Capitol Update: Week 10

Misconceptions on Energy Equity Bill

HF 669 proposes an equitable change so utility infrastructure costs are not transferred from one electricity customer to another. This relieves end electric customers from subsidizing their neighbors. As simple as this concept is, opponents have looked for ways to confuse the issue.

For example, some have claimed HF 669 would effectively end net-metering in Iowa.  This is not accurate. This legislation grandfathers the status of current customers and preserves net metering at full retail rate for new private generation (e.g. solar or wind) customers. Net metering stays the same; the only change is that private generation customers pay for their use of the grid just as their non-generating neighbors do.

It has also been said that the increased cost will make the payback not worth the investment thus costing jobs in the solar industry. Similar concerns were raised in 2003 when legislation was passed regarding wind energy. In 2003, the wind industry impacted approximately 850 jobs. Over 15 years later, that number has increased to approximately 8,000.

Another claim is that private generation users already pay for their use of the grid. However, this is misguided at best. The basic service charge is a flat fee to cover administrative costs like billing and meter reading; it also covers the cost of connecting to the grid (like a driveway connects a garage to the street).

Others argue that private generation and solar in particular brings value to the grid by putting energy on the grid during peak times relieving demand during the most expensive time to purchase or create electricity. They forget that a rate-regulated utility is required to be prepared and able to serve the needs of all customers at the instant they demand it. This is the same for private generation owners and their neighbors who pull all their energy from the grid. In order to provide maximum reliability the utility must stand by and be ready to supply energy and grid services as though the private generation does not exist.

Motives have also been questioned. Some have suggested this is an effort by the utilities to increase their monopoly and profits. However, rate-regulated utilities will not see any additional income from this legislation. The IUB determines what costs are recoverable from customers and this legislation would simply allocate the grid costs across all customers, not just those who cannot afford or chose not to install a private generation system.

It is also important to remember HF 669 will have no effect on current customers who have invested in private generation (solar, wind, etc.). All current private generation owners will be grandfathered in at whatever arrangement they chose when they made the investment.  Nothing will change for them.

Sports Betting Bill Update

A version of sports betting has passed the House Ways & Means Committee on a bipartisan vote of 16-9. This bill had previously passed the House State Government Committee with bipartisan support on a vote of 13-10. This bill continues to allow for sports betting on professional and collegiate level through a licensed casino.  It also legalizes internet fantasy sports contests.

A limitation was placed on collegiate sports betting through an amendment.  House File 648 now places a ban on commercial sports betting on in-state collegiate individual bets.  Another amendment committed .25% of tax revenue from sports wagering to the Department of Public Health for problem gambling programs.

The last amendment also requires Prairie Meadows to use receipts from gambling games and sports betting to support the horse racing industry and to supplement purses for races particularly for Iowa-bred horses pursuant to an agreement. The amendment also expands what the horse purse money designated for quarter horses and thoroughbred horses can go to include benevolence, quarter horse aftercare, breeder promotions and awards, and improvements to the horse racetrack in Polk County.

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