An advocacy organization in the Midwest working to achieve sustainability in energy and transportation.
State Energy Efficiency Policy Database
Iowa
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Advances sound energy efficiency policies, programs, and priorities in the Midwest.
Iowa Utility Policies
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 that are required to be rate-regulated (investor-owned utilities or IOUs) must offer energy efficiency programs through cost-effective energy efficiency plans. Energy efficiency plans filed by municipal utilities and electric cooperatives include voluntary goals. The utilities recover program costs of the plans approved by the IUB through adding tariff riders to 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 programs.
Senate File 2386, signed in 2008, requires the IUB to report periodically to the General Assembly on the plans and results of IOU energy efficiency programs. The first of these reports was due by January 1, 2009. 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.
Senate Bill 2386 also requires utilities to file energy efficiency goals, thereby establishing an EERS. In accordance with this mandate, the IUB issued an order in 2008 asking IOUs to submit plans to achieve multiple goals, including a 1.5% annual electricity and natural gas savings goal.
Reported budgets for energy efficiency programs for 2011, and electricity savings for 2010, are in the State Spending and Savings Tables.
Links:
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October 5, 2012
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), as well as rural electric cooperatives, provide energy efficiency programs, ensuring nearly statewide coverage.
Iowa electric utilities reported efficiency program savings of 409,735 MWh to the Energy Information Administration in 2009, almost 1% of 2009 retail sales.
Reported budgets for energy efficiency programs for 2011, and electricity savings for 2010, are in the State Spending and Savings Tables.
Links:
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March 28, 2013
Regulated investor-owned utilities recover costs of programs approved by the Iowa Utilities Board via adding tariff riders to customer bills. This is an automatic rate pass-through, reconciled annually to prevent over-recovery or under-recovery. Recently-filed utility plans indicate an increasing level of funding for, and commitment to, energy efficiency. The IUB is authorized to conduct prudence reviews of IOU energy efficiency and may disallow imprudent costs. The Consortium for Energy Efficiency reported that electric utilities budgeted $67.8 million for 2010 programs, and natural gas efficiency budgets totaled $40.5 million that year. Reported budgets for energy efficiency programs for 2011 are in the State Spending and Savings Tables.
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October 5, 2012
Summary: Electric: Varies by utility from 1-1.5% annually by 2013. Natural Gas: Varies by utility from 0.74-1.2% annually by 2013.
Senate Bill 2386 amended Iowa Code 476.6, among other provisions, requires the IUB to develop energy savings performance standards for each utility. Each utility must file plans to meet specific energy efficiency goals. In compliance with this bill, the Iowa Utilities Board (IUB) issued an order asking investor-owned utilities (IOUs) to submit plans including a scenario to achieve a 1.5% annual electricity and natural gas savings goal (Docket No. 199 IAC 35.4). Iowa’s two investor-owned electric utilities, Interstate Power and Light Company (IPL) and MidAmerican Energy Company, complied with this request by filing Energy Efficiency Plans for 2009-2013 that outline how the utilities could meet the 1.5% electric target (Docket No. EEP-08-2, Docket No. EEP-08-1). Both utilities determined the 1.5% natural gas target would be unattainable. While MidAmerican plans to meet the 1.5% electric goal, the IUB declined to approve a slightly lower electric goal for IPL due to potential rate impacts on IPL customers. Both IPL and MidAmerican’s goals represent levels of electric savings around twice the levels achieved in 2008. Municipal and cooperative utilities also are required to implement energy efficiency programs, set energy savings goals, create plans to achieve those goals, and report to the IUB on progress. Municipal and co-operative utilities filed goals on December 31, 2009.
Iowa’s natural gas utilities also set annual energy efficiency savings targets for the period between 2009 and 2013. Annual goals vary: municipal utilities plan to save 0.74% by 2013; MidAmerican 0.85%; Black Hills Energy 0.94%; and IPL 1.2%.
Links:
- Authority: Iowa Code § 476
- Authority: Senate Bill 2386, May 2008
- Docket No. 199 IAC 35.4 (EEP-02-38; EEP-03-1; EEP 03-4), January 14, 2008
- MidAmerican Energy Company: Docket No. Docket No. EEP-08-2
- Interstate Power and Light Company: Docket No. EEP-08-1
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March 28, 2013
On December 18, 2006, the Iowa Utilities Board examined the possibility of decoupling profits from sales revenue for their natural gas utilities. The Board did not require utilities to decouple, but concluded that individual utilities may apply for automatic adjustment mechanisms or other rate design changes on a case by case basis. (Iowa Docket No. NOI-06-1).
Links:
- Iowa Utilities Board docket search.
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October 5, 2012
There is currently no policy in place that rewards successful energy efficiency programs. For more information about utility regulation and policy, click here.
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March 28, 2013
Iowa's investor-owned utilities are required to prepare and implement energy efficiency plans. The Iowa Utilities Board approves the plans. 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 cost test 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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September 9, 2010
- Cost-effectiveness test(s) used: SCT, UCT, PCT, RIM
- Uses a deemed savings database: no
The evaluation of ratepayer-funded energy efficiency programs in Iowa relies on both legislative mandates Iowa Code §476.6(16)) and regulatory orders (Iowa Administrative Code 199—35.13(476)). Evaluations are administered by the utilities. There are no specific legal requirements for these evaluations in Iowa. Evaluations are conducted statewide and for each of the utilities. Iowa uses four of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Utility/Programs Administrator (UCT), Participant (PCT), Social Cost (SCT), and Ratepayer Impact Measure (RIM). The rules for benefit-cost tests are stated in Iowa Code §476.6(14)and IAC 199—35.8(2). Iowa specifies the SCT to be its primary cost-effectiveness test. These benefit-cost tests are required for overall portfolio, total program, customer project, and individual measure level screening, with exceptions for low-income programs, pilots, and new technologies.
Links:
- Authority: Iowa Code §476.6(16)
- Authority: Iowa Administrative Code 199—35.13(476)
- Authority: Iowa Code §476.6(14)
- Authority: IAC 199—35.8(2)
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March 28, 2013