Alliant Energy Corp. subsidiaries can shorten a purchase agreement for the output of a nuclear plant in Iowa and build a wind project in the state for its Wisconsin customers, regulators said in separate decisions.
In one of two recent developments, the Iowa Utilities Board approved a settlement Dec. 11 that allows the utility to stop buying energy from the 622.1-MW Duane Arnold Energy Center (DAEC) five years early, in 2020, in exchange for a $110 million buyout payment to operator NextEra Energy Resources LLC. Then on Dec. 13, Alliant Energy said the Public Service Commission of Wisconsin gave oral approval for the company to build the 150-MW Kossuth County Wind Farm in northern Iowa.
The Iowa settlement establishes a method for Alliant Energy utility subsidiary Interstate Power & Light Co., or IPL, to recover the cost of the one-time payment to the NextEra Energy Inc. subsidiary.
Duane Arnold started operating in 1975, and the single-unit plant in Linn County, Iowa, is licensed to operate to 2034. The power purchase agreement, or PPA, originally ran to the end of 2025. Central Iowa Power Cooperative owns a 20% share of the plant, and Corn Belt Power Cooperative owns the remaining 10%.
To partially replace energy from Duane Arnold, NextEra Energy Resources will supply approximately 340 MW of wind energy from four repowered Iowa wind facilities under new PPAs with Alliant Energy.
Alliant estimates the amended power purchase agreement and wind PPAs will result in nearly $300 million in energy cost benefits to its customers beginning in 2020. The company also said the agreement will reduce customer energy bills by 2% to 3% and promote reinvestment in Iowa wind farms.
The board said approval of the agreement allows for the creation of a regulatory asset account under which IPL can recover the cost of its buyout payment through the company's energy adjustment clause, which tracks monthly energy costs.
IPL has to file annual reports beginning in 2022 that show costs and savings associated with the shortened PPA and the wind purchase agreements. If projected savings do not materialize, affected parties can seek recovery of costs in a proceeding before the board. (Iowa Utilities Board Docket No. SPU-2018-0008)
Wis. utility allowed to acquire wind facility
Separately, Alliant Energy subsidiary Wisconsin Power and Light Co., or WPL, in May asked Wisconsin regulators to approve a plan to acquire the Kossuth wind energy development in Iowa and use the electricity to serve its customers in the state.
WPL filed an application to the Wisconsin Public Service Commission for a certificate of authority to build the 150-MW wind farm in Kossuth County, Iowa. WPL has an asset purchase agreement with private developer Invenergy LLC for the project, a deal expected to close in the first quarter of 2019. WPL estimated the cost of the wind facility at about $223 million.
Alliant Energy said Dec. 13 that the wind project will keep energy costs low for Wisconsin customers once it begins operation in 2020.
Construction is expected to start in 2019 and be done by fall 2020. Including the Iowa project, Alliant Energy's companies in Wisconsin and Iowa plan to invest a total of $2 billion to add 1,150 MW of new owned wind generation by 2021.
The investments are helping the company achieve its target of reducing carbon dioxide by 40% by 2030 from 2005 levels, Alliant Energy said.