Elkader resolution opposes Alliant rate hike

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By Willis Patenaude, Times-Register


The Elkader City Council has joined other area communities in taking a stand against Alliant Energy’s recent request submitted to the Iowa Utilities Board (IUB) to increase its electric and natural gas base rates. Elkader is one of several cities, including Decorah, Kalona and Rowan to pass resolutions opposing what would be Alliant’s sixth rate increase since 2004, with the most recent coming in 2019, when rates were raised by 8.1 percent for electricity and 9.7 percent for gas. 


This time around, Alliant is requesting an increase in electric service revenue of $284 million, or approximately 16 percent above their existing electric revenue requirement, as well as an increase in natural gas service revenue of approximately $14 million, or 5 percent above their existing gas revenue requirement. 


According to a press release, the request will be done in a phased-in approach over two years to “prioritize customer affordability,” with 7.7 percent, or roughly $10 a month to residential customers, starting in October 2024. The second phase of the increase will start in October 2025 with a 5.7 percent increase, or about an additional $7 per month. 


The resolution unanimously passed by the council provides data not just for residential, but for small businesses, who would see a 20 percent increase. Large general service customers would see an increase between 17.4 and 20 percent. 


The resolution also noted this would be the single largest rate in the company’s history if approved and take, on average, another $565 from Alliant’s nearly 503,000 customers. 


Furthermore, the resolution pointed out that Alliant posted $1.72 billion in gross profits in 2022, while also increasing its annual common stock dividend by 6 percent. Its chief executive officer was paid well over $7.2 million in 2022. 


All of this is on top of the fact that, according to the U.S. Energy Information Agency, Alliant had the third highest residential costs among similarly sized utilities in the Midwest, and was 61 percent higher than MidAmerican, which had the lowest residential costs. When it comes to commercial and industrial, Alliant outpaced MidAmerican by 48 percent and 31 percent, respectively. 


“We’re not just opposing a rate increase. Rate increases, we understand, are part of operating budgets. But specifically, a rate increase when compared to another supplier of energy in the Midwest is 60 percent higher and they’re going to ask for another increase. That’s material to our opposition,” said council member Tony Hauber. 


Alliant’s latest efforts in Iowa are not unlike a request the company just had approved in neighboring Wisconsin, where the Wisconsin Public Service Commission approved an 8.4 percent increase over the next two years. The justification was similar to those provided in the press release for Iowa customers, namely the company’s investment in solar power and clean energy. The overall goal is to invest now to avoid long-term costs. 


According to a press release sent out by Alliant in October, the reason for the requests is based on several factors that combine their continued efforts and investments into providing a “more reliable, sustainable and resilient energy future in Iowa” through modernizing the energy grid, upgrading infrastructure and diversifying by adding renewable energy. 


“Nobody, including us, wants to see bills increase,” stated Mayuri Farlinger, vice president of customer and community engagement, in the press release. “However, there are more costs down the road if we do nothing or simply continue ‘business as usual.’ It’s why we’re planning ahead and acting on behalf of our customers to ensure we’re ready to manage the rapidly changing energy landscape.” 


Additional Alliant representatives were contacted for comment, but did not respond to requests. 


Looking at the proposed numbers has the council concerned, as the resolution touched on the economic hardships rising rates will have for low- and moderate-income households, fixed-income households, small businesses, nonprofit institutions, educational institutions and local government. The increase will create a “serious hindrance to economic development in the city of Elkader,” the resolution declared. 


It’s not just a hindrance on potential economic development, but also on budgets, both of residents and the city. According to Elkader City Administrator Jennifer Cowsert, if the request is approved as is, it would mean an added cost of $23,400 to the city. When coupled with an anticipated reduction in revenue from property taxes due to changes made by the state, it could put Elkader in a “really hard spot.” What that hard spot would look like is unknown, at least until after the city receives its annual valuation report from the county auditor sometime in January. 


When Cowsert reached out to Alliant, the company did not provide justification for the rate increase, but said the amount approved by the IUB is typically lower than the request. Any rate increase could possibly lead to cuts somewhere else, but the full extent of the impact likely won’t be felt until the IUB makes a decision, which is still a few months off. The evidentiary hearing for the case will be held in April or May. 


It should be noted the city entered into a new franchise agreement with Alliant a little over two years ago, and at that time, no future rate increase was mentioned during discussions with Alliant representatives. 


Should it pass, the city will have little recourse, according to Cowsert, beyond simply “paying for it like everyone else.” 


The only option the city has would be to raise the franchise fee, which is currently at one percent, but could go as high as five percent. That option simply transfers the city’s rate increase onto residents, who would not only pay the added rate increase to their own bill, but also be responsible for the added increase in the franchise fee to offset the impact on the city’s budget. Cowsert quickly  pointed out that, currently, “no one is talking about raising the franchise fee.” 


The customer comment meetings were all held in early November. Any additional voices either for or against the rate increase can do so by visiting https://iub.iowa.gov/ and using the online comment form or by emailing customer@iub.iowa.gov and referencing Docket No. RPU-2023-0002 with your comments. 

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