Utilities, Critics Square off Over Controversial Energy Policy Revamp

Mar 14, 2018

A bill favored by power companies and sharply opposed by consumer advocates and environmentalists advanced today in the Republican-controlled Iowa House.  

Critics warn of higher utility bills while backers say the bill is needed to modernize Iowa energy policy.

This is a bill that's good for utilities and bad for customers. -Consumer Advocate Mark Schuling

The bill scales back energy efficiency programs and changes the rules utilities follow before they build new plants and raise rates.     

“These are changes that are for the utilities and not for the customers,” said Iowa Consumer Advocate Mark Schuling at a packed statehouse hearing.  “We would ask you to take serious consideration of these.”

For example, Schuling says the bill shortens the time for the Utilities Board to consider an electric company’s application for emission projects.   

“That will mean a loss of opportunity for our office to fully represent consumers in proceedings before the Utilities Board and will result in higher rates for customers,” Schuling said. 

The bill also expands advance rate-making for utility projects.  

That means the Utility Board agrees to rates the utility can eventually charge, before construction on a project begins.

The Utilities Board would continue to have oversight over us. -Julie Vande Hoef, Alliant Energy

Energy companies say that will facilitate building out natural gas lines to more parts of rural Iowa.

“It eliminates a lot of the risk we have to undertake when we're building out to areas that don't have natural  gas,” said Brandon Geib with Black Hills Energy.  “We can take our costs before the board before we do the project rather than after we’ve already spent the money.” 

But the consumer advocate says that’s not good for ratepayers.

“It’s already been pre-approved,” Schuling said.   “The customers are on the hook if it was a bad decision.”  

For energy efficiency, the bill makes participation in Iowa’s energy efficiency programs optional.  That means there will be fewer dollars to pay for energy efficiency rebates and home weatherization.    

Paul Dierenfeld represents the Iowa Business Energy Coalition, a coalition of Iowa’s largest industrial consumers of power.

She says the businesses pay more into the energy efficiency programs than they are able to reap the benefit from, since their operations are already energy efficient.

“For large energy users, as much as 50 percent of their production costs are electricity,” Dierenfeld said.   “They believe that they do not receive a benefit from energy efficiency programs even though they pay millions of dollars into it every year.”

I think the bill's a mess. -Rep. John Forbes

But supporters of energy efficiency say if large users and others opt out, funds for the program will dry up.   

Abraham LaMark operates an insulation company called L and L Home Solutions.   

“By getting rid of that, they're not going to step forward and get insulation done,” LaMark said.

Julie Vande Hoef with Alliant Energy says the bill will be good for consumers.

“The Utilities Board would continue to have that broad regulatory oversight of us,” Vande Hoef said.  

The bill cleared a GOP-dominated three-member subcommittee.

“I think the bill’s a mess to be putting it bluntly,” said Rep. John Forbes of Urbandale, the lone Democrat on the panel.

The bill must pass the House Commerce Committee by the end of the week to remain eligible for debate.     The bill was taken off the calendar for procedural reasons on  Wednesday.  It’s back on the committee agenda for  Thursday.