IUA Legislative Briefs, April 12, 2013
MORE LEGISLATIVE ACTION ON REMAINING ENERGY BLLS
 Governor Withdraws Wagner from Session Confirmation
 District Court Reverses IUB Eagle Point Solar Ruling
Although there were several formal legislative actions this week on a number of remaining bills being followed by the
energy industry, most of the industry news focused on the Governor’s appointment to the IUB and the District Court’s
reversal of an IUB ruling. The partisan rhetoric did not let up this week as both parties and the Governor’s office fired
salvos at one another surrounding their differences in structuring Medicaid expansion and education funding/reform
proposals. Still no final resolution in sight for those two issues as well as property tax reductions.
Governor Withdraws IUB Appointment from Confirmation
On Monday, Governor Terry Branstad announced that he was withdrawing two of his board nominees from Senate
confirmation after questions were raised over their ability to gain the needed two-thirds majority of Senators voting to
support their confirmation. In letters to the Secretary of the Senate on Monday, Branstad said he was pulling the
nominations of Nick Wagner to the Iowa Utilities Board and Tom Rielly to the Iowa Transportation Commission.
Wagner is a former Republican state representative from Marion and Rielly is a former Democratic state senator from
Oskaloosa.
The Governor will now be reviewing his options to either make new appointments or consider those individuals for
“interim appointments” to serve in those board posts with Senate confirmations held off until 2014.
District Court Reverses Eagle Point IUB Ruling
Judge Carla Schemmel’s Fifth District Court decision became public this week that formally reverses an April 2012 IUB
Declaratory Ruling that determined Eagle Point Solar would be a public utility and, as a result, is prohibited by Iowa’s
exclusive service territory statutes from offering electric service to the City of Dubuque. Eagle Point Solar is proposing to
enter into a long-term financing agreement with the City of Dubuque for the purpose of supplying power to the city from
an on-site solar facility. Judge Schemmel reversed the IUB’s 2012 ruling stating, “the IUB erred and applied an incorrect
legal standard in determining whether Eagle Point is a ‘public utility’ under Iowa Code section 476.1.”
Shortly after the District Court’s decision was made public, a Wisconsin renewable energy group was praising the
decision. “In effect, an Iowa customer can purchase energy that is produced on his/her property or premises, and the
utilities have no authority to stop those arrangements from happening there,” wrote RENEW Wisconsin. “The utilities
have now lost their regulatory shield in Iowa, and there is nothing to stop a Wisconsin solar company from venturing into
Iowa and market 3rd party arrangements with host customers there.”
The IUB and those entities supporting the IUB’s original ruling now have 30 days to determine whether to appeal Judge
Schemmel’s decision.
On Friday, April 5, 2013, Eagle Point Solar filed an objection with the IUB about the direct assessment invoice of $4,606
it received related to the IUB and OCA expenses associated with its request (DRU-2012-0001) for the declaratory ruling.
Eagle Point is asking the IUB and OCA to allocate the expenses “in equal shares” among the docket participants.
IUA Legislative Briefs, April 12, 2013
This Week’s Key Legislative Activities:
Senate Approves Boiler Inspection Changes
The Senate unanimously gave its approval, without amendments, on Wednesday to HF-484, a bill that allows the Labor
Commissioner to adopt rules establishing an internal inspection interval of up to four years for boilers that are owned and
operated by electric public utilities subject to rate regulation under chapter 476. That completes the legislative action for
the bill and it now goes to the Governor for his consideration.
Senate Approves Bill on Solar Energy System Income Tax Credits
The full Senate on Tuesday unanimously passed an amended version of SF-431, which allows taxpayers to claim
multiple tax credits for solar energy systems for separate and distinct installations. The amendment more clearly
indicates that “A taxpayer must submit an application to the department for each separate and distinct solar installation,”
in order to receive approval of the tax credit. A new fiscal note indicates a projected reduction in net General Fund
revenue in FY 2015 and FY 2016 by $ -210,000 and $ -155,000, respectively. The bill has been referred to the
House Ways & Means Committee.
