By Pat Shaver
IOWA — It’s not easy to predict the future when it comes to energy use.
Interstate Power and Light Company (IPL), a subsidiary of Alliant Energy, announced this month proposed plans to build a natural-gas plant in Marshalltown. The new facility would cost about $700 million.
The company has to make plans that look at least 15 years into the future, said Tom Aller, president of IPL. With gas prices changing and renewable energy evolving, that is a challenge, he said.
“Over time, we’ve been criticized by the Iowa Utilities Board (IUB) for not having a long-range plan, but we do have a long-range plan,” Mr. Aller said.
Earlier this month, IPL outlined its future energy strategy, which includes several items that are up for approval by the IUB.
In 2005, IPL started to prepare to build a coal plant inMarshalltownbut canceled plans in 2009 after the IUB wanted to amend the proposal.
Mr. Aller said IUB had requested they build the plant for cheaper and also wanted to require IPL to build 1,000 megawatts of wind power.
“They said ‘we think you could build it for less,’ and we didn’t think we could,” he said.
Constructing 1,000 megawatts of wind energy would have been too costly at the time and would have been an additional financial burden on customers, he said.
“We said we would go on to Plan B. Well, today is Plan B,” Mr. Aller said.
“A couple years ago in earnest we started thinking about it again,” he said. “Since 2008 there’s been a lot more clarity in EPA regulations.”
Natural gas is about 50 percent cleaner than coal, he said. A gas plant would also be more efficient and involve less maintenance.
“There’s a lot of gas in and around Marshalltown,” Mr. Aller said, adding that there are two major gas lines there that the plant would access.
The 600-megawatt plant would be located on land already owned by Alliant Energy.
IPL saw impacts of the 2008 economic state in all of its major classes (residential, industrial and commercial).
“They used less in every class,” he said. “We started the planning process (for the gas plant) when they began to increase.”
“We can see demand coming back. Residential is roughly flat. In industrial and commercial we can see growth,” he said.
Although there is some growth and the economy has started to turn around, Mr. Aller said, it still seems like people are continuing to use less energy.
“(They’re) not using more power, they’re buying TVs, computers,” he said. “I’m not sure there is a real reason other than people conserving.”
Mr. Aller said though customers have to foot the bill for the project, the benefits are overwhelming.
The project would create hundreds of construction jobs. It would contribute to the state’s tax base and would create 20-30 permanent jobs.
“(We think) it’s ok to have the customers pay for that,” he said. “It’s our job to explain to customers what this plan gets for them and I think it’s compelling.”
IPL hasn’t made any decisions on potential rate increases for customers. Mr. Aller noted that the rate increases couldn’t be applied until the plant is in operation.
Mr. Aller said they plan to file for regulatory approvals later this year. If approved, they hope to receive regulatory decisions by 2014, and expect to have the project complete in the spring of 2017.
IPL also plans to invest $4 million to $5 million in two of its largest coal-powered plants in Ottumwa and Lansing to increase efficiency and reduce emissions.
This month IPL will also propose to the IUB a Purchase Power Agreement (PPA) that was negotiated with NextEra Energy Resources. If approved, the agreement would allow IPL to buy 431 megawatts of energy from the Duane Arnold Energy Center from 2014 through 2025.
IPL is based in Cedar Rapids and provides electric service to 525,000 customers and natural gas service to 233,000 customers in about 100 counties in Iowa and Minnesota.