Senate File 2311 - Introduced SENATE FILE 2311 BY COMMITTEE ON COMMERCE (SUCCESSOR TO SSB 3093) A BILL FOR An Act modifying various provisions relating to public 1 utilities. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5362SV (4) 87 gh/rn

S.F. 2311 Section 1. Section 28F.1, subsection 1, Code 2018, is 1 amended to read as follows: 2 1. This chapter provides a means for the joint financing 3 by public agencies of works or facilities useful and necessary 4 for the collection, treatment, purification, and disposal 5 in a sanitary manner of liquid and solid waste, sewage, 6 and industrial waste, facilities used for the conversion of 7 solid waste to energy, gasworks and facilities useful for 8 the delivery of natural gas service, and also electric power 9 facilities constructed within the state of Iowa, except that 10 hydroelectric power facilities may also be located in the 11 waters and on the dams of or on land adjacent to either side 12 of the Mississippi or Missouri river bordering the state of 13 Iowa, water supply systems, swimming pools or golf courses. 14 This chapter applies to the acquisition, construction, 15 reconstruction, ownership, operation, repair, extension, 16 or improvement of such works or facilities, by a separate 17 administrative or legal entity created pursuant to chapter 18 28E or chapter 389 . When the legal entity created under 19 this chapter is comprised solely of cities, counties, and 20 sanitary districts established under chapter 358 , or any 21 combination thereof or any combination of the foregoing with 22 other public agencies, the entity shall be both a corporation 23 and a political subdivision with the name under which it was 24 organized. The legal entity may sue and be sued, contract, 25 acquire and hold real and personal property necessary for 26 corporate purposes, adopt a corporate seal and alter the seal 27 at pleasure, and execute all the powers conferred in this 28 chapter . 29 Sec. 2. Section 28F.11, Code 2018, is amended to read as 30 follows: 31 28F.11 Eminent domain. 32 Any public agency participating in an agreement authorizing 33 the joint exercise of governmental powers pursuant to this 34 chapter may exercise its power of eminent domain to acquire 35 -1- LSB 5362SV (4) 87 gh/rn 1/ 28

S.F. 2311 interests in property, under provisions of law then in effect 1 and applicable to the public agency, for the use of the entity 2 created to carry out the agreement, provided that the power of 3 eminent domain is not used to acquire interests in property 4 which is part of a system of facilities in existence, under 5 construction, or planned, for the generation, transmission 6 or sale of electric power , or for the transmission, 7 transportation, or sale of natural gas . In the exercise 8 of the power of eminent domain, the public agency shall 9 proceed in the manner provided by chapter 6B . Any interests 10 in property acquired are acquired for a public purpose, as 11 defined in chapter 6A , of the condemning public agency, and the 12 payment of the costs of the acquisition may be made pursuant 13 to the agreement or to any separate agreement between the 14 public agency and the entity or the other public agencies 15 participating in the entity or any of them. Upon payment of 16 costs, any property acquired is the property of the entity. 17 Sec. 3. Section 476.1, subsection 7, Code 2018, is amended 18 to read as follows: 19 7. The jurisdiction of the board under this chapter 20 shall include efforts designed to promote the use of energy 21 efficiency strategies by rate or service-regulated gas and 22 electric utilities required to be rate-regulated . 23 Sec. 4. Section 476.1A, subsections 1, 2, and 4, Code 2018, 24 are amended to read as follows: 25 1. Electric public utilities having fewer than ten 26 thousand customers and electric cooperative corporations 27 and associations are not subject to the rate regulation 28 authority of the board . Such utilities are subject to all 29 other regulation and enforcement activities of the board, 30 including , except for regulatory action pertaining to all of 31 the following : 32 a. Assessment of fees for the support of the division and 33 the office of consumer advocate, pursuant to section 476.10 . 34 b. Safety and engineering standards for equipment, 35 -2- LSB 5362SV (4) 87 gh/rn 2/ 28

