House File 404 - Introduced HOUSE FILE 404 BY COMMITTEE ON COMMERCE (SUCCESSOR TO HSB 81) A BILL FOR An Act relating to solar energy by establishing a community 1 solar facility program. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1491HV (2) 91 sb/js
H.F. 404 Section 1. Section 476.1, Code 2025, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 5. A community solar facility established 3 pursuant to section 476.50 shall not be regarded as a public 4 utility for purposes of this chapter. 5 Sec. 2. Section 476.25, Code 2025, is amended by adding the 6 following new subsection: 7 NEW SUBSECTION . 4. The furnishing of electricity pursuant 8 to a community solar facility under section 476.50 shall not 9 be considered an unnecessary duplication of electric utility 10 facilities and shall not constitute a violation of this 11 section. 12 Sec. 3. NEW SECTION . 476.50 Community solar facility 13 program established. 14 1. As used in this section, unless the context otherwise 15 requires: 16 a. Bill credit means the monetary value of the electricity 17 in kilowatt-hours generated by the community solar facility 18 allocated to a subscriber to offset that subscribers 19 electricity bill. 20 b. Brownfield site means an abandoned, idled, or 21 underutilized industrial or commercial facility where 22 expansion or redevelopment is complicated by real or perceived 23 environmental contamination, including wastewater treatment 24 lagoons, active and former quarry and mining ponds, storm 25 water detention ponds, cooling ponds, and manure ponds. A 26 brownfield site includes property contiguous with the property 27 on which the individual or commercial facility is located. A 28 brownfield site does not include property that has been placed, 29 or is proposed for placement, on the national priorities list 30 established pursuant to the federal Comprehensive Environmental 31 Response, Compensation, and Liability Act, 42 U.S.C. 9601 et 32 seq. 33 c. (1) Except as provided in subparagraph (2), a community 34 solar facility means a distributed generation facility that 35 -1- LSB 1491HV (2) 91 sb/js 1/ 8
H.F. 404 generates electricity by means of a solar photovoltaic device 1 whereby subscribers receive a bill credit for the electricity 2 generated in proportion to the size of the customers 3 subscription and all of the following conditions apply: 4 (a) The facility is located on one or more parcels of 5 land within the assigned area of service of that utility and 6 no other community solar facility under the control of the 7 same entity, an affiliates entity, or an entity under common 8 control is located on that land. 9 (b) At the time the facility initially meets the 10 requirements set forth in the tariff to participate in the 11 program, the facility is not located within one mile, measured 12 from the point of interconnection, of a community solar 13 facility under the control of the same entity. 14 (c) The facility has at least three subscribers. 15 (d) The facility generates not more than five megawatts 16 of electricity as measured in alternating current unless the 17 facility is located on a brownfield site, whereby the facility 18 may generate not more than twenty megawatts of electricity as 19 measured in alternating current. 20 (e) No subscriber holds more than a forty percent interest 21 in the output of the facility. 22 (f) Not less than sixty percent of the capacity of the 23 facility is subscribed to by subscriptions of not more than 24 forty kilowatts. 25 (2) A distributed generation facility qualifies as a 26 community solar facility if the distributed generation facility 27 generates not more than one megawatt of electricity as measured 28 in alternating current and meets the conditions described in 29 subparagraph (1), subparagraph divisions (a), (b), and (d), 30 even if the distributed generation facility does not meet any 31 of the conditions described in subparagraph (1), subparagraph 32 divisions (c), (e), and (f). 33 d. Electric utility means a public utility that furnishes 34 electricity to the public for compensation that is required to 35 -2- LSB 1491HV (2) 91 sb/js 2/ 8
H.F. 404 be rate-regulated under this chapter. 1 e. Subscriber means a customer of an electric utility 2 subject to this section who owns one or more subscriptions to a 3 community solar facility interconnected with that utility. 4 f. Subscriber organization means a for-profit or nonprofit 5 entity that owns or operates one or more community solar 6 facilities. 7 g. Subscription means a proportional contractual interest 8 in a community solar facility under which the estimated bill 9 credits of the subscriber do not exceed the average annual 10 bill for the customer account to which the subscription is 11 attributed. 12 2. a. A community solar facility program is established 13 to encourage and enhance the generation of solar energy and to 14 encourage and enhance the ability of electric utility customers 15 to participate in and derive benefit from alternate solar 16 energy projects. 17 b. An electric utility shall provide a bill credit to a 18 subscribers subsequent monthly electric bill. Any amount of 19 the bill credit that exceeds the subscribers monthly bill 20 shall be carried over in the subscribers account and applied 21 to the next months bill in perpetuity. 