H.F. 226 Section 1. Section 476.1, Code 2013, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 5A. An alternate energy aggregation 3 project established pursuant to section 476.49 shall not be 4 regarded as a public utility for purposes of this chapter. 5 Sec. 2. Section 476.25, Code 2013, is amended by adding the 6 following new unnumbered paragraph: 7 NEW UNNUMBERED PARAGRAPH . The furnishing of electricity 8 pursuant to an alternate energy aggregation project under 9 section 476.49 shall not be considered an unnecessary 10 duplication of electric utility facilities and shall not 11 constitute a violation of this section. 12 Sec. 3. NEW SECTION . 476.49 Alternate energy aggregation 13 projects. 14 1. Definitions. For purposes of this section, unless the 15 context otherwise requires: 16 a. “Alternate energy aggregation project” means an electric 17 generating facility with a nameplate generating capacity of 18 two megawatts or less which is comprised of a minimum of three 19 subscribers, at least one of which is an alternate energy 20 production facility as defined in section 476.42, who jointly 21 share the beneficial use of the electricity generated by the 22 project. 23 b. “Subscriber” means a retail customer of an electric 24 utility subject to this division who owns a subscription and 25 who has identified one or more physical locations to which the 26 subscription shall be attributed or attached. 27 c. “Subscription” means a proportional interest in 28 an alternate energy aggregation project, together with a 29 proportional interest in any state or federal tax credits for 30 which an alternate energy production facility associated with 31 the project may be eligible. 32 2. Program established. 33 a. An alternate energy aggregation project may be 34 established to encourage and enhance the ability of electric 35 -1- LSB 1128HH (1) 85 rn/nh 1/ 5

H.F. 226 utility customers to participate in and derive benefit from 1 alternate energy projects. 2 b. An alternate energy aggregation project established 3 pursuant to this section shall be subject to the following 4 requirements and specifications: 5 (1) A project may be established by an electric utility 6 or any other for-profit or nonprofit entity or organization, 7 including a subscriber organization whose sole purpose shall be 8 beneficially owning and operating the project. Additionally, 9 a project may be constructed, owned, and operated by a third 10 party under contract with a subscriber organization and 11 pursuant to a lease, sale-leaseback transaction, operating 12 agreement, or other third-party ownership arrangement. 13 (2) Physical locations to which subscriptions are 14 attributed or attached shall be located within the same county 15 or municipality and within the same electric utility service 16 area. Each subscription shall represent at least one kilowatt 17 of the alternate energy aggregation project’s generating 18 capacity and shall supply no more than one hundred twenty 19 percent of the average annual consumption of electricity by 20 each subscriber at the premises to which the subscription is 21 attributed or attached. Subscriptions may be transferred 22 or assigned to a subscriber organization or to any person 23 or entity otherwise qualifying as a subscriber pursuant to 24 this section, and may be continued following relocation of 25 a subscriber to another location within the same county or 26 municipality and electric utility service area otherwise 27 meeting the requirements of this section. A subscription 28 following relocation may be subject to adjustment to reflect 29 any differences between the new and previous premises’ 30 electricity usage rate. The board shall determine transfer, 31 assignment, and relocation criteria by rule. 32 (3) Electricity generated pursuant to the project shall 33 be aggregated and then proportionately allocated to each 34 subscriber. Excess electricity generated by the project not 35 -2- LSB 1128HH (1) 85 rn/nh 2/ 5

H.F. 226 utilized at the premises to which a subscription is attributed 1 or attached may be sold pursuant to a power purchase agreement 2 entered into with the electric utility at the same rates 3 applicable to alternate energy production facilities pursuant 4 to section 476.43. 5 (4) Notwithstanding the maximum purchase and ownership 6 restrictions contained in section 476.44, an electric utility 7 subject to this division shall enter into one or more power 8 purchase agreements with one or more projects to purchase a 9 minimum of five hundred kilowatts of electricity annually. The 10 board may by rule adjust this requirement on or after July 1, 11 2016. 12 (5) Federal or state tax credits for which the alternate 13 energy production facility associated with the project 14 qualifies shall be proportionately allocated to each 15 subscriber. 16 3. Rules. The board shall adopt rules governing the 17 establishment of alternate energy aggregation projects pursuant 18 to this section. 19 EXPLANATION 20 This bill allows the establishment of alternate energy 21 aggregation projects. 22 The bill defines an “alternate energy aggregation project” 23 to mean an electric generating facility with a nameplate 24 generating capacity of two megawatts or less which is comprised 25 of a minimum of three subscribers, at least one of which 26 is an alternate energy production facility as defined in 27 Code section 476.43, who jointly share the beneficial use of 28 the electricity generated by the project. The bill defines 29 a “subscriber” to mean a retail customer of an electric 30 utility who owns a subscription and who has identified one or 31 more physical locations to which the subscription shall be 32 attributed or attached. The bill defines a “subscription” to 33 mean a proportional interest in an alternate energy aggregation 34 project, together with a proportional interest in any tax 35 -3- LSB 1128HH (1) 85 rn/nh 3/ 5

H.F. 226 credits for which the alternate energy production facility 1 associated with the project may be eligible. 2 The bill states that the objective of a project shall be to 3 encourage and enhance the ability of public utility customers 4 to participate in and derive benefit from alternate energy 5 projects. 6 Regarding project ownership, the bill provides that 7 a project may be established by an electric or any other 8 for-profit or nonprofit entity or organization, including a 9 subscriber organization whose sole purpose is to beneficially 10 own and operate the project. A project can also be 11 constructed, owned, and operated by a third party under 12 contract with a subscriber organization and pursuant to a 13 lease, sale-leaseback transaction, operating agreement, or 14 other third-party ownership arrangement. 15 The bill provides that physical locations to which 16 subscriptions are attributed or attached must be located within 17 the same county or municipality and within the same electric 18 utility service area. The bill states that each subscription 19 shall represent at least one kilowatt of a project’s generating 20 capacity and shall supply no more than 120 percent of the 21 average annual consumption of electricity by each subscriber 22 at the premises to which the subscription is attributed or 23 attached. The bill authorizes the transfer, assignment, or 24 relocation of subscriptions, under conditions to be determined 25 by the board by rule. 26 The bill states that electricity generated pursuant to 27 a project shall be aggregated and then proportionately 28 allocated to each subscriber, and that excess electricity 29 generated by the project not utilized at the premises to which 30 a subscription is attributed may be sold pursuant to a power 31 purchase agreement entered into with the electric utility 32 at the same rates applicable to alternate energy production 33 facilities pursuant to Code section 476.43. 34 The bill imposes purchase requirements on electric 35 -4- LSB 1128HH (1) 85 rn/nh 4/ 5

H.F. 226 utilities. The bill states that an electric utility shall 1 enter into one or more power purchase agreements with one 2 or more projects to purchase a minimum of 500 kilowatts of 3 electricity annually. The bill provides that the board may by 4 rule adjust this requirement on or after July 1, 2016, and that 5 subscribers shall qualify for the federal and state tax credits 6 for which the alternate energy production facility qualifies on 7 a proportionate basis. 8 The bill provides that an alternate energy aggregation 9 project shall not be considered a public utility subject to 10 the regulatory provisions of Code chapter 476, and that such a 11 project does not violate provisions contained in Code chapter 12 476 prohibiting the unnecessary duplication of electric utility 13 facilities. 14 -5- LSB 1128HH (1) 85 rn/nh 5/ 5