S.F. 2311 operations, and procedures. 1 c. Assigned area of service. 2 d. Pilot projects of the board. 3 e. Assessment of fees for the support of the Iowa energy 4 center created in section 15.120 and the center for global and 5 regional environmental research established by the state board 6 of regents. This paragraph “e” is repealed July 1, 2022. 7 f. Filing alternate energy purchase program plans with the 8 board, and offering such programs to customers, pursuant to 9 section 476.47 . 10 g. Filing energy efficiency plans and energy efficiency 11 results with the board. The energy efficiency plans as a 12 whole shall be cost-effective. The board may permit these 13 utilities to file joint plans. The board shall periodically 14 report the energy efficiency results including energy savings 15 of each of these utilities to the general assembly. The board 16 may waive all or part of the energy efficiency filing and 17 review requirements for electric cooperative corporations and 18 associations and electric public utilities which demonstrate 19 superior results with existing energy efficiency efforts. 20 2. However, sections 476.20 , subsections 1 through 4, 21 476.21 , 476.41 through 476.44 , 476.51 , 476.56 , 476.62 , and 22 476.66 and chapters 476A and 478 , to the extent applicable, 23 apply to such electric utilities. 24 4. The board of directors or the membership of an electric 25 cooperative corporation or association otherwise exempt 26 from rate regulation may elect to have the cooperative’s 27 rates regulated by the board. The board shall adopt rules 28 prescribing the manner in which the board of directors or the 29 membership of an electric cooperative may so elect. If the 30 board of directors or the membership of an electric cooperative 31 has elected to have the cooperative’s rates regulated by the 32 board, after two years have elapsed from the effective date of 33 such election the board of directors or the membership of the 34 electric cooperative may elect to exempt the cooperative from 35 -3- LSB 5362SV (4) 87 gh/rn 3/ 28

S.F. 2311 the rate regulation authority of the board , provided, however, 1 that if the membership elected to have the cooperative’s rates 2 regulated by the board, only the membership may elect to exempt 3 the cooperative from the rate regulation authority of the 4 board . 5 Sec. 5. Section 476.1B, subsection 1, paragraph l, Code 6 2018, is amended to read as follows: 7 l. Filing energy efficiency plans and energy efficiency 8 results with the board. The energy efficiency plans as a whole 9 shall be cost-effective. The board may permit these utilities 10 to file joint plans. The board shall periodically report the 11 energy efficiency results including energy savings of each of 12 these utilities to the general assembly. 13 Sec. 6. Section 476.2, subsection 6, Code 2018, is amended 14 by striking the subsection. 15 Sec. 7. Section 476.4, subsection 1, Code 2018, is amended 16 to read as follows: 17 1. Every public utility shall file with the board tariffs 18 showing the rates and charges for its public utility services 19 and the rules and regulations under which such services were 20 furnished, on April 1, 1963, which rates and charges shall be 21 subject to investigation by the board as provided in section 22 476.3 , and upon such investigation the burden of establishing 23 the reasonableness of such rates and charges shall be upon the 24 public utility filing the same. These filings shall be made 25 under such rules as the board may prescribe within such time 26 and in such form as the board may designate. In prescribing 27 rules and regulations with respect to the form of tariffs 28 and any other regulations , the board shall, in the case of 29 public utilities subject to regulation by any federal agency, 30 give due regard to any corresponding rules and regulations of 31 such federal agency, to the end that unnecessary duplication 32 of effort and expense may be avoided so far as reasonably 33 possible. Each public utility shall keep copies of its tariffs 34 open to public inspection under such rules as the board may 35 -4- LSB 5362SV (4) 87 gh/rn 4/ 28

