Alliant Energy announced an energy strategy Thursday that includes building a new natural gas fired electric plant in Marshalltown and spending some $430-million to upgrade existing coal fired plants. Alliant spokesman, Ryan Stensland, says the new plant would produce 600 megawatts of electricity.

“Six hundred megawatts equates to approximately being able to power about half a million customers during that time,” Stensland explains. “We expect construction to begin after we receive regulatory approval sometime in 2014, and we have an anticipated on-line date of the second quarter of 2017.”

The new plant would cost between 650 to $750 million. The other major part of the energy plan is a new contract to extend the purchase of electricity from the Duane Arnold Nuclear Energy facility in Palo from its current expiration date in 2014 until 2025.

“That’s a multi-billion dollar deal, so you take that, plus the new generating station, plus our investment that we’re making to upgrade our existing generating stations in Lansing and Ottumwa and the Niel unit out in Sioux City and the Louisa generating station down in Louisa County, and that’s a multi-billion dollar investment we are making in Iowa over the next five to seven years,” Stensland says.

Stensland says the natural gas plant helps with the goal of reducing emissions. “Obviously the environmental regulations are tightening on our existing cool-fired fleet, and I think there would be a number of challenges from a regulation standpoint in really making it cost-effective to really build a new coal-fired power plant at this time given the regulations that we are facing and that are currently in place. As a result, natural gas is really our next best option,” Stensland explains.

He says natural gas gives them more operational flexibility than coal as a natural gas plant can ramp up in six to eight minutes, while it takes much longer to ramp up a coal plant.”But also, it takes advantage of a really strong natural gas supply.”

Alliant is allowed to increase rates to cover the cost of the new plant. So what will be the new plant cost its customers?

“We’ve talked about over the five year period, we’re probably looking at a two to four percent increase in rates on an annual basis,” Stensland says.

“Some years might be more, some years might be less. Some years we might not file one, the next year it might be six percent. We’ve still got to figure out what the cost of that facility will be, how we are going to recover the cost and what the Utilities Board will allow us to recover.”

The Iowa Utilities Board must give approval to the proposal to build the new natural gas plant, and the agreement to purchase the nuclear power.