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Alliant officially requests increase to Iowa retail natural gas rates

Company files for first change in Iowa natural gas base rates since 2005

CEDAR RAPIDS, Iowa – May 25, 2012 – Interstate Power and Light Company (IPL), a subsidiary of Alliant Energy Corporation (NYSE: LNT), today is filing a request with the Iowa Utilities Board (IUB) to increase its Iowa retail natural gas rates. IPL’s request proposes to increase annual revenues by approximately $14.8 million, or 5.6 percent. Impacts for each customer class will vary.

“It has been seven years since our company adjusted its natural gas rates in Iowa. During this time, we have invested more than $70 million in Iowa’s natural gas delivery infrastructure to increase both the safety and efficiency of the system,” said Tom Aller, President-IPL. “In addition to these investments, our mix of customers and their usage patterns have changed. This rate case allows us to adjust and continue to keep our rates consistent with the costs of providing natural gas service to each customer.”

Customers have benefited from lower natural gas costs in recent years (see table below). The cost of gas makes up, on average, 60 to 70 percent of the average residential natural gas bill. This cost of gas is a dollar-for-dollar pass-through for customers, and is unaffected in this rate case proposal. Because of these lower gas costs, the average residential bill is down nearly 20 percent since IPL’s last rate case in 2005.

IPL-Iowa Residential Cost   /    Average Cost Per Therm

2005 –  $1.19

2006  – $1.31

2007 –  $1.25

2008 –  $1.23

2009 –  $1.06

2010 –  $0.99

2011 –  $1.00

Interim  –  $1.03*

Proposed Final  –  $1.08

*These costs are estimated based on average IPL-Iowa residential usage in 2011 and do not reflect future changes in gas costs or impact from the proposed Cost Management Plan.

In addition to the recent benefit from lower gas costs, IPL has proposed a cost management plan as part of its final rates proposal. If approved, the plan would credit customers’ bills for three years using approximately $36 million of federal tax benefits expected to be received by the company. Because of these two factors, total bills are expected to be lower than in 2005.

“We recognize customers rely on us to provide natural gas safely, efficiently, and responsibly,” said Aller. “At the same time, we continue to seek ways to manage our costs while continuing to maintain and improve aging infrastructure. We believe we have proposed a plan that best balances our need to recover our costs and the needs of our customers to keep rates low.”

In Iowa, IPL provides natural gas service to more than 240 communities. Some of the larger natural gas communities IPL serves are Ames, Marshalltown, Mason City, Clinton, Muscatine, and Burlington.

Customer impact
IPL expects the proposed change in natural gas rates to impact customers’ natural gas bills in two stages – interim and then the final rates with the cost management plan.

Interim rates
Interim rates will go into effect on June 4, 2012 and will remain in effect until the IUB issues a final ruling on IPL’s rate case request, which is expected to be on or before April 2013. IPL expects interim rates to increase annual natural gas revenues by approximately $8.6 million, or 3.3 percent on average.
· For an average residential gas customer using about 63 therms a month, IPL expects interim rates to increase the typical monthly natural gas bill by approximately $2.17 or 3.4 percent.

Final rates
Final rates will go into effect after the IUB issues a final decision on the company’s natural gas rate request. Because the IUB has up to ten months to rule on this request, IPL customers can expect final rates to take effect on or before April 2013. If the final natural gas rates approved by the IUB are lower than the interim rates, IPL will issue refunds equal to the difference between the interim and final rate levels, plus interest. Final rates are implemented in place of, not in addition to, interim rates.
· For an average residential gas customer using about 63 therms a month, IPL is requesting final rates to increase the typical monthly natural gas bill by approximately $5.07 or 7.9 percent.

Cost Management Plan
IPL’s proposed cost management plan will only impact final rates. This plan will allow a gradual phase in of the impact of this rate case, and will be finalized when final rates are set. Subject to approval, residential customers can expect IPL’s proposed cost management plan to completely mitigate the increase in the first year following the implementation of final rates, mitigate 80 percent of the rate increase in the second year and 40 percent in the third and final year of the cost management plan.

