An overview of Iowa Utilities Board proceedings regarding Alliant Energy rate increases slated in 2024
On August 3, 2023 Alliant Energy (dba Interstate Power and Light) informed the Iowa Utilities Board (IUB) that it is “planning to file an application for changes to its retail electric and natural gas rates, pursuant to Iowa Code §476.6, to reflect the costs and benefits of the investments IPL has made on behalf of its customers and communities since its last rate case.”
Based on data submitted on an annual basis to the Iowa Utilities Board by all of Iowa’s electric utilities, Alliant Energy’s all-in costs per kilowatt hour for residential customers are consistently among the highest in the state. They are higher than all of the rural electric cooperatives, and they are higher than all but a small handful of the 135 municipal electric utilities in Iowa.
Alliant intends to file its rate increase proposal on September 29, 2023. The IUB has assigned Alliant’s request to Docket RPU-2023-0002.
Application for Approval Filed
The company provided this information to the IUB when it filed its Application for Approval of Non-Standard Customer Notices and Requests for Waivers on August 3, 2023. Alliant says a non-standard notice is necessary to comply with House File 601, which Governor Reynolds signed into law during the last legislative session. The standardized notice found on the Board’s website was drafted prior to the change in the law, which is why Alliant says a non-standard notice is necessary.
As revised, Iowa Code § 476.6(2) (2023) now requires: “[T]he written notice to affected customers shall include an estimate of the total bill impact on a typical customer in each affected customer class, provide a general explanation of the board’s rate increase process, and state that the customer has a right to file a written objection to the rate increase and that the affected customers may request the board to hold a public hearing to determine if the rate increase should be allowed. The written notice to each affected customer of the public utility shall be served in the manner in which the customer elects to receive bills and other communications from the public utility.” (Emphasis added)
If Alliant’s non-standard notice is approved by the IUB with no changes, customers will only see the estimated total bill impact of the rate increase; they will not see the projected increase to base rates that represent ~65% of residential customer bills.
In its most recent rate case, Alliant’s proposed increase would have raised base electric rates for residential customers by over 24 percent. Ultimately, the proposed increases to all customer classes were reduced significantly by the IUB due in no small measure to the work of the Office of the Consumer Advocate, the Decorah Area Group, and other intervenors in Docket RPU-2019-0001.
Opposition from Office of Consumer Advocate (OCA)
On August 11, 2023 the Office of the Consumer Advocate (OCA) filed its response to Alliant’s Application for Approval of Non-Standard Customer Notices and Requests for Waivers. “OCA disagrees with IPL’s assertion that informing customers of the base rate impacts of its proposed increase would constitute an undue hardship.” It also argues that “[c]ustomers deserve to know not only the impact of the proposed increase on their total bill, but also how well their monopoly utility company is doing at managing the subset of costs that are within its ability to control, as reflected in the base rates.”
Alliant filed its Reply to OCA’s Response on August 17. It said, in part, that “[a]dopting OCA’s argument would require IPL to comply with rules that are contrary to the statute, would render the Legislature’s clear requirement in HF 601 that customers be noticed on ‘total bill impacts’ superfluous and without meaning, and violate multiple rules of statutory construction, and Iowa’s Administrative Procedure Act.”
Once Alliant does file its application for changes to its retail electric and natural gas rates, the IUB will commence a contested case proceeding that typically takes approximately ten months. According to a company spokesman, Mike Wagner, “Alliant Energy (IPL) anticipates that any adjustment to rates would occur beginning in October 2024.”
Timeline for Rate Increase
Whereas the company has imposed temporary rate increases in its three prior applications to raise rates, Wagner says “we don’t expect any adjustment in rates to occur until October 2024. Specific information about how that will be structured will be found in our September filing.”
Alliant’s Reply to OCA’s Response discussed above is consistent with Mr. Wagner’s comments. It states that “[t]his proceeding will not have a final resolution until nearly a year from now, and customers will not see any increase until well after that.”
While the company apparently does not intend to implement an interim rate increase, it does intend to phase in the rate increase starting first in October 2024 and again in October 2025–presumably to lessen the financial impact of its proposed rate increase. According to a well-regarded Iowa utility expert, such a phased-in rate increase would be unprecedented in the history of Iowa ratemaking.
Finally, regarding customer comment hearings, Alliant opposed OCA’s recommendation that one of the customer comment hearings be held in Decorah.
Posted: August 19, 2023
