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Senate
File
373
-
Introduced
SENATE
FILE
373
BY
KLIMESH
A
BILL
FOR
An
Act
relating
to
rate-regulated
public
utilities,
including
1
rate
proceedings,
automatic
adjustments,
ratemaking
2
principles,
and
integrated
resource
plans.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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Section
1.
Section
476.6,
subsections
7
and
8,
Code
2025,
1
are
amended
to
read
as
follows:
2
7.
Limitation
on
Frequency
of
filings.
3
a.
A
public
utility
shall
not
make
a
subsequent
filing
of
4
an
application
for
a
new
or
changed
rate,
charge,
schedule,
5
or
regulation
which
that
relates
to
services
for
which
a
rate
6
filing
is
pending
within
twelve
months
following
the
date
the
7
prior
application
was
filed
or
until
the
commission
has
issued
8
a
final
order
on
the
prior
application,
whichever
date
is
9
earlier,
unless
the
public
utility
applies
to
the
commission
10
for
authority
and
receives
authority
to
make
a
subsequent
11
filing
at
an
earlier
date.
12
b.
Not
later
than
July
1,
2028,
and
at
least
every
three
13
years
thereafter,
a
public
utility
shall
file
a
general
rate
14
case
in
which
the
commission
shall
confirm
that
the
utility’s
15
rates,
cost
allocations,
and
all
other
provisions
of
its
16
tariff
are
just
and
reasonable
and
based
on
each
customer’s
or
17
customer
group’s
actual
cost
of
service.
If
a
utility
has
not
18
filed
a
general
rate
case
since
July
1,
2022,
the
utility
shall
19
file
a
new
general
rate
case
by
January
1,
2027.
20
8.
Automatic
adjustments.
21
a.
This
chapter
does
not
prohibit
a
public
utility
from
22
making
provision
for
the
automatic
adjustment
of
rates
and
23
charges
for
public
utility
service
provided
that
a
schedule
24
showing
the
automatic
adjustment
of
rates
and
charges
is
first
25
filed
with
and
approved
by
the
commission
in
a
general
rate
26
case
.
27
b.
A
public
utility
may
automatically
adjust
rates
and
28
charges
to
recover
costs
related
to
transmission
incurred
by
29
or
charged
to
the
public
utility
consistent
with
a
tariff
or
30
agreement
that
is
subject
to
the
jurisdiction
of
the
federal
31
energy
regulatory
commission,
provided
that
a
schedule
showing
32
the
automatic
adjustment
of
rates
and
charges
is
first
filed
33
with
and
approved
by
the
commission.
The
commission
shall
34
adopt
rules
regarding
the
reporting
of
transmission
expenses
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and
transmission-related
activity
pursuant
to
this
paragraph.
1
c.
Automatic
adjustments
shall
be
limited
to
those
items
2
outside
of
the
control
of
the
utility.
In
each
utility’s
3
general
rate
case,
a
representative
amount
for
each
automatic
4
adjustment
will
be
established
for
the
applicable
test
5
year.
Annually,
each
utility
will
report
to
the
commission
6
the
amounts
forecast
and
recovered
from
customers
for
each
7
automatic
adjustment.
The
commission
shall
order
a
refund
of
8
or
an
increase
in
each
automatic
adjustment
if
recoveries
are
9
above
or
below
ten
percent
of
the
amount
set
in
the
most
recent
10
rate
case.
11
Sec.
2.
Section
476.53,
subsection
3,
paragraphs
b,
c,
and
12
g,
Code
2025,
are
amended
to
read
as
follows:
13
b.
In
determining
the
applicable
ratemaking
principles
for
14
facilities
constructed
or
acquired
on
or
after
the
effective
15
date
of
this
Act
that
are
not
subject
to
a
prior
determination
16
of
ratemaking
principles
,
the
commission
shall
not
be
limited
17
to
traditional
ratemaking
principles
or
and
traditional
cost
18
recovery
mechanisms
,
including
cost,
depreciable
life,
and
19
size.
The
return
on
equity
for
the
facility
shall
be
the
same
20
as
the
utility’s
most
recent
rate
proceeding.
Ratemaking
21
principles
addressing
automatic
adjustments,
revenue
or
profit
22
sharing,
or
similar
mechanisms,
are
prohibited
.
