S.F. _____ Section 1. Section 476.6, Code 2023, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 22. Innovative utility programs. 3 a. It is the intent of the general assembly to encourage 4 public utilities to pursue innovation in pricing and programs 5 to meet the dynamic needs of current and prospective customers, 6 enable price-responsive solutions, and to provide economic, 7 environmental, employment, and other benefits to the state. 8 It is also the intent of the general assembly that these 9 new endeavors shall not negatively impact nonparticipating 10 customers. Therefore, the general assembly declares that 11 innovative utility programs are essential to further the 12 attraction and retention of customers to benefit the state’s 13 economy and to support economical and sustainable energy 14 production. 15 b. (1) A tariff authorized under this subsection shall 16 comply with all of the following conditions: 17 (a) A program created under the tariff shall be available to 18 interested energy customers and customer participation shall 19 be optional. 20 (b) A tariff shall define the eligible customer groups. 21 (c) Costs of the program shall be borne by participating 22 customers, including program-specific facilities and 23 administrative or overhead costs. 24 (d) An eligible customer group shall not exclude directly 25 competing customers in the same customer service territory. 26 For purposes of this subparagraph, “directly competing 27 customers” means customers that make the same end product or 28 offer the same service for the same general group of customers, 29 and excludes customers that only produce component parts of the 30 same end product. 31 (e) A tariff shall not alter the existing base rates or 32 charges of the public utility. Refund, credit, or waiver of 33 existing base rates or charges offered as part of the program 34 shall not be considered an alteration of existing base rates 35 -1- LSB 1811XC (5) 90 es/rn 1/ 6

S.F. _____ or charges. 1 (f) The program created under the tariff shall not 2 negatively impact nonparticipating customers. 3 (2) A tariff authorized under this subsection may include 4 any of the following: 5 (a) Recovery of costs associated with program-specific 6 services or facilities, including but not limited to energy 7 storage, renewable hydrogen, transmission, electric generating 8 facilities, electric distribution facilities, renewable natural 9 gas generation facilities, renewable natural gas distribution 10 facilities, utility-assisted hourly prices, or liquefied 11 natural gas facilities. 12 (b) A just and reasonable rate of return applicable to 13 the program for its duration for new facilities, existing 14 facilities, or services provided by the public utility that are 15 serving the program created under the tariff. In the absence 16 of a program-specific rate of return, the rate of return 17 approved in a public utility’s most recent general rate case 18 proceeding shall be presumed to be just and reasonable for the 19 purpose of this subparagraph. 20 (c) Application of the program to readily identifiable 21 customer usage patterns, customer characteristics, or output 22 of specified facilities. 23 (d) Assignment of program benefits, including nonmonetary 24 benefits which may derive from dynamically balancing supply 25 and demand, providing ancillary services, or the production of 26 renewable energy attributes. 27 (e) When the program created under the tariff replaces 28 a service for which the public utility collects an existing 29 base rate or charge, a tariff may refund, credit, or waive the 30 base rate or charge for the replaced service. A participating 31 customer shall pay the costs of remaining services received 32 from the public utility unless those costs are refunded, 33 credited, or waived under the program created by the tariff. 34 (f) When the program created under the tariff is designed 35 -2- LSB 1811XC (5) 90 es/rn 2/ 6

S.F. _____ to recover costs associated with existing facilities, such 1 recovery would require reconciliation of the impact to 2 nonparticipating customers. Existing facilities subject to 3 advance ratemaking principles established pursuant to section 4 476.53 are ineligible for program inclusion. 5 (g) If the program or its eligible customer group 6 cease to exist and the public utility seeks the recovery 7 of the program-specific facilities through a general rate 8 case proceeding, the public utility shall demonstrate the 9 reasonableness and prudence without any presumption regarding 10 approval of such request. A public utility shall not be 11 prohibited from recovering the costs of program-specific 12 facilities through an alternative regulatory mechanism. 13 c. A public utility’s participation under this subsection 14 is not mandatory. A public utility that elects to propose a 15 tariff or tariff amendment under this subsection shall file an 16 application for approval with the board. The application shall 17 include an identification of costs and benefits related to the 18 program for the board’s review of the conditions specified in 19 paragraph “b” , subparagraph (1). 20 d. Within thirty days, the board shall approve, deny, 21 or docket for further review an application for a tariff or 22 amended tariff submitted pursuant to this subsection. If 23 the application is docketed for further review, the board 24 shall render a decision within ninety days from the date of 25 application filing unless an objection has been filed with 26 the board. If the application proposes to amend a tariff 27 previously approved under this subsection, the board shall not 28 reconsider existing programs previously approved under the 29 tariff unless proposed as part of the amendment. All further 30 review shall be conducted as a contested case pursuant to 31 chapter 17A. 32 e. In the exercise of its authority under this subsection, 33 the board shall not do any of the following: 34 (1) Limit the number of applications a public utility may 35 -3- LSB 1811XC (5) 90 es/rn 3/ 6

