SF 2324 (LSB 6760XS (1) 91)

SENATE FILE 2324

BY  TRONE GARRIOTT

A BILL FOR

An Act relating to customer classes for large energy use facilities, and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 476.6, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  22.  Large energy use facilities.
   a.  For purposes of this subsection:
   (1)  “Costs of serving” includes, as applicable, the costs incurred by an electric utility in providing transmission, distribution, energy, capacity, or ancillary electricity services, and any related costs or associated risks with serving a customer class or customer.
   (2)  “Large energy use facility” means a facility that uses or is able to use twenty megawatts or more and is primarily engaged in providing a service as described under code number 518210 of the North American industry classification system.
   b.  The commission shall create a customer class for each customer that is a large energy use facility. The customer class must be separate and distinct from customer classes for other customers and have its own rates, charges, and schedules. Any rate, charge, or schedule approved by the commission for the class must meet all of the following requirements:
   (1)  Directly assign the costs of serving to the customer.
   (2)  Mitigate the risk of other customer classes paying unwarranted costs.
   (3)  Mitigate the risk of shifting, in an unwarranted manner, the costs of serving a customer that is a large energy use facility to other customer classes, including costs incurred by an electric utility to meet load requirements resulting from the provision of electricity service to a customer that is a large energy use facility.
   c.  In deciding whether to approve a proposed rate, charge, or schedule of an electric utility for a customer class described under this subsection, the commission shall consider whether the rate, charge, or schedule may do any of the following:
   (1)  Result in, or have the potential to result in, increased costs or unwarranted risk to other customers.
   (2)  Provide for equitable contributions to grid efficiency, reliability, and resiliency benefits.
   (3)  Meet any other conditions the commission may require in the public interest.
   d.  An electric utility and a customer that is a large energy use facility are not required to use a classification of service provided for under this subsection if the commission has not approved for the electric utility a rate, charge, or schedule for that classification of service.
    Sec. 2.  APPLICABILITY.  This Act applies to electric utility services provided to large energy use facilities constructed or expanded on or after January 1, 2027.
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 classes for large energy use facilities.
   The bill defines “costs of serving” to include, as applicable, the costs incurred by an electric utility in providing transmission, distribution, energy, capacity, or ancillary electricity services, and any related costs or associated risks with serving a customer class or customer. The bill defines “large energy use facility” as a facility that uses or is able to use 20 megawatts or more and that is primarily engaged in providing a service described under code number 518210 of the North American industry classification system.
   The bill requires the utilities commission to create a customer class for each customer that is a large energy use facility. The customer class must be separate and distinct from customer classes for other customers and must have its own rates, charges, and schedules. The bill provides that any rate, charge, or schedule approved by the commission for a large energy use facility customer must directly assign the costs of serving the customer, mitigate the risk of other customer classes paying unwarranted costs, and mitigate the risk of shifting, in an unwarranted manner, the costs of serving a large energy use facility to other customer classes. The bill specifies that these costs include costs incurred by an electric utility to meet load requirements resulting from providing electricity service to a large energy use facility.
   The bill requires the commission, when deciding whether to approve a proposed rate, charge, or schedule for a large energy use facility customer class, to consider whether the proposal may result in or have the potential to result in increased costs or unwarranted risk to other customers, whether the proposal provides for equitable contributions to grid efficiency, reliability, and resiliency benefits, and whether the proposal meets any other conditions the commission may require in the public interest.
   The bill provides that an electric utility and a customer that is a large energy use facility are not required to use the customer classification created under the bill if the commission has not approved a rate, charge, or schedule for that classification of service.
   The bill applies to electric utility services provided to large energy use facilities constructed or expanded on or after January 1, 2027.