HF 834 (LSB 1121HV (2) 91)

HOUSE FILE 834

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO HSB 123)

A BILL FOR

An Act relating to energy systems by modifying electric power generation, energy storage, and transmission facility ratemaking principles, creating tariffs for public utility innovation programs, implementing land restoration standards, including right of first refusal, modifying the energy infrastructure revolving loan program, and creating regulations for anaerobic digester systems, making appropriations, providing penalties, and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
ELECTRIC POWER GENERATION, ENERGY STORAGE, AND TRANSMISSION FACILITY RATEMAKING PRINCIPLES

    Section 1.  NEW SECTION.  476.52A  Definitions.
   As used in this subchapter unless the context otherwise requires:
   1.  “Alternate energy production facility” means the same as defined in section 476.42.
   2.  “Energy storage” means any system, equipment, facility, or technology that is capable of absorbing energy, storing the energy for a period of time, and dispatching the energy through one of the following manners:
   a.  Using mechanical, electrochemical, thermal, electrolysis, or other processes to convert and store electric energy that was generated at an earlier time for use at a later time.
   b.  Using mechanical, electrochemical, biochemical, or thermal processes to convert and store energy generated from mechanical processes that would otherwise be wasted for delivery at a later time.
   c.  Storing energy in an electric, thermal, or gaseous state for direct use for heating or cooling at a later time in a manner that avoids the need to use electricity or other fuel sources at that later time, such as a grid-enabled water heater.
   3.  “Nuclear reactor” means an apparatus designed to produce electrical or heat energy through sustained nuclear fission in a self-supporting chain reaction.
   4.  “Repowering” means either the complete dismantling and replacement of generation equipment at an existing project site, or the installation of new parts and equipment to an existing alternate energy production facility in order to increase energy production, reduce load, increase service capacity, improve project reliability, or extend the useful life of the facility.
    Sec. 2.  Section 476.53, subsection 1, Code 2025, is amended to read as follows:
   1.  It is the intent of the general assembly to attract the development of electric power generating, energy storage, and transmission facilities within the state in sufficient quantity to ensure reliable electric service to Iowa consumers, ensure an adequate base load, and provide economic benefits to the state.  Ensuring reliable electric service and providing economic benefits may require public utilities to consider diverse electric power generating technologies and energy storage technologies, including alternate energy production facilities, nuclear reactors, and energy storage facilities. It is also the intent of the general assembly to encourage rate-regulated public utilities to consider altering existing electric power generating facilities, where when reasonable, to manage carbon emission intensity in order to facilitate the transition to a carbon-constrained environment.  It is also the intent of the general assembly to encourage the development of nuclear electric power generation within the state using nuclear reactors and to use nuclear power to meet local and regional electric needs.
    Sec. 3.  Section 476.53, subsection 3, paragraphs a, b, c, and d, Code 2025, are amended to read as follows:
   a.  The commission shall specify in advance, by order issued after conduct a contested case proceeding, the ratemaking principles that will apply when the costs of the electric power generating facility or alternate energy production facility are included in regulated electric rates whenever a rate-regulated public utility does seeks ratemaking principles for any of the following:
   (1)  (a)  Files an application pursuant to section 476A.3 to construct The costs of constructing in Iowa a baseload an electric power generating facility with a nameplate generating capacity equal to or greater than three hundred forty megawatts or a combined-cycle electric power generating facility, or an alternate energy production facility as defined in section 476.42, or an energy storage facility, or the construction costs to significantly alter an existing electric power generating facility, alternate energy production facility, or energy storage facility. For purposes of this subparagraph, a significant alteration of an existing generating facility, alternate energy production facility, or energy storage facility must, in order to qualify for establishment of ratemaking principles, fall into one of the following categories:
   (i)  Conversion of a coal fueled an electric power generating facility into a gas fueled to an alternate fuel type for the electric power generating facility.
   (ii)  Addition of carbon capture and storage facilities at a coal fueled to an existing electric power generating facility.
   (iii)  Addition of gas fueled capability to a coal fueled facility, in order to convert the facility to one that will rely primarily on gas for future generation facilities to capture exhaust heat and thereby generate additional electric power at an existing electric power generating facility.
   (iv)  Addition of a biomass fueled capability to a coal fueled facility.
   (v)  (iv)  Repowering of an alternate energy production facility. For purposes of this subparagraph subdivision, “repowering” shall mean either the complete dismantling and replacement of generation equipment at an existing project site, or the installation of new parts and equipment to an existing alternate energy production facility in order to increase energy production, reduce load, increase service capacity, improve project reliability, or extend the useful life of the facility.
   (v)  Addition of energy storage at an existing electric power generating facility, alternate energy production facility, or energy storage facility.
   (b)  With respect to a significant alteration of an existing generating facility, an original facility shall not be required to be either a baseload or a combined-cycle facility. Only only the incremental investment undertaken by a utility under subparagraph division (a), subparagraph subdivision (i), (ii), or (iii), or (iv) shall be eligible to apply the ratemaking principles established by the order issued pursuant to paragraph “e”. Facilities for which advanced advance ratemaking principles are obtained pursuant to this section shall not be subject to a subsequent commission review pursuant to section 476.6, subsection 19, to the extent that the investment has been considered by the commission under this section. To the extent an eligible utility has been authorized to make capital investments subject to section 476.6, subsection 19, such investments shall not be eligible for ratemaking principles pursuant to this section.
   (2)  Leases or owns When leased or owned in Iowa, in whole or in part, a new baseload electric power generating facility with a nameplate generating capacity equal to or greater than three hundred forty megawatts or a combined-cycle electric power generating, a new energy storage facility, or a new alternate energy production facility as defined in section 476.42.
   b.  If the commission finds that the utility’s application meets the requirements of paragraph “c”, the commission shall specify by order issued after the contested case proceeding the ratemaking principles that will apply when the costs of the electric power generating facility or alternate energy production facility are included in regulated electric rates.

In determining the applicable ratemaking principles, the commission shall not be limited to traditional ratemaking principles or traditional cost recovery mechanisms. Among the principles and mechanisms the commission may consider, the commission has the authority to approve ratemaking principles proposed by a rate-regulated public utility that provide for reasonable restrictions upon the ability of the public utility to seek a general increase in electric rates under section 476.6 for at least three years after the generating facility begins providing service to Iowa customers.
   c.  In determining the applicable ratemaking principles, the commission shall make the following findings:
   (1)  The rate-regulated public utility has in effect a commission-approved energy efficiency plan as required under section 476.6, subsection 15.
   (2)  The rate-regulated public utility has demonstrated to the commission that the public utility has considered other sources for long-term electric supply and that the facility or lease is reasonable when compared to other feasible alternative sources of supply.  The rate-regulated public utility shall provide support of reasonability with an electric utility resource plan pursuant to section 476.53C that has been updated no more than twenty-four months prior to the filing of the public utility’s application.
   d.  The applicable ratemaking principles shall be determined in a contested case proceeding, which proceeding required by paragraph “a” may be combined with the proceeding for issuance of a certificate conducted pursuant to chapter 476A.
    Sec. 4.  NEW SECTION.  476.53B  Commission authority and proceedings.
   The commission shall adopt rules pursuant to chapter 17A to provide for the completion of proceedings under section 476.53 within ten months after the date of the filing of an application under section 476.53, subsection 3. The rules shall include reasonable time limitations for the submission or completion of comments and testimony, and exhibits, briefs, and hearings, and may provide for the granting of additional time upon the request of a party to the proceeding for good cause shown.
    Sec. 5.  NEW SECTION.  476.53C  Electric utility resource planning.
   1.  An electric utility required to be rate-regulated by the commission shall file a resource plan at least once every five years. A resource plan shall consider all reasonable resources proposed by the utility for meeting the probable future demand for energy, including supply resources and conservation and management of demand. For conservation and management of demand, an electric utility’s resource plan shall include programs approved in the electric utility’s most recent energy efficiency plan approved by the commission under section 476.6, subsection 15. The objectives of a resource plan include but are not limited to adequate, cost-effective, and reliable energy service considering costs, fuel diversity, and probable future demand for energy. A resource plan shall not require a specific outcome or specific investment decisions. A resource plan shall reflect the circumstances and management judgment of an electric utility. This section does not restrict an electric utility from making planning decisions based on future resource needs subject to the ratemaking oversight of the commission.
   2.  The commission shall review a resource plan. Within ninety days of filing the final resource plan, the commission shall issue an order acknowledging it has received the plan. In the order acknowledging receipt, the commission may provide recommendations to an electric utility regarding any additional analyses or actions that the electric utility should consider completing in its next resource plan.
   3.  The commission shall adopt rules pursuant to chapter 17A regarding the timeline and stakeholder process to review and provide comments on the resource plan. The stakeholder process shall include the electric utility organizing and facilitating a stakeholder conference for the resource plan. The stakeholder conference shall include representatives of the commission, the consumer advocate, and the electric utility’s customers. The electric utility shall make a good faith effort to inform and consider input from the commission, the consumer advocate, and stakeholders.
