Alliant natural gas bills could drop under rate case settlement

Alliant Energy has reached a settlement with opponents of its proposed natural gas rate increase that could lower customer rates.

Terms of the settlement agreement filed with the Iowa Utilities Board on Thursday call for Alliant to receive a $10.5 million annual increase in natural gas rates, versus an earlier increase of $14.8 million.

Under the settlement, Alliant would receive a return of 10 percent on investments in its natural gas system, compared to a 10.9 percent return sought in its original rate request.

The settlement was reached with the Iowa Office of Consumer Advocate, which is statutorily required to represent the interests of consumers in the state, and the Iowa Consumers Coalition.

A cost management plan would actually lower customer rates during the first three years of the increase, the company said.

The final settlement is larger than an interim revenue increase of $8.6 million already allowed to Alliant. That means customers shouldn't expect any refunds from interim rates.

Terms of the settlement are subject to the review of the Iowa Utilities Board. A timetable for enacting the rate change has not been set, however the utility had previously expected a decision from the board in April 2013.

The rate case affects only Alliant's charges for delivering natural gas, not the price of natural gas itself, which makes up 60 to 70 percent of a typical household natural gas bill.

Natural gas prices have plunged in recent years due to increased use of technology that allows more extraction of natural gas. The overall cost of natural gas to Alliant customers is about 20 percent less than it was during the last rate increase in 2005, the company said.

Alliant provides natural gas service to 240 communities in Iowa, including Ames, Marshalltown, Clinton, Muscatine and Burlington.