S.F. 2311 prescribe. 1 Sec. 8. Section 476.6, subsections 1, 8, and 13, Code 2018, 2 are amended to read as follows: 3 1. Filing with board. A public utility subject to rate 4 regulation shall not make effective a new or changed rate, 5 charge, schedule, or regulation until the rate, charge, 6 schedule, or regulation has been approved by the board, except 7 as provided in subsections 8 , and 9 , and 22 . 8 8. Automatic adjustments permitted . 9 a. This chapter does not prohibit a public utility from 10 making provision for the automatic adjustment of rates and 11 charges for public utility service provided that a schedule 12 showing the automatic adjustment of rates and charges is first 13 filed with the board. 14 b. A public utility may automatically adjust rates and 15 charges to recover costs related to transmission incurred by 16 or charged to the public utility consistent with a tariff or 17 agreement that is subject to the jurisdiction of the federal 18 energy regulatory commission, provided that a schedule showing 19 the automatic adjustment of rates and charges is first filed 20 with the board. 21 13. Energy efficiency plans. Electric and gas public 22 utilities shall offer energy efficiency programs to their 23 customers through energy efficiency plans. An energy 24 efficiency plan as a whole shall be cost-effective. In 25 determining the cost-effectiveness of an energy efficiency 26 plan, the board shall apply the societal test, total resource 27 cost test, utility cost test, rate-payer impact test, and 28 participant test. Energy efficiency programs for qualified 29 low-income persons and for tree planting programs, educational 30 programs, and assessments of consumers’ needs for information 31 to make effective choices regarding energy use and energy 32 efficiency need not be cost-effective and shall not be 33 considered in determining cost-effectiveness of plans as a 34 whole. The energy efficiency programs in the plans may be 35 -5- LSB 5362SV (4) 87 gh/rn 5/ 28

S.F. 2311 provided by the utility or by a contractor or agent of the 1 utility. Programs offered pursuant to this subsection by gas 2 and electric utilities that are required to be rate-regulated 3 shall require board approval. 4 Sec. 9. Section 476.6, subsection 15, paragraphs a and b, 5 Code 2018, are amended to read as follows: 6 a. (1) (a) Gas and electric utilities required to be 7 rate-regulated under this chapter shall file five-year energy 8 efficiency plans and demand response plans with the board as 9 provided . An energy efficiency plan and budget or a demand 10 response plan and budget shall include a range of energy 11 efficiency or demand response programs, tailored to the needs 12 of all customer classes, including residential, commercial, and 13 industrial customers, for energy efficiency or demand response 14 opportunities. The plans shall include programs for qualified 15 low-income persons including a cooperative program with any 16 community action agency within the utility’s service area to 17 implement countywide or communitywide energy efficiency or 18 demand response programs for qualified low-income persons. 19 Rate-regulated gas and electric utilities shall utilize 20 Iowa agencies and Iowa contractors to the maximum extent 21 cost-effective in their energy efficiency plans and demand 22 response plans filed with the board. 23 (b) All gas or electric utility customers shall have the 24 option to enroll in a five-year energy efficiency plan or 25 five-year demand response plan offered by the gas or electric 26 utility during an open enrollment period beginning August 27 1, 2018, and ending September 30, 2018. Gas and electric 28 utilities shall provide notice of the open enrollment period to 29 all customers in the customer’s billing statement. Customers 30 may only enroll in a plan during the open enrollment period 31 and cannot withdraw from such plan until the commencement 32 of the next five-year plan offered by the gas or electric 33 utility. Customers that move into the service area of a gas 34 or electric utility may enroll in an energy efficiency plan or 35 -6- LSB 5362SV (4) 87 gh/rn 6/ 28

S.F. 2311 demand response plan offered by the gas or electric utility 1 within sixty days after the commencement of gas or electric 2 service. Customers that do not enroll in an energy efficiency 3 plan offered by a gas or electric utility shall not be assessed 4 the costs of the plan and shall not be allowed to participate 5 in energy efficiency programs included in the plan. Customers 6 that do not enroll in a demand response plan offered by a gas or 7 electric utility shall not be assessed the costs of the plan 8 and shall not be allowed to participate in demand response 9 programs included in the plan. 10 (c) Following the completion of an open enrollment period 11 pursuant to subparagraph division (b), the gas or electric 12 utility shall file the energy efficiency plan or demand 13 response plan with the board no later than June 1 of the year 14 following the open enrollment period, provided, however, that 15 ten percent or more of the gas or electric utility’s current 16 customers enroll in the energy efficiency plan or demand 17 response plan during the open enrollment period. If less than 18 ten percent of the gas or electric utility’s current customers 19 enroll in a plan during the open enrollment period, the gas or 20 electric utility shall commence a subsequent open enrollment 21 period beginning August 1, and ending September 30, of the 22 following year, and every year thereafter, until ten percent 23 or more of the gas or electric utility’s current customers 24 enroll in the energy efficiency plan or demand response plan. 25 The board shall approve an energy efficiency plan or demand 26 response plan filed with the board no later than December 1 27 of the year the plan was filed with the board. An energy 28 efficiency plan or demand response plan approved by the board 29 shall commence January 1 of the year following the date the 30 plan was approved by the board. Energy efficiency plans 31 approved by the board prior to the effective date of this Act 32 shall remain in effect until December 31, 2018. 33 (d) A gas or electric utility shall commence an open 34 enrollment period for customers to enroll in a subsequent 35 -7- LSB 5362SV (4) 87 gh/rn 7/ 28

