Senate File 2386 - Enrolled PAG LIN 1 1 SENATE FILE 2386 1 2 1 3 AN ACT 1 4 RELATING TO ENERGY EFFICIENCY BY ESTABLISHING A COMMISSION ON 1 5 ENERGY EFFICIENCY STANDARDS AND PRACTICES, PROVIDING FOR 1 6 THE REPORTING OF ENERGY EFFICIENCY RESULTS AND SAVINGS BY 1 7 GAS AND ELECTRIC PUBLIC UTILITIES, SPECIFYING PROCEDURES FOR 1 8 ASSESSING POTENTIAL ENERGY AND CAPACITY SAVINGS AND DEVELOP- 1 9 ING ENERGY EFFICIENCY GOALS BY GAS AND ELECTRIC UTILITIES 1 10 NOT SUBJECT TO RATE REGULATION, PROVIDING FOR THE ESTAB- 1 11 LISHMENT OR PARTICIPATION IN A PROGRAM TO TRACK, RECORD, OR 1 12 VERIFY THE TRADING OF CREDITS FOR ELECTRICITY GENERATED 1 13 FROM SPECIFIED SOURCES, AND PROVIDING FOR THE ESTABLISHMENT 1 14 OF AN INTERIM STUDY COMMITTEE TO CONDUCT AN EXAMINATION OF 1 15 ENERGY EFFICIENCY PLANS AND PROGRAMS WITH AN EMPHASIS ON 1 16 THE DEMAND OR CUSTOMER PERSPECTIVE, AND PROVIDING AN EFFEC- 1 17 TIVE DATE. 1 18 1 19 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 20 1 21 Section 1. NEW SECTION. 103A.27 COMMISSION ON ENERGY 1 22 EFFICIENCY STANDARDS AND PRACTICES. 1 23 1. A commission on energy efficiency standards and 1 24 practices is established within the department of public 1 25 safety. The commission shall be composed of the following 1 26 members: 1 27 a. The state building code commissioner, or the 1 28 commissioner's designee. 1 29 b. The director of the office of energy independence, or 1 30 the director's designee. 1 31 c. A professional engineer licensed pursuant to chapter 1 32 542B. 1 33 d. An architect registered pursuant to chapter 544A. 1 34 e. Two individuals recognized in the construction industry 1 35 as possessing expertise and experience in the construction or 2 1 renovation of energy=efficient residential and commercial 2 2 buildings. 2 3 f. A member of a local planning and zoning commission or 2 4 county board of supervisors. 2 5 g. Three individuals representing gas and electric public 2 6 utilities within this state, comprised of one individual 2 7 representing rural electric cooperatives, one individual 2 8 representing municipal utilities, and one individual 2 9 representing investor=owned utilities. 2 10 h. A local building official whose duties include 2 11 enforcement of requirements for energy conservation in 2 12 construction. 2 13 i. Two consumers, one of whom owns and occupies a 2 14 residential building in this state and one of whom owns and 2 15 occupies a building used in commercial business or 2 16 manufacturing. 2 17 2. The commissioner shall appoint all members to the 2 18 commission other than those members designated in subsection 2 19 1, paragraphs "a" and "b". Appointment of members are subject 2 20 to the requirements of sections 69.16 and 69.16A. A vacancy 2 21 on the commission shall be filled for the unexpired portion of 2 22 the regular term in the same manner as regular appointments 2 23 are made. Members appointed by the commissioner shall be 2 24 reimbursed for actual and necessary expenses incurred in 2 25 performance of their duties. Such members may also be 2 26 eligible to receive compensation as provided in section 7E.6. 2 27 A majority of the members shall constitute a quorum. 2 28 3. Duties of the commission shall include but are not 2 29 limited to the following: 2 30 a. Evaluate energy efficiency standards applicable to 2 31 existing or newly constructed residential, commercial, and 2 32 industrial buildings and vertical infrastructure at the state 2 33 and local level and make suggestions for their improvement and 2 34 enforcement. The evaluation of energy efficiency standards 2 35 shall include but not be limited to a review of the following: 3 1 (1) The reduction in energy usage likely to result from 3 2 the adoption and enforcement of the standards. 3 3 (2) The effect of compliance with the standards on indoor 3 4 air quality. 3 5 (3) The relationship of the standards to weatherization 3 6 programs for existing housing stock and to the availability of 3 7 affordable housing, including rental units. 3 8 b. Develop recommendations for new energy efficiency 3 9 standards, specifications, or guidelines applicable to newly 3 10 constructed residential, commercial, and industrial buildings 3 11 and vertical infrastructure. 3 12 c. Develop recommendations for the establishment of 3 13 incentives for energy efficiency construction projects which 3 14 exceed currently applicable state and local building codes. 3 15 d. Develop recommendations for adoption of a statewide 3 16 energy efficiency building labeling or rating system for 3 17 residential, commercial, and industrial buildings and 3 18 complexes. 3 19 e. Obtain input from individuals, groups, associations, 3 20 and agencies in carrying out the duties specified in 3 21 paragraphs "a" through "d", including but not limited to the 3 22 Iowa league of cities regarding local building code adoption 3 23 and enforcement in both large and small communities, the Iowa 3 24 landlord association, the department of transportation, the 3 25 department of public health, the division of community action 3 26 agencies of the department of human rights regarding 3 27 low=income residential customers, and obtain additional input 3 28 from any other source that the commission determines 3 29 appropriate. 