S.F. _____ file. 1 (2) Deny or condition the approval of a tariff because 2 a public utility is subject to an alternative regulatory 3 mechanism. 4 (3) Require a public utility subject to an alternative 5 regulatory mechanism to record the revenues and costs 6 associated with the program in an inconsistent manner with 7 the federal energy regulatory commission’s uniform system of 8 accounts, 18 C.F.R. pt. 101. 9 (4) Condition its approval on the public utility changing 10 its proposal if the public utility has not agreed to such 11 changes. This subparagraph shall not be interpreted to prevent 12 the board from identifying changes to the proposal which might 13 result in approval. 14 f. Tariffs and programs approved pursuant to this subsection 15 shall be presumed just and reasonable in any subsequent general 16 rate case proceeding. 17 g. The board shall not condition approval or denial of a 18 tariff on final adoption of rules by the board. 19 h. The board shall adopt rules pursuant to chapter 17A to 20 implement this subsection. 21 Sec. 2. APPLICABILITY. This Act applies to a public utility 22 filing an application with the utilities board for review of a 23 tariff on or after the effective date of this Act. 24 EXPLANATION 25 The inclusion of this explanation does not constitute agreement with 26 the explanation’s substance by the members of the general assembly. 27 This bill creates a tariff program relating to innovative 28 utility programs. 29 The bill provides that it is the intent of the general 30 assembly to encourage public utility innovation in pricing 31 and programs, and that the new innovations not negatively 32 impact nonparticipating customers. The bill additionally 33 provides that it is the intent of the general assembly to 34 attract and retain customers for the benefit of the state’s 35 -4- LSB 1811XC (5) 90 es/rn 4/ 6

S.F. _____ economy, support of economical energy production, and support 1 of sustainable energy production. 2 The bill authorizes a tariff program. The bill provides 3 that a tariff shall comply with several provisions. The 4 tariff shall be optional for customers, define eligible 5 customer groups, and assess program costs to participating 6 customers. The tariff shall not allow for an eligible 7 customer group excluding directly competing customers in 8 the same customer service territory, alter existing base 9 rate or charges of the public utility, or negatively impact 10 nonparticipating customers. A tariff may include provisions 11 relating to recovery of costs, rate of return, application of 12 the program to other specified patterns, program benefits, 13 and refunds, credits, or waivers where the program replaces 14 an existing service, or recovery of costs associated with 15 existing facilities. A participating program customer shall 16 pay the costs of the services received from the public utility 17 unless the costs are refunded, credited, or waived under the 18 program. The bill provides that if the program or eligible 19 customer group cease to exist and the public utility seeks 20 recovery of the program-specific facilities through a general 21 rate case proceeding, the public utility shall demonstrate the 22 reasonableness and prudence without any presumption regarding 23 approval of such request. A public utility shall be allowed 24 to recover program-specific facilities though alternative 25 regulatory mechanisms. 26 The bill provides for tariff application and approval. A 27 public utility’s authority is not mandatory regarding tariffs. 28 The bill provides that an application for a tariff or amendment 29 to a tariff shall be filed with the Iowa utilities board 30 (board). The board shall approve, deny, or docket for further 31 review an application within 30 days. If the board dockets 32 the application for further review, the board shall render a 33 decision within 90 days from the date of application filing, 34 unless an objection is filed. The board shall not reconsider 35 -5- LSB 1811XC (5) 90 es/rn 5/ 6

S.F. _____ existing programs previously approved under the tariff during a 1 review of an application for an amendment to a tariff unless 2 the review of a program is proposed as part of the amendment. 3 The bill prohibits the board from certain actions. The 4 bill provides that the board shall not limit the number of 5 applications a public utility may file, deny or condition the 6 approval of a tariff because a public utility is subject to 7 an alternative regulatory mechanism, require a public utility 8 subject to an alternative regulatory mechanism to record 9 revenues and costs in an inconsistent manner with specified 10 federal standards, or condition approval of a tariff on the 11 requirement that the public utility change the proposal to 12 unagreed-upon terms. 13 The bill provides that tariffs and programs approved 14 pursuant to the bill shall be presumed to be just and 15 reasonable in general rate case proceedings. The bill 16 prohibits the board from conditioning approval or denial of a 17 tariff on the final adoption of rules and requires the board to 18 adopt rules related to the bill. 19 The bill applies to a public utility filing an application 20 with the board for review of a tariff on or after the effective 21 date of the bill. 22 -6- LSB 1811XC (5) 90 es/rn 6/ 6