Bill > SF585

Introduced Session

This bill relates to rate-regulated utilities by modifying provisions relating to electric power generation, energy storage, and transmission facility ratemaking principles, creating tariffs for public utility innovation programs, implementing land restoration standards, and modifying the energy infrastructure revolving loan program. Division I of the bill modifies intent language to reflect an intent to attract energy storage and develop nuclear power generation for consumers in the state. Division I of the bill alters ratemaking principle processes and modifies when a rate-regulated public utility may seek ratemaking principles. In addition to electric power generating facilities and alternate energy production facilities, the utilities commission (commission) may specify the ratemaking principles applying to an energy storage facility. Division I of the bill provides that a rate-regulated public utility may seek ratemaking principles from the commission when there are construction-related costs of an electric power generating facility with a nameplate generating capacity equal to or greater than 40 megawatts, an alternate energy production facility, or an energy storage facility, or significant alterations to an existing electric power generating facility, alternate energy production facility, or energy storage facility. Current law generally provides that when a rate-regulated public utility files an application to construct a baseload electric power generating facility with a nameplate generating capacity equal to or greater than 300 megawatts or a combined-cycle electric power generating facility or an alternate energy production facility, or to significantly alter an existing generating facility or a new alternate energy production facility, the commission shall specify in advance the ratemaking principles that will apply. Division I of the bill modifies the requirements for a significant alteration of an existing generating facility to qualify for the establishment of ratemaking principles. Division I of the bill provides that to qualify for ratemaking principles, the significant alteration can convert an electric power generating facility to an alternate fuel type, add carbon capture and carbon storage to an electric power generating facility, add a facility to capture exhaust heat to an electric power generating facility, repower an alternate energy production facility, or add energy storage to an existing electric power generating facility, alternate energy production facility, or energy storage facility. Current law provides that to qualify for ratemaking principles, the significant alteration can convert a coal-fueled facility into a gas-fueled facility, add carbon capture and carbon storage to a coal-fueled facility, add gas-fueled capability to a coal-fueled facility, add a biomass-fueled capability to a coal-fueled facility, or repower an alternate energy production facility. Division I of the bill provides that a utility investment to convert an electric power generating facility to a different fuel type, add carbon capture and carbon storage to an electric power generating facility, or add a fuel type to an electric power generating facility shall be eligible to apply the ratemaking principles established by an order issued prior to construction or lease of a facility. Division I of the bill provides that a rate-regulated public utility may seek ratemaking principles for leasing or owning a new electric power generating facility with a nameplate generating capacity equal to or greater than 40 megawatts, a new energy storage facility, or a new alternate energy production facility. Current law provides that a rate-regulated public utility leasing or owning a new baseload electric power generating facility with a nameplate generating capacity equal to or greater than 300 megawatts, a combined-cycle electric power generating facility, or a new alternate energy production facility may seek ratemaking principles. Division I of the bill requires the commission to issue an order after the contested case proceeding that the ratemaking principles will apply when the costs of the electric power generating facility or alternate energy production facility are included in regulated electric rates once the commission finds that the rate-regulated public utility’s application for ratemaking principles meets all the commission’s requirements. Division I of the bill requires a rate-regulated public utility seeking ratemaking principles to provide support of reasonability with an electric utility resource plan that has been updated within 24 months of filing the application. Division I of the bill requires the commission to adopt rules for proceedings to conclude 10 months after a petition is filed. Division I of the bill requires rate-regulated electric utilities to file a resource plan at least once every five years. The resource plan must consider all reasonable resources by the utility for meeting the probable future demand for energy, including supply resources and conservation and management of demand. For conservation and management of demand, the resource plan shall include programs approved in the electric utility’s most recently approved energy efficiency plan. The objectives of the resource plan include but are not limited to adequate, cost-effective, and reliable energy service considering costs, fuel diversity, and probable future demand for energy, and should reflect the circumstances and management judgment of the electric utility. The resource plan does not require specific outcomes or specific investment decisions. Division I of the bill directs the commission to issue an order within 90 days of the resource