Dive Brief:
- Iowa lawmakers have approved a bill to significantly cut back energy efficiency programs in the state, sending Senate File 2311 to the desk of Republican Gov. Kim Reynolds for her signature or veto.
- The bill passed 28-20 along party lines in the Senate this week, after being approved by the House last Thursday on a vote of 52-42.
- The proposal would cap efficiency program costs for electric and gas utilities. It would also allow customers to opt out of efficiency programs.
Dive Insight:
Republican lawmakers say they don't want less energy efficiency, but claim customers can make those investments more effectively themselves. Allowing customers to opt out of utility programs might reduce program revenues, but it will increase the amount available to ultimately invest in efficiency, they say.
"Provisions in this bill specifically reduce the costs rate-regulated utilities levy on customers for energy efficiency projects by $100 million ... while retaining over $120 million for energy efficiency projects," Sen. Mark Chelgren, R, said in a statement.
"What will happen is that people will have more money in their pockets and they will make the best decisions for themselves," he told the Des Moines Register.
Not surprisingly, Democrats took an opposite tack.
Sen. Joe Bolkcom, D, told The Courier that “putting a cap on these programs is exactly the wrong direction to go. Saving energy is cheaper than building new plants.”
The new law would restrict the Iowa Utilities Board from requiring an electric utility to adopt an energy efficiency plan that "results in projected cumulative average annual costs that exceed two percent of the electric utility's expected annual Iowa retail rate revenue from retail customers." The limit for gas utilities is 1.5%.
Iowa ranks 19th among states in energy efficiency, according to the American Council for an Energy Efficient Economy's annual scorecard, due partly to the electric and gas efficiency programs that utilities are currently mandated to provide.
The Iowa-based utility MidAmerican Energy, which is among the highest in nationwide efficiency spending, has proposed reducing that spending. Residential customers are each paying about $125 annually for energy efficiency programs, according to MidAmerican, and its very largest customers spend more than $1 million.
