New regulations reduce costs and maintain energy efficiency
JOHNSTON—This spring, Gov. Kim Reynolds signed into law Senate File 2311, utility regulations that she believes will reduce consumer costs while continuing to maintain an effective energy efficiency program in the state.
“It’s a balance,” Reynolds explained during a news conference when asked how she squares the law’s changes with her Iowa Energy Plan, which established energy efficiency and conservation as two of its hallmarks. Noting that finding solutions almost always involves reaching beneficial compromises, the governor pointed out that this particular compromise will, over time, save customers “hundreds of millions of dollars” while still providing the resources necessary to maintain a robust energy efficiency program.
The bill will also encourage the extension of natural gas into underserved rural areas to support economic development. MidAmerican Energy agreed with the governor that SF 2311 “ensures MidAmerican Energy can continue to offer a robust set of energy efficiency programs in Iowa at a reasonable cost.”
MidAmerican said customers paid an average of more than 7 percent of their bills toward energy efficiency programs, the highest in the nation. That will be capped at 2 percent for electricity and 1.5 percent for natural gas utilities, “bringing the cost of energy efficiency programming in line with the rest of the country,” MidAmerican said.
The caps implemented through the legislation are expected to save MidAmerican Energy’s customers $80 million to $90 million per year, or about $80 per year for the average residential gas and electric customer, $195 for the average commercial customer and $9,000 for the average industrial customer.
The new law requires utilities to show on customers’ monthly bills how much they are paying to help finance rebates and other incentives for consumer purchases of energy-efficient appliances and energy-conservation features. It was important to lawmakers, the governor said, to improve transparency so ratepayers know how much of their bill is funding energy efficiency initiatives. Previously, utilities were prohibited from disclosing mandated energy efficiency charges.
The governor noted that the state will monitor energy efficiency programs to see whether changes will be required in the future.