DIVISION II
TARIFFS FOR PUBLIC UTILITY INNOVATION PROGRAMS

    Sec. 6.  Section 476.6, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  22.  Innovative utility programs.
   a.  It is the intent of the general assembly to encourage public utilities to pursue innovation in pricing and programs to meet the dynamic needs of current and prospective customers, enable price-responsive solutions, and to provide economic, environmental, employment, and other benefits to the state. It is also the intent of the general assembly that these new endeavors shall not negatively impact nonparticipating customers. Therefore, the general assembly declares that innovative utility programs are essential to further the attraction and retention of customers to benefit the state’s economy and to support economical and sustainable energy production.
   b.  (1)  A tariff authorized under this subsection shall comply with all of the following conditions:
   (a)  A program created under the tariff shall be available to interested energy customers and customer participation shall be optional.
   (b)  A tariff shall define the eligible customer groups.

   (c)  An eligible customer group shall not exclude directly competing customers in the same customer service territory. For purposes of this subparagraph, “directly competing customers” means customers that make the same end product or offer the same service for the same general group of customers, and excludes customers that only produce component parts of the same end product.
   (d)  Participating customers shall bear all program costs. Program costs include direct costs associated with the construction, operation, maintenance, and interconnection of facilities, including new transmission infrastructure directly arising from the tariff program and costs related to the implementation of tariff programs. Participants in a tariff approved pursuant to this section shall participate in future indirect costs allocated to customers of that utility without regard for the existence of a tariff approved pursuant to this section.
   (e)  A tariff shall not alter the existing base rates or charges of the public utility. Refund, credit, or waiver of existing base rates or charges offered as part of the program shall not be considered an alteration of existing base rates or charges.
   (f)  The program created under the tariff shall not negatively impact nonparticipating customers. Additional costs incurred by nonparticipating customers due to costs arising from the tariff, tariff participants no longer sharing in customer class costs, or decreased customer benefit from existing infrastructure shall be considered negative impacts.
   (2)  A tariff authorized under this subsection may include any of the following:
   (a)  Recovery of costs associated with program-specific services or facilities, including but not limited to energy storage, renewable hydrogen, transmission, electric generating facilities, electric distribution facilities, renewable natural gas generation facilities, renewable natural gas distribution facilities, utility-assisted hourly prices, or liquefied natural gas facilities, or administrative and other overhead costs relating to the same.
   (b)  A negotiated rate of return, for new or existing facilities or services provided by the electric utility that are serving the program created under the tariff, applicable to the program for its duration. The use of existing facilities would require reconciliation of impact to existing customers and would no longer be subject to previously approved advance ratemaking principles. In the event that the tariff or its eligible customer class cease to exist, no charges shall be imposed on or costs recovered from existing customers unless approved in a general rate case. A utility may seek to demonstrate the prudence, necessity, and use and usefulness of program-specific facilities or services as defined in subparagraph division (a) and recovery of costs for the same in a general rate proceeding, without any presumption regarding approval of such request.
   (c)  Application of the program to readily identifiable customer usage patterns, customer characteristics, or output of specified facilities.
   (d)  Assignment of program benefits, including nonmonetary benefits that may derive from dynamically balancing supply and demand, providing ancillary services, or the production of renewable energy attributes.
   (e)  Refund, credit, or waive the base rate or charge for the replaced service when the program created under the tariff replaces a service for which the public utility collects an existing base rate or charge. A participating customer shall pay the costs of remaining services received from the public utility unless those costs are refunded, credited, or waived under the program created by the tariff.
   (3)  If a utility can demonstrate to the commission that a proposed tariff generates excess revenue for the utility as compared to total revenue without the tariff, such excess revenue may be retained by the utility.
   c.  (1)  A public utility’s participation under this subsection is not mandatory. A public utility that elects to propose a tariff or tariff amendment under this subsection shall file an application for approval with the commission. The application shall include an identification of costs and benefits related to the program for the commission’s review of the conditions specified in paragraph “b”, subparagraph (1).
   (2)  Within thirty days, the commission shall approve, deny, or docket for further review an application for a tariff or amended tariff submitted pursuant to this subsection. If the application is docketed for further review, the commission shall render a decision within ninety days from the date of application filing unless an objection has been filed with the commission. If the application proposes to amend a tariff previously approved under this subsection, the commission shall not reconsider existing programs previously approved under the tariff unless proposed as part of the amendment. All further review shall be conducted as a contested case pursuant to chapter 17A.
   (3)  If the application proposes to amend a tariff previously approved under this subsection as described in paragraph “b”, subparagraph (2), the commission shall act on the application as described in subparagraph (2) of this paragraph, but shall not reconsider existing programs previously approved under the tariff unless proposed as part of the amendment.
   (4)  In the exercise of its authority under this subsection, the commission shall not:
   (a)  Limit the number of applications a public utility may file pursuant to this subsection.
   (b)  Deny a tariff because a public utility is subject to an alternative regulatory mechanism, nor require a public utility subject to an alternative regulatory mechanism to record the revenues and costs associated with the program inconsistent with the federal energy regulatory commission’s uniform system of accounts; provided, however, that this provision shall not prohibit the utilities commission from denying a tariff if the proposed tariff would result in detrimental treatment of other customers, or require adjustment to the calculation of the alternative regulatory mechanism to reflect the impact of an approved tariff.
   (c)  Condition its approval on the public utility changing its proposal if the public utility has not agreed to such changes. This subparagraph division shall not be interpreted to prevent the commission from identifying changes to the proposal that might result in approval.
   (5)  Tariffs and programs approved pursuant to this subsection shall be rebuttably presumed just and reasonable in any subsequent general rate case proceeding.
   d.  The commission shall not condition approval or denial of a tariff on final adoption of rules by the commission.
   e.  The commission shall adopt rules pursuant to chapter 17A to implement this subsection.
    Sec. 7.  APPLICABILITY.  This division of this Act applies to a public utility filing an application with the utilities commission for review of a tariff on or after the effective date of this division of this Act.
DIVISION III
LAND RESTORATION —— ELECTRIC TRANSMISSION LINES APPROVED BY FEDERALLY REGISTERED PLANNING AUTHORITY TRANSMISSION PLANS

    Sec. 8.  Section 478.16, Code 2025, is amended to read as follows:
   478.16  Electric transmission lines —— federally registered planning authority transmission plans.
   1.  Development and investment in high-voltage transmission is urgently needed to ensure the reliable, adequate, secure, and stable delivery of electricity to consumers. To ensure reliable electric service to the people of Iowa as a matter of public policy, it is the intent of the general assembly to express a preference for further investment in Iowa transmission infrastructure by electric transmission owners who have already dedicated significant resources to develop the infrastructure on which Iowans rely and who are better able to provide reliable electric service to local electric utilities and retail customers in Iowa.
   1.  2.  As used in this section, unless the context otherwise requires:
   a.  “Electric transmission line” means a high-voltage electric transmission line located in this state with a capacity voltage of one hundred kilovolts or more and any associated electric transmission facility, including any substation or other equipment located in this state.
   b.  “Electric transmission owner” means an individual or entity who, as of July 1, 2020, formed, located, or headquartered in any state who owns and maintains an electric transmission line in this state that is required for rate-regulated electric utilities, municipal electric utilities, and rural electric cooperatives in this state to provide electric service to the public for compensation.
   c.  “Incumbent electric transmission owner” means any an individual or entity meeting the definition of the following:
   (1)  A public utility or a municipally owned utility that owns, operates, and maintains an electric transmission line in this state.
   (2)  An electric cooperative corporation or association or municipally owned utility that owns an electric transmission facility in this state and has turned over the functional control of such facility to a federally approved authority.
   (3)  An an “electric transmission owner” as defined in paragraph “b” on or before July 1, 2024.
   d.  “Landowner” means the same as defined in section 478.2 

“Initial construction” means the construction necessary to establish and place an electric transmission line into initial operation.
   e.  “Load ratio share” means the amount, expressed as a percentage, of a public power utility’s electric load divided by the total electric load in the applicable incumbent electric transmission owner’s pricing zone.
   e.  f.  “Municipally owned utility” means a “city utility” as defined in section 362.2, or an “electric power agency” as defined in section 390.9 which that is comprised solely of cities or solely of cities and other political subdivisions.
   g.  “Public power utility” means a municipally owned utility or an electric cooperative corporation or association that receives transmission service from an incumbent electric transmission owner, or that is subject to regional cost allocation for the electric transmission line, or both.
   h.  “Qualified individual” means someone who is capable and knowledgable enough to determine compliance with the standards set forth in this section.
   2.  3.  a.  An incumbent electric transmission owner has the right to construct, own, and maintain an electric transmission line that has been approved for construction in a federally registered planning authority transmission plan and which that directly connects to an electric transmission facility owned by the incumbent electric transmission owner. Where a proposed electric transmission line would directly connect to electric transmission facilities owned by two or more incumbent electric transmission owners, each incumbent electric transmission owner whose facility connects to the electric transmission line has the right to construct, own, and maintain the electric transmission line individually and equally. If an incumbent electric transmission owner declines to construct, own, and maintain its portion of an electric transmission line that would connect to electric transmission facilities owned by two or more incumbent electric transmission owners, then the other incumbent electric transmission owner or owners that own an electric transmission facility to which the electric transmission line connects has the right to construct, own, and maintain the electric transmission line individually.
   b.  An eligible incumbent electric transmission owner exercising the right to construct, own, and maintain an electric transmission line pursuant to paragraph “a” shall offer public power utilities an opportunity to jointly own a portion of the electric transmission line and such offer shall be in an amount not less than a public power utility’s load ratio share, pursuant to a written agreement. Nothing in this section shall be construed to prohibit an incumbent electric transmission owner and a public power utility from agreeing to joint ownership of an electric transmission line in an amount different than the public power utility’s load ratio share. A public power utility may transfer or assign joint ownership rights acquired under this section to another public power utility or group of public power utilities by mutual consent of the eligible contracting parties.
   c.  An eligible incumbent electric transmission owner exercising the right to construct, own, and maintain an electric transmission line pursuant to paragraph “a” may contract with another electric transmission owner or electric public utility as defined in section 476.1 to jointly own a portion of the electric transmission line pursuant to a written agreement.
   d.  For purposes of this section, a municipally owned utility or an electric cooperative corporation or association may elect to be an incumbent electric transmission owner or a public power utility but cannot act as both with respect to a single transmission line.
