Gas system investments ensure customers continue to receive safe, reliable service

Overall customer bills will remain lower than 2012 

 

CEDAR RAPIDS, Iowa – May 2, 2017 – Customers enjoy a safer and more reliable natural gas system in Iowa today because of key investments made by Alliant Energy’s Iowa energy company.

The company has invested hundreds of millions of dollars to replace aging materials and add more capacity to the system for customers. Meanwhile, distribution rates to pay for these investments have not increased in six years.

“Our customers expect safe, reliable and affordable natural gas service,” said Terry Kouba, vice president of Iowa operations for Alliant Energy. “To deliver on that expectation, we maintain more than 5,000 miles of natural gas pipeline. We’re replacing older materials and enabling more efficient safety inspections. In addition, by investing in a safe and reliable system, we are helping drive economic development across Iowa.”

Today, Alliant Energy’s Iowa energy company filed its proposal with the Iowa Utilities Board to increase natural gas distribution rates and service charges. The proposal, which includes the costs of these investments, would increase overall combined rates by 8 percent. 

The impact to a customer’s bill will vary by customer type and usage. A typical residential natural gas bill is $52 a month. This proposal would increase that by almost $8 – bringing it to nearly $60 per month.

Even with this proposed increase, typical bills for residential customers would remain lower than six years ago. That’s because the majority of a customer’s bill consists of the cost for the actual natural gas used. Because the cost of this commodity has dropped, and because customers have used energy efficiency programs to reduce their usage, overall bills for natural gas service have gone down.

Customers can save more by investing in energy efficiency. Details on rebates and programs are available at alliantenergy.com/rebates. Customers can also enroll in budget billing to make bills more predictable each month by visiting alliantenergy.com/budgetbilling.

The proposed change would impact customers’ natural gas bills in two steps. An interim rate increase will be implemented on May 14, 2018. The new interim rates will remain in effect until there is a final decision on the company’s request.

Details about the increase have been mailed to natural gas customers along with information on how to provide feedback or participate in customer comment meetings. More information on the proposed increase and ways to save energy is available at alliantenergy.com/iowarates.
Summary of key financial elements of the rate request
  • Alliant Energy’s Iowa utility is requesting a total increase in annual retail gas revenues of $19.8 million. The requested increase would take place in two phases; $11.3 million, through interim rates starting in the second quarter of 2018, and the remaining increase of $8.5 million when final rates are implemented.
  • Interim retail gas rate base of $460 million includes projects such as the Clinton Lateral, the Ames expansion, and others.
  • The final proposed rates include:

    • Retail gas rate base of $509 million, including post-test year additions through the third quarter of 2018.
    • Return on common equity (ROE) of 9.8 percent.
    • Common equity component of regulatory capital structure of 53 percent.
    • Increased depreciation expense supported by an updated depreciation study.

The company has requested a decision in the fourth quarter of 2018. The IUB has 10 months from the date of filing to issue a final decision. The proposal is available on the IUB’s electronic filing system under Docket No. RPU-2018-0002.