Financial details
IPL is requesting in its final rates, return on $264 million in rate base, a return on common equity of 10.9 percent, and 48.7 percent common equity ratio in the capital structure.

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Anyone else notice the flag pole holder but no flag? Go figure.

I see that in the picture…what’s up with that?

Article states: “During this time, we have invested more than $70 million in Iowa’s natural gas delivery infrastructure to increase both the safety and efficiency of the system”

What about that gas plant in town? That is an investment?? I never see it running. Waste of money if you ask me.

I heard that plant south of town doesnt have many employess. They don’t run much, so that saves on cost. Thats what I heard.

a guy i know works there and makes a $h1t load of $$$…more than my dr

A plant that never runs but is staffed saves cost??? What school of economics did you go to?

Y: are you serious?? Drs make like $200K+…so your saying Alliant employees make that much??

NO BS…maybe he doesnt make 200k but it is over 6 figures. don’t know all what he does but he posts $h1t on facebook when at work.

Interesting comments. I work for a local company and I see the way Alliant spends money. It makes me not want to pay my bill.

Seeing my bill is what makes me not want to pay my bill. I can’t afford to eat with these rate hikes!

Well Mama maybe you dont need eat! Mama maybe you need to become a Alliant employee and eat steak like Alliant does.

This 4TonPapa will take you out to lunch 2TonMama.

I got lots of $ b/c I work for Alliant & when I need money to eat I just raise rates.

PUH-lease!

Here we go again…Alliant asks to raise rates=people complaining. People think they deserve free electricity/natural gas. My husband works very hard for Alliant. He goes out in all sorts of bad weather to bring such ungrateful people services that they need. Get over it people–electricity ain’t free!

Really? We expect it free? Shut up. U sound ignorant.

Obama-tility! Obama-tility! That is the solution. We can get it free then!

WifeOfALineman: I know the Working People of Alliant are good and I appreciate their hard work. I just question the Management of Alliant and their decisions. It seems like they are looking for money to cover bad investments or pursue new bad investments.

Their increase in gas is due to all of their BS. Maybe they need gasex stock???

Go green. Go solar. Build a bunker in your back yard. Stock up on food. Alliant will continue to increase rates, so energy independence is your only answer…and why not prep for world end too.

Alliant talks about managing costs in this article, but their ways of managing cost is to pass it on to the customer. I’m sick and tired of rate increases every year. They say they haven’t had an increase since 2005 for gas, but they’ve screwed us on electrical increases many more times since then.

I am glad that some people are outraged. What are our options? Can we do anything? Or are we just helpless victims subject to increase after increase?

Ramsey, Have you thought about contacting the IUB? I think they consider the opinions of the customer. No guarantee the rate won’t increase, but at least it’s an option to express your opinion.

This is getting out of hand. I hate being treated like a bank account.

These utility’s are the only businesses that can charge extra to increase their business so they can make more profit. It is B.S. They need to operate like other businesses and find ways to improve so they can make more profit. Not charge their customers more. The water will continue to go up every year until we clean house in city hall.

The ONLY business? Really? What is the weather like on your planet?

I get your point LVS.

No you’re not the only one outraged, I just got my letter on that yesterday. WTF are they trying to do to us? They are a monopoly & we need a competitor with lower pricing!! I’m also outraged that my water bill is $60 a month, RIDICULOUS!!!! Hello, this is Mason City, most jobs only pay minimum wage or a little tiny bit over. A person can’t even afford to live.

SHOCKED! I got a letter in the mail discussing the proposed increase. I went to Northiowatoday.com to read what my fellow bloggers wrote about this proposed increase. I was amazed that no one wrote anything. Does this mean I am the only one outraged over this??? Natural gas rates are at an all time low, but yet we are getting charged more? Where is the critisim? Where is the outrage? Or is everyone just accepting this…

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