   3.  4.  If an electric transmission line has been approved for construction in a federally registered planning authority transmission plan, and the electric transmission line is not subject to a right of first refusal in accordance with the tariff of a federally registered planning authority and would otherwise be subject to a competitive developer process, then within the later of ninety days of approval for construction or ninety days after enactment of this division of this Act, an incumbent electric transmission owner, or owners if there is more than one owner, that owns a connecting electric transmission facility shall give written notice to the commission regarding whether the incumbent electric transmission owner or owners intend to construct, own, and maintain the electric transmission line. If the incumbent electric transmission owner or owners give notice of intent to construct the electric transmission line, the incumbent electric transmission owner or owners shall follow the applicable franchise requirements pursuant to this chapter.  The incumbent electric transmission owner shall update the notice to construct an electric transmission line to include information concerning the implementation of joint ownership as described in subsection 3, paragraphs “b” and “c”, within thirty days after a written agreement has been reached between the parties. If the incumbent electric transmission owner or owners give notice declining to construct the electric transmission line, the commission may determine whether another person may construct the electric transmission line.
   4.  5.  For projects where for which an election to construct an electric transmission line has been made under this section, all of the following cost accountability measures shall apply:
   a.  Within thirty days after the issuance of a franchise pursuant to this chapter for the electric transmission line, the incumbent electric transmission owner or owners shall provide to the commission an estimate of the cost to construct complete the initial construction of the electric transmission line.
   b.  Until the initial construction of the electric transmission line is complete, the incumbent electric transmission owner or owners shall provide a quarterly report to the commission, which shall include an updated estimate of the cost to construct the electric transmission line, and an explanation of changes in the cost estimate from the prior cost estimate, and documentation that the incumbent electric transmission owner or owners have used competitively bid construction contracts that meet all the technical, commercial, and other specifications, such as safety performance, that are required by the incumbent electric transmission owner or owners with respect to the initial construction of the electric transmission line.
   c.  The consumer advocate appointed under section 475A.1 shall have free access to documents, reports, and information submitted to the commission pursuant to this subsection, consistent with section 475A.4. To the extent relevant, the commission and the consumer advocate may use the information for any purpose properly within the scope of their respective duties including but not limited to use in proceedings before the federal energy regulatory commission to challenge the costs incurred by the incumbent electric transmission owner. However, this subsection does not create a private cause of action or complaint.
   5.  6.  This section shall not modify the authority of the commission under this chapter, the rights of landowners under this chapter, or the requirements, rights, and obligations relating to the construction, maintenance, and operation of electric transmission lines pursuant to this chapter.
   6.  7.  This section shall not apply to an electric transmission line to be placed underground that has not been approved for construction in a federally registered planning authority transmission plan.
   7.  8.  The commission shall adopt rules pursuant to chapter 17A to administer this section, which shall include rules regarding the restoration of agricultural lands following the initial construction of an electric transmission line, as specified in subsection 9.
   9.  The commission shall adopt rules to implement the following requirements, which shall not apply within the corporate limits of a city or to any construction, activity, or electric transmission lines other than the initial construction of an electric transmission line with a voltage of two hundred or more kilovolts and for which an election to construct has been made under this section:
   a.  An incumbent electric transmission owner shall repair a damaged underground drain tile as soon as practicable during construction of the electric transmission line. Permanent repairs to the damaged underground drain tile shall be completed as soon as practicable after the initial construction of the electric transmission line is complete. The repairs made to the damaged drain tile shall be of at least equal quality, size, and flow capacity of the original drain tile. 
   b.  Following the initial construction of an electric transmission line, the incumbent electric transmission owner shall remove from the easement area all rock larger than three inches in average diameter not native to the soil of the excavated land. The rock removed from the excavated land that cannot be used to backfill shall be disposed of at a location and in a manner agreed upon by the incumbent electric transmission owner and the landowner. 
   c.  Upon completion of construction activities on a property, the incumbent electric transmission owner shall deep till agricultural land, including right-of-way access points or roads traversed by heavy construction equipment, to alleviate soil compaction. The land shall be tilled at least eighteen inches deep in land used for crop production and twelve inches deep in other lands unless otherwise agreed to by the landowner.
   d.  Upon completion of the electric transmission line, the incumbent electric transmission owner shall restore the soil conservation practices and structures damaged during construction of the electric transmission line to the elevation and grade existing on the land prior to the construction. The soil used to repair embankments intended to retain water shall be well compacted. Any vegetation disturbed during construction shall be reestablished, including cover crops when appropriate.
   e.  Following compaction of the land, agricultural land that is not in row crop or small grain production at the time of construction, including hay ground and land in conservation or set-aside programs, shall be reseeded and a cover crop shall be utilized when appropriate. Seeding for cover crops may be delayed if the construction of the electric transmission line is completed too late in the year for a cover crop to become established and is not required if the land will be tilled in the following year. The landowner may request ground cover to prevent soil erosion in areas where construction on the electric transmission line is completed if the season is not suitable for seeding a cover crop.
   f.  Unless agreed upon by the incumbent electric transmission owner and the landowner, the incumbent electric transmission owner shall remove field entrances or temporary roads built for the purpose of constructing the electric transmission line upon the completion of the initial construction and restore the area to its previous use.
   g.  An incumbent electric transmission owner shall use good utility practices for constructing the electric transmission line in wet conditions, such as electing to use matting or padding when utilizing heavy equipment. An incumbent electric transmission owner shall grade and till any rutted land to restore, to the extent practicable, the original condition of the land prior to the construction of the electric transmission line. If agreed upon by the incumbent electric transmission owner and the landowner, the landowner may repair any damage caused by construction activities in wet conditions and the incumbent electric transmission owner shall reimburse the landowner for the reasonable cost incurred to repair the damage. If an incumbent electric transmission owner utilizes heavy equipment in wetlands or mudflats, mats or other measures shall be utilized to minimize soil disturbance.
   h.  For each electric transmission line, the incumbent electric transmission owner shall designate a point of contact for inquiries or claims from an affected person. The designation shall include a name, a telephone number, an email address, and an address.
   10.  a.  If an incumbent electric transmission owner and a landowner dispute a potential violation of the restoration standards provided in subsection 9, the commission may appoint a qualified individual to inspect the property for compliance. If the qualified individual determines that there has been a violation of the applicable restoration standards, the commission shall provide oral notice, followed by written notice, to the incumbent electric transmission owner and the contractor operating for the incumbent electric transmission owner and order corrective action to comply with the restoration standards. The incumbent electric transmission owner shall be responsible for the costs of the corrective action.
   b.  If the incumbent electric transmission owner or the contractor for the incumbent electric transmission owner does not comply with a valid order for corrective action issued by the commission, the commission may issue an order requiring corrective action to be taken and may impose civil penalties under section 478.29.
   c.  The commission shall instruct the inspector appointed by the commission regarding the content of the statutes and rules and the responsibility of the inspector to require restoration conforming with the standards established in subsection 9. 
   11.  a.  A petitioner for a franchise for an electric transmission line shall file with the petition a written land restoration plan that documents how the requirements and rules of subsection 9 will be met. The petitioner shall provide a copy of the plan to all landowners of property that will be disturbed by the initial construction. 
   b.  Nothing in this section shall preclude the application of provisions for protecting or restoring property that are different than those prescribed in subsection 9, in rules adopted under subsection 9, or in the land restoration plan, if the alternative provisions are contained in agreements independently executed by the incumbent electric transmission owner and the landowner. Independent agreements for land restoration between the incumbent electric transmission owner and the landowner shall be in writing and provided to the commission.
   c.  The commission may by waiver allow variations from the requirements of subsection 9 if the incumbent electric transmission owner requesting a waiver satisfies the standards set forth in section 17A.9A and if the alternative methods proposed by the incumbent electric transmission owner would restore the land to a condition as good as or better than as provided for in subsection 9. 
   d.  The commission may waive preparation of a separate land restoration plan if the incumbent electric transmission owner enters into an agricultural impact mitigation plan or similar agreement with the appropriate agencies of this state that satisfies the requirements of subsection 9. If a mitigation plan or agreement is used to fully or partially meet the requirements of a land restoration plan, the statement or agreement shall be filed with the commission and shall be considered to be, or to be part of, the land restoration plan for purposes of subsection 9. 
   12.  Nothing in this section shall limit, expand, or otherwise modify the rights of access and obligations for damages set forth in section 478.17.
