Senate Study Bill 1112 - Introduced SENATE/HOUSE FILE _____ BY (PROPOSED GOVERNOR BILL) A BILL FOR An Act relating to energy systems by modifying electric power 1 generation, energy storage, and transmission facility 2 ratemaking principles, creating tariffs for public utility 3 innovation programs, implementing land restoration 4 standards, including right of first refusal, modifying 5 the energy infrastructure revolving loan program, and 6 creating regulations for anaerobic digester systems, making 7 appropriations, providing penalties, and including effective 8 date and applicability provisions. 9 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 10 TLSB 1121XL (9) 91 sb/js

S.F. _____ H.F. _____ DIVISION I 1 ELECTRIC POWER GENERATION, ENERGY STORAGE, AND TRANSMISSION 2 FACILITY RATEMAKING PRINCIPLES 3 Section 1. Section 476.25, subsection 2, Code 2025, is 4 amended to read as follows: 5 2. Contracts between electric utilities to designate 6 service areas and customers to be served by the electric 7 utilities or for the exchange of customers between electric 8 utilities, when approved by the commission, shall be valid and 9 enforceable and shall be incorporated into the appropriate 10 exclusive service areas established pursuant to subsection 1 11 of this section . The commission shall approve a contract if 12 it finds that the contract will eliminate or avoid unnecessary 13 duplication of facilities, will provide adequate electric 14 service to all areas and customers affected, will promote the 15 efficient and economical use and development of the electric 16 systems of the contracting electric utilities, and is in the 17 public interest. The commission shall also approve a contract 18 if it finds that the contract will promote economic development 19 within the state. 20 Sec. 2. NEW SECTION . 476.52A Definitions. 21 As used in this subchapter unless the context otherwise 22 requires: 23 1. “Alternate energy production facility” means the same as 24 defined in section 476.42. 25 2. “Energy storage” means any system, equipment, facility, 26 or technology that is capable of absorbing energy, storing the 27 energy for a period of time, and dispatching the energy through 28 one of the following manners: 29 a. Using mechanical, electrochemical, thermal, 30 electrolysis, or other processes to convert and store electric 31 energy that was generated at an earlier time for use at a later 32 time. 33 b. Using mechanical, electrochemical, biochemical, or 34 thermal processes to convert and store energy generated 35 -1- LSB 1121XL (9) 91 sb/js 1/ 53

S.F. _____ H.F. _____ from mechanical processes that would otherwise be wasted for 1 delivery at a later time. 2 c. Storing energy in an electric, thermal, or gaseous 3 state for direct use for heating or cooling at a later time 4 in a manner that avoids the need to use electricity or other 5 fuel sources at that later time, such as a grid-enabled water 6 heater. 7 3. “Nuclear reactor” means an apparatus designed to produce 8 electrical or heat energy through sustained nuclear fission in 9 a self-supporting chain reaction. 10 4. “Repowering” means either the complete dismantling and 11 replacement of generation equipment at an existing project 12 site, or the installation of new parts and equipment to an 13 existing alternate energy production facility in order to 14 increase energy production, reduce load, increase service 15 capacity, improve project reliability, or extend the useful 16 life of the facility. 17 Sec. 3. Section 476.53, subsection 1, Code 2025, is amended 18 to read as follows: 19 1. It is the intent of the general assembly to attract 20 the development of electric power generating , energy storage, 21 and transmission facilities within the state in sufficient 22 quantity to ensure reliable electric service to Iowa consumers , 23 ensure an adequate base load, and provide economic benefits to 24 the state. Ensuring reliable electric service and providing 25 economic benefits may require public utilities to consider 26 diverse electric power generating technologies and energy 27 storage technologies, including alternate energy production 28 facilities, nuclear reactors, and energy storage facilities. 29 It is also the intent of the general assembly to encourage 30 rate-regulated public utilities to consider altering existing 31 electric power generating facilities, where when reasonable, 32 to manage carbon emission intensity in order to facilitate the 33 transition to a carbon-constrained environment. It is also the 34 intent of the general assembly to encourage the development 35 -2- LSB 1121XL (9) 91 sb/js 2/ 53