S.F. 2311 five-year energy efficiency plan or demand response plan 1 offered by the gas or electric utility beginning August 1, and 2 ending September 30, during the fourth year of a current plan. 3 Enrollment, filing, approval, and commencement of subsequent 4 five-year energy efficiency plans and demand response plans 5 shall comply with subparagraph divisions (b) and (c). 6 (2) Gas and electric utilities required to be 7 rate-regulated under this chapter may request an energy 8 efficiency plan or demand response plan modification during 9 the course of a five-year plan. A modification may be 10 requested due to changes in funding as the result of customer 11 enrollment in such plan or for any other reason identified by 12 the gas or electric utility. The board shall take action on a 13 modification request made by the gas or electric utility within 14 sixty days after a modification request is filed. If the board 15 fails to take action within sixty days after a modification 16 request is filed, the modification request shall be deemed 17 approved. 18 b. (1) A gas and electric utility required to be 19 rate-regulated under this chapter shall assess potential energy 20 and capacity savings available from actual and projected 21 customer usage by applying commercially available technology 22 and improved operating practices to energy-using equipment and 23 buildings. The utility shall submit the assessment to the 24 board. Upon receipt of the assessment, the board shall consult 25 with the economic development authority to develop specific 26 capacity and energy savings performance standards goals for 27 each utility. Such goals, except as provided for in subsection 28 13, shall only include cost-effective energy efficiency and 29 demand response programs. The utility shall submit an energy 30 efficiency plan which shall include economically achievable 31 programs designed to attain these energy and capacity 32 performance standards goals . The board shall periodically 33 report the energy efficiency results including energy savings 34 of each utility to the general assembly. 35 -8- LSB 5362SV (4) 87 gh/rn 8/ 28

S.F. 2311 (2) For purposes of this paragraph, “cost-effective” means 1 the total resource cost test result for a program is greater 2 than one. In applying the total resource cost test, benefits 3 to be considered include avoided capacity and energy costs 4 and federal tax credits, and costs to be considered include 5 incremental costs of equipment, operation, and maintenance, 6 utility costs, and program administration costs. 7 Sec. 10. Section 476.6, subsection 15, paragraph c, 8 subparagraphs (1) and (3), Code 2018, are amended to read as 9 follows: 10 (1) Gas and electric utilities that are not required to 11 be rate-regulated under this chapter shall assess maximum 12 potential energy and capacity savings available from actual 13 and projected customer usage through cost-effective energy 14 efficiency measures and programs, taking into consideration the 15 utility service area’s historic energy load, projected demand, 16 customer base, and other relevant factors. Each utility shall 17 establish an energy efficiency goal based upon this assessment 18 of potential and shall establish cost-effective energy 19 efficiency programs designed to meet the energy efficiency 20 goal. Separate goals may be established for various customer 21 groupings. 22 (3) Each utility shall commence the process of determining 23 its cost-effective energy efficiency goal on or before July 1, 24 2008, shall provide a progress report to the board on or before 25 January 1, 2009, and complete the process and submit a final 26 report to the board on or before January 1, 2010. The report 27 shall include the utility’s cost-effective energy efficiency 28 goal, and for each measure utilized by the utility in meeting 29 the goal, the measure’s description, projected costs, and the 30 analysis of its cost-effectiveness. Each utility or group 31 of utilities shall evaluate cost-effectiveness using the 32 cost-effectiveness tests in accordance with subsection 13 of 33 this section . Individual utilities or groups of utilities may 34 collaborate in conducting the studies required hereunder and 35 -9- LSB 5362SV (4) 87 gh/rn 9/ 28

