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Alliant thinks it has a strong case in Iowa rate request

Alliant Energy Corp. remains confident in a $204 million electric rate increase request filed by subsidiary Interstate Power & Light Co., even as some in Iowa raise objections about the proposal.

While still reviewing testimony filed on Aug. 1 by parties in the case now before the Iowa Utilities Board, nothing the company has seen thus far seems out of the ordinary, Alliant Energy CFO Robert Durian said during an Aug. 2 earnings call.

Interstate Power & Light Co., or IP&L, in March asked Iowa regulators to approve electric and natural gas base rate increases. The proposed electric rate increase will recover investments in the English Farms I Wind Project (New Wind) and Upland Prairie Wind Farm (New Wind) projects, enhancements to its distribution network and upgrades to customer service technologies. A $90 million interim rate increase took effect April 1. If the request is approved, another $114 million increase would take effect Jan. 1, 2020.

The request marks the utility's first future test year rate review in Iowa, meaning it is based on estimates or forecast data. As part of the filing, IP&L requested a renewable energy rider that would allow recovery of preapproved investments in renewable energy resources when they are placed in service.

Durian noted that, among other things, intervenors have raised issues with the proposed renewable energy rider, return on equity and capital structure and production tax credit carry-forwards.

"Divergent viewpoints are a normal part of the rate reviews and we are generally unsurprised by the intervenors' position," he said. "We are proud of the investments that we have made on behalf of our customers and believe in the merits of the case that we put before the Iowa Utilities Board."

The company will spend the coming weeks working with parties to the case to find areas of agreement on the request. According to Alliant Energy's earnings presentation, any agreements are due on Sept. 20 and hearings begin in October.

Testimony in IP&L's request for a $21 million natural gas rate increase to take effect Jan. 1, 2020, is due on Aug. 15. A decision in both requests should come by the end of the year. (IUB Docket Nos. RPU-2019-0001, electric and RPU-2019-0002, gas)

Alliant Energy on Aug. 1 reported net income attributable to its shareholders of $94.6 million, or 40 cents per share, in the second quarter of 2019, compared to $100.4 million, or 43 cents per share, in the same quarter of 2018.

Alliant Energy's utilities had lower earnings year-over-year, driven by lower electric and gas sales due to milder temperatures in the second quarter of 2019 and timing income tax expense, Durian said. But the lower earnings were partially offset by higher revenue requirements due to increasing rate base, he said.

Alliant Energy reaffirmed its 2019 consolidated EPS guidance range of $2.17 to $2.31. Durian said key drivers of the projected 6% growth in EPS are related to investments in the company's core utility business, including the West Riverside Energy Center in Wisconsin and a wind expansion program in Iowa.

Alliant Energy Chairman, President and CEO John Larsen said the company is making "nice progress" on the remaining 530 MW of new wind for Iowa customers, which would complete 1,000 MW of renewables investment by the end of 2020.

The 732-MW natural gas-fired West Riverside Energy Center is more than 90% complete.