DES MOINES — The Iowa Senate approved and sent Gov. Kim Reynolds legislation Monday that will alter 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 “gut” programs that make Iowa a “green” energy leader.
Senate File 2311 will restore a 2 percent cap on energy-efficiency programs for electricity and 1.5 percent for natural gas utilities.
The bill will require utilities to show on customers’ monthly bills how much they are paying to help finance energy-efficiency rebates and other incentives for consumer purchases of energy-efficient appliances and furnaces or for insulating homes.
It will allow customers to “opt out” of programs if a utility’s energy-efficiency plan does not meet a cost-benefit analysis showing a positive return for rate payers, Sen. Jake Chapman, R-Adel, said.
“If the utility has positive returns for rate payers, there is no opt out,” he said.
Majority GOP senators passed the bill on a party-line vote, with 28 Republicans in favor and 20 Democrats opposed.
Sen. Michael Breitbach, R-Strawberry Point, the bill’s floor manager, said the changes don’t remove energy-efficiency programs dating back to 1990, but they will give consumers the choice of whether they want to voluntarily contribute to the programs.
It could cut yearly energy costs by more than $100 annually if customers opt out.
Breitbach said utilities have collected $3 billion since 1990 when the program started, but kept $600 million of that to administer the energy-efficiency programs.
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“We’re taking extra money from the consumers and then dictating how that money will be spent,” said Sen. Mark Chelgren, R-Ottumwa. “Let’s take away the middle man.”
Opponents warned the bill would deregulate Iowa’s energy utilities, raise energy rates and “kill” thousands of jobs.
They say the bill threatens to cut and erode policies that have held down energy costs, which has helped Iowa avoid the need to build more power plants and that have attracted major data centers, which have cited Iowa’s commitment to renewable energy.
“Iowa has positioned itself as a national leader,” said Sen. Joe Bolkcom, D-Iowa City. “Putting a cap on these programs is exactly the wrong direction to go. Saving energy is cheaper than building new plants.”
Bolkcom said he was hoping Reynolds was listening to the Senate debate because Republicans were “kind of putting the heat on her” by going after an energy-efficiency program that was one of the pillars of her administration.
Chapman countered the bill gives the governor a chance to end a “hidden tax” that has “scammed” Iowans for years.
Chapman said the changes would return $200 million to utility ratepayers the first year and $100 million a year after that, assuming the 2 percent cap is in place.
Senate Democratic leader Janet Petersen called the bill “horrible” and a step backward for the state. “We should be pushing for more renewables, not less,” she said.
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“The estimates I’ve seen so far say that this will reduce the state’s investment in energy efficiency by over $100 million, jeopardizing the 20,000 energy-efficiency jobs,” Sen. Rob Hogg, D-Cedar Rapids, said.
“There are significant indications that this legislation will lead to higher rates for all Iowans,” he said.
Backers of the bill said the current utility laws are outdated and need to be changed to lower energy costs to consumers, incentivize natural gas utilities to expand into rural and underserved areas and relax regulations on cooperatives and municipal utilities.
Republicans also emphasized transparency, saying many ratepayers don’t know that part of their utility bill is for energy-efficiency programs.
“We want to make sure that our customers are getting the biggest bang for their buck,” Breitbach said.
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