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Alliant reduces rates for three years

November 28, 2012
By DAVID ALEXANDER - Staff Writer ( , Times-Republican

Alliant customers will see a decrease in their gas bills over the next three years.

The decrease comes because of an Iowa Utilities Board decision that approved a settlement between Interstate Power and Light Company, a subsidiary of Alliant Energy, and the Iowa Office of Consumer Advocate filed in May.

The IUB handed down the decision Tuesday.

Originally, Alliant filed with the IUB asking to permit a rate increase to offset its $70 million investment since the company's last increase in 2005.

"We don't want to raise rates on customers, but it is something we need to do," said Justin Foss, spokesperson for Alliant.

Since then, Alliant has imposed interim rates - something permitted without IUB approval - but with its agreement with the Office of Consumer Advocate, rates will instead fall slightly.

The three-year reduction in rates comes by way of Alliant passing on tax credits to consumers. Then, in 2016, consumers will see a roughly $3-a-month increase in their rates.

Foss said this type of increase allows customers to plan.

"We are giving customers a little bit of chance to see what rates will be in the future," he said.

Of course, natural gas rates depend on the supply and demand of that gas, Foss said. Only about 60 to 70 percent of a consumer's electric bill is the cost of the gas, the remainder is the cost of services rendered.

Since Alliant essentially only charges for service, meaning it offers the gas itself to consumers at the same cost it purchases it, fluctuations in the natural gas market affect pricing, Foss said.

Rob Hillesland, a spokesperson for the IUB, said the board balances the interests of consumers with the interests of the company and decides whether to allow such settlements. While it does take into account a mutually agreeable settlement, such decisions do not hinge on them.

"[The IUB has] to try to provide an opportunity for the utility to earn a reasonable return on their (sic) investment," he said.

According to the IUB order, the board found that the settlement was a reasonable way to return tax savings to consumers.

Alliant must file compliance tariffs, which outline how the plan is to operate, what it requires of customers and so forth, to the IUB within 20 days, according to the order. The settlement's approval is contingent on the withdrawal of Alliant's request for a rate increase.

The new rates will take effect in the first quarter of 2013.



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