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Iowa Senate moves 2nd bill to rid energy efficiency after House tables first

Tthe Iowa Senate might revise a second bill to scrap energy efficiency plans after a prior omnibus energy bill met resistance in the state House.

The omnibus energy bill, Senate File 2311, which includes energy efficiency, rate design and other topics, passed the Senate on March 6 but has yet to move in the House. As a result, legislators are picking up a second bill, Senate Study Bill 3078, which focuses only on energy efficiency in hopes of passing legislation before the session ends on April 19. The full House and half of the Senate are also up for election in November.

S.S.B. 3078, as introduced on Jan. 24, simply scraps a requirement that regulated and nonregulated gas and electric utilities need to file energy efficiency plans every five years to the regulator, the Iowa Utilities Board.

Sen. Randy Feenstra, a Republican who voted for S.S.B. 3078, told The Quad-City Times newspaper in a March 20 article, "We want to make sure that something gets passed this year." Feenstra said the bill is getting revised to include a cap on the costs of efficiency and add a line item on customer bills that shows what customers pay for efficiency programs.

"We want to make sure that this secret tax is out in the open for everybody and that there is some cap on it so it's not just a runaway train," he said.

A subcommittee of the Senate Ways and Means Committee, which is chaired by Feenstra, passed the bill on March 20, advancing the bill for full committee review. Democratic Sen. Robert Hogg, who opposed the bill in the subcommittee, said in an interview March 23 he thinks it is also getting amended to include opt-out provisions that exempt certain customers from participating in efficiency measures similar to a provision in S.F. 2311. Feenstra could not be reached for additional comment.

Hogg does not believe the efficiency-only bill can pass both chambers given the omnibus bill has stalled in the House. Hogg thinks Feenstra wants to see how the bill does if some of the other more controversial measures in the omnibus bill are stripped out.

S.F. 2311 had provisions that would change the tests used to evaluate whether a gas or electric efficiency plan is cost-effective, which clean energy advocates worry could block plans from getting regulatory approval. It also included provisions such as advanced ratemaking principles backed by utility Alliant Energy Corp. that remove barriers for utilities in terms of project financing. Another benefit to utilities is a section on voluntary ratemaking, which allows a tariff or rate change to go into effect automatically if regulators fail to act within 60 days of a filing.

Alliant, whose Iowa electric utility subsidiary is Interstate Power & Light Co., is undecided on whether to support or oppose S.S.B. 3078, as are other major utilities in the state including MidAmerican Energy Co., a subsidiary of Berkshire Hathaway Energy, and Black Hills Corp. subsidiary Black Hills Energy, according to legislative records.

Though energy efficiency programs have been around since the 1990s, Hogg said the topic is still controversial among lawmakers despite having support from Republican Gov. Kim Reynolds. Reynolds, when serving as lieutenant governor in 2016, signed a comprehensive energy plan calling for widespread adoption of energy efficiency and renewable energy practices.

The businesses that Hogg has heard from "not universally, but generally" do not back S.S.B. 3078 because they have already incorporated energy efficiency into their business model, he said. A source from a trade group representing small and large businesses in Iowa said, "I would say it is a minority position, but there are businesses who feel that [energy efficiency] is a hidden tax."

Hogg foresees various challenges for S.S.B. 3078 to pass both houses of the General Assembly and avoid the issues faced by the omnibus bill. One challenge is getting the support of Iowa Senate President Charles Schneider, who voted against S.F. 2311, Hogg said.