CEDAR RAPIDS, Iowa, Aug. 16, 2012 /PRNewswire/ -- Interstate Power and Light Company (IPL), a subsidiary of Alliant Energy Corporation (NYSE: LNT), the Iowa Office of Consumer Advocate (OCA) and the Iowa Consumers Coalition (ICC) filed today a unanimous settlement proposal with the Iowa Utilities Board (IUB) addressing all issues among these three parties in IPL's natural gas base rate case filed in May 2012.
The parties have agreed to an increase in IPL's annual natural gas service revenue requirement of approximately $10.5 million and the settled return on common equity was established at 10 percent. The parties have also agreed to a Cost Management Plan, proposed by IPL, which would use tax benefits to credit customer bills and mitigate any impact of the revenue requirement increase for a period of three years. This would result in customers per therm expense dropping below the current interim level if approved by the IUB. Because the settled revenue requirement increase of $10.5 million is greater than interim increase of $8.6 million, customer refunds of interim rates would not be necessary under the agreement.
"We appreciate the discussions between the OCA, ICC and our company to reach a fair agreement that meets the needs of our customers and our company," said Tom Aller, President-IPL. "We believe that this proposal helps our company recover the costs of our investments into the natural gas system while meeting our company's goal to minimize impacts to customer costs. With continued low natural gas costs and the benefit provided through the Cost Management Plan, our customers continue to enjoy some of the lowest natural gas costs they have seen in years."
A timeline for review of the settlement proposal by the IUB is unknown at this time, however, prior to a settlement being announced, it was expected that the case would be completed around April 2013. The IUB must approve the settlement before any of the provisions of the agreement become effective. The IUB may accept or reject the agreement, or may come to an alternate decision as part of their review process.
The cost of gas makes up, on average, 60 to 70 percent of the average residential natural gas bill. This cost of gas is a dollar-for-dollar pass-through for customers, and is unaffected in this rate case proposal. Because of lower gas costs, the average current residential bill is down nearly 20 percent since IPL's last rate case in 2005.
The natural gas rate case filed by IPL is the company's first in seven years and is designed to recover more than $70 million in infrastructure investments made to the natural gas distribution systems since the last case.
In Iowa, IPL provides natural gas service to more than 240 communities. The larger communities served by IPL includes Ames, Marshalltown, Mason City, Clinton, Muscatine, and Burlington.
Additional financial detail: This agreement would set the Iowa natural gas rate base at $254 million and the equity ratio at 45 percent.
About Interstate Power and Light Company Interstate Power and Light Company (IPL), based in Cedar Rapids, Iowa, provides electric service to 525,000 customers and natural gas service to 233,000 customers in more than 700 communities throughout Iowa and southern Minnesota. IPL is committed to providing the energy and exceptional service its customers and communities expect – safely, reliably, and affordably. IPL is a subsidiary of Alliant Energy Corporation. Visit alliantenergy.com or call 1-800-ALLIANT (800-255-4268).
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 as "approximately," "expected," "believe," or other words of similar import. Similarly, statements that describe expected outcomes in the rate case 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: -- state regulatory or governmental actions, and future regulatory proceedings, including regulatory decisions regarding IPL's proposed rate increase; -- 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 and political conditions in IPL's service territory; and -- the effectiveness of the Cost Management Plan; and -- changes in the price of natural gas. 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 IPL undertake no obligation to update publicly such statements to reflect subsequent events or circumstances.
SOURCE Interstate Power and Light Company