Alliant Energy reaches agreement on electric rate freeze

Customers of Alliant Energy's Interstate Power and Light will not see an increase in their base electric rates through 2016.

Under a three-year agreement filed Tuesday with the Iowa Utilities Board, Interstate Power and Light will extend the electric base rate freeze that has been in effect since 2011. It also will give customers credits totaling $70 million in 2014, $25 million in 2015 and $10 million in 2016.

The credits will appear in the energy cost portion of customers' bills.

The agreement is a collective effort by Alliant Energy, the Office of Consumer Advocate, Iowa Consumer Coalition, and the Large Energy Group. It will become effective when approved by the Iowa Utilities Board.

Between 2011 and 2014, Alliant Energy will have invested about $750 million in Iowa's electric system to improve electric reliability and the emissions of its generating stations.

The agreement announced Tuesday offsets the cost of the  investments with savings from a new nuclear purchased power agreement with FPL Energy for electricity produced by the Duane Arnold Generating Station near Palo. That agreement took effect last month.

Tom Aller, president of Interstate Power and Light, said the utility is on track to construct the natural gas fired Marshalltown Generating Station, which will add additional electric generation to the company's portfolio when it is completed in 2017.