Senate Passes Bill on Electric and Natural Gas Vehicle Fueling Facility Tax Credit
Also receiving unanimous Senate approval on Tuesday was SF-434, a bill that creates a tax credit (30 percent of
total cost) for constructing, installing and placing in service an electric vehicle fueling facility or a natural gas
vehicle fueling facility. A new fiscal note indicates a projected reduction in net General Fund revenues in FY 2014
($ -0.8 million) FY 2015 ($ -1.8 million) and FY 2016 ($ -2.4 million). The bill was referred to the House Ways &
Means Committee.
Senate Passes Bill on Water Quality & Storm Water Discharges
The full Senate on Tuesday unanimously passed (49-0) HF-311, which provides that storm water and allowable
non-storm water discharges do not require public notices. The bill now goes to the Governor.
MidAmerican Energy Executive Confirmed to Electrical Licensing Board
In the midst of the Senate’s wrangling earlier this week over the Governor’s appointments to the State Board of
Regents, the chamber did take the time to unanimously confirm a number of individuals to other state boards and
commissions. Included in those Monday confirmations was Kathryn Kunert, MidAmerican Energy, vice
president of business and community development, to the Electrical Licensing Examining Board.
Just to Confirm - Second Funnel Losers
The following energy bills did not make it through last Friday’s second major funnel deadline.
SF-270
SF-223
SF-372
SF-420
HF-498
HF-513
Stray Voltage
Special Electric Vehicle License Plates
Wind Energy Incentives – Feed-In-Tariffs
American Products to be used in Public Improvements
On Farm Electrical Inspections
Ratemaking Principles for Power Purchase Agreements
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IUA Legislative Briefs, April 12, 2013
IUA MEMBER REPRESENTATIVES
SYNERGIZE ON ENERGY EFFICIENCY PROGRAMS
Three low-income energy efficiency programs were the reason for a Tuesday gathering in Des Moines of IUA member
company representatives to discuss program strategies, program plans and program costs. The meetings, hosted by Alliant
Energy at its Des Moines offices, focused on the following energy efficiency programs: Multi-Family Low Income and
Institutional Housing Program, State Low Income Collaboration Evaluation (SLICE) and the Energy Wise Client
Education Program (a program for participants in the Low Income Home Energy Assistance Program (LIHEAP) and
the Weatherization Assistance Program).
Participants included the Energy Group’s (for Multi-Family Low Income and Institutional Housing Program only) Emily
Rice, Kelly Needles and Mike Willis; Alliant Energy’s Julie Blackwell and Robin Sempf; Black Hills Energy’s Jim
Dillon; MidAmerican Energy’s David McCammant and Tina Yoder; and the IUA’s Daniel Evans.
INDUSTRIAL USERS DISCUSS
IMPACT OF COMMUNITY FRANCHISE FEES
A discussion of community franchise fees and their impact on industrial customers was held Wednesday during the Spring
Conference of the Iowa Industrial Energy Group (IIEG). Deere & Company’s Jeff Kamen noted that the City of
Waterloo is moving forward with a franchise fee of 2 percent (effective July 1, 2013) and 3 percent (after July 1, 2014)
that will have a “very significant impact” on the community’s largest employer and energy user – John Deere! Cedar
Rapids recently voted to increase from 1 percent to 2 percent its franchise fee on IPL-Alliant Energy (electric) and
MidAmerican Energy (gas). Both Kamen and IIEG president Mike Sarafolean said the franchise fee is nothing more
than a tax on utility customers and urged their industrial members to make sure they are aware of local efforts to either
impose or increase a franchise fee.
According to the IUA’s community franchise fee listing; there are now over 60 communities that have implemented those
fees.
Also speaking at the IIEG conference was Dean Crist, MidAmerican Energy, who outlined his company’s anticipated
rate increase filing and a new website devoted to company information impacting the filing. In addition, the basics of
hydraulic fracturing were featured in an animated PowerPoint presentation delivered by Matt O’Reilly of Black Hills
Energy.
2013 ENERGY BILL WATCH LIST
 SIGNED
SF-91 Increases Civil Penalties for Pipeline Safety Violations (Governor signed into law) This IUB-sponsored bill
increases civil penalties for pipeline and underground gas storage violations to $100,000 per violation and $1 million
maximum for any related series of violations.
