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Senate Study Bill 3093 - IntroducedA Bill ForAn Act 1modifying various provisions relating to public
2utilities.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 28F.1, subsection 1, Code 2018, is
2amended to read as follows:
31. This chapter provides a means for the joint financing
4by public agencies of works or facilities useful and necessary
5for the collection, treatment, purification, and disposal
6in a sanitary manner of liquid and solid waste, sewage,
7and industrial waste, facilities used for the conversion of
8solid waste to energy, gasworks and facilities useful for the
9delivery of gas service, and also electric power facilities
10constructed within the state of Iowa, except that hydroelectric
11power facilities may also be located in the waters and on the
12dams of or on land adjacent to either side of the Mississippi
13or Missouri river bordering the state of Iowa, water supply
14systems, swimming pools or golf courses. This chapter applies
15to the acquisition, construction, reconstruction, ownership,
16operation, repair, extension, or improvement of such works
17or facilities, by a separate administrative or legal entity
18created pursuant to chapter 28E or chapter 389. When the
19legal entity created under this chapter is comprised solely
20of cities, counties, and sanitary districts established under
21chapter 358, or any combination thereof or any combination of
22the foregoing with other public agencies, the entity shall
23be both a corporation and a political subdivision with the
24name under which it was organized. The legal entity may sue
25and be sued, contract, acquire and hold real and personal
26property necessary for corporate purposes, adopt a corporate
27seal and alter the seal at pleasure, and execute all the powers
28conferred in this chapter.
29 Sec. 2. Section 28F.11, Code 2018, is amended to read as
30follows:
3128F.11 Eminent domain.
32Any public agency participating in an agreement authorizing
33the joint exercise of governmental powers pursuant to this
34chapter may exercise its power of eminent domain to acquire
35interests in property, under provisions of law then in effect
-1-1and applicable to the public agency, for the use of the entity
2created to carry out the agreement, provided that the power of
3eminent domain is not used to acquire interests in property
4which is part of a system of facilities in existence, under
5construction, or planned, for the generation, transmission
6or sale of electric power, or for the transmission,
7transportation, or sale of natural gas. In the exercise
8of the power of eminent domain, the public agency shall
9proceed in the manner provided by chapter 6B. Any interests
10in property acquired are acquired for a public purpose, as
11defined in chapter 6A, of the condemning public agency, and the
12payment of the costs of the acquisition may be made pursuant
13to the agreement or to any separate agreement between the
14public agency and the entity or the other public agencies
15participating in the entity or any of them. Upon payment of
16costs, any property acquired is the property of the entity.
17 Sec. 3. Section 476.1, subsection 7, Code 2018, is amended
18to read as follows:
197. The jurisdiction of the board under this chapter
20shall include efforts designed to promote the use of energy
21efficiency strategies by rate or service-regulated gas and
22electric utilities required to be rate-regulated.
23 Sec. 4. Section 476.1A, subsections 1, 2, and 4, Code 2018,
24are amended to read as follows:
251. Electric public utilities having fewer than ten
26thousand customers and electric cooperative corporations
27and associations are not subject to the rate regulation
28authority of the board. Such utilities are subject to all
29other regulation and enforcement activities of the board,
30including, except for regulatory action pertaining to all of
31the following:
32a. Assessment of fees for the support of the division and
33the office of consumer advocate, pursuant to section 476.10.
34b. Safety and engineering standards for equipment,
35operations, and procedures.
-2- 1c. Assigned area of service.
2d. Pilot projects of the board.
3e. Assessment of fees for the support of the Iowa energy
4center created in section 15.120 and the center for global and
5regional environmental research established by the state board
6of regents. This paragraph “e” is repealed July 1, 2022.
7f. Filing alternate energy purchase program plans with the
8board, and offering such programs to customers, pursuant to
9section 476.47.
10g. Filing energy efficiency plans and energy efficiency
11results with the board. The energy efficiency programs
12included in such plans as a whole shall be cost-effective. The
13board may permit these utilities to file joint plans. The
14board shall periodically report the energy efficiency results
15including energy savings of each of these utilities to the
16general assembly. The board may waive all or part of the
17energy efficiency filing and review requirements for electric
18cooperative corporations and associations and electric public
19utilities which demonstrate superior results with existing
20energy efficiency efforts.
212. However, sections 476.20, subsections 1 through 4,
22 476.21, 476.41 through 476.44, 476.51, 476.56, 476.62, and
23476.66 and chapters 476A and 478, to the extent applicable,
24apply to such electric utilities.
254. The board of directors or the membership of an electric
26cooperative corporation or association otherwise exempt
27from rate regulation may elect to have the cooperative’s
28rates regulated by the board. The board shall adopt rules
29prescribing the manner in which the board of directors or the
30membership of an electric cooperative may so elect. If the
31board of directors or the membership of an electric cooperative
32has elected to have the cooperative’s rates regulated by the
33board, after two years have elapsed from the effective date of
34such election the board of directors or the membership of the
35electric cooperative may elect to exempt the cooperative from
-3-1the rate regulation authority of the board, provided, however,
2that if the membership elected to have the cooperative’s rates
3regulated by the board, only the membership may elect to exempt
4the cooperative from the rate regulation authority of the
5board.
6 Sec. 5. Section 476.1B, subsection 1, paragraph l, Code
72018, is amended to read as follows:
8l. Filing energy efficiency plans and energy efficiency
9results with the board. The energy efficiency programs
10included in such plans as a whole shall be cost-effective. The
11board may permit these utilities to file joint plans. The
12board shall periodically report the energy efficiency results
13including energy savings of each of these utilities to the
14general assembly.
15 Sec. 6. Section 476.2, subsection 6, Code 2018, is amended
16by striking the subsection.
17 Sec. 7. Section 476.4, subsection 1, Code 2018, is amended
18to read as follows:
191. Every public utility shall file with the board tariffs
20showing the rates and charges for its public utility services
21and the rules and regulations under which such services were
22furnished, on April 1, 1963, which rates and charges shall be
23subject to investigation by the board as provided in section
24476.3, and upon such investigation the burden of establishing
25the reasonableness of such rates and charges shall be upon the
26public utility filing the same. These filings shall be made
27under such rules as the board may prescribe within such time
28and in such form as the board may designate. In prescribing
29rules and regulations with respect to the form of tariffs
30and any other regulations, the board shall, in the case of
31public utilities subject to regulation by any federal agency,
32give due regard to any corresponding rules and regulations of
33such federal agency, to the end that unnecessary duplication
34of effort and expense may be avoided so far as reasonably
35possible. Each public utility shall keep copies of its tariffs
-4-1open to public inspection under such rules as the board may
2prescribe.
3 Sec. 8. Section 476.6, subsections 1, 8, and 13, Code 2018,
4are amended to read as follows:
51. Filing with board. A public utility subject to rate
6regulation shall not make effective a new or changed rate,
7charge, schedule, or regulation until the rate, charge,
8schedule, or regulation has been approved by the board, except
9as provided in subsections 8, and 9, and 22.
108. Automatic adjustments permitted.
11a. This chapter does not prohibit a public utility from
12making provision for the automatic adjustment of rates and
13charges for public utility service provided that a schedule
14showing the automatic adjustment of rates and charges is first
15filed with the board.
16b. A public utility may automatically adjust rates and
17charges to recover costs related to transmission incurred by
18or charged to the public utility consistent with a tariff or
19agreement that is subject to the jurisdiction of the federal
20energy regulatory commission, provided that a schedule showing
21the automatic adjustment of rates and charges is first filed
22with the board.
2313. Energy efficiency plans. Electric and gas public
24utilities shall offer energy efficiency programs to their
25customers through energy efficiency plans. An Each energy
26efficiency plan as a whole program shall be cost-effective.
27In determining the cost-effectiveness of an energy efficiency
28plan program, the board shall apply the societal test, total
29resource cost test, utility cost test, rate-payer impact
30test, and participant test. Energy efficiency programs for
31qualified low-income persons and for tree planting programs,
32educational programs, and assessments of consumers’ needs for
33information to make effective choices regarding energy use
34and energy efficiency need not be cost-effective and shall
35not be considered in determining cost-effectiveness of plans
-5-1as a whole. The energy efficiency programs in the plans may
2be provided by the utility or by a contractor or agent of the
3utility. Programs offered pursuant to this subsection by gas
4and electric utilities that are required to be rate-regulated
5shall require board approval.
6 Sec. 9. Section 476.6, subsection 15, paragraphs a and b,
7Code 2018, are amended to read as follows:
8a. (1) (a) Gas and electric utilities required to be
9rate-regulated under this chapter shall file energy efficiency
10plans with the board. An energy efficiency plan and budget
11shall include a range of energy efficiency and demand response
12 programs, tailored to the needs of all customer classes,
13including residential, commercial, and industrial customers,
14for energy efficiency opportunities. The plans shall
15include programs for qualified low-income persons including a
16cooperative program with any community action agency within the
17utility’s service area to implement countywide or communitywide
18energy efficiency programs for qualified low-income persons.
19Rate-regulated gas and electric utilities shall utilize
20Iowa agencies and Iowa contractors to the maximum extent
21cost-effective in their energy efficiency plans filed with the
22board.
23(b) Gas and electric utilities required to be
24rate-regulated under this chapter may request an energy
25efficiency plan modification during the course of a five-year
26plan. A modification may be requested due to changes in
27funding as the result of public utility customers filing
28exemptions from the plan or for any other reason identified by
29the gas or electric utility. The board shall take action on a
30modification request made by the gas or electric utility within
31sixty days after a modification request is filed. If the board
32fails to take action within sixty days after a modification
33request is filed, the modification request shall be deemed
34approved.
35(2) Public utility customers with monthly peak usage that
-6-1averages fifteen megawatts or more of electricity during a plan
2year may apply for an exemption from participation in energy
3efficiency and demand response programs included in an energy
4efficiency plan, including an exemption from the costs of the
5plan. For an exemption from a plan that is effective prior to
6the effective date of this Act, a customer qualifying pursuant
7to this paragraph shall apply within three months after the
8effective date of this Act. For an exemption from a plan that
9takes effect on or after the effective date of this Act, a
10customer qualifying pursuant to this paragraph shall apply for
11an exemption on or before June 1 of the first plan year. Upon
12verification that a customer is eligible for such exemption,
13the gas or electric utility shall grant the exemption and,
14beginning January 1 of the following year, the customer shall
15no longer be assessed the costs of the plan and shall no
16longer be required to participate in energy efficiency and
17demand response programs included in the plan. The exemption
18shall be considered permanent unless the customer applies for
19reenrollment in such programs on or before June 1 of a given
20plan year.
