Senate Study Bill 1059 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON BROWN) A BILL FOR An Act relating to plan, update, and budget review of 1 rate-regulated electric utilities, and including effective 2 date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1439XC (4) 90 es/rn

S.F. _____ Section 1. Section 476.6, subsection 16, Code 2023, is 1 amended to read as follows: 2 16. Filing of forecasts. The board shall periodically 3 require each rate-regulated gas or electric public utility 4 to file a forecast of future gas requirements or electric 5 generating needs and the board shall evaluate the forecast. 6 The forecast shall include but is not limited to a forecast of 7 the requirements of its customers, its anticipated sources of 8 supply, and its anticipated means of addressing the forecasted 9 gas requirements or electric generating needs . 10 Sec. 2. Section 476.6, subsection 19, Code 2023, is amended 11 to read as follows: 12 19. Electric power generating facility emissions Biannual 13 resource planning . 14 a. It is the intent of the general assembly that the state, 15 through a collaborative effort involving state agencies and 16 affected generation owners, provide for compatible statewide 17 environmental and electric energy policies with respect 18 to regulated emissions from rate-regulated electric power 19 generating facilities in the state that are fueled by coal. 20 Each rate-regulated public utility that is an owner of one or 21 more electric power generating facilities fueled by coal and 22 located in this state on July 1, 2001, owns or operates an 23 electric power generating facility shall develop a multiyear 24 plan and budget for managing regulated emissions from its 25 facilities in a cost-effective manner the area served by the 26 utility that provides reliable, secure, and low-emission 27 electricity at the lowest cost . 28 b. The plan and budget shall include a minimum of all of the 29 following: 30 (1) The future projected electricity requirements of the 31 area. 32 (2) The projected electricity resources mix, capacity, and 33 infrastructure needed to meet the projected requirements. 34 (3) The future potential demand response capabilities of 35 -1- LSB 1439XC (4) 90 es/rn 1/ 6

S.F. _____ the area. 1 (4) The future nonutility energy resources in the area, 2 including both generation and storage. 3 (5) Planning to efficiently leverage demand response 4 and nonutility energy resources to reduce costs and increase 5 reliability. 6 (6) Alternate planning scenarios for meeting the projected 7 electricity requirements. 8 (7) Additional information that the board deems necessary 9 pursuant to this section. 10 c. (1) The initial multiyear plan and budget shall be filed 11 with the board by April 1, 2002 2024 . Updates to the plan and 12 budget shall be filed at least every twenty-four months. 13 (2) Copies of the initial plan and budget, as well as 14 any subsequent updates, shall be served on the department of 15 natural resources. 16 (3) The initial multiyear plan and budget and any 17 subsequent updates shall be considered in a contested case 18 proceeding pursuant to chapter 17A . Subsequent updates shall 19 be considered in a contested case proceeding every twenty-four 20 months, unless the board determines a contested case is 21 necessary for an earlier update. The department of natural 22 resources and the consumer advocate shall participate as 23 parties to the a contested case proceeding. 24 (4) The department of natural resources shall state whether 25 the plan or update meets applicable state environmental 26 requirements for regulated emissions. If the plan does 27 not meet these requirements, the department shall recommend 28 amendments that outline actions necessary to bring the plan or 29 update into compliance with the environmental requirements. 30 b. The board shall not approve a plan or update that does 31 not meet applicable state environmental requirements and 32 federal ambient air quality standards for regulated emissions 33 from electric power generating facilities located in the state. 34 c. d. The board shall review the plan or update and the 35 -2- LSB 1439XC (4) 90 es/rn 2/ 6

S.F. _____ associated budget, and shall approve the plan or update and 1 the associated budget if the plan or update and the associated 2 budget are reasonably expected to achieve cost-effective 3 compliance with applicable state environmental requirements 4 and federal ambient air quality standards. In reaching its 5 decision, the board shall consider whether determine whether 6 the plan or update and the associated budget reasonably 7 balance balances costs, environmental requirements, economic 8 development potential, and the reliability of the electric 9 generation , distribution, and transmission system. 10 d. e. The board shall issue an order approving or rejecting 11 a plan, update, or budget within one hundred eighty days after 12 the public utility’s filing is deemed complete; however, upon 13 good cause shown, the board may extend the time for issuing the 14 order as follows: 15 (1) The board may grant an extension of thirty days. 16 (2) The board may grant more than one extension, but each 17 extension must rely upon a separate showing of good cause. 18 (3) A subsequent extension must not be granted any earlier 19 than five days prior to the expiration of the original 20 one-hundred-eighty-day period, or the current extension. 21 f. To ensure the utility can timely respond to changes in 22 circumstances, the utility may modify plans by providing notice 23 to the board. The board shall have thirty days to respond by 24 any of the following methods: 25 (1) Indicating no objection to the change. 26 (2) Ordering a contested case. 27 (3) Requesting more information. Upon receiving additional 28 information, the board shall not object to the change or order 29 a contested case proceeding. 30 e. g. The reasonable costs incurred by a rate-regulated 31 public utility in preparing and filing the plan, update, or 32 budget and in participating in the proceedings before the board 33 and the reasonable costs associated with implementing the plan, 34 update, or budget shall be included in its regulated retail 35 -3- LSB 1439XC (4) 90 es/rn 3/ 6

