Alliant issuing refunds; average $5 to $6 per customer

Refunds to Alliant Energy residential customers from excess interim rates in the utility's recent electric rate case will average $5 to $6 when they arrive this spring, the utility said after final orders were issued in the case last week.

The refunds will be credited to customer accounts on one month's bill, utility spokesman Scott Drzycimski said, adding that customers will be notified when the credit is applied.

Alliant was ordered to provide the refunds because the final rate increase it was allowed is less than the interim rates the utility began charging in March 2010.

Alliant implemented rates that would generate $119 million per year in additional revenue beginning in March 2010, but the board whittled it down $4.5 million in its Dec. Dec. 15, 2010, rate decision.

The Office of Consumer Advocate petitioned the utilities board for rehearing in the case. It argued that the board's final written order in January contained several errors that cost consumers $6.3 million more than they should have to pay annually under terms of the board's December 2010 verbal order.

Alliant also petitioned for rehearing, pointing out some of the same errors cited by the Office of Consumer Advocate. However Alliant also argued that it should not have to refund $3.3 million in “offsets” from regulatory reserve accounts to defray the effect of its new Whispering Willow East Wind Farm on rates.

In its order issued Friday, the board trimmed the increase by only $800,000 instead of the $6.3 million sought by the consumer advocate. However the board did not agree with Alliant on the refund issue.

The rate impacts of the 9 percent overall rate increase will vary widely between different Alliant rate zones.

For an average residential customer in Alliant's IES-Northern Zone including Cedar Rapids, bills will go down about 4.5 percent from interim rates. Rates will be about 7 percent higher than before the rate case. Monthly bills are expected to average $97, up about $6 from before the case.

In the IES-Southern Zone, rates will go up an average of 0.9 percent from interim rates with this week's bills. Residential ates will be about 12 percent higher than before the rate case. Monthly bills are expected to average $111, up about $12 from before the case.

In the IPC Zone, rates will go down about 1 percent from interim rates. Residential customers will pay rates about 9.5 percent more than they paid before the rate case. Monthly bills will average about $93 per month, up $9 per month from before the case.

Alliant's Drzycimski said the implementation of the final step of a long rate equalization process is the primary difference the rate increase will affect customers unequally. He said rates will now be the same across all Alliant zones. Monthly bill averages are higher in the IES-Southern Zone due to higher average useage in that area, Drzycimski said.

The rate case also gave Alliant a “transmission rider” that will now take effect. It allows the utility to pass along increases in transmission charges from ITC-Midwest without filing a rate case. It implements a cost management plan that dampens the effect of the increase by using benefits from a IRS tax settlement with Alliant.