HSB 630 (LSB 6839YC (1) 91)

HOUSE FILE _____ 

BY  (PROPOSED COMMITTEE ON COMMERCE BILL BY CHAIRPERSON YOUNG)

A BILL FOR

An Act relating to customer-based energy, including power plants and energy storage.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 474.1, subsections 3 and 4, Code 2026, are amended to read as follows:
   3.  The utilities commission shall regulate and supervise public utilities operating in the state. The commission shall enforce and implement chapters 476, 476A, 476E, 477C, 478, 479, 479A, and 479B and shall perform other duties assigned to it by law.
   4.  As used in this chapter and chapters 475A, 476, 476A, 476E, 477A, 477C, 478, 479, 479A, and 479B, “commission” and “utilities commission” mean the Iowa utilities commission.
    Sec. 2.  NEW SECTION.  476E.1  Definitions.
   For purposes of this chapter:
   1.  “Customer-based energy storage company” means a company that provides power to a customer through an energy storage system. A customer-based energy storage company shall not be considered an electric utility or any other type of public utility if it meets all of the following criteria:
   a.  Does not use energy from the electric grid during peak energy times as defined by the commission.
   b.  If the company produces electricity, a portion of the electricity is stored for use during peak energy times such that the company can demonstrate to the commission that the use of such electricity produces an overall benefit to nonparticipating customers.
   c.  Is certified by the commission.
   2.  “Customer-based power plant” means a system that aggregates, manages, and optimizes distributed energy resources, including but not limited to solar panels, wind turbines, battery storage, and controllable loads, to operate collectively as a single entity within the electric grid for the purposes of energy supply, demand response, and ancillary services.
   3.  “Distributed energy resource” means any electricity-producing resource or controllable load that is interconnected at the distribution level of the electric grid of a public utility, including renewable energy systems, energy storage devices, and demand response capabilities.
   4.  “Operator” means any individual, entity, or organization that owns, operates, or manages a customer-based electric generating facility within the state of Iowa.
   5.  “Public utility” means the same as defined in section 476.1.
    Sec. 3.  NEW SECTION.  476E.2  Customer-based power plants.
   1.  The purpose of this section is to facilitate the deployment and operation of customer-based power plants within the state of Iowa, to establish a clear and comprehensive regulatory framework, to safeguard the interests of all stakeholders, and to promote innovation and grid resilience through distributed energy resources.
   2.  a.  Customer-based power plant operators shall maintain ongoing coordination with public utilities regarding scheduling, dispatch, and emergency protocols.
   b.  The commission shall establish operational protocols for customer-based power plants, including requirements for system reliability, demand response participation, and provision of ancillary service.
   3.  A customer-based power plant shall only operate within the geographic territory of a public utility subject to rate regulation under chapter 476.
   4.  Customer-based power plant operators shall implement safeguards to protect consumer data against unauthorized access, disclosure, or misuse. The commission shall promulgate minimum cybersecurity standards for customer-based power plant operators to ensure the integrity and resilience of customer-based power plant systems and associated data. Customer-based power plant operators must obtain informed consent from consumers before collecting, using, or sharing consumer data, and must provide mechanisms for consumers to access and correct their data.
   5.  a.  The commission shall establish a process to certify a customer-based power plant. The process shall demonstrate technical competence, financial stability, cybersecurity measures, and an ability to comply with all relevant laws and regulations.
   b.  The commission may approve and oversee pilot programs to evaluate innovative customer-based power plant models and technologies, and shall report any findings to the general assembly.
   c.  The commission shall adopt rules necessary to implement this chapter. The rules adopted shall include the following:
   (1)  Technical standards and reporting requirements of customer-based power plants.
   (2)  Penalties, including suspension or revocation of a certification for noncompliance.
    Sec. 4.  NEW SECTION.  476E.3  Customer-based energy storage.
   1.  A customer-based energy storage company may do any of the following:
   a.  Purchase power during nonpeak times through a market-based tariff to compensate for any distribution or transmission use.
   b.  Sell power during peak times through a market-based tariff to compensate for any distribution or transmission use.
   c.  Notwithstanding section 476.25, provide any portion of power to a customer located in the geographic territory of a public utility subject to rate regulation under chapter 476.
   2.  A public utility shall not discriminate against a customer who is a customer of a customer-based energy storage company.