plan acknowledging receipt of the plan. This order may provide recommendations to an electric utility regarding any additional analyses or actions that the electric utility should consider completing in its next resource plan. Division I of the bill directs the commission to adopt rules regarding the timeline and stakeholder process to review and provide comments on the resource plan. The stakeholder process shall include the electric utility organizing and facilitating a stakeholder conference with representatives of the commission, the consumer advocate, and the electric utility’s customers. Division I of the bill directs the electric utility to make a good faith effort to inform and consider input from the commission, the consumer advocate, and stakeholders. Division II of the bill provides that it is the intent of the general assembly to encourage public utility innovation in pricing and programs, and that the new innovations not negatively impact nonparticipating customers. Division II of the bill additionally provides that it is the intent of the general assembly to attract and retain customers for the benefit of the state’s economy, support of economical energy production, and support of sustainable energy production. Division II of the bill authorizes a tariff program. Division II of the bill provides that a tariff shall comply with several provisions. The tariff shall be optional for customers, define eligible customer groups, and assess program costs to participating customers. Program costs shall include specified direct costs arising from the tariff program and costs related to the implementation of tariff programs. Participants of a tariff program shall participate in future indirect costs allocated to customers of that utility without regard for the existence of an approved tariff. The tariff shall not allow for an eligible customer group excluding directly competing customers in the same customer service territory, alter existing base rate or charges of the public utility, or negatively impact nonparticipating customers. Negative impacts include additional costs incurred by nonparticipating customers due to costs arising from the tariff, tariff participants no longer sharing in customer class costs, or decreased customer benefit from existing infrastructure. Division II of the bill explains that a tariff may include provisions relating to recovery of costs, rate of return, application of the program to other specified patterns, program benefits, and refunds, credits, or waivers when the program replaces an existing service, or recovery of costs associated with existing facilities. A participating program customer shall pay the costs of the services received from the public utility unless the costs are refunded, credited, or waived under the program. Division II of the bill provides that if the program or eligible customer group cease to exist and the public utility seeks recovery of the program-specific facilities through a general rate case proceeding, the public utility shall demonstrate the reasonableness and prudence without any presumption regarding approval of such request. A public utility shall be allowed to recover program-specific facilities through general rate case proceedings. If the utility can demonstrate to the commission that the proposed tariff generates excess revenue for the utility as compared to total revenue without the tariff, the excess revenue may be retained by the utility. Division II of the bill provides for tariff application and approval. A public utility’s authority is not mandatory regarding tariffs. Division II of the bill provides that an application for a tariff or amendment to a tariff shall be filed with the commission. The commission shall approve, deny, or docket for further review an application within 30 days. If the commission dockets the application for further review, the commission shall render a decision within 90 days from the date of application filing, unless an objection is filed. The commission shall not reconsider existing programs previously approved under the tariff during a review of an application for an amendment to a tariff unless the review of a program is proposed as part of the amendment. Division II of the bill prohibits the commission from certain actions. Division II of the bill provides that the commission shall not limit the number of applications a public utility may file, deny, or condition the approval of a tariff because a public utility is subject to an alternative regulatory mechanism, or require a public utility subject to an alternative regulatory mechanism to record revenues and costs in an inconsistent manner with specified federal standards, provided that the proposed tariff would not result in detrimental treatment of other customers or require adjustment to the calculation of the alternative regulatory mechanism to reflect the impact of an approved tariff. Division II of the bill prohibits the commission from conditioning approval of a tariff on the requirement that the public utility change the proposal to unagreed-upon terms, but this prohibition does not prevent the commission from identifying changes to the proposal that might result in approval. Division II of the bill provides that tariffs and programs approved pursuant to division II of the bill shall be rebuttably presumed to be just and reasonable in general rate case proceedings. Division II of the bill prohibits the commission from conditioning approval or denial of a tariff on the final adoption of rules and requires the commission to adopt rules related to division II of the bill. Division II of the bill applies to a public utility filing an application with the commission for review of a tariff