S.F. _____ H.F. _____ of nuclear electric power generation within the state using 1 nuclear reactors and to use nuclear power to meet local and 2 regional electric needs. 3 Sec. 4. Section 476.53, subsection 3, paragraphs a, b, c, 4 and d, Code 2025, are amended to read as follows: 5 a. The commission shall specify in advance, by order issued 6 after conduct a contested case proceeding , the ratemaking 7 principles that will apply when the costs of the electric power 8 generating facility or alternate energy production facility are 9 included in regulated electric rates whenever a rate-regulated 10 public utility does seeks ratemaking principles for any of the 11 following: 12 (1) (a) Files an application pursuant to section 476A.3 13 to construct The costs of constructing in Iowa a baseload an 14 electric power generating facility with a nameplate generating 15 capacity equal to or greater than three hundred forty megawatts 16 or a combined-cycle electric power generating facility , or an 17 alternate energy production facility as defined in section 18 476.42 , or an energy storage facility, or the construction 19 costs to significantly alter an existing electric power 20 generating facility , alternate energy production facility, or 21 energy storage facility . For purposes of this subparagraph, 22 a significant alteration of an existing generating facility , 23 alternate energy production facility, or energy storage 24 facility must, in order to qualify for establishment of 25 ratemaking principles, fall into one of the following 26 categories: 27 (i) Conversion of a coal fueled an electric power generating 28 facility into a gas fueled to an alternate fuel type for the 29 electric power generating facility. 30 (ii) Addition of carbon capture and storage facilities at a 31 coal fueled to an existing electric power generating facility. 32 (iii) Addition of gas fueled capability to a coal fueled 33 facility, in order to convert the facility to one that will 34 rely primarily on gas for future generation facilities to 35 -3- LSB 1121XL (9) 91 sb/js 3/ 53

S.F. _____ H.F. _____ capture exhaust heat and thereby generate additional electric 1 power at an existing electric power generating facility . 2 (iv) Addition of a biomass fueled capability to a coal 3 fueled facility. 4 (v) (iv) Repowering of an alternate energy production 5 facility. For purposes of this subparagraph subdivision, 6 “repowering” shall mean either the complete dismantling and 7 replacement of generation equipment at an existing project 8 site, or the installation of new parts and equipment to an 9 existing alternate energy production facility in order to 10 increase energy production, reduce load, increase service 11 capacity, improve project reliability, or extend the useful 12 life of the facility. 13 (v) Addition of energy storage at an existing electric power 14 generating facility, alternate energy production facility, or 15 energy storage facility. 16 (b) With respect to a significant alteration of an 17 existing generating facility, an original facility shall 18 not be required to be either a baseload or a combined-cycle 19 facility. Only only the incremental investment undertaken 20 by a utility under subparagraph division (a), subparagraph 21 subdivision (i), (ii), or (iii), or (iv) shall be eligible 22 to apply the ratemaking principles established by the order 23 issued pursuant to paragraph “e” . Facilities for which advanced 24 advance ratemaking principles are obtained pursuant to this 25 section shall not be subject to a subsequent commission review 26 pursuant to section 476.6, subsection 19 , to the extent that 27 the investment has been considered by the commission under 28 this section . To the extent an eligible utility has been 29 authorized to make capital investments subject to section 30 476.6, subsection 19 , such investments shall not be eligible 31 for ratemaking principles pursuant to this section . 32 (2) Leases or owns When leased or owned in Iowa, in whole or 33 in part, a new baseload electric power generating facility with 34 a nameplate generating capacity equal to or greater than three 35 -4- LSB 1121XL (9) 91 sb/js 4/ 53

