Alliant sticking by steam customers who won’t be ready

Alliant Energy says just five of the original 200 customers won't be ready on Dec. 1 when the utility shuts down its 117-year-old downtown steam system.

Quaker Oats, the nation's largest cereal mill, won't have its new steam boiler system in place until April 2010 because of the size and complexity of the new system, Alliant officials said Wednesday.

Alliant plans to continue operating two temporary natural gas boilers to supply Quaker, according to Tom Aller, president of the company's Interstate Power & Light utility.

Another four large customers also won't be ready for the shutdown of downtown steam.

The U.S. Cellular Center, the Crowne Plaza Five Seasons Hotel, International Paper Co. and Cargill Corp., however, will be connected to other heating systems sometime in December. Until then, they, too, will be supplied with steam from the temporary boilers.

Alliant's coal-fired Sixth Street Generating Station provided inexpensive steam heat and power to downtown customers for 117 years before it was inundated by the Cedar River on June 12, 2008.

Alliant estimated the cost to restore the plant, which served about 200 customers with steam, at roughly $60 million. It decided in January not to rebuild the plant because too few large industrial customers would sign long-term steam contracts at the higher rates needed to recover the cost of restoring the plant.

The city of Cedar Rapids has been asked for permission to leave the system's 17 miles of steam pipes in places under downtown Cedar Rapids, according to Dee Brown, distributed asset care director for Alliant. The utility also is asking the city and large industries if they are interested in buying any of the steam distribution system.

Aller said Alliant hasn't really decided what to do with the Sixth Street Generating Station. The utility will likely ask state regulators to recover the cost of “decommissioning” the plant, essentially demolishing it and cleaning up any environmental contamination it caused over the years, from electric ratepayers because it will no longer have any steam customers.

One possible use for the site would be for a natural gas generating station Alliant plans to build over the next few years. Aller acknowledged that as a possibility, but would not speculate as to the likelihood of its selection. Building another power plant at the site might avoid some of the environmental cleanup and other decommissioning costs.

The operating costs of the new natural gas heating systems most downtown businesses and industries are installing will actually be lower this winter than before the flood, Alliant officials told The Gazette Editorial Board Wednesday. That's only because natural gas prices are near a recent low, Aller said, adding that prices will likely rebound eventually to their previous highs around $14 per decatherm.

Alliant Energy plans to run advertisements celebrating the history of the Sixth Street Generating Station, one of the oldest district steam systems in America. Aller said the system's inexpensive steam has undoubtedly helped keep several thousand factory jobs in the downtown area with the inducement of inexpensive steam. The plant supplied relatively little electricity.

Alliant continues to provide steam to industrial customers from its Prairie Creek Generating Station in southwest Cedar Rapids, which was fully restored after the flood.