S.F. 2311 may file a joint report or reports with the board. However, 1 the board may require individual information from any utility, 2 even if it participates in a joint report. 3 Sec. 11. Section 476.6, subsection 15, paragraph d, Code 4 2018, is amended by striking the paragraph. 5 Sec. 12. Section 476.6, subsection 15, paragraphs e, f, and 6 g, Code 2018, are amended to read as follows: 7 e. (1) The board shall conduct contested case proceedings 8 for review of energy efficiency plans , demand response plans, 9 and budgets filed by gas and electric utilities required to be 10 rate-regulated under this chapter . Notwithstanding the goals 11 developed pursuant to paragraph “b” , the board shall not require 12 a gas utility to adopt an energy efficiency plan or a demand 13 response plan that results in projected annual costs that 14 exceed one and one-half percent of a plan-enrolled gas utility 15 customer’s total billing, and shall not require an electric 16 utility to adopt an energy efficiency plan or a demand response 17 plan that results in projected annual costs that exceed two 18 percent of a plan-enrolled electric utility customer’s total 19 billing. A gas or electric utility may voluntarily propose an 20 energy efficiency plan or a demand response plan that results 21 in projected annual costs that exceed one and one-half percent 22 of a plan-enrolled gas utility customer’s total billing, or 23 two percent of a plan-enrolled electric utility customer’s 24 total billing. The board may approve, reject, or modify the 25 plans and budgets. Notwithstanding the provisions of section 26 17A.19, subsection 5 , in an application for judicial review of 27 the board’s decision concerning a utility’s energy efficiency 28 plan or budget, the reviewing court shall not order a stay. 29 Whenever 30 (2) Notwithstanding paragraph “a” , subparagraph (2), if, 31 on the effective date of this Act, a gas or electric utility’s 32 currently approved energy efficiency plan includes projected 33 annual costs that exceed one and one-half percent of a gas 34 utility customer’s total billing for the previous calendar 35 -10- LSB 5362SV (4) 87 gh/rn 10/ 28

S.F. 2311 year, or two percent of an electric utility customer’s total 1 billing for the previous calendar year, the gas or electric 2 utility may file a request to modify its approved energy 3 efficiency plan to achieve projected annual costs at one 4 and one-half percent or less of a gas utility customer’s 5 total billing, or two percent or less of an electric utility 6 customer’s total billing. In such case, or whenever a request 7 to modify an approved plan or budget is filed subsequently by 8 the office of consumer advocate or a gas or electric utility 9 required to be rate-regulated under this chapter , the board 10 shall promptly initiate a formal proceeding if the board 11 determines that any reasonable ground exists for investigating 12 the request. The formal proceeding may be initiated at 13 any time by the board on its own motion. Implementation of 14 board-approved plans or budgets shall be considered continuous 15 in nature and shall be subject to investigation at any time by 16 the board or the office of the consumer advocate. 17 f. Notice to customers of a contested case proceeding for 18 review of energy efficiency plans , demand response plans, and 19 budgets shall be in a manner prescribed by the board. 20 g. (1) A gas or electric utility required to be 21 rate-regulated under this chapter may recover, through an 22 automatic adjustment mechanism filed pursuant to subsection 8 , 23 over a period not to exceed the term of the plan, the costs of 24 an energy efficiency plan or demand response plan approved by 25 the board , including amounts for a plan approved prior to July 26 1, 1996, in a contested case proceeding conducted pursuant to 27 paragraph “e” . The board shall ensure that costs are recovered 28 from all customers on a reasonably comparable basis, including 29 customers who utilize alternate energy production facilities as 30 defined in section 476.42. Customers who have not enrolled in 31 energy efficiency plans pursuant to paragraph “a” , subparagraph 32 (1), shall not be charged for recovery of energy efficiency 33 costs. Customers who have not enrolled in demand response 34 plans pursuant to paragraph “a” , subparagraph (1), shall not be 35 -11- LSB 5362SV (4) 87 gh/rn 11/ 28

