Decorah Area Group responds to Alliant Energy's Letter to the Editor about electrical rates
Posted: Sun, Nov 24, 2019 6:08 PM
(The following Letter to the Editor has been submitted by Jim Martin-Schramm on behalf of the Decorah Area Group, an association of local organizations which has been fighting the proposed Alliant Energy rate increase):
In a recent Letter to the Editor published on decorahnews.com (http://www.decorahnews.com/news-stories/2019/11/23896.html
), Alliant Energy Director of Operations Marty Mensen said Alliant "doesn't expect much of a change in customer costs for electricity between 2019 and 2020" if the Iowa Utilities Board (IUB) approves the non-unanimous and partial settlement agreement regarding Alliant's proposed rate increase.
This statement is not consistent with the following data Alliant Energy filed on November 7th in response to an order issued by the Iowa Utilities Board requiring more information about the financial impact of the proposed settlement agreement.
Total Base Rate Increase by Class:
| Customer Class||Revenue |
| Percentage Increase|
| Residential |
| $56,314,000|| 15.44%|
| Non-Residential General Service|
| $19,140,000|| 10.69%|
| Large General Service|| $42,669,000|| 15.38%|
| Large General Service |
| $953,000|| 12.66%|
| High Load Factor-|
Large Volume/Bulk Power
| $8,352,000|| 21.23%|
| Standby|| --$2,198,000|| --39.07%|
| $1,511,000|| 9.70%|
| TOTAL|| $126,741,000|| 14.25%|
| || || |
(These figures are from Table 4 of the filing made by Alliant at:
While a 15.44% increase to base electric rates for residential customers is less than the 24.45% increase that would have taken place under Alliant's original rate increase request, a 15.44% increase is still a significant change in customer costs. The same is true for almost all other rate classes.
One reason Alliant doesn't expect much of a change in customer costs for electricity between 2019 and 2020 is that the company raised rates on April 1st to begin collecting $89 million in additional revenue, which they are allowed to do under IUB rules during the interim period while their current rate case is pending. This interim rate increase represents the lion's share of the $127 million revenue requirement in the proposed settlement agreement.
Another reason Alliant doesn't expect customer costs to increase very much from 2019 to 2020 is that the final rates in 2020 will reflect a one-time credit consisting of $27.4 million of unprotected excess deferred income taxes (EDIT). These are dollars the IUB ordered Alliant to return to customers long before Alliant filed their current rate increase proposal. Alliant's final rates will also include a one-time refund of $7.5 million of excess funds raised through higher rates during the interim period that began on April 1st.
These two refunds mask the long-term effect on the rate increase from the proposed settlement agreement. Those effects are shown in the table above and will be experienced to their full degree in every customer bill beginning in 2021.
The Decorah Area Group has opposed Alliant's initial proposed rate increase and the current proposed settlement. All testimony, including two final legal briefs, are available to the public at: https://energydistrict.org/resources/advocacy/alliant-2019-rate-case/