HF-225 Pollution Prevention and Waste Management Assistance (Governor signed into law) Makes several
(non-substantive) changes to waste management statute provisions, eliminates certain terms no longer used, makes
changes to the waste management duties of the DNR and eliminates redundant language.
ENVIRONMENTAL
HF-311 Water Quality & Storm Water Discharges (House and Senate Passed) Provides that storm water and
allowable non-storm water discharges do not require public notices.
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IUA Legislative Briefs, April 12, 2013
RENEWABLE ENERGY / ENERGY EFFICIENCY
HF-48 Geothermal and Solar Property Tax Exemption Limitations Removes the current 10-year limit for the property
tax exemption for geothermal systems and the current 5-year limit for solar systems. Also removes the state’s obligation
to reimburse local governments for these property tax exemptions.
HF-497 School Wind Grants Establishes a school wind generation revolving loan and grant program within the
Iowa energy center, creates a corresponding fund and makes a $5 million appropriation to the fund for FY 2013 2014.
NEW HF-630 (formerly HSB-180) and SSB-1241 Sales Tax Exemption for Hydroelectric Conversion Property
Exempts hydroelectricity conversion property from sales tax in Code section 423.3, subsection 54, in addition to current
sales tax exemption for wind energy conversion property.
SF-4 Appropriation to Build Solar Facility at University of Iowa Appropriates $3.1 million to construct and maintain
solar electric generation facilities at the University of Iowa.
SF-414 Wind & Solar Programs (Senate Environmental Committee Approved; referred to Appropriations
Committee) Extends renewable energy tax credit eligibility dates, expands membership of the Iowa Energy Center
Advisory Council and establishes three specific grant and loan funds.
SSB-1136 Modifies Provisions for Wind Energy & Renewable Energy Tax Credits Extends date to July 1, 2013 for
placing wind facility in service to qualify for 476B tax credit and extends date to January 1, 2020 for placing renewable
energy facility in service to qualify for 476C tax credit. Also extends renewable energy tax credits to December 31, 2029
and increases nameplate generating capacities of wind and non-wind facilities.
SF-431 Solar Energy System Tax Credits (Senate Passed) Allows taxpayers to claim multiple tax credits for solar
energy systems for separate and distinct installations, with retroactive applicability to January 1, 2013. Allows
unclaimed credits be made available for following tax year in addition to amount an nually allocated and caps
cumulative value of tax credits claimed. New fiscal note indicates a projected reduction in net General Fund
revenue in FY 2015 and FY 2016.
SSB-1182 Refuse Conversion Facilities Tax Credits Increases the amount of energy production capacity which
may qualify for renewable energy tax credits for 476C.
TAX
HF-267 and SF-434 Electric or Natural Gas Vehicle Facility Tax Credit (Senate Passed SF-434) Creates an
electric or natural gas vehicle facility tax credit (30 percent of total cost) for constructing, installing and placing in
service an electric vehicle facility or a natural gas vehicle facility. Retroactive applicability beginning on and after
January 1, 2013. New fiscal note to SF-434 indicates a projected reduction in net General Fund revenue in FY
2014, FY 2015 and FY 2016.
HF-620 and SF-409 Economic Development Incentives (Senate Economic Growth Committee Approved SF-409;
referred to Ways & Means Committee) Bill contains a number of changes to business financing and assistance
programs of the Iowa Economic Development Authority (IEDA).
NEW HF-634 Department of Revenue Tax Policy Makes a number of changes to the Department of Revenue’s tax and
related laws and programs policies. Extends the Utility Replacement Tax Task Force through January 1, 2016.
SF-112 Establishes Corporate Flat Tax Eliminates the four corporate income tax brackets and establishes flat income
tax rate of 6 percent applied to corporations, with retroactive applicability to January 1, 2013.
SSB-1242 Extends Replacement Tax Task Force Bill includes provision that extends the replacement tax task force
through January 1, 2016.
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IUA Legislative Briefs, April 12, 2013
HSB-231 Water Utility Replacement Tax The proposal establishes a new Water Utilities Replacement Tax similar in
structure to the energy industry’s Utility Replacement Tax. The bill applies to water companies subject to the rate and
service regulation of the IUB and is based on the number of gallons of water delivered to consumers.