on or after the effective date of division II of the bill. Division III of the bill relates to electric transmission lines and electric transmission owners. Division III of the bill expounds the legislative purpose of Code section 478.16, identifying Iowa consumers’ urgent need for development and investment in high-voltage transmission. Division III of the bill provides that an incumbent electric transmission owner may be formed, located, or headquartered in any state as long as the electric transmission line is located in Iowa. Division III of the bill defines an “incumbent electric transmission owner” as an individual or entity who, as of July 1, 2024, owns and maintains an electric transmission line in this state that is required for rate-regulated electric utilities, municipal electric utilities, and rural electric cooperatives in the state to provide electric service to the public for compensation. Under division III of the bill, an incumbent electric transmission facility owner has the right to construct, own, and maintain an electric transmission line that directly connects to the electric transmission facility. If a proposed transmission line would directly connect to facilities owned by two or more facility owners, each owner has the right to construct, own, and maintain the electric transmission line individually and equally. Division III of the bill requires an incumbent electric transmission owner exercising its right to construct, own, and maintain an electric transmission line to offer public power utilities an opportunity to jointly own a portion of the electric transmission line. The offered amount must be at least the amount of the public power utility’s electric load divided by the total electric load in the applicable incumbent electric transmission owner’s pricing zone. Division III of the bill does not prohibit the entities from agreeing to joint ownership in a different amount. Additionally, division III of the bill allows the public power utility to transfer or assign its joint ownership rights to another public power utility or group of public power utilities with the consent of the incumbent electric transmission owner. Division III of the bill allows an incumbent electric transmission owner exercising its right to construct, own, and maintain an electric transmission line to contract with another electric transmission owner or electric public utility to jointly own a portion of the electric transmission line. Division III of the bill requires the incumbent electric transmission owner or owners with approved electric transmission lines not subject to right of first refusal in a federally registered planning authority transmission plan to give notice to the commission whether the owner or owners intend to construct, own, and maintain the electric transmission line. The notice shall be given within the later of 90 days of approval for construction or 90 days after enactment of division III of the bill. The commission may determine whether another person may construct the electric transmission line if the incumbent electric transmission owner or owners give notice declining to construct or do not give timely notice. Division III of the bill requires incumbent electric transmission owners to provide documentation to the commission that shows utilization of competitively bid construction contracts that meet all necessary technical, commercial, and other specifications required for compliant construction. Division III of the bill allows the consumer advocate free access to all documents, reports, and information submitted to the commission regarding cost accountability measures for the construction of electric transmission lines. These documents, reports, and information may be used by the consumer advocate for any purpose within the scope of the consumer advocate’s duties. These provisions do not create a private cause of action or complaint. Division III of the bill directs the commission to adopt rules to implement the land restoration requirements after initial construction of an electric transmission line as set forth in division III of the bill. Division III of the bill requires incumbent electric transmission owners to repair drain tiles damaged during construction as soon as practicable and to complete permanent repairs as soon as practicable after initial construction. The permanent repairs must be of the same quality, size, and flow capacity of the original drain tile. Division III of the bill requires incumbent electric transmission owners to remove all nonnative rocks larger than three inches in diameter from the easement area. The disposal of rock that cannot be used as backfill must be done at a location and in a manner agreed to between the incumbent electric transmission owner and the landowner. Division III of the bill requires the incumbent electric transmission owner to till agricultural land affected by construction, including right-of-way access points or roads, after electric transmission line construction activities are completed on the affected property. The land must be tilled at least 18 inches deep in land used for crop production and 12 inches deep in all other land, unless otherwise agreed to by the landowner. Division III of the bill requires the incumbent electric transmission owner to restore soil conservation practices and structures damaged during construction to their previous state, compact the soil used to repair embankments intended to retain water, and reestablish any vegetation disturbed during construction, including cover crops. Division III of the bill requires the incumbent electric transmission owner to reseed the agricultural land, excluding row crops and small grain production, following