21b. (1) A gas and electric utility required to be
22rate-regulated under this chapter shall assess potential energy
23and capacity savings available from actual and projected
24customer usage by applying commercially available technology
25and improved operating practices to energy-using equipment and
26buildings. The utility shall submit the assessment to the
27board. Upon receipt of the assessment, the board shall consult
28with the economic development authority to develop specific
29capacity and energy savings performance standards goals for
30each utility. Such goals, except as provided for in subsection
3113, shall only include cost-effective energy efficiency and
32demand response programs. The utility shall submit an energy
33efficiency plan which shall include economically achievable
34programs designed to attain these energy and capacity
35performance standards goals. The board shall periodically
-7-1report the energy efficiency results including energy savings
2of each utility to the general assembly.
3(2) For purposes of this paragraph, “cost-effective” means
4the total resource cost test result for a program is greater
5than one. In applying the total resource cost test, benefits
6to be considered include avoided capacity and energy costs
7and federal tax credits, and costs to be considered include
8incremental costs of equipment, operation, and maintenance,
9utility costs, and program administration costs.
10 Sec. 10. Section 476.6, subsection 15, paragraph c,
11subparagraphs (1) and (3), Code 2018, are amended to read as
12follows:
13(1) Gas and electric utilities that are not required to
14be rate-regulated under this chapter shall assess maximum
15 potential energy and capacity savings available from actual
16and projected customer usage through cost-effective energy
17efficiency measures and programs, taking into consideration the
18utility service area’s historic energy load, projected demand,
19customer base, and other relevant factors. Each utility shall
20establish an energy efficiency goal based upon this assessment
21of potential and shall establish cost-effective energy
22efficiency programs designed to meet the energy efficiency
23goal. Separate goals may be established for various customer
24groupings.
25(3) Each utility shall commence the process of determining
26its cost-effective energy efficiency goal on or before July 1,
272008, shall provide a progress report to the board on or before
28January 1, 2009, and complete the process and submit a final
29report to the board on or before January 1, 2010. The report
30shall include the utility’s cost-effective energy efficiency
31goal, and for each measure utilized by the utility in meeting
32the goal, the measure’s description, projected costs, and the
33analysis of its cost-effectiveness. Each utility or group
34of utilities shall evaluate cost-effectiveness using the
35cost-effectiveness tests in accordance with subsection 13 of
-8-1this section. Individual utilities or groups of utilities may
2collaborate in conducting the studies required hereunder and
3may file a joint report or reports with the board. However,
4the board may require individual information from any utility,
5even if it participates in a joint report.
6 Sec. 11. Section 476.6, subsection 15, paragraph d, Code
72018, is amended by striking the paragraph.
8 Sec. 12. Section 476.6, subsection 15, paragraphs e and g,
9Code 2018, are amended to read as follows:
10e. (1) The board shall conduct contested case proceedings
11for review of energy efficiency plans and budgets filed by gas
12and electric utilities required to be rate-regulated under
13this chapter. Notwithstanding the goals developed pursuant to
14paragraph “b”, the board shall not require a gas or electric
15utility to adopt an energy efficiency plan that results in
16projected average annual costs that exceed two percent of the
17gas or electric utility’s annual rate revenue. For purposes of
18determining the two percent threshold amount, the board shall
19exclude from a gas or electric utility’s annual rate revenue
20the revenues from customers that receive an exemption pursuant
21to paragraph “a”, subparagraph (2), and shall exclude revenues
22associated with the recovery of energy efficiency costs. A
23gas or electric utility may voluntarily propose an energy
24efficiency plan that results in projected average annual costs
25that exceed two percent of the gas or electric utility’s annual
26rate revenue. The board may approve, reject, or modify the
27plans and budgets. Notwithstanding the provisions of section
2817A.19, subsection 5, in an application for judicial review of
29the board’s decision concerning a utility’s energy efficiency
30plan or budget, the reviewing court shall not order a stay.
31Whenever
32(2) Notwithstanding paragraph “a”, subparagraph (1),
33subparagraph division (b), if, on the effective date of this
34Act, a gas or electric utility’s currently approved energy
35efficiency plan includes projected annual costs that exceed
-9-1two percent of the gas or electric utility’s annual rate
2revenue received for service within the previous calendar year,
3exclusive of recovery of energy efficiency costs, the gas or
4electric utility may file a request to modify its approved
5energy efficiency plan to achieve projected annual costs at
6two percent or less of the gas or electric utility’s annual
7rate revenue. In such case, or whenevera request to modify
8an approved plan or budget is filed subsequently by the office
9of consumer advocate or a gas or electric utility required to
10be rate-regulated under this chapter, the board shall promptly
11initiate a formal proceeding if the board determines that any
12reasonable ground exists for investigating the request. The
13formal proceeding may be initiated at any time by the board
14on its own motion. Implementation of board-approved plans or
15budgets shall be considered continuous in nature and shall be
16subject to investigation at any time by the board or the office
17of the consumer advocate.
18g. (1) A gas or electric utility required to be
19rate-regulated under this chapter may recover, through an
20automatic adjustment mechanism filed pursuant to subsection
218, over a period not to exceed the term of the plan, the
22costs of an energy efficiency plan approved by the board,
23including amounts for a plan approved prior to July 1, 1996,
24 in a contested case proceeding conducted pursuant to paragraph
25“e”. The board shall ensure that energy efficiency costs are
26recovered from all customers on a reasonably comparable basis,
27including customers who utilize alternate energy production
28facilities as defined in section 476.42. Customers who are
29granted an exemption from energy efficiency and demand response
30programs pursuant to paragraph “a”, subparagraph (2), shall not
31be charged for recovery of energy efficiency costs.
32(2) The board shall periodically conduct a contested case
33proceeding to evaluate the reasonableness and prudence of the
34utility’s implementation of an approved energy efficiency plan
35and budget. If a utility is not taking all reasonable actions
-10-1to cost-effectively implement an approved energy efficiency
2plan, the board shall not allow the utility to recover from
3customers costs in excess of those costs that would be incurred
4under reasonable and prudent implementation and shall not allow
5the utility to recover future costs at a level other than what
6the board determines to be reasonable and prudent. If the
7result of a contested case proceeding is a judgment against a
8utility, that utility’s future level of cost recovery shall be
9reduced by the amount by which the programs were found to be
10imprudently conducted. The utility shall not represent energy
11efficiency in customer billings as a separate cost or expense
12unless the board otherwise approves.
13 Sec. 13. Section 476.6, subsection 17, Code 2018, is amended
14by striking the subsection.
15 Sec. 14. Section 476.6, subsection 20, Code 2018, is amended
16to read as follows:
1720. Electric power generating facility emissions.
18a. It is the intent of the general assembly that the state,
19through a collaborative effort involving state agencies and
20affected generation owners, provide for compatible statewide
21environmental and electric energy policies with respect
22to regulated emissions from rate-regulated electric power
23generating facilities in the state that are fueled by coal.
24Each A rate-regulated public utility that is an owner of one
25or more electric power generating facilities fueled by coal
26and located in this state on July 1, 2001, shall develop a
27multiyear plan and budget may, in its sole discretion, file for
28advanced review of projects for managing regulated emissions
29from its facilities in a cost-effective manner.
30(1) The initial multiyear plan and budget shall be filed
31with the board by April 1, 2002. Updates to the plan and budget
32shall be filed at least every twenty-four months.
33(2) Copies of the initial plan and budget, as well as
34any subsequent updates, shall be served on the department of
35natural resources.
-11- 1(3) The initial multiyear plan and budget and any subsequent
2updates shall be considered in a contested case proceeding
3pursuant to chapter 17A. The department of natural resources
4and the consumer advocate shall participate as parties to the
5proceeding.
6b. A rate-regulated public utility shall file an application
7for advanced review of a project at least one hundred twenty
8days before the anticipated start of construction. Where an
9electric power generating facility is owned by two or more
10rate-regulated public utilities, the operator of the electric
11power generating facility may file the application on behalf of
12the rate-regulated public utilities.
13(4) c. The department of natural resources shall state
14whether the plan or update project meets applicable state or
15federal environmental requirements for regulated emissions,
16including requirements related to air, water, or solid waste.
17If the plan project does not meet these requirements, the
18department shall recommend amendments that outline actions
19necessary to bring the plan or update project into compliance
20with the environmental requirements.
21b. d. The board shall not approve a plan or update project
22 that does not meet applicable state or federal environmental
23requirements and federal ambient air quality standards for
24regulated emissions from electric power generating facilities
25located in the state.
26c. e. The board shall review the plan or update project
27 and the associated budget, and shall approve the plan or update
28 project and the associated budget if the plan or update project
29 and the associated budget are reasonably expected to achieve
30cost-effective compliance with applicable state or federal
31 environmental requirements and federal ambient air quality
32standards. In reaching its decision, the board shall consider
33whether the plan or update project and the associated budget
34reasonably balance costs, environmental requirements, economic
35development potential, and the reliability of the electric
-12-1generation and transmission system.
2d. f. The board shall issue an order approving or rejecting
3a plan, update, or budget project within one hundred eighty
4 ninety days after the public utility’s a filing is deemed
5complete; however, upon good cause shown, the board may
6extend the time for issuing the order as follows: for approval
7pursuant to this subsection.
8(1) The board may grant an extension of thirty days.
9(2) The board may grant more than one extension, but each
10extension must rely upon a separate showing of good cause.
11(3) A subsequent extension must not be granted any earlier
12than five days prior to the expiration of the original
13one-hundred-eighty-day period, or the current extension.
14e. g. The reasonable costs incurred by a rate-regulated
15public utility in preparing and filing the plan, update, or
16budget project and in participating in the proceedings before
17the board and the reasonable costs associated with implementing
18the plan, update, or budget project shall be included in its
19regulated retail rates.
