SF 2355 (LSB 5465SV (2) 89)

SENATE FILE 2355

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO SSB 3125)

A BILL FOR

An Act relating to the regulation of specified gas and electric utilities.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 364.3, subsection 13, paragraph b, subparagraph (2), Code 2022, is amended to read as follows:
   (2)  Paragraph “a” does not apply to an ordinance, motion, resolution, or amendment relating to the rates, services, or governance of a municipally owned public utility providing gas service to the public for compensation and subject to the jurisdiction of the utilities board of the department of commerce pursuant to section 476.1B 476.1A.
    Sec. 2.  Section 476.1A, Code 2022, is amended by striking the section and inserting in lieu thereof the following:
   476.1A  Applicability of authority —— certain utilities.
   1.  For purposes of this section, unless the context otherwise requires:
   a.  “Engineering standards” means standards adopted by the American national standards institute, or the institute of electrical and electronics engineers, rural utilities service, or comparable engineering organization or engineering standards adopted by the board.
   b.  “Safety standards” means applicable regulations promulgated by the United States occupational safety and health administration and by Iowa occupational safety and health administration and outage notifications. Safety standards for electric utilities subject to this section also include those contained in the national electric safety code, as published by the institute of electrical and electronic engineers, inc. and approved by the American national standards institute. Safety standards for municipal gas utilities subject to this section include the pipeline safety rules contained in the federal regulations at 49 C.F.R. pts. 191 – 193 and 199.
   2.  Electric public utilities having fewer than ten thousand customers, electric cooperative corporations and associations, and municipally owned utilities furnishing gas or electricity are not subject to the regulation authority of the board, except for regulatory action pertaining to the following:
   a.  Assessment of fees for the support of the division and the office of consumer advocate, pursuant to section 476.10.
   b.  Safety standards.
   c.  Procedures and requirements for disconnection of service, as set forth in section 476.20, subsections 1 through 4.
   d.  Assigned area of service, as set forth in sections 476.22 through 476.26.
   e.  Public utility railroad crossings, as set forth in section 476.27.
   f.  Filing alternate energy purchase program plans with the board, and offering such programs to customers, pursuant to section 476.47.
   g.  Civil penalties pursuant to section 476.51.
   h.  Providing energy cost information pursuant to section 476.56.
   i.  Distributed generation interconnection safety pursuant to section 476.58, subsections 3 and 4.
   j.  Utility-owned exterior flood lighting pursuant to section 476.62.
   k.  Customer contribution funds pursuant to section 476.66.
   l.  Chapters 476A and 478, to the extent applicable.
   3.  Electric public utilities having fewer than ten thousand customers and electric cooperative corporations and associations are also subject to the regulation authority of the board for engineering standards for equipment, operations, and procedures and shall be subject to section 476.21.
   a.  This subsection shall not apply to a municipally owned utility.
   b.  This subsection shall apply to an electric power agency as defined in chapter 28F and section 390.9 that includes as a member a city or municipally owned utility that builds transmission facilities after July 1, 2001, and is subject to applicable transmission reliability rules or standards adopted by the board for those facilities.
   4.  The board may hear complaints regarding the practices, facilities, or services of public utilities subject to this section. Such complaints shall be limited solely to matters directly related to the regulatory actions listed in subsections 2 through 4. After a complaint is submitted to the board or filed by the board upon its own motion, the written complaint shall be forwarded by the board to the public utility. The public utility shall be called upon to satisfy the complaint or to answer it in writing within a reasonable time to be specified by the board.
   a.  Copies of the written complaint forwarded by the board to the public utility and copies of all correspondence from the public utility in response to the complaint shall be provided by the board in an expeditious manner to the consumer advocate.
   (1)  If the board determines the public utility’s response is inadequate and there appears to be reasonable ground for investigating the complaint, the board shall promptly initiate a formal proceeding.
   (2)  If the consumer advocate determines the public utility’s response to the complaint is inadequate, the consumer advocate may file a petition with the board which shall promptly initiate a formal proceeding if the board determines that there is any reasonable ground for investigating the complaint.
   (3)  The complainant or the public utility may petition the board to initiate a formal proceeding and such petition shall be granted if the board determines that there is any reasonable ground for investigating the complaint.
   b.  The formal proceeding may be initiated at any time by the board on its own motion. If a proceeding is initiated upon petition filed by the consumer advocate, complainant, or the public utility, or upon the board’s own motion, the board shall set the case for hearing and give notice as it deems appropriate. When the board, after a hearing held after reasonable notice, finds a public utility’s practices or services over which it exercises regulatory authority pursuant to subsections 2 through 4 are in violation of law, the board shall determine reasonable practices, services, or regulations to be observed and enforced.
   5.  Electric public utilities having fewer than ten thousand customers and electric cooperative corporations and associations under this section shall not make or grant any unreasonable preferences or advantages as to rates or services to any person or subject any person to any unreasonable prejudice or disadvantage. This subsection shall not apply to municipal utilities subject to section 388.6.
   6.  The board of directors or the membership of an electric cooperative otherwise exempt from rate regulation may elect to have the cooperative’s corporation or association rates regulated by the board. The board shall adopt rules prescribing the manner in which the board of directors or the membership of an electric cooperative may so elect.
