House File 2554 S-5056 Amend House File 2554, as passed by the House, as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < Section 1. Section 476.33, subsection 4, Code 2024, is 4 amended to read as follows: 5 4. The board shall adopt rules that require the board, in 6 rate regulatory proceedings under sections 476.3 and 476.6 , to 7 utilize either a historic test year , or a future test year , or 8 a multiyear rate plan at the rate-regulated public utility’s 9 discretion , subject to the requirements of this section . 10 a. For a rate regulatory proceeding utilizing a historic 11 test year, the rules shall require the board to consider the 12 use of the most current test period possible in determining 13 reasonable and just rates, subject only to the availability of 14 existing and verifiable data respecting costs and revenues, and 15 in addition, to consider verifiable data that exists within 16 nine months after the conclusion of the test year, respecting 17 known and measurable changes in costs not associated with a 18 different level of revenue, and known and measurable revenues 19 not associated with a different level of costs, that are to 20 occur at any time within twelve months after the date of 21 commencement of the proceedings. Parties proposing adjustments 22 that are not verifiable at the commencement of the proceedings 23 shall include projected data related to the adjustments in 24 their initial substantive filing with the board. For purposes 25 of this paragraph, a proceeding commences under section 26 476.6 upon the filing date of new or changed rates, charges, 27 schedules, or regulations. 28 b. For a rate regulatory proceeding utilizing a future test 29 year, the rules shall require the board to consider the use 30 of any twelve-month period beginning no later than the date 31 on which a proposed rate change is expected to take effect 32 in determining just and reasonable rates. The rules shall 33 also require the board to conduct a proceeding subsequent to 34 the effective date of a rate resulting from a rate regulatory 35 -1- HF 2554.3478 (4) 90 lh/js 1/ 9 #1.

proceeding utilizing a future test year to determine whether 1 the actual costs and revenues are reasonably consistent with 2 those approved by the board. If the actual costs and revenues 3 are not reasonably consistent with those approved by the 4 board, the board shall adjust the rates accordingly. For a 5 rate regulatory proceeding utilizing a future test year, the 6 board may adopt rules regarding evidence required, information 7 to support forecasts, and any reporting obligations. The 8 board may also adopt rules regarding the conditions under 9 which a public utility that utilizes a future test year may 10 subsequently utilize a historic test year. A public utility 11 shall not be precluded from filing a rate regulatory proceeding 12 utilizing a future test year prior to the adoption of any rules 13 pursuant to this subsection . 14 c. Commencing January 1, 2026, a public utility shall 15 have the option of filing with the board an application to 16 approve a utility tariff and a rate plan to remain in effect 17 for a multiyear period specified in the application, provided 18 that the public utility shall have filed with the board an 19 integrated resource plan, approved by the board, pursuant 20 to section 476.53C. The multiyear rate plan shall establish 21 the rates the public utility may charge for each year of the 22 specified period of years identified in the plan. A rate may 23 change during the course of the multiyear period in the manner 24 set forth in the plan. The board shall either approve the 25 public utility’s application without modification or reject the 26 application upon a finding by the board that the application is 27 not consistent with public interest. If the board rejects an 28 application, the board shall identify in the rejection order 29 the modifications that the board would require as a condition 30 of approval. The utility shall have the option to accept the 31 conditions identified by the board in the order, upon which the 32 board shall approve the amended application, or to withdraw the 33 application. During the term of a multiyear rate plan approved 34 by the board, the rates for the utility’s service shall change 35 -2- HF 2554.3478 (4) 90 lh/js 2/ 9

