Alliant Energy has filed a natural gas rate increase request for its Iowa Power and Light Company subsidiary with the Iowa Utilities Board. Alliant spokesman, Justin Foss says the company is seeking to get back money it has put into the system that brings the gas to customers.
“Really what we’re doing is recovering about 70-million dollars that we’ve invested in the last seven years in the infrastructure to deliver natural gas throughout the state. With this we are recovering what we need, but at the same time trying make as little impact as possible to our customers,” Foss explains. “Part of the reason for that is in the last seven natural gas bills for residential customers have actually gone down by 20%”.
Under state regulation, utility companies are paid a delivery charge for providing the natural gas, and customers are also charged whatever the market dictates for the actual cost of the natural gas. The rate increase covers the company’s delivery charge.
“For all of our customer classes overall, the total is 5.6%. For our residential customers it’s about a 7.9% increase in our final rates. So, once the IUB comes back with their decision — which we expect in early 2013 – it would be about a 7.9%increase,” Foss says.
The law allows the company to start charging an interim rate increase of 3.3% on June 4th. The Iowa Utilities Board can approve the total requested increase, no increase, or a lower increase than requested. Foss says there’s another factor that would keep the increase from being felt right away.
“We’re also proposing a cost-management plan with this that will distribute about 36-million dollars in tax benefits that we expect to get. So really that increase for residential customers, they won’t see that whole increase for at least three or more years after the IUB comes back with its final decision,” Foss explains.
“Because we’ll take that cost-management plan and all of that money, and we’ll distribute it to customers to offset and mitigate that increase for at least three years.” The cost of natural gas that is passed onto the customer has been dropping, so Foss says the overall natural gas bill has been dropping.
“When you look at it as a whole –which is what customers do when they write out a check — they’re seeing what they pay for natural gas, the whole all end cost, is lower in 2011 than it was back in 2005 when we last filed a rate case,” Foss says.
Alliant has 233,000 natural gas customers in cities such as Ames, Marshaltown, Burlington.