Dozens of Iowa communities oppose Alliant’s proposed rate increases

More than 60 communities across the state have joined the Clean Energy Districts of Iowa in opposition to Alliant Energy’s requested rate increases for its electric and gas customers.

Last year, Alliant proposed a 7.7 percent hike to its residential electric bills, along with a 5 percent increase for its natural gas rates. If approved by the Iowa Utilities Board, both rate increases would go into effect this October. The utility also proposed an additional 5.7 percent increase for electric bills starting in October 2025.

Altogether, the changes would add around $150 more to the average residential customer’s bill each year, and even more for non-residential customers like businesses and industries. Alliant deems the increases necessary to cover added operation costs, support grid resiliency and allow future growth, spokesperson Morgan Hawk previously told The Gazette.

The proposed hikes — the largest in company history — mark Alliant’s sixth request to increase electric rates since 2004.

They would exacerbate existing energy burdens on low-, middle- and fixed-income residents, said Clean Energy Districts of Iowa policy analyst Jim Martin-Schramm. The Clean Energy Districts of Iowa, or CEDI, is made up of 12 districts across the state, including districts in Linn and Johnson counties.

For example, the City of Decorah already spends around $500,000 a year on energy. It can expect to spend between $72,000 to $100,000 more each year if Alliant’s new rates are approved. That money could “otherwise be spent on vital public services,” according to its resolution in opposition to the proposal.

“That's a lot of money for a small community,” Martin-Schramm said. “I think that's in large measure why we've seen such a positive uptake from the communities that have decided to join the coalition.”

As of mid-January, at least 34 communities in Alliant’s service territory had joined CEDI’s coalition against the proposed rate hikes. More than 60 communities signed resolutions in opposition of the rate increases, including Central City, Swisher and Palo. Dozens of members of the public have submitted comments to the Iowa Utilities Board in protest of the proposal.

Alliant’s existing electric rates are among the most expensive in the state. In 2022, they were higher than all but six of Iowa’s 181 electric utilities, according to a CEDI analysis.

The utility’s residential electric costs in 2022 were 61 percent higher than that of MidAmerican Energy, the other dominant utility in Iowa. Alliant’s commercial and industrial rates were 49 percent and 32 percent higher respectively. That disparity may impact economic growth in Alliant’s service areas, Martin-Schramm said, referencing the several multibillion-dollar data centers located in MidAmerican territory.

“We’re the Clean Energy Districts of Iowa, so we are not opposed, in principle, to Alliant’s desire to transition from fossil fuels to renewables. We commend them for that,” Martin-Schramm said. “The problem is that, in our view, there are ways to do that more cost-effectively.”

He pointed to Alliant’s November 2021 request to the Iowa Utilities Board for preapproval of 400 megawatts of solar and 75 megawatts of battery storage, along with their associated lifetime costs and rates. The board initially denied Alliant on grounds that the utility didn’t adequately consider alternative energy generation options that could be cheaper, as required by Iowa Code.

After filing additional evidence, Alliant received preapproval last May for the 200 megawatts of solar planned for the Duane Arnold Solar projects in Linn County. The remaining 200 megawatts of solar in the request — which have since been identified as the Creston Solar Project and Wever Solar Project — were preapproved this past October.

Like the Iowa Utilities Board’s initial decision, CEDI isn’t convinced that the investments are worth the costs they’ll push onto customers, Martin-Schramm said. The projected impacts to customers’ energy bills also don’t include other factors outside Alliant’s control, like transmission rates or energy adjustment costs.

“Right now, and this has been the case for the last 20 years, (Alliant’s) sales have been stagnant or declining,” Martin-Schramm said. “If you're not selling more electricity, how can you make more money for your shareholders? Well, the way you do it is by building stuff and owning it.”

The utility proposed its last successful rate increase in 2019, when electric rates jumped by 8.1 percent and gas rates by 9.7 percent. Rates were stagnant throughout the COVID-19 pandemic, the 2020 derecho, inflation ebbs and flows and other challenges, Alliant’s Hawk said.

The currently proposed rate hike would allow the utility to expand its fiber network and move overhead power lines underground to decrease the number and length of power outages. Alliant also plans to incorporate more renewable energy into its portfolio, in line with goals detailed in its Clean Energy Blueprint.

The utility serves many rural customers and communities with smaller populations, meaning costs are spread out over fewer customers, Hawk said.

“Nobody, including us, wants to see bills increase,” he said. “However, there are more costs down the road if we do nothing or simply continue ‘business as usual.’ It’s why we’re planning ahead and acting on behalf of our customers to best manage future costs and meet customers’ energy needs.”

The Iowa Utilities Board established a schedule for the proceedings Wednesday, planning the hearing for July 9-12. On Thursday, the board requested additional information from Alliant about its proposed rate increases.

Brittney J. Miller is the Energy & Environment Reporter for The Gazette and a corps member with Report for America, a national service program that places journalists in local newsrooms to report on under-covered issues.

Comments: (319) 398-8370; brittney.miller@thegazette.com