Alliant Energy reaches agreement to extend Iowa electric base rate freeze and provide customer credits
CEDAR RAPIDS, Iowa, March 25, 2014 /PRNewswire/ -- Customers of Alliant Energy's Iowa electric utility will see no increase in their base electric rates through 2016. Credits will also be included in customer bills based on the three-year agreement filed with the Iowa Utilities Board (IUB) today.
The agreement is a collective effort by Alliant Energy, the Office of Consumer Advocate, Iowa Consumer Coalition, and the Large Energy Group. It will become effective when approved by the IUB.
The customer credits will be $70 million in 2014, $25 million in 2015 and $10 million in 2016. These credits will appear in the energy cost portion of customers' bills.
The agreement will extend the electric base rate freeze that has been in effect since 2011.
Between 2011 and 2014, Alliant Energy will have invested about $750 million in Iowa's electric system to improve electric reliability and the emissions profile of its generating stations. This agreement offsets the cost of these investments with savings from the new nuclear purchased power agreement that began in February 2014.
"The base rate freeze and bill credits will continue to support the competitiveness of our Iowa customers and communities," said Tom Aller, President of Alliant Energy's Iowa utility. "We are pleased that through the collective efforts of our stakeholders, we can propose the unanimous agreement to the IUB, and appreciate their consideration of this proposal."
Alliant Energy continues to invest in the Iowa electric system to:
- Improve the environmental profile of our electric generation by continuing our support of renewable energy and reducing emissions at our existing generation stations.
- Construct the natural gas fired Marshalltown Generating Station, which will add additional flexible and reliable electric generation to our portfolio when completed in 2017.
- Improve customer reliability by investing in the electric distribution system, which has helped significantly reduce outage length and duration since 2010.
Summary of Key Financial Elements of Retail Electric Settlement Agreement
The settlement agreement contains the following provisions:
- Electric base rate moratorium through 2016
- Continuation of the energy adjustment clause
- Continuation of the regional transmission service cost recovery rider
- Electric Tax Benefit Rider credits continue through at least 2016
- Force majeure provision to allow IPL to seek rate relief if a significant event occurs
- Show cause action could be brought by OCA if IPL ROE exceeds 11%
IPL has based its settlement on the assumptions that the current authorized return on equity and common equity component of the capital structure remains unchanged, and the settlement allows for a return on and of 2014 year-end Iowa electric rate base of approximately $3.1 billion.
This settlement must be approved by the IUB before it becomes effective.
The filed settlement is available on the IUB's electronic filing system. The filing is under Docket No. RPU-2014-0001.
Alliant Energy Forward-Looking Statements
This press release includes forward-looking statements. These forward-looking statements can be identified as such because the statements include words such "approximately," "expected," "believe," or other words of similar import. Similarly, statements that describe expected outcomes in the rate case settlement filed with the IUB, including the effects of the proposed settlement, are forward-looking. 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 the following factors, among others:
-- Whether the IUB approves the settlement, the timing of any such approval and any conditions or modifications imposed by the IUB in connection with any such approval;
-- other state regulatory or governmental actions, and future regulatory proceedings, including regulatory decisions regarding IPL's proposed settlement;
-- IPL's ability to obtain adequate and timely rate relief to allow for, among other things, the recovery of operating costs, capital expenditures, the earning of reasonable rates of return and the payment of expected levels of dividends;
-- economic conditions in IPL's service territory;
-- future modifications to IPL's energy adjustment clause or regional transmission service cost recovery riders; and
-- force majeure or other significant changes contemplated in the settlement agreement, that could allow IPL or other parties to seek changes in base rates during the base rate freeze.
For more information about potential factors that could affect Alliant Energy's and IPL's businesses and financial results, please review "Risk Factors" in the companies' Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the Securities and Exchange Commission and in the companies' other filings with the SEC. 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, except as required by law, Alliant Energy and IPL undertake no obligation to update publicly such statements to reflect subsequent events or circumstances.
About Alliant Energy
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, efficiently, and responsibly. 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.
SOURCE Alliant Energy Corporation