    Sec. 9.  Section 478.18, Code 2025, is amended to read as follows:
   478.18  Supervision of construction —— location.
   1.  The utilities commission shall have power of supervision over the construction of a transmission line and over its future operation and maintenance, including inspections for compliance with the standards adopted under section 478.16 after restoration of the land is complete.
   2.  A transmission line shall be constructed near and parallel to roads, to the right-of-way of the railways of the state, or along the division lines of the lands, according to the government survey, wherever the same is practicable and reasonable, and so as not to interfere with the use by the public of the highways or streams of the state, nor unnecessarily interfere with the use of any lands by the occupant.
   3.  The utilities commission may contract a qualified individual for the purpose of inspections authorized under section 478.16. The reasonable cost of the inspection shall be paid by the incumbent electric transmission owner. The utilities commission shall instruct the inspector appointed by the commission regarding the content of the statutes and rules and the responsibility of the inspector to require restoration conforming with the applicable standards established in section 478.16. For purposes of this section, “qualified individual” means the same as defined in section 478.16.
    Sec. 10.  EFFECTIVE DATE.  This division of this Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 11.  RETROACTIVE APPLICABILITY.  With the exception of the portion of the section of this division of this Act amending section 478.16, subsection 3, paragraph “b”, this division of this Act applies retroactively to transmission lines included in a federally registered planning authority long-term transmission plan approved on or after July 1, 2020. The portion of the section of this division of this Act amending section 478.16, subsection 3, paragraph “b”, shall apply retroactively to transmission lines included in a federally registered planning authority long-term transmission plan approved on or after July 1, 2024.
DIVISION IV
ENERGY AND WATER INFRASTRUCTURE REVOLVING LOAN PROGRAM

    Sec. 12.  Section 476.46A, Code 2025, is amended to read as follows:
   476.46A  Energy and water infrastructure revolving loan program.
   1.  a.  An energy and water infrastructure revolving loan fund is created in the office of the treasurer of state and shall be administered by the Iowa energy center economic development authority established in section 15.120 15.105.
   b.  The fund may be administered as a revolving fund and may consist of any moneys appropriated by the general assembly for purposes of this section and any other moneys that are lawfully directed to the fund.
   c.  Moneys in the fund shall be used to provide financial assistance for the development and construction of energy or water infrastructure, including projects that support electric or gas generation transmission, storage, or distribution; electric grid modernization; energy-sector workforce development; emergency preparedness for rural and underserved areas; the expansion of biomass, biogas, and renewable natural gas; innovative technologies; and the development of infrastructure for alternative fuel vehicles that support economic development.
   d.  Notwithstanding section 8.33, moneys appropriated in this section that remain unencumbered or unobligated at the close of the fiscal year shall not revert but shall remain available for expenditure for the purposes designated until the close of the succeeding fiscal year.
   e.  Notwithstanding section 12C.7, subsection 2, interest or earnings on moneys in the fund shall be credited to the fund.
   2.  a.  The Iowa energy center economic development authority shall establish and administer an energy and water infrastructure revolving loan program to encourage the development of energy and water infrastructure within the state. 
   b.  An individual, business, rural electric cooperative, or municipal utility located and operating in this state shall be eligible for financial assistance under the program. With the approval of the Iowa energy center governing board established under section 15.120, subsection 2, the economic development authority shall determine the amount and the terms of all financial assistance awarded to an individual, business, rural electric cooperative, or municipal utility under the program. All agreements and administrative authority shall be vested in the Iowa energy center governing board. To be eligible for a financial assistance award under the energy and water infrastructure revolving loan program, an eligible borrower must demonstrate that the proposed project will attract and encourage the location of new industrial enterprise or the expansion of existing industrial enterprise. Eligible borrowers may be awarded financial assistance under the program for projects that support electric or gas generation transmission, storage, or distribution; electric grid modernization; energy sector workforce development; emergency preparedness for rural and underserved areas; the expansion of biomass, biogas, and renewable natural gas; or innovative technologies and drinking water treatment systems and wastewater treatment systems. The economic development authority shall determine the amount and the terms of all financial assistance awarded to an eligible borrower under the program. All agreements and administrative authority shall be vested in the economic development authority. The economic development authority may adopt rules for the implementation of this program.
   c.  The economic development authority may use not more than five percent of the moneys in the fund at the beginning of each fiscal year for purposes of administrative costs, marketing, technical assistance, and other program support. 
   d.  Each fiscal year beginning July 1, 2025, the economic development authority shall be authorized to transfer an amount not to exceed six hundred thirty-three thousand dollars from the energy and water infrastructure revolving loan fund to Iowa state university of science and technology to be used for the purposes of providing financial assistance to the state load forecasting center.
   3.  For the purposes of this section:
   a.  “Eligible borrower” means an individual, business, county, city, rural electric cooperative, or municipal utility located and operating in this state.
   a.  b.  “Energy infrastructure” means land, buildings, physical plant and equipment, and services directly related to the development of projects used for, or useful for, electricity or gas generation, transmission, storage, or distribution.
   b.  c.  “Financial assistance” means the same as defined in section 15.102.
   d.  “Water infrastructure” means water pollution control facilities useful for the collection, treatment, and disposal of sewage and industrial waste in a sanitary manner and drinking water facilities useful for providing potable water to residents served by a water system.
DIVISION V
ANAEROBIC DIGESTER SYSTEMS

    Sec. 13.  NEW SECTION.  459C.101  Title.
   This chapter shall be known and may be cited as the “Animal Agriculture Compliance Act for Anaerobic Digester Systems”.
    Sec. 14.  NEW SECTION.  459C.102  Definitions.
   1.  For purposes of this chapter, unless the context otherwise requires:
   a.  “Anaerobic digester system” or “digester” means a covered manure storage structure, if the function of the manure storage structure is to process manure, by employing environmental conditions including bacteria to break down organic matter in the absence of oxygen, and is used for producing, collecting, and utilizing a biogas, and may also process on-farm and off-farm organic feedstocks, and food products or food for human consumption if approved by the department pursuant to section 459C.201, subsection 4. “Anaerobic digester system” also includes related buildings, storage structures, transfer pipes, and stockpiles associated with the digester process.
   b.  “Digestate” means the dry or liquid nutrient-rich material that remains after the anaerobic digestion of organic matter, such as agricultural residues, food waste, or manure.
   c.  “Off-farm organic feedstocks” means organic materials that originate from outside the farm but can be used within farming systems, particularly for soil enrichment, composting, or other agricultural purposes.
   d.  “On-farm organic feedstocks” means organic materials that are produced as by-products of farming activities that typically come from plant or animal sources and may include crop residues and other organic waste generated during farm operations.
   e.  “Owner” means the person who owns an anaerobic digester system.
   2.  Where not in conflict with the definitions set out in subsection 1, the definitions provided in sections 459.102, 459A.102, and 459B.102 shall control.
    Sec. 15.  NEW SECTION.  459C.103  General authority —— commission and department —— purpose —— compliance.
   1.  The commission shall establish, by rule adopted pursuant to chapter 17A, requirements relating to the construction, including expansion, or operation of anaerobic digester systems, including related buildings, storage structures, transfer pipes, and stockpiles.
   2.  The purpose of this chapter is to provide requirements relating to the construction, including the expansion, and operation of anaerobic digester systems and the control of digestate, which purpose shall be construed to supplement applicable provisions of chapters 459, 459A, and 459B. If there is a conflict between the provisions of this chapter and chapters 459, 459A, and 459B, the provisions of this chapter shall prevail.
    Sec. 16.  NEW SECTION.  459C.201  Anaerobic digester systems —— permit requirements.
   1.  The department shall approve applications for permits for the construction, including the expansion, of anaerobic digester systems, as provided by rules adopted pursuant to this chapter. The department’s decision to approve a permit for the construction of an anaerobic digester system shall be based on whether the application is submitted according to procedures required by the department and the application meets standards established by the department. Construction of an anaerobic digester system requiring a permit under this section shall not begin until the department first approves the application and issues a construction permit.
   2.  In addition to the construction permit application under subsection 1, the following must be submitted in order for the department to approve the application:
   a.  A two hundred fifty dollar construction permit application fee.
   b.  A written plan for the disposal of the digestate.
   c.  A written operation plan for the anaerobic digester system detailing the responsibilities of all owners, animal feeding operations, or other entities involved in the anaerobic digester system processes.
   3.  Every anaerobic digester system shall obtain a construction permit, regardless of size of the anaerobic digester system or facility. The owner of the anaerobic digester system is considered the applicant and shall be responsible for the construction and operation of the anaerobic digester system.
   4.  a.  Every anaerobic digester system is intended to accept only manure unless department approval is obtained for the inclusion of on-farm and off-farm organic by-products, food products, or food for human consumption. Nonmanure material shall not exceed ten percent of the total material added to the anaerobic digester system.
   b.  Daily records of the volumes of all materials added to the anaerobic digester system shall be required to be maintained at the facility.
   c.  The department may require additional testing or monitoring of any manure or nonmanure component being added to the anaerobic digester system. The department may require additional testing of the digestate.
   d.  Medical wastes, including expired or unused antibiotics, petroleum products not designed for use in manure storage facilities, pesticides, paints, solvents, hazardous materials, municipal or sanitary waste or sludge, industrial wastewater, contaminated feedstock, slaughterhouse wastes, and residues from processing of food materials that have not been deemed acceptable for human consumption shall not be processed in the anaerobic digester system.
