CEDAR RAPIDS Customers of Alliant Energy's Iowa electric utility will see no increase in their base electric rates through 2016. Credits will also be included in customer bills based on the three-year agreement filed with the Iowa Utilities Board (IUB) on March 25.
This settlement must be approved by the IUB before it becomes effective.
The agreement is a collective effort by Alliant Energy, the Office of Consumer Advocate, Iowa Consumer Coalition and the Large Energy Group.
The customer credits will be $70 million in 2014, $25 million in 2015 and $10 million in 2016. These credits will appear in the energy cost portion of customers' bills.
The agreement will extend the electric base rate freeze that has been in effect since 2011.
Between 2011 and 2014, Alliant Energy will have invested about $750 million in Iowa's electric system to improve electric reliability and the emissions profile of its generating stations. This agreement offsets the cost of these investments with savings from the new nuclear purchased power agreement that began in February 2014.
Summary of Key Financial Elements of Retail Electric Settlement Agreement
The settlement agreement contains the following provisions:
Electric base rate moratorium through 2016
Continuation of the energy adjustment clause
Continuation of the regional transmission service cost recovery rider
Electric Tax Benefit Rider credits continue through at least 2016
Force majeure provision to allow IPL to seek rate relief if a significant event occurs
Show cause action could be brought by OCA if IPL ROE exceeds 11%
IPL has based its settlement on the assumptions that the current authorized return on equity and common equity component of the capital structure remains unchanged, and the settlement allows for a return on and of 2014 year-end Iowa electric rate base of approximately $3.1 billion.
"The base rate freeze and bill credits will continue to support the competitiveness of our Iowa customers and communities," said Tom Aller, President of Alliant Energy's Iowa utility. "We are pleased that through the collective efforts of our stakeholders, we can propose the unanimous agreement to the IUB, and appreciate their consideration of this proposal."
Alliant Energy continues to invest in the Iowa electric system to:
Improve the environmental profile of our electric generation by continuing our support of renewable energy and reducing emissions at our existing generation stations.
Construct the natural gas fired Marshalltown Generating Station, which will add additional flexible and reliable electric generation to our portfolio when completed in 2017.
Improve customer reliability by investing in the electric distribution system, which has helped significantly reduce outage length and duration since 2010.