Two bills before the Iowa legislature could roll back energy efficiency and renewable energy development efforts and offer provisions that opponents say benefit utilities.
Energy efficiency programs have been around since the early 1990s but could be significantly undermined if an omnibus bill, Senate Study Bill 3093, is enacted, Josh Mandelbaum, a staff attorney at the Chicago-based advocacy group Environmental Law and Policy Center, said Feb. 7.
S.S.B. 3093 and its companion, House Study Bill 595, were introduced in January before the Senate and House Commerce Committees, respectively. The bills address various topics including rate design, transmission and emissions plans, but several provisions pull back energy efficiency efforts and challenge renewable energy growth.
As an example, Mandelbaum, who is against the bills, pointed to energy efficiency provisions that create a "total resource cost test," which requires each program within a gas or electric utility's efficiency plan to be cost-effective. The current statute allows the Iowa Utilities Board, or IUB, to approve programs if a utility's overall plan is cost-effective. Utilities have to file plans to the board every five years.
Those provisions could impact low-income energy efficiency programs, Mandelbaum said, which may not be cost-effective on their own. For renewables, another provision allows municipalities, corporations and member-owned electric cooperatives to charge different rates for customers using renewable energy while current statutes protect against such ratemaking.
A subcommittee of the Senate Ways and Means Committee is reviewing a shorter bill, S.S.B 3078, that would remove a requirement for regulated and nonregulated utilities to be required to submit efficiency plans to the board.
S.S.B.3093 and H.S.B. 595 are stuck in committee and subcommittee review, respectively. Those bills have to move out of committee review by Feb. 16 to eligible for a House or Senate vote. Bills in the Appropriations and Ways and Means committees, however, are exempt from this requirement.
Alliant Energy Corp., which serves electric and gas customers in Iowa through subsidiary Interstate Power & Light Co., supports S.S.B. 3093/H.S.B. 595 but remains neutral on S.S.B. 3078, spokesman Justin Foss said Feb. 8, explaining the company backed six principles in the omnibus bill that are not in S.S.B. 3078.
The six principles refer to advanced ratemaking, preapproval for natural gas extensions, transmission riders, advanced reviews of air emission projects, voluntary rates and revenue neutral tariffs, and an optional forward-looking test year, Foss said. Some of these principles deal with tariff design. For instance, the bill expands the use of "advanced ratemaking principles" to "emerging energy technology" and repowering projects. Advanced ratemaking principles remove barriers for utilities in terms of project financing. The principle allows utilities to establish their overall rate of return before investments are made rather than after, Foss said.
The omnibus bills also include several energy efficiency initiatives that align with MidAmerican Energy Co.'s latest five-year efficiency plan filed with state regulators on Nov. 1, 2017. The plan calls for "right-sizing" the costs of the efficiency programs, MidAmerican Energy spokeswoman Tina Hoffman said on Feb. 8. MidAmerican is a subsidiary of Berkshire Hathaway Energy.
MidAmerican's 2019-2023 plan, as proposed, includes efficiency targets and a portfolio of 17 programs, but emphasizes reducing program costs, according to its application for approval. Like the omnibus bills, the plan includes an industrial opt-out provision that allows certain customers to withdraw from participating. The omnibus bills allow large utility customers using at least 15 MW a month to apply for an exemption. Interstate Power also asked the IUB to consider an opt-out for its industrial customers in its latest five-year plan filed Feb. 1.
MidAmerican's plan aims to cut customers' electricity use by about 1.1% to 1.3% per year over its forecast sales and is projected at $359.3 million, according to the filing. Interstate Power's plan includes 16 efficiency programs and establishes electricity savings targets of 0.79% to 0.89% per year.
S.S.B 3093 was also backed by transmission provider ITC Midwest LLC, a Fortis Inc. subsidiary; Black Hills Corp. subsidiary Black Hills Energy, known legally in Iowa as Black Hills Iowa Gas Utility Co. LLC; and various electric co-ops. The Iowa Environmental Council and state Office of Consumer Advocate are among the opponents. Other Iowa electricity market participants such as aerospace and aluminum products firm Arconic Inc. and NextEra Energy Inc., which operates unregulated power plants in the state, remain undecided, legislative records show.
