Senate Study Bill 1149 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON BROWN) A BILL FOR An Act relating to electric power generation, energy storage, 1 and transmission facility ratemaking principles, and 2 including applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1740XC (4) 90 es/rn

S.F. _____ Section 1. Section 476.53, subsection 1, Code 2023, is 1 amended to read as follows: 2 1. It is the intent of the general assembly to attract 3 the development of electric power generating , energy storage, 4 and transmission facilities within the state in sufficient 5 quantity to ensure reliable electric service to Iowa consumers 6 and provide economic benefits to the state. It is also the 7 intent of the general assembly to encourage rate-regulated 8 public utilities to consider altering existing electric 9 generating facilities, where reasonable, to manage carbon 10 emission intensity in order to facilitate the transition to a 11 carbon-constrained environment. 12 Sec. 2. Section 476.53, subsection 3, paragraph a, Code 13 2023, is amended to read as follows: 14 a. The board shall specify in advance, by order issued 15 after a contested case proceeding, the ratemaking principles 16 that will apply when the costs of the electric power generating 17 facility or alternate energy production facility , or energy 18 storage facility, are included in regulated electric rates 19 whenever a . A rate-regulated public utility does may seek 20 ratemaking principles for any of the following: 21 (1) (a) Files an application pursuant to section 476A.3 22 to construct The costs of developing, engineering, and 23 constructing in Iowa a baseload an electric power generating 24 facility , with a nameplate generating capacity equal to or 25 greater than three hundred megawatts or a combined-cycle 26 electric power generating facility, or an alternate energy 27 production facility as defined in section 476.42 , an energy 28 storage facility, or to significantly alter an existing 29 electric power generating facility or energy storage facility . 30 For purposes of this subparagraph, a significant alteration 31 of an existing generating facility or energy storage facility 32 must, in order to qualify for establishment of ratemaking 33 principles, fall into one of the following categories: 34 (i) Conversion of a coal fueled an electric power generating 35 -1- LSB 1740XC (4) 90 es/rn 1/ 5

S.F. _____ facility into a gas fueled to a different fuel type for the 1 electric power generating facility. 2 (ii) Addition of carbon capture and storage facilities at a 3 coal fueled to an already existing electric power generating 4 facility. 5 (iii) Addition of gas fueled capability to a coal fueled 6 facility, in order to convert the facility to one that will 7 rely primarily on gas for future generation a different fuel 8 type to an already existing electric power generating facility . 9 (iv) Addition of a biomass fueled capability to a coal 10 fueled facility. 11 (v) (iv) Repowering of an alternate energy production 12 facility. For purposes of this subparagraph subdivision, 13 “repowering” shall mean either the complete dismantling and 14 replacement of generation equipment at an existing project 15 site, or the installation of new parts and equipment to an 16 existing alternate energy production facility in order to 17 increase energy production, reduce load, increase service 18 capacity, improve project reliability, or extend the useful 19 life of the facility. 20 (v) Addition of energy storage at an already existing 21 electric power generating facility or energy storage facility. 22 (b) With respect to a significant alteration of an existing 23 generating facility, an original facility shall not be required 24 to be either a baseload or a combined-cycle facility. Only 25 only the incremental investment undertaken by a utility 26 under subparagraph division (a), subparagraph subdivision 27 (i), (ii), or (iii) , or (iv) shall be eligible to apply the 28 ratemaking principles established by the order issued pursuant 29 to paragraph “e” . Facilities for which advanced ratemaking 30 principles are obtained pursuant to this section shall not 31 be subject to a subsequent board review pursuant to section 32 476.6, subsection 19 , to the extent that the investment has 33 been considered by the board under this section . To the 34 extent an eligible utility has been authorized to make capital 35 -2- LSB 1740XC (4) 90 es/rn 2/ 5

S.F. _____ investments subject to section 476.6, subsection 19 , such 1 investments shall not be eligible for ratemaking principles 2 pursuant to this section . 3 (2) Leases or owns in Iowa, in whole or in part, a new 4 baseload electric power generating facility with a nameplate 5 generating capacity equal to or greater than three hundred 6 megawatts or a combined-cycle electric power generating , energy 7 storage facility, or a new alternate energy production facility 8 as defined in section 476.42 . 9 Sec. 3. APPLICABILITY. This Act applies to an application 10 for new or changed rates, charges, schedules, or regulations 11 filed by a public utility on or after the effective date of the 12 Act. 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 electric power generation, energy 17 storage, and transmission facility ratemaking principles. 18 The bill modifies intent language to reflect an intent to 19 attract energy storage for consumers in the state. 20 The bill alters ratemaking principle processes and modifies 21 when a rate-regulated public utility may seek a ratemaking 22 principle. The bill provides that in addition to electric 23 power generating facilities and alternate energy production 24 facilities, the board shall specify the ratemaking principles 25 applying to an energy storage facility. 26 The bill provides that a rate-regulated public utility may 27 seek ratemaking principles from the utilities board where 28 there are construction-related costs of an electric power 29 generating facility, an alternate energy production facility, 30 an energy storage facility, or significant alterations to an 31 existing electric power generating facility or energy storage. 32 Current law provides that when a rate-regulated public utility 33 files an application to construct a baseload electric power 34 generating facility with a nameplate generating capacity equal 35 -3- LSB 1740XC (4) 90 es/rn 3/ 5

S.F. _____ to or greater than 300 megawatts or a combined-cycle electric 1 power generating facility or an alternative energy production 2 facility, or to significantly alter an existing generating 3 facility or a new alternate energy production facility, the 4 utility may seek ratemaking principles. 5 The bill modifies the requirements for a significant 6 alteration of an existing generating facility to qualify for 7 the establishment of ratemaking principles. The bill provides 8 that to qualify for ratemaking principles, the significant 9 alteration can convert an electric power generating facility 10 to a different fuel type, add carbon capture and carbon 11 storage to an electric power generating facility, add a fuel 12 type to an electric power generating facility, repower an 13 alternate energy production facility, or add energy storage 14 to an already existing electric power generating facility or 15 energy storage facility. Current law provides that to qualify 16 for ratemaking principles, the significant alteration can 17 convert a coal-fueled facility into a gas-fueled facility, add 18 carbon capture and carbon storage to a coal-fueled facility, 19 add gas-fueled capability to a coal-fueled facility, add a 20 biomass-fueled capability to a coal-fueled facility, or repower 21 an alternate energy production facility. 22 The bill provides that a utility investment to convert an 23 electric power generating facility to a different fuel type, 24 add carbon capture and carbon storage to an electric power 25 generating facility, or add a fuel type to an electric power 26 generating facility shall be eligible to apply the ratemaking 27 principles established by an order issued prior to construction 28 or lease of a facility. 29 The bill provides that a rate-regulated public utility may 30 seek ratemaking principles for leasing or owning a new electric 31 power generating facility, energy storage facility, or a new 32 alternate energy production facility. Current law provides 33 that a rate-regulated public utility leasing or owning a new 34 baseload electric power generating facility with a nameplate 35 -4- LSB 1740XC (4) 90 es/rn 4/ 5

S.F. _____ generating capacity equal to or greater than 300 megawatts 1 or a combined-cycle electric power generating facility, or a 2 new alternate energy production facility may seek ratemaking 3 principles. 4 The bill applies to an application for new or changed rates, 5 charges, schedules, or regulations filed by a public utility on 6 or after the effective date of the bill. 7 -5- LSB 1740XC (4) 90 es/rn 5/ 5