20f. It is the intent of the general assembly that the board,
21in an environmental plan, update, or associated budget filed
22under this section by a rate-regulated public utility, may
23limit investments or expenditures that are proposed to be
24undertaken prior to the time that the environmental benefit to
25be produced by the investment or expenditure would be required
26by state or federal law.
27 Sec. 15. Section 476.6, Code 2018, is amended by adding the
28following new subsections:
29 NEW SUBSECTION. 22. Voluntary rates and revenue-neutral
30tariff filings.
31a. A rate-regulated public utility may file at any time for
32approval a tariff or rate that satisfies any of the following
33conditions:
34(1) The tariff or rate is optional for customers and all
35costs associated with the tariff or rate are borne by customers
-13-1who elect to participate in the tariff or rate.
2(2) The tariff or rate is revenue-neutral. For purposes
3of this subparagraph, “revenue-neutral” means a change in a
4rate, tariff design, or mechanism as a component of an energy
5efficiency plan or base rate that does not shift annualized
6allowed revenue between customer classes and does not increase
7or decrease the public utility’s average nonfuel revenue per
8customer for any given rate class when compared to either the
9rate, tariff design, or mechanism in effect at the time that a
10filing is made pursuant to this subsection or the allocation
11of costs approved by the board in a rate case using the cost of
12service methodology.
13b. The board shall review the tariff or rate filing within
14thirty days of filing. If the board fails to review the tariff
15or rate filing within thirty days of filing, the tariff or
16rate filing shall be deemed approved. The board shall not be
17required to hold a hearing to review a tariff or rate filing
18made pursuant to this subsection.
19 NEW SUBSECTION. 23. Preapproval for natural gas extensions
20— rules. The board may adopt rules which provide for a
21preapproval process for natural gas extensions to support
22population growth or economic development.
23 Sec. 16. Section 476.20, subsection 5, paragraph a,
24unnumbered paragraph 1, Code 2018, is amended to read as
25follows:
26The board shall establish rules which shall be uniform with
27respect to all public utilities furnishing gas or electricity
28relating to deposits which may be required by the public
29utility for the initiation or reinstatement of service. This
30subsection shall not apply to municipally owned utilities,
31which shall be governed by the provisions of section 384.84
32with respect to deposits and payment plans for delinquent
33amounts owed. Municipally owned utilities and electric
34utilities that are not required to be rate-regulated shall not
35be subject to the board’s rules in regards to deposits and
-14-1payment plans for delinquent amounts owed and repayment of past
2due debt. Municipally owned utilities and electric utilities
3that are not required to be rate-regulated shall be subject to
4the board’s rules in regards to payment plans made prior to the
5disconnection of services.
6 Sec. 17. Section 476.21, Code 2018, is amended to read as
7follows:
8476.21 Discrimination prohibited.
9A municipality, corporation or cooperative association
10providing electrical or gas service shall not consider the
11use of renewable energy sources by a customer as a basis for
12establishing discriminatory rates or charges for any service
13or commodity sold to the customer or discontinue services or
14subject the customer to any other prejudice or disadvantage
15based on the customer’s use or intended use of renewable energy
16sources. As used in this section, “renewable energy sources”
17includes but is not limited to solar heating, wind power
18and the conversion of urban and agricultural organic wastes
19into methane gas and liquid fuels. This section shall not
20prohibit the establishment of rates or charges for customers
21that are different than the rates or charges for customers who
22obtain all of their energy requirements from the municipality,
23corporation, or cooperative association, provided that the
24difference in rates or charges is based on the difference in
25cost of service and anticipated energy use.
26 Sec. 18. NEW SECTION. 476.26A Right to construct, own, and
27maintain electric transmission lines.
281. As used in this section, unless the context otherwise
29requires:
30a. “Electric transmission line” means a high-voltage
31direct current electric transmission line with a capacity of
32one hundred kilovolts or more and any associated electric
33transmission facilities.
34b. “Electric transmission owner” means an individual or
35entity who, as of the effective date of this Act, owns and
-15-1maintains an electric transmission facility including electric
2transmission lines, wires, or cables that are capable of
3operating at an electric voltage of one hundred kilovolts or
4more that are required for rate-regulated electric utilities,
5municipal electric utilities, and rural electric cooperatives
6in this state to provide electric service to the public for
7compensation.
8c. “Incumbent electric transmission owner” means any of the
9following:
10(1) A public utility or a municipally owned utility that
11owns, operates, and maintains an electric transmission line in
12this state.
13(2) An electric cooperative corporation or association or
14municipally owned utility that owns an electric transmission
15facility in this state and has turned over the functional
16control of such facility to a federally approved authority.
17(3) An “electric transmission owner” as defined in paragraph
18“b”.
19d. “Municipally owned utility” means a “city utility” as
20defined in section 362.2, or an “electric power agency” as
21defined in section 390.9 which is comprised solely of cities or
22solely of cities and other political subdivisions.
232. An incumbent electric transmission owner may construct,
24own, and maintain an electric transmission line that has
25been approved for construction in a federally registered
26planning authority transmission plan and which connects to an
27electric transmission facility owned by the incumbent electric
28transmission owner. Where an electric transmission facility is
29owned by two or more incumbent electric transmission owners,
30each incumbent electric transmission owner shall have the right
31to construct, own, and maintain an electric transmission line
32that connects to the electric transmission facility regardless
33of whether one incumbent electric transmission owner declines
34to construct, own, or maintain its portion of an electric
35transmission line connecting to the electric transmission
-16-1facility, unless otherwise agreed upon in writing.
23. This section shall not modify the rights and obligations
3relating to the construction, maintenance, and operation of
4electric transmission lines pursuant to chapter 478.
5 Sec. 19. Section 476.33, subsection 4, Code 2018, is amended
6to read as follows:
74. The board shall adopt rules that require the board, in
8rate regulatory proceedings under sections 476.3 and 476.6, to
9utilize either a historic test year or a future test year at
10the rate-regulated public utility’s discretion.
11a. For a rate regulatory proceeding utilizing a historic
12test year, the rules shall require the board toconsider the
13use of the most current test period possible in determining
14reasonable and just rates, subject only to the availability of
15existing and verifiable data respecting costs and revenues, and
16in addition, to consider verifiable data that exists within
17nine months after the conclusion of the test year, respecting
18known and measurable changes in costs not associated with a
19different level of revenue, and known and measurable revenues
20not associated with a different level of costs, that are to
21occur at any time within twelve months after the date of
22commencement of the proceedings. Parties proposing adjustments
23that are not verifiable at the commencement of the proceedings
24shall include projected data related to the adjustments in
25their initial substantive filing with the board. For purposes
26of this subsection paragraph, a proceeding commences under
27section 476.6 upon the filing date of new or changed rates,
28charges, schedules, or regulations. This subsection does not
29limit the authority of the board to consider other evidence in
30proceedings under sections 476.3 and 476.6.
31b. For a rate regulatory proceeding utilizing a future test
32year, the rules shall require the board to consider the use
33of any twelve-month period beginning no later than the date
34on which a proposed rate change is expected to take effect in
35determining just and reasonable rates.
-17- 1c. This subsection does not limit the authority of the board
2to consider other evidence in proceedings under sections 476.3
3and 476.6.
4 Sec. 20. Section 476.53, subsection 3, paragraph a,
5subparagraph (1), subparagraph division (a), Code 2018, is
6amended by adding the following new subparagraph subdivision:
7 NEW SUBPARAGRAPH SUBDIVISION. (v) Repowering of an
8alternate energy production facility to upgrade or extend the
9useful life of the facility.
10 Sec. 21. NEW SECTION. 476.59 Emerging energy technologies.
111. For purposes of this section, “emerging energy
12technology” includes but is not limited to an energy storage
13facility, electric grid protection system, electric grid
14management system, cyber security infrastructure, electric
15vehicle infrastructure, or any other emerging energy technology
16identified by the board and consistent with the general
17assembly’s intent as provided in subsection 2.
182. a. It is the intent of the general assembly to attract
19the development of emerging energy technologies within the
20state in sufficient quantity to ensure reliable electric
21service to Iowa consumers and provide economic benefits to
22the state. It is also the intent of the general assembly to
23encourage the development of the state’s future electric energy
24supply and the protection of the electric grid from cyber and
25physical threats.
26b. The general assembly’s intent with regard to the
27reliability of electric service to Iowa consumers shall be
28implemented by considering, among other things, the development
29of energy storage, and the protection of the electric grid from
30cyber and physical threats.
31c. The general assembly’s intent with regard to the
32development of Iowa’s future electric energy supply shall be
33implemented in a manner that advances a reliable, secure,
34economical, and environmentally responsible energy supply
35for the state, recognizing the value of emerging energy
-18-1technologies to promote the state’s economic development.
23. a. The board shall specify in advance, by order issued
3after a contested case proceeding, the ratemaking principles
4that will apply whenever a rate-regulated public utility
5requests advanced ratemaking principles for the construction,
6investment, or implementation of an emerging energy technology,
7and the costs of the emerging energy technology are included in
8regulated electric rates.
9b. In determining the applicable ratemaking principles, the
10board shall not be limited to traditional ratemaking principles
11or traditional cost recovery mechanisms.
12c. In determining the applicable ratemaking principles, the
13board shall make the following findings:
14(1) The rate-regulated public utility has demonstrated
15to the board that the proposed emerging energy technology is
16reasonable.
17(2) The rate-regulated public utility has demonstrated
18to the board that the public utility has considered
19other reasonable alternatives, if any, to the proposed
20emerging energy technology and that the proposed emerging
21energy technology is reasonable when compared to any such
22alternatives.
23d. The applicable ratemaking principles shall be determined
24in a contested case proceeding.
25e. The order setting forth the applicable ratemaking
26principles shall be issued prior to the construction,
27investment, or implementation of the emerging energy
28technology.
29f. Following issuance of the order, the rate-regulated
30public utility may proceed with the construction, investment,
31or implementation of the emerging energy technology.
32g. Notwithstanding any provision of this chapter to the
33contrary, the ratemaking principles established by the order
34issued pursuant to paragraph “e” shall be binding with regard to
35the specific emerging energy technology in any subsequent rate
-19-1proceeding.
