Former IUC members and business groups say governor's energy bill would cost ratepayers
Wind turbines along west-bound Interstate 80 on March 29, 2025. (Photo by Cami Koons/Iowa Capital Dispatch)
A slew of business organizations, as well as AARP and several former members of the Iowa Utilities Commission, are opposing an energy bill proposed by the governor, because they say it would negatively affect Iowa ratepayers.
In addition to granting existing utilities the right of first refusal to new transmission projects, House File 834 and Senate File 585 expand the projects that can pursue ratemaking principles and set rules for utility resource planning.
Opponents argue these elements of the bills would give big utilities a 'carte-blanche' to add more capital investments in the state regardless of impact to ratepaying Iowans.
Utility companies MidAmerican Energy and Alliant Energy are in favor of the bill and disagreed with the assertions that it would not benefit ratepayers.
'The policies in the bill allow us to deliver on our promise to provide safe, reliable and affordable energy when our customers need it,' a spokesperson for MidAmerican said in a statement.
SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Five former members of the Iowa Utilities Commission, or the Iowa Utilities Board as it was formerly titled, penned a letter to lawmakers and urged them to pause the current legislation.
The letter said the bill has potential to 'shift the risk/benefit ratemaking balance away from ratepayers and towards investors.'
In the early 2000s, Iowa authorized ratemaking principles to account for the added risk of investments into alternative energy sources, like wind and solar, which were new at the time.
These principles, according to the letter from former IUC members, 'freed' regulators from traditional ratemaking principles and granted them 'premium' returns on equity at levels that ranged between 1% to 2% above the national average.
The bill would expand the projects eligible for these ratemaking principles with the intent of attracting energy storage and nuclear electric power generation facilities in the state.
'With these changes, Iowa ratepayers could be paying some of the highest (return on equities) in the country for another round of very large utility investments,' the letter read.
Legislation sets regulations for anaerobic digesters on livestock operations in Iowa
The former IUC members cited a report completed by an outside firm in 2023, per requests of the Iowa Legislature, to review Iowa utility ratemaking laws and procedures.
The study found that rate-regulated utilities can receive advanced ratemaking approval with 'relative ease' and that the IUC had limited ability to 'determine whether an asset would truly benefit the electric system and the ratepayers that pay for it.'
It also said precedent around advanced ratemaking 'facilitates infrastructure build-up without thorough assessment by the IU(C)'
The former IUC members said they 'commend legislators for taking ratemaking reform seriously' but they recommend 'pausing the current legislation' or amending the bill, to better address the issue in a way that 'protects ratepayers.'
Geoff Greenwood, media relations manager for MidAmerican, said the letter 'ignores' that the returns can 'only be approved if they are found to be in the public's interest.'
'MidAmerican's track record over the past two decades proves that the policies in the bill allow us to deliver on our promise to provide safe, reliable and affordable energy when our customers need it,' Greenwood said in a statement.
He said returns on equity are approved 'after a robust process' in the IUC with input from the Office of the Consumer Advocate and customers. Greenwoods said the returns are 'not 'premium'' because they 'reflect the cost and risk of long-term investments' as they are applied to the 30- to 40-year lifespan of a facility.
Latest figures from MidAmerican point to average utility rates in Iowa that are 44% below the national average.
'The use of 'non-traditional' advance ratemaking principles is exactly what has made Iowa exceptional and resulted in some of the lowest electricity rates in the country,' Greenwood said.
He said MidAmerican additionally uses a method of revenue sharing that allows the company to use revenue, beyond a certain level of return, to 'pay off company generating facilities so that customers won't bear those costs in the future.'
'This customer-first mechanism incentivizes MidAmerican to better manage its operations and, when that happens, customers benefit,' Greenwood said in the statement.
The bill would also remove the requirement that projects are a baseload electric power generating facility, or one that essentially operates at all times, and lowers the generating capacity of the facility from at least 300 megawatts to 40 megawatts.
Bob Rafferty, with Iowa Businesses for Clean Energy which is one of the groups opposed to the bill, said these changes would allow companies to seek higher ratemaking principles on projects like gas peaker plants.
Per MidAmerican documents, a newly proposed $600 million peaker plant project would work when demand is high, and is expected to operate less than 10% of the year.
A fact sheet on the plants say they are a 'key addition' to the company's 'all-of-the-above generation strategy' to meet the expected increased demand of the next 20 years.
But Rafferty said utility companies have an incentive to build more capital assets, like generating stations and transmission lines, because they can profit from them.
