By PETER HUSSMANN
Just two months after being allowed a 7 percent increase on the rates it charges its residential electric customers, Alliant Energy is back asking for another 14 percent increase to fund its development of a wind farm in north central Iowa.
On Wednesday, Alliant filed a proposal with the Iowa Utilities Board asking that it be allowed to increase its annual revenues by $163 million.
In early January, the Utilities Board rejected Alliant's full rate increase request noting the "difficult economic environment" for consumers. The Board did allow Alliant to continue with its interim 7 percent increase.
In a press release issued by Alliant, the company says the electric rate increase for its 527,000 Iowa customers, including those in Newton and Jasper County, is needed to finance its $1 billion investment its electric systems.
"We are investing nearly $1 billion in 2009 and 2010 to create a clean and reliable energy future for all Iowans," said Tom Aller, corporate president. "Our investments focus on expanding renewables, reducing emissions and enhancing reliability. With our investment in the Whispering Willow-East Wind Farm in Franklin County, Iowa, we are powering the equivalent of nearly 50,000 homes with clean, renewable energy. Also , our investments in power plant emissions reduction controls and our electric distribution systems are providing Iowans with safe, reliable and environmentally responsible energy."
The company is looking to implement the increase in two stages.
Beginning March 20, Alliant plans to introduce an interim rate hike of 10 percent, a move that will generate approximately $119 million in new annual revenue. For a typical residential customer, this will increase monthly payments by approximately $10.62, or 11.7 percent. This is based on monthly energy usage of approximately 750 kilowatt hours.
The interim rate hike, which does not need Utility Board approval, will remain in effect until the Board issues its final decision on the company's electric rate increase request, which is expected some time in the first quarter of 2011. If the final revenues approved by the Utilities Board are lower than the interim revenue levels, customers will get refunds equal to the difference, plus interest.
If the overall 14 percent increase is approved, a typical residential customer will see another monthly increase of $1.90 to $6.98. The wide variance is based on geographic location (Newton residents will be at the higher end) because Alliant is still implementing a five-step rate increase plan approved by the Utilities Board in 2006. (See link to story above for additional information.)
Alliant is also proposing a "customer cost management plan" designed to reduce the impact of the rate increase over the next several years. The company plans to utilize $90 million in proceeds from a previous asset sale to drop the interim 10 percent increase by 4 percent for a three-year period beginning in 2011. After that, the full 14 percent increase would take hold.
"We are currently in an increasing cost environment as we transition to a green energy future," Aller said. "We recognize that while these types of investments provide our customers with safe, reliable and cleaner energy, there are cost impacts on our customers. Our proposed customer cost management plan would reduce the impact of final rates on our customers in the near term, which is important given the difficult economy in which we still find ourselves."
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