Iowa Utilities Board approves revenue increase of about US$114.5M/year for Alliant Energy subsidiary Interstate Power and Light, which includes cost recovery for company's Whispering Willow wind farm
CEDAR RAPIDS, Iowa
December 15, 2010
– Customers to see reduction in electric bills due to rate refunds and cost management plan
Interstate Power and Light Company (IPL), a subsidiary of Alliant Energy Corporation (NYSE: LNT) received an oral decision today from the Iowa Utilities Board (IUB) regarding its electric rate case. In its oral decision, the IUB approved an annual revenue increase of approximately $114.5 million, slightly less than the $119 million interim rate increase implemented in March 2010. This will result in a refund, plus interest to customers.
The IUB approved IPL's proposed Cost Management Plan, which will reduce the impacts of the rate change on customers. The decision will have the net impact of reducing customer bills in 2011, but specific impacts are not yet available. IPL’s Cost Management Plan will use funds from projected tax benefits to reduce customer bills through at least 2013.
Specific impacts for each class of customers, including refund amounts and timelines, will be known after the IUB issues its final written order, which is expected by January 10, 2011. Parties have 20 days to ask the IUB to rehear its decision once the written order is issued.
Pending confirmation in the written order, as part of the IUB's decision, the Board:
* Approved full recovery of IPL's investment to reduce emissions from the Lansing Generating Station.
* Approved the final step of a five step process to equalize rates across IPL's Iowa territory.
* Approved recovery of costs related to IPL’s Whispering Willow – East Wind Farm.
* Approved an automatic adjustment clause that will adjust customer rates based on transmission cost changes approved by federal regulators, if the company accepts certain conditions after receiving the final written order, including a three-year rate freeze.
* Approved partial recovery of costs related to the retirement of the company’s Sixth Street Generating Station in Cedar Rapids, which was damaged in the June 2008 flooding.
* Will review IPL's management and affiliate transactions outside of a rate case proceeding.
"We appreciate the IUB’s efforts to reach a fair outcome in this case. We believe the board has struck a balance between the needs to recover investments made in a safe and reliable electric system and the financial impact for our customers," states Tom Aller, President - IPL. "We’re pleased that the IUB has decided to utilize a cost management strategy to mitigate the impact of these costs on customers and look forward to the written order in January to complete our review of the decision."
The IUB established a return on common equity of 10 percent for all capital not related to Emery Generating Station and Whispering Willow – East Wind Farm. The return on common equity for capital related to Emery Generating Station and Whispering Willow – East Wind Farm remain unchanged.