A spokesperson for Alliant Energy’s Interstate Power and Light Company subsidiary says they are reviewing the ruling Wednesday by the Iowa Utilities Board that set the rate of return and costs the company can recover for its proposed coal-fired power plant in Marshalltown.
The IUB set a rate of return for the electricity from the plant at 10.1%. IPL spokesman Ryan Stensland says the company had sought a rate of return of 12.55%. Stensland says they are disappointed with the decision because they “don’t believe that the conditions placed on the plant actually take the reality of the financial climate into consideration right now.” He says the company will continue to work with its partners to determine the next steps.
Stensland says the company has to go over all the requirements set by the IUB before determining if it will go ahead. “We’ve made not definitive decision to not move forward with this decision, we need to be able talk to our suppliers and the financial community to see if they believe this project is feasible,” Stensland says. He says they need to determine if the plant can be built at the cost that has been set.
This is only the second rate setting case for the IUB since the new law in 2001 that was passed to spur the development of power plants. Stensland says they had hoped to get a better return for the investment. Stensland says the law was intended to keep companies from being exposed and spending dollars it won’t later be able to recover. He says the company had that happen in the 1980’s with the Ottumwa electric plant, and the state went 20 years before a new plant was built.
The IUB set the cost cap the company can recover from customers for building the plant at nearly $700 less per kilowatt of electricity than the company had requested, which Stensland says is another issue they have to look at. Stensland says that creates uncertainty as to whether they would be able to recover their costs.
“I don’t know if that’s a risk that we’re willing to take on behalf of our customers and shareowners at this time, and exposing the company to those types of risk given the current financial climate may not be prudent,” Stensland says.
The three member IUB board did discuss the financial climate and whether setting the rate and cost recovery for the plant too low would adversely impact the plan, but voted 3-0 to approved the rates they set. Alliant Energy serves some 530,000 electric customers in Iowa.