2EXPLANATION
3The inclusion of this explanation does not constitute agreement with
4the explanation’s substance by the members of the general assembly.
5This bill modifies various provisions relating to public
6utilities.
7The bill adds gasworks and facilities useful for the
8delivery of gas service to the list of works or facilities
9permitted for joint financing by public agencies pursuant
10to Code chapter 28F. The bill prohibits public agencies
11participating in joint financing agreements pursuant to Code
12chapter 28F from exercising their powers of eminent domain to
13acquire interests in properties used for the transmission,
14transportation, or sale of natural gas.
15Current law requires certain non-rate-regulated electric
16utilities and municipally owned utilities to file energy
17efficiency plans with the Iowa utilities board. The bill
18provides that the energy efficiency programs included in such
19plans shall be cost-effective and removes requirements for the
20board to report the energy efficiency results of such utilities
21to the general assembly.
22Current law allows the board of directors or the membership
23of non-rate-regulated electric cooperatives to elect to
24have the cooperative’s rates regulated by the board, and
25subsequently elect to exempt the cooperative from rate
26regulation. The bill provides that if the membership of a
27cooperative elects to have the cooperative’s rates regulated
28by the board, only the membership may elect to exempt the
29cooperative from rate regulation.
30The bill allows a public utility to automatically adjust
31rates and charges to recover certain costs related to
32transmission, provided that the public utility first files a
33schedule showing such automatic adjustment with the board.
34Current law requires electric and gas public utilities to
35offer energy efficiency programs to customers through energy
-20-1efficiency plans, which plans must be cost-effective. The
2bill requires each energy efficiency program, instead of the
3energy efficiency plan as a whole, to be cost-effective. The
4bill adds the total resource cost test to the list of tests the
5board must apply in determining the cost-effectiveness of an
6energy efficiency program. The bill specifies that the types
7of programs included in an energy efficiency plan must pertain
8to energy efficiency and demand response.
9The bill allows a gas and electric utility to request an
10energy efficiency plan modification during the course of a
11five-year plan due to changes in funding or any other reason
12identified by the utility. The board must take action on a
13modification request within 60 days after filing, or such
14request is deemed approved.
15The bill allows public utility customers with monthly peak
16usage of 15 megawatts of electricity or more during a plan
17year to apply for an exemption from participation in programs
18included in an energy efficiency plan, including the costs of
19the plan. For a plan that takes effect prior to the effective
20date of the bill, a qualifying customer must apply within three
21months after the effective date of the bill. For a plan taking
22effect on or after the effective date of the bill, a qualifying
23customer must apply no later than June 1 of the first plan
24year. An exemption shall take effect on January 1 of the
25year following the application filing and shall be considered
26permanent unless the customer applies for reenrollment on or
27before June 1 of a given plan year.
28Current law requires the board to consult with the
29economic development authority to develop capacity and energy
30savings performance standards for each rate-regulated gas or
31electric utility. The bill replaces “performance standards”
32with “goals”, and specifies that such goals only include
33cost-effective energy efficiency and demand response programs,
34as defined in the bill.
35The bill removes the outdated requirement for
-21-1non-rate-regulated gas and electric utilities to submit reports
2to the board on or before January 1, 2010, relating to such
3utilities’ energy efficiency goals. The bill also removes
4outdated requirements for the board to submit certain reports
5relating to energy efficiency to the general assembly in 1998,
62009, and 2011.
7The bill prohibits the board from requiring a gas or electric
8utility from adopting an energy efficiency plan that results in
9projected annual costs in excess of 2 percent of the utility’s
10annual rate revenue. In determining the 2 percent threshold
11amount, the board shall exclude revenues from customers
12receiving exemptions from participation in energy efficiency
13programs and revenues associated with the recovery of energy
14efficiency costs. A gas or electric utility may voluntarily
15propose an energy efficiency plan in excess of the 2 percent
16threshold amount. If a gas or electric utility has an approved
17energy efficiency plan that exceeds the 2 percent threshold
18amount on the effective date of the bill, the utility may file
19a request to modify the energy efficiency plan to achieve
20projected annual costs below the 2 percent threshold amount.
21The board shall promptly initiate a formal proceeding if
22reasonable grounds exist for investigating the request.
23Current law allows a rate-regulated gas or electric utility
24to recover the costs of energy efficiency plans through
25automatic adjustment mechanisms. The bill requires the board
26to ensure that energy efficiency costs are recovered from all
27customers on a reasonably comparable basis, including customers
28who utilize alternate energy production facilities. The bill
29prohibits customers exempt from energy efficiency and demand
30response programs from being charged for recovery of energy
31efficiency costs.
32The bill strikes Code section 476.6(17), which allows the
33board to require rate-regulated gas or electric utilities to
34offer financing for certain energy efficiency improvements to
35customers.
-22- 1Current law specifies the general assembly’s intent to
2provide for compatible statewide environmental and electric
3energy policies with respect to emissions from electric
4power generating facilities in the state that are fueled
5by coal. Current law requires each rate-regulated public
6utility that owns one or more such facilities on July 1, 2001,
7to develop a multiyear plan and budget managing emissions
8in a cost-effective manner. The bill strikes the language
9expressing the general assembly’s intent and replaces the
10requirement that an applicable rate-regulated public utility
11develop a multiyear plan and budget with the option for a
12rate-regulated public utility to file for advanced review of
13projects to manage regulated emissions from its facilities
14in a cost-effective manner. Such filing shall be made at
15least 120 days before the anticipated start of construction.
16When a facility is owned by two or more rate-regulated public
17utilities, the owner of such facility may file the application
18for advanced review on behalf of the utilities. The bill
19requires a project to comply with applicable state and federal
20environmental requirements. The bill requires the board to
21issue an order approving or rejecting a project within 90 days
22after filing. The bill removes the ability of the board to
23limit certain proposed investments or expenditures pursuant to
24an environmental plan, update, or associated budget.
25The bill allows rate-regulated public utilities to file
26for approval of a tariff or rate that is either optional
27for customers, with all associated costs borne by customers
28electing to participate, or is revenue-neutral, as defined in
29the bill. The board must review the tariff or rate within 30
30days of filing or the tariff or rate is deemed approved. The
31board is not required to hold a hearing to review such tariff
32or rate.
33The bill allows the board to adopt rules to provide for
34a preapproval process for natural gas extensions to support
35population growth or economic development.
-23- 1The bill provides that non-rate-regulated electric utilities
2shall not be subject to the board’s rules in regards to
3deposits and payment plans for delinquent amounts owed and
4repayment of past due debt, but shall be subject to the
5board’s rules in regards to payment plans made prior to the
6disconnection of service.
7Current law prohibits a municipality, corporation,
8or cooperative from considering the use of renewable
9energy sources by a customer as a basis for establishing
10discriminatory rates or charges. The bill provides that
11these entities shall not be prohibited from establishing
12rates or charges for customers that are different than the
13rates or charges for customers who obtain all of their energy
14requirements from such entities, provided that the difference
15in rates or charges is based on the difference in cost of
16service and anticipated energy use.
17The bill allows an incumbent electric transmission owner,
18as defined in the bill, to construct, own, and maintain an
19electric transmission line, as defined in the bill, that has
20been approved for construction in a federally registered
21planning authority transmission plan and which connects to the
22owner’s electric transmission facility. Where an electric
23transmission facility is owned by two or more incumbent
24electric transmission owners, each owner shall have the right
25to construct, own, and maintain an electric transmission
26line that connects to the facility regardless of whether one
27owner declines to construct, own, or maintain its portion of
28an electric transmission line connecting to the facility,
29unless otherwise agreed upon in writing. The bill provides
30that this does not modify the rights and obligations related
31to the construction, maintenance, and operation of electric
32transmission lines under Code chapter 478.
33Current law requires the board to adopt rules that require
34the board to consider the most current test period to determine
35just and reasonable rates in rate regulatory proceedings under
-24-1Code sections 476.3 and 476.6. The bill requires the board
2to adopt rules that require the board to utilize either a
3historic test year or a future test year, at a public utility’s
4discretion, in rate regulatory proceedings. For a proceeding
5utilizing a historic test year, the rules shall require the
6board to consider the use of the most current test period
7to determine just and reasonable rates. For a proceeding
8utilizing a future test year, the rules shall require the board
9to consider the use of any 12-month period beginning no later
10than the date on which a proposed rate change is expected to
11take effect to determine just and reasonable rates.
12Current law requires the board to specify ratemaking
13principles in advance whenever a rate-regulated public utility
14files an application to significantly alter an existing
15electric generating facility. The bill adds the repowering of
16an alternate energy production facility to upgrade or extend
17the useful life of the facility to the list of significant
18alterations requiring the establishment of advanced ratemaking
19principles.
20The bill creates new Code section 476.59, relating to
21emerging energy technologies. The bill defines “emerging
22energy technology” to include but not be limited to an energy
23storage facility, electric grid protection system, electric
24grid management system, cyber security infrastructure, electric
25vehicle infrastructure, or other technologies identified
26by the board. The bill provides that it is the general
27assembly’s intent to attract the development of emerging energy
28technologies within the state to ensure reliable electric
29service and encourage the development of the state’s future
30electric energy supply and the protection of the electric grid
31from cyber and physical threats. The bill further elaborates
32on the general assembly’s intent with respect to emerging
33energy technologies.
34New Code section 476.59 requires the board to specify in
35advance the ratemaking principles that will apply whenever a
-25-1rate-regulated public utility requests advanced ratemaking
2principles for the construction, investment, or implementation
3of an emerging energy technology and the costs of such
4technology are included in rates. The board shall not be
5limited to traditional ratemaking principles or cost recovery
6mechanisms in determining such ratemaking principles. In
7determining the applicable ratemaking principles, the board
8shall find that the utility has demonstrated that the proposed
9emerging energy technology is reasonable and that such
10technology is reasonable when compared to any other reasonable
11alternatives. The applicable ratemaking principles shall be
12determined in a contested case proceeding and shall be issued
13prior to the construction, investment, or implementation of
14the emerging energy technology. Following the issuance of
15the order, the utility may proceed with the construction,
16investment, or implementation of the emerging energy
17technology. The applicable ratemaking principles shall be
18binding with respect to the specific emerging energy technology
19in subsequent rate proceedings.