S.F. _____ H.F. _____ hundred forty megawatts or a combined-cycle electric power 1 generating , a new energy storage facility, or a new alternate 2 energy production facility as defined in section 476.42 . 3 b. If the commission finds that the utility’s application 4 meets the requirements of paragraph “c” , the commission shall 5 specify by order issued after the contested case proceeding 6 the ratemaking principles that will apply when the costs of 7 the electric power generating facility or alternate energy 8 production facility are included in regulated electric rates. 9 In determining the applicable ratemaking principles, the 10 commission shall not be limited to traditional ratemaking 11 principles or traditional cost recovery mechanisms. Among the 12 principles and mechanisms the commission may consider, the 13 commission has the authority to approve ratemaking principles 14 proposed by a rate-regulated public utility that provide for 15 reasonable restrictions upon the ability of the public utility 16 to seek a general increase in electric rates under section 17 476.6 for at least three years after the generating facility 18 begins providing service to Iowa customers. 19 c. In determining the applicable ratemaking principles, the 20 commission shall make the following findings: 21 (1) The rate-regulated public utility has in effect a 22 commission-approved energy efficiency plan as required under 23 section 476.6, subsection 15 . 24 (2) The rate-regulated public utility has demonstrated to 25 the commission that the public utility has considered other 26 sources for long-term electric supply and that the facility or 27 lease is reasonable when compared to other feasible alternative 28 sources of supply. The rate-regulated public utility shall 29 provide support of reasonability with an electric utility 30 resource plan pursuant to section 476.53C that has been updated 31 no more than twenty-four months prior to the filing of the 32 public utility’s application. 33 d. The applicable ratemaking principles shall be determined 34 in a contested case proceeding , which proceeding required by 35 -5- LSB 1121XL (9) 91 sb/js 5/ 53

S.F. _____ H.F. _____ paragraph “a” may be combined with the proceeding for issuance 1 of a certificate conducted pursuant to chapter 476A . 2 Sec. 5. NEW SECTION . 476.53B Commission authority and 3 proceedings. 4 The commission shall adopt rules pursuant to chapter 17A 5 to provide for the completion of proceedings under section 6 476.53 within ten months after the date of the filing of an 7 application under section 476.53, subsection 3. The rules 8 shall include reasonable time limitations for the submission or 9 completion of comments and testimony, and exhibits, briefs, and 10 hearings, and may provide for the granting of additional time 11 upon the request of a party to the proceeding for good cause 12 shown. 13 Sec. 6. NEW SECTION . 476.53C Electric utility resource 14 planning. 15 1. An electric utility required to be rate-regulated by the 16 commission shall file a resource plan at least once every five 17 years. A resource plan shall consider all reasonable resources 18 proposed by the utility for meeting the probable future demand 19 for energy, including supply resources and conservation and 20 management of demand. For conservation and management of 21 demand, an electric utility’s resource plan shall include 22 programs approved in the electric utility’s most recent energy 23 efficiency plan approved by the commission under section 476.6, 24 subsection 15. The objectives of a resource plan include but 25 are not limited to adequate, cost-effective, and reliable 26 energy service considering costs, fuel diversity, and probable 27 future demand for energy. A resource plan shall not require a 28 specific outcome or specific investment decisions. A resource 29 plan shall reflect the circumstances and management judgment 30 of an electric utility. This section does not restrict an 31 electric utility from making planning decisions based on future 32 resource needs subject to the ratemaking oversight of the 33 commission. 34 2. The commission shall review a resource plan. Within 35 -6- LSB 1121XL (9) 91 sb/js 6/ 53

