Senate File 2399 - Introduced SENATE FILE BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SF 2325) (SUCCESSOR TO SF 2133) Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to renewable energy including the renewable 2 energy tax credit and the wind energy production tax credit. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5725SZ 81 5 kk/gg/14 PAG LIN 1 1 Section 1. Section 476B.1, subsection 4, paragraph c, Code 1 2 Supplement 2005, is amended to read as follows: 1 3 c. Was originally placed in service on or after July 1, 1 4 2005, but before July 1,20082009. 1 5 Sec. 2. Section 476B.5, subsection 1, paragraph e, Code 1 6 Supplement 2005, is amended to read as follows: 1 7 e. A copy of an executed power purchase agreement or other 1 8 agreement to purchase electricity upon completion of the 1 9 project. An executed interconnection agreement or 1 10 transmission service agreement shall be accepted by the board 1 11 under this paragraph if the owner of the facility has agreed 1 12 to sell electricity from the facility directly or indirectly 1 13 to a wholesale power pool market. 1 14 Sec. 3. Section 476B.5, subsection 3, Code Supplement 1 15 2005, is amended to read as follows: 1 16 3. A facility that is not operational within eighteen 1 17 months after issuance of an approval for the facility by the 1 18 board shall cease to be a qualified facility. However, a 1 19 facility that is approved as qualified under this section but 1 20 is not operational within eighteen months due to the 1 21 unavailability of necessary equipment shall be granted an 1 22 additional twelve months to become operational. A facility 1 23 that is granted and thereafter loses approval may reapply to 1 24 the board for a new determination. 1 25 Sec. 4. Section 476C.1, subsection 6, unnumbered paragraph 1 26 1, Code Supplement 2005, is amended to read as follows: 1 27 "Eligible renewable energy facility" means a wind energy 1 28 conversion facility, a biogas recovery facility, a biomass 1 29 conversion facility, a methane gas recovery facility,ora 1 30 solar energy conversion facility, or a refuse conversion 1 31 facility that meets all of the following requirements: 1 32 Sec. 5. Section 476C.1, subsection 6, paragraph d, Code 1 33 Supplement 2005, is amended to read as follows: 1 34 d. Was initially placed into service on or after July 1, 1 35 2005, and before January 1,20112012. 2 1 Sec. 6. Section 476C.1, subsection 8, Code Supplement 2 2 2005, is amended to read as follows: 2 3 8. "Heat for a commercial purpose" means the heat in 2 4 British thermal unit equivalents from refuse derived fuel, 2 5 methane, or other biogas produced in this state sold to a 2 6 purchaser of renewable energy for use for a commercial purpose 2 7 in this state or for use by an institution in this state. 2 8 Sec. 7. Section 476C.1, Code Supplement 2005, is amended 2 9 by adding the following new subsection: 2 10 NEW SUBSECTION. 12A. "Refuse conversion facility" means a 2 11 facility in this state that converts solid waste into fuel 2 12 that can be burned to generate heat for a commercial purpose 2 13 in this state. 2 14 Sec. 8. Section 476C.3, subsections 2, 3, 4, and 5, Code 2 15 Supplement 2005, are amended to read as follows: 2 16 2. The board shall review the application and supporting 2 17 information and shall make a preliminary determination 2 18 regarding whether the facility is an eligible renewable energy 2 19 facility. The board shall notify the applicant of the 2 20 approval or denial of the application within thirty days of 2 21 receipt of the application and information required. If the 2 22 board fails to notify the applicant of the approval or denial 2 23 within thirty days, the application shall be deemed denied 2 24 unless the application is placed on a waiting list as 2 25 described in subsection 5. An applicant who receives a 2 26 determination denying an application may file an appeal with 2 27 the board within thirty days from the date of the denial 2 28 pursuant to the provisions of chapter 17A. In the absence of 2 29 a timely appeal, the preliminary determination shall be final. 2 30 If the application is incomplete, the board may grant an 2 31 extension of time for the provision of additional information. 