Here  is a list of some of the problems with the bill (and proposed
amendments) that allows more power plants to be built.

Specific problem areas contained within the amendments are as follows:

1.  Leasing is included within the actions subject to the special rate
making procedures.  The lease does not have to be for a new power plant,
it
just has to be for a plant in Iowa.  There is nothing in this bill which

would prevent, for example, MidAmerican Energy from leasing Ottumwa
Generating from Alliant Energy, then applying for the ratemaking under
this
section.

2.  Requiring a minimum of 300 megawatts of nameplate baseload capacity
may
still mean a spiking plant solely used when energy prices are at the
highest.  Almost all gas-fired power plants currently being built are
for
over 300 megawatts.  These plants are used exclusively as merchant
plants.
The distinction between baseload and spiking is vague.  The issue may be

framed one way when the application is filed, but used another way after

the plant is built.

3.  The applicant has to demonstrate that the proposed rate making
principles "are necessary for the commitment of capital to the new
facility."  The problem with this section is more what it omits than
what
it includes.  An applicant still does not have to demonstrate that a
plant
is built for the public convenience, use and necessity.  Further, with
the
definition of "public" to include citizens outside of Iowa (page 16,
lines
2-4), nothing prevents a utility from passing the costs of a plant on to

consumers and selling the energy to whomever they please.

4.  A utility may withdraw its application for building or leasing a
plant
if it does not like the rate making principles established by the Board.

This gives utilities an incredible amount of leverage and gives
consumers
no protections whatsoever.  Utilities do not have to fear an unfavorable

ruling, because they have nothing to lose, i.e., they can simply
withdraw
until they get a ruling they like.

5.  A public utility must demonstrate that a power purchase contract "is

reasonable when compared to other feasible alternative sources..."
"Reasonable" is an incredibly low standard and rules out exploring a
least
cost alternative.  Further, the amendment does nothing to address the
problems of irrevocable agreements, which could include deregulated
rates
of return and other costs currently not allowed.

In summary, the utilities can have rate making principles which they can

review and reject if they are dissatisfied.  At the same time, they can
get
irrevocable approval of a power purchase agreement.  The review
procedure
is, at best, minimal.  There is no obligation that new or leased plants
serve Iowans.  There is also no obligation that new or leased plants
provide service for any specific period of time.

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