Iowa’s new law designed to spur the development of new power plants is being put into action for the first time. The Iowa Utilities Board used the law passed in 2001 to set a rate agreement Tuesday for the 400-million dollar electric plant MidAmerican energy has proposed building near Pleasant Hill. Utilities Board spokesman Chuck Seele says developing a rate agreement before the plant is built is a new feature of the law.Seele says prior to the new law, utility companies had to build plants and then hope they could get a rate approved to cover their costs. Seele explains the details of the rate agreement.He says the agreement guarantees MidAmerican can set electric rates to achieve a 12-percent return on the company’s investment, and recover 350-million dollars of the cost of the plant. Seele says there hasn’t been a new power plant built in Iowa since 1983, and new plants will be needed to keep up with capacity. MidAmerican has proposed one other new electric plant, and Alliant Energy has also announced it will build a new plant.
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