William Smith, The Hawk Eye, Burlington, Iowa –
MOUNT PLEASANT – Washington resident Margaret Marie was the only person to share her concerns about a proposed 7.9 percent rate increase for natural gas Thursday evening, and she carried words of warning.
“I strongly urge the Iowa Utilities Board to be very careful about the increase with an economic downturn in our country. More people are without jobs, and there are no jobs coming soon,” she said during a public hearing Thursday evening.
Interstate Power and Light Co., a subsidiary of Alliant Energy Corp., filed the request in late May. If approved, it will generate about $14.8 million for the company.
When it filed, the utility company was allowed an interim 3.3 percent rate increase. If the full rate is implemented, average monthly natural gas bills are expected to increase about $5.07, according to the Iowa Utilities Board.
“Iowa being a farm state has different needs than states with more industry. If the drought continues, many farmers will be in huge debt and unable to pay normal rates and fees,” Marie said.
Corn and soybean prices surged Monday after the latest government report showed a widespread drought in the middle of the country is hurting this year’s crop.
The U.S. Department of Agriculture report said 30 percent of the corn in the 18 states that produce most of the nation’s crop is now considered in poor or very poor condition. A week ago, it was 22 percent.
Tom Aller, president of Interstate Light and Power, said he understands those concerns. He pointed out it has been seven years since the last rate hike, which was 4.7 percent, and the rate hike was necessary to keep natural gas running efficient.
Factors determining the fee include the cost to read meters, keep records, provide customer call centers, as well as the cost to build, maintain and repair distribution facilities, collect bad debt and administrative costs. That includes $70 million worth of investments into the natural gas infrastructure since 2005.
“An example of those kind of investments would be when we installed in Mount Pleasant here last year 2,800 feet of natural gas pipes at a cost in excess of over $130,000,” Aller said.
Marie, who had her house converted to solar power in December of last year, said she had problems getting solar billing rates for a few months, until she finally talked to one of the meter readers. The situation was resolved shortly after that, and Marie applauded Alliant Energy for the quick fix.
She still questioned whether the executives at Alliant Energy are sacrificing as much as their customers are in the sagging economy.
“Over the last three or four years, everyone, including myself, have taken furloughs, no increases in pay, things of that nature. Just like our customers have had to,” Aller said.
Alliant Energy customers should not see an increase in their bill in the first year of the new rate, if it is approved. Iowa Power and Light is expecting $36 million in tax benefits, which it plans to give to customers to offset the increase.
The proposed increase for next April roughly breaks down to 7.9 percent for residential customers, 2.4 percent for commercial establishments and 0.2 percent for large industrial users.
Iowa Power and Light, based in Cedar Rapids, provides natural gas service to more than 240 communities and 233,000 customers throughout Iowa and southern Minnesota.
The Iowa Utilities Board has up to 10 months to rule on IPL’s request. If the IUB rules on a lower rate than the interim rate, the company will issue refunds equal to the difference between the interim and final rate levels, plus interest.
