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Neighbors Growing Together | Apr 19, 2018

Iowa senators try new tack on energy overhaul

By Rod Boshart, Gazette Des Moines Bureau | Mar 21, 2018

DES MOINES — Senate Republicans essentially started a “do over” bill Tuesday in hopes of keeping alive an effort to revamp Iowa’s energy efficiency programs and provide more information to consumers about how much they are contributing on their monthly utility bills.

A three-member Senate Ways and Means subcommittee started work on Senate Study Bill 3078, a measure designed to eliminate energy efficiency plans and programs for public utilities from the Iowa Code.

The Senate already passed a separate bill, Senate File 2311, which dealt with a similar topic.

But its backers expressed concern that the multipronged bill has bogged down in the Iowa House. They launched a second bill in hopes of keeping alive a key element of the measure.

“We want to make sure that something gets passed this year,” said subcommittee leader Sen. Randy Feenstra, R-Hull, chairman of the Senate Ways and Means Committee.

Sen. Rob Hogg, D-Cedar Rapids, a subcommittee member who opposed the new measure, said it was “a little odd” that a new bill on a topic already addressed by the Senate would begin when SF 2311 was a “live, pending bill” in the House.

“It’s just bizarre,” said Hogg. “I understand that you want to double down on your dislike of energy efficiency programs that save hundreds of millions of dollars for Iowans, but that’s your right to do that.”

While the original bill calls for elimination, Feenstra said an amendment is being drafted similar to language in SF 2311 that would restore a 2 percent cap on energy efficiency programs for electricity and 1.5 percent for natural gas, allow customers to opt out of the programs and require utilities to show on customers' bills how much they are paying to help finance rebates and other incentives for energy-efficient appliances and insulating homes.

“We want to make sure that this secret tax is out in the open for everybody and that there is some cap on it so it’s not just a runaway train,” Feenstra said.

Representatives and lobbyists from utility companies and large businesses spoke in favor of the bill, though most were registered as undecided. Consumer advocacy and environmental groups spoke in opposition to a bill they said would raise energy rates and erode policies that have avoided the need to build more power plants.

“You’re moving in the right direction here,” said Paula Dierenfeld, a lobbyist for Iowa Association of Electric Companies, although she pushed for allowing industrial customers to opt out completely from energy efficiency programs. “Our clients pay millions of dollars into that program every year and don’t receive any benefit back from that.”

Jennifer Easler of the Office of Consumer Advocate said energy efficiency programs by law must be cost effective and enhance customers’ ability to control utility costs. Amanda Zwanziger of Right Hand Consulting said the programs generate needed capital for projects that Iowa lacks.

“A cap of 2 percent will kill the energy efficiency programs,” said Zwanziger, who served on a working group that helped then-Lt. Gov. Kim Reynolds form a statewide energy strategy that include energy efficiency. “Frankly, this bill completely blows us the second pillar of the energy plan.”

Because state law currently bars utilities from including an energy efficiency line item on monthly energy bills, Feenstra said, most consumers don’t realize they’re paying up to 10 percent for energy efficiency programs that started at $4 million in 1990 and grew to $241 million in 2016.

Sen. Jake Chapman, R-Adel, who attended the meeting but was not a subcommittee member, said GOP senators were bringing transparency to consumers who are in the dark about money they are contributing to programs that may not benefit them and subsidize someone else's purchases. He also said the federal wind energy tax credit has done more to facilitate lower-cost energy in Iowa than any state program.

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