DES MOINES — Legislation that would cap some energy efficiency programs and alter the Iowa Utilities Board oversight of investor-owned utilities moved forward in the Iowa House, but likely will be amended by the Commerce Committee on Thursday.
Senate File 2311 would restore a 2 percent cap on energy efficiency programs for electricity and 1.5 percent for natural gas utilities, allow customers to “opt out” of the programs and require utilities to show on customers’ monthly bills how much they are paying to help finance rebates and other incentives for consumer purchases of energy-efficient appliances and furnaces or for insulating homes.
The bill faces a Friday deadline for committee approval to remain eligible for consideration in this legislative session.
“It’s probably going to be amended. We’re not sure how. That’s why we caucused for an hour-and-a-half,” Commerce Committee Chairman Peter Cownie, R-West Des Moines, said, referring to separate closed door meetings of Democrats and Republicans to discuss the bill in private.
Mark Schuling, Democratic Attorney General Tom Miller’s consumer advocate, warned the subcommittee that the bill is not a win-win for consumers and utilities.
“It’s good for utilities, bad for consumers,” Schuling said, referencing the Iowa Energy Plan that calls energy efficiency the “least-cost resource,” meaning that it is the single most cost-effective tool within an energy portfolio.
Increasing energy efficiency reduces costs associated with the generation, transmission and distribution of electricity or natural gas. It can generate savings to be plowed into further energy improvements.
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The proposed changes, opponents say, would scale back or eliminate measures that have lowered energy costs and usage, lessened the need for new power plants and have attracted industries, such as Microsoft, that cited Iowa’s commitment to renewable energy as a reason for locating facilities in Iowa.
Current energy efficiency programs make the state more attractive and competitive to businesses, according to the Iowa Economic Development Authority.
Google and other large electricity consumers that have invested millions in energy conservation oppose scaling back the energy efficiency programs because that would shift risks to future ratepayers.
On the flip side, representatives of other industries said they’ve achieved their energy conservation goals, but current law requires them to pay for incentives for others to adopt energy efficiency measures.
Utilities back the bill that would allow them more control of certain ratemaking procedures and make changes in energy-efficiency provisions and emissions standards.
That would lead to deregulation of Iowa’s energy utilities, raise energy rates and be a job-killer, especially among small business and contractors in the solar industry and home improvement sectors, others told the subcommittee. It threatens to erode policies that have held down energy costs and lessened the need to build more power plants.
Without those incentives, homeowners and others would be less likely to invest their own money in energy efficiency measures that lower their bills and encourage them to adopt energy-saving practices.
Subcommittee member Rep. John Forbes, D-Des Moines, said he’s not sure he would have invested about $200,000 on energy efficiency when he built a new pharmacy if the incentives were not available.
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“I think this bill is s mess ... anti-consumer,” he said, adding he could not support it “unless we can make major changes.”
Retired utility engineer Rep. Ralph Watts, D-Adel, joked that he didn’t “recall getting a thank-you for participating in your energy efficiency projects.”
The Commerce Committee is scheduled to meet at 11 a.m. Thursday to consider the bill.
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