He said it's 'important' to make sure the system doesn't allow a company to determine how many capital assets they need to build, as he alleges the bill would do.
Opponents are also worried about a line in the bill that says utilities should submit resource plans to the IUC that 'reflect the circumstances and management judgment of an electric utility.' Rafferty said this means an investor-owned utility would have to create its resource plans in line with what would benefit its shareholders, rather than ratepayers.
Iowa is currently one of a handful of states that does not require an integrated resource plan, defined by Midwest Energy Efficiency Alliance as an examination of energy supply, demand and potential risks to meeting demand at a reasonable cost.
Gov. Kim Reynolds' energy plan for the state, on which the bill is based, notes the need for integrated resource planning, or IRP, to comprehensively look at what energy sources will be needed for further growth in the state.
Current law requires utilities to submit energy efficiency plans every five years, with five- or 20-year energy needs forecasts.
Rafferty said when a utility proposes an investment be considered for ratemaking principles, the utilities commission doesn't get the 'big picture' of the project's impact on the state without an IRP.
'What the IRP should do is require it to be in the ratepayers' best interest, and the Iowa Utility Commission needs to be empowered to make sure that that is, in fact, the case,' he said.
ROE Letter 4-24-25
Former members of the Iowa Utilities Commission, Richard Lozier, Jr., Geri Huser, Sheila Tipton, Darrell Hanson and John Norris wrote a letter to legislators opposing the bill.
Under the bill, the Iowa Utilities Commission may make recommendations to the utilities on the resource plan, and the company must 'make a good faith effort' to inform and include suggestions from the commissioners, consumer advocate and stakeholders.
'The legislation, as it's currently constructed … would give the utilities a carte blanche to make any investment that they want and to earn a premium return on equity,' Rafferty said.
Rafferty as part of Iowa Businesses for Clean Energy, has banded with lobbyists from Iowa Business Energy Coalition, AARP, Iowa Economic Alliance, National Federation of Independent Business, Iowa Retail Federation and LSPower in opposition of the bill and to suggest lawmakers either 'fix it or forget it.'
An amendment suggested by the bill opponents would make it so that facilities outlined in resource plans are 'in customers' best interests.'
The proposed amendment would also allow the IUC to approve, reject or modify a resource plan and would greatly expand the ability of stakeholders to participate and weigh in on the plans.
The bill, as is, stipulates a resource plan should 'consider all reasonable resources' and should include 'adequate, cost-effective, and reliable energy service considering costs, fuel diversity, and probable future demand for energy.'
Rafferty said legislators need to think of utility rates like they think about taxes for Iowans.
'Their vote will determine whether taxes go up, or taxes don't go up,' he said.
A spokesperson from Alliant Energy said the bill will 'strengthen and help grow Iowa communities to meet the state's future energy needs.'
'We commend Governor Reynolds for leading on energy policy that promotes an all-the-above energy strategy, enhances customer transparency and participation for generation planning and is focused on driving economic development in this state,' the spokesperson said in an email.
Greenwood with MidAmerican said the bill is important in updating Iowa's policies that 'have been effective for customers for decades' and will keep the state from 'falling behind other states.'
'Simply put, Iowa's energy policy – as it is currently as well as the bill's proposed updates – works for Iowans,' Greenwood said.
Lawmakers noted during House hearings in early February the bill would have some amendments before it would be ready for floor debate. As legislators close out the 110th day of session, the bill remains stuck in a Senate appropriations committee and a House subcommittee.
House Speaker Pat Grassley said Thursday to reporters that the caucus is focusing on the budget before 'taking up significant pieces of policy.' When asked specifically about ROFR and the energy bill as a whole, the Republican leader said 'it's still pretty divided' among representatives.
