Overview: Iowa has considered customer choice options for many years. In October 1997, the Iowa Utilities Board (Board) adopted rules that gave utilities the option to file tariffs to implement unbundled service to small customers, including residential customers. All utilities in the State filed plans in late 1998, but the plans were quite diverse. Several workshops were conducted, but there was still disagreement among utilities, marketers, and consumer advocates as to how to proceed. In March 2000, the Board dismissed the unbundling plans, determining that they either moved too slowly or too quickly in opening the residential market to competition. Instead, the Board ordered each utility to propose tariff changes that "remove the primary barriers to providing a competitive option for small-volume customers interested in transporting gas." In its order, the Board also noted that some of the issues raised during the workshop process might need to be resolved through legislation. All the utilities filed new unbundling draft tariffs in November 2000.

In July 2003, the Board decided that implementation of a small-volume gas transportation plan would no longer be in the public interest because of significant industry changes. Instead the Board initiated (October 2003) an inquiry that focused on ways to limit price risk for small-volume customers. At a workshop held in July 2004, discussions centered on fixed-bill alternatives and proposals to modify rules and tariffs to give small-volume customers the same options as large-volume customers. In a separate proceeding in August 2004, the Board approved expansions of MidAmerican Energy Company’s (MidAmerican) and Interstate Power and Light Company’s (IPL) pilot small-volume transportation programs, which had been in place since 1997, to include participation by governmental entities with predictable heat-sensitive loads, in addition to the schools and community colleges that were already eligible.

In November 2007, the Board directed MidAmerican and IPL to file proposed permanent small-volume transportation tariffs to replace the pilots, and both companies did so in December 2007. The Board approved IPL's proposed permanent tariff (revised in March 2008) in April 2008, to become effective on May 1, 2008. Under this tariff, transportation service is available to all small-volume customers except residential customers, with the number of customers capped at 500 on a first-come, first-served basis. Customers must remain on the service for 1 year, and will be charged a switching fee when returning to system gas. The Board approved MidAmerican's proposed permanent tariff in November 2008, after rejecting (June 2008) the company's initial proposal because of capacity assignment issues. The approved tariff makes transportation service available to small-volume customers who purchase natural gas that is transported by an interstate pipeline company on a firm basis and who comply with MidAmerican's administrative terms. The Board capped the number of customers who can use this service at 2,500 to reduce the risk of capacity problems on MidAmerican's system. The proposed switching fee was waived for pilot program customers who moved to the new permanent service during the period from December 1, 2008, through April 30, 2009, when the pilot program ended.

All marketers operating in the State must be certified by the Iowa Utilities Board. According to rules adopted in February 2001, applicants seeking certification to serve small-volume customers must demonstrate that they have the operational and financial capability to deliver the services they propose to offer. Certified marketers must file an annual report giving the number of small and large customers served each month, total sales to small- and large-volume users, and revenues collected. As of December 2009, two marketers were certified to provide service to small-volume users.