MAY 2018 IOWA INDUSTRIAL ENERGY GROUP IIEG 2018 SPRING CONFERENCE The IIEG Spring Conference was held on April 10 this year. The event began with a presentation recognizing the service of Dell Collins of Vermeer Corporation as he completed two consecutive terms as President of the IIEG Executive Committee. Dell s service to the IIEG will be of benefit to the organization for years to come. The presentation was followed by an informative and spirited talk by former IIEG Executive Committee President, Mike Sarafolean. Mike, who has retired from Gerdau, traveled from Florida to be with us. His presentation discussed the background of IIEG, including how and why it was formed. He also explained the policy and benefit of all parts of the energy industry coming together to discuss energy issues. Next came a presentation from Vern Cochran of Missouri River Energy Services which included startling pictures of the construction of the Red Rock Hyrdroelectric Project currently underway. We then heard from Mike Kruger from the Smart Power Electric Alliance in Washington, DC. He provided an interactive presentation regarding important large business energy issues. Barry Shear of the Solar Trade Group presented an eye-opening presentation regarding some of the disruptive technologies of the future. The conference s final presentation of the day was from Board Member Richard Lozier of the Iowa Utilities Board who talked about the current energy legislation before the Iowa legislature, utility refunds of tax cuts, and performancebased regulation. Most all of these presentations are available on our website (www.iieg.org) under the Newsletter Tab. The IIEG Fall Conference will held be in October 2018. Watch for the date so you can mark your calendars.
Business Meeting for Industrial Company Members: Prior to the conference in April, the industrial company members held its IIEG annual business meeting. At the meeting an election was held in which the following new officers were elected unanimously: John Powell of SSAB President Rachel Robertson of Cargill Secretary/ Treasurer Ed Beller of Vermeer Corporation At-Large Member Luke Schryver of Green Products Inc. At-Large Member Dalton Meyer of Deere & Company was elected as an At-Large Member in 2017 and will continue to serve. IN THE STATE SF2311 - Iowa Utility Legislation Sent to Governor: Although the Governor could veto it, the legislation that scales back energy efficiency and some of the ways in which utilities are regulated, passed out of both houses of the legislature by a straight party-line vote on April 30, 2018. While the legislation was at the House numerous amendments were passed and sent back to the Senate. Some main provisions of the enrolled bill are: (1) Customers may request an exemption from participating in and payment for costs of an electric utilities 5- year energy efficiency program under certain conditions; (2) a cap on how much both an electric and gas utility is allowed to spend and charge customers for energy efficiency and demand response programs; and, (3) provisions that allow the utilities rates to be set using either a future or historic test year and some other provisions that loosen the regulatory authority of the Iowa Utilities Board over utility rates. The Board is directed to write rules that will set out procedures for requesting exemptions and other aspects of the energy efficiency programs going forward. Note that MidAmerican Energy, Interstate Power Company and Black Hills Energy have filed proposed energy efficiency plans for the upcoming 2019-2021 period. The Iowa Utilities Board has scheduled hearings to review testimony in the MidAmerican (July) and Interstate (September) cases. A procedural schedule for the Black Hills case has not been issued as 2
of this date. We will be following this and provide an update as the procedure is made clear. Tax Reform Act: The Tax Cuts and Jobs Act was signed into law on December 22, 2017. Among other things, the federal income tax law reduced the corporate income tax rates from 35 percent to 21 percent, effective January 1, 2018. On January 18, 2018, the Iowa Utilities Board initiated an investigation to gather information regarding the effect that tax rate change has on the rates charged by public utilities operating in Iowa. The Board has now approved the utilities proposals which will provide the following refunds to customers: Black Hills Energy will return an estimated $2.2 million to its natural gas customers Alliant Energy will return approximately $34.7 million to its electric customers and its proposal to return estimated benefits to its natural gas customers is subject to further review in Alliant s upcoming natural gas rate increase proceeding MidAmerican Energy will return approximately $33 million to its electric customers and return an estimated $8.8 million to its natural gas customers