S.F. 2311 charged for recovery of demand response costs. 1 (2) The board shall periodically conduct a contested case 2 proceeding to evaluate the reasonableness and prudence of the 3 utility’s implementation of an approved energy efficiency 4 or demand response plan and budget. If a utility is not 5 taking all reasonable actions to cost-effectively implement 6 an approved energy efficiency plan, the board shall not allow 7 the utility to recover from customers costs in excess of those 8 costs that would be incurred under reasonable and prudent 9 implementation and shall not allow the utility to recover 10 future costs at a level other than what the board determines 11 to be reasonable and prudent. If the result of a contested 12 case proceeding is a judgment against a utility, that utility’s 13 future level of cost recovery shall be reduced by the amount 14 by which the programs were found to be imprudently conducted. 15 The utility shall not represent energy efficiency in customer 16 billings as a separate cost or expense unless the board 17 otherwise approves. 18 Sec. 13. Section 476.6, subsection 17, Code 2018, is amended 19 by striking the subsection. 20 Sec. 14. Section 476.6, subsection 20, Code 2018, is amended 21 to read as follows: 22 20. Electric power generating facility emissions. 23 a. It is the intent of the general assembly that the state, 24 through a collaborative effort involving state agencies and 25 affected generation owners, provide for compatible statewide 26 environmental and electric energy policies with respect 27 to regulated emissions from rate-regulated electric power 28 generating facilities in the state that are fueled by coal. 29 Each A rate-regulated public utility that is an owner of one 30 or more electric power generating facilities fueled by coal 31 and located in this state on July 1, 2001, shall develop a 32 multiyear plan and budget may, in its sole discretion, file for 33 advanced review of projects for managing regulated emissions 34 from its facilities in a cost-effective manner. 35 -12- LSB 5362SV (4) 87 gh/rn 12/ 28

S.F. 2311 (1) The initial multiyear plan and budget shall be filed 1 with the board by April 1, 2002. Updates to the plan and budget 2 shall be filed at least every twenty-four months. 3 (2) Copies of the initial plan and budget, as well as 4 any subsequent updates, shall be served on the department of 5 natural resources. 6 (3) The initial multiyear plan and budget and any subsequent 7 updates shall be considered in a contested case proceeding 8 pursuant to chapter 17A . The department of natural resources 9 and the consumer advocate shall participate as parties to the 10 proceeding. 11 b. A rate-regulated public utility shall file an application 12 for advanced review of a project at least one hundred twenty 13 days before the anticipated start of construction. Where an 14 electric power generating facility is owned by two or more 15 rate-regulated public utilities, the operator of the electric 16 power generating facility may file the application on behalf of 17 the rate-regulated public utilities. 18 (4) c. The department of natural resources shall state 19 whether the plan or update project meets applicable state or 20 federal environmental requirements for regulated emissions , 21 including requirements related to air, water, or solid waste . 22 If the plan project does not meet these requirements, the 23 department shall recommend amendments that outline actions 24 necessary to bring the plan or update project into compliance 25 with the environmental requirements. 26 b. d. The board shall not approve a plan or update project 27 that does not meet applicable state or federal environmental 28 requirements and federal ambient air quality standards for 29 regulated emissions from electric power generating facilities 30 located in the state. 31 c. e. The board shall review the plan or update project 32 and the associated budget, and shall approve the plan or update 33 project and the associated budget if the plan or update project 34 and the associated budget are reasonably expected to achieve 35 -13- LSB 5362SV (4) 87 gh/rn 13/ 28

