 Rate-regulated electric utilities and generation and 22 transmission electric cooperatives would be required within 23 five years to be purchasing a minimum of 2 percent of their 24 required electrical output from distributed generation 25 facilities. The bill specifies percentage requirements 26 applicable to the purchase of electricity from wind, solar, 27 and biomass facilities, and further specifies percentage 28 requirements applicable to such purchases from facilities 29 of varying sizes. If the utility or cooperative fails to 30 document purchasing the required amounts and percentages, the 31 bill states that the civil penalty provisions of Code section 32 476A.14 shall be applicable. This penalty shall not exceed 33 $10,000 for each day of continuing violation. The bill also 34 provides that the board may suspend or revoke the utility’s or 35 -3- LSB 2299SS (14) 85 rn/nh 3/ 4

S.F. 315 cooperative’s license or permit. 1 The bill states that the board shall utilize existing 2 standard offer contract forms to facilitate interconnection 3 between the utility or cooperative and distributed generation 4 facilities, which would continue in effect for 20 years and be 5 calculated at reasonable and competitive rates. A distributed 6 generating facility, as defined in the bill, of up to 20 7 megawatts of nameplate generating capacity would be eligible 8 for interconnection. The bill provides that the contract forms 9 shall not contain any provision or impose any requirement which 10 could create or constitute an unreasonable barrier to or burden 11 on the development of distributed generation facilities in 12 Iowa. 13 The bill takes effect upon enactment. 14 -4- LSB 2299SS (14) 85 rn/nh 4/ 4