S.F. _____ H.F. _____ ninety days of filing the final resource plan, the commission 1 shall issue an order acknowledging it has received the plan. 2 In the order acknowledging receipt, the commission may provide 3 recommendations to an electric utility regarding any additional 4 analyses or actions that the electric utility should consider 5 completing in its next resource plan. 6 3. The commission shall adopt rules pursuant to chapter 7 17A regarding the timeline and stakeholder process to review 8 and provide comments on the resource plan. The stakeholder 9 process shall include the electric utility organizing and 10 facilitating a stakeholder conference for the resource plan. 11 The stakeholder conference shall include representatives of the 12 commission, the consumer advocate, and the electric utility’s 13 customers. The electric utility shall make a good faith effort 14 to inform and consider input from the commission, the consumer 15 advocate, and stakeholders. 16 DIVISION II 17 TARIFFS FOR PUBLIC UTILITY INNOVATION PROGRAMS 18 Sec. 7. Section 476.6, Code 2025, is amended by adding the 19 following new subsection: 20 NEW SUBSECTION . 22. Innovative utility programs. 21 a. It is the intent of the general assembly to encourage 22 public utilities to pursue innovation in pricing and programs 23 to meet the dynamic needs of current and prospective customers, 24 enable price-responsive solutions, and to provide economic, 25 environmental, employment, and other benefits to the state. 26 It is also the intent of the general assembly that these 27 new endeavors shall not negatively impact nonparticipating 28 customers. Therefore, the general assembly declares that 29 innovative utility programs are essential to further the 30 attraction and retention of customers to benefit the state’s 31 economy and to support economical and sustainable energy 32 production. 33 b. (1) A tariff authorized under this subsection shall 34 comply with all of the following conditions: 35 -7- LSB 1121XL (9) 91 sb/js 7/ 53

S.F. _____ H.F. _____ (a) A program created under the tariff shall be available to 1 interested energy customers and customer participation shall 2 be optional. 3 (b) A tariff shall define the eligible customer groups. 4 (c) An eligible customer group shall not exclude directly 5 competing customers in the same customer service territory. 6 For purposes of this subparagraph, “directly competing 7 customers” means customers that make the same end product or 8 offer the same service for the same general group of customers, 9 and excludes customers that only produce component parts of the 10 same end product. 11 (d) Participating customers shall bear all program costs. 12 Program costs include direct costs associated with the 13 construction, operation, maintenance, and interconnection of 14 facilities, including new transmission infrastructure directly 15 arising from the tariff program and costs related to the 16 implementation of tariff programs. Participants in a tariff 17 approved pursuant to this section shall participate in future 18 indirect costs allocated to customers of that utility without 19 regard for the existence of a tariff approved pursuant to this 20 section. 21 (e) A tariff shall not alter the existing base rates or 22 charges of the public utility. Refund, credit, or waiver of 23 existing base rates or charges offered as part of the program 24 shall not be considered an alteration of existing base rates 25 or charges. 26 (f) The program created under the tariff shall not 27 negatively impact nonparticipating customers. Additional 28 costs incurred by nonparticipating customers due to costs 29 arising from the tariff, tariff participants no longer sharing 30 in customer class costs, or decreased customer benefit from 31 existing infrastructure shall be considered negative impacts. 32 (2) A tariff authorized under this subsection may include 33 any of the following: 34 (a) Recovery of costs associated with program-specific 35 -8- LSB 1121XL (9) 91 sb/js 8/ 53

S.F. _____ H.F. _____ services or facilities, including but not limited to energy 1 storage, renewable hydrogen, transmission, electric generating 2 facilities, electric distribution facilities, renewable natural 3 gas generation facilities, renewable natural gas distribution 4 facilities, utility-assisted hourly prices, or liquefied 5 natural gas facilities, or administrative and other overhead 6 costs relating to the same. 7 (b) A negotiated rate of return, for new or existing 8 facilities or services provided by the electric utility that 9 are serving the program created under the tariff, applicable to 10 the program for its duration. The use of existing facilities 11 would require reconciliation of impact to existing customers 12 and would no longer be subject to previously approved advance 13 ratemaking principles. In the event that the tariff or its 14 eligible customer class cease to exist, no charges shall be 15 imposed on or costs recovered from existing customers unless 16 approved in a general rate case. A utility may seek to 17 demonstrate the prudence, necessity, and use and usefulness 18 of program-specific facilities or services as defined in 19 subparagraph division (a) and recovery of costs for the same in 20 a general rate proceeding, without any presumption regarding 21 approval of such request. 22 (c) Application of the program to readily identifiable 23 customer usage patterns, customer characteristics, or output 24 of specified facilities. 25 (d) Assignment of program benefits, including nonmonetary 26 benefits that may derive from dynamically balancing supply and 27 demand, providing ancillary services, or the production of 28 renewable energy attributes. 29 (e) Refund, credit, or waive the base rate or charge for 30 the replaced service when the program created under the tariff 31 replaces a service for which the public utility collects an 32 existing base rate or charge. A participating customer shall 33 pay the costs of remaining services received from the public 34 utility unless those costs are refunded, credited, or waived 35 -9- LSB 1121XL (9) 91 sb/js 9/ 53