   3.  The commission may approve and oversee pilot programs to evaluate innovative customer-based energy storage models and technologies, and shall report any findings to the general assembly.
   4.  The commission shall adopt rules necessary to implement this section. The rules adopted shall include the following:
   a.  Determination of peak energy times, technical standards, and reporting requirements.
   b.  A market-based tariff pursuant to this chapter. The tariff shall be constructed to benefit nonparticipating ratepayers.
   c.  A process to certify customer-based energy storage companies. The process shall demonstrate technical competence, financial stability, cybersecurity measures, and an ability to comply with all relevant laws and regulations.
   d.  Penalties, including suspension or revocation of a certification for noncompliance.
    Sec. 5.  NEW SECTION.  476E.4  New tariffs —— demand management.
   1.  If more than thirty months have passed since the commission has entered an order in a rate-review proceeding, the following parties may request a new tariff:
   a.  The office of consumer advocate.
   b.  A user or aggregation of users with a generating capacity of at least fifteen megawatts.
   2.  A request for a new tariff under this section must meet both of the following criteria:
   a.  Encourages the reduction of peak energy demand.
   b.  The value of the potential reduction of peak energy demand for nonparticipating customers exceeds the cost in projected lost revenue.
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 customer-based energy, including power plants and energy storage.
   The bill defines “customer-based energy storage company” as a company that provides power to a customer through an energy storage system and provides that the company is not considered an electric utility or any other type of public utility if it meets certain criteria. The bill defines “customer-based power plant” as a system that aggregates, manages, and optimizes distributed energy resources to operate collectively as a single entity for purposes that may include energy supply, demand response, and ancillary services.
   The bill requires operators of customer-based power plants (CPPs) to maintain ongoing coordination with public utilities regarding scheduling, dispatch, and emergency protocols. The bill requires the Iowa utilities commission (commission) to establish operational protocols for CPPs, including requirements related to system reliability, participation in demand response programs, and provision of ancillary services.
   The bill requires CPPs to operate only within the geographic territory of a public utility subject to rate regulation.
   The bill requires CPP operators to implement safeguards to protect consumer data from unauthorized access, disclosure, or misuse. The bill requires the commission to adopt minimum cybersecurity standards to ensure the integrity and resilience of CPP systems and associated data. The bill requires operators to obtain informed consent from consumers before collecting, using, or sharing consumer data and to provide mechanisms for consumers to access and correct their data.
   The bill requires the commission to establish a process to certify CPPs, requiring a demonstration of technical competence, financial stability, cybersecurity measures, and compliance with applicable laws and regulations. The bill authorizes the commission to approve and oversee pilot programs to evaluate innovative CPP models and technologies and requires the commission to report the findings to the general assembly.
   The bill authorizes a customer-based energy storage company to purchase power during nonpeak times and sell power during peak times through market-based tariffs to compensate for distribution or transmission use. The bill provides that a customer-based energy storage company may provide any portion of power to a customer regardless of assigned service area laws and regulations, provided the customer is located in the geographic area of a public utility subject to rate regulation. The bill prohibits a public utility from discriminating against a customer who is served by a customer-based energy storage company. The bill authorizes the commission to approve and oversee pilot programs to evaluate innovative customer-based energy storage models and technologies and requires reporting of the findings to the general assembly.
   The bill requires the commission to adopt rules necessary to implement the bill. The rules must address technical standards and reporting requirements for CPPs, determination of peak energy times, a market-based tariff designed to benefit nonparticipating ratepayers, certification of customer-based energy storage companies, and the establishment of penalties for noncompliance, including suspension or revocation of certifications.
   The bill provides that if more than 30 months have passed since the commission entered an order in a rate-review proceeding, the office of consumer advocate or a user or aggregation of users with a generating capacity of at least 15 megawatts may request a new tariff. The bill requires a requested tariff to encourage the reduction of peak energy demand and the value of the potential reduction of peak energy demand for nonparticipating customers to exceed the cost of projected lost revenue.