Renewable Energy Mandate – Iowa

Date: 20 Jan 2009 | posted in: Energy | 0 Facebooktwitterredditmail

Iowa’s 1983 Alternate Energy Production law required the state’s investor-owned utilities to purchase 105 megawatts (averaged) of electricity from renewable energy projects. Because the law did not include enforcement provisions, the utilities were able to stall for years. In July 1996, the Iowa Utilities Board finally ordered the utilities to comply with the law. Today, Iowa is one of the leading states in the nation for wind power development.

In 2001, Iowa’s governor established a secondary, voluntary goal of 1,000 MW of wind generating capacity by 2010.

More Information:


Iowa’s Renewable Energy Mandate Law
Iowa Code 1997: Sections 476.43, 476.44, 476.46

476.43 Rates for Alternate Energy Production Facilities.

1. Subject to section 476.44, the board shall require electric utilities to enter into long-term contracts to do the following:

a. Purchase or wheel electricity from alternate energy production facilities or small hydro facilities located in the utility’s service area under the terms and conditions that the board finds are just and economically reasonable to the electric utilities’ ratepayers, are nondiscriminatory to alternate energy producers and small hydro producers and will further the policy stated in section 476.41.

b. Provide for the availability of supplemental or backup power to alternate energy production facilities or small hydro facilities on a nondiscriminatory basis and at just and reasonable rates.

2.Upon application by the owner or operator of an alternate energy production facility or small hydro facility or any interested party, the board shall establish for the affected public utility just and economically reasonable rates for electricity purchased under subsection 1, paragraph "a". The rates shall be established at levels sufficient to stimulate the development of alternate energy production and small hydro facilities in Iowa and to encourage the continuation of existing capacity from those facilities.

3. The board may adopt individual utility or uniform statewide facility rates. The board shall consider the following factors in setting individual or uniform rates:

a. The estimated capital cost of the next generating plant, including related transmission facilities, to be placed in service by the electric utility serving the area.

b. The term of the contract between the electric utility and the seller.

c. A levelized annual carrying charge based upon the term of the contract and determined in a manner consistent with both the methods and the current interest or return requirements associated with the electric utility’s new construction program.

d. The electric utility’s annual energy costs, including current fuel costs, related operation and maintenance costs, and other energy-related costs considered appropriate by the board.

e. External factors, including but not limited to, environmental and economic factors.

f. Other relevant factors.

g. If the board adopts uniform statewide rates, the board shall use representative data in lieu of utility specific information in applying the factors listed in paragraphs "a" through "f".

4.In the case of a utility that purchases all or substantially all of its electricity requirements, the rates established under this section must be based on the electric utility’s current purchased power costs.

5.In lieu of the other procedures provided by this section, an electric utility and an owner or operator of an alternate energy production facility or small hydro facility may enter into a long-term contract in accordance with subsection 1 and may agree to rates for purchase and sale transactions. A contract entered into under this subsection must be filed with the board in the manner provided for tariffs under section 476.4.

6. This section does not require an electric utility to construct additional facilities unless those facilities are paid for by the owner or operator of the affected alternate energy production facility or small hydro facility.

476.44 Exceptions.

1.The board shall not require an electric utility to purchase or wheel electricity from an alternate energy production facility or small hydro facility unless the facility is owned or operated by an individual, firm, copartnership, corporation, company, association, joint stock association, city, town, or county that meets both of the following:

a. Is not primarily engaged in the business of producing or selling electricity, gas, or useful thermal energy other than electricity, gas, or useful thermal energy sold solely from alternate energy production facilities or small hydro facilities.

b. Does not sell electricity, gas, or useful thermal energy to residential users other than the tenants or the owner or operator of the facility.

2.An electric utility subject to this division, except a utility which elects rate regulation pursuant to section 476.1A, shall not be required to purchase, at any one time, more than its share of one hundred five megawatts of power from alternative energy production facilities or small hydro facilities at the rates established pursuant to section 476.43. The board shall allocate the one hundred five megawatts based upon each utility’s percentage of the total Iowa retail peak demand, for the year beginning January 1, 1990, of all utilities subject to this section. If a utility undergoes reorganization as defined in section 476.76, the board shall combine the allocated purchases of power for each utility involved in the reorganization.

Notwithstandingthe one hundred five megawatt maximum, the board may increase the amount of power that a utility is required to purchase at the rates established pursuant to section 476.43 if the board finds that a utility, including a reorganized utility, exceeds its 1990 Iowa retail peak demand by twenty percent and the additional power the utility is required to purchase will encourage the development of alternate energy production facilities and small hydro facilities. The increase shall not exceed the utility’s increase in peak demand multiplied by the ratio of the utility’s share of the one hundred five megawatt maximum to its 1990 Iowa retail peak demand.

476.46 Alternate energy revolving loan program.

1.The Iowa energy center created under section 266.39C shall establish and administer an alternate energy revolving loan program to encourage the development of alternate energy production facilities and small hydro facilities within the state.

2. An alternate energy revolving loan fund is created in the office of the treasurer of state to be administered by the Iowa energy center. The fund shall include moneys remitted to the fund pursuant to subsection 3 and any other moneys appropriated or otherwise directed to the fund. Moneys in the fund shall be used to provide loans for the construction of alternate energy production facilities or small hydro facilities as defined in section 476.42. A gas or electric utility which is not required to be rate-regulated shall not be eligible for a loan under this section. A facility shall be eligible for no more than two hundred fifty thousand dollars in loans outstanding at any time under this program. Each loan shall be for a period not to exceed twenty years, shall bear no interest, and shall be repayable to the fund created under this section in installments as determined by the Iowa energy center. The interest rate upon delinquent payments shall accelerate immediately to the current legal usury limit. Any loan made pursuant to this program shall become due for payment upon sale of the facility for which the loan was made. Interest on the fund shall be deposited in the fund. Section 8.33 shall not apply to the moneys in the fund.

3.The board shall direct all gas and electric utilities required to be rate-regulated to remit to the treasurer of state by July 1, 1996, eighty-five one-thousandths of one percent of the total gross operating revenues during calendar year 1995 derived from their intrastate public utility operations, by July 1, 1997, eighty-five one-thousandths of one percent of the total gross operating revenues during calendar year 1996 derived from their intrastate public utility operations and by July 1, 1998, eighty-five one- thousandths of one percent of the total gross operating revenues during calendar year 1997 derived from their intrastate public utility operations. The amounts collected pursuant to this section shall be in addition to the amounts permitted to be assessed pursuant to section 476.10 and the amounts assessed pursuant to section 476.10A. The board shall allow inclusion of these amounts in the budgets approved by the board pursuant to section 476.6, subsection 19, paragraph "c".