H.F. _____ Section 1. NEW SECTION . 476.52A Definitions. 1 As used in this subchapter unless the context otherwise 2 requires: 3 1. “Alternate energy production facility” means the same as 4 defined in section 476.42. 5 2. “Energy storage” means any system, equipment, facility, 6 or technology that is capable of absorbing energy, storing the 7 energy for a period of time, and dispatching the energy through 8 one of the following manners: 9 a. Using mechanical, electrochemical, thermal, 10 electrolysis, or other processes to convert and store electric 11 energy that was generated at an earlier time for use at a later 12 time. 13 b. Using mechanical, electrochemical, biochemical, or 14 thermal processes to convert and store energy generated 15 from mechanical processes that would otherwise be wasted for 16 delivery at a later time. 17 c. Storing energy in an electric, thermal, or gaseous 18 state for direct use for heating or cooling at a later time 19 in a manner that avoids the need to use electricity or other 20 fuel sources at that later time, such as a grid-enabled water 21 heater. 22 3. “Nuclear reactor” means an apparatus designed to produce 23 electrical or heat energy through sustained nuclear fission in 24 a self-supporting chain reaction. 25 4. “Repowering” means either the complete dismantling and 26 replacement of generation equipment at an existing project 27 site, or the installation of new parts and equipment to an 28 existing alternate energy production facility in order to 29 increase energy production, reduce load, increase service 30 capacity, improve project reliability, or extend the useful 31 life of the facility. 32 Sec. 2. Section 476.53, subsection 1, Code 2026, is amended 33 to read as follows: 34 1. It is the intent of the general assembly to attract 35 -1- LSB 5423YC (4) 91 sb/js 1/ 7

H.F. _____ the development of electric power generating , energy storage, 1 and transmission facilities within the state in sufficient 2 quantity to ensure reliable electric service to Iowa consumers , 3 ensure an adequate base load, and provide economic benefits to 4 the state. Ensuring reliable electric service and providing 5 economic benefits may require public utilities to consider 6 diverse electric power generating technologies and energy 7 storage technologies, including alternate energy production 8 facilities, nuclear reactors, and energy storage facilities. 9 It is also the intent of the general assembly to encourage 10 rate-regulated public utilities to consider altering existing 11 electric power generating facilities, where when reasonable, 12 to manage carbon emission intensity in order to facilitate the 13 transition to a carbon-constrained environment. It is also the 14 intent of the general assembly to encourage the development 15 of nuclear electric power generation within the state using 16 nuclear reactors and to use nuclear power to meet local and 17 regional electric needs. 18 Sec. 3. Section 476.53, subsection 3, paragraphs a, b, and 19 d, Code 2026, are amended to read as follows: 20 a. The commission shall specify in advance, by order issued 21 after conduct a contested case proceeding , the ratemaking 22 principles that will apply when the costs of the electric power 23 generating facility or alternate energy production facility are 24 included in regulated electric rates whenever a rate-regulated 25 public utility does seeks ratemaking principles for any of the 26 following: 27 (1) (a) Files an application pursuant to section 476A.3 28 to construct The costs of constructing in Iowa a baseload an 29 electric power generating facility with a nameplate generating 30 capacity equal to or greater than three hundred forty megawatts 31 or a combined-cycle electric power generating facility , or an 32 alternate energy production facility as defined in section 33 476.42 , or an energy storage facility, or the construction 34 costs to significantly alter an existing electric power 35 -2- LSB 5423YC (4) 91 sb/js 2/ 7

H.F. _____ generating facility , alternate energy production facility, or 1 energy storage facility . For purposes of this subparagraph, a 2 significant alteration of an existing generating facility must, 3 in order to qualify for establishment of ratemaking principles, 4 fall into one of the following categories: 5 (i) Conversion of a coal fueled an electric power generating 6 facility into a gas fueled to an alternate fuel type for the 7 electric power generating facility. 8 (ii) Addition of carbon capture and storage facilities at a 9 coal fueled to an existing electric power generating facility. 10 (iii) Addition of gas fueled capability to a coal fueled 11 facility, in order to convert the facility to one that will 12 rely primarily on gas for future generation facilities to 13 capture exhaust heat and thereby generate additional electric 14 power at an existing electric power generating facility . 15 (iv) Addition of a biomass fueled capability to a coal 16 fueled facility. 17 (v) (iv) Repowering of an alternate energy production 18 facility. For purposes of this subparagraph subdivision, 19 “repowering” shall mean either the complete dismantling and 20 replacement of generation equipment at an existing project 21 site, or the installation of new parts and equipment to an 22 existing alternate energy production facility in order to 23 increase energy production, reduce load, increase service 24 capacity, improve project reliability, or extend the useful 25 life of the facility. 26 (v) Addition of energy storage at an existing electric power 27 generating facility, alternate energy production facility, or 28 energy storage facility. 29 (b) With respect to a significant alteration of an 30 existing generating facility, an original facility shall 31 not be required to be either a baseload or a combined-cycle 32 facility. Only only the incremental investment undertaken 33 by a utility under subparagraph division (a), subparagraph 34 subdivision (i), (ii), or (iii), or (iv) shall be eligible 35 -3- LSB 5423YC (4) 91 sb/js 3/ 7

