Alliant Energy submits “notice of intent to settle” on future Wisconsin rates
Agreement in principle would provide Alliant Energy customers ongoing rate certainty while advancing the company’s transition to clean energy.
MADISON, Wis. (May 5, 2021) – Alliant Energy (NASDAQ: LNT) today notified the Public Service Commission of Wisconsin (PSCW) of its intent to enter into a settlement agreement regarding electric and natural gas rates in Wisconsin for 2022 and 2023. Alliant Energy has a settlement in principle with several Wisconsin-based stakeholder organizations, including the Citizens Utility Board (CUB), Wisconsin Industrial Energy Group (WIEG) and Sierra Club, which further manages customer costs and enables a thoughtful transition to clean energy.
During the two years covered by the settlement in principle, Alliant Energy anticipates placing nearly 1,100 megawatts of new solar generation into service in Wisconsin; the company’s utility-scale solar plans are currently under review by the PSCW. The settlement in principle further aligns rate increases in Wisconsin with customer cost savings, particularly related to retiring the Edgewater 5 coal facility. The agreement also reflects the company’s continued operation and maintenance cost management practices.
“We appreciate the constructive discussions with our stakeholders as we focus on following the path outlined in our Clean Energy Blueprint,” said David de Leon, President of Alliant Energy's Wisconsin energy company. “Guided by our purpose-driven strategy, we look forward to continuing these conversations and doing what’s right for our customers while helping to build stronger communities.”
Over the last decade, Alliant Energy’s Wisconsin residential electric customers have experienced an average rate increase of less than 1%, year over year, while residential natural gas customers in the state have experienced, on average, a decrease of nearly 2% per year.
The conversation between Alliant Energy and stakeholders is ongoing; however, in principle, the groups have reached tentative agreement on:
- Covering two test years (2022 and 2023), which enables Alliant Energy to hold electric base rates flat in 2023, avoiding an otherwise anticipated base rate increase.
- An overall increase in revenue requirements in 2022 of $70M for the electric utility and $15M for the gas utility.
- Implementing a financial equity layer of 52.5% and maintaining its presently authorized return on equity (10%).
- Levelized recovery of 100% of the remaining net book value balance of the Edgewater Unit 5 plant, after it retires in 2022 using a 9.8% ROE to calculate the revenue requirement. The levelized recovery mechanism results in an effective ROE of 9.2% on the plant following retirement and provides customers near-term savings.
The parties continue to finalize the terms of the settlement, including discussing rate design and cost allocation issues. The settlement will be subject to review and approval by the PSCW. Alliant Energy plans to outline additional details in their rate review filing, which the company expects to submit this month.
Once filed, Alliant Energy’s rate review will be available on the PSCW’s electronic filing system under Docket No. 6680-UR-123.