In early February, Iowa Governor Kim Reynolds saw her proposed energy plan introduced in the Iowa House of Representatives as House Study Bill 123, with companion Senate Study Bill 1112 introduced in the Iowa Senate six days later. The legislation is all part of Governor Reynolds’ vision to build an “affordable, reliable, and sustainable energy system” in the state. As guest columnist former state Senator Waylon Brown wrote in an opinion piece for the Des Moines Register, “The governor encourages all-the-above energy resources to generate millions in tax revenue for communities, and it’s time for everyone to follow suit.”
According to the Governor’s Office, Iowa has the most electricity produced through renewable generation of any state in the nation, at 64.3%, and ranks in the top ten for grid reliability. Molly Severn, deputy chief of staff and legislative liaison for Governor Reynolds, noted in a subcommittee meeting, “Our energy mix and reliability are among the best in the country, but as technology evolves and the demand on energy increases, Gov. Reynolds is committed to a forward-focused, all-of-the-above energy strategy that serves to keep consumer prices low and positions Iowa for future growth.”
Not everything in it is new, though. Rep. Shannon Lundgren, the Republican in charge of the House Commerce Committee, explained, “Last year, the Iowa House passed a very good energy bill that was bipartisan over to the Senate, and it stayed there. A lot of the language that we worked very hard on for several years is a component of this bill.” Now, the hope is that these bills will go all the way.
Photo Courtesy Governor Kim Reynolds
The plan contains several important measures, including a popular section granting local Iowan utility companies a Right of First Refusal on new electric transmission line infrastructure projects. As Dehn Stevens, vice president of transmission development and planning for MidAmerican Energy, explained, “We are here in the state, we have the emergency response, the equipment, the materials, the effort to quickly restore electricity to the state.” Ethan Hohenadel, director of regulatory affairs for the Iowa Association of Electric Cooperatives, added, “Having those boots on the ground, having that … long-standing commitment to Iowa, really helps us to get those storm restorations done quickly.”
Dusky Terry, president of electric transmission operating company ITC Midwest, reflected on the importance of having those “boots on the ground” during 2020’s derecho, or powerful and long-running series of thunders, which ripped up agricultural fields and left tens of thousands powerless. “We had 1,200 poles on the ground following the derecho across 26 counties, and we had power restored in eight days. That only happens when you have an Iowa-based company with crews across the state, ready to respond in a moment’s notice,” he noted.
The proposed legislation also requires transmission owners to engage in restoration efforts on landowner property affected by the construction, including repairing damaged drain tile, removing large rocks, deep tilling agricultural land, restoring conservation practices and structures, reestablishing disturbed vegetation, and removing temporary roads that were built for construction. The Iowa Farm Bureau Federation, in particular, celebrated the inclusion of this section.
Photo Courtesy ITC Holdings Corp.
Governor Reynolds is also pushing forward on renewable forms of energy. According to her energy plan, she plans to issue an executive order establishing a Nuclear Energy Task Force. The expert members of this task force will analyze and make recommendations for adding nuclear energy generation to the state. She intends to include nuclear energy expansion in the Iowa Energy Plan, which was initially released in 2016 with objectives and strategies for the state’s journey toward renewable energy.
Private companies are also expressing interest in using nuclear energy in the state. In January, NextEra Energy announced that it had begun the process of recommissioning the 600-megawatt Duane Arnold nuclear plant, the only such site in Iowa, which has been out of commission since 2020.
Plus, embedded in the bills is a proposal to assign to the Environmental Protection Commission the responsibility of developing rules around the building and operating of anaerobic digesters, which break down organic waste like manure into renewable biogas that can be captured and deployed, as well as to give the Iowa Department of Natural Resources the authority to issue permits for on-farm and near-farm digesters. With farm operations spanning 30 million acres in the state, according to the USDA National Agriculture Statistics Service’s 2024 State Agriculture Overview, advancing the bioeconomy offers significant opportunity.
It is worth noting that some environmental groups oppose anaerobic digestion because they do not want to encourage even bigger livestock operations that could hurt air and water quality. However, the bills address both these concerns. Regarding air quality, the bills would prevent anaerobic digesters from being built within 3,000 feet of another person’s residence or within 100 feet of a public thoroughfare. Similarly for water sources, the legislation would prevent anaerobic digestors from being built in any 100-year floodplain, or within 2,500 feet of a designated wetland or 1,000 feet of a major water source.
Photo Courtest NextEra Energy Resources
Several other proposals are baked into the bills, many of which are tied to economic development. Governor Reynolds highlights that she “continues to make Iowa one of the most business-friendly states in the country.” For example, she wants the Iowa Utilities Commission to consider economic development as a factor when reviewing electric utility service territory contracts. Her plan also outlines hopes to foster the creation of a flexible rates tool that will help electric utility companies attract big customers who consume substantial quantities of energy.
Other parts of the bills are focused on a stable and effective grid. One section would require rate-regulated electric utilities to file a noncontested integrated resource plan with the Iowa Utilities Commission (IUC) at least once every five years. Such a plan would consider all reasonable energy resources for meeting energy demand to provide “adequate, cost-effective, and reliable energy service considering costs, fuel diversity, and probable future demand for energy,” the legislation reads. Only then would such utilities be able to move on through the regulatory proceedings for setting prices to charge consumers.
Additionally, Governor Reynolds’ plan lays out a partnership between IUC and Iowa State University to generate independent load forecasts and energy assessments for electric infrastructure planning. Iowa State University’s reports will help indicate the reliability of the state’s future electricity supply. The university would receive up to $633,000 annually to help fund its state load forecasting center.
Finally, some parts of the bills promote infrastructure build-outs. One part would shift the Iowa Energy Center’s current Energy Infrastructure Revolving Loan Program into an Energy and Water Infrastructure Revolving Loan Program under the Iowa Economic Development Authority. The updated program would enable the likes of individuals, businesses, cities, counties, municipalities, and rural electric cooperatives to apply for low-interest loans for infrastructure related to the generation, transmission, storage, or distribution of energy, the collection, treatment, or disposal of sewage or waste, or the creation of drinking water facilities. To receive the loans, the recipients would need to show that the projects would attract or expand industrial enterprise and economic development. The Governor’s plan also calls for allowing local governments to access tax-exempt bonds for energy and water infrastructure projects.
Photo Courtesy Alliant Energy
Now that the House’s Commerce Committee has approved the bill and the Senate’s Commerce Committee has recommended passage, the bills will move forward to the Appropriations Committees, and the language will be adjusted to address any concerns.
As Governor Reynolds expressed in her annual Condition of the State address, “We want to send a message to business: Invest in Iowa, and you won’t regret it. You’ll have the workforce, the energy infrastructure and the low cost of doing business to compete with any company in the world.”