only as expressly provided in the multiyear plan, except that 1 board-approved riders and adjustment mechanisms expressly 2 excluded from the plan shall operate for those applicable 3 portions of the utility’s rates. The board may at any time, 4 upon the board’s motion, inquire into the reasonableness of 5 rates charged by a public utility pursuant to a multiyear rate 6 plan, and may proceed under section 476.3 as on a complaint. 7 c. d. This subsection does not limit the authority of the 8 board to consider other evidence in proceedings under sections 9 476.3 and 476.6 . 10 Sec. 2. NEW SECTION . 476.52A Definitions. 11 As used in this subchapter unless the context otherwise 12 requires: 13 1. “Alternate energy production facility” means the same as 14 defined in section 476.42. 15 2. “Energy storage” means any system, equipment, facility, 16 or technology that is capable of absorbing energy, storing the 17 energy for a period of time, and dispatching the energy through 18 one of the following manners: 19 a. Using mechanical, electrochemical, thermal, 20 electrolysis, or other processes to convert and store electric 21 energy that was generated at an earlier time for use at a later 22 time. 23 b. Using mechanical, electrochemical, biochemical, or 24 thermal processes to convert and store energy generated 25 from mechanical processes that would otherwise be wasted for 26 delivery at a later time. 27 c. Storing energy in an electric, thermal, or gaseous 28 state for direct use for heating or cooling at a later time 29 in a manner that avoids the need to use electricity or other 30 fuel sources at that later time, such as a grid-enabled water 31 heater. 32 3. “Nuclear reactor” means an apparatus designed to produce 33 electrical or heat energy through sustained nuclear fission in 34 a self-supporting chain reaction. 35 -3- HF 2554.3478 (4) 90 lh/js 3/ 9

4. “Repowering” means either the complete dismantling and 1 replacement of generation equipment at an existing project 2 site, or the installation of new parts and equipment to an 3 existing alternate energy production facility in order to 4 increase energy production, reduce load, increase service 5 capacity, improve project reliability, or extend the useful 6 life of the facility. 7 Sec. 3. Section 476.53, Code 2024, is amended to read as 8 follows: 9 476.53 Electric generating , energy storage, and transmission 10 facilities. 11 1. It is the intent of the general assembly to attract 12 the development of electric power generating , energy storage, 13 and transmission facilities within the state in sufficient 14 quantity to ensure reliable electric service to Iowa consumers , 15 ensure an adequate base load, and provide economic benefits to 16 the state. Ensuring reliable electric service and providing 17 economic benefits may require public utilities to consider 18 diverse electric power generating technologies and energy 19 storage technologies, including alternate energy production 20 facilities, nuclear reactors, and energy storage facilities. 21 It is also the intent of the general assembly to encourage 22 rate-regulated public utilities to consider altering existing 23 electric power generating facilities, where when reasonable, 24 to manage carbon emission intensity in order to facilitate the 25 transition to a carbon-constrained environment. It is also the 26 intent of the general assembly to encourage the development 27 of nuclear electric power generation within the state using 28 nuclear reactors and to use nuclear power to meet local and 29 regional electric needs. 30 2. a. The general assembly’s intent with regard to the 31 development of electric power generating and transmission 32 facilities, or the significant alteration of an existing 33 generating facility, as provided in subsection 1 , shall be 34 implemented in a manner that is cost-effective and compatible 35 -4- HF 2554.3478 (4) 90 lh/js 4/ 9

