JOHNSTON — Gov. Kim Reynolds defended changes in Iowa utility regulations she signed into law last week as a compromise that will save ratepayers’ money while maintaining a “robust” energy efficiency program.
Senate File 2311 will make changes in Iowa’s energy efficiency programs and reshape the Iowa Utility Board’s regulatory role — moves that sponsors say will save consumers money and that critics warn will kill jobs and guts program that make Iowa a green energy leader.
“It’s a balance,” Reynolds said at her weekly news conference Tuesday when asked how she squares the changes with her Iowa Energy Plan that identifies energy efficiency and conservation as one of its pillars.
“You know very well legislation is about compromise,” Reynolds said. “You had legislators who felt differently on some of these issues. So what you do … is you talk about the areas that are important. They talk about the areas that are important to them. It’s about reaching a compromise.”
The compromise will provide “hundreds of millions of dollars in reductions to ratepayers and balances that with a very robust energy efficiency program,” Reynolds said.
The bill will encourage the extension of natural gas into underserved rural areas to support economic development efforts — another goal of the energy plan, the governor said. It was important to lawmakers, she added, to improve transparency so ratepayers know how much of their bill was for energy efficiency programs. Previously, utilities were prohibited from disclosing mandated energy efficiency charges.
“It does all of the above,” said Reynolds, who added that the energy plan recommendations were never intended to be mandates on Iowans and utilities.
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However, the Iowa Environmental Council said that in addition to contradicting the Iowa Energy Plan, SF 2311 is a “leap backward” that will gut energy efficiency programs and allow municipal utilities to discriminate against solar energy customers.
Without effective energy efficiency programs, “the end result of SF 2311 will be that utilities will sell more power and Iowans will pay more out of their paycheck for energy,” the council said. “Utilities are the only winner here today — businesses and citizens across Iowa will pay the price of this action.”
In a statement Tuesday, MidAmerican Energy agreed with the governor that SF 2311 “ensures MidAmerican Energy can continue to offer a robust set of energy efficiency programs in Iowa at a reasonable cost.”
MidAmerican said customers paid an average of more than 7 percent of their bills toward energy efficiency programs, the highest in the nation. That will be capped at 2 percent for electricity and 1.5 percent for natural gas utilities, “bringing the cost of energy efficiency programming in line with the rest of the country,” MidAmerican said.
The caps implemented through the legislation are expected to save MidAmerican Energy’s customers $80 million to $90 million per year, which equates to $80 per year for the average residential gas and electric customer, $195 for the average commercial customer and $9,000 for the average MidAmerican industrial customer.
The new law allows customers to “opt out” of energy efficiency 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 state will monitor energy efficiency programs to see of anything needs to change in the future, Reynolds said.
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