compaction of the land. Seeding for cover crops may be delayed if construction is completed too late in the year and is not required if the land will be tilled the following year. When the season is not suitable for the seeding of cover crops, the landowner may request ground cover to prevent soil erosion. Division III of the bill requires the incumbent electric transmission owner to remove all field entrances and temporary roads used during construction and to restore the areas to their previous state following the completion of the initial construction. Division III of the bill requires the incumbent electric transmission owner to use good practices when constructing in wet conditions and to grade and till any rutted land in order to restore the land to its original condition to the extent practicable. Additionally, division III of the bill allows the landowner to repair damage caused by construction in wet conditions. The incumbent electric transmission owner shall then reimburse the landowner for reasonable costs of repair. Division III of the bill requires an electric transmission owner to utilize mudflats, mats, or other measures to minimize soil disturbance when using heavy equipment in wetlands. Division III of the bill requires the incumbent electric transmission owner to provide contact information to all persons affected by the construction of each transmission line. Division III of the bill allows the commission to appoint an inspector to determine compliance with restoration standards in the event the incumbent electric transmission owner and the landowner dispute over potential violations. The cost of the inspection shall be paid by the incumbent electric transmission owner. If the inspector determines there have been violations of the restoration standards, the commission will provide oral and written notice to the incumbent electric transmission owner. The commission will order corrective actions be taken to comply with the standards. The costs of the corrective actions will be borne by the electric transmission owner. Division III of the bill allows the commission to issue an order requiring corrective action and impose civil penalties if the incumbent electric transmission owner or its contractor do not comply with the required standards. Division III of the bill requires the commission to instruct the inspectors on the statutes, rules, and responsibilities regarding restoration standards. Division III of the bill requires petitioners for a franchise for electric transmission construction to file a land restoration plan outlining how the construction will conform to the required standards. The restoration plan will also be provided to all property owners affected by the construction. Division III of the bill allows alternative provisions in independent agreements with landowners regarding protecting or restoring property as long as these provisions are in writing and are provided to the commission. Division III of the bill allows electric transmission owners to propose alternate methods of land restoration to the commission. The commission, by waiver, may allow variations to the land restoration requirements if the proposed alternate methods would restore the land to a condition as good or better than those required by division III of the bill. Division III of the bill allows the commission to waive the preparation of a separate land restoration plan, in whole or in part, if the incumbent electric transmission owner satisfies the requirements through similar agreement with other agencies in the state. The relevant agreements must be filed with the commission. Division III of the bill does not limit, expand, or otherwise modify the rights of access and obligations for damages set forth in Code section 478.17. Division III of the bill takes effect upon enactment. Division III of the bill applies retroactively to an electric transmission line included in a federally registered planning authority long-term transmission plan approved on or after July 1, 2020, with the exception of the provisions requiring incumbent electric transmission owners to offer public power utilities the option to jointly own qualifying electric transmission lines. For this exception, division III of the bill applies retroactively to July 1, 2024. Division IV of the bill relates to the energy infrastructure revolving loan program, which is renamed as the “energy and water infrastructure revolving loan program”. Under current law, the energy infrastructure revolving loan fund (fund) and program are administered by the Iowa energy center (center). Division IV of the bill instead places the administrative duty with the Iowa economic development authority (IEDA) and renames the fund the “energy and water infrastructure revolving loan fund”. Division IV of the bill adds financial assistance for the development and construction of water infrastructure that supports economic development to the fund’s approved uses, including drinking water treatment systems and wastewater treatment systems. Division IV of the bill expands the entities eligible for assistance under the fund to include a county or city. Under current law, the approval of the center’s governing board is required before IEDA can determine the amount and the terms of all financial assistance awarded to an eligible borrower and all agreements and administrative authority are vested in the center’s governing board. Division IV of the bill removes the approval requirement by the center and its authority regarding agreements. Division IV of the bill adds that to be eligible for a financial assistance award under the energy and water infrastructure revolving loan program, an eligible borrower must demonstrate that the