    Sec. 17.  NEW SECTION.  459C.202  Construction design standard —— anaerobic digester systems.
   1.  The department shall adopt rules establishing construction design standards for formed manure storage structures that are part of an anaerobic digester system.
   2.  The construction design standards shall be based, to every extent possible, upon uniform standards such as available standards promulgated by the American society for testing and materials international. The department may require that all or part of a formed manure storage structure be constructed of concrete.
   3.  The construction design standards for concrete shall provide for all of the following:
   a.  The concrete’s minimum compressive strength calculated on a pounds-per-square-inch basis.
   b.  The use of reinforcement, including but not limited to the grade, amount, and location of steel rebar, fiberglass, or similar materials set in the concrete, or the use of exterior braces to support joints.
   c.  The depth of footings.
   d.  The thickness of the footings, the floor, and walls.
   4.  A person shall only construct a formed manure storage structure on karst terrain or an area that drains into a known sinkhole pursuant to upgraded construction design standards necessary to ensure that the structure does not pollute groundwater sources. The construction of unformed manure storage structures is prohibited on karst terrain.
    Sec. 18.  NEW SECTION.  459C.203  Distance requirements.
   1.  Water quality related requirements.
   a.  Except as provided in paragraph “b”, the following requirements shall apply to the location of an anaerobic digester system manure storage structure:
   (1)  An anaerobic digester system manure storage structure shall not be constructed closer than five hundred feet away from the surface intake of an agricultural drainage well. An anaerobic digester system manure storage structure shall not be constructed closer than two thousand feet from a wellhead, cistern of an agricultural drainage well, or known sinkhole.
   (2)  An anaerobic digester system manure storage structure shall not be constructed if the anaerobic digester system manure storage structure as constructed is closer than any of the following:
   (a)  Five hundred feet away from a water source other than a major water source.
   (b)  One thousand feet away from a major water source.
   (c)  Two thousand five hundred feet away from a designated wetland.
   (3)  (a)  A water source, other than a major water source, shall not be constructed, expanded, or diverted, if the water source as constructed, expanded, or diverted is closer than five hundred feet away from an anaerobic digester system manure storage structure.
   (b)  A major water source shall not be constructed, expanded, or diverted, if the major water source as constructed, expanded, or diverted is closer than one thousand feet from an anaerobic digester system manure storage structure.
   (c)  A designated wetland shall not be established, if the designated wetland is closer than two thousand five hundred feet away from an anaerobic digester system manure storage structure.
   (4)  An anaerobic digester system manure storage structure shall not be constructed on land that is part of a one hundred year floodplain as designated by rules adopted by the department pursuant to section 459.301.
   b.  A separation distance required in paragraph “a” shall not apply to any of the following:
   (1)  A location or object and a farm pond or privately owned lake, as defined in section 462A.2.
   (2)  An anaerobic digester system manure storage structure constructed with a secondary containment barrier. The department shall adopt rules providing for the construction and use of a secondary containment barrier, including construction design standards.
   2.  Air quality related requirements.
   a.  Except as provided in paragraph “b”, the following requirements shall apply to the location of an anaerobic digester system manure storage structure:
   (1)  An anaerobic digester system manure storage structure shall not be constructed closer than three thousand feet from a residence not owned by the owner of the anaerobic digester system or the owner of the animal feeding operation where the anaerobic digester system is located; a bona fide religious institution; a public use area; a commercial enterprise; or an educational institution.
   (2)  An anaerobic digester system manure storage structure shall not be constructed closer than one hundred feet from a public thoroughfare.
   b.  A separation distance required in paragraph “a” shall not apply to any of the following:
   (1)  (a)  An anaerobic digester system manure storage structure that is constructed or expanded, if the titleholder of the land benefiting from the distance separation requirement executes a written waiver with the titleholder of the land where the structure is located. If an anaerobic digester system manure storage structure is constructed or expanded within the separation distance required between an anaerobic digester system manure storage structure and a public thoroughfare, the state or a political subdivision constructing or maintaining the public thoroughfare benefiting from the distance separation requirement may execute a written waiver with the titleholder of the land where the structure is located.
   (b)  A written waiver under this subsection becomes effective only upon the recording of the waiver in the office of the recorder of the county in which the benefited land is located. The filed waiver shall preclude enforcement by the state as it relates to a distance requirement between the anaerobic digester system manure storage structure and the location or object benefiting from the separation distance requirement.
   (2)  An anaerobic digester system manure storage structure that is constructed or expanded within any distance from a residence, educational institution, commercial enterprise, bona fide religious institution, city, or public use area, if the residence, educational institution, commercial enterprise, or bona fide religious institution was constructed or expanded, or the boundaries of the city or public use area were expanded, after the date that the anaerobic digester system manure storage structure was established. The date the anaerobic digester system manure storage structure was established is the date on which the anaerobic digester system commenced operating. A change in ownership or expansion of the anaerobic digester system shall not change the established date of operation.
    Sec. 19.  NEW SECTION.  459C.301  Minimum requirements for digestate control.
   1.  An anaerobic digester system shall retain all digestate produced by the operation between periods of digestate disposal or delivery to animal feeding operations. For purposes of this section, dry digestate may be retained by stockpiling as provided in this subchapter. An anaerobic digester system shall not discharge digestate directly into water of the state or into a tile line that discharges directly into water of the state.
   2.  Digestate from an anaerobic digester system shall be disposed of in a manner that will not cause surface water or groundwater pollution.
   3.  The owner of the anaerobic digester system that discontinues the use of the operation shall remove all digestate from related anaerobic digester system structures used to store digestate within six months following the date that the anaerobic digester system is discontinued.
    Sec. 20.  NEW SECTION.  459C.302  Disposal of digestate requirements.
   1.  If digestate is returned to an animal feeding operation for land application, the material must be accounted for in the animal feeding operation’s manure management plan or nutrient management plan.
   2.  For any portion of the digestate not returned to an animal feeding operation, the owner of the anaerobic digester system shall satisfy all applicable law for proper application of the digestate.
    Sec. 21.  NEW SECTION.  459C.401  Stockpiling requirements.
   1.  An anaerobic digester system may stockpile materials prior to digestation or dry digestate so long as the facility stockpiles the materials and dry digestate in compliance with restrictions applicable to stockpiling as provided in this subchapter.
   2.  Anaerobic digester system stockpiles shall not be commingled with animal feeding operation stockpiles.
   3.  A person shall not stockpile the materials and dry digestate within the following distances from any of the following:
   a.  A terrace tile inlet or surface tile inlet, two hundred feet. However, this paragraph does not apply to a person who stockpiles the dry digestate in a manner that does not allow precipitation-induced runoff to drain from the stockpile to the terrace tile inlet or surface tile inlet. A terrace tile inlet or surface tile inlet does not include a tile inlet that is not directly connected to a tile line that discharges directly into a water of the state.
   b.  (1)  A designated area, four hundred feet. However, an increased separation distance of eight hundred feet shall apply to all of the following:
   (a)  A high-quality water resource.
   (b)  An agricultural drainage well.
   (c)  A known sinkhole.
   (2)  Subparagraph (1) does not apply to a person who stockpiles materials or dry digestate in a manner that does not allow precipitation-induced runoff to drain from the stockpile to the designated area.
   c.  One thousand two hundred fifty feet from a residence not owned by the owner of the anaerobic digester system or the owner of the animal feeding operation where the anaerobic digester system is located; a bona fide religious institution; a public use area; a commercial enterprise; or an educational institution.
   4.  A person shall not stockpile materials or dry digestate in a grassed waterway.
   5.  A person shall not stockpile materials or dry digestate on land having a slope of more than three percent. However, this subsection shall not apply to a person who stockpiles materials or dry digestate using methods, structures, or practices that contain the stockpile, including but not limited to silt fences, temporary earthen berms, or other effective measures, and that prevent or diminish precipitation-induced runoff from the stockpile.
   6.  A person stockpiling materials or dry digestate on terrain, other than karst terrain, for more than fifteen consecutive days shall comply with any of the following:
   a.  Stockpile materials or dry digestate using a qualified stockpile structure or qualified stockpile cover. However, the person shall not stockpile materials or dry digestate using a qualified stockpile cover at a long-term stockpile location unless the person stockpiles the materials or dry digestate on compacted soil, compacted granular aggregates, asphalt, concrete, or other similar materials.
   b.  Deliver a stockpile inspection statement to the department by the fifteenth day of each month in writing, which may be on a form prescribed by the department. The stockpile inspection statement shall provide the location of the stockpile and document the results of an inspection conducted by the person during the previous month. The inspection must evaluate whether precipitation-induced runoff is draining away from the stockpile and, if so, describe actions taken to prevent the runoff. If an inspection by the department documents that precipitation-induced runoff is draining away from a stockpile, the person shall immediately remove dry digestate from the stockpile in compliance with this chapter or comply with all directives of the department to prevent the runoff.
