Energy Efficiency Slashed; Bill Headed to Governor

May 1, 2018

Iowa’s decades-old energy efficiency programs will be reduced by about two-thirds under a bill that gained final approval in the Iowa Senate last night, in spite of a last-ditch effort by Democrats to defeat it.  

The Senate approved SF2311 on a strict party-line vote of 28 to 20.    It goes now to the governor. 

Under the bill, a smaller portion of Iowans’ electric and gas bills will go into an energy efficiency fund that pays for rebates for energy efficiency appliances and retrofitting homes.   

"This is a really, really bad bill." -Sen. Rob Hogg

Critics of the program say Iowans don’t even know that some of their power bills are paying for other people’s home energy improvements.

Sen. Jake Chapman, R-Adel, called that “shameful.”

“I'm appalled that we had legislators back in 1990 hide a tax from Iowans,” Chapman said.   ”That tax has collected almost three billion dollars hidden from Iowa ratepayers.”

Under the bill, ratepayers will be able to see the cost of the program on their bills.   And payment into the energy efficiency fund will be capped at 2 percent of a ratepayer’s bill.

But the program’s backers say electric and gas rates are kept in check when energy efficiency helps prevent building new generating plants.   They warn that thousands of energy efficiency jobs will be lost. 

Sen.  Rob Hogg, D-Cedar Rapids, calls the bill “bad for jobs and bad for consumers.”

“It undermines good strong energy policy that this state has had on a bipartisan basis for decades,” Hogg said.   “And it's a real shame that in this overtime session we're doing this bill is so harmful to so many people.” 

"You talk like the energy efficiency programs are going to completely go away." -Sen. Michael Breitbach

Under the bill, an estimated $100 million that goes into the energy efficiency fund will go directly back to ratepayers instead. But the bill’s backers say an estimated $120 million in rebates and energy efficiency incentives will still be handed out annually by Iowa electric and gas utilities.

"You talk like the energy efficiency programs are going to completely go away,” said Sen. Michael Breitbach, R-Strawberry Point. “They're still going to pay them if they've got an older home to replace their windows with more energy efficient windows.

“They're still going to save if they get insulation in their attic," Breitbach added.

The bill’s critics say Iowa’s energy efficiency programs have helped attract high-tech firms such as Google to the state.

“Iowa has positioned itself as a national leader,” said Sen. Joe Bolkcom, D-Iowa City. “Saving energy is cheaper than building new plants.”

Iowa Consumer Advocate Mark Schuling wrote lawmakers a letter urging them to defeat the bill.

“Energy efficiency has saved millions of dollars in energy savings and benefits all customers with lower rates,” Schuling wrote. “It has added thousands of jobs in energy efficiency across Iowa.”