with the environmental policies of the state, as expressed in 1 this Title XI . 2 b. The general assembly’s intent with regard to the 3 reliability of electric service to Iowa consumers, as provided 4 in subsection 1 , shall be implemented by considering the 5 diversity of the types of fuel used to generate electricity, 6 the availability and reliability of fuel supplies, and the 7 impact of the volatility of fuel costs. 8 3. a. The board shall specify in advance, by order issued 9 after conduct a contested case proceeding , the ratemaking 10 principles that will apply when the costs of the electric power 11 generating facility or alternate energy production facility are 12 included in regulated electric rates whenever a rate-regulated 13 public utility does seeks ratemaking principles for any of the 14 following: 15 (1) (a) Files an application pursuant to section 476A.3 16 to construct The costs of constructing in Iowa a baseload an 17 electric power generating facility with a nameplate generating 18 capacity equal to or greater than three hundred forty megawatts 19 or a combined-cycle electric power generating facility , or an 20 alternate energy production facility as defined in section 21 476.42 , or an energy storage facility, or the construction 22 costs to significantly alter an existing electric power 23 generating facility , alternate energy production facility, or 24 energy storage facility . For purposes of this subparagraph, 25 a significant alteration of an existing generating facility , 26 alternate energy production facility, or energy storage 27 facility must, in order to qualify for establishment of 28 ratemaking principles, fall into one of the following 29 categories: 30 (i) Conversion of a coal fueled an electric power generating 31 facility into a gas fueled to an alternate fuel type for the 32 electric power generating facility. 33 (ii) Addition of carbon capture and storage facilities at a 34 coal fueled to an existing electric power generating facility. 35 -5- HF 2554.3478 (4) 90 lh/js 5/ 9

(iii) Addition of gas fueled capability to a coal fueled 1 facility, in order to convert the facility to one that will 2 rely primarily on gas for future generation facilities to 3 capture exhaust heat and thereby generate additional electric 4 power at an existing electric power generating facility . 5 (iv) Addition of a biomass fueled capability to a coal 6 fueled facility. 7 (v) (iv) Repowering of an alternate energy production 8 facility. For purposes of this subparagraph subdivision, 9 “repowering” shall mean either the complete dismantling and 10 replacement of generation equipment at an existing project 11 site, or the installation of new parts and equipment to an 12 existing alternate energy production facility in order to 13 increase energy production, reduce load, increase service 14 capacity, improve project reliability, or extend the useful 15 life of the facility. 16 (v) Addition of energy storage at an existing electric power 17 generating facility, alternate energy production facility, or 18 energy storage facility. 19 (b) With respect to a significant alteration of an existing 20 generating facility, an original facility shall not be required 21 to be either a baseload or a combined-cycle facility. Only 22 only the incremental investment undertaken by a utility 23 under subparagraph division (a), subparagraph subdivision 24 (i), (ii), or (iii) , or (iv) shall be eligible to apply the 25 ratemaking principles established by the order issued pursuant 26 to paragraph “e” . Facilities for which advanced advance 27 ratemaking principles are obtained pursuant to this section 28 shall not be subject to a subsequent board review pursuant to 29 section 476.6, subsection 19 , to the extent that the investment 30 has been considered by the board under this section . To the 31 extent an eligible utility has been authorized to make capital 32 investments subject to section 476.6, subsection 19 , such 33 investments shall not be eligible for ratemaking principles 34 pursuant to this section . 35 -6- HF 2554.3478 (4) 90 lh/js 6/ 9

(2) Leases or owns When leased or owned in Iowa, in whole or 1 in part, a new baseload electric power generating facility with 2 a nameplate generating capacity equal to or greater than three 3 hundred forty megawatts or a combined-cycle electric power 4 generating , a new energy storage facility, or a new alternate 5 energy production facility as defined in section 476.42 . 6 b. If the board finds that the utility’s application meets 7 the requirements of paragraph “c” , the board shall specify by 8 order issued after the contested case proceeding the ratemaking 9 principles that will apply when the costs of the electric power 10 generating facility or alternate energy production facility 11 are included in regulated electric rates. In determining 12 the applicable ratemaking principles, the board shall not be 13 limited to traditional ratemaking principles or traditional 14 cost recovery mechanisms. Among the principles and mechanisms 15 the board may consider, the board has the authority to approve 16 ratemaking principles proposed by a rate-regulated public 17 utility that provide for reasonable restrictions upon the 18 ability of the public utility to seek a general increase in 19 electric rates under section 476.6 for at least three years 20 after the generating facility begins providing service to Iowa 21 customers. 22 c. In determining the applicable ratemaking principles, the 23 board shall make the following findings: 24 (1) The rate-regulated public utility has in effect a 25 board-approved energy efficiency plan as required under section 26 476.6, subsection 15 . 27 (2) The rate-regulated public utility has demonstrated to 28 the board that the public utility has considered other sources 29 for long-term electric supply and that the facility or lease is 30 reasonable when compared to other feasible alternative sources 31 of supply. The rate-regulated public utility shall provide 32 support of reasonability with an electric utility resource 33 plan pursuant to section 476.53C, that has been completed no 34 more than twenty-four months prior to the filing of the public 35 -7- HF 2554.3478 (4) 90 lh/js 7/ 9

