HF 2668 (LSB 6666HV (2) 91)

HOUSE FILE 2668

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO HF 2365)

A BILL FOR

An Act relating to the regulation of public utilities, including virtual power plants and integrated resource planning.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 476.53, subsection 2, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  c.  Customer-owned generation and storage is vital to cost-effectively meeting rising demand for electricity. Virtual power plants are a collection of customer-owned distributed generation resources and energy storage devices managed and dispatched by a common control mechanism, which may only be located in the service territory of a rate-regulated electric utility. Virtual power plants shall not be considered public utilities under this chapter. The commission shall promulgate rules that provide a process and standards for the commission’s approval and oversight of virtual power plants, including information the commission finds necessary for the evaluation of a virtual power plant proposal. Such information shall include the nature of the resources that may participate in a virtual power plant, the entities who may propose virtual power plants, and the estimated benefits to customers in the service territory in which the virtual power plant will operate. The commission shall not approve or continue to allow the operation of a virtual power plant if the virtual power plant does not, under standards established by the commission, benefit the customers in the service territory in which the virtual power plant operates.
    Sec. 2.  NEW SECTION.  476.53B  Integrated resource planning.
   1.  To implement the intent of the general assembly as set forth in sections 476.53 and 476.53A, each rate-regulated public utility shall file with the commission an integrated resource plan every five years, with the first plan due July 1, 2028. The commission shall promulgate rules for the development and evaluation of integrated resource plans. At a minimum, the rules shall include all of the following:
   a.  A process under which a utility files a new plan every five years that includes a five-year and a twenty-year planning horizon.
   b.  A quantitative comparative analysis of multiple resource mixes to serve anticipated customer needs using industry best practices, including capacity expansion and production cost modeling that include all of the following for both planning horizons:
   (1)  Existing and potential generating resources needed to serve customers, including competitively procured purchase power agreements and market purchase.
   (2)  The process for determining the forecast projects, costs, and other inputs and assumptions to be used in an integrated resource plan by all parties. It is the intent of the general assembly that the utilities use uniform scenarios, inputs, assumptions, and sources of data.
   (3)  An assessment of customer costs and seasonal reliability.
   (4)  Resources including energy efficiency, demand response, peak load conservation, and distributed generation plans, as described elsewhere in this chapter, that will assist in meeting energy and capacity needs.
   (5)  A utility’s energy and capacity forecasts, for existing and potential generating resources, as described elsewhere in this chapter, including filings made with any federal or regional authority. The forecast shall include but is not limited to a forecast of the requirements of customers, its anticipated sources of supply, and its anticipated means of addressing the forecasted electric generating needs.
   (6)  Transmission and distribution upgrades and expansion plans needed to reliably serve the utility’s customers and integrate each potential resource, and the associated costs of such plans in connection with the various resource mixes proposed.
   c.  Determination of eligibility for access to modeling software and data, including access to appropriate data from the utilities’ production cost model scenarios. The commission may determine the number of parties eligible for access to the modeling software.
   d.  The ability of parties eligible for access to the modeling software license to have at least four alternative scenarios and a process to best balance and represent the input of the respective parties. The alternative scenarios will be included on equal footing with utility scenarios.
   e.  Annual reporting on the performance of the plan and any nonmaterial updates.
   f.  Mechanisms for the utility to make, or for the commission, the office of consumer advocate, or customers to request, updates or modifications to the plan to reflect material changes.
   g.  Other rules for the development and evaluation of integrated resource plans the commission deems necessary or appropriate.
   2.  The commission shall ensure the public has maximum access to information, while protecting only the necessary confidential information of the utility. The commission shall require a uniform nondisclosure agreement that allows as much access as possible to data and information, including that data deemed by the commission as confidential.
   3.  Any proposed deviation from an integrated resource plan must be demonstrated by the utility to be in the best interest of customers when rate recovery or other approval of the generation facility is sought.
   4.  The commission may employ additional temporary staff, or may contract for professional services with persons who are not state employees, as the commission deems necessary to perform required functions as provided in this section, including but not limited to promulgating rules for the development and evaluation of resource plans. The costs of the additional staff and services shall be assessed to the utilities pursuant to the procedure in sections 475A.6 and 476.10.
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 regulation of public utilities, including customer-owned resources, virtual power plants, and integrated resource planning.
   The bill recognizes that customer-owned generation and storage is vital to cost-effectively meeting rising demand for electricity. The bill describes virtual power plants as collections of customer-owned distributed generation and energy storage resources managed by a common control mechanism within a utility’s service territory. The bill provides that virtual power plants are not public utilities and requires the commission to adopt rules establishing standards and processes for approval and oversight. The bill prohibits the commission from approving or allowing continued operation of a virtual power plant if the virtual power plant does not benefit customers in the service territory.
   The bill requires each rate-regulated public utility to file an integrated resource plan every five years, with the first plan due July 1, 2028. The bill directs the commission to adopt rules governing the development and evaluation of integrated resource plans. The plans must include 5-year and 20-year planning horizons and a quantitative comparative analysis of multiple resource mixes to serve anticipated customer needs using industry best practices. The rules adopted by the commission must also address a determination of eligibility for access to modeling software and data, including the ability for eligible parties to have alternative scenarios and a process to best balance and represent the input of the respective parties. The bill provides the rules adopted must also include requirements for annual reporting on plan performance, as well as mechanisms for plan updates or modifications in response to material changes and any other rule for the development and evaluation of integrated resource plans the commission deems necessary or appropriate.
   The bill directs the commission to maximize public access to information while protecting only necessary confidential information through uniform disclosure agreements. The bill requires any deviation from an integrated resource plan to be demonstrated to be in the best interest of the customers when rate recovery approval is sought.
   The bill allows the commission or consumer advocate to employ additional staff or contract for professional services with persons who are not state employees for the development of rules for the filing and review of resource plans or to aid the commission in the review and approval, disapproval, or modification of a plan. The costs of the additional staff services shall be assessed to the utilities.