S.F. _____ H.F. _____ under the program created by the tariff. 1 (3) If a utility can demonstrate to the commission that 2 a proposed tariff generates excess revenue for the utility 3 as compared to total revenue without the tariff, such excess 4 revenue may be retained by the utility. 5 c. (1) A public utility’s participation under this 6 subsection is not mandatory. A public utility that elects to 7 propose a tariff or tariff amendment under this subsection 8 shall file an application for approval with the commission. 9 The application shall include an identification of costs and 10 benefits related to the program for the commission’s review of 11 the conditions specified in paragraph “b” , subparagraph (1). 12 (2) Within thirty days, the commission shall approve, deny, 13 or docket for further review an application for a tariff or 14 amended tariff submitted pursuant to this subsection. If the 15 application is docketed for further review, the commission 16 shall render a decision within ninety days from the date of 17 application filing unless an objection has been filed with the 18 commission. If the application proposes to amend a tariff 19 previously approved under this subsection, the commission shall 20 not reconsider existing programs previously approved under the 21 tariff unless proposed as part of the amendment. All further 22 review shall be conducted as a contested case pursuant to 23 chapter 17A. 24 (3) If the application proposes to amend a tariff previously 25 approved under this subsection as described in paragraph “b” , 26 subparagraph (2), the commission shall act on the application 27 as described in subparagraph (2) of this paragraph, but shall 28 not reconsider existing programs previously approved under the 29 tariff unless proposed as part of the amendment. 30 (4) In the exercise of its authority under this subsection, 31 the commission shall not: 32 (a) Limit the number of applications a public utility may 33 file pursuant to this subsection. 34 (b) Deny a tariff because a public utility is subject to an 35 -10- LSB 1121XL (9) 91 sb/js 10/ 53

S.F. _____ H.F. _____ alternative regulatory mechanism, nor require a public utility 1 subject to an alternative regulatory mechanism to record the 2 revenues and costs associated with the program inconsistent 3 with the federal energy regulatory commission’s uniform system 4 of accounts; provided, however, that this provision shall not 5 prohibit the utilities commission from denying a tariff if the 6 proposed tariff would result in detrimental treatment of other 7 customers, or require adjustment to the calculation of the 8 alternative regulatory mechanism to reflect the impact of an 9 approved tariff. 10 (c) Condition its approval on the public utility changing 11 its proposal if the public utility has not agreed to such 12 changes. This subparagraph division shall not be interpreted 13 to prevent the commission from identifying changes to the 14 proposal that might result in approval. 15 (5) Tariffs and programs approved pursuant to this 16 subsection shall be rebuttably presumed just and reasonable in 17 any subsequent general rate case proceeding. 18 d. The commission shall not condition approval or denial of 19 a tariff on final adoption of rules by the commission. 20 e. The commission shall adopt rules pursuant to chapter 17A 21 to implement this subsection. 22 Sec. 8. APPLICABILITY. This division of this Act applies 23 to a public utility filing an application with the utilities 24 commission for review of a tariff on or after the effective 25 date of this division of this Act. 26 DIVISION III 27 LAND RESTORATION —— ELECTRIC TRANSMISSION LINES APPROVED BY 28 FEDERALLY REGISTERED PLANNING AUTHORITY TRANSMISSION PLANS 29 Sec. 9. Section 478.16, Code 2025, is amended to read as 30 follows: 31 478.16 Electric transmission lines —— federally registered 32 planning authority transmission plans. 33 1. Development and investment in high-voltage transmission 34 is urgently needed to ensure the reliable, adequate, secure, 35 -11- LSB 1121XL (9) 91 sb/js 11/ 53