proposed project will attract and encourage the location of new industrial enterprise or the expansion of existing industrial enterprise. Division IV of the bill states that IEDA shall determine the amount and the terms of all financial assistance awarded to an eligible borrower under the program and that all agreements and administrative authority shall be vested in IEDA. Division IV of the bill provides that IEDA may adopt rules for the implementation of this program. Division IV of the bill grants IEDA the ability to authorize the transfer of up to $633,000 annually to Iowa state university of science and technology to be used for providing financial assistance to the state load forecasting center. Division V of the bill relates to anaerobic digester systems. Division V of the bill states its purpose is to provide requirements relating to the construction, including the expansion, and operation of anaerobic digester systems and the control of digestate. Division V of the bill directs the environmental protection commission to make rules for this stated purpose. Division V of the bill states that if the provisions of new Code chapter 459C conflict with Code chapter 459, 459A, or 459B, the provisions of Code chapter 459C shall prevail. Division V of the bill directs the department of natural resources (DNR) to approve applications for permits for construction, including expansion, of anaerobic digester systems based on procedures required in division V of the bill and rules created by DNR pursuant to division V of the bill. Division V of the bill prohibits the construction of an anaerobic digester system, regardless of size, until the construction permit has been approved. The applicant must also submit a $250 permit application fee, a written plan for disposal of the digestate, and a written operation plan for an anaerobic digester system. Division V of the bill requires an anaerobic digester system to accept only manure unless DNR otherwise approves the inclusion of organic by-product, food product, or food for human consumption. Nonmanure materials shall not compose more than 10 percent of the total material added to an anaerobic digester system. Division V of the bill requires a daily record of materials added to an anaerobic digester system to be kept and maintained at the facility and grants DNR the authority for additional testing or monitoring of the materials added to an anaerobic digester system and the digestate. Division V of the bill prohibits medical wastes, including expired or unused antibiotics, petroleum products not designed for use in manure storage facilities, pesticides, paints, solvents, hazardous materials, municipal or sanitary waste or sludge, industrial wastewater, contaminated feedstock, slaughterhouse wastes, and residues from processing of food materials that have not been deemed acceptable for human consumption from being processed in an anaerobic digester system. Division V of the bill directs DNR to adopt rules to establish construction design standards for formed manure storage structures that are part of an anaerobic digester system. Division V of the bill requires construction design standards to be based upon uniform standards and provides construction design standards for concrete. Division V of the bill prohibits the construction of unformed manure storage structures on karst terrain, but allows the construction of a formed manure storage structure on karst terrain or an area that drains into a known sinkhole if upgraded construction design standards necessary to ensure that the structure does not pollute groundwater sources are used. Division V of the bill provides separation distance requirements between an anaerobic digester system manure storage structure and a surface intake of a drainage well, wellhead, cistern of an agricultural well, known sinkhole, water source, or wetland. Division V of the bill provides exceptions for a location or object and a farm pond or privately owned lake. Division V of the bill prohibits construction, expansion, or diversion of a water source or the designation of a wetland if the action would cause an anaerobic digester system manure storage structure to be in violation of the distance requirements. Division V of the bill prohibits an anaerobic digester system manure storage structure from being constructed on land that is part of a 100 year floodplain as determined by DNR. Division V of the bill states there are no distance requirements between a location or object and a farm pond or privately owned lake. Additionally, distance requirements do not apply to an anaerobic digester system manure storage structure constructed with a secondary containment barrier approved by DNR. Division V of the bill provides separation distances between an anaerobic digester system manure storage structure and a residence, bona fide religious institution, public use area, commercial enterprise, educational institution, or public thoroughfare. Division V of the bill allows the titleholder of the land benefiting from the distance requirements to waive the distance requirements. Division V of the bill allows the state or political subdivision to waive distance requirements of public thoroughfares. The waivers must be filed with the county recorder before becoming effective. Division V of the bill allows an anaerobic digester system manure storage structure to be within the distance requirement from a residence, educational institution, commercial enterprise, bona fide religious institution, city, or public use area if the anaerobic digester system manure storage structure was operating in conformance with distance requirements, but was brought within the distance requirement due to the expansion or