LICENSING / INSPECTIONS
HF-484 Boiler Inspections (House passed; Senate Passed) The bill allows the Labor Commissioner to adopt rules
establishing an internal inspection interval of up to four years for boilers that are owned and operated by electric public
utilities subject to rate regulation under chapter 476.
SF-427 Plumbing, Mechanical, HVAC-Refrigeration, Sheet Metal and Hydronic Professionals Licensing (House
and Senate passed) Redefines plumbing, HVAC, refrigeration and hydronic systems professionals as plumbing,
mechanical, HVAC-refrigeration, sheet metal or hydronic professionals. Includes provisions on classifying current
licensees and licensing renewals, and makes penalties applicable.
GENERAL ENERGY
HF-219 Eminent Domain Authority & Procedures (House passed) Makes significant changes to eminent domain
laws but does not affect utilities subject to the eminent domain authority of the IUB.
HSB-216 and SSB-1237 Access to Closed Session Information of Agencies Allows the Office of Citizens’ Aide and the
Iowa Public Information Board to obtain, without a court order, the minutes and audio recordings of the closed session
deliberations of government agencies.
FOR MORE INFORMATION CONTACT:
515-282-2115
Website: www.iowautility.org
Mark Douglas
[email protected]
Daniel Evans
[email protected]
Iowa Utility Association
500 East Court Ave. Suite 312
Des Moines, Iowa 50309
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IUA Legislative Briefs, April 12, 2013
May 2 is only three weeks away | Register now at www.iowasmartconf.com
2013 Agenda Highlight
Gerry Schnepf, Margo Underwood and Bob Donahoo will present “Hometown Pride – A New Program to
Enhance Rural Iowa” during their afternoon workshop.
Gerry Schnepf is the executive director of Keep Iowa Beautiful (KIB), a statewide nonprofit established in 2000
(the 23rd State affiliate of Keep America Beautiful) that aims to make Iowa communities more attractive places to
live, work and raise a family through various beautification, cleanliness and community improvement initiatives.
Schnepf previously served as Chief of Planning for five years with the Provincial Parks system in Manitoba,
Canada, planning director for the Iowa Conservation Commission (now the Department of Natural Resources) and
founding president of the Iowa Natural Heritage Foundation (INHF). Schnepf also serves on a number of non-profit
boards.
Margo Underwood is the KIB Hometown Pride community coach in nine communities in Pocahontas County and
president of Underwood Consulting, a business that provides Resource Management and Public Relations
services to communities, businesses and non-profit organizations. Margo has twenty years’ experience in both the
public and private sectors working with communities to help them develop solid waste plans in Iowa and
Minnesota. Margo serves as Chair of the Iowa Natural Resource Commission and is a past president and current
board member of Trees Forever.
Bob Donahoo is the city administrator for City of Pocahontas also will be a panel presenter.
Kyler James and Andrea Steinkamp will present “EB-5 Visas for Economic Development” during their
afternoon workshop. The EB-5 (Immigrant Investor) program was authorized by Congress in 1990 to target
qualified foreigners seeking to obtain lawful permanent residency by investing in a business that will benefit the US
economy and create or save at least 10 full-time US jobs.
Kyler James is the Iowa CMB Regional Centers economist and senior project developer. James develops and
reviews economic analyses related to all CMB projects and specializes in project analysis, market research and
document production. James actively communicates with the development community through conferences,
presentations and meetings with both public and private developers, working directly with CMB clients and
attorneys throughout the Russian-speaking market.
Andrea Steinkamp is the EB-5 project manager at the Iowa Economic Development Authority (IEDA). With a
bachelor’s degree in accounting, prior employment experience includes internal auditing and taxation. As a
certified public accountant, Steinkamp’s role at IEDA includes reviewing and analyzing projects and application
documents for financial assistance from the State of Iowa.
Full agenda, map & directions, bios at www.iowasmartconf.com | Questions? [email protected]
The SMART Conference is a public/private partnership co-sponsored by the investor-owned electric and natural
gas companies of the Iowa Utility Association (IUA) and the Iowa Economic Development Authority (IEDA).
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