Alliant Energy accepts proposed IUB order to construct Marshalltown power plant
CEDAR RAPIDS, Iowa, Nov. 19, 2013 /PRNewswire/ -- Alliant Energy's Iowa utility filed a notice today accepting the proposed decision and order for the Marshalltown Generating Station (MGS), issued by Iowa Utilities Board (IUB) on November 8. The proposed decision and order approved construction of the company's proposed MGS and included a cost cap of $920 million.
Chair Jacobs, as presiding officer for the MGS administrative hearing, issued the proposed decision and order. The proposed decision and order becomes final on November 25, unless the IUB moves to review it or an appeal is filed by any party involved in the process.
In its filing, Alliant Energy's Iowa utility affirms its plan to construct the plant and cover costs of related high-voltage transmission upgrades and allowance for funds used during construction (AFUDC) within the cost cap established in the proposed order.
"Chair Jacobs recognized the need for a new natural gas plant in Marshalltown and the benefits it will bring our customers," said Tom Aller, President of Alliant Energy's Iowa utility. "This plant is a cost-effective way to provide Iowa customers with a long-term source of locally-produced power."
The IUB's approval is conditional on the company attaining other state and federal permitting approvals necessary to construct and operate the MGS. Monday, the company received a proposed decision and order approving the needed pipeline construction to serve natural gas to the facility, which is one of the key approvals necessary before the plant project begins. Pending all regulatory approvals, the company expects to begin construction in 2014 and begin operations in 2017.
Alliant Energy Corporation's Iowa and Minnesota utility subsidiary, Interstate Power and Light Company (IPL), utilizes the trade name of Alliant Energy. The Iowa and Minnesota utility is based in Cedar Rapids, Iowa, and provides electric service to 525,000 customers and natural gas service to 233,000 customers in more than 700 communities. The employees of Alliant Energy focus on delivering the energy and exceptional service their customers and communities expect – safely, reliably, and affordably. Visit alliantenergy.com or call 1-800-ALLIANT (800-255-4268) for more information. Alliant Energy Corporation is traded on the New York Stock Exchange under the symbol LNT.
This press release contains forward-looking statements. These forward-looking statements can be identified as such because the statements include words such as "expects," "plan," "believe," or other words of similar import. Similarly, statements that describe future plans or strategies are also forward-looking statements. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Actual results could be affected by such factors as: appeals of the proposed order; state or federal regulatory actions or local government actions, including inability to obtain all necessary approvals and permits; current or future litigation, regulatory investigations, proceedings or inquiries that could impede the implementation of IPL's plans; changes in costs of materials, equipment, commodities, fuel or labor; shortages in materials, equipment and qualified labor; changes to the scope or timing of the projects; general contractors or subcontractors not performing as required under their contracts; the inability to agree to contract terms or disputes in contract terms; poor initial cost estimates; work stoppages; adverse weather conditions; adverse interpretation or enforcement of permit conditions; changes in applicable laws or regulations; unforeseen engineering or technology issues; and limited access to capital and other adverse economic conditions. These factors should be considered when evaluating the forward-looking statements and undue reliance should not be placed on such statements. 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.
Summary of Key Financial Elements of Proposed Decision and Order
The proposed decision and order, accepted by IPL, contains the following provisions:
- The cost cap shall be $920 million, including the facility, transmission costs, owner's costs and AFUDC.
- IPL shall be permitted to include in rates the actual cost of the MGS project up to the cost cap of $920 million without the need to establish prudence or reasonableness. IPL shall be required to establish the prudence and reasonableness of any cost in excess of the cost cap.
- The allowed rate of return of common equity capital on the portion of the MGS project included in Iowa electric rate base shall be 11%. This rate of return and common equity will not apply to the AFUDC calculation.
- An ROE of 10.3% will be used in calculating the AFUDC rate.
- The depreciable life of MGS for the first rate case where it is included shall be 35 years.
- If IPL cancels construction of the MGS project for a good cause, IPL's prudently incurred costs, as determined by the Board, shall be amortized over a period not more than 5 years.
- The issue of double leverage will be addressed at a later date in the context of a rate case or other proceeding.
- IPL was required to notify the IUB within 30 days of receipt of this order whether it would accept the advance ratemaking principles awarded in this proceeding.
This order will become final unless the full Board or another party appeals the decision by November 25, 2013. IPL and other parties then have 14 days to respond to any such appeal. The IUB will establish a procedural schedule to address appeals or enter the order.
The proposed decision and order are available on the IUB's electronic filing system. The filing is under docket numbers GCU-2012-0001 and RPU-2012-0003.
SOURCE Alliant Energy Corporation
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