S.F. _____ H.F. _____ and stable delivery of electricity to consumers. To ensure 1 reliable electric service to the people of Iowa as a matter 2 of public policy, it is the intent of the general assembly 3 to express a preference for further investment in Iowa 4 transmission infrastructure by electric transmission owners who 5 have already dedicated significant resources to develop the 6 infrastructure on which Iowans rely and who are better able to 7 provide reliable electric service to local electric utilities 8 and retail customers in Iowa. 9 1. 2. As used in this section , unless the context otherwise 10 requires: 11 a. “Electric transmission line” means a high-voltage 12 electric transmission line located in this state with a 13 capacity voltage of one hundred kilovolts or more and any 14 associated electric transmission facility, including any 15 substation or other equipment located in this state . 16 b. “Electric transmission owner” means an individual 17 or entity who, as of July 1, 2020, formed, located, or 18 headquartered in any state who owns and maintains an 19 electric transmission line in this state that is required 20 for rate-regulated electric utilities, municipal electric 21 utilities, and rural electric cooperatives in this state to 22 provide electric service to the public for compensation. 23 c. “Incumbent electric transmission owner” means any an 24 individual or entity meeting the definition of the following: 25 (1) A public utility or a municipally owned utility that 26 owns, operates, and maintains an electric transmission line in 27 this state. 28 (2) An electric cooperative corporation or association or 29 municipally owned utility that owns an electric transmission 30 facility in this state and has turned over the functional 31 control of such facility to a federally approved authority. 32 (3) An an “electric transmission owner” as defined in 33 paragraph “b” on or before July 1, 2024 . 34 d. “Landowner” means the same as defined in section 478.2 35 -12- LSB 1121XL (9) 91 sb/js 12/ 53

S.F. _____ H.F. _____ “Initial construction” means the construction necessary to 1 establish and place an electric transmission line into initial 2 operation . 3 e. “Load ratio share” means the amount, expressed as a 4 percentage, of a public power utility’s electric load divided 5 by the total electric load in the applicable incumbent electric 6 transmission owner’s pricing zone. 7 e. f. “Municipally owned utility” means a “city utility” 8 as defined in section 362.2 , or an “electric power agency” as 9 defined in section 390.9 which that is comprised solely of 10 cities or solely of cities and other political subdivisions. 11 g. “Public power utility” means a municipally owned utility 12 or an electric cooperative corporation or association that 13 receives transmission service from an incumbent electric 14 transmission owner, or that is subject to regional cost 15 allocation for the electric transmission line, or both. 16 h. “Qualified individual” means someone who is capable and 17 knowledgable enough to determine compliance with the standards 18 set forth in this section. 19 2. 3. a. An incumbent electric transmission owner has the 20 right to construct, own, and maintain an electric transmission 21 line that has been approved for construction in a federally 22 registered planning authority transmission plan and which that 23 directly connects to an electric transmission facility owned by 24 the incumbent electric transmission owner. Where a proposed 25 electric transmission line would directly connect to electric 26 transmission facilities owned by two or more incumbent electric 27 transmission owners, each incumbent electric transmission owner 28 whose facility connects to the electric transmission line 29 has the right to construct, own, and maintain the electric 30 transmission line individually and equally. If an incumbent 31 electric transmission owner declines to construct, own, and 32 maintain its portion of an electric transmission line that 33 would connect to electric transmission facilities owned by 34 two or more incumbent electric transmission owners, then the 35 -13- LSB 1121XL (9) 91 sb/js 13/ 53