SUPPORT: YOU MAKE OUR WORK POSSIBLE
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
10 hours ago
- Yahoo
Iowa governor vetoes bill restricting private pipelines' use of eminent domain
Gov. Kim Reynolds vetoed a bill Wednesday aimed at CO2 pipelines and eminent domain. She's pictured at her 2025 Condition of the State Address Jan. 14, 2025. (Photo by Robin Opsahl/Iowa Capital Dispatch) Gov. Kim Reynolds Wednesday vetoed a controversial bill pertaining to eminent domain and carbon sequestration pipelines in Iowa. House Republican leaders initiated an effort to reconvene the Legislature to override the veto, but Senate GOP leaders indicated that was unlikely. House File 639 would have increased insurance requirements for hazardous liquid pipelines, limited carbon pipeline permits to one 25-year term and changed the definition of a common carrier for pipelines, making it more difficult for the projects to use eminent domain. Reynolds, in a statement, said she shared the bill's goal of 'protecting landowners' but the bill lacked the 'clear, careful lines' drawn in good policy. 'It combines valid concerns with vague legal standards and sweeping mandates that reach far beyond their intended targets,' Reynolds said in a letter announcing her decision to veto. Reynolds followed her critique of the bill by noting that Iowa could lose its 'leadership position' as a top biofuel production state if legislation stopped the infrastructure necessary to enter ultra-low carbon markets. Central to the bill is a carbon sequestration pipeline project led by Summit Carbon Solutions that would transport liquid carbon dioxide, captured from biorefineries across Iowa, to underground storage in North Dakota. Farmers and the biofuels industry have been supportive of the Summit pipeline, and therefore opposed to the bill, because it would give Iowa access to the carbon capture and sequestration technologies necessary to make products like sustainable aviation fuels. In a statement following the governor's veto, Iowa Renewable Fuels Association Executive Director Monte Shaw said without carbon capture projects, and entry to ultra-low carbon fuel industry, Iowa could face 'very real, very severe economic consequences.' 'This is a classic example of why our system of government has checks and balances,' Shaw said. 'Any thoughtful review of this bill would determine that it would lead to higher energy prices for Iowans, hamper future economic development, hold back job creation, and stifle new markets for Iowa farmers. IRFA thanks Gov. Reynolds for listening to Iowans, studying the actual legislation, and ignoring the rhetoric that was as inaccurate as it was loud.' A press release from Iowa Corn Growers Association said entrance to the aviation fuel industry alone could result in nearly 6.5 million bushels of new corn demand, which it said is necessary for farmers dealing with high input costs and decreased profit margins. Farmers 'need expanded market growth and access to continue raising corn profitably; allowing them to continue growing Iowa's agricultural industry and economy,' the statement said. Opponents of the bill, including several lawmakers, argued the bill was aimed solely at carbon sequestration projects, rather than protecting landowners from eminent domain as supporters claimed. 'Eminent domain' allows the government to force private landowners to allow use of their property, for a fee set by the courts, for infrastructure projects deemed in the public interest. Eminent domain has long been used projects such as public roads and utilities. Leadership from Southwest Iowa Renewable Energy, or SIRE, said its CO2 pipeline project connecting to Nebraska's Tallgrass Trailblazer pipeline would be impacted by the bill's insurance and permit limit clauses, even though the SIRE project secured voluntary easements for 100% of its path in Iowa. Reynolds cited this example in her explanation, and said the 'arbitrary' term limits and insurance requirements would make it 'difficult for companies like SIRE to justify the additional investment' in Iowa. 'Those who crafted the bill said they don't want to stop CO2 pipelines that rely entirely on voluntary easements,' Reynolds said. 'But that is exactly what the bill does.' Summit Carbon Solutions thanked the governor for her 'thoughtful and thorough review' of the bill. In a statement, the company said the pipeline project 'opens the door to new markets and helps strengthen America's energy dominance for the long term.' 'Summit remains committed to working with landowners through voluntary agreements—just as we have with more than 1,300 Iowa landowners to date, resulting in $175 million in payments,' a spokesperson said in the statement. 'We look forward to continued discussions with state leaders as we advance this important project.' Opponents to the pipeline project, who were supportive of HF 639, argue the pipeline would negatively impact their properties and health, and that sequestering CO2 does not constitute a 'public use' deserving of eminent domain rights. Landowners opposed to the project lobbied state lawmakers for four years before a bill was debated, and ultimately passed, in the Senate and sent to the governor. Since the bill landed on the governor's desk, landowners have encouraged Reynolds to support Iowa GOP values on protecting property rights. Reynolds said the debate of when the government, or companies with government approval, can take private property is a 'debate as old as the Republic.' 'I've consistently said that if eminent domain is used, it must be rare, fair and a last resort,' Reynolds said. 'But HF 639 isn't just about eminent domain.' Reynolds said the bill sets a precedent that 'threatens' the state's 'energy reliability, economy and reputation as a place where businesses can invest with confidence.' Mary Powell, a Shelby County landowner opposed to the pipeline, said the veto shows that the state motto of, 'Our liberties we prize, and our rights we will maintain' are 'just empty words' to the governor. 