S.F. 2311 cost-effective compliance with applicable state or federal 1 environmental requirements and federal ambient air quality 2 standards . In reaching its decision, the board shall consider 3 whether the plan or update project and the associated budget 4 reasonably balance costs, environmental requirements, economic 5 development potential, and the reliability of the electric 6 generation and transmission system. 7 d. f. The board shall issue an order approving or rejecting 8 a plan, update, or budget project within one hundred eighty 9 ninety days after the public utility’s a filing is deemed 10 complete; however, upon good cause shown, the board may 11 extend the time for issuing the order as follows: for approval 12 pursuant to this subsection. 13 (1) The board may grant an extension of thirty days. 14 (2) The board may grant more than one extension, but each 15 extension must rely upon a separate showing of good cause. 16 (3) A subsequent extension must not be granted any earlier 17 than five days prior to the expiration of the original 18 one-hundred-eighty-day period, or the current extension. 19 e. g. The reasonable costs incurred by a rate-regulated 20 public utility in preparing and filing the plan, update, or 21 budget project and in participating in the proceedings before 22 the board and the reasonable costs associated with implementing 23 the plan, update, or budget project shall be included in its 24 regulated retail rates. 25 f. It is the intent of the general assembly that the board, 26 in an environmental plan, update, or associated budget filed 27 under this section by a rate-regulated public utility, may 28 limit investments or expenditures that are proposed to be 29 undertaken prior to the time that the environmental benefit to 30 be produced by the investment or expenditure would be required 31 by state or federal law. 32 Sec. 15. Section 476.6, Code 2018, is amended by adding the 33 following new subsections: 34 NEW SUBSECTION . 22. Voluntary rates and tariff filings. 35 -14- LSB 5362SV (4) 87 gh/rn 14/ 28

S.F. 2311 a. A rate-regulated public utility may file at any time for 1 expedited approval of a new tariff or rate that is optional for 2 customers and all costs associated with the tariff or rate are 3 borne by customers who elect to participate in the new tariff 4 or rate. 5 b. A tariff or rate approved under this subsection may not 6 change any existing rates or charges. 7 c. The board shall review the tariff or rate filing within 8 sixty days of filing. If the board fails to review the tariff 9 or rate filing within sixty days of filing, the tariff or 10 rate filing shall be deemed approved. The board shall not be 11 required to hold a hearing to review a tariff or rate filing 12 made pursuant to this subsection. 13 NEW SUBSECTION . 23. Preapproval of cost recovery for natural 14 gas extensions —— rules. The board may adopt rules which 15 provide for a preapproval process for cost recovery for natural 16 gas extensions. 17 Sec. 16. Section 476.20, subsection 5, paragraph a, 18 unnumbered paragraph 1, Code 2018, is amended to read as 19 follows: 20 The board shall establish rules which shall be uniform with 21 respect to all public utilities furnishing gas or electricity 22 relating to deposits which may be required by the public 23 utility for the initiation or reinstatement of service. This 24 subsection shall not apply to municipally owned utilities, 25 which shall be governed by the provisions of section 384.84 26 with respect to deposits and payment plans for delinquent 27 amounts owed. Municipally owned utilities and electric 28 utilities that are not required to be rate-regulated shall not 29 be subject to the board’s rules in regards to deposits and 30 payment plans for delinquent amounts owed and repayment of past 31 due debt. Municipally owned utilities and electric utilities 32 that are not required to be rate-regulated shall be subject to 33 the board’s rules in regards to payment plans made prior to the 34 disconnection of services. 35 -15- LSB 5362SV (4) 87 gh/rn 15/ 28

S.F. 2311 Sec. 17. Section 476.21, Code 2018, is amended to read as 1 follows: 2 476.21 Discrimination prohibited. 3 A municipality, corporation or cooperative association 4 providing electrical or gas service shall not consider the 5 use of renewable energy sources by a customer as a basis for 6 establishing discriminatory rates or charges for any service 7 or commodity sold to the customer or discontinue services or 8 subject the customer to any other prejudice or disadvantage 9 based on the customer’s use or intended use of renewable energy 10 sources. As used in this section , “renewable energy sources” 11 includes but is not limited to solar heating, wind power 12 and the conversion of urban and agricultural organic wastes 13 into methane gas and liquid fuels. This section shall not 14 prohibit the establishment of rates or charges for customers 15 that are different than the rates or charges for customers who 16 obtain all of their energy requirements from the municipality, 17 corporation, or cooperative association, provided that the 18 difference in rates or charges is based on the difference in 19 cost of service and anticipated energy use. 20 Sec. 18. NEW SECTION . 476.26A Right to construct, own, and 21 maintain electric transmission lines. 22 1. As used in this section, unless the context otherwise 23 requires: 24 a. “Electric transmission line” means a high-voltage 25 electric transmission line with a capacity of one hundred 26 kilovolts or more and any associated electric transmission 27 facilities. 28 b. “Electric transmission owner” means an individual or 29 entity who, as of the effective date of this Act, owns and 30 maintains an electric transmission facility including electric 31 transmission lines, wires, or cables that are capable of 32 operating at an electric voltage of one hundred kilovolts or 33 more that are required for rate-regulated electric utilities, 34 municipal electric utilities, and rural electric cooperatives 35 -16- LSB 5362SV (4) 87 gh/rn 16/ 28