   7.  A person stockpiling materials or dry digestate on karst terrain shall comply with all of the following:
   a.  If the proposed stockpile is located in potential karst terrain, a professional engineer licensed in Iowa or a staff person or organization qualified through the Iowa natural resource conservation service shall submit a soil report to the department, based on the results from soil corings, test pits, or acceptable well log data, describing the subsurface materials and vertical separation distance from the proposed bottom of the stockpile to the underlying limestone, dolomite, or soluble rock. A minimum of two soil corings spaced equally within the stockpile location or two test pits located within five feet of the outside of the stockpile location are required if acceptable well log data is not available. The soil corings shall be taken to a minimum depth of twenty-five feet below the bottom elevation of the proposed stockpile or into bedrock, whichever is shallower. After the soil exploration is complete, each coring or test pit shall be properly plugged with concrete grout, bentonite, or similar materials and completion of this activity shall be documented in the soil report. If a twenty-five-foot vertical separation distance can be maintained between the bottom of the proposed stockpile and limestone, dolomite, or other soluble rock, then the structure is not considered to be in karst terrain.
   b.  The person shall stockpile the dry digestate at a location where there is a vertical separation distance of at least five feet between the bottom of the stockpile and the underlying limestone, dolomite, or other soluble rock.
   c.  A person who stockpiles materials or dry digestate for more than fifteen consecutive days shall use any of the following:
   (1)  A qualified stockpile structure.
   (2)  A qualified stockpile cover. However, the person shall not stockpile materials or dry digestate using a qualified stockpile cover at a long-term stockpile location unless the stockpile is located on reinforced concrete at least five inches thick.
   8.  A person stockpiling materials or dry digestate shall comply with applicable national pollutant discharge elimination system permit requirements pursuant to the federal Water Pollution Control Act, 33 U.S.C. ch. 26, as amended, and 40 C.F.R. pts. 122 and 412.
   9.  A person stockpiling materials or dry digestate shall remove the dry digestate and apply it in accordance with the provisions of this chapter within six months after the materials or dry digestate are first stockpiled.
    Sec. 22.  NEW SECTION.  459C.501  General enforcement.
   The department and the attorney general shall enforce the provisions of this chapter in the same manner as provided in chapter 459, subchapter VI.
    Sec. 23.  NEW SECTION.  459C.502  Violations —— civil penalty.
   A person who violates a provision of this chapter for which the alleged harm is related to air quality shall be subject to the same penalty as provided in section 459.602. A person who violates a provision of this chapter for which the alleged harm is related to water quality shall be subject to the same penalties and restrictions as provided in section 459.603. A habitual violator of the provisions of this chapter shall be subject to the same penalties and restrictions as provided in sections 459.604 and 459.605. Any collected civil penalty and interest on a civil penalty shall be credited to the Iowa nutrient research fund created in section 466B.46.
    Sec. 24.  CODE EDITOR DIRECTIVE.
   1.  The Code editor shall designate sections 459C.101 through 459C.502, as enacted by this division of this Act, as new chapter 459C, entitled “Anaerobic Digester Systems”.
   2.  The Code editor shall designate sections 459C.101 through 459C.103, as enacted by this division of this Act, as a new subchapter within chapter 459C, entitled “General Provisions”.
   3.  The Code editor shall designate sections 459C.201 through 459C.203, as enacted by this division of this Act, as a new subchapter within chapter 459C, entitled “Construction Provisions”.
   4.  The Code editor shall designate sections 459C.301 through 459C.302, as enacted by this division of this Act, as a new subchapter within chapter 459C, entitled “Digestate Disposal”.
   5.  The Code editor shall designate section 459C.401, as enacted by this division of this Act, as a new subchapter within chapter 459C, entitled “Stockpiling Provisions”.
   6.  The Code editor shall designate sections 459C.501 through 459C.502, as enacted by this division of this Act, as a new subchapter within chapter 459C, entitled “Enforcement Provisions”.
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 rate-regulated utilities by modifying provisions relating to electric power generation, energy storage, and transmission facility ratemaking principles, creating tariffs for public utility innovation programs, implementing land restoration standards, and modifying the energy infrastructure revolving loan program.
   Division I of the bill modifies intent language to reflect an intent to attract energy storage and develop nuclear power generation for consumers in the state.
   Division I of the bill alters ratemaking principle processes and modifies when a rate-regulated public utility may seek ratemaking principles. In addition to electric power generating facilities and alternate energy production facilities, the utilities commission (commission) may specify the ratemaking principles applying to an energy storage facility.
   Division I of the bill provides that a rate-regulated public utility may seek ratemaking principles from the commission when there are construction-related costs of an electric power generating facility with a nameplate generating capacity equal to or greater than 40 megawatts, an alternate energy production facility, or an energy storage facility, or significant alterations to an existing electric power generating facility, alternate energy production facility, or energy storage facility. Current law generally provides that when a rate-regulated public utility files an application to construct a baseload electric power generating facility with a nameplate generating capacity equal to or greater than 300 megawatts or a combined-cycle electric power generating facility or an alternate energy production facility, or to significantly alter an existing generating facility or a new alternate energy production facility, the commission shall specify in advance the ratemaking principles that will apply.
   Division I of the bill modifies the requirements for a significant alteration of an existing generating facility to qualify for the establishment of ratemaking principles. Division I of the bill provides that to qualify for ratemaking principles, the significant alteration can convert an electric power generating facility to an alternate fuel type, add carbon capture and carbon storage to an electric power generating facility, add a facility to capture exhaust heat to an electric power generating facility, repower an alternate energy production facility, or add energy storage to an existing electric power generating facility, alternate energy production facility, or energy storage facility. Current law provides that to qualify for ratemaking principles, the significant alteration can convert a coal-fueled facility into a gas-fueled facility, add carbon capture and carbon storage to a coal-fueled facility, add gas-fueled capability to a coal-fueled facility, add a biomass-fueled capability to a coal-fueled facility, or repower an alternate energy production facility.
   Division I of the bill provides that a utility investment to convert an electric power generating facility to a different fuel type, add carbon capture and carbon storage to an electric power generating facility, or add a fuel type to an electric power generating facility shall be eligible to apply the ratemaking principles established by an order issued prior to construction or lease of a facility.
   Division I of the bill provides that a rate-regulated public utility may seek ratemaking principles for leasing or owning a new electric power generating facility with a nameplate generating capacity equal to or greater than 40 megawatts, a new energy storage facility, or a new alternate energy production facility. Current law provides that a rate-regulated public utility leasing or owning a new baseload electric power generating facility with a nameplate generating capacity equal to or greater than 300 megawatts, a combined-cycle electric power generating facility, or a new alternate energy production facility may seek ratemaking principles.
   Division I of the bill requires the commission to issue an order after the contested case proceeding that the ratemaking principles will apply when the costs of the electric power generating facility or alternate energy production facility are included in regulated electric rates once the commission finds that the rate-regulated public utility’s application for ratemaking principles meets all the commission’s requirements.
   Division I of the bill requires a rate-regulated public utility seeking ratemaking principles to provide support of reasonability with an electric utility resource plan that has been updated within 24 months of filing the application.
   Division I of the bill requires the commission to adopt rules for proceedings to conclude 10 months after a petition is filed.
   Division I of the bill requires rate-regulated electric utilities to file a resource plan at least once every five years. The resource plan must consider all reasonable resources by the utility for meeting the probable future demand for energy, including supply resources and conservation and management of demand. For conservation and management of demand, the resource plan shall include programs approved in the electric utility’s most recently approved energy efficiency plan. The objectives of the resource plan include but are not limited to adequate, cost-effective, and reliable energy service considering costs, fuel diversity, and probable future demand for energy, and should reflect the circumstances and management judgment of the electric utility. The resource plan does not require specific outcomes or specific investment decisions.
   Division I of the bill directs the commission to issue an order within 90 days of the resource plan acknowledging receipt of the plan. This order may provide recommendations to an electric utility regarding any additional analyses or actions that the electric utility should consider completing in its next resource plan.
   Division I of the bill directs the commission to adopt rules regarding the timeline and stakeholder process to review and provide comments on the resource plan. The stakeholder process shall include the electric utility organizing and facilitating a stakeholder conference with representatives of the commission, the consumer advocate, and the electric utility’s customers. Division I of the bill directs the electric utility to make a good faith effort to inform and consider input from the commission, the consumer advocate, and stakeholders.
   Division II of the bill provides that it is the intent of the general assembly to encourage public utility innovation in pricing and programs, and that the new innovations not negatively impact nonparticipating customers. Division II of the bill additionally provides that it is the intent of the general assembly to attract and retain customers for the benefit of the state’s economy, support of economical energy production, and support of sustainable energy production.
   Division II of the bill authorizes a tariff program. Division II of the bill provides that a tariff shall comply with several provisions. The tariff shall be optional for customers, define eligible customer groups, and assess program costs to participating customers. Program costs shall include specified direct costs arising from the tariff program and costs related to the implementation of tariff programs. Participants of a tariff program shall participate in future indirect costs allocated to customers of that utility without regard for the existence of an approved tariff. The tariff shall not allow for an eligible customer group excluding directly competing customers in the same customer service territory, alter existing base rate or charges of the public utility, or negatively impact nonparticipating customers. Negative impacts include additional costs incurred by nonparticipating customers due to costs arising from the tariff, tariff participants no longer sharing in customer class costs, or decreased customer benefit from existing infrastructure.
