Investments to modernize the power grid and advance cleaner energy lead to Alliant Energy's first retail electric base rate increase in Iowa since 2011
Over the past six years, Alliant Energy's Iowa utility has made significant investments on behalf of customers. The company's efforts to strengthen the power grid have resulted in fewer and shorter outages and enhanced security. In addition, the new highly efficient Marshalltown Generating Station advances cleaner energy and can power more than 500,000 homes.
"Our goal is to deliver the energy future our customers expect," says Doug Kopp, President of Alliant Energy's Iowa utility. "These investments will continue to strengthen the communities, families and businesses we serve both today and beyond."
Today Alliant Energy's Iowa utility filed its proposal with the Iowa Utilities Board (IUB) to increase retail electric base rates for the first time since 2011. The proposal, which includes the costs of these investments, would increase rates by 11.6 percent. Tax credits and transmission refunds will reduce the effect of the increase on customer bills in 2017 and 2018.
The impact to a customer's bill will vary by customer type and usage. A typical residential customer with a monthly electric bill of $114 will see a total increase of approximately $14 per month.
The proposed change would impact customers' electric bills in two steps. An interim rate increase will be implemented on April 13, 2017. The new interim rates will remain in effect until there is a final decision on the company's electric rate request.
The company is also proposing rate options designed to help customers manage their energy bills. These include an expanded Time of Day rate, an electric vehicle charging rate and an enhanced renewable energy pricing program.
Details about the increase have been mailed to electric customers along with information on how to provide feedback or participate in customer comment meetings. More information on the proposed increase and ways to save energy is available at alliantenergy.com/iowarates.
Summary of key financial elements of the rate request
Alliant Energy's Iowa utility is requesting a total increase in annual retail electric revenues of $176 million. The requested increase would take place in two phases: $102 million, through interim rates starting in the second quarter of 2017, and the remaining increase of $74 million when final rates are implemented.
Interim retail electric rate base of $3.8 billion includes the Marshalltown Generating Station and the Franklin County Wind Farm.
The final proposed rates include:
Retail electric rate base of $4.1 billion including deferred tax assets for production tax credits and post-test year additions through the third quarter of 2017
Return on common equity (ROE) of 10.3 percent. The Marshalltown, Whispering Willow-East and Emery generating stations received advance ratemaking principles with separate ROEs set for the life of those assets
Common equity component of regulatory capital structure of 49 percent
Increased depreciation expense supported by an updated depreciation study
Recovery of asset retirement obligation costs since the last rate filing
Recovery of remaining net book value of Sutherland Generating Station planned for retirement in 2017
Recovery of forward contract costs for sulfur dioxide emission allowances
Continuation of the transmission rider
The company has requested a decision in the fourth quarter of 2017. The IUB has 10 months from the date of filing to issue a final decision. The proposal is available on the IUB's electronic filing system under Docket No. RPU-2017-0001.