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PAG LIN 1 1 Section 1. Section 476.1A, Code 1995, is amended by adding 1 2 the following new subsection: 1 3 NEW SUBSECTION. 7. Purchase of electricity from alternate 1 4 energy production facilities as required in sections 476.41 1 5 through 476.45. 1 6 Sec. 2. Section 476.1A, unnumbered paragraph 3, Code 1995, 1 7 is amended to read as follows: 1 8 However, sections 476.20, 476.21,476.41 through 476.44,1 9 476.51, 476.56, 476.62, and 476.66 and chapters 476A and 478, 1 10 to the extent applicable, apply to such electric utilities. 1 11 Sec. 3. Section 476.1B, subsection 1, paragraph g, Code 1 12 1995, is amended by striking the paragraph and inserting in 1 13 lieu thereof the following: 1 14 g. Purchase of electricity from alternate energy 1 15 production as required in sections 476.41 through 476.45. 1 16 Sec. 4. Section 476.6, Code 1995, is amended by adding the 1 17 following new subsection: 1 18 NEW SUBSECTION. 22. ALTERNATE ENERGY PROMOTIONAL RATES. 1 19 The board shall require that electric utilities offer to their 1 20 customers the opportunity to pay, on a voluntary basis, an 1 21 alternate energy promotional rate. This rate shall exceed the 1 22 rate for electricity otherwise payable and shall be designed 1 23 and encouraged by the electric utility to maximize voluntary 1 24 financial support for alternate energy production. The 1 25 alternate energy promotional rate shall be filed as a tariff 1 26 with the board pursuant to section 476.4. Retaining only 1 27 amounts approved by the board for its administrative and 1 28 marketing costs, the electric utility shall remit that portion 1 29 of the electric rate attributable to the alternate energy 1 30 promotional rate to the department of revenue and finance in 1 31 the same manner as sales tax is remitted under chapter 422. 1 32 Sec. 5. Section 476.41, Code 1995, is amended to read as 1 33 follows: 1 34 476.41 PURPOSE. 1 35 It is the policy of this state to encourage the development 2 1 of cost-effective alternate energy production facilities and 2 2 small hydro facilitiesin order to conserve our finite and2 3expensive energy resources and to provide for their most2 4efficient use. 2 5 Sec. 6. Section 476.42, subsection 1, Code 1995, is 2 6 amended to read as follows: 2 7 1. "Alternate energy production facility" means any or all 2 8 of the following: 2 9 a. Asolar,windturbine, waste management, resource, 2 10 methane recovery,refuse-derived fuel,or agricultural crops 2 11 or residues, or woodburningfacility. Alternate energy 2 12 production facility includes a small hydro facility as defined 2 13 in subsection 4. 2 14 b. Land, systems, buildings, or improvements that are 2 15 located at the project site and are necessary or convenient to 2 16 the construction, completion, or operation of the facility. 2 17 c. Transmission or distribution facilities necessary to 2 18 conduct the energy produced by the facility tousers located2 19at or near the project sitethe electric utility purchasing 2 20 the electricity. 2 21 A facility which is a qualifying facility under 18 C.F.R. 2 22 part 292, subpart B is not precluded from being an alternate 2 23 energy production facility under this division. A facility 2 24 which is owned by an electric utility is considered to be an 2 25 alternate energy production facility for purposes of this 2 26 division. 2 27 Sec. 7. Section 476.42, subsection 3, Code 1995, is 2 28 amended by striking the subsection. 2 29 Sec. 8. Section 476.42, subsection 4, Code 1995, is 2 30 amended to read as follows: 2 31 4. "Small hydro facility" means any or all of the 2 32 following: 2 33 a. A hydroelectric facility at a dam, located within this 2 34 state. 2 35 b. Land, systems, buildings, or improvements that are 3 1 located at the project site and are necessary or convenient to 3 2 the construction, completion, or operation of the facility. 3 3 c. Transmission or distribution facilities necessary to 3 4 conduct the energy produced by the facility tousers located3 5at or near the project sitethe electric utility purchasing 3 6 the electricity. 3 7 A facility which is a qualifying facility under 18 C.F.R. 3 8 part 292, subpart B is not precluded from being a small hydro 3 9 facility under this division. A facility which is owned by an 3 10 electric utility is considered to be a small hydro facility 3 11 for purposes of this division. 3 12 Sec. 9. Section 476.43, Code 1995, is amended by striking 3 13 the section and inserting in lieu thereof the following: 3 14 476.43 ALTERNATE ENERGY PURCHASE REQUIREMENTS. 