Iowa

Energy Efficiency Standards

Iowa has what some consider an equivalent to an EERS, but unlike other states that mandate savings statewide, Iowa’s approach provides more flexibility. The Iowa Utility Board has enacted rules for utility energy efficiency programs that set annual energy savings targets for each rate-regulated electric and gas utility. Rate-regulated utilities are required to submit an assessment of energy usage and potential savings to the IUB for the required five-year planning cycle. Accordingly, mandatory savings targets are assigned to individual utilities, tailored to their specific service territory and demands. The IUB considers energy efficiency to be a top priority. While there are no statewide mandates for energy savings levels, once the IUB approves a utility’s five-year energy efficiency plan, the planned energy savings are mandated for that five-year period.

The most recent energy efficiency plans cover 2014–2018, and most utilities have been approved at savings levels around 1.1% of annual sales through 2018. Non-rate-regulated utilities in Iowa are required to file biennial energy efficiency plans with the IUB. In the filing, they must report on the results of all programs undertaken in the previous two years and the programs and potential savings that will be achieved in the upcoming two years.

Resource Planning

Iowa's utilities do not engage in a traditional Integrated Resource Planning (IRP) process. Utilities are required to submit an annual report to the Iowa Utilities Board (IUB). The board's rules for this utility annual reporting require utilities to include a complete financial report of receipts and expenditures and a list of applications, including board fees. 

Energy efficiency planning is not required on an annual basis, but is scheduled by order of the IUB, who have established rules for energy efficiency planning.  Energy efficiency plans are required to cover a five-year budget time frame. Electric plans are required to include a 20-year energy needs forecast and natural gas utilities are required to include a 5-year forecast.

Rate Structures & Incentives

Cost Recovery

Iowa utilities are allowed cost recovery for energy efficiency programs. Subject to the filings required by the rules, cost recovery is automatic for approved energy efficiency plans. The IUB periodically reviews the cost recovery mechanisms, and energy efficiency plans and budgets in a contested case.

Lost Revenue Recovery

Lost revenue recovery has been allowed on a case-by-case basis by natural gas utilities in Iowa.

Utility Incentives

None.

Noncompliance Penalties

None.

Stakeholder Collaboration

Iowa requires that utilities report collaboration with other utilities with which they share service territory and with other interested parties in the planning process.

As part of the settlement agreements of utilities' current energy efficiency plans, the Iowa Office of Consumer Advocate coordinates the Iowa Energy Efficiency Collaborative. This collaborative includes utilities, Office of the Consumer Counsel, Department of Economic Development, Iowa Association of Electric Cooperatives, Iowa Energy Center, Iowa Interfaith Power & Light, Office of the Consumer Advocate and other stakeholders. It reviews various utility programs within the state and provides a venue for sharing information, challenges and successes.

Program Evaluation

Rate-regulated utilities in Iowa must submit a monitoring and evaluation procedure to the IUB as part of their energy efficiency plan filing. This plan includes a proposal for how programs will be evaluated and reported to the IUB.

Non-regulated utilities must include in their biennial plan an evaluation of their program performance over the previous two-year plan.

Cost-effectiveness Testing

Cost-effectiveness testing for Iowa utilities is part of their energy efficiency planning process.  Iowa requires that utilities evaluate the cost-effectiveness of their planned programs using the Societal Cost Test, as well as the Program Administrator Cost Test, the Ratepayer Impact Measure and the Participant Cost Test. Utilities must provide a justification for any program with a benefit-cost ratio of less than 1.0 on the Societal Cost Test, and the portfolio must meet an overall ratio of 1.0.

Net vs. Gross

Iowa utilities are required to report both gross and net savings potential and to account for free-ridership in their energy efficiency plans.

Technical Resource Manual

Iowa does not have a statewide Technical Resource Manual. Deemed savings are approved on a case-by-case basis as part of utilities' energy efficiency plan filings.

State Energy Plan or Vision

In late 2015, the Iowa Economic Development Authority (IEDA) and the Iowa Department of Transportation were tasked with preparing an Iowa state energy plan to set priorities and provide strategic guidance on Iowa’s energy future. The planning process concluded with the release of the final Iowa Energy Plan in December 2016. Discussions regarding implementation of the plan’s objectives are ongoing within the state.  

State Agency Energy Reduction Requirement

The IEDA has made no formal commitment regarding energy reduction in state government, but may be address the issue in the upcoming Iowa state energy plan.

EE in New State Buildings

The 2009 Executive Order 20 by Governor Culver set out measures for improving overall government efficiency, including requiring all state buildings to conduct energy efficiency retrofits. Executive Order 20 was rescinded by Governor Branstad because he deemed the order to be unnecessarily burdensome.

In 2015, the state legislature approved the updated Life Cycle Cost Analysis (LCCA) guidelines, which are required on energy equipment installed in certain public buildings. The LCCA requirements promote energy efficiency in public buildings by accounting for reduced operational costs for energy efficient systems. The state is also involved with creating a public building benchmarking database to help target and offer assistance to buildings with high potential for energy savings and return on investment.

The State of Iowa is also enrolled in the US DOE Better Buildings Challenge program and has committed 17 million square feet under the program. Efficiency in state buildings may also be addressed in the upcoming state energy plan.

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