Among
the
23
principles
and
mechanisms
the
commission
may
consider,
the
24
commission
has
the
authority
to
approve
ratemaking
principles
25
proposed
by
a
rate-regulated
public
utility
that
provide
for
26
reasonable
restrictions
upon
the
ability
of
the
public
utility
27
to
seek
a
general
increase
in
electric
rates
under
section
28
476.6
for
at
least
three
years
after
the
generating
facility
29
begins
providing
service
to
Iowa
customers.
30
c.
In
determining
the
applicable
ratemaking
principles,
the
31
commission
shall
make
the
following
findings:
32
(1)
The
rate-regulated
public
utility
has
in
effect
a
33
commission-approved
energy
efficiency
plan
as
required
under
34
section
476.6,
subsection
15
.
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(2)
The
rate-regulated
public
utility
has
an
approved
1
resource
plan
under
section
476.53B
or
has
filed
one
2
concurrently
with
its
ratemaking
principles
application,
and
3
has
demonstrated
to
the
commission
that
the
public
utility
4
has
considered
other
sources
for
long-term
electric
supply
5
and
that
the
facility
or
lease
is
reasonable
when
compared
to
6
other
feasible
alternative
sources
of
supply
facility
proposed
7
was
indicated
as
the
least-cost
facility
in
the
most
recent
8
resource
plan
or
is
otherwise
the
most
reasonable
facility
9
indicated
in
the
most
recent
resource
plan
for
ensuring
10
reliable
and
cost-effective
service
.
11
(3)
The
facility
was
subject
to
a
competitive
procurement
12
process
that
included,
at
a
minimum,
a
request
for
proposals
13
for
power
purchase
agreements,
and
that
the
costs
to
be
14
included
in
customer
rates
are
reasonable.
15
g.
Notwithstanding
any
provision
of
this
chapter
to
the
16
contrary,
the
ratemaking
principles
established
by
the
order
17
issued
pursuant
to
paragraph
“e”
shall
be
binding
with
regard
18
to
the
specific
electric
power
generating
facility
in
any
19
subsequent
the
utility’s
first
rate
proceeding
occurring
20
after
the
effective
date
of
this
Act,
but
shall
be
subject
to
21
revision
in
subsequent
rate
proceedings
.
22
Sec.
3.
Section
476.53,
subsection
3,
Code
2025,
is
amended
23
by
adding
the
following
new
paragraph:
24
NEW
PARAGRAPH
.
0e.
A
utility
may
elect
to
combine
25
a
ratemaking
principles
proceeding
with
a
resource
plan
26
proceeding.
If
the
utility
has
an
approved
resource
plan
prior
27
to
filing
for
ratemaking
principles,
the
commission
must
issue
28
a
decision
on
the
ratemaking
principles
application
within
five
29
months,
unless
extended
for
good
cause
shown.
If
the
utility
30
elects
to
combine
its
ratemaking
principles
proceeding
with
its
31
resource
plan
proceeding,
the
commission
must
issue
a
decision
32
within
ten
months,
unless
extended
for
good
cause
shown.
33
Sec.
4.
NEW
SECTION
.
476.53B
Resource
planning.
34
1.
To
implement
the
intent
of
the
general
assembly
as
set
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forth
in
sections
476.53
and
476.53A,
each
rate-regulated
1
public
utility
shall
file
with
the
commission
an
integrated
2
resource
plan
by
July
1,
2026,
and
every
three
years
3
thereafter.
The
commission
shall
approve,
modify,
or
deny
4
each
plan
within
ten
months
of
filing,
unless
extended
for
5
good
cause
shown,
and
will
conduct
a
review
of
each
plan
as
a
6
contested
case
proceeding
under
chapter
17A.
The
commission
7
shall
promulgate
rules
to
implement
this
section,
which
must
8
include
the
following:
9
a.
A
process
under
which
a
utility
files
a
new
plan
every
10
three
years
that
includes
a
twenty-year
plan
and
a
short-term
11
action
plan
for
years
one
through
five.
12
b.
A
quantitative
comparative
analysis
of
multiple
resource
13
mixes
to
serve
anticipated
customer
needs
using
industry
best
14
practices,
including
capacity
expansion
and
production
cost
15
modeling
that
includes
the
following
for
each
plan:
16
(1)
Planning
scenarios
that
each
utility
must
include
in
its
17
plan.
18
(2)
Inputs,
assumptions,
and
sources
of
data
that
each
19
utility
must
include
in
its
plan,
unless
the
commission
finds
20
that
an
alternative
input,
assumption,
or
source
of
data
is
21
reasonable
and
should
be
used
by
all
electric
rate-regulated
22
utilities.
