House File 2656 - Introduced HOUSE FILE BY COMMITTEE ON ENVIRONMENTAL PROTECTION (SUCCESSOR TO HSB 742) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to energy efficiency by establishing specified 2 standards and goals relating to energy production and 3 utilization, and establishing a commission on energy 4 efficiency standards and practices. 5 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 6 TLSB 5711HV 82 7 rn/rj/14 PAG LIN 1 1 Section 1. NEW SECTION. 103A.27 COMMISSION ON ENERGY 1 2 EFFICIENCY STANDARDS AND PRACTICES. 1 3 1. A commission on energy efficiency standards and 1 4 practices is established within the department of public 1 5 safety. The commission shall be composed of the following 1 6 members: 1 7 a. The state building code commissioner, or the 1 8 commissioner's designee. 1 9 b. The director of the office of energy independence, or 1 10 the director's designee. 1 11 c. A professional engineer licensed pursuant to chapter 1 12 542B. 1 13 d. An architect registered pursuant to chapter 544A. 1 14 e. Two individuals recognized in the construction industry 1 15 as possessing expertise and experience in the construction or 1 16 renovation of energy=efficient residential and commercial 1 17 buildings. 1 18 f. A member of a local planning and zoning commission or 1 19 county board of supervisors. 1 20 g. Three individuals representing gas and electric public 1 21 utilities within this state. 1 22 h. A local building official whose duties include 1 23 enforcement of requirements for energy conservation in 1 24 construction. 1 25 i. Two consumers, one of whom owns and occupies a 1 26 residential building in this state and one of whom owns and 1 27 occupies a building used in commercial business or 1 28 manufacturing. 1 29 2. The commissioner shall appoint all members to the 1 30 commission other than those members designated in subsection 1 31 1, paragraphs "a" and "b". Appointment of members are subject 1 32 to the requirements of sections 69.16 and 69.16A. A vacancy 1 33 on the commission shall be filled for the unexpired portion of 1 34 the regular term in the same manner as regular appointments 1 35 are made. Members appointed by the commissioner shall be 2 1 reimbursed for actual and necessary expenses incurred in 2 2 performance of their duties. Such members may also be 2 3 eligible to receive compensation as provided in section 7E.6. 2 4 A majority of the members shall constitute a quorum. 2 5 3. Duties of the commission shall include but are not 2 6 limited to the following: 2 7 a. Evaluate energy efficiency standards applicable to 2 8 existing or newly constructed residential, commercial, and 2 9 industrial buildings and vertical infrastructure at the state 2 10 and local level and make suggestions for their improvement and 2 11 enforcement. The evaluation of energy efficiency standards 2 12 shall include but not be limited to a review of the following: 2 13 (1) The reduction in energy usage likely to result from 2 14 the adoption and enforcement of the standards. 2 15 (2) The effect of compliance with the standards on indoor 2 16 air quality. 2 17 (3) The relationship of the standards to weatherization 2 18 programs for existing housing stock and to the availability of 2 19 affordable housing, including rental units. 2 20 b. Develop recommendations for new energy efficiency 2 21 standards, specifications, or guidelines applicable to newly 2 22 constructed residential, commercial, and industrial buildings 2 23 and vertical infrastructure. 2 24 c. Develop recommendations for the establishment of 2 25 incentives for energy efficiency construction projects which 2 26 exceed currently applicable state and local building codes. 2 27 d. Develop recommendations for adoption of a statewide 2 28 energy efficiency building labeling or rating system for 2 29 residential, commercial, and industrial buildings and 2 30 complexes. 2 31 e. Obtain input from individuals, groups, associations, 2 32 and agencies in carrying out the duties specified in 2 33 paragraphs "a" through "d", including but not limited to the 2 34 Iowa league of cities regarding local building code adoption 2 35 and enforcement in both large and small communities, the Iowa 3 1 landlord association, the department of transportation, the 3 2 department of public health, the division of community action 3 3 agencies of the department of human rights regarding 3 4 low=income residential customers, and obtain additional input 3 5 from any other source that the commission determines 3 6 appropriate. 