'Governor Reynolds chose to support the millionaires and billionaires at the expense of Iowans and their property rights,' Powell said in a statement. Another landowner, Don Johanssen from Cherokee County, said the governor's decision was 'beyond words,' especially as the bill would have given landowners 'some liability coverage' from hazardous pipelines. The bill would have required pipeline operator to carry insurance that covered any loss or injury from accidental, negligent or intentional discharges from the pipeline, and to cover insurance increases that landowners face due to the pipeline. 'This is a sad day for Iowa that will be long remembered,' Johanssen said. Reynolds said the bill would impact 'more than just CO2 infrastructure' and would change permitting rules 'across the board,' giving 'uncertainty into critical energy projects.' Opponents of the bill called the insurance requirements 'untenable.' The American Petroleum Institute's Midwest Regional Director Mike Karbo said the bill had 'unprecedented and unfeasible requirements' that would have hindered future projects in the state. 'Since there are no refineries in the state, critical energy infrastructure, such as pipelines, are crucial in ensuring Iowans have a reliable source of energy, and certainty is needed to develop the infrastructure network,' Karbo said. 'We thank the Governor for doing what is right for the future of energy development in the state.' Reynolds said HF 639 included 'a few helpful provisions' and the surrounding debate 'highlighted' areas for progress. 'I agree we can do more to limit the use of eminent domain, promote transparency, and ensure responsible land restoration,' Reynolds said. 'We can do better.' Reynolds, who is not running for reelection in 2026, said she is 'committed' to working with legislation to 'strengthen landowner protections, modernize permitting and respect private property.' Taking one element from HF 639, Reynolds will ask the IUC to require all commissioners to be present for live testimony and ensure at least one commissioner is present at every informational meeting. In a statement from Iowa House Republicans, Speaker Pat Grassley said he has requested members sign a petition to reconvene the Legislature in a special session. 'This veto is a major setback for Iowa,' Grassley said in the statement. 'It is a setback not only for landowners who have been fighting across Iowa, but for the work the House of Representatives has put in for four years to get legislation like HF 639 passed. We will not stop fighting and stand firm on our commitment until landowners' in Iowa are protected against Eminent Domain for private gain.' Rep. Charley Thomson, R-Charles City, said he was 'very disappointed' in the governor's decision and that he was supportive of a special session to override the veto. Two-thirds of the Legislature must sign a petition to request a special session, and to override a veto, two-thirds of the members from each chamber must vote to pass the bill again. Sen. Jack Whitver, R-Grimes, the majority leader for the chamber, said he expects most of his caucus will 'not be interested in any attempt' to override the governor's veto. The bill likely would not have advanced in the Senate had it not been for a dozen Republican senators who vowed to block necessary budget legislation until the chamber debated eminent domain. The 12 were also joined by Senate Democrats in pushing for amendments, which were ultimately defeated, and approval of the bill. Senate Democrats said the fight for property rights will continue. 'I'm disappointed by the governor's veto of HF639, but, unfortunately, I cannot say I'm surprised,' Sen. Janice Weiner, D-Iowa City, said. 'There is simply no amount of political posturing or legislative stonewalling that can deny the fact that Iowans' right to private property should never be infringed upon for private gain.' One of the 12 to disagree with the Senate majority, Sen. Kevin Alons, R-Salix, said signing the bill was 'the single option available' to protect the rights of impacted landowners. Alons pledged to 'never quit working' on the issue, but said that means 'very little' to landowners who have been impacted by the 'unprecedented, and unconstitutional land grab.' 'To be clear: the Iowa government has given this private company the right to take people's land for one reason: corporate earnings,' Alons said in a statement. 'This has nothing to do with public use. It's absolutely not necessary for the ethanol industry in our state … And it certainly is not what the founders had in mind.' Alons said when the Legislature returns in January, he and other lawmakers 'will use every tool at our disposal' to 'return property rights back to the people.' Rep. Steven Holt, R-Denison, who sponsored the legislation, wrote in a social media post he was 'profoundly disappointed' by the veto. Holt said the state constitution and the Republican platform are clear in their message that eminent domain is for public use projects. 'Today the Governor has chosen to ignore landowners, the vast majority of the Legislature, the Republican Party Platform and the Iowa Constitution by choosing the economic development argument of special interests,' Holt wrote. Holt said Reynolds, and the Senate had opportunities of the past several years to offer their own suggestions to the eminent domain issue instead of opposing House legislation. 'On behalf of the people of Iowa and their fundamental property rights, the Governor's veto should be overridden,' he wrote. 'This fight for who we are as Republicans is far from over.' House Democratic Leader Rep. Brian Meyer said parties in the House collaborated to 'protect property rights.' 'At the end of the day, there is only one group to blame for the failure of the eminent domain bill: Iowa Republican lawmakers,' Meyer said in a statement. The first phase of the Summit Carbon Solutions project was approved by IUC nearly a year ago, which granted Summit the right to condemn easements from landowners who do not want to voluntarily sign agreements to put the pipeline on their land. Per the Iowa permit, Summit still needs a permit from South Dakota, which it has been denied twice, to begin construction. SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