-26-gh/rn
2utilities.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 28F.1, subsection 1, Code 2018, is
2amended to read as follows:
31. This chapter provides a means for the joint financing
4by public agencies of works or facilities useful and necessary
5for the collection, treatment, purification, and disposal
6in a sanitary manner of liquid and solid waste, sewage,
7and industrial waste, facilities used for the conversion of
8solid waste to energy, gasworks and facilities useful for the
9delivery of gas service, and also electric power facilities
10constructed within the state of Iowa, except that hydroelectric
11power facilities may also be located in the waters and on the
12dams of or on land adjacent to either side of the Mississippi
13or Missouri river bordering the state of Iowa, water supply
14systems, swimming pools or golf courses. This chapter applies
15to the acquisition, construction, reconstruction, ownership,
16operation, repair, extension, or improvement of such works
17or facilities, by a separate administrative or legal entity
18created pursuant to chapter 28E or chapter 389. When the
19legal entity created under this chapter is comprised solely
20of cities, counties, and sanitary districts established under
21chapter 358, or any combination thereof or any combination of
22the foregoing with other public agencies, the entity shall
23be both a corporation and a political subdivision with the
24name under which it was organized. The legal entity may sue
25and be sued, contract, acquire and hold real and personal
26property necessary for corporate purposes, adopt a corporate
27seal and alter the seal at pleasure, and execute all the powers
28conferred in this chapter.
29 Sec. 2. Section 28F.11, Code 2018, is amended to read as
30follows:
3128F.11 Eminent domain.
32Any public agency participating in an agreement authorizing
33the joint exercise of governmental powers pursuant to this
34chapter may exercise its power of eminent domain to acquire
35interests in property, under provisions of law then in effect
-1-1and applicable to the public agency, for the use of the entity
2created to carry out the agreement, provided that the power of
3eminent domain is not used to acquire interests in property
4which is part of a system of facilities in existence, under
5construction, or planned, for the generation, transmission
6or sale of electric power, or for the transmission,
7transportation, or sale of natural gas. In the exercise
8of the power of eminent domain, the public agency shall
9proceed in the manner provided by chapter 6B. Any interests
10in property acquired are acquired for a public purpose, as
11defined in chapter 6A, of the condemning public agency, and the
12payment of the costs of the acquisition may be made pursuant
13to the agreement or to any separate agreement between the
14public agency and the entity or the other public agencies
15participating in the entity or any of them. Upon payment of
16costs, any property acquired is the property of the entity.
17 Sec. 3. Section 476.1, subsection 7, Code 2018, is amended
18to read as follows:
197. The jurisdiction of the board under this chapter
20shall include efforts designed to promote the use of energy
21efficiency strategies by rate or service-regulated gas and
22electric utilities required to be rate-regulated.
23 Sec. 4. Section 476.1A, subsections 1, 2, and 4, Code 2018,
24are amended to read as follows:
251. Electric public utilities having fewer than ten
26thousand customers and electric cooperative corporations
27and associations are not subject to the rate regulation
28authority of the board. Such utilities are subject to all
29other regulation and enforcement activities of the board,
30including, except for regulatory action pertaining to all of
31the following:
32a. Assessment of fees for the support of the division and
33the office of consumer advocate, pursuant to section 476.10.
34b. Safety and engineering standards for equipment,
35operations, and procedures.
-2- 1c. Assigned area of service.
2d. Pilot projects of the board.
3e. Assessment of fees for the support of the Iowa energy
4center created in section 15.120 and the center for global and
5regional environmental research established by the state board
6of regents. This paragraph “e” is repealed July 1, 2022.
7f. Filing alternate energy purchase program plans with the
8board, and offering such programs to customers, pursuant to
9section 476.47.
10g. Filing energy efficiency plans and energy efficiency
11results with the board. The energy efficiency programs
12included in such plans as a whole shall be cost-effective. The
13board may permit these utilities to file joint plans. The
14board shall periodically report the energy efficiency results
15including energy savings of each of these utilities to the
16general assembly. The board may waive all or part of the
17energy efficiency filing and review requirements for electric
18cooperative corporations and associations and electric public
19utilities which demonstrate superior results with existing
20energy efficiency efforts.
212. However, sections 476.20, subsections 1 through 4,
22 476.21, 476.41 through 476.44, 476.51, 476.56, 476.62, and
23476.66 and chapters 476A and 478, to the extent applicable,
24apply to such electric utilities.
254. The board of directors or the membership of an electric
26cooperative corporation or association otherwise exempt
27from rate regulation may elect to have the cooperative’s
28rates regulated by the board. The board shall adopt rules
29prescribing the manner in which the board of directors or the
30membership of an electric cooperative may so elect. If the
31board of directors or the membership of an electric cooperative
32has elected to have the cooperative’s rates regulated by the
33board, after two years have elapsed from the effective date of
34such election the board of directors or the membership of the
35electric cooperative may elect to exempt the cooperative from
-3-1the rate regulation authority of the board, provided, however,
2that if the membership elected to have the cooperative’s rates
3regulated by the board, only the membership may elect to exempt
4the cooperative from the rate regulation authority of the
5board.
6 Sec. 5. Section 476.1B, subsection 1, paragraph l, Code
72018, is amended to read as follows:
8l. Filing energy efficiency plans and energy efficiency
9results with the board. The energy efficiency programs
10included in such plans as a whole shall be cost-effective. The
11board may permit these utilities to file joint plans. The
12board shall periodically report the energy efficiency results
13including energy savings of each of these utilities to the
14general assembly.
15 Sec. 6. Section 476.2, subsection 6, Code 2018, is amended
16by striking the subsection.
17 Sec. 7. Section 476.4, subsection 1, Code 2018, is amended
18to read as follows:
191. Every public utility shall file with the board tariffs
20showing the rates and charges for its public utility services
21and the rules and regulations under which such services were
22furnished, on April 1, 1963, which rates and charges shall be
23subject to investigation by the board as provided in section
24476.3, and upon such investigation the burden of establishing
25the reasonableness of such rates and charges shall be upon the
26public utility filing the same. These filings shall be made
27under such rules as the board may prescribe within such time
28and in such form as the board may designate. In prescribing
29rules and regulations with respect to the form of tariffs
30and any other regulations, the board shall, in the case of
31public utilities subject to regulation by any federal agency,
32give due regard to any corresponding rules and regulations of
33such federal agency, to the end that unnecessary duplication
34of effort and expense may be avoided so far as reasonably
35possible. Each public utility shall keep copies of its tariffs
-4-1open to public inspection under such rules as the board may
2prescribe.
3 Sec. 8. Section 476.6, subsections 1, 8, and 13, Code 2018,
4are amended to read as follows:
51. Filing with board. A public utility subject to rate
6regulation shall not make effective a new or changed rate,
7charge, schedule, or regulation until the rate, charge,
8schedule, or regulation has been approved by the board, except
9as provided in subsections 8, and 9, and 22.
108. Automatic adjustments permitted.
11a. This chapter does not prohibit a public utility from
12making provision for the automatic adjustment of rates and
13charges for public utility service provided that a schedule
14showing the automatic adjustment of rates and charges is first
15filed with the board.
16b. A public utility may automatically adjust rates and
17charges to recover costs related to transmission incurred by
18or charged to the public utility consistent with a tariff or
19agreement that is subject to the jurisdiction of the federal
20energy regulatory commission, provided that a schedule showing
21the automatic adjustment of rates and charges is first filed
22with the board.
2313. Energy efficiency plans. Electric and gas public
24utilities shall offer energy efficiency programs to their
25customers through energy efficiency plans. An Each energy
26efficiency plan as a whole program shall be cost-effective.
27In determining the cost-effectiveness of an energy efficiency
28plan program, the board shall apply the societal test, total
29resource cost test, utility cost test, rate-payer impact
30test, and participant test. Energy efficiency programs for
31qualified low-income persons and for tree planting programs,
32educational programs, and assessments of consumers’ needs for
33information to make effective choices regarding energy use
34and energy efficiency need not be cost-effective and shall
35not be considered in determining cost-effectiveness of plans
-5-1as a whole. The energy efficiency programs in the plans may
2be provided by the utility or by a contractor or agent of the
3utility. Programs offered pursuant to this subsection by gas
4and electric utilities that are required to be rate-regulated
5shall require board approval.
6 Sec. 9. Section 476.6, subsection 15, paragraphs a and b,
7Code 2018, are amended to read as follows:
8a. (1) (a) Gas and electric utilities required to be
9rate-regulated under this chapter shall file energy efficiency
10plans with the board. An energy efficiency plan and budget
11shall include a range of energy efficiency and demand response
12 programs, tailored to the needs of all customer classes,
13including residential, commercial, and industrial customers,
14for energy efficiency opportunities. The plans shall
15include programs for qualified low-income persons including a
16cooperative program with any community action agency within the
17utility’s service area to implement countywide or communitywide
18energy efficiency programs for qualified low-income persons.
19Rate-regulated gas and electric utilities shall utilize
20Iowa agencies and Iowa contractors to the maximum extent
21cost-effective in their energy efficiency plans filed with the
22board.
23(b) Gas and electric utilities required to be
24rate-regulated under this chapter may request an energy
25efficiency plan modification during the course of a five-year
26plan. A modification may be requested due to changes in
27funding as the result of public utility customers filing
28exemptions from the plan or for any other reason identified by
29the gas or electric utility. The board shall take action on a
30modification request made by the gas or electric utility within
31sixty days after a modification request is filed. If the board
32fails to take action within sixty days after a modification
33request is filed, the modification request shall be deemed
34approved.
35(2) Public utility customers with monthly peak usage that
-6-1averages fifteen megawatts or more of electricity during a plan
2year may apply for an exemption from participation in energy
3efficiency and demand response programs included in an energy
4efficiency plan, including an exemption from the costs of the
5plan. For an exemption from a plan that is effective prior to
6the effective date of this Act, a customer qualifying pursuant
7to this paragraph shall apply within three months after the
8effective date of this Act. For an exemption from a plan that
9takes effect on or after the effective date of this Act, a
10customer qualifying pursuant to this paragraph shall apply for
11an exemption on or before June 1 of the first plan year. Upon
12verification that a customer is eligible for such exemption,
13the gas or electric utility shall grant the exemption and,
14beginning January 1 of the following year, the customer shall
15no longer be assessed the costs of the plan and shall no
16longer be required to participate in energy efficiency and
17demand response programs included in the plan. The exemption
18shall be considered permanent unless the customer applies for
19reenrollment in such programs on or before June 1 of a given
20plan year.