22 c. An electric utility shall be required to bill subscribers 23 to a community solar facility in accordance with section 24 476.49, to the extent that section does not conflict with this 25 section. 26 d. An electric utility shall review its interconnection 27 processes to ensure they are adequate to facilitate the 28 efficient and cost-effective interconnection of community solar 29 facilities and allow an investor-owned electric utility to 30 recover reasonable interconnection costs for each community 31 solar facility. 32 e. A subscriber may subscribe all of their electricity 33 meters to a community solar facility. 34 f. Community solar facilities may be owned by investors. 35 -3- LSB 1491HV (2) 91 sb/js 3/ 8
H.F. 404 g. An electric utility shall provide a bill credit to 1 a subscribers subsequent monthly electric bill for the 2 proportional output of a community solar facility attributable 3 to that subscriber for not less than twenty-five years from the 4 date the solar facility is first placed into operation. 5 h. A subscriber organization shall periodically and in 6 a standardized electronic format provide to the electric 7 utility whose service territory includes the location of the 8 subscriber organizations community solar facility a subscriber 9 list indicating the percentage of generation attributable 10 to each of the electric utilitys retail customers who are 11 subscribers to a community solar facility in accordance with 12 the subscribers portion of the output of the community solar 13 facility. The electric utility shall create a platform for the 14 subscriber organization to periodically communicate updates to 15 the subscriber list to reflect canceling subscribers and new 16 subscribers. 17 i. An electric utility shall provide a subscriber 18 organization a report each month in a standardized electronic 19 format detailing the total value of bill credits generated 20 by the subscriber organizations community solar facility in 21 the prior month and the amount of bill credits applied to each 22 subscriber. 23 j. A subscriber organization may accumulate bill credits 24 if all of the electricity generated by a community solar 25 facility is not allocated to subscribers in a given month. On 26 an annual basis, the subscriber organization shall furnish 27 to the electric utility whose service territory includes the 28 location of the subscriber organizations community solar 29 facility instructions for distributing accumulated bill 30 credits to subscribers. The electric utility shall apply 31 accumulated credits to a subscribers electric utility account 32 in accordance with section 476.49. Any credits not distributed 33 to subscribers annually will be forfeited. 34 k. Any renewable energy credits created from the production 35 -4- LSB 1491HV (2) 91 sb/js 4/ 8
H.F. 404 of electricity in a community solar facility are the property 1 of the subscriber organization that owns or operates the 2 community solar facility. The subscriber organization may 3 sell, accumulate, retire, or distribute to subscribers the 4 renewable energy credits of the subscriber organization. 5 3. The commission shall adopt rules to implement the 6 provisions of this section that accomplish all of the 7 following: 8 a. Reasonably allow for the creation and financing of 9 community solar facilities. 10 b. Allow all customer classes to participate as subscribers 11 to a community solar facility, and ensure participation 12 opportunities for all customer classes. 13 c. Prohibit removing a customer from the customers 14 applicable customer class due to the customer subscribing to a 15 community solar facility. 16 d. Reasonably allow for the transferability and portability 17 of subscriptions, including allowing a subscriber to retain a 18 subscription to a community solar facility if the subscriber 19 moves within the same investor-owned electric utilitys service 20 territory. 21 e. Modify existing interconnection standards, fees, 22 and processes as needed to facilitate the efficient and 23 cost-effective interconnection of community solar facilities 24 and that allow an electric utility to recover reasonable 25 interconnection costs for each community solar facility. 26 f. Provide for consumer protection in accordance with 27 existing laws. 28 g. Allow an electric utility to recover costs of applying 29 bill credits under this section. 30 h. Require electric utilities to efficiently connect 31 community solar facilities to the electrical distribution grid 32 and not discriminate against community solar facilities. 33 i. Require a subscriber organization to satisfy 34 interconnection process benchmarks, demonstrate site control, 35 -5- LSB 1491HV (2) 91 sb/js 5/ 8
