Mistake alleged in Alliant energy rate decision

CEDAR RAPIDS - Iowa's consumer advocate has asked the Iowa Utilities Board for a rehearing on Alliant Energy's recent electric rate increase, citing what it says is a $6.3 million mistake in the company's favor in the board's written decision.

The Iowa Utilities Board approved an electric rate increase of about 9 percent in December that will bring in about $114.8 million more per year for Alliant's Interstate Power & Light utility.

In a motion filed Friday, the Office of Consumer Advocate says the board indicated that it would limit the amount Alliant Energy could recover from ratepayers for investments in the Sixth Street Generating Station in Cedar Rapids to 52.5 percent of the expenses sought.

The Sixth Street Generating Station was closed permanently after the June 2008 flood because of the extent of damages. Alliant wanted permission to recover from electric ratepayers much of the investment it had made to modernize and improve the plant through the years.

The board rejected full recovery of those amounts because close to half of the plant's output went to generate steam for downtown businesses. The company had said it could not recover 47.5 percent of the investments, or about $12.5 million, from the steam customers because they no longer were customers. The board said it could not shift all the costs to electric ratepayers.

Final calculations in the Iowa Utilities Board's order disallowed 23.75 percent, or $6.3 million, instead of the 47.5 percent, or $12.5 million, the consumer advocate's motion said.

The consumer advocate also noted that the board's order allowed Alliant to increase its revenue to reflect the expiration of a federal research and development tax credit. Just one day after the board issued its final decision, however, new legislation renewed the tax credit.

If the decision is left to stand, the consumer advocate argued, Iowa ratepayers will be required to pay $278,647 more than necessary each year.

Neither Alliant nor the board had responded to the motion as of Monday.