Energy Efficiency Program Saved But Diminished in Compromise Bill

Mar 15, 2018

Iowa’s nearly 30-year old energy efficiency program would continue, but would be scaled back significantly, under a compromise energy bill that advanced at the statehouse today.  

Since 1990, Iowans have paid into the program through a percentage of their monthly electricity or natural gas bills.   In turn, they have been eligible for millions of dollars in rebates, retrofits and other energy efficiency initiatives.

Over the years, the charge on a monthly bill has risen from 2 percent to as much as 9 percent for some customers.  Critics say that’s pushed energy bills up too much.

“Are we competitive in our energy rates with surrounding states and countries?” asked Rep. Gary Carlson (R-Muscatine).

Are we competitive in our energy rates? -Rep. Gary Carlson

To address the concern, an earlier version of a wide-ranging bill on energy policy, Senate File 2311, would have made the energy efficiency program voluntary.   That way a customer could opt out and no longer be charged, while also not being eligible for the rebates.

Rep. Dawn Pettengill (R-Mount Auburn) wishes she could opt out of the program.

“I paid energy bills for 27 years and I’ve never taken advantage of this program,” Pettengill said.  “So my dollars have went to everybody else."

But many feared that making the contributions optional would essentially eliminate the program.  The compromise bill instead caps contributions at 2 percent of a customer’s electric or natural gas bill.

The Iowa Utilities Board estimates that for customers of rate-regulated electric utilities, under the revised bill, the contributions would fall from $162 million to $66 million a year.

It's going to have a pretty drastic effect on energy efficiency. -Rep. John Forbes

“If we stay at 2 percent, it's going to have a pretty drastic effect on energy efficiency programs across our state,” said Rep. John Forbes (D-Urbandale).

“I’m not buying it,” added Rep. Scott Ourth (D-Ackworth).   “Two percent is nothing.”

If the revised bill becomes law, a typical electric or natural gas bill would spell out how much the two percent charge for energy efficiency is costing.

“I like the disclosure in the bill,” said Rep. Pettengill.  “I had no idea that on my energy bill I was paying for these programs that go for our water heaters and lightbulbs and all of the things that the energy efficiency program is doing.”

The revised bill passed the House Commerce Committee on a party-line vote.   The bill is now available for debate in the full House.