DES MOINES — The Iowa Senate has approved energy-policy changes that will alter energy efficiency programs and reshape the Iowa Utility Board’s regulatory role — moves that backers say will save consumers money and that critics warn will “gut” measures that make Iowa a “green” energy leader.
Senate File 2311 would restore a 2 percent cap on energy efficiency programs for electricity and 1.5 percent for natural gas utilities. It would allow customers to “opt out” of the programs and require utilities to show on customers’ monthly bills how much they are paying to help finance rebates and other incentives for consumer purchases of energy-efficient appliances and furnaces or for insulating homes.
Majority GOP senators passed the bill late Tuesday night, 27-23, with two Republicans and one independent joining 20 Democrats in opposing the proposed changes.
The measure now goes to the Iowa House where it faces an uncertain future.
During floor debate, senators agreed to remove provisions related to solar energy that advocates worried would have done significant damage to rooftop and community solar projects.
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 up to $100 annually if they opt out, he said.
“For Iowans struggling to put food on the table for themselves and their families, this is a real savings that will make a real difference in their home,” said Breitbach, who noted the bill also would remove what he called regulatory inefficiencies at the Iowa Utilities Board.
“Senate File 2311 will fulfill our goal with providing Iowans with clean, reliable and safe energy,” he said. “The bill will help stimulate our economy by putting more money in the hands of consumers and also expanding natural gas service to our underserved communities.
“The bill will remove the hidden tax that has been on the customers’ bill since 1990,” Breitbach added. “This hidden tax cost Iowans $241 million in 2016 alone. Since 1990, this tax has cost just shy of $2.6 billion. If you take 20 percent of that, that comes out to about $520 million that went to the utilities to administer the cost of the program.”
Utilities lined up behind the wide-ranging bill that would give them more control of certain ratemaking procedures and make changes in energy-efficiency provisions and emissions standards.
Opponents warned the bill would deregulate Iowa’s energy utilities, raise energy rates and “kill” thousands of jobs. It threatens to cut and erode policies that have held down energy costs, that 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.
“Doing away with energy efficiency. We’re going the wrong way,” said Sen. Matt McCoy, D-Des Moines. “We were leading the nation in that effort, and we’re going backwards. We’re throwing the Buick into reverse, and we’re headed back to the 1950s, which is where I think so many of you want to live. Well, I don’t want to live there. ... I don’t think Iowans want to live in the 1950s.”
McCoy also warned that shortening the time frame that new tariffs can be levied by the Iowa Utilities Board and allowing state regulators only 60 days without public comment to consider “these major, sweeping changes, which all the large energy-users oppose,” is a bad idea would hurt consumers.
“The reality is this is an anti-consumer, job-killing monument to companies who run legal monopolies in the state of Iowa. This takes away the power of the consumers to have a regulatory authority that governs these people. We are shifting the cost of cheap energy now onto the consumers,” said McCoy, who held out hope the Iowa House would choose not to take up the Senate-passed bill.
However, Sen. Jake Chapman, R-Adel, countered that GOP senators were bringing much-needed transparency and disclosure to consumers who are in the dark about money they are contributing to programs that may not benefit them and that 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.
“As I’ve gone out and educated Iowans on what this really is, they’re irate. This is the reason why they distrust government — you hide a fee from them,” said Chapman, who noted the “scam” hits low-income renters who pay utilities especially hard because they get no benefit for the fees they pay.
“I think this is a great bill, I think it’s a great bill for consumers, it’s a great bill for Iowans,” he added. “We keep hearing rates will go up, rates will go up, well we’ll see won’t we?”