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Iowa Power Bill Faces Uphill Battle

Iowa Power Bill Faces Uphill Battle

Legislation to make it easier to build electric power plants in Iowa finally inched its way through the Iowa House last week on a 54-44 vote, but it faces more battles in an uncompromising Senate and opposition from Gov. Tom Vilsack. Supporters argue that the bill (House File 577) would prevent a shortfall in generating capacity, which is expected by 2006.

Iowa's demand for electricity is growing at a rate of about 2% a year, and the state estimates it will need at least two new power plants by 2007 to generate another 1,400 MW. Praised by Republicans, who had even considered pulling the bill two weeks ago to gain more support, Democrats in Iowa are calling the legislation a "back-door deregulation" attempt.

Under the current legislation, the bill would give state regulators the authority to approve in advance of construction a rate structure allowing a utility to recoup the costs of building a power plant. Supporters say the bill would give utilities assurances to make a large investment to build a new plant. However, opponents argue the way it is written the bill would allow electricity generated at the new plants to not be regulated, which would allow utilities to by energy on contract from an affiliate that sells at unregulated wholesale prices.

Although Vilsack has said he supports building new power plants to create jobs and provide more energy, he has expressed concerns about the bill. An advocate of alternative energy, Vilsack said the current legislation does not address "in any meaningful way issues relating to renewable energy or alternative energy sources."

Vilsack said current drafts of the legislation don't balance the needs of utility companies and consumers, and he said he wants to be sure consumers are "getting the best deal they possibly can under the circumstances." He has set up a task force to study the issue, which is scheduled to release a report sometime this summer.

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