CEDAR RAPIDS, Iowa, Oct. 3, 2019 /PRNewswire/ -- Alliant Energy's Iowa energy company has filed a partial settlement agreement in its current electric rate review. Customers would see lower than expected increases in electric bills in 2020. This non-unanimous settlement is subject to approval from the Iowa Utilities Board (IUB).
The proposed settlement addresses investments Alliant Energy has made to reduce long-term operating costs. These include new wind generation in Iowa, distribution system enhancements, and advanced customer meters.
"I want to thank the Iowa Office of Consumer Advocate, the Iowa Business Energy Coalition and the other parties to the settlement for coming together on these issues," said Terry Kouba, President of Alliant Energy's Iowa energy company. "Our company continually looks for ways to better serve our customers, and we are excited about the new options we've proposed to advance renewable energy and drive economic development."
On March 1, 2019, Alliant Energy filed a request with the Iowa Utilities Board to increase annual retail electric revenues, with final rates starting January 1, 2020. An interim base rate increase went into effect April 1, 2019.
The settlement will result in a modest base rate increase from interim rates in 2020 – which would be smaller than the final rates originally requested. The company would also use one-time credits to lessen the overall impact to customers in that year. The final bill impact for each customer class will be decided through the rate review process.
Alliant Energy's significant investments in wind generation will result in lower fuel costs, benefiting customers into the future. In addition, in 2021, customers will see additional savings from the early contract termination of a nuclear power contract.
The proposed settlement is supported by a broad coalition of groups representing customers, environmental interests, employees and other stakeholders.
Key details of the proposed settlement:
- Final annual retail electric revenue requirement increase of $127 million
- Billing credits for electric retail customers of approximately $35 million in 2020. These billing credits include approximately $27 million in credits resulting from the use of the remaining unprotected excess deferred income tax benefits and approximately $8 million in credits from a partial refund of interim rates implemented in 2019
- Recovery of wind facilities constructed as part of the company's New Wind I (RPU-2016-0005) and New Wind II (RPU-2017-0002) through a new Renewable Energy Rider
- Common equity component of regulatory capital structure increased to 51%
- Return on equity (ROE):
- 9.5% for all non-advance ratemaking principle assets (including production tax credit carry forwards from the Whispering Willow-East wind project)
- 5.0% for production tax credit carry forwards from New Wind I and II
- No current return on construction work in progress
- Recovery of, but no return on, the remaining net book value of the retired electric meters, which will result in a modest non-cash valuation charge in 2019
- Continuation of current depreciation rates
In previous IUB decisions, New Wind I and II, Marshalltown, Whispering Willow-East and Emery generating stations received advance ratemaking principles with separate ROEs between 11.0% and 12.23%.
The settlement addresses certain rate design issues. Issues not addressed in the settlement, including class cost of service, will be addressed as part of the rest of the rate review process. In addition, not all intervenors in the rate review have agreed to the proposed settlement. Those intervenors could address issues within the settlement at the hearing.
The next step of the process is a hearing in front of the Iowa Utilities Board starting on October 7, 2019. The IUB has 10 months from the date of filing (March 1, 2019) to issue a final decision. The proposed settlement agreement filing is available on the Board's electronic filing system. The filing is under docket number RPU-2019-0001.
This settlement does not include the proposed natural gas rate review which is under RPU-2019-0002 in IUB's electronic filing system. The scheduled hearing for the gas rate review is November 4, 2019.
About Alliant Energy
Alliant Energy Corporation (NASDAQ: LNT) provides regulated energy service to 965,000 electric and 415,000 natural gas customers across Iowa and Wisconsin. Alliant Energy's mission is to deliver the energy solutions and exceptional service customers and communities count on – safely, efficiently and responsibly. Interstate Power and Light Company and Wisconsin Power and Light Company are Alliant Energy's two public energy companies. Alliant Energy is a component of the Nasdaq CRD Sustainability Index, Bloomberg's 2019 Gender-Equality Index, and the S&P 500. For more information, visit alliantenergy.com and follow us on LinkedIn, Facebook, Instagram and Twitter.
Alliant Energy Forward-Looking Statement
This press release includes forward-looking statements. These forward-looking statements describe the details of the proposed rate review settlement. These details are subject to final approval by the IUB and could change, possibly materially, prior to final approval. The forward-looking statements included herein are made as of the date hereof and Alliant Energy and Interstate Power and Light Company undertake no obligation to update publicly such statements to reflect subsequent events or circumstances.
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SOURCE Alliant Energy Corporation