Decorah Power: A group of residents in Decorah, Iowa is backing a May 1 referendum which would give the city the power to explore the option of creating a municipal utility to provide power to 8,000 residents. The Decorah Power Group estimates a municipal utility could save residents 30 percent annually. Decorah is served by Interstate Power and Light. Interstate opposes the group s proposal stating that it will lead to higher costs for the city s residents. Note that the last time an Iowa city created a new municipal electric utility was in 1974. Alliant-IPL Rate Case: Interstate Power and Light Company requested a permanent annual revenue increase to its electric rates of approximately $176 million or 11.6%. Several of the parties to the case (including two of the industrial customer intervention groups) filed a proposed non-unanimous partial settlement in September. On February 2, 2018, the Iowa Utilities Board approved the settlement reducing Interstate s overall annual revenue increase request to $130 million, or 7.8 percent. The Board s order approved a return on equity for Alliant of 9.6 percent. 3
Alliant-IPL Application for Ratemaking Principles: Interstate Power and Light Company requested the Iowa Utilities Board to approve advance ratemaking principles for its proposal to add 500 MW of wind generation called the New Wind II Project. On April 17, 2018, the Board approved eight ratemaking principles that define how the $890 million expansion project will be treated for the life of the project. Alliant- IPL Gas Rate Increase Customer Comment Hearings Scheduled: In anticipation of filing for an increase in its gas rates, Interstate asked for approval of a customer notice which it will provide to its customers. The Iowa Utilities Board approved the notice and has scheduled customer meetings in May and June in Clinton, Mason City, Storm Lake, Fairfield, Marshalltown and Ames. MidAmerican Energy s Application to Amend Capital Investment Infrastructure Investment Automatic Adjustment Mechanism: On March 1, 2018, MidAmerican filed an application and proposed tariff requesting the Iowa Utilities Board allow it to amend and update the automatic adjustment to rates related to infrastructure investment. On March 21, 2018, the Office of the Consumer Advocate filed an objection to the proposal. On April 4, 2018, MidAmerican replied to the OCA s objection. The Board has docketed the matter but, as of this date, has not set it for hearing. NATIONAL AND REGIONAL ISSUES Clean Power Council: A global organization, the World Resources Institute, is leading a collaboration of U.S electric utilities and major customers that are committed to solutions for creating a low-carbon energy supply through mutually beneficial solutions. The green tariff concept is one of those solutions. WRI has identified eight utilities with completed green tariff contracts and nine corporate buyers and one municipality with green tariff contracts. More recently, the Clean Power Council has been created to study solutions. According to WRI, this new forum is intended to go beyond renewable energy to enable technologies that reduce greenhouse gas emissions while growing businesses. As of April 2018, CPC members include: Adobe, American Electric Power, American Honda Motor Co., Berkshire Hathaway Energy, Best Buy, Consumers Energy, General Motors, IBM, Levi 4
Strauss & Co., Southern Company, Target, Walmart, and Xcel Energy. For more information, go to http://www.wri.org/our-work/project/electricity-initiative/conveningchange-us-electricity-sector and/or https://sepapower.org/about/ EPA Region 7 Awards: The U.S. Environmental Protection Agency (EPA) Region 7 recognized the city of Dubuque, Iowa, and John Deere Dubuque Works for contributions to environmentalism and sustainability at Superfund sites. At John Deere Dubuque Works, the company installed six inches of soil across the northern portion of the landfill surface; seeded native grasses and wildflowers to stabilize soil; installed a walking trail to promote employees mental and physical well-being; and installed pollinator habitats that will increase species diversity. States File Opposition to Repeal of Clean Power Plan: Iowa has joined a group of 27 states that has filed comments with the US Environmental Protection Agency stating that the proposed repeal is "unsupported by the facts or law," while ignoring the agency's obligations to regulate the emissions of existing power plants under the federal Clean Air Act. UPCOMING ENERGY SEMINARS/WORKSHOPS Midwest Cogeneration Association: No cost Webinars: New topic covered every third Thursday of the month: mcanewsletter@cogneration.org EUCI Webcasts: https://www.euci.com/webcasts Find Training and Informational Videos through the Iowa Energy Center at https://vimeo.com/iowaenergycenter/videos 5
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