The Iowa Utilities Board has approved a settlement agreement granting Interstate Power and Light Company (IPL), an Alliant Energy utility subsidiary, a portion of its requested natural gas service rate increase in Iowa.
The approved settlement allows the utility's permanent annual revenue from natural gas service rates to increase by $10.5 million (4.8 percent) and includes tax credits that will reduce customer rate impacts over the next three years.
IPL had requested a $14.8 million (5.6 percent) annual revenue increase, and as allowed by Iowa law, the utility has already collected a temporary revenue increase of $8.6 million (3.3 percent) since June 4, 2012.
The settlement calls for three years of bill credits to customers resulting from IPL's tax benefits for, among other things, its mixed service costs, repair expenditures, and 2008 flood proceeds. Tax credits will be applied to all IPL customer classes, with varying rate impacts. With the tax credits in place, a typical IPL residential natural gas customer should pay about 39 cents (0.6 percent) less per month than before this rate increase request was filed on May 25, 2012. When the tax benefits expire in three years, residential customers' bills will increase by approximately $3 per month.
The Board's order, based on its review of the evidence submitted in this proceeding, finds that the settlement agreement is reasonable, consistent with the law, and in the public interest. Rate changes will only apply to the natural gas service portion of customer bills and not to the cost of the gas itself, which the utility passes to customers dollar for dollar.