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PAG LIN 1 1 Section 1. Section 422.51, Code 1995, is amended by adding 1 2 the following new subsection: 1 3 NEW SUBSECTION. 5. The taxes remitted pursuant to this 1 4 division shall be reduced by an alternate energy purchase tax 1 5 credit. An electric utility which has purchased electricity 1 6 from an alternate energy production facility or small hydro 1 7 facility pursuant to section 476.43 shall be granted the 1 8 credit. The credit shall equal the difference between the 1 9 competitively bid rate per kilowatt hour that the utility paid 1 10 for purchase of the electricity and the rate which is 1 11 equivalent to the utility's total annual average cost per 1 12 kilowatt hour of electricity for the year prior to the year in 1 13 which the utility entered into the contract for purchase of 1 14 the alternate energy. A utility's total annual average cost 1 15 per kilowatt hour shall be calculated by dividing annual 1 16 operating expenses by the total annual number of kilowatt 1 17 hours sold. This difference shall be used to determine the 1 18 alternate energy purchase tax credit for the remainder of the 1 19 term of the contract. The tax credit shall not be less than 1 20 zero. 1 21 Sec. 2. Section 476.1A, Code 1995, is amended by adding 1 22 the following new subsection: 1 23 NEW SUBSECTION. 7. Encouragement of alternate energy 1 24 production and the purchase of alternate energy. 1 25 Sec. 3. Section 476.1A, unnumbered paragraph 3, Code 1995, 1 26 is amended to read as follows: 1 27 However, sections 476.20, 476.21,476.41 through 476.44,1 28 476.51, 476.56, 476.62, and 476.66 and chapters 476A and 478, 1 29 to the extent applicable, apply to such electric utilities. 1 30 Sec. 4. Section 476.1B, subsection 1, paragraph g, Code 1 31 1995, is amended by striking the paragraph and inserting in 1 32 lieu thereof the following: 1 33 g. Encouragement of alternate energy production and the 1 34 purchase of alternate energy. 1 35 Sec. 5. Section 476.6, Code 1995, is amended by adding the 2 1 following new subsection: 2 2 NEW SUBSECTION. 22. ALTERNATE ENERGY PROMOTIONAL RATES. 2 3 The board shall require that electric utilities offer to their 2 4 customers the opportunity to pay, on a voluntary basis, an 2 5 alternate energy promotional rate. This rate shall exceed the 2 6 rate for electricity otherwise payable and shall be designed 2 7 and encouraged by the electric utility to maximize voluntary 2 8 financial support for alternate energy production. The 2 9 alternate energy promotional rate shall be filed as a tariff 2 10 with the board pursuant to section 476.4. Retaining only 2 11 amounts approved by the board for its administrative and 2 12 marketing costs, the electric utility shall remit that portion 2 13 of the electric rate attributable to the alternate energy 2 14 promotional rate to the state treasurer to be allocated to the 2 15 general fund of the state to offset the cost of the alternate 2 16 energy purchase tax credit under section 422.51. 2 17 Sec. 6. Section 476.42, subsection 1, paragraph a, Code 2 18 1995, is amended to read as follows: 2 19 a. A solar, windturbine,waste management, resource2 20 methane recovery,refuse-derived fuel,agricultural crops or 2 21 residues, or woodburning facility. 2 22 Sec. 7. Section 476.42, subsection 3, Code 1995, is 2 23 amended by striking the subsection. 2 24 Sec. 8. Section 476.42, subsection 4, paragraph a, Code 2 25 1995, is amended to read as follows: 2 26 a. A hydroelectric facility at a dam located within this 2 27 state. 2 28 Sec. 9. Section 476.42, Code 1995, is amended by adding 2 29 the following new subsection: 2 30 NEW SUBSECTION. 5. "Alternate energy" means electricity 2 31 derived from hydro, solar, wind, methane recovery, 2 32 agricultural crops or residues, or woodburning energy. 2 33 Sec. 10. Section 476.43, subsection 1, Code 1995, is 2 34 amended to read as follows: 2 35 1. Subject to section 476.44, the board shall require 3 1 electric utilities to enter into long-term contracts to do the 3 2 following: 3 3 a. Purchase or wheel electricity from alternate energy 3 4 production facilities or small hydro facilitieslocated in the3 5utility's service areaundertheterms and conditions that the 3 6 board finds are just and economically reasonable to the 3 7 electric utilities' ratepayers, are nondiscriminatory to 3 8 alternate energy producers and small hydro producers and will 3 9 further the policy stated in section 476.41. 3 10 b. Provide for the availability of supplemental or backup 3 11 power to alternate energy production facilities or small hydro 3 12 facilities on a nondiscriminatory basis and at just and 3 13 reasonable rates. 