   Division II of the bill explains that a tariff may include provisions relating to recovery of costs, rate of return, application of the program to other specified patterns, program benefits, and refunds, credits, or waivers when the program replaces an existing service, or recovery of costs associated with existing facilities. A participating program customer shall pay the costs of the services received from the public utility unless the costs are refunded, credited, or waived under the program. Division II of the bill provides that if the program or eligible customer group cease to exist and the public utility seeks recovery of the program-specific facilities through a general rate case proceeding, the public utility shall demonstrate the reasonableness and prudence without any presumption regarding approval of such request. A public utility shall be allowed to recover program-specific facilities through general rate case proceedings. If the utility can demonstrate to the commission that the proposed tariff generates excess revenue for the utility as compared to total revenue without the tariff, the excess revenue may be retained by the utility.
   Division II of the bill provides for tariff application and approval. A public utility’s authority is not mandatory regarding tariffs. Division II of the bill provides that an application for a tariff or amendment to a tariff shall be filed with the commission. The commission shall approve, deny, or docket for further review an application within 30 days. If the commission dockets the application for further review, the commission shall render a decision within 90 days from the date of application filing, unless an objection is filed. The commission shall not reconsider existing programs previously approved under the tariff during a review of an application for an amendment to a tariff unless the review of a program is proposed as part of the amendment.
   Division II of the bill prohibits the commission from certain actions. Division II of the bill provides that the commission shall not limit the number of applications a public utility may file, deny, or condition the approval of a tariff because a public utility is subject to an alternative regulatory mechanism, or require a public utility subject to an alternative regulatory mechanism to record revenues and costs in an inconsistent manner with specified federal standards, provided that the proposed tariff would not result in detrimental treatment of other customers or require adjustment to the calculation of the alternative regulatory mechanism to reflect the impact of an approved tariff. Division II of the bill prohibits the commission from conditioning approval of a tariff on the requirement that the public utility change the proposal to unagreed-upon terms, but this prohibition does not prevent the commission from identifying changes to the proposal that might result in approval.
   Division II of the bill provides that tariffs and programs approved pursuant to division II of the bill shall be rebuttably presumed to be just and reasonable in general rate case proceedings. Division II of the bill prohibits the commission from conditioning approval or denial of a tariff on the final adoption of rules and requires the commission to adopt rules related to division II of the bill.
   Division II of the bill applies to a public utility filing an application with the commission for review of a tariff on or after the effective date of division II of the bill.
   Division III of the bill relates to electric transmission lines and electric transmission owners. Division III of the bill expounds the legislative purpose of Code section 478.16, identifying Iowa consumers’ urgent need for development and investment in high-voltage transmission. Division III of the bill provides that an incumbent electric transmission owner may be formed, located, or headquartered in any state as long as the electric transmission line is located in Iowa.
   Division III of the bill defines an “incumbent electric transmission owner” as an individual or entity who, as of July 1, 2024, owns and maintains an electric transmission line in this state that is required for rate-regulated electric utilities, municipal electric utilities, and rural electric cooperatives in the state to provide electric service to the public for compensation.
   Under division III of the bill, an incumbent electric transmission facility owner has the right to construct, own, and maintain an electric transmission line that directly connects to the electric transmission facility. If a proposed transmission line would directly connect to facilities owned by two or more facility owners, each owner has the right to construct, own, and maintain the electric transmission line individually and equally.
   Division III of the bill requires an incumbent electric transmission owner exercising its right to construct, own, and maintain an electric transmission line to offer public power utilities an opportunity to jointly own a portion of the electric transmission line. The offered amount must be at least the amount of the public power utility’s electric load divided by the total electric load in the applicable incumbent electric transmission owner’s pricing zone. Division III of the bill does not prohibit the entities from agreeing to joint ownership in a different amount. Additionally, division III of the bill allows the public power utility to transfer or assign its joint ownership rights to another public power utility or group of public power utilities with the consent of the incumbent electric transmission owner.
   Division III of the bill allows an incumbent electric transmission owner exercising its right to construct, own, and maintain an electric transmission line to contract with another electric transmission owner or electric public utility to jointly own a portion of the electric transmission line.
   Division III of the bill requires the incumbent electric transmission owner or owners with approved electric transmission lines not subject to right of first refusal in a federally registered planning authority transmission plan to give notice to the commission whether the owner or owners intend to construct, own, and maintain the electric transmission line. The notice shall be given within the later of 90 days of approval for construction or 90 days after enactment of division III of the bill. The commission may determine whether another person may construct the electric transmission line if the incumbent electric transmission owner or owners give notice declining to construct or do not give timely notice.
   Division III of the bill requires incumbent electric transmission owners to provide documentation to the commission that shows utilization of competitively bid construction contracts that meet all necessary technical, commercial, and other specifications required for compliant construction.
   Division III of the bill allows the consumer advocate free access to all documents, reports, and information submitted to the commission regarding cost accountability measures for the construction of electric transmission lines. These documents, reports, and information may be used by the consumer advocate for any purpose within the scope of the consumer advocate’s duties. These provisions do not create a private cause of action or complaint.
   Division III of the bill directs the commission to adopt rules to implement the land restoration requirements after initial construction of an electric transmission line as set forth in division III of the bill.
   Division III of the bill requires incumbent electric transmission owners to repair drain tiles damaged during construction as soon as practicable and to complete permanent repairs as soon as practicable after initial construction. The permanent repairs must be of the same quality, size, and flow capacity of the original drain tile.
   Division III of the bill requires incumbent electric transmission owners to remove all nonnative rocks larger than three inches in diameter from the easement area. The disposal of rock that cannot be used as backfill must be done at a location and in a manner agreed to between the incumbent electric transmission owner and the landowner.
   Division III of the bill requires the incumbent electric transmission owner to till agricultural land affected by construction, including right-of-way access points or roads, after electric transmission line construction activities are completed on the affected property. The land must be tilled at least 18 inches deep in land used for crop production and 12 inches deep in all other land, unless otherwise agreed to by the landowner.
   Division III of the bill requires the incumbent electric transmission owner to restore soil conservation practices and structures damaged during construction to their previous state, compact the soil used to repair embankments intended to retain water, and reestablish any vegetation disturbed during construction, including cover crops.
   Division III of the bill requires the incumbent electric transmission owner to reseed the agricultural land, excluding row crops and small grain production, following compaction of the land. Seeding for cover crops may be delayed if construction is completed too late in the year and is not required if the land will be tilled the following year. When the season is not suitable for the seeding of cover crops, the landowner may request ground cover to prevent soil erosion.
   Division III of the bill requires the incumbent electric transmission owner to remove all field entrances and temporary roads used during construction and to restore the areas to their previous state following the completion of the initial construction.
   Division III of the bill requires the incumbent electric transmission owner to use good practices when constructing in wet conditions and to grade and till any rutted land in order to restore the land to its original condition to the extent practicable. Additionally, division III of the bill allows the landowner to repair damage caused by construction in wet conditions. The incumbent electric transmission owner shall then reimburse the landowner for reasonable costs of repair. Division III of the bill requires an electric transmission owner to utilize mudflats, mats, or other measures to minimize soil disturbance when using heavy equipment in wetlands.
   Division III of the bill requires the incumbent electric transmission owner to provide contact information to all persons affected by the construction of each transmission line.
   Division III of the bill allows the commission to appoint an inspector to determine compliance with restoration standards in the event the incumbent electric transmission owner and the landowner dispute over potential violations. The cost of the inspection shall be paid by the incumbent electric transmission owner. If the inspector determines there have been violations of the restoration standards, the commission will provide oral and written notice to the incumbent electric transmission owner. The commission will order corrective actions be taken to comply with the standards. The costs of the corrective actions will be borne by the electric transmission owner.
   Division III of the bill allows the commission to issue an order requiring corrective action and impose civil penalties if the incumbent electric transmission owner or its contractor do not comply with the required standards.
   Division III of the bill requires the commission to instruct the inspectors on the statutes, rules, and responsibilities regarding restoration standards.
   Division III of the bill requires petitioners for a franchise for electric transmission construction to file a land restoration plan outlining how the construction will conform to the required standards. The restoration plan will also be provided to all property owners affected by the construction.
   Division III of the bill allows alternative provisions in independent agreements with landowners regarding protecting or restoring property as long as these provisions are in writing and are provided to the commission.
   Division III of the bill allows electric transmission owners to propose alternate methods of land restoration to the commission. The commission, by waiver, may allow variations to the land restoration requirements if the proposed alternate methods would restore the land to a condition as good or better than those required by division III of the bill.
   Division III of the bill allows the commission to waive the preparation of a separate land restoration plan, in whole or in part, if the incumbent electric transmission owner satisfies the requirements through similar agreement with other agencies in the state. The relevant agreements must be filed with the commission.
   Division III of the bill does not limit, expand, or otherwise modify the rights of access and obligations for damages set forth in Code section 478.17.
   Division III of the bill takes effect upon enactment.
   Division III of the bill applies retroactively to an electric transmission line included in a federally registered planning authority long-term transmission plan approved on or after July 1, 2020, with the exception of the provisions requiring incumbent electric transmission owners to offer public power utilities the option to jointly own qualifying electric transmission lines. For this exception, division III of the bill applies retroactively to July 1, 2024.