3 30 4. The commission shall be formed for the two=year period 3 31 beginning July 1, 2008, and ending June 30, 2010, and shall 3 32 submit a report to the governor and the general assembly by 3 33 January 1, 2011, regarding its activities and recommendations. 3 34 Administrative support shall be furnished by the department of 3 35 public safety, with the assistance of the office of energy 4 1 independence and the department of natural resources. 4 2 Sec. 2. Section 476.1A, subsection 7, Code 2007, is 4 3 amended to read as follows: 4 4 7. Filing energy efficiency plans and energy efficiency 4 5 results with the board. The energy efficiency plans as a 4 6 whole shall be cost=effective. The board may permit these 4 7 utilities to file joint plans. The board shall periodically 4 8 report the energy efficiency results including energy savings 4 9 of each of these utilities to the general assembly. 4 10 Sec. 3. Section 476.1B, subsection 1, paragraph 1, Code 4 11 2007, is amended to read as follows: 4 12 l. Filing energy efficiency plans and energy efficiency 4 13 results with the board. The energy efficiency plans as a 4 14 whole shall be cost=effective. The board may permit these 4 15 utilities to file joint plans. The board shall periodically 4 16 report the energy efficiency results including energy savings 4 17 of each of these utilities to the general assembly. 4 18 Sec. 4. Section 476.6, subsection 16, paragraph b, Code 4 19 Supplement 2007, is amended to read as follows: 4 20 b. A gas and electric utility required to be 4 21 rate=regulated under this chapter shall assess potential 4 22 energy and capacity savings available from actual and 4 23 projected customer usage by applying commercially available 4 24 technology and improved operating practices to energy=using 4 25 equipment and buildings. The utility shall submit the 4 26 assessment to the board. Upon receipt of the assessment, the 4 27 board shall consult with the department of natural resources 4 28 to develop specific capacity and energy savings performance 4 29 standards for each utility. The utility shall submit an 4 30 energy efficiency plan which shall include economically 4 31 achievable programs designed to attain these energy and 4 32 capacity performance standards. The board shall periodically 4 33 report the energy efficiency results including energy savings 4 34 of each utility to the general assembly. 4 35 Sec. 5. Section 476.6, subsection 16, Code Supplement 5 1 2007, is amended by adding the following new paragraphs: 5 2 NEW PARAGRAPH. bb. (1) Gas and electric utilities that 5 3 are not required to be rate=regulated under this chapter shall 5 4 assess maximum potential energy and capacity savings available 5 5 from actual and projected customer usage through 5 6 cost=effective energy efficiency measures and programs, taking 5 7 into consideration the utility service area's historic energy 5 8 load, projected demand, customer base, and other relevant 5 9 factors. Each utility shall establish an energy efficiency 5 10 goal based upon this assessment of potential and shall 5 11 establish cost=effective energy efficiency programs designed 5 12 to meet the energy efficiency goal. Separate goals may be 5 13 established for various customer groupings. 5 14 (2) Energy efficiency programs shall include efficiency 5 15 improvements to a utility infrastructure and system and 5 16 activities conducted by a utility intended to enable or 5 17 encourage customers to increase the amount of heat, light, 5 18 cooling, motive power, or other forms of work performed per 5 19 unit of energy used. In the case of a municipal utility, for 5 20 purposes of this paragraph, other utilities and departments of 5 21 the municipal utility shall be considered customers to the 5 22 same extent that such utilities and departments would be 5 23 considered customers if served by an electric or gas utility 5 24 that is not a municipal utility. Energy efficiency programs 5 25 include activities which lessen the amount of heating, 5 26 cooling, or other forms of work which must be performed, 5 27 including but not limited to energy studies or audits, general 5 28 information, financial assistance, direct rebates to customers 5 29 or vendors of energy=efficient products, research projects, 5 30 direct installation by the utility of energy=efficient 5 31 equipment, direct and indirect load control, time=of=use 5 32 rates, tree planting programs, educational programs, and hot 5 33 water insulation distribution programs. 5 34 (3) Each utility shall commence the process of determining 5 35 its cost=effective energy efficiency goal on or before July 1, 6 1 2008, shall provide a progress report to the board on or 6 2 before January 1, 2009, and complete the process and submit a 6 3 final report to the board on or before January 1, 2010. The 6 4 report shall include the utility's cost=effective energy 6 5 efficiency goal, and for each measure utilized by the utility 6 6 in meeting the goal, the measure's description, projected 6 7 costs, and the analysis of its cost=effectiveness. Each 6 8 utility or group of utilities shall evaluate 6 9 cost=effectiveness using the cost=effectiveness tests in 6 10 accordance with section 476.6, subsection 14. Individual 6 11 utilities or groups of utilities may collaborate in conducting 6 12 the studies required hereunder and may file a joint report or 6 13 reports with the board. However, the board may require 6 14 individual information from any utility, even if it 6 15 participates in a joint report. 