Retail natural gas base rates will be reduced and retail electric base rates will be unchanged for customers of Alliant Energy's Wisconsin utility if a request filed with the Public Service Commission of Wisconsin (PSCW) is approved.
Alliant Energy is requesting retail natural gas customers' annual retail gas base rates be reduced by $5 million in 2015, followed by a freeze of those rates through 2016. For electric customers, retail electric base rates will remain at their current levels through 2016.
Alliant Energy's retail electric base rates have been stable since 2010 and retail natural gas base rates have decreased. This request to extend rate stability through 2016 includes input from Citizens Utility Board and the Wisconsin Industrial Energy Group.
"We currently have some of the lowest electric and gas rates in the state, while using renewable energy and reducing emissions," said John Larsen, President of Alliant Energy's Wisconsin utility. "This is especially welcome news for our customers who recently experienced one of the coldest winters in decades."
The PSCW approval process for the proposed retail electric and gas base rate freeze is expected to be completed in the second quarter of 2014. If approved, the base rate freeze proposal would become effective January 1, 2015 and extend until the end of 2016. The proposed terms of the freeze are similar to the January 1, 2013 through December 31, 2014 rate freeze currently in place.
The request recognizes the investments made in Alliant Energy's Wisconsin electric system, including:
- Improvements in the environmental profile of Columbia Energy Center Units 1 and 2 and Edgewater Generating Station Unit 5
- Continued investment in the electric and natural gas delivery system to maintain safe and reliable service
While electric base rates will not change under the Alliant Energy rate freeze proposal during 2015 and 2016, changes in fuel costs would be adjusted in customer bills during that time. Alliant Energy will file an annual electric fuel cost plan for calendar years 2015 and 2016. Fuel costs for natural gas customers will continue to adjust monthly as gas costs change.
Summary of Key Financial Elements of Retail Electric and Gas Base Rate Freeze Proposal
The rate freeze proposal contains the following provisions:
- No change in retail electric base rates through 2016
- Natural gas base rate reduction of $5 million effective January 1, 2015
- Continued authorized return on common equity of 10.40%
- Continuation of the earning sharing mechanism that is currently in place for 2013 and 2014
- Common equity component of regulatory capital structure of 50.46% in 2015 and 50.95% in 2016
- Retail electric and gas rate base of $2.5 billion in 2015 and $2.7 billion in 2016
- Escrow treatment of major transmission charges
- Continued use of the conservation escrow to offset rate base additions The proposal must be approved by the PSCW before it becomes effective.
The proposal is available on the PSCW's electronic filing system. The filing is under Docket No. 6680-UR-119.
Alliant Energy Forward-Looking Statements This press release includes forward-looking statements. These forward-looking statements can be identified as such because the statements include words such as "approximately," "expected," "believe," "would," or other words of similar import. Similarly, statements that describe expected outcomes in the rate case settlement proposal filed with the PSCW, including the effects of the proposed settlement, are forward-looking. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Actual results could be affected by the following factors, among others:
- Whether the PSCW approves the settlement, the timing of any such approval and any conditions or modifications imposed by the PSCW in connection with any such approval;
- other state regulatory or governmental actions, and future regulatory proceedings, including regulatory decisions regarding WPL's proposed settlement;
- WPL's ability to obtain adequate and timely rate relief to allow for, among other things, the recovery of operating costs, capital expenditures, the earning of reasonable rates of return and the payment of expected levels of dividends;
- economic conditions in WPL's service territory;
- the impact fuel and fuel-related costs; and
- significant changes in the condition of WPL, its service territory or customers, the industry, or other changes, that could cause WPL or other parties to seek changes in base rates during the base rate freeze.
For more information about potential factors that could affect Alliant Energy's and WPL's businesses and financial results, please review "Risk Factors" in the companies' Annual Report on Form 10-K for the fiscal year ended December 31, 2013 filed with the Securities and Exchange Commission and in the companies' other filings with the SEC. These factors should be considered when evaluating the forward-looking statements and undue reliance should not be placed on such statements. The forward-looking statements included herein are made as of the date hereof and, except as required by law, Alliant Energy and IPL undertake no obligation to update publicly such statements to reflect subsequent events or circumstances.
About Alliant Energy
Alliant Energy Corporation's Wisconsin utility subsidiary, Wisconsin Power and Light Company, utilizes the trade name of Alliant Energy. The Wisconsin utility is based in Madison, Wis., and provides electric service to 460,000 customers and natural gas service to 182,000 customers in more than 600 communities across central and southern Wisconsin. The employees of Alliant Energy focus on delivering the energy and exceptional service their customers and communities expect - safely, efficiently and responsibly. Visit alliantenergy.com or call 1-800-ALLIANT (800-255-4268) for more information. Alliant Energy Corporation is traded on the New York Stock Exchange under the symbol LNT.