ELPC and IEC Call for Retirement of Expensive Coal Plants, Rejection of Blank Check for Grid Investments in Alliant Rate Case

posted on Friday, August 2, 2019 in Energy News

Groups challenge regressive rates, attacks on customer-owned solar, and energy efficiency

DES MOINES - The Iowa Environmental Council and Environmental Law and Policy Center submitted testimony yesterday in Alliant Energy’s rate case currently before the Iowa Utilities Board. The testimony brings to light the real drivers behind the company’s proposed rate increase and puts forward solutions that will save customers money while cleaning up Alliant’s generation mix.

Alliant Energy, a utility providing electric service to about 490,000 customers in Iowa, has come before the Iowa Utilities Board for the second time in two years seeking to increase electric rates. The Iowa Utilities Board sets the rates for Iowa’s investor-owned utilities, including Alliant Energy, through information gathered during a contested rate case. Alliant is currently requesting an increase of 24.25 percent, or about $20 per month for a residential customer.

ELPC and IEC expert testimony includes concerns about Alliant’s expensive coal fleet, increased rates that are regressive and discourage energy savings, unnecessary and wasteful investments in Alliant’s distribution system, and attempts to undermine the solar market in Iowa.

Alliant’s current fossil fuel generation is not economic

Analysis by ELPC and IEC’s expert showed that Alliant could save customers $16 million next year if they close three coal plants and replace them with wind or open-market purchases. “Continuing to operate these coal plants is forcing customers to pay more than they should. Alliant’s ongoing reliance on coal ignores the cheaper options of wind and solar,” said Kerri Johannsen, Energy Program Director at the Iowa Environmental Council.

The expert analysis found that the operating costs of most of Alliant’s coal and gas plants in Iowa are more expensive than renewable energy generation to deliver the same energy. “Retiring Alliant’s uneconomic coal plants now and moving to renewable energy will save customers money. The economics show it is time for Alliant to walk away from coal, an outdated, dirty, and expensive energy source,” said Josh Mandelbaum, attorney with the Environmental Law and Policy Center.

Regressive rate changes encourage waste

New rates proposed by Alliant are regressive and discourage energy efficiency and customer-owned renewables. Alliant is proposing to increase the fixed charge for every resident by 13 percent. “Alliant’s approach to residential rates essentially penalizes people who use less while giving a discount to big wasteful users,” said Mandelbaum. “This discourages efficiency, hits the wallets of people who can least afford it, and adds barriers to renewable adoption.” 

ELPC and IEC also oppose the company’s “fixed bill” proposal, which charges customers a flat rate for electricity for a year, but offers no true-up at the end of the year to account for actual usage. “This type of program has very little potential upside for customers who can already take advantage of budget billing and pay for what they are actually using. At the same time, it removes the price signal that helps customers decide the best ways to save energy. It is bad policy all the way around,” said Michael Schmidt, Staff Attorney with the Iowa Environmental Council

Unnecessary and ill-conceived grid investments

Alliant’s rate increase proposal includes a number of excessive and unnecessary spending proposals. Perhaps the most extreme example is the company’s plan to put every single one of its power lines underground. “This is unheard of,” said Johannsen. “It has been rejected as too expensive by both utilities and regulators in every other circumstance where it has been considered.” ELPC and IEC also criticize upgrades to the grid that do not clearly benefit customers. Together, these upgrades would cost tens of millions of dollars. “Even Alliant’s own analysis showed that the costs of these upgrades outweighed the benefits,” said Mandelbaum.

Undercutting the market for renewables

Alliant proposed several programs for the customer-sited renewables market. “The community solar proposal is moving in the right direction but still needs some tweaks to ensure all customers have access to the program,” said Johannsen. The proposed programs also lack protections to ensure Alliant is not able to use its power as a monopoly to compete unfairly with solar companies.

“Alliant should focus its programs for distributed renewables where the market doesn’t always work, such as providing access to low-income customers, multi-family dwellings, and locations on the grid that could benefit from a small generation system,” said Schmidt.

“Utility renewable programs should be designed to benefit customers. Alliant’s proposals seem designed largely to create competition with solar businesses already employing hundreds of Iowans to do this work,” said Mandelbaum.

At the same time Alliant is proposing programs that cut into the solar market, they are proposing to increase fees for people who install solar panels. “This proposal is a sneakier version of the Sunshine Tax that recently failed at the Iowa legislature,” said Johannsen. “It is unreasonable and contradicts long-standing policy in Iowa.”

Alliant Energy led the lobbying effort to pass Senate File 2311 in 2018, which reduced required utility investments in energy efficiency programs. The legislation also limited consumer choice for businesses and homeowners seeking to control energy costs.

“The passage of SF2311 gave Alliant the ability to pass even more costs to customers. We are seeing a ‘blank check’ mentality in this proposed rate increase,” said Johannsen. “Instead of seeking ways to truly benefit their customers, Alliant is making imprudent investments that benefit the company bottom line at the expense of their customers.”


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