trending Market Intelligence /marketintelligence/en/news-insights/trending/e9efjq8o2fge_aoxdgc5wa2 content esgSubNav
In This List

Omnibus energy bill passes Iowa Senate; worries energy efficiency advocates

Podcast

Next in Tech | Episode 49: Carbon reduction in cloud

Blog

Using ESG Analysis to Support a Sustainable Future

Research

US utility commissioners: Who they are and how they impact regulation

Blog

Q&A: Datacenters: Energy Hogs or Sustainability Helpers?


Omnibus energy bill passes Iowa Senate; worries energy efficiency advocates

An Iowa omnibus energy bill that has raised concerns from energy efficiency advocates passed the state Senate by a 27-23 vote on March 6.

The bill covers a range of issues reforming state energy policies, which state Sen. Michael Breitbach, R-Strawberry Point, told the Des Moines Register could help lower rates for consumers. In addition to energy efficiency issues, the legislation would also change policies for ratemaking and transmission.

Clean energy advocates have criticized the bill for two energy efficiency provisions that could lead to cuts in energy efficiency programs. The provisions include a cap on the rate impact of efficiency programs and an allowance for customers to opt out of such programs.

A prior version of the bill allowed industrial customers with an average use of 15 MW per month to opt out of participating in utility efficiency and demand response programs. The latest version, however, allows any gas or electric utility customer to apply for an exemption, regardless of size. To qualify for an exemption, customers would have to meet eligibility requirements set by the Iowa Utilities Board.

The bill also does not require the board to approve a gas efficiency or demand response plan if the projected annual costs of the plan are more than 1.5% of a gas utility's annual revenue. For electricity savings plans, annual costs are capped at 2% of a utility's annual revenue.

Josh Mandelbaum, a staff attorney at the Environmental Law and Policy Center, said in an interview that the bill set an "awful" precedent for future energy efficiency policies and the provisions could reduce overall funding to such programs. Large technology companies, including Alphabet Inc. subsidiary Google Inc. — which owns smart thermostat maker Nest Labs Inc. — Facebook Inc., Microsoft Corp. and Apple Inc., are also opposed to the bill, legislative records show.

Alliant Energy Corp. spokesman Justin Foss said the utility backs the bill because of changes related to natural gas extensions, transmission riders, advanced reviews of air emission projects, voluntary rates and an optional forward-looking test year. The utility also supported an advanced ratemaking provision in an earlier version, but it has been taken out.

The state's two largest electric utilities — MidAmerican Energy Co. and Alliant Energy Corp. subsidiary Interstate Power & Light Co. asked the board to consider an industrial opt-out as part of their 2019-2023 plans. Legislative records show MidAmerican Energy, a subsidiary of Berkshire Hathaway Energy, as undecided on the bill. But the state's largest gas utility, Black Hills Corp. subsidiary Black Hills Energy, and certain municipal utilities and electric cooperatives support the bill.

The bill also benefits utilities by allowing them to apply for expedited approval of tariff changes. If the Iowa Utilities Board fails to review the rate change within 60 days of filing, the tariff changes would automatically be approved.

Bills outside of the Appropriations, Ways and Means and certain other committees must pass both chambers by March 23 to stay alive before the end of the legislative session on April 17, according to a timeline from the Iowa General Assembly.

The bill is Senate File 2311, introduced as Senate Bill 3093.