H.F. 404 and obtain all applicable nonministerial permits for a 1 community solar facility before the subscriber organization 2 owns or operates the facility. 3 4. a. Not later than eighteen months after a community 4 solar facility has ceased generating electricity, except for 5 instances when the owner is actively working to recommence 6 production of electricity, including instances following the 7 occurrence of a force majeure or similar event, the owner of 8 the community solar facility shall commence decommissioning of 9 the facility. 10 b. Unless the property owner authorizing the community 11 solar facility to operate on the property and the owner of 12 the community solar facility mutually agree in writing on 13 an alternative condition for restoring the property, the 14 decommissioning plan for the community solar facility shall 15 include all of the following: 16 (1) Removal of all nonelectric utility-owned equipment, 17 conduits, structures, fencing, and foundations to a depth of at 18 least three feet below grade. 19 (2) Removal of all graveled areas and access roads. 20 (3) Restoration of the property to a condition reasonably 21 similar to its condition before the commencement of 22 construction, except for ordinary wear and degradation and any 23 changes to the condition of the property caused by or at the 24 request of the property owner. 25 (4) To the extent practicable and seasonally appropriate, 26 at the request of the property owner, reseeding, or causing the 27 reseeding of, any cleared areas on the property. 28 5. a. The owner of a community solar facility shall 29 maintain sufficient financial assurances in the form of a bond, 30 a parent company guaranty with a minimum investment grade 31 credit rating for the parent company issued by a major domestic 32 credit rating agency, or a letter of credit to provide for 33 decommissioning. 34 b. The amount of financial assurance shall be equal to the 35 -6- LSB 1491HV (2) 91 sb/js 6/ 8
H.F. 404 cost of decommissioning the community solar facility, less the 1 facilitys salvage value, and shall be updated periodically, 2 but not less than every ten years. 3 c. Decommissioning and salvage value costs shall be 4 calculated by an independent professional engineer at the 5 expense of the owner of the community solar facility. 6 Sec. 4. IMPLEMENTATION OF TARIFFS. By January 1, 2026, an 7 electric utility, as defined in section 476.50, as enacted by 8 this Act, shall file new or updated tariffs, if applicable, to 9 implement any necessary changes resulting from this Act. 10 EXPLANATION 11 The inclusion of this explanation does not constitute agreement with 12 the explanations substance by the members of the general assembly. 13 This bill establishes a community solar facility program. 14 The bill specifies that an electric utility for purposes 15 of the bill is a public utility that provides electricity 16 to the public for compensation and is required to be 17 rate-regulated under Code chapter 476. The bill defines 18 brownfield site to mean an abandoned, idled, or underutilized 19 industrial or commercial facility where expansion or 20 redevelopment is complicated by real or perceived environmental 21 contamination, but not including property that has been placed, 22 or is proposed for placement, on the national priorities 23 list established pursuant to the federal Comprehensive 24 Environmental Response, Compensation, and Liability Act. The 25 bill defines community solar facility to mean a distributed 26 generation facility that generates electricity through solar 27 panels whereby subscribers may receive bill credits for 28 the electricity generated in proportion to the size of the 29 customers subscription. The bill defines subscriber to mean 30 a customer of an electric utility who owns at least one share 31 of a subscription to a community solar facility. A subscriber 32 organization is a for-profit or nonprofit entity that owns 33 or operates one or more community solar facilities. The bill 34 defines subscription to mean a proportional contractual 35 -7- LSB 1491HV (2) 91 sb/js 7/ 8
H.F. 404 interest in a community solar facility. 1 The bill establishes a community solar facility program to 2 encourage and enhance solar energy generation and the ability 3 of electric public utility customers to participate in and 4 derive benefit from alternate solar energy projects. 5 The bill requires an electric utility to bill subscribers in 6 accordance with billing methods established pursuant to Code 7 section 476.49. 8 The bill requires an electric utility to review its 9 interconnection processes with community solar facilities to 10 ensure adequacy, efficiency, and cost-effectiveness and to 11 allow an investor-owned electric utility to recover reasonable 12 interconnection costs. The bill allows a subscriber to include 13 all of the subscribers electricity meters in the community 14 solar facility. The bill provides that a community solar 15 facility may be owned by investors. The bill provides specific 16 procedures and requirements for the administration of bill 17 credits and subscriber information. 18 The bill requires the Iowa utilities commission to adopt 19 rules regarding implementation of the bills provisions. 20 The bill requires the owner of a community solar facility to 21 have a decommissioning plan, including financial assurances. 22 The bill provides procedures and requirements for the 23 decommissioning of a community solar facility. 24 The bill requires an electric utility to file new or updated 25 tariffs, if applicable, by January 1, 2026, to implement any 26 necessary changes resulting from the bill. 27 -8- LSB 1491HV (2) 91 sb/js 8/ 8