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Summary
Iowa's utilities administer energy efficiency programs under a regulated structure with oversight by the Iowa Utilities Board (IUB), and significant input from the Office of Consumer Advocate. Iowa Code 476.6.16 mandates that electric and natural gas utilities required to be rate-regulated (investor-owned utilities) must offer energy efficiency programs through cost-effective energy efficiency plans. The utilities recover program costs of the plans approved by the IUB through tariff riders on customer bills.
Iowa's utilities have long records of funding and providing comprehensive portfolios of energy efficiency programs to all major customer categories — residential, commercial, industrial, and agricultural. Funding levels have been strong throughout the years, with a notable decrease in the late 1990s as the state considered restructuring proposals. Since the early 2000s, the state has renewed and increased its commitment to energy efficiency through utility programs. In 2007, Iowa's utilities spent $36.7 million on electric energy efficiency, $36.6 million on electric load management, and $28.4 million on natural gas efficiency programs. These programs saved 282,000 MWh and 806,000 MCF in 2007.
Senate File 2386, signed in 2008, requires the IUB to report periodically on the plans and results of IOU energy efficiency programs, including a report by January 1, 2009. See the IUB website at http://www.state.ia.us/government/com/util/about_iub/noi072_reports.html. Municipal utilities and electric cooperatives are required to develop new energy efficiency plans and the IUB is required to report on these plans by January 1, 2011.
SB 2386 also requires utilities to file energy efficiency goals. In accordance with this mandate, the IUB issued an order in 2008 asking IOUs to submit plans including a scenario to achieve a 1.5% annual electricity and natural gas savings goal. |
| Customer Energy Efficiency Programs |
Iowa's energy utilities administer energy efficiency programs for their customers. State law requires regulated utilities to provide such programs; most publicly owned utilities in Iowa (municipal utilities and rural cooperatives) also provide energy efficiency programs, ensuring nearly statewide coverage.
Iowa utilities reported efficiency program savings of 282,000 MWh in 2007.
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Regulated investor-owned utilities recover costs of programs approved by the IUB via tariff riders on customer bills. This is an automatic rate pass-through, reconciled annually to prevent over-recovery or under-recovery. Utility plans recently filed suggest an increasing level of funding and commitment to energy efficiency. The IUB is authorized to conduct prudence reviews of IOU energy efficiency, with authority to disallow imprudent costs. In 2007, Iowa's utilities spent $36.7 million on electric energy efficiency, $36.6 million on electric load management, and $28.4 million on natural gas efficiency programs.
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| Energy Efficiency Resource Standard |
In compliance with Senate Bill 2386, which requires utilities to file energy efficiency goals, the IUB issued an order in 2008 asking IOUs to submit plans including a scenario to achieve a 1.5% annual electricity and natural gas savings goal. In a report to the Iowa General Assembly in January 2009, the IUB estimated that savings from the three investor-owned utilities in Iowa (including Interstate Power and Light Company and Black Hills Corporation, formerly Aquila) would reach 1.4% of retail electric sales and 1.0% of natural gas sales by 2013. Most recently, in March 2009, the IUB approved MidAmerican Energy Company’s Energy Efficiency Plan, which calls for 1.5% electricity savings by 2010 and 0.85% natural gas savings by 2013. Once the Board approves the utility plan, the goals are binding.
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On December 18, 2006 the IUB examined the possibility of decoupling natural gas and electric utilities. The Board did not issue a requirement for utilities to decouple due to the system already in place for energy efficiency. Individual utilities may review their circumstances to decide if the current energy efficiency programs have caused them lost revenue. If there is enough concern, the Board will reconsider the possibility of automatic adjustment mechanisms or other rate design change. Iowa Docket No. NOI-06-1
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| Reward Structures for Successful Energy Efficiency Programs |
None in place or proposed.
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| Energy Efficiency as a Resource |
Iowa's investor-owned utilities are required to prepare and implement energy efficiency plans. The plans are approved by the Iowa Utilities Board. Key features of all the plans and programs approved for IOUs by the IUB include:
- Plans must be cost-effective; four different cost-effectiveness tests are assessed and applied; of these, the societal perspective is the primary determinant of cost-effectiveness.
- Plans must include programs for all types of customers.
- Plans must include analysis of the potential for energy efficiency and must include performance standards in terms of energy and capacity savings.
Iowa's municipally owned utilities and rural electric cooperatives must also develop energy efficiency plans and submit both progress and final reports to the IUB. The IUB does not review or approve these plans, but compiles the results to use as part of overall state energy planning.
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Last Updated
09/23/2009
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