S.F. _____ rates. 1 f. It is the intent of the general assembly that the board, 2 in an environmental plan, update, or associated budget filed 3 under this section by a rate-regulated public utility, may 4 limit investments or expenditures that are proposed to be 5 undertaken prior to the time that the environmental benefit to 6 be produced by the investment or expenditure would be required 7 by state or federal law. 8 h. The board shall adopt rules concerning the plan 9 submission of multiyear plan and budgets pursuant to this 10 section. 11 Sec. 3. EFFECTIVE DATE. This Act, being deemed of immediate 12 importance, takes effect upon enactment. 13 EXPLANATION 14 The inclusion of this explanation does not constitute agreement with 15 the explanation’s substance by the members of the general assembly. 16 This bill relates to plan, update, and budget review of 17 rate-regulated electric utilities by the Iowa utilities board. 18 The bill removes electric utilities from the filing of 19 forecasts for future electric generating needs. Current law 20 requires electric public utilities to file a forecast with 21 the Iowa utilities board (board) which includes anticipated 22 customer requirements, supply sources, and future electric 23 generating needs. 24 The bill strikes intent language relating to electric 25 energy policies and emissions. The bill modifies the type of 26 rate-regulated public utility that is subject to developing 27 a multiyear plan and budget with the board to include all 28 rate-regulated public utilities owning or operating an electric 29 power generating facility instead of rate-regulated public 30 utilities owned by one or more electric power generating 31 facilities fueled by coal and located in Iowa on July 1, 2001. 32 The bill modifies the content of the multiyear plan and budget 33 from including cost-effective emission management to a plan 34 and budget for the area served by the utility that provides 35 -4- LSB 1439XC (4) 90 es/rn 4/ 6

S.F. _____ reliable, secure, and low-emission electricity at the lowest 1 cost. 2 The bill provides that the plan and budget shall include 3 information relating to electricity requirements for the area, 4 needs for the electricity project, future potential demand 5 capabilities, future nonutility energy resources in the area, 6 efficient planning, alternative planning, and other information 7 the board requires. 8 The bill updates the date for the filing of the initial 9 multiyear plan and budget to be April 1, 2024, and modifies 10 subsequent plan and budget update requirements in a contested 11 case proceeding. The bill provides that every 24 months, 12 subsequent updates shall be considered in a contested case 13 proceeding, except where the board determines an earlier update 14 is necessary. 15 The bill maintains the requirement for the department of 16 natural resources (DNR) to state whether a plan or update meets 17 applicable state or environmental laws and strikes language 18 relating to the DNR to recommend plan adaptations. The bill 19 adds criteria for the board to use in determining whether a 20 plan or update and associated budget balance costs and other 21 considerations. Current law provides that the board shall 22 reject a plan or update that does not meet applicable state 23 environmental requirements or federal standards as determined 24 by the DNR, and that the board shall review and approve the 25 plan, update, and budget if the plan, update, and budget are 26 reasonably expected to achieve cost-effective compliance 27 with applicable state environmental requirements and federal 28 standards. 29 The bill strikes provisions relating to subsequent 30 extensions of timelines for a public utility’s filing of a 31 plan, update, or budget. 32 The bill provides that a utility may modify plans and provide 33 notice to the board. The board shall have 30 days to respond 34 by indicating no objection, ordering a contested case, or 35 -5- LSB 1439XC (4) 90 es/rn 5/ 6

S.F. _____ requesting more information. 1 The bill strikes the intent language providing that the 2 board has ability to limit certain investments or expenditures. 3 The bill provides that the board shall adopt rules 4 concerning plan and budget submission. 5 The bill takes effect upon enactment. 6 -6- LSB 1439XC (4) 90 es/rn 6/ 6