Coal Generation, Rate Increases, Energy Efficiency Addressed In Proposed Settlement as Alliant Rate Case Gets Underway

DES MOINES – The Environmental Law & Policy Center, Iowa Environmental Council, and Sierra Club agreed to a proposed partial settlement in the Alliant Energy rate case being heard by the Iowa Utilities Board this week. The proposed settlement, joined by ten of the 14 intervening parties, including the Consumer Advocate and large energy consumers, addressed several key issues in the rate case, including energy generation from Alliant’s coal plants, rate structures impacting energy efficiency, rate increases and others.

Alliant Energy, a utility providing electric service to about 490,000 customers in Iowa, is seeking a rate increase and proposing a number of rate changes and new programs. The Iowa Utilities Board sets the rates for Iowa’s investor-owned utilities, including Alliant Energy, through information gathered during a contested rate case.

Alliant Receives Less Money Than Requested

Alliant was seeking to increase electric rates to cover a request of $203.6 million per year. As part of the proposed settlement, Alliant agreed to a reduced request of $127 million. The company will refund customers interim rate increases applied in 2019 to the tune of $7.5 million through the end of 2020. While customers will still see an increased bill, it will be a smaller increase than Alliant had sought.

Alliant also agreed to waive their fixed-bill plan, which sought to charge customers a fixed bill each month plus an administrative fee, but without any true-up at the end of the year to account for actual energy usage. 

A Plan for Uneconomic Coal Plants

As part of the proposed settlement, Alliant Energy agreed to participate in a first-ever in Iowa comprehensive planning process for their generating fleet. This analysis will require Alliant to assess the economics of its coal plants compared to cleaner, home-grown energy options like solar, efficiency, wind, and battery storage. 

An analysis conducted by expert witnesses in the case by IEC and ELPC found that Alliant’s coal plants are not economic and customers could save hundreds of millions of dollars by developing a plan to transition away from these plants. Additional expert analysis on behalf of Sierra Club found that retirement and replacement of Alliant’s coal plants could save customers more than $600 million. These analyses found that customers could be better served with cheaper, cleaner energy from renewables or open-market energy purchases.

“We are proud to have secured a commitment by Alliant to evaluate the economics of its remaining coal plants and integrate meaningful stakeholder input as part of the process. We are confident that this analysis will be the first step in moving Alliant away from dirty, expensive coal plants,” said Elizabeth Katt Reinders with the Sierra Club. "We look forward to working with Alliant on its transition off coal as they move from analysis to planning to action.”

Energy Choices for Customers

Alliant Energy agreed to discontinue their plan for applying a declining block rate in summer months. This type of rate structure reduces the cost per kilowatt hour as more energy is used, which discourages energy savings and encourages users to consume more power. Alliant’s proposed declining block rate also has an outsized negative impact on smaller individual customers who could not benefit from the rate structure.

The company also withdrew plans to increase some fees for customers with solar panels or other self-generation. “We are pleased to see that Alliant recognizes the benefits of customers generating their own power and supporting the grid. Their investment, while keeping their rates low, also benefits the utility by producing and supplying clean power that enhances grid stability,” said Johannsen. 

Collaboration on the Path Forward

Alliant Energy agreed to an improved collaborative stakeholder engagement process more with environmental and consumer groups as the company moves forward with grid investments and utility-owned distributed renewable energy projects.

“We look forward to a more robust and fruitful engagement with Alliant Energy. While we have been included in collaborative projects previously, there is an opportunity to better incorporate feedback and reflect it in decision-making processes. We are ready to get around the table to talk about what’s next,” said Josh Mandelbaum with the Environmental Law & Policy Center.

While the environmental groups are applauding the proposed settlement, the agreement was not comprehensive. Some issues remain unresolved. This week’s hearing at the Iowa Utilities Board will be an opportunity for parties to cross-examine witnesses and for the Board to gather further information. The proposed settlement agreement will not go into effect unless the IUB approves it in its final order in the rate case, which will come before the end of the year. 

The hearing is open to the public and the media and is taking place in the Varied Industries Building at 3000 E Grand Ave in Des Moines starting at 8:00 am daily.

View the case docket at https://efs.iowa.gov/efs/ShowDocketSummary.do?docketNumber=RPU-2019-0001

View the logistics for the hearing at https://efs.iowa.gov/cs/groups/external/documents/docket/mdax/odgz/~edisp/1883271.pdf