Iowa environmental groups say proposed Alliant rate hike is uneconomical


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Two Iowa environmental non-profits are concerned about proposed cost increases for Alliant Energy customers(via flickr).

Julia Poska | September 11, 2019

The Iowa Environmental Council and Environmental Law and Policy Center last month submitted testimony  from five “expert witnesses” to the Iowa Utilities Board regarding Alliant Energy’s proposed base rate increases, currently under review.

The environmental groups disapprove of the proposal overall and said they believe they have identified alternative “solutions that will save customers money while cleaning up Alliant’s generation mix.”

Below are summaries of Alliant’s proposal and the environmental groups’ critique.

About Alliant’s proposal

On April 1, 2019, Alliant customers began seeing an interim base rate increase (about $8 for the typical residential customer) on their energy bills.

The company plans to further raise the rate beginning January 1, 2020. The total increase of $20 (24.45%) for typical  residential customers would bring about $203.6 million in revenue into the company annually.

In a proposal to customers, Alliant said the company is “investing in new wind farms, energy grid technologies including advanced metering infrastructure, and environmental controls that reduce emissions.”

The company has also said that the additional cost to customers would be offset over time by reductions in other costs like energy efficiency.

 The proposed increases are awaiting a hearing in November from the Iowa Utility Board. If the increases are not approved, Alliant would have to refund customers for excess paid during the interim increase. 

The IEC/ELPC perspective 

The IEC and ELPC have both economic and socioeconomic concerns about the proposal, as outlined in their testimony to the IUB. The testimony also provided economic analysis of the utility’s current coal power generation. 

A few highlights from the testimony include:

  1. Coal generation costs more than renewables. An analysis by Rocky Mountain Institute Principal Uday Varadarajan on behalf of the two organizations found that the cost of Alliant’s coal generation exceeds that of projected renewable energy costs. Retiring three Alliant coal plants and purchasing market energy or purchasing or generating wind energy could save customers $16 million in 2020, he found.  This was proposed as an alternative move for Alliant to make, increasing renewables while reducing rather than increasing cost to consumers. (Read more from U.S. Energy News).
  2. Revenue would be spent on wasteful initiatives. The groups call out one initiative Alliant has proposed — putting power lines underground — as a poor use of consumer funds.
  3. Proposed solar programs could undermine the industry. The groups believe Alliant’s new community solar program (implied to be funded in part by the rate increase) would compete with solar businesses and potentially create a monopoly. They said the proposal also includes measures similar to those proposed in the “Sunshine Tax” legislation earlier this year to increase cost for solar customers.

 

 

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