21b. (1) A gas and electric utility required to be
22rate-regulated under this chapter shall assess potential energy
23and capacity savings available from actual and projected
24customer usage by applying commercially available technology
25and improved operating practices to energy-using equipment and
26buildings. The utility shall submit the assessment to the
27board. Upon receipt of the assessment, the board shall consult
28with the economic development authority to develop specific
29capacity and energy savings performance standards goals for
30each utility. Such goals, except as provided for in subsection
3113, shall only include cost-effective energy efficiency and
32demand response programs. The utility shall submit an energy
33efficiency plan which shall include economically achievable
34programs designed to attain these energy and capacity
35performance standards goals. The board shall periodically
-7-1report the energy efficiency results including energy savings
2of each utility to the general assembly.
3(2) For purposes of this paragraph, “cost-effective” means
4the total resource cost test result for a program is greater
5than one. In applying the total resource cost test, benefits
6to be considered include avoided capacity and energy costs
7and federal tax credits, and costs to be considered include
8incremental costs of equipment, operation, and maintenance,
9utility costs, and program administration costs.
10 Sec. 10. Section 476.6, subsection 15, paragraph c,
11subparagraphs (1) and (3), Code 2018, are amended to read as
12follows:
13(1) Gas and electric utilities that are not required to
14be rate-regulated under this chapter shall assess maximum
15 potential energy and capacity savings available from actual
16and projected customer usage through cost-effective energy
17efficiency measures and programs, taking into consideration the
18utility service area’s historic energy load, projected demand,
19customer base, and other relevant factors. Each utility shall
20establish an energy efficiency goal based upon this assessment
21of potential and shall establish cost-effective energy
22efficiency programs designed to meet the energy efficiency
23goal. Separate goals may be established for various customer
24groupings.
25(3) Each utility shall commence the process of determining
26its cost-effective energy efficiency goal on or before July 1,
272008, shall provide a progress report to the board on or before
28January 1, 2009, and complete the process and submit a final
29report to the board on or before January 1, 2010. The report
30shall include the utility’s cost-effective energy efficiency
31goal, and for each measure utilized by the utility in meeting
32the goal, the measure’s description, projected costs, and the
33analysis of its cost-effectiveness. Each utility or group
34of utilities shall evaluate cost-effectiveness using the
35cost-effectiveness tests in accordance with subsection 13 of
-8-1this section. Individual utilities or groups of utilities may
2collaborate in conducting the studies required hereunder and
3may file a joint report or reports with the board. However,
4the board may require individual information from any utility,
5even if it participates in a joint report.
6 Sec. 11. Section 476.6, subsection 15, paragraph d, Code
72018, is amended by striking the paragraph.
8 Sec. 12. Section 476.6, subsection 15, paragraphs e and g,
9Code 2018, are amended to read as follows:
10e. (1) The board shall conduct contested case proceedings
11for review of energy efficiency plans and budgets filed by gas
12and electric utilities required to be rate-regulated under
13this chapter. Notwithstanding the goals developed pursuant to
14paragraph “b”, the board shall not require a gas or electric
15utility to adopt an energy efficiency plan that results in
16projected average annual costs that exceed two percent of the
17gas or electric utility’s annual rate revenue. For purposes of
18determining the two percent threshold amount, the board shall
19exclude from a gas or electric utility’s annual rate revenue
20the revenues from customers that receive an exemption pursuant
21to paragraph “a”, subparagraph (2), and shall exclude revenues
22associated with the recovery of energy efficiency costs. A
23gas or electric utility may voluntarily propose an energy
24efficiency plan that results in projected average annual costs
25that exceed two percent of the gas or electric utility’s annual
26rate revenue. The board may approve, reject, or modify the
27plans and budgets. Notwithstanding the provisions of section
2817A.19, subsection 5, in an application for judicial review of
29the board’s decision concerning a utility’s energy efficiency
30plan or budget, the reviewing court shall not order a stay.
31Whenever
32(2) Notwithstanding paragraph “a”, subparagraph (1),
33subparagraph division (b), if, on the effective date of this
34Act, a gas or electric utility’s currently approved energy
35efficiency plan includes projected annual costs that exceed
-9-1two percent of the gas or electric utility’s annual rate
2revenue received for service within the previous calendar year,
3exclusive of recovery of energy efficiency costs, the gas or
4electric utility may file a request to modify its approved
5energy efficiency plan to achieve projected annual costs at
6two percent or less of the gas or electric utility’s annual
7rate revenue. In such case, or whenevera request to modify
8an approved plan or budget is filed subsequently by the office
9of consumer advocate or a gas or electric utility required to
10be rate-regulated under this chapter, the board shall promptly
11initiate a formal proceeding if the board determines that any
12reasonable ground exists for investigating the request. The
13formal proceeding may be initiated at any time by the board
14on its own motion. Implementation of board-approved plans or
15budgets shall be considered continuous in nature and shall be
16subject to investigation at any time by the board or the office
17of the consumer advocate.
18g. (1) A gas or electric utility required to be
19rate-regulated under this chapter may recover, through an
20automatic adjustment mechanism filed pursuant to subsection
218, over a period not to exceed the term of the plan, the
22costs of an energy efficiency plan approved by the board,
23including amounts for a plan approved prior to July 1, 1996,
24 in a contested case proceeding conducted pursuant to paragraph
25“e”. The board shall ensure that energy efficiency costs are
26recovered from all customers on a reasonably comparable basis,
27including customers who utilize alternate energy production
28facilities as defined in section 476.42. Customers who are
29granted an exemption from energy efficiency and demand response
30programs pursuant to paragraph “a”, subparagraph (2), shall not
31be charged for recovery of energy efficiency costs.
32(2) The board shall periodically conduct a contested case
33proceeding to evaluate the reasonableness and prudence of the
34utility’s implementation of an approved energy efficiency plan
35and budget. If a utility is not taking all reasonable actions
-10-1to cost-effectively implement an approved energy efficiency
2plan, the board shall not allow the utility to recover from
3customers costs in excess of those costs that would be incurred
4under reasonable and prudent implementation and shall not allow
5the utility to recover future costs at a level other than what
6the board determines to be reasonable and prudent. If the
7result of a contested case proceeding is a judgment against a
8utility, that utility’s future level of cost recovery shall be
9reduced by the amount by which the programs were found to be
10imprudently conducted. The utility shall not represent energy
11efficiency in customer billings as a separate cost or expense
12unless the board otherwise approves.
13 Sec. 13. Section 476.6, subsection 17, Code 2018, is amended
14by striking the subsection.
15 Sec. 14. Section 476.6, subsection 20, Code 2018, is amended
16to read as follows:
1720. Electric power generating facility emissions.
18a. It is the intent of the general assembly that the state,
19through a collaborative effort involving state agencies and
20affected generation owners, provide for compatible statewide
21environmental and electric energy policies with respect
22to regulated emissions from rate-regulated electric power
23generating facilities in the state that are fueled by coal.
24Each A rate-regulated public utility that is an owner of one
25or more electric power generating facilities fueled by coal
26and located in this state on July 1, 2001, shall develop a
27multiyear plan and budget may, in its sole discretion, file for
28advanced review of projects for managing regulated emissions
29from its facilities in a cost-effective manner.
30(1) The initial multiyear plan and budget shall be filed
31with the board by April 1, 2002. Updates to the plan and budget
32shall be filed at least every twenty-four months.
33(2) Copies of the initial plan and budget, as well as
34any subsequent updates, shall be served on the department of
35natural resources.
-11- 1(3) The initial multiyear plan and budget and any subsequent
2updates shall be considered in a contested case proceeding
3pursuant to chapter 17A. The department of natural resources
4and the consumer advocate shall participate as parties to the
5proceeding.
6b. A rate-regulated public utility shall file an application
7for advanced review of a project at least one hundred twenty
8days before the anticipated start of construction. Where an
9electric power generating facility is owned by two or more
10rate-regulated public utilities, the operator of the electric
11power generating facility may file the application on behalf of
12the rate-regulated public utilities.
13(4) c. The department of natural resources shall state
14whether the plan or update project meets applicable state or
15federal environmental requirements for regulated emissions,
16including requirements related to air, water, or solid waste.
17If the plan project does not meet these requirements, the
18department shall recommend amendments that outline actions
19necessary to bring the plan or update project into compliance
20with the environmental requirements.
21b. d. The board shall not approve a plan or update project
22 that does not meet applicable state or federal environmental
23requirements and federal ambient air quality standards for
24regulated emissions from electric power generating facilities
25located in the state.
26c. e. The board shall review the plan or update project
27 and the associated budget, and shall approve the plan or update
28 project and the associated budget if the plan or update project
29 and the associated budget are reasonably expected to achieve
30cost-effective compliance with applicable state or federal
31 environmental requirements and federal ambient air quality
32standards. In reaching its decision, the board shall consider
33whether the plan or update project and the associated budget
34reasonably balance costs, environmental requirements, economic
35development potential, and the reliability of the electric
-12-1generation and transmission system.
2d. f. The board shall issue an order approving or rejecting
3a plan, update, or budget project within one hundred eighty
4 ninety days after the public utility’s a filing is deemed
5complete; however, upon good cause shown, the board may
6extend the time for issuing the order as follows: for approval
7pursuant to this subsection.
8(1) The board may grant an extension of thirty days.
9(2) The board may grant more than one extension, but each
10extension must rely upon a separate showing of good cause.
11(3) A subsequent extension must not be granted any earlier
12than five days prior to the expiration of the original
13one-hundred-eighty-day period, or the current extension.
14e. g. The reasonable costs incurred by a rate-regulated
15public utility in preparing and filing the plan, update, or
16budget project and in participating in the proceedings before
17the board and the reasonable costs associated with implementing
18the plan, update, or budget project shall be included in its
19regulated retail rates.