S.F. _____ H.F. _____ other incumbent electric transmission owner or owners that 1 own an electric transmission facility to which the electric 2 transmission line connects has the right to construct, own, and 3 maintain the electric transmission line individually. 4 b. An eligible incumbent electric transmission owner 5 exercising the right to construct, own, and maintain an 6 electric transmission line pursuant to paragraph “a” shall 7 offer public power utilities an opportunity to jointly own a 8 portion of the electric transmission line and such offer shall 9 be in an amount not less than a public power utility’s load 10 ratio share, pursuant to a written agreement. Nothing in this 11 section shall be construed to prohibit an incumbent electric 12 transmission owner and a public power utility from agreeing to 13 joint ownership of an electric transmission line in an amount 14 different than the public power utility’s load ratio share. A 15 public power utility may transfer or assign joint ownership 16 rights acquired under this section to another public power 17 utility or group of public power utilities by mutual consent of 18 the eligible contracting parties. 19 c. An eligible incumbent electric transmission owner 20 exercising the right to construct, own, and maintain an 21 electric transmission line pursuant to paragraph “a” may 22 contract with another electric transmission owner or electric 23 public utility as defined in section 476.1 to jointly own a 24 portion of the electric transmission line pursuant to a written 25 agreement. 26 d. For purposes of this section, a municipally owned utility 27 or an electric cooperative corporation or association may elect 28 to be an incumbent electric transmission owner or a public 29 power utility but cannot act as both with respect to a single 30 transmission line. 31 3. 4. If an electric transmission line has been approved 32 for construction in a federally registered planning authority 33 transmission plan, and the electric transmission line is 34 not subject to a right of first refusal in accordance with 35 -14- LSB 1121XL (9) 91 sb/js 14/ 53

S.F. _____ H.F. _____ the tariff of a federally registered planning authority 1 and would otherwise be subject to a competitive developer 2 process , then within the later of ninety days of approval for 3 construction or ninety days after enactment of this division 4 of this Act , an incumbent electric transmission owner, or 5 owners if there is more than one owner, that owns a connecting 6 electric transmission facility shall give written notice 7 to the commission regarding whether the incumbent electric 8 transmission owner or owners intend to construct, own, and 9 maintain the electric transmission line. If the incumbent 10 electric transmission owner or owners give notice of intent 11 to construct the electric transmission line, the incumbent 12 electric transmission owner or owners shall follow the 13 applicable franchise requirements pursuant to this chapter . 14 The incumbent electric transmission owner shall update the 15 notice to construct an electric transmission line to include 16 information concerning the implementation of joint ownership 17 as described in subsection 3, paragraphs “b” and “c” , within 18 thirty days after a written agreement has been reached between 19 the parties. If the incumbent electric transmission owner 20 or owners give notice declining to construct the electric 21 transmission line, the commission may determine whether another 22 person may construct the electric transmission line. 23 4. 5. For projects where for which an election to construct 24 an electric transmission line has been made under this section , 25 all of the following cost accountability measures shall apply: 26 a. Within thirty days after the issuance of a franchise 27 pursuant to this chapter for the electric transmission line, 28 the incumbent electric transmission owner or owners shall 29 provide to the commission an estimate of the cost to construct 30 complete the initial construction of the electric transmission 31 line. 32 b. Until the initial construction of the electric 33 transmission line is complete, the incumbent electric 34 transmission owner or owners shall provide a quarterly report 35 -15- LSB 1121XL (9) 91 sb/js 15/ 53

S.F. _____ H.F. _____ to the commission, which shall include an updated estimate of 1 the cost to construct the electric transmission line , and an 2 explanation of changes in the cost estimate from the prior 3 cost estimate , and documentation that the incumbent electric 4 transmission owner or owners have used competitively bid 5 construction contracts that meet all the technical, commercial, 6 and other specifications, such as safety performance, that 7 are required by the incumbent electric transmission owner or 8 owners with respect to the initial construction of the electric 9 transmission line . 10 c. The consumer advocate appointed under section 475A.1 11 shall have free access to documents, reports, and information 12 submitted to the commission pursuant to this subsection, 13 consistent with section 475A.4. To the extent relevant, the 14 commission and the consumer advocate may use the information 15 for any purpose properly within the scope of their respective 16 duties including but not limited to use in proceedings before 17 the federal energy regulatory commission to challenge the 18 costs incurred by the incumbent electric transmission owner. 19 However, this subsection does not create a private cause of 20 action or complaint. 21 5. 6. This section shall not modify the authority of the 22 commission under this chapter , the rights of landowners under 23 this chapter , or the requirements, rights, and obligations 24 relating to the construction, maintenance, and operation of 25 electric transmission lines pursuant to this chapter . 26 6. 7. This section shall not apply to an electric 27 transmission line to be placed underground that has not been 28 approved for construction in a federally registered planning 29 authority transmission plan. 30 7. 8. The commission shall adopt rules pursuant to chapter 31 17A to administer this section , which shall include rules 32 regarding the restoration of agricultural lands following the 33 initial construction of an electric transmission line, as 34 specified in subsection 9 . 35 -16- LSB 1121XL (9) 91 sb/js 16/ 53