3 15 1. PURCHASE REQUIREMENT. The board shall require an 3 16 electric utility, within the state, to enter into contracts 3 17 for the purchase of the utility's allotted portion of eighty- 3 18 nine megawatts of electricity generated from alternate energy 3 19 production facilities located in the utility's service area 3 20 and subject to the terms and conditions established by the 3 21 board pursuant to this section. 3 22 2. ALLOCATION. By August 31, 1996, the board shall 3 23 allocate among the classes of alternate energy production 3 24 facilities, the amount of electricity to be purchased from 3 25 that class of facility. The board's action shall result in an 3 26 allotment of electricity purchases assigned each class of 3 27 alternate energy. Alternate energy classes include wind, 3 28 methane recovery, agricultural crops or residue recovery, and 3 29 hydro generated electricity. 3 30 3. COMPETITIVE BIDDING. Within each class of alternate 3 31 energy production facility, the board shall require 3 32 competitive bidding to be conducted by electric utilities for 3 33 the purchase of electricity assigned that class. 3 34 The board shall establish the required specifications for a 3 35 qualifying bid, and a schedule for the conduct of all rounds 4 1 of competitive bidding, including a detailed timeline for 4 2 facility construction and energy delivery, and any other 4 3 contract terms the board deems necessary and commercially 4 4 reasonable. In the conduct of competitive bidding, the board 4 5 shall require compliance with all applicable provisions of the 4 6 competitive bidding procedures of the department of general 4 7 services printing division as stated in 401 IAC ch. 5. The 4 8 first round of competitive bidding shall be completed not 4 9 later than December 31, 1996, and the last shall be completed 4 10 not later than December 31, 1997. If the first round of 4 11 competitive bidding is not fully successful in fulfilling the 4 12 allotments as specified by the board, the board shall require 4 13 the repeat of competitive bidding as necessary to fulfill the 4 14 allotments. Upon the completion of each round, the board 4 15 shall designate as successful the lowest responsible bid or 4 16 bids that meet all bidding specifications. The successful 4 17 proposals shall not exceed in the aggregate the amount of 4 18 electricity purchase supported by that portion of the 4 19 appropriation under section 476.44 which corresponds to the 4 20 allocation assigned to that particular class of facility. The 4 21 determination made by the board shall not be considered an 4 22 administrative rule within the meaning of the Iowa 4 23 administrative procedures Act. 4 24 4. PURCHASES. Upon designation of a successful proposal, 4 25 the board shall require the successful bidder and the electric 4 26 utility in whose service area the facility is to be located to 4 27 enter into a contract for the purchase of electricity from 4 28 that alternate energy production facility in the amount 4 29 specified by the board. The contract shall be executed within 4 30 ninety days after designation of the successful bidder. Any 4 31 item in dispute shall be submitted to the board for 4 32 resolution. The contract shall require the electric utility 4 33 to pay to the facility during the contract term the utility's 4 34 incremental cost of electricity as certified not later than 4 35 the bidding deadline by the board. For purposes of this 5 1 section, "incremental cost" means the cost to the electric 5 2 utility of the electricity which, but for the purchase from 5 3 the alternate energy production facility, the electric utility 5 4 would have generated or purchased from another source. The 5 5 board shall pay to the facility the balance of the purchase 5 6 price designated in the facility's successful bid. 5 7 5. PRIVATE CONTRACTS. Notwithstanding other provisions of 5 8 this section to the contrary, an electric utility and an 5 9 alternate energy production facility may enter into a long- 5 10 term contract and may agree to rates for purchase and sale 5 11 transactions. A contract entered into under this subsection 5 12 must be filed with the board in the manner provided for 5 13 tariffs under section 476.4. 5 14 6. ADDITIONAL FACILITIES AND BACKUP POWER. This section 5 15 does not require an electric utility to construct additional 5 16 facilities unless those facilities are paid for by the owner 5 17 or operator of the affected alternate energy production 5 18 facility. The electric utility shall provide for the 5 19 availability of supplemental or backup power to alternate 5 20 energy production facilities on a nondiscriminatory basis and 5 21 at just and reasonable rates. 5 22 Sec. 10. Section 476.44, Code 1995, is amended by striking 5 23 the subsection and inserting in lieu thereof the following: 5 24 476.44 ANNUAL APPROPRIATION. 