IPL seeks approval in Iowa for increase in annual revenue of $176m

Alliant Energy’s Interstate Power and Light (IPL) on April 3 filed with the Iowa Utilities Board (IUB) an application seeking approval of an increase in annual revenues of $176m, or 11.6%, to recover the costs associated with grid improvements and cleaner generation, among other things.

Alliant Energy, in an April 3 statement, said that a typical residential customer with a monthly electric bill of $114 would see a total increase of about $14 per month.

The requested increase would take place in two phases: $102m through interim rates starting in 2Q17, and the remaining increase of $74m when final rates are implemented.

The interim retail electric rate base of $3.8bn includes the natural gas combined-cycle Marshalltown Generating Station and the Franklin County Wind Farm, the company added.

Alliant Energy said that the final proposed rates include:

  • Retail electric rate base of $4.1bn, including deferred tax assets for production tax credits and post-test year additions through 3Q17
  • Return on common equity (ROE) of 10.3%. The Marshalltown, Whispering Willow-East, and Emery generating stations received advanced ratemaking principles with separate ROEs set for the life of those assets
  • Common equity component of regulatory capital structure of 49%
  • Recovery of asset retirement obligation costs since the last rate filing

The company noted in its application that its last base rate increase occurred six years ago and that since then, it has made significant investments to modernize and strengthen the power grid, as well as to advance clean energy.

The investments in the power grid have reduced the average duration of outages by about 30% and the frequency of outages by about 25%, IPL said, adding that its power grid investments are also enhancing the grid’s security and data systems, as well as further enabling the safe integration of distributed energy resources.

The company said that its investments in generation reflect a thoughtful transition of its generation fleet, increasing the use of renewable generation and cleaner natural gas-fired generation, while reducing reliance on coal-fired generation.

For instance, between 2007 and 2016, coal generation – as measured by capacity – decreased from 50% to 37% of IPL’s fleet, the company said. During that same time, IPL said, the company’s wind capacity doubled, from 7% to 14%, while natural gas capacity increased from 23% to 29%.

IPL noted that it has brought online the Marshalltown Generating Station, acquired the Franklin County Wind Farm, and is installing a large solar generation project in Dubuque, Iowa.

IPL also said that it has pursued credits and refunds on behalf of its customers – returning $481m to its customers since 2011 – and that it has identified an additional $156m that customers will receive in 2017 and 2018, for a total of $637m in customer credits and refunds from 2011 through 2018. On an overall basis, the credits and refunds returned in 2017 will offset the overall interim increase, while the 2018 credits and refunds are anticipated to offset about 30% of the final increase, the company said.

“Since 2011, IPL has made $2.4 billion in investments on behalf of its customers and communities to modernize and strengthen the power grid, advance cleaner energy, provide innovative solutions, and strengthen communities,” IPL said. “If IPL is not able to reasonably increase rates to recover for costs not currently in rates, the fair balance between provision of quality service to customers and the opportunity for the company to earn a reasonable return will be upset.”

The company noted that it proposes to modify, expand or create new rate options, which include an enhanced time of day rate, an arrearage management program pilot for limited income customers, an infill economic development rate, and an electric vehicle charging rate.

IPL said that the proposed rate options allow customers to exercise more control over their bills; give customers greater access to renewable energy; and/or help establish a pricing approach and structure that continues to align costs with causation, while providing appropriate price signals.

To promote alignment of transmission costs and cost recovery, IPL said that it requests to continue its regional transmission service rider, noting that continuation of the rider provides a mechanism for IPL to quickly and efficiently return any transmission refunds – such as Midcontinent ISO ROE refunds – to customers.

Among other things, IPL said that it requests a final order on the matter on or about Nov. 30, about two months after a proposed hearing date of Oct. 2.

About Corina Rivera-Linares 3063 Articles
Corina Rivera-Linares, chief editor for TransmissionHub, has covered the U.S. power industry for the past 15 years. Before joining TransmissionHub, Corina covered renewable energy and environmental issues, as well as transmission, generation, regulation, legislation and ISO/RTO matters at SNL Financial. She has also covered such topics as health, politics, and education for weekly newspapers and national magazines. She can be reached at clinares@endeavorb2b.com.