2 32 3. A facility that is not operational withineighteen2 33 thirty months after issuance of an approval for the facility 2 34 by the board shall cease to be an eligible renewable energy 2 35 facility. A facility that is granted and thereafter loses 3 1 approval may reapply to the board for a new determination. 3 2 4. The maximum amount of nameplate generating capacity of 3 3 all wind energy conversion facilities the board may find 3 4 eligible under this chapter shall not exceedninetyone 3 5 hundred eighty megawatts of nameplate generating capacity. 3 6 The maximum amount of energy production capacity equivalent of 3 7 all other facilities the board may find eligible under this 3 8 chapter shall not exceed a combined output oftentwenty 3 9 megawatts of nameplate generating capacity and one hundred 3 10 sixty=seven billion British thermal units of heat for a 3 11 commercial purpose. Of the maximum amount of energy 3 12 production capacity equivalent of all other facilities found 3 13 eligible under this chapter, fifty=five billion British 3 14 thermal units of heat for a commercial purpose shall be 3 15 reserved for an eligible facility that is a refuse conversion 3 16 facility for processed, engineered fuel from a multi=county 3 17 solid waste management planning area. The maximum amount of 3 18 energy production capacity the board may find eligible for a 3 19 single refuse conversion facility is fifty=five billion 3 20 British thermal units of heat for a commercial purpose. 3 21 5. The board shall maintain a waiting list of facilities 3 22 that may have been found eligible under this section but for 3 23 the maximum capacity restrictions of subsection 4. The 3 24 priority of the waiting list shall be maintained in the order 3 25 the applications were received by the board. The board shall 3 26 remove from the waiting list any facility that has 3 27 subsequently been found ineligible under this chapter. If 3 28 additional capacity becomes available within the capacity 3 29 restrictions of subsection 4, the board shall grant approval 3 30 to facilities according to the priority of the waiting list 3 31 before granting approval to new applications. An owner of a 3 32 facility on the waiting list shall provide the board each year 3 33 by August 31 with a sworn statement of verification stating 3 34 that the information contained in the application for 3 35 eligibility remains true and correct or stating that the 4 1 information has changed and providing the new information. 4 25.6. An owner meeting the requirements of section 4 3 476C.1, subsection 6, paragraph "b", shall not be an owner of 4 4 more than two eligible renewable energy facilities. A person 4 5 that has an equity interest equal to or greater than fifty=one 4 6 percent in an eligible renewable energy facility shall not 4 7 have an equity interest greater than ten percent in any other 4 8 eligible renewable energy facility. 4 9 Sec. 9. Section 476C.5, Code Supplement 2005, is amended 4 10 to read as follows: 4 11 476C.5 CERTIFICATE ISSUANCE PERIOD. 4 12 A producer or purchaser of renewable energy may receive 4 13 renewable energy tax credit certificates for a ten=year period 4 14 for each eligible renewable energy facility under this 4 15 chapter. The ten=year period for issuance of the tax credit 4 16 certificates begins with the date the purchaser of renewable 4 17 energy first purchases electricity, hydrogen fuel, methane gas 4 18 or other biogas used to generate electricity, or heat for 4 19 commercial purposes from the eligible renewable energy 4 20 facility for which a tax credit is issued under this chapter. 4 21 Renewable energy tax credit certificates shall not be issued 4 22 for renewable energy purchased after December 31,20202021. 4 23 Sec. 10. TRANSITION PROVISIONS == APPLICABILITY. 4 24 1. The waiting list described in this Act is the waiting 4 25 list maintained by the Iowa utilities board for applications 4 26 for eligibility received prior to the effective date of this 4 27 Act. 4 28 2. As of the effective date of this Act, the section of 4 29 this Act amending section 476C.3, subsection 6, applies to all 4 30 facilities on the waiting list described by this Act 4 31 regardless of the date a facility applied for eligibility. 