| 1 | 1 | | 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 TLSB 2008XS (3) 91 sb/js |
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| 3 | 3 | | S.F. 373 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 utilitys 15 rates, cost allocations, and all other provisions of its 16 tariff are just and reasonable and based on each customers or 17 customer groups 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 35 -1- LSB 2008XS (3) 91 sb/js 1/ 8 |
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| 5 | 5 | | S.F. 373 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 utilitys 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 utilitys 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 . 35 -2- LSB 2008XS (3) 91 sb/js 2/ 8 |
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| 7 | 7 | | S.F. 373 (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 utilitys 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 35 -3- LSB 2008XS (3) 91 sb/js 3/ 8 |
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| 9 | 9 | | S.F. 373 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. 35 -4- LSB 2008XS (3) 91 sb/js 4/ 8 |
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| 11 | 11 | | S.F. 373 (6) A utilitys 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 utilitys 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 plans reasonableness 12 that must include an analysis of customer cost, risk, 13 reliability, and environmental impact, and include the 14 commissions 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 utilitys 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 35 -5- LSB 2008XS (3) 91 sb/js 5/ 8 |
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| 13 | 13 | | S.F. 373 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 explanations 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 utilitys rates, cost 11 allocations, and all other provisions of its tariff are just 12 and reasonable and based on each customers or customer groups 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 utilitys 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 35 -6- LSB 2008XS (3) 91 sb/js 6/ 8 |
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| 15 | 15 | | S.F. 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 utilitys 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 35 -7- LSB 2008XS (3) 91 sb/js 7/ 8 |
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| 17 | 17 | | 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 plans 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 utilitys 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 -8- LSB 2008XS (3) 91 sb/js 8/ 8 |
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