SSB 3093/HSB 595
Action Alert

Clayton County Energy District encourages all Iowans to immediately call your legislators (NEIA , and statewide ) and ask them to oppose the omnibus energy bills SSB 3093/HSB 595, if you care about:

1. Consumer protection and public oversight of monopoly utilities, which will be significantly reduced, and the energy cost burden on low to moderate income households, which will likely grow

2. Energy efficiency programs and their major economic impacts, which will be gutted

3. Locally-owned renewable energy, including the right to own solar on fair terms, which will likely be dramatically curtailed through discriminatory charges and rates

These companion bills are identical, and you can view the senate version here  (scroll down to p20 for an “explanation” of the bill). Because of the scope outlined above, it is difficult to imagine significant improvement, so the message needs to be “NO,” these bills are bad for Iowa citizens, ratepayers, and communities.

The Iowa Environmental Council has prepared an overview you can read here.   Here is summary of the benefits to all Iowans of our energy efficiency programs.

For those wanting a deep dive, below we outline issues and reference sections of the senate bill linked above, in the order of our introductory points.

1. Consumer Protection and Energy Cost Burdens: Electric and gas utilities in Iowa are monopolies. They are regulated (in different ways depending on utility type) for consumer protection and fairness, precisely because they are not subject to competition or market pressures, and Iowans are captive customers with no choice and little voice. This bill is fundamentally a de-regulation bill, giving freer rein to utilities.

   1. P13 lines 29-35 and p14 lines 1-18 allow rate-regulated utilities to adjust charges (rates or tariffs) within customer classes with a simple filing at the Iowa Utilities Board (IUB). The IUB is not required to review the filing, or to allow public input through a docket or hearing, and unless the IUB acts the utility filing is automatically approved in a short 30 days.

   2. This de-regulation of rate-making appears to allow utilities to unilaterally shift costs, for example by decreasing the per-kWh energy charge and increasing the fixed monthly charge for residential and commercial customers. Such a shift represents a significant increase in energy cost burden for low to moderate income households, as we testified in the recent Alliant rate case when such a shift was requested and denied. The massive cuts to the energy efficiency programs outlined below will also disproportionately impact residential – and especially lower-income – customers.

   3. Investor-owned utilities (IOU) promise long-term profit to their investors by gaining approval of regulatory bodies such (as the IUB) to make major investments (such as electricity generation plants) and to recoup those investments plus approved profit via rates. Pp18-19 appears to write a nearly blank check to utilities to invest heavily in a new and broadly-defined category of “emerging energy technology” and then raise our rates, with minimal ability of regulators or the public to prevent such actions. With relatively flat energy sales, this is their new growth paradigm, and it will suck ever greater sums out of Iowa customers and communities.

2. Energy Efficiency Programs: Since the 1990s, Iowa investor-owned utilities (IOU) have been required to run major, cost-effective, rate-payer funded energy efficiency programs (consumer-owned utilities have been required to run programs, though with less oversight). This legislation would dramatically roll back these programs, and the benefits they provide to all Iowans.

   1. P6 line 35 to p7 line 20 allows the largest (industrial) energy users to apply for exemption from contributing to the efficiency programs. Since industrial sales represent over a third of IOU revenue and so contributions to the efficiency plans, such “opt-out” has been rejected by the Iowa Utilities Board in the past and should not be allowed now.

   2. P5 line 26 (and elsewhere) changes the cost-effectiveness requirement from the utility plan “as a whole” to each subset (program) of the plan, and then (p5 lines 28-29, p8 lines 3-9) also adds the “total resource cost test” to each program subset. These changes will have the cumulative effect of eliminating many current offerings and dramatically reducing the scope of efficiency services (such as rebates, audits, etc) available to customers.

   3. Currently, the IOU efficiency programs collect about 4-5% of revenue and return it to customers through the efficiency programs. P9 lines 13-22 allow IOUs to cap program spending at 2% of revenue, not including the revenue of industrial customers that opt out. Together with the above points, this will likely cut the efficiency programs by 60-80%, and could represent the beginning of the end for Iowa’s energy efficiency leadership.

3. Discrimination Against Customer-Owned Solar: Utilities nationwide and in Iowa are worried about relatively flat sales, and the potential reduction in profits over time that customer ownership of renewable energy represents. Legislators should be worried about the tremendous opportunity cost this bill represents, in possibly closing the door to the continued growth of customer and community-owned solar in Iowa, and shutting down the economic engine such investment could represent for a generation or more.

   1. The de-regulation explained in #1a above will likely allow utilities to impose significant extra charges and fees on solar-owning customers under the guise of “cost recovery”

   2. P15 lines 19-25 supports this unfortunate conclusion. It appears to contradict and even reverse the “non-discrimination” section in which it is located, by specifically authorizing utilities to establish unique rates or charges for customers owning generation such as solar.

   3. Such discriminatory charges could include the establishment of entirely separate rate classes for solar-owning customers (which Alliant proposed in its recent rate case), with higher rates, fixed charges, and /or demand charges likely to reduce the economic viability of customer-owned solar, and throttle the growth of the nascent solar industry in Iowa.

      (research and message developed by the Winneshiek Energy District)