   a.  If the board of directors or the membership of an electric cooperative has elected to have the cooperative’s rates regulated by the board, after two years have elapsed from the effective date of such election the board of directors or the membership of an electric cooperative may elect to exempt the cooperative from the rate regulation authority of the board.
   b.  If the membership of an electric cooperative elected to have the cooperative’s rates regulated by the board, only the membership may elect to exempt the cooperative from the rate regulation authority of the board.
   7.  A municipal utility providing local exchange services is not subject to regulation by the board under this chapter except for regulatory action pertaining to the enforcement of sections 476.10, 476.95, 476.95A, 476.95B, 476.100, 476.102, and 476.103.
   8.  The Iowa utilities board does not have direct or indirect rate authority over the utilities in this section, unless an electric cooperative has elected rate regulation authority. For purposes of this section, “rate” means the same as defined in section 384.80 and also includes the charges for services provided by utilities subject to this chapter.
    Sec. 3.  Section 476.2, subsection 4, Code 2022, is amended to read as follows:
   4.  The board shall have authority, to the extent reasonably necessary to implement the provisions of this chapter, to inquire into the management of the business of all public utilities that are subject to regulation pursuant to this chapter, and shall keep itself informed as to the manner and method in which the same such business is conducted, and may obtain from any public utility all necessary the information reasonably necessary to enable the board to perform its duties, as provided in this chapter.
    Sec. 4.  Section 476.20, subsection 3, paragraph a, Code 2022, is amended to read as follows:
   a.  The board shall establish adopt rules which shall be uniform with respect to all public utilities furnishing gas or electricity relating to establishing the procedures and requirements for disconnection of service.  The rules adopted by the board shall be uniform with respect to all rate-regulated public utilities furnishing gas or electricity. The rules adopted by the board shall reflect the limited scope of the board’s jurisdiction pursuant to section 476.1A. This subsection applies both to regulated rate-regulated utilities, utilities over which the board’s jurisdiction is limited by section 476.1A, and to municipally owned utilities and unincorporated villages which own their own distribution systems, and violations of this subsection subject the utilities to civil penalties under section 476.51.
    Sec. 5.  Section 476.58, subsections 3 and 4, Code 2022, are amended to read as follows:
   3.  Procedures and requirements provided in rules adopted pursuant to subsection 2 shall apply to all electric utilities and all interconnection customers in this state. However, only those rule provisions concerning interconnections between distributed generation facilities and electric distribution systems and safety issues shall apply to utilities over which the board’s jurisdiction is limited by section 476.1A or 476.1B.
   4.  This section shall not be construed to expand the board’s jurisdiction over a utility over which the board’s jurisdiction is limited by section 476.1A or 476.1B. This section shall not be construed to authorize the board to require that an installation or connection of a distributed generation facility, disconnection device, or interconnection between a distributed generation facility and an electric distribution system be performed by a licensed electrician, installer, or professional engineer. This section shall not be construed to require inspection of a distributed generation facility, disconnection device, or interconnection between a distributed generation facility and an electric distribution system pursuant to chapter 103.
    Sec. 6.  REPEAL.  Section 476.1B, Code 2022, is repealed.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to the regulatory authority of the Iowa utilities board regarding specified gas and electric utilities.
   The bill provides that municipally owned gas or utility companies, electric public utilities having less than 10,000 customers, and electric cooperative corporations and associations shall not be subject to the regulation authority of the board except for the assessment of fees for the support of the office of consumer advocate, safety standards, assigned areas of service, public utility railroad crossings, procedures for the disconnection of service, alternative energy program plans filed with the board, specified civil penalties, energy cost information, distributed generation interconnection safety, utility-owned exterior flood lighting, customer contribution funds, and electric power generation and transmission under Code chapter 476A and electric transmission lines under Code chapter 478.
   The bill provides that electric public utilities with less than 10,000 customers and electric cooperative corporations and associations, and certain electric power agencies are subject to board regulation for engineering standards and are prohibited from discriminatory rates or charges under Code section 476.21. This provision is inapplicable to municipal utilities.
   The bill provides that an electric cooperative not subject to rate regulation may elect to have their rates regulated by the board. After two years, rate regulation may be reconsidered. If the membership of the electric cooperative chooses to have the rates regulated, only the membership may elect to be exempt from regulation.
   The bill provides that a municipal utility providing local exchange services is not subject to regulation by the board except for regulatory action pertaining to Code sections 476.10, 476.95, 476.95A, 476.95B, 476.100, 476.102, and 476.103.
   The bill provides that electric public utilities with less than 10,000 customers and electric cooperative corporations and associations shall not make or grant any unreasonable preferences or advantages as to rates or services to any person or subject any person to any unreasonable prejudice or disadvantage. The bill provides that this bill does not apply to municipal utilities subject to the prohibition relating to discrimination in rates specified in Code section 388.6.
   The bill establishes a written complaint and response process. Both the board and the division of the office of the consumer advocate may determine if the utility’s response is inadequate and initiate further action. The bill establishes practices and procedures for a formal action filed by complainants.
   The bill provides that the board shall adopt rules establishing procedures and requirements for public utilities supplying gas or electricity and to utilities over which the board’s jurisdiction is limited by the bill relating to the disconnection of service. These rules must be uniform for all rate-regulated public utilities.