20f. It is the intent of the general assembly that the board,
21in an environmental plan, update, or associated budget filed
22under this section by a rate-regulated public utility, may
23limit investments or expenditures that are proposed to be
24undertaken prior to the time that the environmental benefit to
25be produced by the investment or expenditure would be required
26by state or federal law.
27 Sec. 15. Section 476.6, Code 2018, is amended by adding the
28following new subsections:
29 NEW SUBSECTION. 22. Voluntary rates and revenue-neutral
30tariff filings.
31a. A rate-regulated public utility may file at any time for
32approval a tariff or rate that satisfies any of the following
33conditions:
34(1) The tariff or rate is optional for customers and all
35costs associated with the tariff or rate are borne by customers
-13-1who elect to participate in the tariff or rate.
2(2) The tariff or rate is revenue-neutral. For purposes
3of this subparagraph, “revenue-neutral” means a change in a
4rate, tariff design, or mechanism as a component of an energy
5efficiency plan or base rate that does not shift annualized
6allowed revenue between customer classes and does not increase
7or decrease the public utility’s average nonfuel revenue per
8customer for any given rate class when compared to either the
9rate, tariff design, or mechanism in effect at the time that a
10filing is made pursuant to this subsection or the allocation
11of costs approved by the board in a rate case using the cost of
12service methodology.
13b. The board shall review the tariff or rate filing within
14thirty days of filing. If the board fails to review the tariff
15or rate filing within thirty days of filing, the tariff or
16rate filing shall be deemed approved. The board shall not be
17required to hold a hearing to review a tariff or rate filing
18made pursuant to this subsection.
19 NEW SUBSECTION. 23. Preapproval for natural gas extensions
20— rules. The board may adopt rules which provide for a
21preapproval process for natural gas extensions to support
22population growth or economic development.
23 Sec. 16. Section 476.20, subsection 5, paragraph a,
24unnumbered paragraph 1, Code 2018, is amended to read as
25follows:
26The board shall establish rules which shall be uniform with
27respect to all public utilities furnishing gas or electricity
28relating to deposits which may be required by the public
29utility for the initiation or reinstatement of service. This
30subsection shall not apply to municipally owned utilities,
31which shall be governed by the provisions of section 384.84
32with respect to deposits and payment plans for delinquent
33amounts owed. Municipally owned utilities and electric
34utilities that are not required to be rate-regulated shall not
35be subject to the board’s rules in regards to deposits and
-14-1payment plans for delinquent amounts owed and repayment of past
2due debt. Municipally owned utilities and electric utilities
3that are not required to be rate-regulated shall be subject to
4the board’s rules in regards to payment plans made prior to the
5disconnection of services.
6 Sec. 17. Section 476.21, Code 2018, is amended to read as
7follows:
8476.21 Discrimination prohibited.
9A municipality, corporation or cooperative association
10providing electrical or gas service shall not consider the
11use of renewable energy sources by a customer as a basis for
12establishing discriminatory rates or charges for any service
13or commodity sold to the customer or discontinue services or
14subject the customer to any other prejudice or disadvantage
15based on the customer’s use or intended use of renewable energy
16sources. As used in this section, “renewable energy sources”
17includes but is not limited to solar heating, wind power
18and the conversion of urban and agricultural organic wastes
19into methane gas and liquid fuels. This section shall not
20prohibit the establishment of rates or charges for customers
21that are different than the rates or charges for customers who
22obtain all of their energy requirements from the municipality,
23corporation, or cooperative association, provided that the
24difference in rates or charges is based on the difference in
25cost of service and anticipated energy use.
26 Sec. 18. NEW SECTION. 476.26A Right to construct, own, and
27maintain electric transmission lines.
281. As used in this section, unless the context otherwise
29requires:
30a. “Electric transmission line” means a high-voltage
31direct current electric transmission line with a capacity of
32one hundred kilovolts or more and any associated electric
33transmission facilities.
34b. “Electric transmission owner” means an individual or
35entity who, as of the effective date of this Act, owns and
-15-1maintains an electric transmission facility including electric
2transmission lines, wires, or cables that are capable of
3operating at an electric voltage of one hundred kilovolts or
4more that are required for rate-regulated electric utilities,
5municipal electric utilities, and rural electric cooperatives
6in this state to provide electric service to the public for
7compensation.
8c. “Incumbent electric transmission owner” means any of the
9following:
10(1) A public utility or a municipally owned utility that
11owns, operates, and maintains an electric transmission line in
12this state.
13(2) An electric cooperative corporation or association or
14municipally owned utility that owns an electric transmission
15facility in this state and has turned over the functional
16control of such facility to a federally approved authority.
17(3) An “electric transmission owner” as defined in paragraph
18“b”.
19d. “Municipally owned utility” means a “city utility” as
20defined in section 362.2, or an “electric power agency” as
21defined in section 390.9 which is comprised solely of cities or
22solely of cities and other political subdivisions.
232. An incumbent electric transmission owner may construct,
24own, and maintain an electric transmission line that has
25been approved for construction in a federally registered
26planning authority transmission plan and which connects to an
27electric transmission facility owned by the incumbent electric
28transmission owner. Where an electric transmission facility is
29owned by two or more incumbent electric transmission owners,
30each incumbent electric transmission owner shall have the right
31to construct, own, and maintain an electric transmission line
32that connects to the electric transmission facility regardless
33of whether one incumbent electric transmission owner declines
34to construct, own, or maintain its portion of an electric
35transmission line connecting to the electric transmission
-16-1facility, unless otherwise agreed upon in writing.
23. This section shall not modify the rights and obligations
3relating to the construction, maintenance, and operation of
4electric transmission lines pursuant to chapter 478.
5 Sec. 19. Section 476.33, subsection 4, Code 2018, is amended
6to read as follows:
74. The board shall adopt rules that require the board, in
8rate regulatory proceedings under sections 476.3 and 476.6, to
9utilize either a historic test year or a future test year at
10the rate-regulated public utility’s discretion.
11a. For a rate regulatory proceeding utilizing a historic
12test year, the rules shall require the board toconsider the
13use of the most current test period possible in determining
14reasonable and just rates, subject only to the availability of
15existing and verifiable data respecting costs and revenues, and
16in addition, to consider verifiable data that exists within
17nine months after the conclusion of the test year, respecting
18known and measurable changes in costs not associated with a
19different level of revenue, and known and measurable revenues
20not associated with a different level of costs, that are to
21occur at any time within twelve months after the date of
22commencement of the proceedings. Parties proposing adjustments
23that are not verifiable at the commencement of the proceedings
24shall include projected data related to the adjustments in
25their initial substantive filing with the board. For purposes
26of this subsection paragraph, a proceeding commences under
27section 476.6 upon the filing date of new or changed rates,
28charges, schedules, or regulations. This subsection does not
29limit the authority of the board to consider other evidence in
30proceedings under sections 476.3 and 476.6.
31b. For a rate regulatory proceeding utilizing a future test
32year, the rules shall require the board to consider the use
33of any twelve-month period beginning no later than the date
34on which a proposed rate change is expected to take effect in
35determining just and reasonable rates.
-17- 1c. This subsection does not limit the authority of the board
2to consider other evidence in proceedings under sections 476.3
3and 476.6.
4 Sec. 20. Section 476.53, subsection 3, paragraph a,
5subparagraph (1), subparagraph division (a), Code 2018, is
6amended by adding the following new subparagraph subdivision:
7 NEW SUBPARAGRAPH SUBDIVISION. (v) Repowering of an
8alternate energy production facility to upgrade or extend the
9useful life of the facility.
10 Sec. 21. NEW SECTION. 476.59 Emerging energy technologies.
111. For purposes of this section, “emerging energy
12technology” includes but is not limited to an energy storage
13facility, electric grid protection system, electric grid
14management system, cyber security infrastructure, electric
15vehicle infrastructure, or any other emerging energy technology
16identified by the board and consistent with the general
17assembly’s intent as provided in subsection 2.
182. a. It is the intent of the general assembly to attract
19the development of emerging energy technologies within the
20state in sufficient quantity to ensure reliable electric
21service to Iowa consumers and provide economic benefits to
22the state. It is also the intent of the general assembly to
23encourage the development of the state’s future electric energy
24supply and the protection of the electric grid from cyber and
25physical threats.
26b. The general assembly’s intent with regard to the
27reliability of electric service to Iowa consumers shall be
28implemented by considering, among other things, the development
29of energy storage, and the protection of the electric grid from
30cyber and physical threats.
31c. The general assembly’s intent with regard to the
32development of Iowa’s future electric energy supply shall be
33implemented in a manner that advances a reliable, secure,
34economical, and environmentally responsible energy supply
35for the state, recognizing the value of emerging energy
-18-1technologies to promote the state’s economic development.
23. a. The board shall specify in advance, by order issued
3after a contested case proceeding, the ratemaking principles
4that will apply whenever a rate-regulated public utility
5requests advanced ratemaking principles for the construction,
6investment, or implementation of an emerging energy technology,
7and the costs of the emerging energy technology are included in
8regulated electric rates.
9b. In determining the applicable ratemaking principles, the
10board shall not be limited to traditional ratemaking principles
11or traditional cost recovery mechanisms.
12c. In determining the applicable ratemaking principles, the
13board shall make the following findings:
14(1) The rate-regulated public utility has demonstrated
15to the board that the proposed emerging energy technology is
16reasonable.
17(2) The rate-regulated public utility has demonstrated
18to the board that the public utility has considered
19other reasonable alternatives, if any, to the proposed
20emerging energy technology and that the proposed emerging
21energy technology is reasonable when compared to any such
22alternatives.
23d. The applicable ratemaking principles shall be determined
24in a contested case proceeding.
25e. The order setting forth the applicable ratemaking
26principles shall be issued prior to the construction,
27investment, or implementation of the emerging energy
28technology.
29f. Following issuance of the order, the rate-regulated
30public utility may proceed with the construction, investment,
31or implementation of the emerging energy technology.
32g. Notwithstanding any provision of this chapter to the
33contrary, the ratemaking principles established by the order
34issued pursuant to paragraph “e” shall be binding with regard to
35the specific emerging energy technology in any subsequent rate
-19-1proceeding.
2EXPLANATION
3The inclusion of this explanation does not constitute agreement with
4the explanation’s substance by the members of the general assembly.
