Iowa Considering Feed-in Tariffs

Senators in the heartland state of Iowa have introduced a modest feed-in tariff bill into the state legislature. The move is the first serious effort to introduce a system of feed-in tariffs anywhere in the U.S. during the current legislative session.

Introduced by four Iowa state senators representing the majority party and one senator from the minority party, SF 225 calls for a limited system of differentiated tariffs for renewable power plants less than 20 MW in size.

Senators Daryl Beall, D-Fort Dodge; Joe Bolkcom , D-Iowa City (Chair of the Senate Ways & Means Committee); Robert M. Hogg, D-Cedar Rapids; Hubert Houser, R-Carson; and John P. (Jack) Kibbie, D-Emmetsburg introduced SF 225 to “encourage the development of utility-owned and customer-owned alternate (sic) renewable energy production facilities.”

The proposal is modest even by U.S. standards, limiting the amount of new capacity under the program to half of retail load growth.

Yet there are several novel aspects of the Iowa proposal. While not a proposal encouraging local ownership specifically, SF 225 does limit program participation only to projects with a majority of ownership within Iowa.

More significant, however, SF 225 is the first major effort to introduce wind tariffs differentiated by wind resource intensity in the US. SF 225 directs the Iowa Utility Board (IUB) to determine the wind tariff at each project site based on the “wind speed at the project location”. This requirement is unheard of and if implemented would catapult Iowa to the forefront of modeling wind tariffs in North America.

To qualify for contracts 

  • Projects must be in Iowa,
  • 51 percent of the ownership must reside in Iowa, be a cooperative, or be a school district in the state,
  • Have arranged financing, and
  • Have interconnection agreements in place.

Below is summary of SF 225 program elements. 

  • Program cap: 50 percent of retails sales “growth”
  • Project size cap: 20 MW
  • Program review: every two years
  • Contract term: 20 years
  • Tariff calculation: cost of generation plus utility’s regulated rate of return
  • Differentiation: by technology and project size
  • Wind tranches:
    • <500 kW
    • >500 kW<20 MW
  • Wind resource differentiation: tariff determined for each representative site
  • Solar PV tranches:
    • <20 kW
    • >20 kW<20 MW
  • Biomass from crop and Ag waste, & Hydro tranches:
    • <500 kW
    • >500 kW<20 MW
  • Reporting requirements: annual
  • Administration: Iowa Utilities Board

The Senate’s Commerce Sub-committee will hear the bill Thursday, 9 February, 2012.

SF225

Section 476c of the IUB code

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