H.F. 2261 Section 1. Section 476.6, Code 2026, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 22. Large energy use facilities. 3 a. For purposes of this subsection: 4 (1) “Costs of serving” includes, as applicable, the costs 5 incurred by an electric utility or water utility in providing 6 electric transmission, distribution, energy, water service, 7 capacity, or ancillary electricity or water services, and any 8 related costs or associated risks with serving a customer class 9 or customer. 10 (2) “Large energy use facility” means a facility that uses 11 or is able to use twenty megawatts or more and is primarily 12 engaged in providing a service as described under code number 13 518210 of the North American industry classification system. 14 (3) “Water utility” means a public utility that furnishes 15 water by piped distribution system to the public for 16 compensation. 17 b. (1) The commission shall create a customer class 18 for each customer that is a large energy use facility. The 19 customer class must be separate and distinct from customer 20 classes for other customers and have its own rates, charges, 21 and schedules. Any rate, charge, or schedule approved by 22 the commission for the class must meet all of the following 23 requirements: 24 (a) Directly assign the costs of serving to the customer. 25 (b) Mitigate the risk of other customer classes paying 26 unwarranted costs. 27 (c) Mitigate the risk of shifting, in an unwarranted manner, 28 the costs of serving a customer that is a large energy use 29 facility to other customer classes, including costs incurred by 30 an electric utility or water utility to meet load requirements 31 resulting from the provision of electricity service or water 32 service to a customer that is a large energy use facility. 33 (2) In deciding whether to approve a proposed rate, charge, 34 or schedule of an electric utility or water utility for a 35 -1- LSB 5759YH (5) 91 sb/js 1/ 6

H.F. 2261 customer class described under this subsection, the commission 1 shall consider whether the rate, charge, or schedule may do any 2 of the following: 3 (a) Result in, or have the potential to result in, increased 4 costs or unwarranted risk to other customers. 5 (b) Provide for equitable contributions to grid efficiency, 6 distribution efficiency, reliability, and resiliency benefits. 7 (c) Meet any other conditions the commission may require in 8 the public interest. 9 (3) An electric utility or water utility and a customer 10 that is a large energy use facility are not required to 11 use a classification of service provided for under this 12 subsection if the commission has not approved for the electric 13 utility or water utility a rate, charge, or schedule for that 14 classification of service. 15 c. (1) Notwithstanding section 476.1, subsection 3, this 16 paragraph shall apply to all municipally owned waterworks, 17 waterworks having less than two thousand customers, joint water 18 utilities established pursuant to chapter 389, rural water 19 districts incorporated and organized pursuant to chapters 357A 20 and 504, and cooperative water associations incorporated and 21 organized pursuant to chapter 499 that provide service to a 22 large energy use facility. This paragraph shall not apply to 23 water utilities subject to paragraph “b” . 24 (2) Any water utility providing service to a large energy 25 use facility shall create a customer class for each customer 26 that is a large energy use facility. The customer class must 27 be separate and distinct from customer classes for other 28 customers and have its own rates, charges, and schedules. 29 Any rate, charge, or schedule must meet all the following 30 requirements: 31 (a) Directly assign the costs of serving to the customer. 32 (b) Mitigate the risk of other customer classes paying 33 unwarranted costs. 34 (c) Mitigate the risk of shifting, in an unwarranted manner, 35 -2- LSB 5759YH (5) 91 sb/js 2/ 6

H.F. 2261 the costs of serving a customer that is a large energy use 1 facility to other customer classes, including costs incurred by 2 a water utility to meet load requirements resulting from the 3 provision of water service to a customer that is a large energy 4 use facility. 5 (3) In calculating a rate, charge, or schedule of a water 6 utility for a customer class described under this subsection, 7 the water utility shall consider whether the rate, charge, or 8 schedule may do any of the following: 9 (a) Result in, or have the potential to result in, increased 10 costs or unwarranted risk to other customers. 11 (b) Provide for equitable contributions to distribution 12 efficiency, reliability, and resiliency benefits. 13 (c) Meet any other conditions the commission may require in 14 the public interest. 15 (4) (a) Upon request by the commission, a water utility 16 that provides service to a large energy use facility shall 17 submit documentation to the commission within thirty days of 18 the request that demonstrates compliance with this section. 19 (b) If a water utility does not submit documentation as 20 required by subparagraph (1), the water utility shall be 21 subject to a civil penalty, as determined by the commission. 22 Sec. 2. APPLICABILITY. This Act applies to electric utility 23 services and water utility services provided to large energy 24 use facilities constructed or expanded on or after January 1, 25 2027. 26 EXPLANATION 27 The inclusion of this explanation does not constitute agreement with 28 the explanation’s substance by the members of the general assembly. 29 This bill relates to customer classes for large energy use 30 facilities. 31 The bill defines “costs of serving” to include, as 32 applicable, the costs incurred by an electric utility or water 33 utility in providing electric transmission, distribution, 34 energy, water service, capacity, or ancillary electricity or 35 -3- LSB 5759YH (5) 91 sb/js 3/ 6

