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Alliant expects power plant decision by mid-summer

Dave DeWitte, CR Gazette –

Alliant Energy expects to reach a decision by the end of June whether to build another power plant or pursue another path to meet its long-term energy needs in Iowa.

The company’s Interstate Power and Light asked for proposals last week from energy suppliers for a long-term power supply agreement to provide 550 megawatts of power. The proposals are due by March 22.

Alliant spokesman Ryan Stensland said the request for proposals was issued as part of an evaluation process to determine the best way to meet the long-term energy needs of the company’s customers. The company has dropped plans to build a coal-burning power plant in Marshalltown, and has signaled that it isn’t likely to renewa its agreement to purchase power from NextEra Energy’s Duane Arnold nuclear power plant in Palo.

“This is probably a good time to be out there with a RFP (request for proposals) because of the price of natural gas,” said Ryan Stensland, an Alliant Energy spokesman. He said the current low price of generating electricity with natural gas seems to be reflected in the market.

The initial response to Alliant’s request for proposals has been good, Stensland said.

One of the key options Alliant is likely to weigh the long-term power supply requests against is building a natural gas-fired power plant of its own. A natural gas fired power plant would provide a valuable element of flexibility — the ability to ramp up production when demand is high and natural gas prices are economically favorable, and to halt production or reduce it when natural gas prices are high or power demand is low.

Coal-fired plants such as the one Alliant had considered building in Marshalltown lack the ability to be ramped up and down quickly.

The request for proposals is being managed by Concentric Energy Advisors. Alliant hopes to wrap up the evaluation process in the second quarter of 2012 and move forward with a plan that will dovetail with its “tiered power plant approach.”

Stensland said the tiered power plant approach includes upgrading certain existing power plants and switching fuels at some plants. Interstate Power and Light serves 530,000 electric customers and 235,000 natural gas customers.

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