Section 1. Section 476.23, subsection 1, Code 2003, is amended to read as follows:

1. An electric utility shall not construct or extend

facilities or furnish or offer to furnish electric service to

the existing point of delivery of any customer already

receiving electric service from another electric utility

without having first filed with the board the express written

agreement of the electric utility presently serving this

customer, except as otherwise provided in this section. Any

municipal corporation, after being authorized by a vote of the

people, or any electric utility may file a petition with the

board requesting a certificate of authority to furnish

electric service to the existing point of delivery of any

customer already receiving electric service from another

electric utility. If, after notice by the board to the

electric utility currently serving the customer, objection to

the petition is not filed and investigation is not deemed

necessary, the board shall issue a certificate within thirty

days of the filing of the petition. When an objection is

filed, if the board, after notice and opportunity for hearing,

determines that service to the customer by the petitioner is

in the public interest, including consideration of any

unnecessary duplication of facilities, it shall grant this

certificate in whole or in part, upon such terms, conditions,

and restrictions as may be justified. Whether or not an

objection is filed, any certificate issued shall require that

the petitioner pay to the electric utility presently serving

the customer, the reasonable price for facilities serving the

customer. This price determination by the board shall include

due consideration of the cost of the facilities being

acquired,; any necessary generating capacity and transmission

capacity dedicated to the customer, including, but not limited

to, electric power generating facilities and alternate energy

production facilities not yet in service but for which the

board has issued an order pursuant to section 476.53, and

electric power generating facility emissions plan budgets

approved by the board pursuant to section 476.6, subsection

25; depreciation,; loss of revenue,; and the cost of

facilities necessary to reintegrate the system of the utility

after detaching the portion sold.

Sec. 2. Section 476.43, subsection 1, Code 2003, is amended to read as follows:

1. Subject to section 476.44, the board shall require

electric utilities to enter into long-term contracts to do

both of the following under terms and conditions that the

board finds are just and economically reasonable for the

electric utilities' customers, are nondiscriminatory to

alternate energy producers and small hydro producers, and will

further the policy stated in section 476.41:

a. PurchaseAt least one of the following:

(1) Own alternate energy production facilities or small

hydro facilities located in this state.

(2) Enter into long-term contracts to purchase or wheel

electricity from alternate energy production facilities or

small hydro facilities located in the utility's service area

under the terms and conditions that the board finds are just

and economically reasonable to the electric utilities'

ratepayers, are nondiscriminatory to alternate energy

producers and small hydro producers and will further the

policy stated in section 476.41.

b. Provide for the availability of supplemental or backup

power to alternate energy production facilities or small hydro

facilities on a nondiscriminatory basis and at just and

reasonable rates.

Sec. 3. Section 476.44, subsection 2, Code 2003, is amended to read as follows:

2. An electric utility subject to this division, except a

utility whichthat elects rate regulation pursuant to section

476.1A, shall not be required to own or purchase, at any one

time, more than its share of one hundred five megawatts of

power from alternative energy production facilities or small

hydro facilities at the rates established pursuant to section

476.43. The board shall allocate the one hundred five

megawatts based upon each utility's percentage of the total

Iowa retail peak demand, for the year beginning January 1,

1990, of all utilities subject to this section. If a utility

undergoes reorganization as defined in section 476.76, the

board shall combine the allocated purchases of power for each

utility involved in the reorganization.

Notwithstanding the one hundred five megawatt maximum, the

board may increase the amount of power that a utility is

required to own or purchase at the rates established pursuant

to section 476.43 if the board finds that a utility, including

a reorganized utility, exceeds its 1990 Iowa retail peak

demand by twenty percent and the additional power the utility

is required to purchase will encourage the development of

alternate energy production facilities and small hydro

facilities. The increase shall not exceed the utility's

increase in peak demand multiplied by the ratio of the

utility's share of the one hundred five megawatt maximum to

its 1990 Iowa retail peak demand.

Sec. 4. Section 476.45, Code 2003, is amended to read as follows:

Capacity purchased fromof an alternate energy production

facility or small hydro facility, that is owned or purchased

by an electric utility, shall not be included in a calculation

of an electric utility's excess generating capacity for rate-

makingratemaking purposes.

Sec. 5. Section 476.53, subsection 3, paragraph b, Code 2003, is amended to read as follows:

b. In determining the applicable ratemaking principles,

the board shall not be limited to traditional ratemaking

principles or traditional cost recovery mechanisms. Among the

principles and mechanisms the board may consider, the board

has the authority to approve ratemaking principles proposed by

a rate-regulated public utility that provide for reasonable

restrictions upon the ability of the public utility to seek a

general increase in electric rates under section 476.6 for at

least three years after the generation facility begins

providing service to Iowa customers.

Sec. 6.

EFFECTIVE DATE.

This Act, being deemed of

immediate importance, takes effect upon enactment.