Jul. 18--The Iowa Office of Consumer Advocate isn't having any of Alliant Energy's proposed 16 per cent rate increase. Consumers' utility watchdog said in a filing with state regulators this week that Alliant should be required to lower rates by 2.8 percent instead of being granted the increase it is seeking.

The Iowa Utilities Board often trims some rate increase requests in rate cases but seldom tells a utility to reduce rates instead. Consumer Advocate Jerry Perkins said the agency made the unusual recommendation "to hold (Alliant) accountable for poor management deci sions that have led to certain unreasonably high costs." Perkins cited as one example the decision by Alliant's Interstate Power & Light utility to sell its transmission assets to ITC Midwest.

Perkins said Alliant filed sworn testimony stating the sale was structured in a way that would "zero out" any rate increase effects on customers for eight years.

State regulators approved the sale, which was opposed by the consumer advocate on the grounds that it would increase Alliant's transmission costs.

In the pending rate case, Alliant asks to raise rates by $87 million per year to cover increased transmission costs. Perkins said that request violates Alliant's promise to protect customers for eight years from higher rates because of the transmission asset sale. "Our evidence will show that Alliant Energy's board of directors decided on behalf of shareholders to sell Interstate's transmission assets," Perkins said. He said Alliant shareholders should bear the financial consequences of the utility's "errone ous calculations." The consumer advocate said he's concerned that the rapid increase in Alliant Energy's electric rates will cause manufacturers seeking locations for expansion to avoid Iowa, or cause existing Iowa factories to close.

Perkins said the Office of Consumer Advocate does not oppose charging customers for costs Alliant reasonably incurred -- including costs of repairs from the June 2008 flood in the Cedar Rapids area.

Alliant has said the rate increase is needed to cover rising operating costs and the cost of restoring its system from natural disasters, including the flood.

The utility was unsuccessful in arguing for a petition it filed with the Federal Energy Regulatory Commission, seeking reversal of ITC Midwest's transmission rate hikes.

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

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