MAY NEWSLETTER: Energy Bills Fail to Move Forward in a Victory for Consumers

The Iowa legislature adjourned last week without passing either HF 834 or its companion bill SF 585, the omnibus energy bills that incorporated Governor Reynold’s recommendations.

Consumer groups worked together to first try to get important changes to the legislation, then when that did not occur, successfully worked to stop the legislation from passing. This coalition included AARP (representing seniors), NFIB (representing small business), the Iowa Retail Federation (representing Iowa’s small and large retailers), and the Iowa Economic Alliance and Iowa Business Energy Council (representing Iowa’s largest users).

Governor Reynolds introduced major new energy legislation over the past two weeks, House Study Bill 123 and Senate Study Bill 1112. The Governor’s bill includes several concepts which, if amended, can have a positive impact on the future electric rates of Iowa’s investor-owned electric utilities.

Unfortunately, as currently constructed, the bills are very pro-utility. These bills, if not amended, would:

• allow utilities to determine future investment plans without the Utilities Commission evaluating whether investment decisions serve consumers' best interests,

• increase the interest rate consumers have to pay utilities on new gas plants,

• permit the utilities to retain 100% of the profits generated from innovative rate structures, revenue that would otherwise be allocated to mitigate future rate increases, and

• allow incumbent utilities to build $3 billion in new transmission lines without competitive bidding.

All the ratepayer groups are united in advocating for amendments to change the pro-utility legislation into a pro-ratepayer bill. The groups range from AARP, representing Iowa’s seniors, to the National Federation of Business, which represents Iowa’s small businesses, to the Iowa Retail Federation and Iowa’s largest energy users.

Four Iowa business groups want state lawmakers to change the way its largest utilities raise rates, saying rising energy costs are hurting small businesses' ability to compete.

The groups — the Iowa Economic Alliance, the Iowa Business Energy Coalition, Iowa Business for Clean Energy and a large energy group that represents industrial users — say the state’s process is flawed and has led to Alliant Energy’s energy charges being among the highest nationally.

Four Iowa business groups are advocating for a reform of how both residential and business electric rates are set in the state.

The groups — the Iowa Economic Alliance, the Large Energy Group, the Iowa Business Energy Coalition and Iowa Business for Clean Energy — released a statement this week saying it is “important to assess how legislative initiatives could meaningfully improve future utility infrastructure deployment, ensure reasonable energy costs, and give the (Iowa Utilities) Commission additional tools to adjudicate future rate requests by Iowa’s utilities.”