Alliant rate hike on hold, for now

DES MOINES - Alliant Energy's electric rates won't be going up beyond the seven percent interim rate increase that took effect last year - at least for a few more months.

State regulators  Monday authorized revenue increases for Alliant of about $18 million beyond the $84 million interim rate increase that took effect in March 2009. But the extra $18 million will be taken from regulatory reserve accounts - not directly from customers - in a bid to help customers dealing with the effects of the recession and the June 2008 flood.

The bad news for customers is that Alliant Energy plans to file another rate case within a few months, and some of the requests that weren't granted the company in the case decided Monday are expected to be considered again.

Alliant had been seeking an overall increase of 16.6 percent,, or $171 million. It will receive about $102 million in additional revenue.

Iowa Utilities Board Chairman Rob Berntsen said the decision was an effort to balance the needs of customers struggling with job losses, rising unemployment and flood damage with Alliant Energy's needs to remain viable and be compensated for its response to storms and floods.

The decision mainly rebuffed the arguments of the Office of Consumer Advocate, which had asked that the board lower Allliant Energy's rates, partly because of management decisions that had contributed to rising costs.

The board agreed with a request from a large energy user group to accelerate the dispersal of funds from a regulatory account set up with proceeds from the sale of Allliant Energy's Iowa transmission system to ITC Midwest. It also agreed to use funds from a regulatory reserve account set up with proceeds of the sale of the Duane Arnold Energy Center.

Tom Aller, president of Alliant's Interstate Power & Light Utility, said the utility was relatively pleased with the outcome.

"It's fair to say the commission was trying to balance the needs of the customers against the needs of the shareholders," Aller said.

Alliant was granted a return on equity of 10.5 percent, about one percent lower than the utility had been seeking.