Utilities board approves natural gas rate increase for Allliant
November 27th, 2012 by Ric Hanson
The Iowa Utilities Board has approved a request by Alliant Energy’s subsidiary Iowa Power and Light (I-P-L) to raise the delivery cost charged to customers for natural gas. Alliant spokesman, Justin Foss, says the company will use tax credits it has from projects to do a three-year phase in program. “What that means now is that when customers see their bills, they will see the increase on there, however, they will also see a credit on there, and that will negate the increase,” Foss explains. “And customers really won’t experience the affects of this rate case until at least 2016.”
Natural gas customers pay the utility the cost of delivering the gas, and the second part of their bill is for the actual gas itself.
“For residential customers, that’s about 60 to 70-percent of the cost of gas. There’s another 30 to 40-percent that they see, and that cost is the cost of providing the service — and that’s really what this rate case is addressing. And while there is a small increase in providing the service, the majority of the cost is made up of the cost of gas itself,” Foss says.
He says the company has put some 70-million dollars into the delivery system the company uses to bring the gas to homes and the increase lets them recover that cost. Alliant customers will see a couple of changes on their bills. Foss says they will see the customer charge go up about three dollars a month and the cost for the amount of gas they use will go down slightly.
The cost of natural gas has dropped over the last couple of years, which has led to an average 20-percent drop in a customer’s bill.
“Supply and demand has really benefited customers and consumers right now. There is a large supply of natural gas, and demand has stayed relatively unchanged. And so as supply and demand work their way together, consumers right now are benefiting with some really low natural gas costs,” Foss says.
Alliant’s I-P-L subsidiary supplies natural gas to some 220-thousand Iowans in 240 communities.