House Study Bill 185 - Introduced
HOUSE FILE _____
BY (PROPOSED COMMITTEE
ON COMMERCE BILL BY
CHAIRPERSON CARLSON)

A BILL FOR

1 An Act relating to electric utility rates and infrastructure
2
support options for private generation customers.
3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

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Section 1. NEW SECTION. 476.49 Private generation rates ——
infrastructure support options for customers.
1. The general assembly recognizes the importance of
electric utility infrastructure, including electric generation,
transmission, and distribution systems, to provide electric
service to all customers in this state, whether electricity
is generated by a public utility, by a customer, or on behalf
of a customer. The general assembly also recognizes that
tariffs for electric service are traditionally designed for
the provision of full electric service to customers, not
taking into account the private generation of electricity. It
is the intent of the general assembly to require customers
who utilize private generation to pay their share of costs
of electric utility infrastructure, thereby eliminating
cross-subsidization. It is also the intent of the general
assembly to provide such customers with options to pay their
share of costs.
2. For purposes of this section, unless the context
otherwise requires:
a. “Avoided cost” means the energy rate paid by an electric
utility for energy purchases from a private generation customer
established in the electric utility’s board-approved tariff for
cogeneration facilities and small power production facilities
in compliance with the federal Public Utility Regulatory
Policies Act of 1978, 16 U.S.C. §2601 et seq.
b. “Private generation customer” means an electric utility
customer who utilizes a private generation facility.
c. “Private generation facility” means an alternate energy
production facility that is owned, leased, operated by, or
operated on behalf of a private generation customer and whose
production of electricity is used to offset a portion or all of
the customer’s electricity bill or usage that would otherwise
be purchased from an electric utility.
3. A rate-regulated electric utility may file tariffs with
the board applicable to any private generation customer who

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utilizes a private generation facility installed on or after
the date a tariff is approved pursuant to subsection 5. All
tariff rates charged to a private generation customer for
electric service shall recover the electric utility’s cost of
providing electric service to the applicable customer class,
as determined by the board in the electric utility’s most
recently approved rate proceeding. Tariffs filed pursuant
to this section shall be designed to ensure that a private
generation customer pays for electric utility infrastructure
costs. Tariffs filed pursuant to this section shall require a
private generation customer to choose one of the following rate
structures for the provision of electric service:
a. A minimum infrastructure charge rate structure whereby
the private generation customer pays a minimum amount each
month, or the private generation customer’s applicable standard
electric service bill, whichever is higher. The private
generation customer’s applicable standard electric service
bill shall be calculated using the applicable standard retail
tariff. This tariff rate structure shall allow the private
generation facility to offset the private generation customer’s
energy usage, and shall allow excess energy to carry forward
in the form of excess energy credits to offset the private
generation customer’s energy usage in future billing periods.
This tariff rate structure shall also include an annual
cash-out of excess energy credits at a rate that does not
exceed the electric utility’s avoided cost.
b. A multi-part rate structure whereby rates applicable
to the customer include, at a minimum, a fixed basic service
charge, an energy charge designed to recover variable costs,
and a monthly demand charge designed to ensure that the
private generation customer pays for fixed electric utility
infrastructure costs. This tariff rate structure shall
allow the private generation facility to offset the private
generation customer’s energy usage, and shall allow excess
energy to carry forward in the form of excess energy credits to

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offset the private generation customer’s energy usage in future
billing periods. This tariff rate structure shall also include
an annual cash-out of excess energy credits at a rate that does
not exceed the electric utility’s avoided cost.
c. A buy all and sell all rate structure whereby the private
generation facility’s output is measured separately from the
private generation customer’s consumption. All electricity
consumed shall be purchased from the electric utility and all
electricity generated shall be sold to the electric utility on
a monthly basis. Rates applicable to the private generation
customer for all electricity purchased from the electric
utility shall be the applicable standard retail tariff.
Rates applicable for electricity purchased from the private
generation customer shall not exceed the electric utility’s
avoided cost.
d. A rate structure filed by the electric utility that
recovers the electric utility’s cost of providing electric
service to the applicable customer class, subject to board
approval.
4. The board shall review a tariff filed pursuant to this
section for compliance with this section, and shall approve
the tariff as filed or with modification to meet compliance
with this section within ninety days of filing. If the board
fails to review the tariff within ninety days of filing, the
tariff shall be deemed approved. A tariff approved pursuant to
this subsection shall supersede any previously approved tariffs
applicable to private generation customers, except as provided
in subsection 5.
5. A private generation customer who utilizes a private
generation facility pursuant to a tariff approved by the board
on or before the effective date of this Act may continue to
receive electric service pursuant to the preexisting tariff for
the remaining duration of the contract involving the private
generation facility, regardless of any subsequent change in
ownership of such private generation facility. However, if the

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private generation customer terminates electric service with
the electric utility, the preexisting tariff shall no longer
apply and the private generation customer shall be required to
receive electric service pursuant to a tariff approved pursuant
to subsection 4, provided that the electric utility filed such
tariff with the board.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.

This bill establishes new Code section 476.49, relating to
electric utility rates and infrastructure support options for
private generation customers.
The bill defines “private generation customer” to mean an
electric utility customer who utilizes a private generation
facility. “Private generation facility” is defined as an
alternate energy production facility that is owned, leased,
operated by, or operated on behalf of a private generation
customer and whose production of electricity is used to offset
a portion or all of the customer’s electricity bill or usage
that would otherwise be purchased from an electric utility.
The bill provides that the general assembly recognizes
the importance of electric utility infrastructure, including
generation, transmission, and distribution systems, to provide
electric service to all customers in Iowa. The general
assembly also recognizes that tariffs are traditionally
designed for the provision of full electric service to
customers, not taking private generation into account. The
bill specifies that it is the intent of the general assembly
to require private generation customers to pay their share of
costs of electric utility infrastructure, and to provide such
customers with options to pay their share of costs.
The bill allows rate-regulated electric utilities to file
tariffs with the Iowa utilities board applicable to any private
generation customer who utilizes a private generation facility
installed on or after the date a tariff is approved pursuant
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to the bill. All tariff rates charged to a customer shall
recover the electric utility’s cost of providing service to the
applicable customer class.
The bill provides that tariffs filed pursuant to the bill
shall be designed to ensure that a private generation customer
pays for electric utility infrastructure costs and shall
require a private generation customer to choose from one of
several rate structures described in the bill.
The bill provides that the board shall review a tariff for
compliance with the bill and shall approve the tariff as filed
or with modification to meet compliance within 90 days of
filing. If the board fails to review the tariff within 90 days
of filing, the tariff is deemed approved. An approved tariff
shall supersede any previously approved tariffs applicable to
private generation customers, except as provided in the bill.
The bill provides that a private generation customer who
utilizes a private generation facility pursuant to a tariff
approved by the board on or before the effective date of the
bill may continue to receive electric service pursuant to the
preexisting tariff for the remaining duration of the contract
involving the facility, regardless of any subsequent change in
ownership of such facility. If the private generation customer
terminates electric service with the utility, the preexisting
tariff shall no longer apply and the customer shall be required
to receive electric service pursuant to a tariff approved in
accordance with the bill, if such tariff was filed with the
board.

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