CEDAR RAPIDS — With two wind farms coming online in about a month and upgrades underway on the power grid, Alliant Energy customers could soon see an increase to their electricity rates.
But while customer base rates — which are one component of an energy bill — are expected to increase, utility officials say company investments in renewable energy and a resilient grid ultimately will bring customer costs down in the long run.
“Usually when you have projects like that they’re going to have a slight increase in base rates, but a lot of times that is offset by the benefits,” Terry Kouba, president of Iowa Power and Light and senior vice president of Alliant Energy, said Wednesday. “They’re important projects that the customers will take advantage of for a long time.”
Kouba said Alliant will file electric and gas rate cases with the Iowa Utilities Board for review. More specific details on customer rates will be available at that time.
Kouba said on Wednesday that customers can expect “a low- to mid-single digit” percentage increase in their overall electric bills in 2019 and 2020 and a “low- to mid-single digit” percentage increase in their 2020 gas bills.
Details released by Alliant Energy on Friday provide more specific numbers regarding the impact customers can expect on their monthly bills.
According to the release, a typical residential customer with a monthly electric bill of $116 would see a total increase of approximately $8 per month starting April 1, 2019.
And, if the Iowa Utilities Board approves the rate increase request, a second projected increase of roughly $12 additional dollars per month would start on January 1, 2020.
This means in total, the customer with the current monthly bill of $116 per month could see their 2020 monthly bills at $136. This would represent a $240 annual increase in 2020 over the current rate, which is a 17.24% increase.
Kouba said the rate increase is tied to a number of ongoing investments by the utility, including a growing wind portfolio and a smarter, resilient power grid.
In about a month, Alliant’s Upland Prairie Wind Farm in northwest Iowa and central Iowa’s English Farms Wind Farm will come online. The two farms represent roughly 470 megawatts of wind power.
Three more wind farms are expected to be finished next year.
Meanwhile, Alliant has been expanding its advance metering infrastructure — or smart meters — across the state. As of December, Alliant had deployed smart meters on about 335,000 of its roughly 500,000 meters in Iowa.
Kouba said those investments can increase a customers base rate, but added that customers should see savings in other portions of their bill such as energy efficiencies and fuel and transmission costs.
“Certainly there is a base rate impact based on the capital investment and ongoing operation maintenance cost, but that is largely offset by a combination of production tax benefits we flow back to customers and fuel cost reductions we also flow back to customers,” Kouba said. “Those savings largely offset the cost increases associated with base rates to customers.”
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