S.F. _____ H.F. _____ 9. The commission shall adopt rules to implement the 1 following requirements, which shall not apply within the 2 corporate limits of a city or to any construction, activity, or 3 electric transmission lines other than the initial construction 4 of an electric transmission line with a voltage of two hundred 5 or more kilovolts and for which an election to construct has 6 been made under this section: 7 a. An incumbent electric transmission owner shall repair a 8 damaged underground drain tile as soon as practicable during 9 construction of the electric transmission line. Permanent 10 repairs to the damaged underground drain tile shall be 11 completed as soon as practicable after the initial construction 12 of the electric transmission line is complete. The repairs 13 made to the damaged drain tile shall be of at least equal 14 quality, size, and flow capacity of the original drain tile. 15 b. Following the initial construction of an electric 16 transmission line, the incumbent electric transmission owner 17 shall remove from the easement area all rock larger than 18 three inches in average diameter not native to the soil of 19 the excavated land. The rock removed from the excavated land 20 that cannot be used to backfill shall be disposed of at a 21 location and in a manner agreed upon by the incumbent electric 22 transmission owner and the landowner. 23 c. Upon completion of construction activities on a property, 24 the incumbent electric transmission owner shall deep till 25 agricultural land, including right-of-way access points or 26 roads traversed by heavy construction equipment, to alleviate 27 soil compaction. The land shall be tilled at least eighteen 28 inches deep in land used for crop production and twelve 29 inches deep in other lands unless otherwise agreed to by the 30 landowner. 31 d. Upon completion of the electric transmission line, 32 the incumbent electric transmission owner shall restore the 33 soil conservation practices and structures damaged during 34 construction of the electric transmission line to the elevation 35 -17- LSB 1121XL (9) 91 sb/js 17/ 53

S.F. _____ H.F. _____ and grade existing on the land prior to the construction. 1 The soil used to repair embankments intended to retain water 2 shall be well compacted. Any vegetation disturbed during 3 construction shall be reestablished, including cover crops when 4 appropriate. 5 e. Following compaction of the land, agricultural land that 6 is not in row crop or small grain production at the time of 7 construction, including hay ground and land in conservation or 8 set-aside programs, shall be reseeded and a cover crop shall 9 be utilized when appropriate. Seeding for cover crops may be 10 delayed if the construction of the electric transmission line 11 is completed too late in the year for a cover crop to become 12 established and is not required if the land will be tilled in 13 the following year. The landowner may request ground cover 14 to prevent soil erosion in areas where construction on the 15 electric transmission line is completed if the season is not 16 suitable for seeding a cover crop. 17 f. Unless agreed upon by the incumbent electric transmission 18 owner and the landowner, the incumbent electric transmission 19 owner shall remove field entrances or temporary roads built for 20 the purpose of constructing the electric transmission line upon 21 the completion of the initial construction and restore the area 22 to its previous use. 23 g. An incumbent electric transmission owner shall use good 24 utility practices for constructing the electric transmission 25 line in wet conditions, such as electing to use matting or 26 padding when utilizing heavy equipment. An incumbent electric 27 transmission owner shall grade and till any rutted land to 28 restore, to the extent practicable, the original condition of 29 the land prior to the construction of the electric transmission 30 line. If agreed upon by the incumbent electric transmission 31 owner and the landowner, the landowner may repair any damage 32 caused by construction activities in wet conditions and the 33 incumbent electric transmission owner shall reimburse the 34 landowner for the reasonable cost incurred to repair the 35 -18- LSB 1121XL (9) 91 sb/js 18/ 53