11 hours ago
- Yahoo
Iowa Board of Regents hears opposition to proposed DEI policy from students, state officials
The Iowa Board of Regents read for the first time a policy that would bar required university courses with "substantial" DEI content. (Photo by Brooklyn Draisey/Iowa Capital Dispatch) Members of the Iowa Board of Regents told the public Wednesday they are listening and slowing down the process of implementing new board policy relating to diversity, equity and inclusion in classroom instruction. Regents said whatever policy is eventually approved might look different than its current form. Regent David Barker said a proposed policy barring universities from requiring students to take courses with 'substantial content that conveys DEI or CRT (critical race theory)' to earn their credentials, with pathways to certain course exceptions, 'will be an important first step' in preventing the teaching of controversial ideas as fact and raising confidence in higher education once again. The board discussed the policy in its June 11 meeting, the first of two readings ahead of a vote for approval in July. Under the proposed policy, students could not be required to take courses with 'substantial content' covering areas 'as primary principals' that include topics like antiracism, allyship, microaggressions, types of biases or privileges, social justice, critical race theory and systematic oppression, marginalization or gender theory, among others. Mark Braun, executive director of the board of regents, acknowledged during discussion the vagueness behind the term 'substantial,' but said board staff will work with the institutions to more clearly define it and demonstrate where it should apply as the policy is implemented. He emphasized that this policy would only apply to required courses and not electives. 'To a large extent, this will help highlight just how many academic programs do not require courses that meet the substantial standard,' Braun said. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX Also included in the policy is an option for seeking exemption, Braun said, as the board understands some courses must include this content for different reasons. According to the policy draft, universities can submit which majors, minors and certificates should be exempted from the rules 'each even-numbered year, no later than June 30.' The board must approve these requests. Regent Christine Hensley and Barker said during the meeting they learned from the emails sent after the suggested policy was released by concerned parties, some of which Barker said were 'a bit on the arrogant and pompous side' or 'showed a misunderstanding of the policy.' However, what helpful information he said he received helped him determine that a better version of this first-draft policy could be developed. Reynolds vetoes $1.5 million for UNI tuition program The goal behind the policy is not to subdue a certain point of view, Barker said, but to prevent attempts on both sides of the political spectrum to present 'contested, controversial ideas as settled fact.' When the policy was first released, Hensley said the discussion this week was supposed to act as the first and second reading, which she said 'lit a firestorm' in many people worried about the policy heading too quickly toward approval. 'I am a very, very strong proponent of when you have something that is controversial, and I would say that this has been controversial, it's important that you take a pause — you push the pause button — you step back, and you take in information from the various groups out there,' Hensley said. Critics of the proposed policy have done more than send emails to board members — some took to public comment Wednesday to express their concerns. Groups and individuals at the institutional and state level have called the revisions classroom censorship and a violation of the law. While many of the students, faculty and citizens who spoke during public comment thanked the board for pushing the vote back, the consensus remained that the policy would harm campuses and their communities while claiming to protect student rights. After the University of Northern Iowa faculty union published a statement opposing the policy last week, United Faculty President Christopher Martin took to public comment Wednesday to explain the three truths he sees about the proposal — first, that it was crafted from out-of-state recommendations instead of in response to major problems in Iowa, second, its implementation will act as censorship by the government, and third, it is against the law. 'There is no middle position, no position of slight appeasement,' Martin said. 'Either you stand for free expression at Iowa's universities or you don't, and God help Iowa, its public universities and all the citizens of this state if you don't.' Ashley Maempa, a doctoral student studying history at the University of Iowa, said she was 'deeply concerned' with both this policy, which she said was an example of over-compliance with the law, and other legislation impacting her institution and other state universities. While the claim behind making these decisions has been that they are protecting students, Maempa said the policy would empower 'a politically appointed government body to make a political decision about what concepts are merely opinions and what has legitimate scholarly basis.' The people who should be deciding what is taught in classes should be the people who are trained to do so, she said, rather than the board, whose members do not have as much experience in these matters. 