construction of a residence, educational institution, commercial enterprise, bona fide religious institution, city, or public use area. A change in ownership or expansion of an anaerobic digester system shall not change the established date of operation. Division V of the bill requires an anaerobic digester system to retain all digestate produced by operation between periods of digestate disposal or delivery to animal feeding operations and to dispose the digestate in a manner that will not cause surface water or groundwater pollution. Division V of the bill requires the owner of an anaerobic digester system that discontinues the use of the operation to remove all digestate from related anaerobic digester system structures used to store digestate within six months following the date that the anaerobic digester system is discontinued. Division V of the bill requires materials returned to an animal feeding operation for land application be accounted for in the animal feeding operation’s manure management plan or nutrient management plan and that the owner of the anaerobic digester system must satisfy all applicable laws for proper application of any portion of the digestate not returned to an animal feeding operation. Division V of the bill allows an anaerobic digester system to stockpile materials prior to digestation or dry digestate so long as the facility stockpiles the materials and dry digestate in compliance with restrictions applicable to stockpiling as provided in division V of the bill. Division V of the bill prohibits anaerobic digester system stockpiles from commingling with animal feeding operation stockpiles. Division V of the bill provides separation distance requirements between a stockpile and a designated area that includes a known sinkhole, a cistern, an abandoned well, an unplugged agricultural drainage well, an agricultural drainage well surface inlet, a drinking water well, a designated wetland, or a water source. Special separation distance requirements are provided for a high-quality water resource, an agricultural drainage well, or a known sinkhole. Division V of the bill provides special separation distance requirements between a stockpile and a terrace tile inlet or surface tile inlet. An exception allows a stockpile to be located closer than otherwise required from these water sources so long as it is maintained in a manner that will not allow precipitation induced runoff to drain from the material or dry digestate. Division V of the bill also provides separation distance requirements between a stockpile and a residence, bona fide religious institution, public use area, commercial enterprise, or educational institution. Division V of the bill provides that a stockpile cannot be located in a grassed waterway. The stockpile also cannot be located on a slope of a certain grade, unless efforts are taken to contain the stockpile and prevent runoff. If the materials or dry digestate are not stockpiled on karst terrain, division V of the bill does not provide any requirements so long as the materials or dry digestate are stockpiled for 15 days or less. Otherwise, division V of the bill requires a person to comply with stockpiling requirements or file a monthly inspection report with DNR. The special stockpiling requirements include either the use of a structure or the use of an impermeable cover. However, if the stockpile is covered on a long-term basis, it must be sited on compacted or other prepared ground. Division V of the bill states that if a proposed stockpile is located on potential karst terrain, a qualified person must test the ground in conformance with requirements described in division V of the bill and submit a soil report to confirm whether the proposed stockpile location is on karst terrain. If the material or dry digestate is stockpiled on karst terrain, there must be a separation distance between the bottom of the stockpile and the soluble rock, regardless of how long the stockpile is located at that location. For material or dry digestate that is stockpiled for more than 15 days, special compliance requirements apply, including either the use of a structure or an impermeable cover. If the stockpile is located at that location on a long-term basis, it must be sited on concrete. Division V of the bill requires a person stockpiling material or dry digestate to comply with all applicable national pollutant discharge elimination system permit requirements pursuant to the federal Water Pollution Control Act. Division V of the bill requires a person stockpiling materials or dry digestate to remove the dry digestate and apply it in accordance with the provisions of division V of the bill within six months after the materials or dry digestate are first stockpiled. Division V of the bill directs DNR and the attorney general to enforce Code chapter 459C in the same manner as provided in Code chapter 459, subchapter VI. A person who violates the provisions of division V of the bill for which the alleged harm is related to air quality shall be subject to the same penalty as provided in Code section 459.602. A person who violates the provisions of division V of the bill for which the alleged harm is related to water quality shall be subject to the same penalties as provided in Code section 459.603. A habitual violator of the provisions of division V of the bill shall be subject to the same penalties and restrictions as provided in Code sections 459.604 and 459.605. Any collected civil penalty and interest on a civil penalty shall be credited to the Iowa nutrient research fund created in Code section 466B.46.

Committee Categories

No sponsors listed

Other Sponsors (1)

Subcommittee recommends passage. (on 03/31/2025)

Official Document