Ad-Express and Daily Iowegian, Centerville, IA

Business

May 31, 2012

Interstate Power and Light Company seeks to increase rates in Iowa

CEDAR RAPIDS — Interstate Power and Light Company, a subsidiary of Alliant Energy Corporation, today is filing a request with the Iowa Utilities Board  to increase its Iowa retail natural gas rates. IPL’s request proposes to increase annual revenues by approximately $14.8 million, or 5.6 percent. Impacts for each customer class will vary.

“It has been seven years since our company adjusted its natural gas rates in Iowa. During this time, we have invested more than $70 million in Iowa’s natural gas delivery infrastructure to increase both the safety and efficiency of the system,” said Tom Aller, president-IPL. “In addition to these investments, our mix of customers and their usage patterns have changed. This rate case allows us to adjust and continue to keep our rates consistent with the costs of providing natural gas service to each customer.”

Customers have benefited from lower natural gas costs in recent years (see table below). The cost of gas makes up, on average, 60 to 70 percent of the average residential natural gas bill. This cost of gas is a dollar-for-dollar pass-through for customers, and is unaffected in this rate case proposal. Because of these lower gas costs, the average residential bill is down nearly 20 percent since IPL’s last rate case in 2005.

IPL-Iowa Residential Cost per year and Average Cost Per Therm

2005 - $1.19

2006 - $1.31

2007 - $1.25

2008 - $1.23

2009 - $1.06

2010 - $0.99

2011 - $1.00

Interim - $1.03*

Proposed Final - $1.08*

*These costs are estimated based on average IPL-Iowa residential usage in 2011 and do not reflect future changes in gas costs or impact from the proposed Cost Management Plan.

In addition to the recent benefit from lower gas costs, IPL has proposed a cost management plan as part of its final rates proposal. If approved, the plan would credit customers’ bills for three years using approximately $36 million of federal tax benefits expected to be received by the company. Because of these two factors, total bills are expected to be lower than in 2005.

“We recognize customers rely on us to provide natural gas safely, efficiently, and responsibly,” said Aller. “At the same time, we continue to seek ways to manage our costs while continuing to maintain and improve aging infrastructure.  We believe we have proposed a plan that best balances our need to recover our costs and the needs of our customers to keep rates low.”

In Iowa, IPL provides natural gas service to more than 240 communities. Some of the larger natural gas communities IPL serves are Ames, Marshalltown, Mason City, Clinton, Muscatine, and Burlington.

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