1. Iowa Energy and Policy Issue Discussion
Jeff Kaman
Manager, Energy and Climate Strategy
Deere & Company
Jeff Kaman
25 years in energy: Power plant operations; MISO/Regional markets and policy; Iowa regulatory experience; 7+ years with increasing responsibility in this role for Deere. At Deere, I focus our priorities on reliability – in contracts and infrastructure; supply cost reduction – we have an active goal and new initiative for our U.S. natural gas strategy; and sustainability – setting and achieving our public goals in energy and GHG as well as some other company climate policy items.
TODAY: Following up the utility panel, with some context on what’s happening in Iowa. I want to end with a Q&A and to generate some comments from you.

2. John Deere – in the U.S.

3. Deere’s Energy Profile in Iowa
13 major sites
Electricity
IOUs: MidAmerican, Alliant
Rural Electric Cooperatives
Municipal Utilities
Limited self-generation, Demand Response
Natural Gas
IOUs: MidAmerican, Black Hills Iowa Gas
Transportation (gas marketer contract) sites and Utility/PGA sites

4. Electricity Policy Issues
Capacity
State jurisdiction vs. organized market
Protection of assets from retirement*
Impact of subsidies/policy
U.S. DOE “resiliency” policy effort
In Iowa, there is no formal “integrated resource planning” (IRP); but required to be “reasonable” and advance ratemaking certainty is provided for new build
* Iowa Notes: Coal plant reductions, fuel switching, early retirement announced for Duane Arnold Energy Center.
Source: 2017 State of the Market Report for the MISO Electricity Market – Analytic Appendix. Prepared by Independent Market Monitor for the MidContinent ISO – Potomac Economics. June Market%20Report%20Analytical%20Appendix pdf

5. Electricity Policy Issues
Carbon
Paris Climate Accord – U.S. exit announced
Clean Power Plan
Electric utility only (customer energy efficiency removed)
Now withdrawn; replacement to focus on existing asset efficiency
Various proposals for Federal Tax and Dividend
Carbon price up to $40/mt CO2e
Upstream tax, but dividends to individuals, not us…
Border adjustments for some energy-intensive exports. Would these be WTO compliant?

6. Electricity Policy Issues
Trends
Tax Cut and Jobs Act
Customer needs/wants
Market development
Customer owned generation
Storage
Transportation sector electrification
Utility risk/reward

7. Iowa – Unique?
Good regulatory history leadership IGOV energy planning in Vilsack (~ ) and Reynolds (2016) Administrations
Today, Iowa is at least somewhat unique in…
Wind
Advance Ratemaking
No nuclear moratorium
Clarity on regulated utility renewable electricity claims for customers

8. Utility Regulatory Proceedings
In Iowa
Legislature (“Super Regulators”): Law established before case/issues are heard Iowa Utilities Board: Regulator/Decision Maker Consumer Advocate Customer Intervention Groups Environmental Groups Others…

9. 2018 Iowa “Utility Omnibus” Legislation
(Including some proposals that did not eventually pass)
Expansion of Advance Ratemaking Principles
Transmission, Energy Storage, Electric Grid Protection and Management, Cyber Security, Electric Vehicle Infrastructure, Other Emerging Technologies
Energy Efficiency Plans
Capped programs, very stringent new cost effectiveness requirements, bill line item
Modifications intended to address utility concerns with net metering
Forward-Looking Test Year
Coal Plant environmental cost recovery
Transmission Cost Adjustments
Transmission – Right of First Refusal
Gas Extension Recovery Charges

10. Questions (…in addition to any from the utilities’ panel discussion)
Utility Rates: Value of immediacy vs. stability/volatility? How long is too long between rate cases – is a utility still making valuable investments (e.g. Transmission, Distribution, Maintenance)?
Is customer DR and energy efficiency (1) a tax; (2) a resource and check against the need for utility assets?
Is Demand adequately valued…
In Cost of Service?
In EEP and DR programs?
What should be utility assets?
What constitutes utility vs. customer risk, and how should that be reflected in rates?

11. Closing Thoughts
Changes are in progress Our Priorities: Reliability, Cost, Sustainability Customer Rights Statement: Bill Riders are a last resort. Engage!