BY KEVIN CONDON
As lawmakers and Gov. Kim Reynolds tout the 2021 Iowa legislative session’s legitimate advances in public policy that benefit rural Iowans, one area where progress will go unclaimed is in the interests of Iowa’s electric cooperatives.
Although the session went three weeks into overtime, absent from debate was the opportunity to have worthy and robust discussions on two key priorities for Iowa’s electric co-ops and their member-consumers. Establishing or changing laws isn’t easy and can take time. With that said, we’re disappointed that policies pertaining to vegetation management and the sales tax code inequities co-ops face are not new issues being raised by rural electric cooperatives (RECs).
Lack of vegetation management standards
In the January edition of this column, I detailed the issue surrounding vegetation management distances and how the August 2020 derecho exposed part of our concerns. We hoped that lawmakers would have recent and ample evidence of the need to set a statewide safety and reliability standard for distances that electric co-ops could perform tree trimming and other management practices.
Unfortunately, despite our best efforts, the same opposition groups that prevented the legislation from becoming law a few years ago were able to keep this renewed effort from reaching the House and Senate for a full debate. Sadly, misinformation and scare tactics about the proposal won the day, and the state will continue to lack a standard that provides greater safety for co-op members and linemen while increasing reliability of electric service to rural Iowa.
Sales tax code inequities continue
Further, RECs were disappointed when provisions to resolve a sales tax inequity impacting electric co-ops included in a proposal put forward by the House were stripped out of the final legislation by Senate negotiators. In what appears to be an oversight from legislation passed in 2018, not-for-profit utilities like RECs have been subject to a tax on digital goods and services that for-profit, investor-owned utilities (IOUs) are exempt from. It is estimated that rural electric member-consumers are paying $250,000 more in sales taxes through their electric bills than ratepayers served by IOUs.
We believe resolving the inequity was certainly worthy of inclusion in a tax proposal that included tax provisions for Iowa’s non-profit food banks and casinos, both of which will have General Fund impacts, just as the REC proposal would. We congratulate both of those entities for securing a place in the legislation. We also caution those who might claim the potential for a “slippery slope” in resolving this sales tax inequity issue.
To be clear, the electric co-ops appreciate the role of the Legislature and are grateful to those lawmakers who are willing to put their name on a ballot and serve. In our estimation, they continue to deserve our respect; but when it comes to our concerns this session, RECs are not taking any victory laps.
We look forward to developing our policy goals for the 2022 Iowa legislative session and will enjoy planning for our traditional and effective in-person events with lawmakers. We hope they are prepared to answer friendly but direct questions about the lack of progress on these issues. We hope our electric cooperative advocacy on behalf of the 650,000 Iowans we serve throughout all 99 counties will result in more favorable outcomes next year.
Kevin Condon is the director of government relations for the Iowa Association of Electric Cooperatives.