3 14 c. If the parties fail to agree on the terms of a contract 3 15 required pursuant to this section, a party may request that 3 16 the board intervene. The board shall have sixty days from the 3 17 date of the intervention request to render a decision on the 3 18 contract. 3 19 Sec. 11. Section 476.43, subsections 2, 3, and 4, Code 3 20 1995, are amended by striking the subsections and inserting in 3 21 lieu thereof the following: 3 22 2. The board shall establish a uniform competitive bidding 3 23 process so that an electric utility shall acquire alternate 3 24 energy at a just and economically based market rate. An 3 25 alternate energy contract shall require that the utility pay 3 26 the competitive bid rate to the facility during the contract 3 27 term. The kilowatt per hour competitive bid rate shall not be 3 28 less than the annual average rate of off-peak kilowatt per 3 29 hour rates and peak kilowatt per hour rates at which an 3 30 electric utility would have had to purchase the power. An 3 31 electric utility may produce its own alternate energy by 3 32 constructing and operating an alternate energy production 3 33 facility or small hydro facility if the facility is 3 34 constructed and operated as a separate affiliate entity. 3 35 However, the electric utility shall participate in the 4 1 competitive bidding process using a third-party evaluator. A 4 2 bid from an electric utility producing its own alternate 4 3 energy shall not take into account regulated industry-based 4 4 factors including, but not limited to, eminent domain and 4 5 transmission ownership in order to produce a lower cost bid. 4 6 3. Notwithstanding section 476.51, an electric utility 4 7 which fails to comply with the requirements of subsection 1 or 4 8 which obstructs the policy of this state as stated in section 4 9 476.41 shall be subject to a civil penalty, levied by the 4 10 board, in an amount that is equivalent to three times the 4 11 total project capital cost of the lowest bid filed with the 4 12 board to comply with the requirements of subsection 1. Civil 4 13 penalties collected under this subsection shall be forwarded 4 14 to the treasurer of state to be credited to the Iowa energy 4 15 center. Any moneys allocated to the Iowa energy center 4 16 pursuant to this subsection shall be used solely for providing 4 17 grants to nonprofit agencies for alternate energy production. 4 18 These penalties shall be excluded from the electric utility's 4 19 costs when determining the electric utility's revenue 4 20 requirement, and shall not be included either directly or 4 21 indirectly in the electric utility's rates or charges to 4 22 customers. 4 23 4. Notwithstanding subsection 2, alternate energy produced 4 24 by recovery of methane at a sanitary landfill shall be 4 25 purchased at the rate existing as of January 1, 1996. 4 26 Sec. 12. Section 476.43, Code 1995, is amended by adding 4 27 the following new subsection: 4 28 NEW SUBSECTION. 7. An electric utility purchasing 4 29 alternate energy pursuant to this section shall be entitled to 4 30 an alternate energy purchase tax credit. The electric utility 4 31 shall reflect the tax credit received by the utility in the 4 32 utility's automatic adjustment pursuant to section 476.6, 4 33 subsection 11. The credit shall be equal to the difference 4 34 between the kilowatt hour rate established through the 4 35 competitive bidding process and the rate that is equivalent to 5 1 the utility's total annual average cost per kilowatt hour of 5 2 electricity for the year prior to the year in which the 5 3 utility entered into the contract for purchase of the 5 4 alternate energy as determined under section 422.51, 5 5 subsection 5. 5 6 Sec. 13. Section 476.44, subsection 1, Code 1995, is 5 7 amended to by striking the subsection. 5 8 Sec. 14. Section 476.44, subsection 2, Code 1995, is 5 9 amended to read as follows: 5 10 2. a. An electric utility subject to this division, 5 11 except a utility which elects rate regulation pursuant to 5 12 section 476.1A, shallnotbe required to purchase, at any one5 13time, more thanits share ofonetwo hundredfiveten 5 14 megawatts of power from alternative energy production 5 15 facilities or small hydro facilitiesat the ratesin 5 16 accordance with the competitive bidding process established 5 17 pursuant to section 476.43 and pursuant to timelines 5 18 established under paragraph "c". For purposes of this 5 19 section, "megawatt" shall be determined in accordance with a 5 20 utility's average capacity. "Average capacity" means a 5 21 utility's total output over a year divided by the number of 5 22 hours in the year. The board shall allocate theonetwo 5 23 hundredfiveten megawatts based upon each utility's 5 24 percentage of the total Iowa retail peak demand, for the year 5 25 beginning January 1, 1990, of all utilities subject to this 5 26 section. If a utility undergoes reorganization as defined in 5 27 section 476.76, the board shall combine the allocated 5 28 purchases of power for each utility involved in the 5 29 reorganization. 