4 32 Sec. 11. PROPOSAL FOR TRANSMISSION STUDY. The utilities 4 33 board shall submit to the government oversight committee by 4 34 January 1, 2007, a proposal to conduct a study on the 4 35 transmission of electricity in Iowa. The proposal shall 5 1 include a description of the content to be studied which shall 5 2 include examining the reliability and limitations of the 5 3 primary grid system and the development of additional small 5 4 wind projects in all regions of the state. The content to be 5 5 studied shall also include issues related to the security of 5 6 Iowa's energy supply in the event of a national or local 5 7 emergency affecting the primary grid system. The proposal 5 8 shall include a description of the estimated time needed to 5 9 complete the study, an estimate of the cost to complete the 5 10 study, and any other information the board deems necessary. 5 11 EXPLANATION 5 12 This bill relates to renewable energy including the 5 13 renewable energy tax credit and the wind energy production tax 5 14 credit. 5 15 The bill extends the eligibility of a qualified facility 5 16 for the wind energy production tax credit by one year to 5 17 include those wind energy conversion facilities that are 5 18 initially placed into service before July 1, 2009. The bill 5 19 permits an owner applying for a determination as to whether a 5 20 facility is qualified to provide an executed interconnection 5 21 agreement or transmissions service agreement instead of an 5 22 executed power purchase agreement or other agreement. The 5 23 bill provides that if a qualified facility is not operational 5 24 within 18 months, that the facility shall be granted an 5 25 additional 12 months to become operational if the delay is due 5 26 to the unavailability of necessary equipment. 5 27 The bill extends the eligibility of renewable energy 5 28 facilities for the renewable energy tax credit by one year to 5 29 include those facilities that are initially placed into 5 30 service before January 1, 2012. The bill extends the time by 5 31 which an eligible renewable energy facility must be 5 32 operational after approval of eligibility is granted from 18 5 33 months to 30 months. 5 34 The bill provides that an eligible renewable energy 5 35 facility includes a refuse conversion facility as defined by 6 1 the bill. The bill provides that "heat for a commercial 6 2 purpose" includes heat from refuse derived fuel and may be for 6 3 use by an institution. 6 4 The bill provides that the board may place an application 6 5 for a determination of whether a facility is an eligible 6 6 renewable energy facility on a waiting list if the facility 6 7 may have been found eligible but for the maximum capacity 6 8 requirements. The bill requires owners of facilities on the 6 9 waiting list to provide the board an annual verification of 6 10 the content of the application for eligibility. The bill 6 11 prohibits a person with an equity interest of 51 percent or 6 12 more in an eligible facility from owning more than 10 percent 6 13 in another eligible facility. 6 14 The bill allows additional tax credits for the production 6 15 of wind energy by increasing the maximum amount of nameplate 6 16 generating capacity that the board may find eligible for a 6 17 renewable energy tax credit from 90 megawatts to 180 6 18 megawatts. The bill similarly increases the maximum 6 19 eligibility for other nonwind renewable energy facilities from 6 20 10 megawatts to 20 megawatts of nameplate generating capacity 6 21 and provides for a maximum amount of 167 billion British 6 22 thermal units of heat for a commercial purpose to be found 6 23 eligible by the board. The bill provides that 55 billion 6 24 British thermal units shall be reserved for a refuse 6 25 conversion facility for processed, engineered fuel from a 6 26 multi=county solid waste management planning area. The board 6 27 shall not find eligible more than 55 billion British thermal 6 28 units for a single refuse conversion facility. 6 29 The bill extends the tax credit certificate issuance period 6 30 by one year to allow tax credits issued for facilities placed 6 31 into service before January 1, 2012, to have the same 10=year 6 32 period of eligibility to produce and sell renewable energy for 6 33 a renewable energy tax credit certificate as facilities are 6 34 allowed under current law. 6 35 The bill provides that the waiting list described in the 7 1 bill is the same waiting list maintained by the board for 7 2 applications received prior to the effective date of the bill. 7 3 The bill requires the board to conduct a study on the 7 4 transmission of electricity in this state. 7 5 LSB 5725SZ 81 7 6 kk:rj/gg/14