It
is
the
intent
of
the
general
assembly
that
the
23
utilities
use
uniform
scenarios,
inputs,
assumptions,
and
24
sources
of
data.
25
(3)
All
existing
and
potential
generating
resources
needed
26
to
serve
customers,
including
competitively
procured
purchase
27
power
agreements
or
market
purchases.
28
(4)
An
assessment
of
customer
costs
and
seasonal
29
reliability.
30
(5)
The
information
from
the
most
recent
31
commission-approved
energy
efficiency,
demand
response,
32
peak
load
conservation,
and
distributed
generation
plans,
33
as
described
elsewhere
in
this
chapter,
that
will
assist
in
34
meeting
energy
and
capacity
needs.
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(6)
A
utility’s
energy
and
capacity
forecasts
for
existing
1
and
potential
generating
resources,
as
described
elsewhere
2
in
this
chapter,
including
filings
made
with
any
federal
or
3
regional
authority.
However,
the
commission
cannot
consider,
4
order,
or
recommend
closure
of
a
baseload
generating
facility
5
unless
the
closure
is
proposed
by
the
utility.
6
(7)
Transmission
and
distribution
upgrades
and
expansion
7
plans
needed
to
reliably
serve
the
utility’s
customers
and
8
integrate
each
potential
resource
and
the
associated
costs
9
of
such
plans
in
connection
with
the
various
resource
mixes
10
proposed.
11
c.
Minimum
criteria
for
evaluating
the
plan’s
reasonableness
12
that
must
include
an
analysis
of
customer
cost,
risk,
13
reliability,
and
environmental
impact,
and
include
the
14
commission’s
ability
to
approve,
disapprove,
or
modify
part
or
15
all
of
a
plan.
16
d.
A
list
of
minimum
filing
requirements
and
a
timeline
for
17
the
resolution
of
the
case,
including
deadlines
for
the
filing
18
of
testimony
and
a
hearing.
19
e.
Criteria
and
a
process
under
which
the
commission
shall
20
consider
plan
modifications
or
amendments,
whether
initiated
21
by
the
commission,
utility,
consumer
advocate,
or
a
customer,
22
to
reflect
changed
circumstances
that
affect
the
utility’s
23
planning
assumptions.
24
f.
Other
criteria
the
commission
deems
necessary
or
25
appropriate.
26
2.
The
commission
and
the
consumer
advocate
may
employ
27
additional
temporary
staff,
or
may
contract
for
professional
28
services
with
persons
who
are
not
state
employees,
as
the
29
commission
and
the
consumer
advocate
deem
necessary
to
perform
30
required
functions
as
provided
in
this
section,
including
the
31
development
of
rules
for
the
filing
and
review
of
resource
32
plans,
and
to
aid
the
commission
in
the
review
and
approval,
33
disapproval,
or
modification
of
a
plan.
The
costs
of
the
34
additional
staff
and
services
shall
be
assessed
to
the
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utilities
pursuant
to
the
procedure
set
forth
in
sections
1
475A.6
and
476.10.
2
EXPLANATION
3
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
4
the
explanation’s
substance
by
the
members
of
the
general
assembly.
5
This
bill
relates
to
rate-regulated
public
utilities,
6
including
rate
proceedings,
automatic
adjustments,
ratemaking
7
principles,
and
integrated
resource
plans.
8
The
bill
directs
rate-regulated
public
utilities
to
file
9
a
general
rate
case
by
July
1,
2028,
for
the
Iowa
utilities
10
commission
to
confirm
that
the
utility’s
rates,
cost
11
allocations,
and
all
other
provisions
of
its
tariff
are
just
12
and
reasonable
and
based
on
each
customer’s
or
customer
group’s
13
actual
cost
of
service.
The
general
rate
case
must
be
filed
by
14
January
1,
2027,
if
the
rate-regulated
public
utility
has
not
15
filed
a
rate
case
since
July
1,
2022.
16
The
bill
requires
any
provisions
for
the
automatic
17
adjustment
of
rates
and
charges
for
public
utility
service
18
provided
to
be
approved
through
a
general
rate
case
proceeding.
19
Under
current
law,
an
automatic
adjustment
could
be
approved
by
20
the
commission
without
a
general
rate
case
proceeding.
21
The
bill
only
allows
automatic
adjustments
outside
the
22
control
of
the
utility.