6 16 (4) On January 1 of each even=numbered year, commencing 6 17 January 1, 2012, gas and electric utilities that are not 6 18 required to be rate=regulated shall file a report with the 6 19 board identifying their progress in meeting the energy 6 20 efficiency goal and any updates or amendments to their energy 6 21 efficiency plans and goals. Filings made pursuant to this 6 22 paragraph "bb" shall be deemed to meet the filing requirements 6 23 of section 476.1A, subsection 7, and section 476.1B, 6 24 subsection 1, paragraph "l". 6 25 NEW PARAGRAPH. bbb. (1) The board shall evaluate the 6 26 reports required to be filed pursuant to paragraph "b" by gas 6 27 and electric utilities required to be rate=regulated, and 6 28 shall submit a report summarizing the evaluation to the 6 29 general assembly on or before January 1, 2009. 6 30 (2) The board shall evaluate the reports required to be 6 31 filed pursuant to paragraph "bb" by gas and electric utilities 6 32 that are not required to be rate=regulated, and shall submit a 6 33 report summarizing the evaluation to the general assembly on 6 34 or before January 1, 2011. 6 35 (3) The reports submitted by the board to the general 7 1 assembly pursuant to this paragraph "bbb" shall include the 7 2 goals established by each of the utilities. The reports shall 7 3 also include the projected costs of achieving the goals, 7 4 potential rate impacts, and a description of the programs 7 5 offered and proposed by each utility or group of utilities, 7 6 and may take into account differences in system 7 7 characteristics, including but not limited to sales to various 7 8 customer classes, age of facilities of new large customers, 7 9 and heating fuel type. The reports may contain 7 10 recommendations concerning the achievability of certain 7 11 intermediate and long=term energy efficiency goals based upon 7 12 the results of the assessments submitted by the utilities. 7 13 Sec. 6. NEW SECTION. 476.44A TRADING OF CREDITS. 7 14 The board may establish or participate in a program to 7 15 track, record, and verify the trading of credits for 7 16 electricity generated from alternative energy production 7 17 facilities or renewable energy sources among electric 7 18 generators, utilities, and other interested entities, within 7 19 this state and with similar entities in other states. 7 20 Sec. 7. RENEWABLE ENERGY GENERATION == COST=EFFECTIVE 7 21 POTENTIAL STUDY. The Iowa utility association, in 7 22 consultation with the Iowa association of electric 7 23 cooperatives and the Iowa association of municipal utilities, 7 24 shall conduct a technical study of the potential for achieving 7 25 or engaging in renewable energy generation on a cost=effective 7 26 basis by 2025. The study shall be transmitted to the office 7 27 of energy independence by December 1, 2008, to be submitted 7 28 with the energy independence plan required to be submitted by 7 29 the office to the governor and the general assembly by 7 30 December 14, 2008. 7 31 Sec. 8. ENERGY EFFICIENCY INTERIM STUDY COMMITTEE == 7 32 CONSUMER FOCUS == REQUEST TO ESTABLISH. The legislative 7 33 council is requested to establish an interim study committee 7 34 to examine the existence and effectiveness of energy 7 35 efficiency plans and programs implemented by gas and electric 8 1 public utilities, with an emphasis on results achieved by 8 2 current plans and programs from the demand, or customer, 8 3 perspective, and to make recommendations for additional 8 4 requirements applicable to energy efficiency plans and 8 5 programs that would improve such results. In conducting the 8 6 study and developing recommendations, the committee shall 8 7 consider testimony from the Iowa utilities board, rate and 8 8 nonrate=regulated gas and electric utilities, the consumer 8 9 advocate, state agencies involved with energy efficiency 8 10 program administration, environmental groups and associations, 8 11 and consumers. The committee shall be composed of ten 8 12 members, representing both political parties and both houses 8 13 of the general assembly. Five members shall be members of the 8 14 senate, three of whom shall be appointed by the majority 8 15 leader of the senate and two of whom shall be appointed by the 8 16 minority leader of the senate. The other five members shall 8 17 be members of the house of representatives, three of whom 8 18 shall be appointed by the speaker of the house of 8 19 representatives, and two of whom shall be appointed by the 8 20 minority leader of the house of representatives. The 8 21 committee shall issue a report of its recommendations to the 8 22 general assembly by January 15, 2009. 8 23 Sec. 9. EFFECTIVE DATE. This Act, being deemed of 8 24 immediate importance, takes effect upon enactment. 8 25 8 26 8 27 8 28 JOHN P. KIBBIE 8 29 President of the Senate 8 30 8 31 8 32 8 33 PATRICK J. MURPHY 8 34 Speaker of the House 8 35 9 1 I hereby certify that this bill originated in the Senate and 9 2 is known as Senate File 2386, Eighty=second General Assembly. 9 3 9 4 9 5 9 6 MICHAEL E. MARSHALL 9 7 Secretary of the Senate 9 8 Approved , 2008 9 9 9 10 9 11 9 12 CHESTER J. CULVER 9 13 Governor