S.F. _____ Section 1. NEW SECTION . 476.6A Distributed generation pilot 1 project. 2 1. a. Notwithstanding section 476.44 or any other provision 3 of law to the contrary, the board shall establish a distributed 4 generation pilot project for a rate-regulated public utility 5 that was subject to a revenue sharing settlement agreement with 6 regard to its electric base rates as of January 1, 2010, if the 7 board determines that the utility has a need for additional 8 electric generation capacity. The board shall make such a 9 determination no later than December 31, 2012. 10 b. For purposes of this section, “distributed generation 11 facility” means a biomass conversion facility, a solar energy 12 conversion facility, or a wind energy conversion facility as 13 those terms are defined in section 476C.1. 14 2. A utility that is participating in a distributed 15 generation pilot project pursuant to subsection 1 shall submit 16 a filing to the board documenting the following: 17 a. (1) That within five years after the board’s 18 establishment of the pilot project, the utility is purchasing a 19 minimum of five percent of the utility’s required electrical 20 output from distributed generation facilities. The utility 21 shall submit annual filings during the five-year interval 22 following establishment of the pilot project demonstrating 23 progress toward attainment of this requirement. 24 (2) That the electricity is purchased from distributed 25 generation facilities in the following percentage amounts: 26 (i) Sixty percent from wind energy conversion facilities. 27 Of this sixty percent, fifteen percent shall be purchased 28 from facilities with a nameplate generating capacity or the 29 energy production capacity equivalent of each of the following: 30 between zero and ten kilowatts; between ten and one hundred 31 kilowatts; between one hundred and one thousand kilowatts; and 32 between one thousand and twenty thousand kilowatts. 33 (ii) Twenty percent from solar energy conversion 34 facilities. Of this twenty percent, five percent shall be 35 -1- LSB 6131SC (2) 84 rn/nh 1/ 4

S.F. _____ purchased from facilities with a nameplate generating capacity 1 or the energy production capacity equivalent of each of the 2 following: between zero and ten kilowatts; between ten and 3 twenty kilowatts; between twenty and one hundred kilowatts; and 4 between one hundred and twenty thousand kilowatts. 5 (iii) Twenty percent from biomass conversion facilities. 6 Of this twenty percent, five percent shall be purchased from 7 facilities with a nameplate generating capacity or the energy 8 production capacity equivalent of each of the following: 9 between zero and one hundred kilowatts; between one hundred and 10 five hundred kilowatts; between five hundred and one thousand 11 kilowatts; and between one thousand kilowatts and twenty 12 megawatts. 13 (3) If the utility fails to document purchasing of 14 the required amounts and percentages of electricity from 15 distributed generation facilities pursuant to this paragraph 16 “a” , it shall be subject to the penalty provisions of section 17 476A.14, and possible suspension or revocation of a license or 18 permit as determined by the board by rule. 19 b. That the utility is in compliance with all applicable 20 rules relating to distributed generation adopted by the board. 21 3. a. The board shall utilize existing standard offer 22 contract forms to facilitate interconnection between the 23 utility and a distributed generation facility as required 24 pursuant to this section. The standard offer contracts 25 shall continue in effect for a twenty-year period, subject 26 to termination provisions for failure to perform, to be 27 established by the board by rule. The board shall ensure that 28 the contracts are calculated at reasonable and competitive 29 rates determined by the board and sufficient to facilitate 30 distributed generation facility financing. The forms shall be 31 made available for utilization by July 1, 2013. 32 b. The contracts shall be made available to any 33 distributed generation facility of up to twenty megawatts of 34 nameplate generating capacity which seeks to enter into an 35 -2- LSB 6131SC (2) 84 rn/nh 2/ 4

S.F. _____ interconnection and power sales agreement with the utility, 1 and which meets the requirements of section 476C.1, subsection 2 6, paragraph “a” , and section 476C.1, subsection 6, paragraph 3 “b” , subparagraphs (1) through (3) and subparagraphs (6) and 4 (7), with regard to fifty-one percent ownership in the facility 5 being comprised of one or more of the individuals or entities 6 identified pursuant to those subparagraphs. 7 c. The standard offer contracts shall not contain any 8 provision or impose any requirement which could create 9 or constitute an unreasonable barrier to or burden on the 10 development of distributed generation in this state. 11 EXPLANATION 12 This bill authorizes the Iowa utilities board to establish a 13 distributed generation pilot project if the board determines 14 that a rate-regulated public utility that was subject to 15 a revenue sharing settlement agreement with regard to its 16 electric base rates as of January 1, 2010, has a need for 17 additional electric generation capacity. Such a determination 18 is required to be made by the board no later than December 31, 19 2012. The bill defines a “distributed generation facility” to 20 mean a biomass conversion facility, a solar energy conversion 21 facility, or a wind energy conversion facility as those terms 22 are defined in Code section 476C.1. 23 If the pilot project is established, the specified utility 24 would be required within five years to be purchasing a minimum 25 of 5 percent of its required electrical output from distributed 26 generation facilities. The bill specifies percentage 27 requirements applicable to the purchase of electricity from 28 wind, solar, and biomass facilities, and further specifies 29 percentage requirements applicable to such purchases from 30 facilities of varying sizes. If the utility fails to document 31 purchasing the required amounts and percentages, the bill 32 states that the civil penalty provisions of Code section 33 476A.14 shall be applicable. This penalty shall not exceed 34 $10,000 for each day of continuing violation. The bill also 35 -3- LSB 6131SC (2) 84 rn/nh 3/ 4

S.F. _____ provides that the board may suspend or revoke the utility’s 1 license or permit. 2 The bill states that the board shall utilize existing 3 standard offer contract forms to facilitate interconnection 4 between the utility and distributed generation facilities, 5 which would continue in effect for 20 years and be calculated 6 at reasonable and competitive rates. Any distributed 7 generating facility, as defined in the bill, of up to 20 8 megawatts of nameplate generating capacity would be eligible 9 for interconnection, provided the facility met ownership 10 requirements contained in specified provisions of Code section 11 476C.1. The contract forms shall not contain any provision 12 or impose any requirement which could create or constitute 13 an unreasonable barrier to or burden on the development of 14 distributed generation facilities in Iowa. 15 -4- LSB 6131SC (2) 84 rn/nh 4/ 4