During
the
rate-regulated
public
23
utility’s
general
rate
case,
a
representative
amount
for
each
24
automatic
adjustment
will
be
established
for
the
applicable
25
test
year.
Annually,
each
utility
will
report
to
the
26
commission
the
amounts
forecast
and
recovered
from
customers
27
for
each
automatic
adjustment
and
the
commission
shall
order
28
a
refund
of
or
an
increase
in
each
automatic
adjustment
if
29
recoveries
are
above
or
below
10
percent
of
the
amount
set
in
30
the
most
recent
rate
case.
31
Under
current
law,
the
commission
is
not
limited
to
32
traditional
ratemaking
principles
or
traditional
cost-recovery
33
mechanisms
when
determining
applicable
ratemaking
principles
34
for
electric
generating
facilities.
The
bill
amends
this
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373
provision
to
limit
the
commission
to
traditional
ratemaking
1
principles
and
traditional
cost
mechanisms
when
determining
2
applicable
ratemaking
principles
for
electric
generating
3
facilities
constructed
or
acquired
by
the
rate-regulated
public
4
utility
on
or
after
the
effective
date
of
the
bill.
5
Under
current
law,
in
determining
applicable
ratemaking
6
principles
for
electric
generating
facilities,
the
commission
7
must
find
that
the
rate-regulated
public
utility
has
8
demonstrated
to
the
commission
that
the
public
utility
has
9
considered
other
sources
for
long-term
electric
supply
and
that
10
the
facility
or
lease
is
reasonable
when
compared
to
other
11
feasible
alternative
sources
of
supply.
The
bill
amends
this
12
provision
to
require
the
commission
to
find
the
rate-regulated
13
public
utility
has
an
approved
integrated
resource
plan
(plan)
14
or
has
filed
one
concurrently
with
its
application
and
has
15
demonstrated
to
the
commission
and
included
in
the
public
16
utility’s
plan
that
the
proposed
electric
generating
facility
17
is
the
least-cost
facility
or
the
most
reasonable
facility
18
for
ensuring
reliable
and
cost-effective
service.
The
bill
19
requires
the
electric
generating
facility
to
be
subject
to
a
20
competitive
procurement
process.
21
The
bill
provides
the
option
for
a
rate-regulated
public
22
utility
to
combine
a
ratemaking
principles
proceeding
and
a
23
resource
plan
proceeding.
24
The
bill
provides
that
ratemaking
principles
established
25
in
the
order
setting
forth
applicable
ratemaking
principles
26
for
an
electric
generating
facility
are
subject
to
revision
27
in
subsequent
rate
proceedings,
except
for
the
first
rate
28
proceeding
occurring
after
the
effective
date
of
the
bill.
29
The
bill
requires
each
rate-regulated
public
utility
to
30
file
a
plan
within
one
year
of
the
enactment
of
the
bill.
The
31
plan
shall
be
subject
to
a
contested
case
proceeding
and
must
32
be
approved,
modified,
or
denied
by
the
commission
within
10
33
months
of
filing.
The
utility
shall
then
file
an
update
to
34
the
initial
plan
three
years
after
the
initial
filing
with
any
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S.F.
373
changes
made
since
the
initial
filing.
1
The
bill
directs
the
commission
to
establish
rules
for
2
implementation
of
the
bill,
including
a
process
under
which
3
the
plan
must
consist
of
a
20-year
plan
and
a
5-year
plan,
a
4
quantitative
comparative
analysis
of
multiple
resource
mixes
to
5
serve
anticipated
customer
needs
using
industry
best
practices,
6
minimum
criteria
for
evaluating
the
plan’s
reasonableness,
a
7
list
of
minimum
filing
requirements
and
a
timeline
for
the
8
resolution
of
the
case,
criteria
and
a
process
under
which
the
9
commission
shall
consider
plan
modifications
or
amendments
10
to
reflect
changed
circumstances
that
affect
the
utility’s
11
planning
assumptions,
and
other
criteria
the
commission
deems
12
necessary
or
appropriate.
13
The
bill
allows
the
commission
or
consumer
advocate
to
14
employ
additional
staff
or
contract
for
professional
services
15
with
persons
who
are
not
state
employees
for
the
development
16
of
rules
for
the
filing
and
review
of
resource
plans
or
to
aid
17
the
commission
in
the
review
and
approval,
disapproval,
or
18
modification
of
a
plan.
The
costs
of
the
additional
staff
and
19
services
shall
be
assessed
to
the
utilities.
20
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