Iowa denies full Alliant rate hike

Published 3:29 pm Wednesday, December 15, 2010

Iowa customers to see refund

The Iowa Utilities Board on Wednesday denied a 14 percent electric rate increase proposal by Alliant Energy for its Iowa utility customers, instead ordering only a 9 percent increase.

That means a refund will be issued to all of the company’s customers in Iowa, who have been paying a temporary 10 percent rate increase since March.

Alliant Energy’s subsidiary Interstate Power & Light initially requested an increase of $163 million — or a 14 percent increase in revenue. It later reduced its request to $149 million.

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The Iowa Utilities Board ultimately approved a revenue increase of about $114.5 million for the utility; however, since the company had implemented a $119 million temporary revenue increase in March, there will be $4.5 million, plus interest, in refunds given to customers.

Rates for the company’s Iowa users will be lower than they have been since March.

The board also ordered that a review of Alliant’s management and affiliate transactions be conducted in a non-rate-case setting as part of an ongoing responsibility to ensure rate payer dollars are being wisely spent, according to a news release. There will be no management efficiency penalty as part of the case.

The release also states the Utilities Board established a 10 percent return on equity in the decision, and it also approved Alliant’s request for automatic recovery of its transmission costs, but only if the utility agrees to a minimum three-year rate freeze. The utility’s response will be due after the board issues its written decision order in this rate case. This is expected in January 2011.

Alliant Energy spokesman Ryan Stensland said he thought the decision was “a good compromise,” and noted that the company is beginning to review the decision from the board and figure out how it will affect the company’s operations and its customers.

The decision was made in Iowa as a 22 percent rate increase proposal is being considered in Minnesota. The decision in this case is expected from the Minnesota Public Utilities Commission in spring 2011.

Joe Sullivan, lawyer with Flaherty & Hood, who is representing the city of Albert Lea in opposition to the proposed increase, said he is pleased with the Iowa Utilities Board’s decision, pointing out that it was an almost 30 percent reduction from the original proposal.

“I think that’s a positive sign and shows that they’re concerned about rate-payer impact,” Sullivan said.

He noted that though he cannot speculate as to what the Minnesota Public Utilities Commission will decide in the Minnesota case, he does think regulators are aware of how increases will affect rate payers. And that was with a 14 percent proposed increase, he pointed out. The Minnesota proposed increase is even higher.