The 2014 session of the Iowa General Assembly brought a few changes to the public utilities law practice in Iowa. Lawmakers focused their utility related discourse on tax credits for renewable energy, renewable fuels and solar energy, purview of the Iowa Utilities Board, water service requirements, delinquent customer accounts, and notice requirements for underground facilities. Below is a summary of notable utility related bills passed by the Legislature and signed into law by Governor Terry Branstad.
WIND ENERGY/ COGENERATION TAX CREDIT: The production tax credit for wind energy and other renewable energy facilities was extended two years and the law, introduced as Senate File 2343, adds new eligible fuel sources for a cogeneration production tax credit, including methane gas, landfill gas and biogas.
RENEWABLE FUELS: Biodiesel and other renewable fuel producers can continue taking advantage of a renewable energy tax credit incentive that was previously set to expire in 2013 but is now extended through 2017. Senate File 2343 became new law and modifies the rate of the E-15 plus gasoline tax credit and provides a two cents per gallon refundable credit for the first 25 million gallons of biodiesel produced in any single biodiesel plant.
SOLAR: The total amount of solar tax credits available for residential and business installations increased from $1.5 million to $4.5 million under Senate File 2340. It also increases the maximum credit a taxpayer can claim of the federal credit available per project from 50 percent to 60 percent. The new law also increases the maximum amount of credit per project from $15,000 to $20,000 for businesses.
REGULATION OF TELECOMMUNICATIONS UTILITIES: Through Senate File 2195, Lawmakers updated certain Iowa Code sections to reflect today’s deregulation of retail telephone rates. Nearly four years ago, the Iowa Utilities Board completed its gradual process of deregulating retail rates and the new bill removed code references to retail rate regulation that are now obsolete such as tariff filing requirements for retail rates, employee discounts for phone services, Board approval of rate schedules, and transferability of certificates for providing retail services. Now, telecommunications providers in Iowa are only required to file tariffs for wholesale services as specified by the IUB. The new law also authorizes the IUB to extend the time frame by 30 days for Board action regarding a formal allegation of monopoly, exclusive privilege or franchise against a local telephone exchange carrier.
RURAL WATER – House File 2192 clarified service territory matters for municipal and rural water providers. Under current law, a rural water district or association is prohibited from providing water services within two miles of a city and may file notice with the city if it intends to serve a new area within the two miles buffer. The new law requires the association to submit its water plan directly to the municipal water provider and the plan must include any area the association intends to serve within three years. The city has 75 days to respond to the notice and the new law allows the city to waive its right to serve areas or reserve its right to serve those areas later.
DISCONNECTION OF WATER SERVICES – Municipalities or city utilities and water service providers can now formalize joint efforts to address delinquent customer accounts. A water utility can enter an agreement with the city utility to disconnect service to a property if the customer account becomes delinquent and the water utility will not be liable for any damages as a result of the disconnect. The customer is responsible for all cost associated with discontinuing and reestablishing water service. The new law also provides that a city utility or city enterprise can file a law suit against the customer in district court for the cost of providing service as well as reasonable attorney fees.
IOWA ONE CALL – Iowa’s owners and operators of underground facilities are required to participate in the Iowa One Call requirements established in 1983. House File 2408 modified notification requirements applicable to underground facility excavations. Currently, a notice is required to the Iowa One Call notification center at least 48 hours before digging. The new law provides that notices received after 5:00 p.m. shall be processed as being received at 8:00 a.m. the next business day and if locating and marking is done before the 48 hour window closes, the digging party can proceed with excavation once it is notified by Iowa One Call that the locating and marking is completed. Additionally, no digging shall take place within 25 feet of a natural gas transmission line or designated critical facility unless a representative of the operator of the line is present.
While 2014 saw the above changes in Iowa’s utility related laws, it will be perhaps more interesting to see what changes will be proposed in the 2015 legislative session based on recent Iowa Supreme Court rulings regarding the definition of a utility and a Notice of Inquiry proceeding regarding distributed generation before the Iowa Utilities Board. These are exciting times in the utility industry, stay tuned.