'We are not political mouthpieces for whoever is in power,' Maempa said. 'We are scholars, we are teachers, we are students. We ask that you vote no on this proposed policy in July, and we ask that you do your job and take a stand for academic freedom in our Legislature.' State Sen. Herman Quirmbach, D-Ames, released a memorandum ahead of the meeting going over past legislation and current Iowa Code relating to the duties of the board and education policy in Iowa, and concluded that the board has no statutory authority to limit academic instruction in this manner and would violate Iowa law by implementing the policy. 'No recent legislation has given the Board of Regents any authority over course content regarding diversity and race or sex discrimination,' Quirmbach said in a press release. 'Moreover, existing Iowa law contains strong protections guarding the academic freedom of both faculty and students, protections that the Board's proposed changes would violate.' With the start date a year away, Quirmbach said in the memorandum there shouldn't be any hurry to finalize it before campus community members have the time to fully review it, let alone form and share an opinion on what impacts they foresee. He suggested pushing the vote back to the fall to provide more time to campus constituents wishing to respond, and to the board in order to look more into the 'possible legal and constitutional vulnerabilities and the risk of legal action against the Board.' Regent Robert Cramer said during the meeting he'd like to hear from university faculty about what language they think would be best used to stop the indoctrination of students in the classroom while still ensuring they have the freedom to teach. Hensley agreed that it was right to push the vote back, and with another reading planned before vote, Hensley said it would be all right if it doesn't feel like the policy is ready for prime time even after seeing edits. 'This isn't going into effect until next year, so we've got time to get this dealt with and dealt with correctly, and I think that should be our number one priority,' Hensley said. SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
12 hours ago
- Yahoo
Reynolds makes ‘difficult decision' to sign bill on pharmacy benefit managers
Pharmacists who advocated for legislation setting regulations on pharmacy benefit managers celebrated from the Iowa House gallery as the chamber sent the bill to Gov. Kim Reynolds' desk May 12, 2025. (Photo by Robin Opsahl/Iowa Capital Dispatch) Calling it a 'difficult decision,' Gov. Kim Reynolds signed legislation Wednesday that's intended to help keep rural pharmacies in business but could also lead to higher drug costs for Iowans. At the urging of the state's pharmacists, the Iowa Legislature approved the measure earlier this year. Senate File 383 imposes restrictions and regulations on pharmacy benefit managers, or PBMs, that negotiate prescription drug prices between manufacturers, health insurance companies and pharmacies. The law limits PBMs' use of strategies that favor a specific pharmacy to fill a prescription — such as cost-sharing rates, fees, and other financial penalties or incentives. The legislation would also require pharmacies to be reimbursed at the average state or national price for a drug. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX Supporters have claimed the law is needed to combat 'anti-competitive' practices by PBMs that they say give an advantage to mail-order prescription refills and larger pharmacy chains that have greater purchasing power. In signing the bill, Reynolds said that while PBMs have helped negotiate drug prices and access for millions of Americans, consolidation has led to only three major PBMs controlling 80% of the market, giving them 'outsized power' in determining what patients pay for their medications. 'But this bill does not signify an end,' she said. 'The complexity and lack of verifiable data made signing this bill a difficult decision and my administration will closely monitor implementation to mitigate and ensure that any unintended consequences for private employers are addressed.' Reynolds vetoes $1.5 million for UNI tuition program A Legislative Services Agency analysis found the bill could result in higher costs and co-pays for the state's health insurance program. The Iowa Association of Business and Industry warned it could result in an additional $340 million in costs for private-sector health insurance plans and add $169 annually to the average insured Iowan's pharmaceutical expenses. Earlier this year, Rep. Jeff Cooling, D-Cedar Rapids, warned that while the bill may initially increase revenue for smaller pharmacies, the added cost for consumers and their employers will give Iowans even more incentive to fill their prescriptions at a lower cost through larger pharmacies. More bill actions See a full list of the bills signed or vetoed Wednesday by Gov. Kim Reynolds here. The Iowa Pharmacy Association said the new law 'marks a major victory for Iowa patients, independent and community pharmacies, and healthcare providers across the state' by ensuring greater oversight of PBMs. 'For too long, PBMs have put profits over patients, contributing to the closure of more than 200 pharmacies in Iowa since 2014,' said Kate Gainer, CEO of the Iowa Pharmacy Association. 'This law gives us the tools to level the playing field and protect access to care, especially in rural areas.' SUPPORT: YOU MAKE OUR WORK POSSIBLE