3 7 4. The commission shall be formed for the two=year period 3 8 beginning July 1, 2008, and ending June 30, 2010, and shall 3 9 submit a report to the governor and the general assembly by 3 10 January 1, 2011, regarding its activities and recommendations. 3 11 Administrative support shall be furnished by the department of 3 12 public safety, with the assistance of the office of energy 3 13 independence and the department of natural resources. 3 14 Sec. 2. Section 476.6, Code Supplement 2007, is amended by 3 15 adding the following new subsection: 3 16 NEW SUBSECTION. 23. ENERGY SAVINGS STANDARD. 3 17 a. The board shall establish an energy efficiency standard 3 18 of a one and one=half percent annual reduction in projected 3 19 energy use applicable to all gas and electric utilities as a 3 20 statewide average goal. In applying the standard, the board 3 21 shall collaborate with each utility to determine an 3 22 individualized and cost=effective energy efficiency goal, 3 23 taking into consideration the utility service area's historic 3 24 energy load, its projected demand, its consumer base, the 3 25 effectiveness of its previous or current energy efficiency 3 26 plans generating energy savings by consumers or generating 3 27 cost savings or efficiencies in the production and delivery of 3 28 energy, and other relevant factors. The goal applicable to a 3 29 gas and electric utility may be implemented through 3 30 modification of the utility's energy efficiency plan submitted 3 31 pursuant to subsection 14, a plan developed and implemented by 3 32 the board, a plan developed by a utility association and filed 3 33 with and approved by the board, or pursuant to a third=party 3 34 contract entered into by the utility. Any utility that 3 35 implements a board=approved plan filed by an association or 4 1 developed by the board shall be deemed to have met its energy 4 2 efficiency goal without having to determine an individualized 4 3 goal. Upon application, the board may establish an energy 4 4 efficiency goal for a group or groups of utilities to pool 4 5 their energy use reductions. Any costs attributable to or 4 6 incurred by customers resulting from implementation of a 4 7 utility's energy efficiency goal pursuant to this subsection 4 8 shall be separately itemized on customer utility bills. 4 9 b. The board shall conduct an assessment of the 4 10 feasibility and cost=effectiveness of establishing a standard 4 11 of one and one=half percent annual reduction in projected 4 12 energy use applicable to all gas and electric utilities, and 4 13 may by rule establish intermediate goals during the assessment 4 14 process. A preliminary report of the assessment shall be 4 15 submitted to the governor and the general assembly by January 4 16 1, 2009, and a final report shall be submitted to the governor 4 17 and the general assembly by January 1, 2011. 4 18 Sec. 3. Section 476.44, subsection 2, Code 2007, is 4 19 amended to read as follows: 4 20 2.An electric utility subject to this division, except a 4 21 utility that elects rate regulation pursuant to section 4 22 476.1A, shall not be required to own or purchase, at any one 4 23 time, more than its share of one hundred five megawatts of 4 24 power from alternative energy production facilities or small 4 25 hydro facilities at the rates established pursuant to section 4 26 476.43. The board shall allocate the one hundred five 4 27 megawatts based upon each utility's percentage of the total 4 28 Iowa retail peak demand, for the year beginning January 1, 4 29 1990, of all utilities subject to this section. If a utility 4 30 undergoes reorganization as defined in section 476.76, the 4 31 board shall combine the allocated purchases of power for each 4 32 utility involved in the reorganization.4 33Notwithstanding the one hundred five megawatt maximum, the 4 34 board may increase the amount of power that a utility is 4 35 required to own or purchase at the rates established pursuant 5 1 to section 476.43 if the board finds that a utility, including 5 2 a reorganized utility, exceeds its 1990 Iowa retail peak 5 3 demand by twenty percent and the additional power the utility 5 4 is required to purchase will encourage the development of 5 5 alternate energy production facilities and small hydro 5 6 facilities. The increase shall not exceed the utility's 5 7 increase in peak demand multiplied by the ratio of the 5 8 utility's share of the one hundred five megawatt maximum to 5 9 its 1990 Iowa retail peak demand.5 10 a. The board shall establish for each electric utility the 5 11 goal of producing or purchasing twenty=five percent of its 5 12 total annual Iowa retail electric sales from alternative 5 13 energy production facilities by December 31, 2025. 