5 25 There is appropriated from the general fund of the state to 5 26 the Iowa utilities board for the fiscal year beginning July 1, 5 27 1996, and for each subsequent fiscal year, the sum of ten 5 28 million dollars for payment to alternate energy production 5 29 facilities as provided in section 476.43. 5 30 Sec. 11. GOOD FAITH INVESTMENT – REIMBURSEMENT MECHANISM. 5 31 It is the intent of the general assembly that persons who have 5 32 proceeded in good faith under the terms and conditions of 5 33 sections 476.43 and 476.44, Code 1995, prior to their 5 34 amendment in this Act, and who choose not to submit 5 35 competitive bids pursuant to section 476.43, not suffer 6 1 economic loss as a result of this Act. The Iowa utilities 6 2 board shall recommend a mechanism for reimbursement from the 6 3 general fund of the state for those reasonable good faith 6 4 development costs by those persons deemed by the board to have 6 5 been incurred in good faith. This recommendation shall be 6 6 made to the general assembly by December 31, 1996. 6 7 Sec. 12. EXISTING CONTRACTS. Notwithstanding the 6 8 amendments to section 476.43 and 476.44, as contained in this 6 9 Act, nothing in this Act shall be construed to modify the 6 10 terms of any contract entered into prior to December 31, 1995, 6 11 between an electric utility and an alternate energy production 6 12 facility or small hydro facility. The Iowa utilities board 6 13 shall continue to allow the recovery of costs incurred, until 6 14 the termination of such contracts. 6 15 EXPLANATION 6 16 This bill makes several changes to the existing alternate 6 17 energy production purchasing requirements. Currently, certain 6 18 rate-regulated electric utilities are required to purchase the 6 19 utilities' share of 105 megawatts of electricity generated 6 20 from alternate energy production facilities. In addition, the 6 21 utilities are required to enter into long-term contracts at a 6 22 rate set by the board. This rate has been determined by rule 6 23 to be 6.02 cents per kilowatt hour. 6 24 The bill amends sections 476.1A and 476.1B to require that 6 25 all electric utilities, including municipal utilities and 6 26 electric cooperative associations, are required to purchase 6 27 allotted shares of alternate energy. The bill amends section 6 28 476.42 to provide that the definition of alternate energy 6 29 production facility includes small hydro facilities and to 6 30 strike solar, waste management, refuse-derived fuel, and wood- 6 31 burning facilities from the definition of alternate energy 6 32 production facility. The bill also amends a provision that 6 33 includes within the definition of alternate energy production 6 34 facility and small hydro facility the transmission or 6 35 distribution facilities necessary to conduct the energy 7 1 produced by the facility to the users located at or near the 7 2 project site and instead includes the transmission or 7 3 distribution facilities necessary to conduct energy to the 7 4 electric utility purchasing the electricity. The definition 7 5 of alternate energy production facility and small hydro 7 6 facility is amended to include a facility owned by an electric 7 7 utility, thus allowing an electric utility to fulfill the 7 8 utility's purchase requirement with alternate energy produced 7 9 by the utility. The bill amends the definition of small hydro 7 10 facility by limiting it to facilities located at dams within 7 11 the state. The bill strikes section 476.42, subsection 3, 7 12 which defines the term "next generating plant". 7 13 The bill requires that electric utilities offer their 7 14 customers the opportunity to pay, on a voluntary basis, an 7 15 alternate energy promotional rate. The alternate energy 7 16 promotional rate is in addition to the electric rate otherwise 7 17 payable, and is to encourage voluntary financial support for 7 18 alternate energy production. An electric utility is required 7 19 to file the alternate energy promotional rate as a tariff, may 7 20 retain only those amounts approved by the board for its 7 21 administrative and marketing costs, and must remit that 7 22 portion attributable to the alternate energy promotional rate 7 23 to the department of revenue and finance in the same manner as 7 24 sales tax is remitted under chapter 422. 