Alliant Energy wants to build wind farms in Iowa and get a 12.3 percent return on its estimated $360 million to $440 million investment.
Interstate Power and Light Co. last week filed an application with the Iowa Utilities Board regarding the company’s proposed construction of up to 200 megawatts of wind-powered generating facilities in the state at sites yet to be determined.
“Wind generation in Iowa is a critical component of our renewable energy portfolio,” said Tom Aller, president of Alliant’s division in Iowa. “IPL is committed to enhancing the state’s renewable energy economy through our build out of wind generation.”
To complete the wind project, the company is seeking the IUB’s approval that the proposed rate-making principles are reasonable prior to investing in the project. Alliant is requesting a 12.3 percent return on equity as part of the filing.
Rate-making principles define how the costs associated with building wind facilities will be recovered in utility rates throughout the life of the project. Those standards were approved four years ago by the Iowa Legislature encouraging utility companies to invest in power-generation systems.
Alliant believes its investment will create 200 megawatts of company-owned wind power in Iowa by the end of 2010.
Chuck Seel, customer service representative for IUB, said Tuesday the filing is a routine process and does not constitute a rate case. IUB staffers would review Alliant’s application and make a recommendation to the board.
Historically, a utility’s computation comes within a half of a percent or so difference than what is granted by the IUB.
“So it’s probably in the ballpark,” Seel said of the equity return proposed.
Mid-American recently was given an 11.7 percent return on its wind-turbine investment, he said.
Alliant expects to receive an IUB decision on its application in the first quarter of 2008.
Upon completion of the Iowa wind project, approximately 6 percent of Alliant’s electricity in the state will be generated from renewable energy sources through either purchased power agreements or company-owned renewable generation.
More than 90 percent of Alliant’s renewable energy in Iowa will be derived from wind generation, a company news release said.
IUB last month gave Alliant approval to sell its transmission assets of 34.5 kilovolts and higher to ITC Midwest LLC, for $750 million in cash, equity and debt financing.
Alliant has said the sale will allow it to proceed with its energy development plan, which includes more than $2 billion in a new coal power plant near Marshalltown, and additional wind power resources to be built in the state.
By Mike Augspurger
3 October 2007
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