Senate File 2070 - Introduced SENATE FILE BY HOGG Passed Senate, Date Passed House, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act relating to renewable energy production by establishing an 2 electricity renewable energy standard, and making specified 3 tax credits applicable. 4 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 5 TLSB 5148XS 82 6 rn/rj/5 PAG LIN 1 1 Section 1. Section 476.44, subsection 2, Code 2007, is 1 2 amended to read as follows: 1 3 2.An electric utility subject to this division, except a 1 4 utility that elects rate regulation pursuant to section 1 5 476.1A, shall not be required to own or purchase, at any one 1 6 time, more than its share of one hundred five megawatts of 1 7 power from alternative energy production facilities or small 1 8 hydro facilities at the rates established pursuant to section 1 9 476.43. The board shall allocate the one hundred five 1 10 megawatts based upon each utility's percentage of the total 1 11 Iowa retail peak demand, for the year beginning January 1, 1 12 1990, of all utilities subject to this section. If a utility 1 13 undergoes reorganization as defined in section 476.76, the 1 14 board shall combine the allocated purchases of power for each 1 15 utility involved in the reorganization.1 16Notwithstanding the one hundred five megawatt maximum, the 1 17 board may increase the amount of power that a utility is 1 18 required to own or purchase at the rates established pursuant 1 19 to section 476.43 if the board finds that a utility, including 1 20 a reorganized utility, exceeds its 1990 Iowa retail peak 1 21 demand by twenty percent and the additional power the utility 1 22 is required to purchase will encourage the development of 1 23 alternate energy production facilities and small hydro 1 24 facilities. The increase shall not exceed the utility's 1 25 increase in peak demand multiplied by the ratio of the 1 26 utility's share of the one hundred five megawatt maximum to 1 27 its 1990 Iowa retail peak demand.1 28 a. An electric utility shall produce or purchase at least 1 29 the following percentages of its total annual Iowa retail 1 30 electric sales from alternate energy production facilities or 1 31 small hydro facilities: 1 32 (1) By December 31, 2014, fourteen percent. 1 33 (2) By December 31, 2020, twenty percent. 1 34 (3) By December 31, 2025, twenty=five percent. 1 35 b. Amounts produced or purchased in excess of the required 2 1 percentages in paragraph "a" may be sold or exchanged between 2 2 electric utilities for purposes of satisfying the 2 3 requirements, subject to procedures as determined by the board 2 4 by rule. 2 5 c. Of the total amounts of electricity to be produced or 2 6 purchased from alternate energy production facilities or small 2 7 hydro facilities required by paragraph "a", designated amounts 2 8 of electricity shall be derived from specified alternative and 2 9 renewable energy sources, as follows: 2 10 (1) Three hundred fifty megawatts shall be produced or 2 11 purchased from community=owned renewable energy projects, 2 12 pursuant to definition and criteria to be determined by the 2 13 board by rule, by 2014. The amount required to be produced or 2 14 purchased from community=owned renewable energy projects shall 2 15 increase to five hundred megawatts by 2020, and to six hundred 2 16 twenty=five megawatts by 2025, and be maintained each year 2 17 thereafter. 2 18 (2) Eighty megawatts shall be produced or purchased from a 2 19 sustainable, closed=loop biomass conversion facility, as 2 20 defined in section 476C.1, by 2014, and maintained each year 2 21 thereafter. 2 22 (3) Twenty megawatts shall be produced or purchased from a 2 23 methane gas recovery facility, as defined in section 476C.1, 2 24 by 2014, and maintained each year thereafter. 2 25 (4) Five megawatts shall be produced or purchased from a 2 26 solar energy conversion facility, as defined in section 2 27 476C.1, by 2014, and maintained each year thereafter. An 2 28 electric utility which maintains a solar energy utilization 2 29 project with which the electric utility is involved on July 1, 2 30 2008, may allocate megawatts derived therefrom in satisfying 2 31 this requirement. 