   Division IV of the bill relates to the energy infrastructure revolving loan program, which is renamed as the “energy and water infrastructure revolving loan program”.
   Under current law, the energy infrastructure revolving loan fund (fund) and program are administered by the Iowa energy center (center). Division IV of the bill instead places the administrative duty with the Iowa economic development authority (IEDA) and renames the fund the “energy and water infrastructure revolving loan fund”.
   Division IV of the bill adds financial assistance for the development and construction of water infrastructure that supports economic development to the fund’s approved uses, including drinking water treatment systems and wastewater treatment systems.
   Division IV of the bill expands the entities eligible for assistance under the fund to include a county or city.
   Under current law, the approval of the center’s governing board is required before IEDA can determine the amount and the terms of all financial assistance awarded to an eligible borrower and all agreements and administrative authority are vested in the center’s governing board. Division IV of the bill removes the approval requirement by the center and its authority regarding agreements.
   Division IV of the bill adds that to be eligible for a financial assistance award under the energy and water infrastructure revolving loan program, an eligible borrower must demonstrate that the proposed project will attract and encourage the location of new industrial enterprise or the expansion of existing industrial enterprise. Division IV of the bill states that IEDA shall determine the amount and the terms of all financial assistance awarded to an eligible borrower under the program and that all agreements and administrative authority shall be vested in IEDA. Division IV of the bill provides that IEDA may adopt rules for the implementation of this program.
   Division IV of the bill grants IEDA the ability to authorize the transfer of up to $633,000 annually to Iowa state university of science and technology to be used for providing financial assistance to the state load forecasting center.
   Division V of the bill relates to anaerobic digester systems. Division V of the bill states its purpose is to provide requirements relating to the construction, including the expansion, and operation of anaerobic digester systems and the control of digestate. Division V of the bill directs the environmental protection commission to make rules for this stated purpose. Division V of the bill states that if the provisions of new Code chapter 459C conflict with Code chapter 459, 459A, or 459B, the provisions of Code chapter 459C shall prevail.
   Division V of the bill directs the department of natural resources (DNR) to approve applications for permits for construction, including expansion, of anaerobic digester systems based on procedures required in division V of the bill and rules created by DNR pursuant to division V of the bill. Division V of the bill prohibits the construction of an anaerobic digester system, regardless of size, until the construction permit has been approved. The applicant must also submit a $250 permit application fee, a written plan for disposal of the digestate, and a written operation plan for an anaerobic digester system.
   Division V of the bill requires an anaerobic digester system to accept only manure unless DNR otherwise approves the inclusion of organic by-product, food product, or food for human consumption. Nonmanure materials shall not compose more than 10 percent of the total material added to an anaerobic digester system.
   Division V of the bill requires a daily record of materials added to an anaerobic digester system to be kept and maintained at the facility and grants DNR the authority for additional testing or monitoring of the materials added to an anaerobic digester system and the digestate.
   Division V of the bill prohibits medical wastes, including expired or unused antibiotics, petroleum products not designed for use in manure storage facilities, pesticides, paints, solvents, hazardous materials, municipal or sanitary waste or sludge, industrial wastewater, contaminated feedstock, slaughterhouse wastes, and residues from processing of food materials that have not been deemed acceptable for human consumption from being processed in an anaerobic digester system.
   Division V of the bill directs DNR to adopt rules to establish construction design standards for formed manure storage structures that are part of an anaerobic digester system. Division V of the bill requires construction design standards to be based upon uniform standards and provides construction design standards for concrete.
   Division V of the bill prohibits the construction of unformed manure storage structures on karst terrain, but allows the construction of a formed manure storage structure on karst terrain or an area that drains into a known sinkhole if upgraded construction design standards necessary to ensure that the structure does not pollute groundwater sources are used.
   Division V of the bill provides separation distance requirements between an anaerobic digester system manure storage structure and a surface intake of a drainage well, wellhead, cistern of an agricultural well, known sinkhole, water source, or wetland. Division V of the bill provides exceptions for a location or object and a farm pond or privately owned lake.
   Division V of the bill prohibits construction, expansion, or diversion of a water source or the designation of a wetland if the action would cause an anaerobic digester system manure storage structure to be in violation of the distance requirements.
   Division V of the bill prohibits an anaerobic digester system manure storage structure from being constructed on land that is part of a 100 year floodplain as determined by DNR.
   Division V of the bill states there are no distance requirements between a location or object and a farm pond or privately owned lake. Additionally, distance requirements do not apply to an anaerobic digester system manure storage structure constructed with a secondary containment barrier approved by DNR.
   Division V of the bill provides separation distances between an anaerobic digester system manure storage structure and a residence, bona fide religious institution, public use area, commercial enterprise, educational institution, or public thoroughfare. Division V of the bill allows the titleholder of the land benefiting from the distance requirements to waive the distance requirements. Division V of the bill allows the state or political subdivision to waive distance requirements of public thoroughfares. The waivers must be filed with the county recorder before becoming effective.
   Division V of the bill allows an anaerobic digester system manure storage structure to be within the distance requirement from a residence, educational institution, commercial enterprise, bona fide religious institution, city, or public use area if the anaerobic digester system manure storage structure was operating in conformance with distance requirements, but was brought within the distance requirement due to the expansion or construction of a residence, educational institution, commercial enterprise, bona fide religious institution, city, or public use area. A change in ownership or expansion of an anaerobic digester system shall not change the established date of operation.
   Division V of the bill requires an anaerobic digester system to retain all digestate produced by operation between periods of digestate disposal or delivery to animal feeding operations and to dispose the digestate in a manner that will not cause surface water or groundwater pollution.
   Division V of the bill requires the owner of an anaerobic digester system that discontinues the use of the operation to remove all digestate from related anaerobic digester system structures used to store digestate within six months following the date that the anaerobic digester system is discontinued.
   Division V of the bill requires materials returned to an animal feeding operation for land application be accounted for in the animal feeding operation’s manure management plan or nutrient management plan and that the owner of the anaerobic digester system must satisfy all applicable laws for proper application of any portion of the digestate not returned to an animal feeding operation.
   Division V of the bill allows an anaerobic digester system to stockpile materials prior to digestation or dry digestate so long as the facility stockpiles the materials and dry digestate in compliance with restrictions applicable to stockpiling as provided in division V of the bill. Division V of the bill prohibits anaerobic digester system stockpiles from commingling with animal feeding operation stockpiles.
   Division V of the bill provides separation distance requirements between a stockpile and a designated area that includes a known sinkhole, a cistern, an abandoned well, an unplugged agricultural drainage well, an agricultural drainage well surface inlet, a drinking water well, a designated wetland, or a water source. Special separation distance requirements are provided for a high-quality water resource, an agricultural drainage well, or a known sinkhole. Division V of the bill provides special separation distance requirements between a stockpile and a terrace tile inlet or surface tile inlet. An exception allows a stockpile to be located closer than otherwise required from these water sources so long as it is maintained in a manner that will not allow precipitation induced runoff to drain from the material or dry digestate. Division V of the bill also provides separation distance requirements between a stockpile and a residence, bona fide religious institution, public use area, commercial enterprise, or educational institution.
   Division V of the bill provides that a stockpile cannot be located in a grassed waterway. The stockpile also cannot be located on a slope of a certain grade, unless efforts are taken to contain the stockpile and prevent runoff.
   If the materials or dry digestate are not stockpiled on karst terrain, division V of the bill does not provide any requirements so long as the materials or dry digestate are stockpiled for 15 days or less. Otherwise, division V of the bill requires a person to comply with stockpiling requirements or file a monthly inspection report with DNR. The special stockpiling requirements include either the use of a structure or the use of an impermeable cover. However, if the stockpile is covered on a long-term basis, it must be sited on compacted or other prepared ground.
   Division V of the bill states that if a proposed stockpile is located on potential karst terrain, a qualified person must test the ground in conformance with requirements described in division V of the bill and submit a soil report to confirm whether the proposed stockpile location is on karst terrain. If the material or dry digestate is stockpiled on karst terrain, there must be a separation distance between the bottom of the stockpile and the soluble rock, regardless of how long the stockpile is located at that location. For material or dry digestate that is stockpiled for more than 15 days, special compliance requirements apply, including either the use of a structure or an impermeable cover. If the stockpile is located at that location on a long-term basis, it must be sited on concrete.
   Division V of the bill requires a person stockpiling material or dry digestate to comply with all applicable national pollutant discharge elimination system permit requirements pursuant to the federal Water Pollution Control Act.
   Division V of the bill requires a person stockpiling materials or dry digestate to remove the dry digestate and apply it in accordance with the provisions of division V of the bill within six months after the materials or dry digestate are first stockpiled.
   Division V of the bill directs DNR and the attorney general to enforce Code chapter 459C in the same manner as provided in Code chapter 459, subchapter VI. A person who violates the provisions of division V of the bill for which the alleged harm is related to air quality shall be subject to the same penalty as provided in Code section 459.602. A person who violates the provisions of division V of the bill for which the alleged harm is related to water quality shall be subject to the same penalties as provided in Code section 459.603. A habitual violator of the provisions of division V of the bill shall be subject to the same penalties and restrictions as provided in Code sections 459.604 and 459.605. Any collected civil penalty and interest on a civil penalty shall be credited to the Iowa nutrient research fund created in Code section 466B.46.