Image via WikipediaAlliant Energy is planning on raising rates as much as 17% per customer. The Iowa Utilities Board will be ruling on the proposed increase.
From the Des Moines Register...
Alliant Energy vice president Vern Gebhart took the microphone at a hearing to propose a rate increase that could be as high as 17 percent per customer.Alliant had planned on building a new coal-fired power plant in Marshalltown, but dropped those plans this spring after the Iowa Utilities Board ruled a lower return on investment than the company wanted. Add that to news that Alliant's earning are down and the cost of operating coal plants will be getting more expensive after the EPA, under the Bush administration, ruled that coal plants must limit carbon emissions, it became clear that a new coal plant was a poor investment.
"Given the current economic environment, the rate increase is a challenge," he acknowledged.
The utility has asked the Iowa Utilities Board to increase rates across all of its system, which includes Cedar Rapids, Dubuque, Keokuk, Marshalltown, Mason City, Ottumwa and the Spirit Lake area. The Osceola hearing was the first of several that Alliant and the utilities board will conduct through May 21. The board will make its decision by early next year.
Gebhart told the crowd that the rate increase, which would raise $171 million annually, is necessary to help pay for more than $600 million in upgrades Alliant has had to make to its generation and transmission system, and also to buy power from other utilities.
Last summer, an independent financial expert, testified that a new coal-fired power plant in Marshalltown could significantly raise rates even more.
According to Thomas Sanzillo, IPL hasn't addressed four major risks sufficiently: the cost of construction, weak demand, likely regulation of greenhouse gases in the near future, and the rising price of coal.
"The company has decided to place the risk for this plant squarely on the ratepayers. This is costly for Iowans, and in the long-term risky for shareholders," Sanzillo said. He is a former First Deputy Comptroller for New York State who has reviewed the management and operation of the New York Power Authority and the Long Island Power Authority and supervised New York State's $150 billion public investment fund.
"IPL's plan could double the cost of electricity consumers pay to keep the Marshalltown plant solvent." Sanzillo said. "This does not mean the monthly household bill doubles. It does mean a stiff monthly increase. This is not the time to build a coal plant. There are just too many risks and the plant is not needed."