5 14 b. Any goal established by the board shall allow the 5 15 continued sale of renewable energy credits associated with 5 16 those facilities in any market for those credits. The board 5 17 may establish or participate in a program to track, record, 5 18 and verify the trading of credits for electricity generated 5 19 from renewable energy sources among electric generators, 5 20 utilities, and other interested entities, within this state 5 21 and among similar entities in other states. 5 22 EXPLANATION 5 23 This bill relates to improving energy efficiency within 5 24 this state. 5 25 The bill provides for the establishment of an energy 5 26 efficiency standard of a 1.5 percent annual reduction in 5 27 projected energy use applicable to all gas and electric 5 28 utilities as a statewide average goal. The bill directs the 5 29 Iowa utilities board to collaborate with each utility to 5 30 determine an individualized and cost=effective energy 5 31 efficiency goal, taking into consideration the utility service 5 32 area's historic energy load, its projected demand, its 5 33 consumer base, the effectiveness of previous or current energy 5 34 efficiency plans, and other relevant factors. The bill 5 35 specifies that the goal may be implemented through 6 1 modification of a utility's energy efficiency plan submitted 6 2 pursuant to Code section 476.6, subsection 14, a plan 6 3 developed and implemented by the board, a plan developed by a 6 4 utility association and filed with and approved by the board, 6 5 or pursuant to a third=party contract entered into by the 6 6 utility. The bill provides that, upon application, the board 6 7 may establish an energy efficiency goal for a group or groups 6 8 of utilities to pool their energy use reductions, and that a 6 9 utility implementing a board=approved plan filed by an 6 10 association or developed by the board shall be deemed to have 6 11 meet its goal without having to determine an individualized 6 12 goal. The bill provides for itemization of energy efficiency 6 13 plan costs to customers on their utility bills. 6 14 The bill also establishes a goal applicable to electric 6 15 utilities of producing or purchasing 25 percent of their total 6 16 annual Iowa retail electric sales from alternative energy 6 17 production facilities by December 31, 2025. The bill 6 18 specifies that this goal shall not impact renewable energy 6 19 credit trading, and authorizes the board to track and monitor 6 20 such trading. 6 21 The bill provides for the establishment of a commission on 6 22 energy efficiency standards and practices within the 6 23 department of public safety, to be comprised of the state 6 24 building code commissioner or designee, the director of the 6 25 office of energy independence or designee, a licensed 6 26 engineer, a registered architect, two individuals recognized 6 27 in the construction industry as possessing expertise and 6 28 experience in the construction or renovation of 6 29 energy=efficient residential and commercial buildings, a 6 30 member of a local planning and zoning commission or county 6 31 board of supervisors, three representatives of gas and 6 32 electric public utilities, a local building official, and two 6 33 consumers. The commission's duties would include evaluating 6 34 energy efficiency standards applicable to buildings, 6 35 developing recommendations for new energy efficiency 7 1 standards, specifications, or guidelines applicable to new 7 2 construction, developing recommendations for incentives for 7 3 energy efficiency construction projects which exceed currently 7 4 applicable state and local building codes, and developing 7 5 recommendations for adopting a statewide energy efficiency 7 6 building labeling or rating system. An additional duty would 7 7 involve obtaining input from individuals, groups, 7 8 associations, and agencies in carrying out these specified 7 9 duties as the commission determines appropriate. The 7 10 commission would exist for a two=year period, with a report of 7 11 recommendations submitted to the governor and the general 7 12 assembly by January 1, 2011. 7 13 LSB 5711HV 82 7 14 rn/rj/14