Alliant Energy electric customers bills will go up in February as a new transmission rider granted in its last case is adjusted for the first time.
The rider approved by the Iowa Utilities Board in January 2011 allows Alliant Energy to begin collecting from customers for higher rates it is charged by ITC Midwest, its transmission provider, without filing a rate case.
Alliant Energy agreed to a three-year freeze in its base rates as a condition imposed by the utilities board to gain the transmission rider.
The transmission part of an Alliant energy residential customer’s bills will rise by about 6 percent, company spokesman Scott Drzycimski said. That equates to a monthly increase of $1 on average for residential customers, or about a 0.25 percent increase in the customer’s overall bill.
For general service customers, the transmission portion of the bill will rise about 14 percent, and for large general service customers the transmission charge will rise about 9 percent, Drzycimski said.
Drzycimski said the transmission rider’s impact was blunted somewhat by a Tax Benefit Rider approved by the utilities board to flow a favorable tax settlement back to customers.
The utility is hopeful that falling costs for natural gas to generate electricity, reflected in the energy adjustment clause of a customer’s bill, will at least partly offset the increased transmission rider.
The rate agreement called for the new transmission rider to take effect in January. The implementation date was delayed due to the need for the Iowa Utilities Board to resolve a question about whether $205,000 in charges are eligible for recovery, Drzycimski said.
Alliant sold the transmission system used by its Interstate Power and Light subsidiary in Iowa to ITC Midwest several years ago. Transmission costs have increased more rapidly since that sale because ITC Midwest has been seeking recovery for millions it’s spending to make the transmission system more strong and reliable.