7 25 This bill amends the policy of the state in section 476.41 7 26 relating to alternate energy development by inserting the term 7 27 "cost-effective" so that the state is encouraging the 7 28 development of cost-effective alternate energy production 7 29 facilities and small hydro facilities and by striking out a 7 30 provision stating that alternate energy production is 7 31 encouraged in order to conserve our finite and expensive 7 32 energy resources and to provide for their most efficient use. 7 33 The bill strikes current section 476.43 which requires that 7 34 the board set rates for purchase of alternate energy and 7 35 replaces it with the following: 8 1 1. Purchase Requirement. The bill requires an electric 8 2 utility to enter into contracts for the purchase of 8 3 electricity from alternate energy production facilities 8 4 located in the utility's service area as required by the Iowa 8 5 utilities board, hereinafter "board" and subject to the terms 8 6 and conditions established by the board. The board must 8 7 require utilities within the state to purchase the utility's 8 8 allocated portion of 89 megawatts. 8 9 2. Allocation. By August 31, 1996, the board is required 8 10 to allocate among the classes of alternate energy production 8 11 facilities the amount of electricity to be purchased from that 8 12 class of facility. Alternate energy classes include wind, 8 13 methane recovery, agricultural crops or residue recovery, and 8 14 hydro generated electricity. 8 15 3. Competitive Bidding. Within each class of alternate 8 16 energy production facility, the board is to require 8 17 competitive bidding to be conducted by electric utilities for 8 18 the purchase of electricity assigned that class. The board is 8 19 required to establish specifications for a qualifying bid, and 8 20 a schedule for the conduct of all rounds of competitive 8 21 bidding, including a detailed timeline for facility 8 22 construction and energy delivery and any other contract terms 8 23 as the board deems necessary and commercially reasonable. 8 24 Competitive bidding is to be conducted in the same manner as 8 25 the department of general services printing division as stated 8 26 at 401 IAC ch. 5. The bill requires that the first round of 8 27 competitive bidding must be completed no later than December 8 28 31, 1996, and the last round completed no later than December 8 29 31, 1997. Upon the completion of each round, the board is to 8 30 designate as successful the lowest responsible bid or bids 8 31 which meet all bidding specifications. The successful 8 32 proposals may not exceed in the aggregate the amount of 8 33 electricity purchase supported by that portion of the standing 8 34 appropriation corresponding to the allocation assigned the 8 35 class of facility in question. The determination made by the 9 1 board shall not be considered to be an administrative rule 9 2 within the meaning of the Iowa administrative procedures Act. 9 3 4. Purchases. The board shall require that a contract be 9 4 executed within 90 days after designation of a successful 9 5 bidder. Any items in dispute must be submitted to the board 9 6 for resolution. The electric utility is required to pay only 9 7 the utility's incremental cost of electricity. "Incremental 9 8 cost" means the cost to the electric utility of the 9 9 electricity which, but for the purchase from the alternate 9 10 energy production facility, the electric utility would have 9 11 generated or purchased from another source. The board shall 9 12 pay to the facility from the moneys appropriated from the 9 13 general fund of the state, the balance of the purchase price 9 14 designated in the alternate energy production facility's 9 15 successful bid. 9 16 Finally, the bill retains current provisions allowing the 9 17 parties to enter into private contracts and providing that an 9 18 electric utility is not required to construct additional 9 19 facilities unless those facilities are paid for by the owner 9 20 or operator of the affected alternate energy production 9 21 facility. 9 22 The bill strikes current section 476.44 which required 9 23 purchase of 105 megawatts of alternate energy and replaces it 9 24 with an annual $10,000,000 appropriation from the general fund 9 25 of the state beginning July 1, 1996, to the Iowa utilities 9 26 board for payment to alternate energy production facilities. 9 27 The board is to use the money to reimburse an alternate energy 9 28 production facility for that portion of the contract cost 9 29 which is greater than that which the electric utility is 9 30 required to pay to the alternate energy producer. 9 31 Finally, the bill requires the board to recommend to the 9 32 general assembly a reimbursement mechanism for persons who 9 33 have proceeded in good faith under the terms and conditions of 9 34 sections 476.43 and 476.44, prior to their amendment in this 9 35 Act, who have suffered economic loss as a result of this Act. 10 1 The bill mandates that existing contracts are valid until they 10 2 expire. 10 3 LSB 3833SS 76 10 4 js/sc/14
Text: SF02187 Text: SF02189 Text: SF02100 - SF02199 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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