5 30 Notwithstanding theonetwo hundredfiveten megawatt 5 31 maximum, the board may increase the amount of power that a 5 32 utility is required to purchaseat the rates established5 33pursuant to section 476.43if the board finds that a utility, 5 34 including a reorganized utility, exceeds its 1990 Iowa retail 5 35 peak demand by twenty percent and the additional power the 6 1 utility is required to purchase will encourage the development 6 2 of alternate energy production facilities and small hydro 6 3 facilities. The increase shall not exceed the utility's 6 4 increase in peak demand multiplied by the ratio of the 6 5 utility's share of theonetwo hundredfiveten megawatt 6 6 maximum to its 1990 Iowa retail peak demand. 6 7 b. Of that portion of alternate energy required to be 6 8 purchased by a utility under this section, eighty-five percent 6 9 shall be purchased from alternate energy production facilities 6 10 or small hydro facilities generating electricity with current 6 11 and viable technologies and fifteen percent shall be purchased 6 12 from alternate energy production facilities generating 6 13 electricity from new technologies. The board shall provide 6 14 for a minimum of thirty percent of the eighty-five percent 6 15 required purchase of alternate energy under this paragraph to 6 16 be purchased from small hydro facilities. Of the eighty-five 6 17 percent, thirty percent shall be purchased in accordance with 6 18 the following: 6 19 (1) At least ten percent shall be from dedicated energy 6 20 crops grown within the state, fifty percent of which shall be 6 21 from projects of five hundred kilowatts or less. 6 22 (2) At least ten percent shall be from agricultural wastes 6 23 produced from agricultural crops grown within the state, fifty 6 24 percent of which shall be from projects of five hundred 6 25 kilowatts or less. 6 26 (3) At least ten percent shall be from small scale wind 6 27 generation projects located within the state of two hundred 6 28 fifty kilowatts or less. 6 29 c. By December 31, 1997, the board shall require an 6 30 electric utility to enter into contracts for the purchase of 6 31 the utility's allotted share of eighty-nine megawatts of 6 32 electricity generated from alternate energy production 6 33 facilities, and by July 1, 1999, the board shall require the 6 34 utility to enter into contracts for the purchase of the 6 35 utility's allotted share of an additional one hundred five 7 1 megawatts. For purposes of this section, new technologies 7 2 include only those technologies that use nonfossil fuel to 7 3 derive renewable energy. 7 4 Sec. 15. APPLICABILITY TO EXISTING CONTRACTS. This Act 7 5 shall not affect the terms and conditions of any contract 7 6 between an alternate energy production facility or small hydro 7 7 facility and an electric utility that was entered into 7 8 pursuant to sections 476.43 and 476.44 for purchase of 7 9 alternate energy if the contract was entered into prior to the 7 10 effective date of this Act. In addition, this Act shall not 7 11 affect potential contracts between alternate energy production 7 12 facilities and electric utilities if a petition relating to 7 13 the potential contracts has been filed by January 1, 1996, and 7 14 an action is currently pending before the Iowa utilities 7 15 board. For purposes of the pending actions, the Iowa 7 16 utilities board shall not take into account the changes 7 17 contained in this Act. 7 18 Sec. 16. It is the intent of the general assembly that 7 19 persons who have proceeded in good faith under the terms and 7 20 conditions of sections 476.43 and 476.44, prior to their 7 21 amendment by this Act, not suffer economic loss as a result of 7 22 this Act. These persons shall be reimbursed by the utilities 7 23 for their reasonable good faith development costs as 7 24 determined by the Iowa utilities board. 7 25 SF 2221 7 26 js/cc/26
Text: SF02220 Text: SF02222 Text: SF02200 - SF02299 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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