Interstate Power and Light Co. (IPL), a subsidiary of Alliant Energy Corp., filed a proposal with the Iowa Utilities Board to increase its Iowa retail electric rates. IPL is requesting a rate increase that is expected to increase revenues by approximately $171 million, or 17 percent. The impact of the proposed change in rates will vary depending on customer class. This is the company's first Iowa electric base rate case since 2004.
The company expects the proposed change in electric rates to affect customers' electric bills in two stages: interim and final rates. IPL anticipates implementing interim electric rates on March 27, 2009. During this interim period, the company expects the typical residential customer monthly electric bill to increase by approximately $7.21, or 8.9%.
The increase in interim rates is expected to increase revenues by approximately $84 million, or 8 percent. Interim rates will remain in effect until the IUB issues a decision on the company's final electric rate request, expected in the first quarter of 2010. If the final electric rates approved by the IUB are lower than the interim rates, IPL will grant refunds in the difference between the interim and final rates, plus interest.
If the IUB approves IPL's proposal to increase final electric rates, the company expects the typical residential customer monthly electric bill to increase by an additional $7.45, or 9.2 percent. The company anticipates implementing any final change in electric rates in the first quarter of 2010.
IPL believes the proposal to adjust electric rates is necessary to recover costs related to the 2007 ice storms and 2008 floods that impacted the company's Iowa electric service area; investments made over the past five years to further the company's commitment to environmental stewardship and enhance the reliability of the company's electric system; and general operational costs necessary to provide customers with safe and reliable power.
"Over the past five years, our company has invested nearly $1 billion in Iowa's energy future," says Tom Aller, President-IPL. "These investments have been focused on rebuilding our electric system after the devastating natural disasters to help Iowa recover and move forward; enhancing the reliability and safety of our energy infrastructure to foster economic opportunities for Iowa's working families; and reducing our impact upon the environment. Through our continued investments we are creating a bright energy future for Iowa.
"However, we recognize that while these investments benefit our customers, there is also an impact on their monthly bills. We understand that our customers face difficult financial choices in the midst of this economic downturn. We encourage our customers to take advantage of the number of programs our company offers to help customers manage their energy costs. We will also be proposing to use proceeds from previous asset divestitures to reduce part of the increase in electric rates. If approved, this would reduce our final rate request by approximately $20 million."