Governor’s energy bill advances

Bills advanced from subcommittees in both the Iowa House and Senate that would give existing utility companies the right of first refusal to new transmission projects, establish anaerobic digester regulations and allow utilities to have program tariffs.

House Study Bill 123 and its partnering Senate Study Bill 1112, were proposed by Gov. Kim Reynolds as part of her plan to build reliable and sustainable energy programs in Iowa. 

“As technology evolves and the demand for energy increases, Governor Reynolds is committed to a forward-focused, all- of-the-above energy strategy that serves to keep consumer prices low and position Iowa for future growth,” Molly Severn said in the hearing on behalf of the governor’s office. 

Severn said Monday the governor was removing language from the bill pertaining to disputed utility territories.

The first section of the bill updated Iowa Code to encourage the development of energy projects that make use of nuclear reactors and energy storage facilities to meet the state’s electricity needs.

The bill deals with existing sections of code that mention carbon capture and storage at power generating facilities, which led some members of the public to believe the bill related to the Summit Carbon Solutions pipeline, which would transport sequestered carbon from ethanol facilities in Iowa to underground storage facilities in North Dakota.

Rep. Shannon Lundgren, R-Peosta, who chaired the House subcommittee, said the language in the bill was never intended for hazardous liquid pipelines. 

She and other subcommittee members said it would be necessary to add language to the bill to clarify it was not addressing carbon sequestration pipelines. 

“We can clarify that, and we’ll continue to work with the governor’s office moving forward,” Lundgren said. 

Cindy Hansen, a landowner from Shelby County who is opposed to the pipeline, said after the hearing she is still concerned that the bill will allow utilities to sequester carbon dioxide into the land, which she said will have impacts on water quality and availability in Iowa. 

“I’m still concerned … until I see them pull the actual wording for the CO2 out of those (bills),” Hansen said. “The potential for contaminating the aquifers here in Iowa, and the water that is so precious to us, is a big concern.” 

Right of first refusal 

The bill would authorize the right of first refusal to existing utility companies on new electric transmission projects and to jointly own portions of transmission lines.

Dehn Stevens, vice president of transmission development for MidAmerican Energy Co., spoke in favor of the bill and noted the importance of right to first refusal for the utilities that are located in Iowa and employing people in the state.

“We are here in the state, we have the emergency response, the equipment, the materials, the effort to quickly restore electricity to the state,” Stevens said. 

A lobbyist on behalf of Alliant Energy also spoke in favor of the bill. 

Doug Struyk spoke in opposition to the ROFR component of the bill on behalf of the Resale Power Group of Iowa. Struyk said the cost-sharing principles in bill could be accomplished without a ROFR, which he noted has been opposed by the U.S. Department of Justice. 

“RPGI believes that anything that drives up the cost of power is adverse to their economic development in their small communities, and would ask that you remove that provision from the bill,” Struyk said. 

Additionally, the bill would require the Iowa Utilities Commission to adopt land restoration requirements following the construction of transmission lines on an easement. 

The requirements would task the incumbent electric transmission owners to do things like repair tile lines, remove rocks, till agricultural land and restore conservation practices used on easements affected by transmission line construction. 

Anaerobic digesters 

The bill would also task the Environmental Protection Commission with developing rules for the construction, expansion and operation of anaerobic digesters. 

Anaerobic digesters make use of organic material, like animal manure, and in an oxygen-free environment convert the waste material into a biogas. 

The bill would task the Iowa Department of Natural Resources, which registered in favor of the bill, with reviewing applications for permits. 

The Iowa Pork Producers Association registered undecided for the bill and a lobbyist at the hearing said the association has been involved in the development of animal feeding operation rules in the past and is available as a resource to the Legislature on this addition. 

Many environmental groups are opposed to anaerobic digesters for fear that the supplemental income from digesters at confined animal feeding operations will encourage operators to grow their herds even larger.

Pam Mackey-Taylor spoke on behalf of the Sierra Club Iowa Chapter in opposition to the bill and said anaerobic digesters would promote more feedlots and negatively impact Iowa’s water quality. 

“So the last thing we need to do is expand this industry,” Mackey-Taylor said.

Utility tariffs

The bill allows utility companies to offer tariffs to help with “innovative” programs. Tariff groups could include support for projects like renewable natural gas generation facilities and distribution, or for following customer usage patterns.

The bill specifies all of the program costs would be on the customers who elect to participate in the tariffs and would not affect the base rate for other customers. 

This program would allow for innovation in the state’s energy sector without affecting nonparticipating customers, according to the bill text. The bill states this innovation is “essential” to further the “attraction and retention of customers to benefit the state’s economy and to support economical and sustainable energy production.”

Another section of the bill would rename the energy infrastructure revolving loan fund to the energy and water infrastructure revolving loan program and move the administration authority from the Iowa Energy Center to the Iowa Economic Development Authority. 

The bill would also make cities and counties eligible recipients of the fund and authorize a transfer of up to $633,000 annually to Iowa State University to support the university’s partnership with IUC to forecast energy load. 

HSB 123 is on the Tuesday agenda for the House Commerce Committee, and the Senate version of the bill, which passed its subcommittee Thursday, has not yet been added to a committee agenda. 

“Last year, the Iowa House passed a very good energy bill that was bipartisan over to the Senate, and it stayed there,” Lundgren said. “A lot of the language that we worked very hard on for several years is a component of this bill.” 

Lundgren said the bill is not “floor ready” but she is intent on advancing the bill to avoid a March 7 committee deadline.

This article has been updated to clarify the language removed from the bill by the governor’s office.