Formal Ratemaking Study

During the 2023 legislative session, the Iowa Legislature passed HF617 which called for the Iowa Utilities Board (IUB) to initiate and coordinate an independent review of current law and ratemaking procedures. The bill identified policy objectives of “ensuring safe, adequate, reliable, and affordable utility services provided at rates that are nondiscriminatory, just, reasonable, and based on the utility’s cost of providing service to its customers within the state”. An independent consultant assisted the IUB in the review of existing ratemaking laws and procedures and the identification of possible statutory or procedural changes to achieve the desired policy objectives. 

Consider a maximum stay out provision for general rate cases.

Enact a statute that requires rate-regulated electric utilities to file an integrated resource plan.

Align necessity and advantages of advance ratemaking with the resource plan.

Review tracker and rider mechanisms for utility operations. 

Initiate study on evaluating the current spending cap and alternative energy efficiency and demand response opt-out options.

Examine the implementation of a performance-based regulation framework and various components, which include multi-year rate plans, performance mechanisms (such as scorecards and performance incentive mechanisms), and earnings sharing mechanisms.