When the Iowa Utilities Commission (IUC) approved Alliant Energy’s rate increase in 2024, it placed a 15% cap on bill increases for each customer class to prevent “rate shock.” However, new data from a “subsequent proceeding” reveals that many small businesses, nonprofits, and local governments in the “General Service” rate class are experiencing an 18% increase—and those with solar are seeing a staggering 23% hike.
This disparity suggests serious flaws in the rate-setting process. In 2023, Alliant sought a record rate increase using a “future test year.” Unlike traditional cases using historical data, this method relies on forecasts of what a utility expects to spend and earn. To protect Iowans, Iowa law requires a “subsequent proceeding” to verify if actual costs and revenues match those projections.
A review of the data in Docket No. RPU-2023-0002 reveals results that are deeply concerning. The Office of Consumer Advocate (OCA), the Large Energy Group (LEG), and the Iowa Business Energy Coalition (IBEC) have all raised alarms regarding Alliant’s financial transparency and its failure to pass savings to customers.
Consumer rights organizations define Alliant’s earnings violations
The OCA’s findings are a stark wake-up call: Alliant’s actual return on equity (ROE)—essentially its profit margin—exceeded authorized levels by 51.6 basis points for electric and 128.2 basis points for natural gas. This means Alliant is earning significantly more than what the IUC deemed “just and reasonable,” given its captive customer base of Iowa ratepayers.
Furthermore, the OCA is “troubled” by Alliant’s lack of transparency regarding mass layoffs implemented after a non-unanimous settlement was achieved in the rate case. Alliant reduced staff through a voluntary employee separation plan and outsourced customer service, but it failed to adequately disclose the timing and planning of these moves. Consequently, labor savings are padding Alliant’s bottom line instead of lowering costs for ratepayers.
IBEC’s response expresses similar concerns regarding undisclosed employee reductions and highlights sudden, large increases in uncollectible expenses. These factors make an “apples-to- apples” comparison of costs difficult, leading IBEC to doubt that Alliant has met its burden of proof to show its actual costs are “reasonably consistent” with its projections.
The Large Energy Group (LEG) has reached the same conclusion: Alliant is over-earning. Because Alliant exceeded its authorized rate of return, LEG is calling on the IUC to require Alliant to provide customers with a refund and to adjust rates downward going forward. They argue it is Alliant’s burden to prove its costs are consistent with IUC orders—a burden the company has failed to meet.
At the Clean Energy Districts of Iowa (CEDI), we share these broad concerns, but we are specifically alarmed by the broken promise regarding rate shock.
The IUC’s 2024 order was clear: no rate class should experience an increase greater than 15%. Yet, data shows this cap has been exceeded for many of the 82,311 customers in the General Service classes, including main street businesses, churches, and municipal governments. Alliant has yet to provide an explanation for why these increases were allowed to spiral past the legal limit.
A regulated utility’s purpose is to provide essential services at a fair price. When a “future test year” is used, the subsequent review is the only safeguard against inflated forecasts and undisclosed cost-cutting. The evidence shows a pattern of over-earning, lack of transparency, and a failure to adhere to the IUC’s own rate caps.
Fairness and transparency are the bedrock of Iowa’s regulatory system.
We urge the IUC to hold Alliant to its burden of proof, strictly enforce the 15% cap for all customer classes, and provide the refunds Alliant customers deserve. We also encourage Iowa legislators to remove the “Future Test Year” option from rate regulation. Added in 2018 at the request of utilities, it has proven to be an ineffective, nontransparent option susceptible to abuse.
UPDATE
On April 1, the Iowa Utilities Commission issued an order regarding what evidence would be considered during the hearing for the subsequent proceeding on May 26-27. Conspicuously absent was the information Alliant had provided about which ratepayer classes experienced bill increases in relation to the Commission’s 15% cap.
On April 8, the CEDI Coalition filed a motion for reconsideration about this important matter.
On April 27, the Iowa Utilities Commission denied CEDI’s request for reconsideration on narrow legal grounds. Nevertheless, the IUC went to state:
“The Commission does take CEDl’s concerns seriously, in addition to the mandate to ensure rates are just and reasonable; however, the subsequent proceeding has a very specific purpose and a narrowly defined scope. Because of the seriousness of CEDl’s concerns, upon the conclusion of the subsequent proceeding, the Commission will open a docket to address whether IPL is complying with the Final Decision and Order of the rate case and is within the 15% cap, and any other issues deemed appropriate.[FN3]
That docket, however, will not be opened until after the subsequent proceeding is concluded. The Commission believes the subsequent proceeding and whether the utility’s rates are just and reasonable are both important issues, while distinctly different and not within the same purview; it will not do either issue justice to have reviews going on simultaneously.
FN3: While not being enumerated at this time, the specific issues will be identified when the Commission issues the order opening the docket.“
Order Addressing Request for Reconsideration and Clarification,
(RPU-2023-0002), April 27, 2026, pp. 4-5
CEDI understands the Commission’s interpretation regarding the limited scope of the subsequent proceeding, and appreciates its willingness to pursue CEDI’s concerns about rate shock and IPL compliance with the Commission’s order in a follow-up docket.
ARE YOU EXPERIENCING RATE SHOCK?
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Posted: April 29, 2026