2 32 d. Projects originated or utilized for the purpose of 2 33 meeting the requirements of paragraph "c", subparagraphs (2) 2 34 through (4), shall be eligible for the renewable energy tax 2 35 credit pursuant to chapter 476C, and the maximum capacity 3 1 restrictions of section 476C.3, subsection 4, shall not be 3 2 applicable to a facility determined to be eligible pursuant to 3 3 that section and supplying electricity produced or purchased 3 4 by a utility in satisfaction of the alternative and renewable 3 5 energy percentage purchase requirements of this section. 3 6 Sec. 2. Section 476C.3, subsection 4, Code 2007, is 3 7 amended to read as follows: 3 8 4. a. The maximum amount of nameplate generating capacity 3 9 of all wind energy conversion facilities the board may find 3 10 eligible under this chapter shall not exceed one hundred 3 11 eighty megawatts of nameplate generating capacity. The 3 12 maximum amount of energy production capacity equivalent of all 3 13 other facilities the board may find eligible under this 3 14 chapter shall not exceed a combined output of twenty megawatts 3 15 of nameplate generating capacity and one hundred sixty=seven 3 16 billion British thermal units of heat for a commercial 3 17 purpose. Of the maximum amount of energy production capacity 3 18 equivalent of all other facilities found eligible under this 3 19 chapter, fifty=five billion British thermal units of heat for 3 20 a commercial purpose shall be reserved for an eligible 3 21 facility that is a refuse conversion facility for processed, 3 22 engineered fuel from a multicounty solid waste management 3 23 planning area. The maximum amount of energy production 3 24 capacity the board may find eligible for a single refuse 3 25 conversion facility is fifty=five billion British thermal 3 26 units of heat for a commercial purpose. 3 27 b. The maximum amount of energy production capacity 3 28 limitations specified in paragraph "a" shall not be applicable 3 29 to an eligible facility supplying electricity produced or 3 30 purchased in satisfaction of the alternative and renewable 3 31 energy percentage purchase requirements contained in section 3 32 476.44, subsection 2. 3 33 EXPLANATION 3 34 This bill relates to alternative and renewable energy 3 35 production. 4 1 The bill requires electric utilities to produce or purchase 4 2 increasing percentages of their total annual Iowa retail 4 3 electric sales from alternative energy production facilities 4 4 or small hydro facilities, as defined in Code section 476.42, 4 5 by specified dates, and provides that amounts produced or 4 6 purchased in excess of the percentage requirements may be sold 4 7 or exchanged between utilities pursuant to procedures 4 8 determined by the Iowa utilities board by rule. 4 9 The bill provides that out of the production or purchase 4 10 requirements, designated amounts of electricity shall be 4 11 derived from specified sources of alternative and renewable 4 12 energy sources. Specifically, 350 megawatts are required to 4 13 be produced or purchased from community=owned renewable energy 4 14 projects, pursuant to a definition of such projects and 4 15 criteria relating to them as determined by the board by rule, 4 16 by 2014, and increased to 500 megawatts by 2020 and 625 4 17 megawatts by 2025 and maintained each year thereafter. 4 18 Additionally, 80 megawatts must be produced or purchased from 4 19 a sustainable, closed=loop biomass conversion facility by 2014 4 20 and maintained each year thereafter; 20 megawatts must be 4 21 produced or purchased from a methane gas recovery facility by 4 22 2014 and maintained each year thereafter; and 5 megawatts must 4 23 be produced or purchased from a solar energy conversion 4 24 facility and maintained each year thereafter. The bill 4 25 references Code section 476C relating to alternative and 4 26 renewable energy tax credits regarding a definition of biomass 4 27 conversion facility, methane gas recovery facility, and solar 4 28 energy conversion facility, and provides with reference to 4 29 solar energy that utilities which maintain current solar 4 30 energy utilization projects may allocate megawatts derived 4 31 from them in satisfying the 5 megawatt requirement. 4 32 The bill provides that biomass, methane, or solar projects 4 33 which are originated or utilized to meet the percentage and 4 34 megawatt requirements shall be eligible for the renewable 4 35 energy tax credits pursuant to Code chapter 476C without 5 1 application of statutory maximum capacity restrictions. 5 2 LSB 5148XS 82 5 3 rn/rj/5.1