S.F. 2311 in this state to provide electric service to the public for 1 compensation. 2 c. “Incumbent electric transmission owner” means any of the 3 following: 4 (1) A public utility or a municipally owned utility that 5 owns, operates, and maintains an electric transmission line in 6 this state. 7 (2) An electric cooperative corporation or association or 8 municipally owned utility that owns an electric transmission 9 facility in this state and has turned over the functional 10 control of such facility to a federally approved authority. 11 (3) An “electric transmission owner” as defined in paragraph 12 “b” . 13 d. “Municipally owned utility” means a “city utility” as 14 defined in section 362.2, or an “electric power agency” as 15 defined in section 390.9 which is comprised solely of cities or 16 solely of cities and other political subdivisions. 17 2. An incumbent electric transmission owner may construct, 18 own, and maintain an electric transmission line that has 19 been approved for construction in a federally registered 20 planning authority transmission plan and which connects to an 21 electric transmission facility owned by the incumbent electric 22 transmission owner. Where an electric transmission line 23 connects to electric transmission facilities owned by two or 24 more incumbent electric transmission owners, each incumbent 25 electric transmission owner whose facilities connect to the 26 electric transmission line may construct, own, and maintain the 27 electric transmission line individually and equally. If an 28 incumbent electric transmission owner declines to construct, 29 own, and maintain its portion of an electric transmission line 30 that connects to electric transmission facilities owned by 31 two or more incumbent electric transmission owners, then the 32 other incumbent electric transmission owner or owners that own 33 the electric transmission facilities to which the electric 34 transmission line connects may construct, own, and maintain the 35 -17- LSB 5362SV (4) 87 gh/rn 17/ 28

S.F. 2311 electric transmission line individually and equally. 1 3. This section shall not modify the authority of the board 2 under chapter 478 or the requirements, rights, and obligations 3 relating to the construction, maintenance, and operation of 4 electric transmission lines pursuant to chapter 478. 5 Sec. 19. Section 476.33, subsection 4, Code 2018, is amended 6 to read as follows: 7 4. The board shall adopt rules that require the board, in 8 rate regulatory proceedings under sections 476.3 and 476.6 , to 9 utilize either a historic test year or a future test year at 10 the rate-regulated public utility’s discretion. 11 a. For a rate regulatory proceeding utilizing a historic 12 test year, the rules shall require the board to consider the 13 use of the most current test period possible in determining 14 reasonable and just rates, subject only to the availability of 15 existing and verifiable data respecting costs and revenues, and 16 in addition, to consider verifiable data that exists within 17 nine months after the conclusion of the test year, respecting 18 known and measurable changes in costs not associated with a 19 different level of revenue, and known and measurable revenues 20 not associated with a different level of costs, that are to 21 occur at any time within twelve months after the date of 22 commencement of the proceedings. Parties proposing adjustments 23 that are not verifiable at the commencement of the proceedings 24 shall include projected data related to the adjustments in 25 their initial substantive filing with the board. For purposes 26 of this subsection paragraph , a proceeding commences under 27 section 476.6 upon the filing date of new or changed rates, 28 charges, schedules, or regulations. This subsection does not 29 limit the authority of the board to consider other evidence in 30 proceedings under sections 476.3 and 476.6 . 31 b. For a rate regulatory proceeding utilizing a future test 32 year, the rules shall require the board to consider the use 33 of any twelve-month period beginning no later than the date 34 on which a proposed rate change is expected to take effect in 35 -18- LSB 5362SV (4) 87 gh/rn 18/ 28