Alliant Energy is defending its request for a big boost in electric rates.
Alliant initially proposed a 17% increase, but is now asking state regulators to approve 14.2% instead. That means customers in eastern and northern Iowa would pay a combined $146 million more for heat and electricity.
Alliant spokesperson Scott Drzycimski says the rate hike is necessary to cover the cost of recent upgrades to the state’s transmission lines. “That will set us up in the future for great opportunities in additional wind power and renewable generation across the state,” Drzycimski said.
The state’s Office of Consumer Advocate blames the proposed rate hike on poor management by Alliant’s parent company, Interstate Power and Light. Attorney Ron Polle says I.P.L.’s decision to sell its transmission lines in 2007 has come back to haunt consumers.
“The residential customers are beside themselves,” Polle said. “I attended all the consumer comment hearings and that’s one of the things that the customers said – ‘we have to be protected against these enormous rate increases when the economy is so bad and we don’t have the money to pay.'”
Drzycimski says Iowa’s transmission lines needed significant upgrades so selling them to another company made sense.
“Obviously Iowa is a hotbed for wind power and hopefully other forms of renewable generation through our (agriculture) background here and what we saw in the sale to ITC Midwest was an opportunity to have the transmission expanded beyond what we were able to do in the realm as a investor owned, integrated utility,” Drzycimski said.
Polle says consumers were supposed to be held harmless for eight years but are now being asked to cover a 60% increase in transmission costs.
“We’ve heard from hundreds of businesses who are concerned about these costs, about the enormous rate increase that Interstate has proposed, and the impact their businesses, and the impact on the economy, and impact on economic development, and those businesses are worried and we are too,” Polle said.
The Iowa Utilities Board is expected to approve or reject the rate increase in January.
