S.F. _____ Section 1. NEW SECTION . 476.43A Wind energy incentive 1 program. 2 1. A wind energy production facility with a nameplate 3 generating capacity of less than or equal to twenty megawatts 4 which seeks to enter into an interconnection and power sales 5 agreement with an electric utility may submit an application 6 for approval to the board. The board shall develop an 7 application form and establish approval criteria by rule. 8 2. a. Eligibility for the program shall be contingent upon 9 the following: 10 (1) Constructing the facility on agricultural land in this 11 state as defined in section 9H.1. 12 (2) Having applied for or obtained the necessary financing 13 to cover facility construction and operation costs. 14 (3) Completing a standard interconnection request form 15 established by the board by rule. 16 b. Notwithstanding the ownership or maximum purchase 17 requirements of section 476.44, an electric utility shall 18 interconnect with a facility which is approved by the board 19 for participation in the program and shall purchase energy 20 from that facility at the rates approved in the standard 21 offer contract filed pursuant to subsection 3 with the board. 22 However, an electric utility shall not be required to purchase 23 an amount of energy from new program participants in a given 24 year which exceeds fifty percent of the electric utility’s 25 retail sales growth during the previous year. 26 3. a. The board shall develop a standard offer contract 27 form to facilitate interconnection between an electric utility 28 and a program participant. The form shall be subject to 29 biannual review and periodic adjustment by the board with 30 respect to new program participants. The board shall require 31 all electric utilities to file with the board standard offer 32 contracts consistent with the form, subject to modification 33 and approval by the board. Electric utilities shall make 34 the contracts available to any approved program participant. 35 -1- LSB 1923XC (1) 85 rn/rj 1/ 4

S.F. _____ Standard offer contracts shall continue in effect for a 1 ten-year period or until construction and financing costs of 2 the facility have been recovered, whichever is earlier, may be 3 renewed, and shall be subject to termination provisions for 4 failure to perform, to be established by the board by rule. 5 b. The standard offer contracts shall be calculated on 6 a kilowatt-hour basis, and shall be based on each utility’s 7 cost, inclusive of its required rate of return, for the new 8 development of wind technology. 9 c. Until the owner of the facility has recovered all 10 construction and financing costs incurred in construction 11 of the facility through electricity sales to the utility, 12 electricity generated by the facility shall be fully 13 transmitted to the utility and not available to the owner of 14 the facility for utilization on-site. 15 4. Standard offer contracts shall be in lieu of rates 16 otherwise determined by the board pursuant to section 476.43. 17 An unsuccessful applicant, or a wind energy production facility 18 with larger than twenty megawatts of nameplate generating 19 capacity, shall be governed by the rates established in section 20 476.43. 21 5. The board shall submit a report to the general assembly 22 by January 1 annually regarding program participation levels 23 and program results. 24 EXPLANATION 25 This bill establishes a wind energy incentive program 26 applicable to wind energy production facilities approved for 27 participation in the program. 28 The bill provides that a wind energy production facility 29 with a nameplate generating capacity of less than or equal 30 to 20 megawatts which seeks to enter into an interconnection 31 and power sales agreement with an electric utility may submit 32 an application for approval to the Iowa utilities board. To 33 be eligible to apply for the program, a facility must be 34 constructed on land suitable for use in farming, have applied 35 -2- LSB 1923XC (1) 85 rn/rj 2/ 4

S.F. _____ for or obtained the necessary financing to cover facility 1 construction and operation costs, and complete a standard 2 interconnection request form established by the board by rule. 3 The bill provides that notwithstanding the ownership or 4 maximum purchase requirements of Code section 476.44, an 5 electric utility shall be required to interconnect with a 6 facility approved by the board for the program, but shall not 7 be required to purchase an amount of energy from new program 8 participants in a given year which exceeds 50 percent of its 9 retail sales growth during the previous year. 10 The bill directs the board to develop a standard offer 11 contract form to facilitate interconnection between an electric 12 utility and a program participant, which shall be subject to 13 biannual review and periodic adjustment by the board with 14 respect to new program participants. All electric utilities 15 shall file with the board standard offer contracts consistent 16 with this form, subject to modification and board approval, and 17 shall make these contracts available to any approved program 18 participant. The bill provides that standard offer contracts 19 shall continue in effect for the earlier of 10 years, or the 20 date by which the facility owner has recovered construction and 21 financing costs, are renewable, and are subject to termination 22 provisions for failure to perform to be established by the 23 board by rule. 24 The bill provides that purchases of electricity under the 25 standard offer contracts shall be calculated on a kilowatt-hour 26 basis, and shall be based on each utility’s cost, inclusive of 27 its required rate of return, for the new development of wind 28 technology. Until the owner of the facility has recovered all 29 construction and financing costs incurred in construction of 30 the facility, the bill provides that all electricity generated 31 by the facility shall be fully transmitted to the utility and 32 not available to the owner of the facility for utilization 33 on-site. 34 The bill states that standard offer contracts shall be 35 -3- LSB 1923XC (1) 85 rn/rj 3/ 4

S.F. _____ in lieu of alternate and renewable energy rates otherwise 1 determined by the board pursuant to Code section 476.43, and 2 that an unsuccessful applicant, or a wind energy production 3 facility with larger than 20 megawatts of nameplate generating 4 capacity, shall be governed by the Code section 476.43 rates. 5 The bill requires the board to submit a report to the general 6 assembly by January 1 annually regarding program participation 7 levels and results. 8 -4- LSB 1923XC (1) 85 rn/rj 4/ 4