Iowa board approves final order for 500 MW of Alliant wind power

The Iowa Utilities Board (IUB) on Oct. 15 issued a final order that clears the way for Alliant Energy (NYSE:LNT) unit Interstate Power and Light (IPL) to move ahead with 500 MW of new wind capacity in the state.

The order backing the New Wind Project approves, with limited modifications, the settlement between Alliant Energy and customer groups, which was filed on Oct. 12. Alliant announced the order in an Oct. 27 news release.

Alliant Energy is currently working with landowners in Franklin County near its existing Whispering Willow Wind Farm, as well as exploring opportunities to develop in other areas of the state. Construction could start as soon as next year. Alliant Energy expects to place 250 MW in service in 2019 and the rest in 2020.

“We want to thank our community partners in Franklin County. We also want to thank the Iowa Utilities Board for its work and the organizations that came together to advance this application toward approval,” said IPL President Doug Kopp. “They include the Office of Consumer Advocate, the Iowa Business Energy Coalition, the Large Energy Group, the Iowa Environmental Council and the Environmental Law and Policy Center,” said Kopp. “Through our work together, we are helping to advance clean energy while providing low-cost, reliable energy solutions to our customers.”

Here are some of the key terms in the IUB order:

•The ratemaking principles apply to any new wind facility constructed as part of IPL’s New Wind Project that qualifies for 100% of the federal Production Tax Credits (PTC), regardless of its location in Iowa, up to 500 MW.

•Cost cap: $1,830/kilowatt, including allowance for funds used during construction (AFUDC) and transmission costs;

•Return on common equity: 11%, with the exception of certain transmission facilities classified as intangible assets, which shall earn the rate of return on equity authorized by the Iowa Utilities Board in a future rate case;

•Return on common equity used in calculating AFUDC rate to be the higher of the outcome of the next rate case or 10%;

•Depreciable life of 40 years, unless changed as a result of a contested case before the IUB;

•Alliant Energy’s Iowa customers shall be entitled to the full value of any environmental attributes, beyond those needed for compliance with applicable regulatory requirements, associated with investment included in IPL’s Iowa jurisdictional rate base;

•Alliant Energy is permitted to include in Iowa rates the actual cost of the wind project up to the cost cap without need to establish prudence, but required to establish the prudence of any cost in excess of the cost cap, and;

•Cancellation costs: recovery of prudently incurred and unreimbursed costs, if applicable, amortized over 10 years.

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Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at