Jun. 27--State regulators Thursday approved Interstate Power and Light's five-year energy efficiency plan, citing a weak economy and rising electric rates as it rejected calls for higher efficiency goals.

The Iowa Utilities Board approved a settlement between the utility and several intervenors in the case. It calls for annual spending on energy efficiency programs to rise 30 percent from $60 million this year to about $78 million in 2013. Goals for electric energy efficiency will increase from about 0.86 percent of retail sales this year to 1 percent by 2013.

Features to be added to the program include a renewable energy initiative that is a first for energy efficiency programs; help for renters and property managers in multifamily housing units; and a residential energy efficiency program for lower-income customers who don't qualify for state heating assistance.

Participating in the settlement were the Iowa Office of Consumer Advocate, the Environmental Coalition and the Community Coalition. A fourth intervenor, Industrial Employers, representing Gerdau Ameristeel, Ag Processing Inc. and Gelita USA, did not agree to the plan.

The main issue the settlement did not resolve was whether the board should order Interstate Power and Light to raise the tar gets for energy efficiency from 1.3 percent to 1.5 percent. The increases are calculated from a "base case" model that estimates how much consumption would rise without the programs.

The Cedar Rapids-based utility said achieving the 1.5 percent goal would add $200 million in costs compared with the 1.3 percent goal. Several intervenors said the costs would be much less.

The Environmental Coalition predicted the recession would give customers an even greater incentive to participate in energy efficiency programs to save money. Meeting the higher goal would give customers protections against the costs of utility compliance with greenhouse gas regulations or construction of a new power plant, the group said. The state's order said the economic slowdown "probably tends to decrease enthusiasm among business and residential customers alike for substantial investments in energy efficiency measures." Alliant is now asking the utilities board to approve an overall rate increase of 16.3 percent.

In addition to raising the utility's spending on the electric efficiency program, the plan would increase its spending on a natural gas efficiency program by about 45 percent, from $11 million this year to about $16 million in 2013.

-- Contact the writer: (319) 398-8317 or david.dewitte@gazcomm.com

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