H.F. 2261 water services, and any related costs or associated risks with 1 serving a customer class or customer. The bill defines “large 2 energy use facility” as a facility that uses or is able to use 3 20 megawatts or more and that is primarily engaged in providing 4 a service described under code number 518210 of the North 5 American industry classification system. 6 RATE-REGULATED UTILITIES. The bill requires the utilities 7 commission (commission) to create a customer class for each 8 customer that is a large energy use facility. The customer 9 class must be separate and distinct from customer classes 10 for other customers and must have its own rates, charges, 11 and schedules. The bill provides that any rate, charge, or 12 schedule approved by the commission for a large energy use 13 facility customer must directly assign the costs of serving the 14 customer, mitigate the risk of other customer classes paying 15 unwarranted costs, and mitigate the risk of shifting, in an 16 unwarranted manner, the costs of serving a large energy use 17 facility to other customer classes. The bill specifies that 18 these costs include costs incurred by an electric utility 19 or water utility to meet load requirements resulting from 20 providing electricity service or water service to a large 21 energy use facility. 22 The bill requires the commission, when deciding whether 23 to approve a proposed rate, charge, or schedule for a large 24 energy use facility customer class, to consider whether 25 the proposal may result in or have the potential to result 26 in increased costs or unwarranted risk to other customers, 27 whether the proposal provides for equitable contributions to 28 grid efficiency, distribution efficiency, reliability, and 29 resiliency benefits, and whether the proposal meets any other 30 conditions the commission may require in the public interest. 31 The bill provides that an electric utility or water utility 32 and a customer that is a large energy use facility are not 33 required to use the customer classification created under the 34 bill if the commission has not approved a rate, charge, or 35 -4- LSB 5759YH (5) 91 sb/js 4/ 6

H.F. 2261 schedule for that classification of service. 1 OTHER WATER UTILITIES. The bill applies to certain water 2 utilities not otherwise regulated by the commission. 3 The bill requires water utilities to create a customer class 4 for each customer that is a large energy use facility. The 5 customer class must be separate and distinct from customer 6 classes for other customers and must have its own rates, 7 charges, and schedules. The bill provides that any rate, 8 charge, or schedule for a large energy use facility must 9 directly assign the costs of serving the customer, mitigate the 10 risk of other customer classes paying unwarranted costs, and 11 mitigate the risk of shifting, in an unwarranted manner, the 12 costs of serving a large energy use facility to other customer 13 classes. The bill specifies that these costs include costs 14 incurred by a water utility to meet load requirements resulting 15 from providing water service to a large energy use facility. 16 The bill requires the water utility, when calculating a 17 rate, charge, or schedule for a large energy use facility 18 customer class, to consider whether the rate, charge, or 19 schedule may result in or have the potential to result in 20 increased costs or unwarranted risk to other customers, 21 provides for equitable contributions to distribution 22 efficiency, reliability, and resiliency benefits, and meets 23 any other conditions the commission may require in the public 24 interest. 25 The bill provides that upon request by the commission, a 26 water utility that provides service to a large energy use 27 facility must submit documentation to the commission within 28 30 days of the request that demonstrates compliance with the 29 bill. If the water utility does not submit the documentation 30 as required, the water utility is subject to a civil penalty, 31 as determined by the commission. 32 APPLICABILITY. The bill applies to electric utility 33 services and water utility services provided to large energy 34 use facilities constructed or expanded on or after January 1, 35 -5- LSB 5759YH (5) 91 sb/js 5/ 6