utility’s application. 1 d. The applicable ratemaking principles shall be determined 2 in a contested case proceeding , which proceeding required by 3 paragraph “a” may be combined with the proceeding for issuance 4 of a certificate conducted pursuant to chapter 476A . 5 e. The order setting forth the applicable ratemaking 6 principles shall be issued prior to the commencement of 7 construction or lease of the facility. 8 f. Following issuance of the order, the rate-regulated 9 public utility shall have the option of proceeding according to 10 either of the following: 11 (1) Withdrawing its application for a certificate pursuant 12 to chapter 476A . 13 (2) Proceeding with the construction or lease of the 14 facility. 15 g. Notwithstanding any provision of this chapter to the 16 contrary, the ratemaking principles established by the order 17 issued pursuant to paragraph “e” shall be binding with regard 18 to the specific electric power generating facility in any 19 subsequent rate proceeding. 20 4. The utilities board and the consumer advocate may employ 21 additional temporary staff, or may contract for professional 22 services with persons who are not state employees, as the 23 board and the consumer advocate deem necessary to perform 24 required functions as provided in this section , including but 25 not limited to review of power purchase contracts, review of 26 emission plans and budgets, and review of ratemaking principles 27 proposed for construction or lease of a new generating 28 facility. Beginning July 1, 2002, there is appropriated out 29 of any funds in the state treasury not otherwise appropriated, 30 such sums as may be necessary to enable the board and the 31 consumer advocate to hire additional staff and contract for 32 services under this section . The costs of the additional staff 33 and services shall be assessed to the utilities pursuant to the 34 procedure in section 476.10 and section 475A.6 . 35 -8- HF 2554.3478 (4) 90 lh/js 8/ 9

Sec. 5. NEW SECTION . 476.53B Department authority and 1 proceedings. 2 The board shall adopt rules pursuant to chapter 17A to 3 provide for the completion of proceedings under section 476.53 4 within ten months after the date of the filing of a petition 5 under section 476.53, subsection 3. The rules shall include 6 reasonable time limitations for the submission or completion 7 of comments and testimony, and exhibits, briefs, and hearings, 8 and may provide for the granting of additional time upon the 9 request of a party to the proceeding for good cause shown. 10 Sec. 6. NEW SECTION . 476.53C Electric utility resources 11 planning. 12 An electric utility regulated by the board shall file a 13 resource plan at least once every five years. The board 14 shall review a resource plan for completeness. A resource 15 plan shall consider all reasonable resources for meeting the 16 probable future demand for energy, including supply resources 17 and conservation and management of demand. The objectives 18 of a resource plan include but are not limited to adequate, 19 cost-effective, and reliable energy service considering costs, 20 fuel diversity, and probable future demand for energy. A 21 resource plan shall not require a specific outcome or specific 22 investment decisions. A resource plan shall reflect the 23 circumstances and management judgment of an electric utility. 24 This section does not restrict an electric utility from making 25 planning decisions based on future resource needs subject to 26 the ratemaking oversight of the board. > 27 2. Title page, by striking lines 2 and 3 and inserting < and 28 transmission facility ratemaking principles. > 29 ______________________________ COMMITTEE ON COMMERCE WAYLON BROWN, CHAIRPERSON -9- HF 2554.3478 (4) 90 lh/js 9/ 9 #2.