Senate File 432
SENATE FILE
BY IVERSON and GRONSTAL
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to ownership of alternate energy production
2 facilities by public utilities, making related changes, and
3 providing an effective date.
4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
5 TLSB 3115XS 80
6 jj/cf/24
PAG LIN
1 1 Section 1. Section 476.23, subsection 1, Code 2003, is
1 2 amended to read as follows:
1 3 1. An electric utility shall not construct or extend
1 4 facilities or furnish or offer to furnish electric service to
1 5 the existing point of delivery of any customer already
1 6 receiving electric service from another electric utility
1 7 without having first filed with the board the express written
1 8 agreement of the electric utility presently serving this
1 9 customer, except as otherwise provided in this section. Any
1 10 municipal corporation, after being authorized by a vote of the
1 11 people, or any electric utility may file a petition with the
1 12 board requesting a certificate of authority to furnish
1 13 electric service to the existing point of delivery of any
1 14 customer already receiving electric service from another
1 15 electric utility. If, after notice by the board to the
1 16 electric utility currently serving the customer, objection to
1 17 the petition is not filed and investigation is not deemed
1 18 necessary, the board shall issue a certificate within thirty
1 19 days of the filing of the petition. When an objection is
1 20 filed, if the board, after notice and opportunity for hearing,
1 21 determines that service to the customer by the petitioner is
1 22 in the public interest, including consideration of any
1 23 unnecessary duplication of facilities, it shall grant this
1 24 certificate in whole or in part, upon such terms, conditions,
1 25 and restrictions as may be justified. Whether or not an
1 26 objection is filed, any certificate issued shall require that
1 27 the petitioner pay to the electric utility presently serving
1 28 the customer, the reasonable price for facilities serving the
1 29 customer. This price determination by the board shall include
1 30 due consideration of the cost of the facilities being
1 31 acquired,; any necessary generating capacity and transmission
1 32 capacity dedicated to the customer, including, but not limited
1 33 to, electric power generating facilities and alternate energy
1 34 production facilities not yet in service but for which the
1 35 board has issued an order pursuant to section 476.53, and
2 1 electric power generating facility emissions plan budgets
2 2 approved by the board pursuant to section 476.6, subsection
2 3 25; depreciation,; loss of revenue,; and the cost of
2 4 facilities necessary to reintegrate the system of the utility
2 5 after detaching the portion sold.
2 6 Sec. 2. Section 476.43, subsection 1, Code 2003, is
2 7 amended to read as follows:
2 8 1. Subject to section 476.44, the board shall require
2 9 electric utilities to enter into long=term contracts to do
2 10 both of the following under terms and conditions that the
2 11 board finds are just and economically reasonable for the
2 12 electric utilities' customers, are nondiscriminatory to
2 13 alternate energy producers and small hydro producers, and will
2 14 further the policy stated in section 476.41:
2 15 a. Purchase At least one of the following:
2 16 (1) Own alternate energy production facilities or small
2 17 hydro facilities located in this state.
2 18 (2) Enter into long=term contracts to purchase or wheel
2 19 electricity from alternate energy production facilities or
2 20 small hydro facilities located in the utility's service area
2 21 under the terms and conditions that the board finds are just
2 22 and economically reasonable to the electric utilities'
2 23 ratepayers, are nondiscriminatory to alternate energy
2 24 producers and small hydro producers and will further the
2 25 policy stated in section 476.41.
2 26 b. Provide for the availability of supplemental or backup
2 27 power to alternate energy production facilities or small hydro
2 28 facilities on a nondiscriminatory basis and at just and
2 29 reasonable rates.
2 30 Sec. 3. Section 476.44, subsection 2, Code 2003, is
2 31 amended to read as follows:
2 32 2. An electric utility subject to this division, except a
2 33 utility which that elects rate regulation pursuant to section
2 34 476.1A, shall not be required to own or purchase, at any one
2 35 time, more than its share of one hundred five megawatts of
3 1 power from alternative energy production facilities or small
3 2 hydro facilities at the rates established pursuant to section
3 3 476.43. The board shall allocate the one hundred five
3 4 megawatts based upon each utility's percentage of the total
3 5 Iowa retail peak demand, for the year beginning January 1,
3 6 1990, of all utilities subject to this section. If a utility
3 7 undergoes reorganization as defined in section 476.76, the
3 8 board shall combine the allocated purchases of power for each
3 9 utility involved in the reorganization.
3 10 Notwithstanding the one hundred five megawatt maximum, the
3 11 board may increase the amount of power that a utility is
3 12 required to own or purchase at the rates established pursuant
3 13 to section 476.43 if the board finds that a utility, including
3 14 a reorganized utility, exceeds its 1990 Iowa retail peak
3 15 demand by twenty percent and the additional power the utility
3 16 is required to purchase will encourage the development of
3 17 alternate energy production facilities and small hydro
3 18 facilities. The increase shall not exceed the utility's
3 19 increase in peak demand multiplied by the ratio of the
3 20 utility's share of the one hundred five megawatt maximum to
3 21 its 1990 Iowa retail peak demand.
3 22 Sec. 4. Section 476.45, Code 2003, is amended to read as
3 23 follows:
3 24 476.45 EXEMPTION FROM EXCESS CAPACITY.
3 25 Capacity purchased from of an alternate energy production
3 26 facility or small hydro facility, that is owned or purchased
3 27 by an electric utility, shall not be included in a calculation
3 28 of an electric utility's excess generating capacity for rate=
3 29 making ratemaking purposes.
3 30 Sec. 5. Section 476.53, subsection 3, paragraph b, Code
3 31 2003, is amended to read as follows:
3 32 b. In determining the applicable ratemaking principles,
3 33 the board shall not be limited to traditional ratemaking
3 34 principles or traditional cost recovery mechanisms. In
3 35 particular, the board shall have the authority to consider
4 1 ratemaking proposals by a rate=regulated public utility that
4 2 facilitate the construction of an electric power generating
4 3 facility or an alternate energy production facility pursuant
4 4 to paragraph "a" and provide for reasonable restrictions on
4 5 the ability of the public utility to seek a general increase
4 6 in electric rates under section 476.6 for at least three years
4 7 after the generation facility begins providing service to Iowa
4 8 consumers.
4 9 Sec. 6. EFFECTIVE DATE. This Act, being deemed of
4 10 immediate importance, takes effect upon enactment.
4 11 EXPLANATION
4 12 This bill amends various provisions in Code chapter 476,
4 13 relating to public utilities. Specifically, the bill provides
4 14 for ownership of alternate energy production facilities by
4 15 public utilities, and makes related changes.
4 16 The bill in Code section 476.23 states the authority of the
4 17 utilities board to consider the cost of a utility's alternate
4 18 energy production facilities and other generating facilities,
4 19 as well as generating plant emissions plan budgets approved by
4 20 the board, when valuing an electric utility's property.
4 21 The bill provides in Code section 476.43 that public
4 22 utilities may own alternate energy production facilities or
4 23 small hydro facilities located in Iowa. The bill also
4 24 restructures the language in subsection 1. Related changes
4 25 are made in Code sections 476.44 and 476.45.
4 26 The bill in Code section 476.53 specifies the authority of
4 27 the utilities board to consider rate proposals that facilitate
4 28 construction of alternate energy production facilities or
4 29 other electric generating facilities when the proposal
4 30 provides for reasonable restrictions on the utility's ability
4 31 to seek rate increases for at least three years after the
4 32 generating facility begins providing service.
4 33 The bill is effective upon enactment.
4 34 LSB 3115XS 80
4 35 jj/cf/24.2