Iowa regulators approve Alliant Energy rate increase

The rates Alliant Energy’s Iowa customers pay for electricity and gas will increase under an order issued this week by the Iowa Utilities Commission.

Interstate Power and Light Company, the Cedar Rapids-based subsidiary of Alliant Energy, announced in October last year it was requesting increases to electric and gas rates in two phases: first in 2024, and again in 2025.

Intervention by a number of groups led to a settlement agreement that was ultimately signed by the Office of Consumer Advocate in the Iowa Attorney General’s Office, the Iowa Business Energy Coalition, Walmart and Alliant.

The settlement — approved Tuesday by the utilities commission — is less than Alliant had sought.

The utility company initially sought to increase its electric rate revenue by $284 million. The settlement cut that by $99 million, to $185 million, an amount the utilities commission noted is “significant” in its order.

The additional revenue from Alliant’s natural gas rate increase also was cut, by 28 percent, from the requested $14 million increase, to $10 million.

“By reducing the revenue requirement, it will reduce the amount customers will be required to pay in rates,” the IUC order states.

The settlement also eliminates the two-phase increase Alliant had proposed, allowing just one increase. Further, the company cannot seek another rate increase before October 2029, unless it meets certain requirements spelled out in the settlement.

The utility’s last rate increase was in 2019, when electric rates went up 8.1 percent and gas rates by 9.7 percent.

What does this mean for customers?

The Iowa Utilities Commission, in announcing its order, said the average residential charge for electric customers will increase from $13 to $15.50 a month.

The commission did not provide numbers for the increases for gas customers.

Alliant Energy spokesperson Morgan Hawk said Wednesday the company is currently reviewing the utilities commission order and evaluating the impact it will have on customers’ bills.

Hawk said Alliant still is planning for the new rates to take effect in October — as it announced last year. He said when the new rates are implemented, Alliant will send customers information about how they will impact their monthly bill going forward.

Why is the increase needed?

Alliant Energy said last year it was proposing a rate increase to cover added operation costs, support grid resiliency and allow future growth.

One element of grid resiliency has been moving overhead power lines underground to decrease the number and length of power outages.

Hawk told The Gazette last year, the frequency and duration of Alliant outages had decreased by about 30 percent over the previous decade as more lines were moved underground.

Morgan said this week that work to move lines underground continues. He said the additional revenue from rate increases also will allow Alliant to continue to diversity its energy mix by adding renewables.

Alliant said the increase “paves the way for substantial economic development and community growth.”

“This increases reliability while creating local construction jobs and new tax revenues for communities,” Hawk said Wednesday. “Transitioning to more renewable energy avoids long-term costs, like fuel, to deliver greater customer value.”

Mayuri Farlinger, president of Alliant Energy’s Iowa energy company and vice president of operations, said Alliant appreciates the Iowa Utilities Commission’s approval of the rate adjustments.

“This decision stabilizes customer base rates until the end of the decade, driving affordability and predictability for our customers and the communities we serve in Iowa,” Farlinger said in a statement to The Gazette on Wednesday. “While providing long-term rate stability, we remain committed to cost-effectively meeting customers’ energy supply needs.”

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