Iowa Utilities Board Approves Settlement, Requires First-Ever Evaluation of Alliant's Iowa Coal Generation

ELPC, IEC, and Sierra Club supported the settlement, look forward to beginning review of coal plants 

DES MOINES, IA -- The Iowa Utilities Board this week issued an order addressing Alliant Energy’s electricity rates and approving a settlement supported by the Environmental Law and Policy Center, Iowa Environmental Council, and Sierra Club.

The settlement, joined by ten of the 14 intervening parties, including the state’s Office of the Consumer Advocate and large energy consumers, addressed several key issues in the rate case, including energy generation from Alliant’s coal plants, rate structures impacting energy efficiency, rate increases and others.

Alliant Energy, a utility providing electric service to about 490,000 customers in Iowa, sought a rate increase and proposed rate changes and new programs. The Iowa Utilities Board sets the rates for Iowa’s investor-owned utilities, including Alliant Energy, through information gathered during a contested rate case.

Analyzing the Economics of Coal Plants

As part of the settlement approved by the Board yesterday, Alliant Energy agreed to participate in a comprehensive planning process for their generating fleet, the first time such a review will happen in Iowa. This analysis will require Alliant to assess the economics of its coal plants compared to cleaner, home-grown energy options like solar, efficiency, wind, and battery storage. 

An analysis conducted by expert witnesses in the case by IEC and ELPC found that Alliant’s coal plants are not economic and customers could save hundreds of millions of dollars by developing a plan to transition away from these plants. Additional expert analysis on behalf of Sierra Club found that retirement and replacement of Alliant’s coal plants could save customers more than $600 million. These analyses found that customers could be better served with cheaper, cleaner energy from renewables or open-market energy purchases.

“Alliant’s planning process is a critical step in setting the path for the company to move off expensive, dirty coal plants towards cheaper, clean energy,” said Elizabeth Katt Reinders with the Sierra Club. "We look forward to working with Alliant to begin relieving Iowa of its coal dependence and make the state a true clean energy leader.”

Protecting Solar Customers and Net Metering

The Board’s order rejected a proposed change to transmission costs that would have unfairly penalized customers with solar panels or other generation. Alliant proposed to change the way they calculate “net metering,” in which customers sell energy they produce, by not giving customers credit for avoided transmission costs. IEC and ELPC argued that Alliant’s proposal effectively reduced the savings to customers with solar, even though costs to Alliant would be lower.

Through the approved settlement, the company agreed to withdraw plans to increase other fees for customers with solar panels or other self-generation. “Customer-owned renewables provide value to other customers through avoided transmission, generation, fuel, and other costs,” said Kerri Johannsen with the Iowa Environmental Council. “Full net metering ensures that those benefits are recognized. We are pleased that the Board in their order largely upheld retail net metering and that Alliant backed off of some of their more damaging proposals.” 

No Progress for Electric Vehicles

The Board disapproved Alliant’s ability to recover the costs of proposed incentives to encourage development of more electric vehicle infrastructure, but the Board did not prohibit IPL from offering the incentives so long as they were paid by shareholders. IEC and ELPC had argued the incentives would benefit all customers, which was supported by analysis of impacts to rates. Because EV charging incentives will provide a benefit to the utility through increased electricity sales, IEC and ELPC encourage Alliant to deploy these incentives with shareholder funds. Currently, the lack of incentives for infrastructure, combined with legislation passed in 2019 to tax electric vehicle charging, present increasing challenges to adoption of zero-emission vehicles.

Collaboration on the Path Forward

The Board approved a collaborative stakeholder engagement process with environmental and consumer groups as the company moves forward with grid investments and utility-owned distributed renewable energy projects. The process will require regular meetings to evaluate progress and consider stakeholder input.

“We look forward to continuing to work with Alliant Energy to advance smart investments for the long-term. The continued stakeholder processes will help us achieve results that benefit Iowans and lead to cleaner energy,” said Josh Mandelbaum with the Environmental Law and Policy Center.

View the case docket at https://efs.iowa.gov/efs/ShowDocketSummary.do?docketNumber=RPU-2019-0001

View the Board’s order at https://efs.iowa.gov/cs/idcplg?IdcService=GET_FILE&dDocName=2015516&allowInterrupt=1&noSaveAs=1&RevisionSelectionMethod=LatestReleased

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1. carbon pollution
2. clean energy