H.F. _____ to apply the ratemaking principles established by the order 1 issued pursuant to paragraph “e” . Facilities for which advanced 2 advance ratemaking principles are obtained pursuant to this 3 section shall not be subject to a subsequent commission review 4 pursuant to section 476.6, subsection 19 , to the extent that 5 the investment has been considered by the commission under 6 this section . To the extent an eligible utility has been 7 authorized to make capital investments subject to section 8 476.6, subsection 19 , such investments shall not be eligible 9 for ratemaking principles pursuant to this section . 10 (2) Leases or owns When leased or owned in Iowa, in whole or 11 in part, a new baseload electric power generating facility with 12 a nameplate generating capacity equal to or greater than three 13 hundred forty megawatts or a combined-cycle electric power 14 generating , a new energy storage facility, or a new alternate 15 energy production facility as defined in section 476.42 . 16 b. If the commission finds that the utility’s application 17 meets the requirements of paragraph “c” , the commission shall 18 specify by order issued after the contested case proceeding 19 the ratemaking principles that will apply when the costs of 20 the electric power generating facility or alternate energy 21 production facility are included in regulated electric rates. 22 In determining the applicable ratemaking principles, the 23 commission shall not be limited to traditional ratemaking 24 principles or traditional cost recovery mechanisms. Among the 25 principles and mechanisms the commission may consider, the 26 commission has the authority to approve ratemaking principles 27 proposed by a rate-regulated public utility that provide for 28 reasonable restrictions upon the ability of the public utility 29 to seek a general increase in electric rates under section 30 476.6 for at least three years after the generating facility 31 begins providing service to Iowa customers. 32 d. The applicable ratemaking principles shall be determined 33 in a contested case proceeding , which proceeding required by 34 paragraph “a” may be combined with the proceeding for issuance 35 -4- LSB 5423YC (4) 91 sb/js 4/ 7

H.F. _____ of a certificate conducted pursuant to chapter 476A . 1 Sec. 4. Section 476.53, subsection 3, Code 2026, is amended 2 by adding the following new paragraph: 3 NEW PARAGRAPH . h. Notwithstanding any provision of this 4 chapter to the contrary, the return on equity for a utility’s 5 wind energy systems and solar energy systems shall be the same 6 as the utility’s most recent rate proceeding. 7 EXPLANATION 8 The inclusion of this explanation does not constitute agreement with 9 the explanation’s substance by the members of the general assembly. 10 This bill relates to energy production including the 11 modification of electric power generation, energy storage, and 12 transmission facility ratemaking principles. 13 The bill modifies intent language to reflect an intent to 14 attract energy storage and develop nuclear power generation for 15 consumers in the state. 16 The bill alters ratemaking principle processes and modifies 17 when a rate-regulated public utility may seek ratemaking 18 principles. In addition to electric power generating 19 facilities and alternate energy production facilities, the 20 utilities commission (commission) may specify the ratemaking 21 principles applying to an energy storage facility. 22 The bill provides that a rate-regulated public utility may 23 seek ratemaking principles from the commission when there are 24 construction-related costs of an electric power generating 25 facility with a nameplate generating capacity equal to or 26 greater than 40 megawatts, an alternate energy production 27 facility, or an energy storage facility, or significant 28 alterations to an existing electric power generating facility, 29 alternate energy production facility, or energy storage 30 facility. Current law generally provides that when a 31 rate-regulated public utility files an application to construct 32 a baseload electric power generating facility with a nameplate 33 generating capacity equal to or greater than 300 megawatts 34 or a combined-cycle electric power generating facility or an 35 -5- LSB 5423YC (4) 91 sb/js 5/ 7

H.F. _____ alternate energy production facility, or to significantly alter 1 an existing generating facility, the commission shall specify 2 in advance the ratemaking principles that will apply. 3 The bill modifies the requirements for a significant 4 alteration of an existing generating facility to qualify for 5 the establishment of ratemaking principles. The bill provides 6 that to qualify for ratemaking principles, the significant 7 alteration can convert an electric power generating facility to 8 an alternate fuel type, add carbon capture and carbon storage 9 to an electric power generating facility, add a facility to 10 capture exhaust heat to an electric power generating facility, 11 repower an alternate energy production facility, or add energy 12 storage to an existing electric power generating facility, 13 alternate energy production facility, or energy storage 14 facility. Current law provides that to qualify for ratemaking 15 principles, the significant alteration can convert a coal 16 fueled facility into a gas fueled facility, add carbon capture 17 and carbon storage to a coal fueled facility, add gas fueled 18 capability to a coal fueled facility, add a biomass fueled 19 capability to a coal fueled facility, or repower an alternate 20 energy production facility. 21 The bill provides that a utility investment to convert an 22 electric power generating facility to a different fuel type, 23 add carbon capture and carbon storage to an electric power 24 generating facility, or add a fuel type to an electric power 25 generating facility shall be eligible to apply the ratemaking 26 principles established by an order issued prior to construction 27 or lease of a facility. 28 The bill provides that a rate-regulated public utility may 29 seek ratemaking principles for leasing or owning a new electric 30 power generating facility with a nameplate generating capacity 31 equal to or greater than 40 megawatts, a new energy storage 32 facility, or a new alternate energy production facility. 33 Current law provides that a rate-regulated public utility 34 leasing or owning a new baseload electric power generating 35 -6- LSB 5423YC (4) 91 sb/js 6/ 7

H.F. _____ facility with a nameplate generating capacity equal to or 1 greater than 300 megawatts, a combined-cycle electric power 2 generating facility, or a new alternate energy production 3 facility may seek ratemaking principles. 4 The bill requires the commission to issue an order after 5 the contested case proceeding that the ratemaking principles 6 will apply when the costs of the electric power generating 7 facility or alternate energy production facility are included 8 in regulated electric rates once the commission finds that the 9 rate-regulated public utility’s application for ratemaking 10 principles meets all the commission’s requirements. The 11 bill requires the return on equity for a utility’s wind 12 energy systems and solar energy systems to be the same as the 13 utility’s most recent rate proceeding. 14 -7- LSB 5423YC (4) 91 sb/js 7/ 7