Alliant Energy asked state regulators for a 11.25 percent return on its investment in a proposed Marshalltown power plant on Wednesday.
The company filed applications with the Iowa Utilities Board seeking advance ratemaking principles that would include the costs it could recover and the rate of return. The company is seeking a return on investment of 11.25 percent.
Alliant also seeks a siting certificate that would allow it to build the location on a proposed site near its current Sutherland Generating Station in Marshalltown.
The 600-megawatt natural gas-fired plant proposed for Alliant’s Interstate Power and Light utility could cost $650-$750 million, excluding transmission upgrades.
The utility announced plans to build the plant in August as part of a long-term energy resource plan that includes a new long-term contract to buy energy for the Duane Arnold Energy Center in Palo. The plant would have enough capacity to serve 500,000 homes, however a 25 percent capacity factor is assumed in many projections on the plant. That means the plant’s output would be far less than if it ran continuously at its rated capacity.
In the filing, Alliant estimated that the plant would create 15-20 permanent jobs, and that construction jobs would generate a payroll of $100 to $150 million.
The utility said the plant is justified because power demand on its system grows 20 to 25 megawatts per year, it appears preferable to other options in studies and the company’s programs to help reduce energy demand have exceeded their goals.
Interstate Power and Light would get 20 percent of its power from natural gas by 2017 if the plant is built, up from a current 10 percent. It would get 50 percent of its power from burning coal. The share of its electricity purchased from other utilities would decrease from 15 percent to 5 percent.
Overreliance on coal is a growing concern among utilities because of forthcoming federal regulations to control carbon dioxide emissions which are higher with coal plants. By 2027, Interstate Power and Light would get as much of its power from burning natural gas as from coal, the utility’s filing said.
The transmission upgrades mentioned in the filing include a 20-inch diameter, 10-mile-long natural gas pipeline from the Marshalltown plant site to the Northern Border pipeline 10 miles northeast of the plant site, and a 63-mile, 345 kilovolt transmission line from Marshalltown to Morgan Valley along existing right-of-way.
Another 345 kilovolt transmission line would go from Marshalltown to Newton along new right of way. An existing transmission line from Marshalltown to Prairie Creek Generating Station in Cedar Rapids would be retired, and a 161 kilovolt transmission line from Marshalltown to Jasper would be rebuilt.
“Regulatory approval is the next step in the process to construct MGS,” Interstate Power and Light President Tom Aller said in prepared remarks. He said the application demonstrates how the natural gas-fired station will contribute to the company’s long-term energy resource plan.