5This bill modifies various provisions relating to public
6utilities.
7The bill adds gasworks and facilities useful for the
8delivery of gas service to the list of works or facilities
9permitted for joint financing by public agencies pursuant
10to Code chapter 28F. The bill prohibits public agencies
11participating in joint financing agreements pursuant to Code
12chapter 28F from exercising their powers of eminent domain to
13acquire interests in properties used for the transmission,
14transportation, or sale of natural gas.
15Current law requires certain non-rate-regulated electric
16utilities and municipally owned utilities to file energy
17efficiency plans with the Iowa utilities board. The bill
18provides that the energy efficiency programs included in such
19plans shall be cost-effective and removes requirements for the
20board to report the energy efficiency results of such utilities
21to the general assembly.
22Current law allows the board of directors or the membership
23of non-rate-regulated electric cooperatives to elect to
24have the cooperative’s rates regulated by the board, and
25subsequently elect to exempt the cooperative from rate
26regulation. The bill provides that if the membership of a
27cooperative elects to have the cooperative’s rates regulated
28by the board, only the membership may elect to exempt the
29cooperative from rate regulation.
30The bill allows a public utility to automatically adjust
31rates and charges to recover certain costs related to
32transmission, provided that the public utility first files a
33schedule showing such automatic adjustment with the board.
34Current law requires electric and gas public utilities to
35offer energy efficiency programs to customers through energy
-20-1efficiency plans, which plans must be cost-effective. The
2bill requires each energy efficiency program, instead of the
3energy efficiency plan as a whole, to be cost-effective. The
4bill adds the total resource cost test to the list of tests the
5board must apply in determining the cost-effectiveness of an
6energy efficiency program. The bill specifies that the types
7of programs included in an energy efficiency plan must pertain
8to energy efficiency and demand response.
9The bill allows a gas and electric utility to request an
10energy efficiency plan modification during the course of a
11five-year plan due to changes in funding or any other reason
12identified by the utility. The board must take action on a
13modification request within 60 days after filing, or such
14request is deemed approved.
15The bill allows public utility customers with monthly peak
16usage of 15 megawatts of electricity or more during a plan
17year to apply for an exemption from participation in programs
18included in an energy efficiency plan, including the costs of
19the plan. For a plan that takes effect prior to the effective
20date of the bill, a qualifying customer must apply within three
21months after the effective date of the bill. For a plan taking
22effect on or after the effective date of the bill, a qualifying
23customer must apply no later than June 1 of the first plan
24year. An exemption shall take effect on January 1 of the
25year following the application filing and shall be considered
26permanent unless the customer applies for reenrollment on or
27before June 1 of a given plan year.
28Current law requires the board to consult with the
29economic development authority to develop capacity and energy
30savings performance standards for each rate-regulated gas or
31electric utility. The bill replaces “performance standards”
32with “goals”, and specifies that such goals only include
33cost-effective energy efficiency and demand response programs,
34as defined in the bill.
35The bill removes the outdated requirement for
-21-1non-rate-regulated gas and electric utilities to submit reports
2to the board on or before January 1, 2010, relating to such
3utilities’ energy efficiency goals. The bill also removes
4outdated requirements for the board to submit certain reports
5relating to energy efficiency to the general assembly in 1998,
62009, and 2011.
7The bill prohibits the board from requiring a gas or electric
8utility from adopting an energy efficiency plan that results in
9projected annual costs in excess of 2 percent of the utility’s
10annual rate revenue. In determining the 2 percent threshold
11amount, the board shall exclude revenues from customers
12receiving exemptions from participation in energy efficiency
13programs and revenues associated with the recovery of energy
14efficiency costs. A gas or electric utility may voluntarily
15propose an energy efficiency plan in excess of the 2 percent
16threshold amount. If a gas or electric utility has an approved
17energy efficiency plan that exceeds the 2 percent threshold
18amount on the effective date of the bill, the utility may file
19a request to modify the energy efficiency plan to achieve
20projected annual costs below the 2 percent threshold amount.
21The board shall promptly initiate a formal proceeding if
22reasonable grounds exist for investigating the request.
23Current law allows a rate-regulated gas or electric utility
24to recover the costs of energy efficiency plans through
25automatic adjustment mechanisms. The bill requires the board
26to ensure that energy efficiency costs are recovered from all
27customers on a reasonably comparable basis, including customers
28who utilize alternate energy production facilities. The bill
29prohibits customers exempt from energy efficiency and demand
30response programs from being charged for recovery of energy
31efficiency costs.
32The bill strikes Code section 476.6(17), which allows the
33board to require rate-regulated gas or electric utilities to
34offer financing for certain energy efficiency improvements to
35customers.
-22- 1Current law specifies the general assembly’s intent to
2provide for compatible statewide environmental and electric
3energy policies with respect to emissions from electric
4power generating facilities in the state that are fueled
5by coal. Current law requires each rate-regulated public
6utility that owns one or more such facilities on July 1, 2001,
7to develop a multiyear plan and budget managing emissions
8in a cost-effective manner. The bill strikes the language
9expressing the general assembly’s intent and replaces the
10requirement that an applicable rate-regulated public utility
11develop a multiyear plan and budget with the option for a
12rate-regulated public utility to file for advanced review of
13projects to manage regulated emissions from its facilities
14in a cost-effective manner. Such filing shall be made at
15least 120 days before the anticipated start of construction.
16When a facility is owned by two or more rate-regulated public
17utilities, the owner of such facility may file the application
18for advanced review on behalf of the utilities. The bill
19requires a project to comply with applicable state and federal
20environmental requirements. The bill requires the board to
21issue an order approving or rejecting a project within 90 days
22after filing. The bill removes the ability of the board to
23limit certain proposed investments or expenditures pursuant to
24an environmental plan, update, or associated budget.
25The bill allows rate-regulated public utilities to file
26for approval of a tariff or rate that is either optional
27for customers, with all associated costs borne by customers
28electing to participate, or is revenue-neutral, as defined in
29the bill. The board must review the tariff or rate within 30
30days of filing or the tariff or rate is deemed approved. The
31board is not required to hold a hearing to review such tariff
32or rate.
33The bill allows the board to adopt rules to provide for
34a preapproval process for natural gas extensions to support
35population growth or economic development.
-23- 1The bill provides that non-rate-regulated electric utilities
2shall not be subject to the board’s rules in regards to
3deposits and payment plans for delinquent amounts owed and
4repayment of past due debt, but shall be subject to the
5board’s rules in regards to payment plans made prior to the
6disconnection of service.
7Current law prohibits a municipality, corporation,
8or cooperative from considering the use of renewable
9energy sources by a customer as a basis for establishing
10discriminatory rates or charges. The bill provides that
11these entities shall not be prohibited from establishing
12rates or charges for customers that are different than the
13rates or charges for customers who obtain all of their energy
14requirements from such entities, provided that the difference
15in rates or charges is based on the difference in cost of
16service and anticipated energy use.
17The bill allows an incumbent electric transmission owner,
18as defined in the bill, to construct, own, and maintain an
19electric transmission line, as defined in the bill, that has
20been approved for construction in a federally registered
21planning authority transmission plan and which connects to the
22owner’s electric transmission facility. Where an electric
23transmission facility is owned by two or more incumbent
24electric transmission owners, each owner shall have the right
25to construct, own, and maintain an electric transmission
26line that connects to the facility regardless of whether one
27owner declines to construct, own, or maintain its portion of
28an electric transmission line connecting to the facility,
29unless otherwise agreed upon in writing. The bill provides
30that this does not modify the rights and obligations related
31to the construction, maintenance, and operation of electric
32transmission lines under Code chapter 478.
33Current law requires the board to adopt rules that require
34the board to consider the most current test period to determine
35just and reasonable rates in rate regulatory proceedings under
-24-1Code sections 476.3 and 476.6. The bill requires the board
2to adopt rules that require the board to utilize either a
3historic test year or a future test year, at a public utility’s
4discretion, in rate regulatory proceedings. For a proceeding
5utilizing a historic test year, the rules shall require the
6board to consider the use of the most current test period
7to determine just and reasonable rates. For a proceeding
8utilizing a future test year, the rules shall require the board
9to consider the use of any 12-month period beginning no later
10than the date on which a proposed rate change is expected to
11take effect to determine just and reasonable rates.
12Current law requires the board to specify ratemaking
13principles in advance whenever a rate-regulated public utility
14files an application to significantly alter an existing
15electric generating facility. The bill adds the repowering of
16an alternate energy production facility to upgrade or extend
17the useful life of the facility to the list of significant
18alterations requiring the establishment of advanced ratemaking
19principles.
20The bill creates new Code section 476.59, relating to
21emerging energy technologies. The bill defines “emerging
22energy technology” to include but not be limited to an energy
23storage facility, electric grid protection system, electric
24grid management system, cyber security infrastructure, electric
25vehicle infrastructure, or other technologies identified
26by the board. The bill provides that it is the general
27assembly’s intent to attract the development of emerging energy
28technologies within the state to ensure reliable electric
29service and encourage the development of the state’s future
30electric energy supply and the protection of the electric grid
31from cyber and physical threats. The bill further elaborates
32on the general assembly’s intent with respect to emerging
33energy technologies.
34New Code section 476.59 requires the board to specify in
35advance the ratemaking principles that will apply whenever a
-25-1rate-regulated public utility requests advanced ratemaking
2principles for the construction, investment, or implementation
3of an emerging energy technology and the costs of such
4technology are included in rates. The board shall not be
5limited to traditional ratemaking principles or cost recovery
6mechanisms in determining such ratemaking principles. In
7determining the applicable ratemaking principles, the board
8shall find that the utility has demonstrated that the proposed
9emerging energy technology is reasonable and that such
10technology is reasonable when compared to any other reasonable
11alternatives. The applicable ratemaking principles shall be
12determined in a contested case proceeding and shall be issued
13prior to the construction, investment, or implementation of
14the emerging energy technology. Following the issuance of
15the order, the utility may proceed with the construction,
16investment, or implementation of the emerging energy
17technology. The applicable ratemaking principles shall be
18binding with respect to the specific emerging energy technology
19in subsequent rate proceedings.
-26-gh/rn