Office of Consumer Advocate
John R. Perkins, Consumer Advocate
For immediate release: Wednesday, September 28, 2005
Contact: John R. Perkins, Consumer Advocate, 515-281-5984
Consumer Advocate Opposes Proposed Sale of Low-Cost Nuclear Power
Plant to Out-of-State Company
DES MOINES. Iowa's Office of Consumer Advocate is asking the Iowa Utilities Board to disapprove
an application by Interstate Power & Light Company to sell its interest in the Duane Arnold Energy
Center to a Florida-based company.
The Utilities Board has scheduled a hearing to begin November 1 and has stated it hopes to issue a
decision by November 30, 2005.
Interstate filed an application on July 29, 2005, to sell its 70-percent interest in the Duane Arnold Energy
Center to a subsidiary of Florida Power and Light Company. The Duane Arnold Energy Center is a 598-megawatt nuclear power plant located near Palo, Iowa. Interstate is owned by Alliant Energy
Corporation, a holding company based in Madison, Wisconsin.
According to Consumer Advocate John R. Perkins, the proposed sale should be rejected because it is
contrary to the interests of Interstate's Iowa customers and the public interest. "The evidence in this case
clearly shows this is a very efficient, low-cost power plant that can and will continue to operate safely
and efficiently for years to come," Perkins said. "If the proposed sale is approved, Interstate's Iowa
customers can expect large rate increases because the replacement electricity would cost much more than
if Interstate continued to own and operate this low-cost plant."
In written testimony being filed today with the Iowa Utilities Board, OCA experts conclude that the
analysis filed by Interstate to justify the proposed sale is fatally flawed. OCA chief economist, Dr.
David Habr, states in his written testimony that when the flaws are corrected, Interstate's own analysis
does not provide a justification for selling the plant; rather it provides a justification for Interstate to re-license the plant for another 20 years after the current operating license expires in 2014. In fact, re-licensing the plant for another 20 years is exactly what Florida Power and Light plans to do if the sale is
According to OCA, the way the sale is structured, Interstate's parent company, Alliant, would receive
over $109 million in the form of an extraordinary dividend if the sale is approved.
In previously filed documents, Interstate has said it will not re-license the plant if the IUB does not
approve the sale, but rather, will shut it down when its license expires in 2014. In response, Perkins
pointed out that OCA's testimony makes it clear that any efficient and prudently run utility would want
to keep a low-cost generating unit like the Duane Arnold plant in its fleet of generating plants as long as
possible in order to enhance and promote substantial local economic development in the utility's service
territory to the benefit of customers and shareholders alike.
The Iowa Utilities Board regulates public utility rates in Iowa and the Office of Consumer Advocate
represents the interests of utility customers and the public interest before the Utilities Board. The OCA
is a division of the Iowa Department of Justice.
Some of the Iowa communities served by Interstate are Cedar Rapids, Marshalltown, Marion, Boone,
Keokuk, Fort Madison, Burlington, Ottumwa, Osceola, Newton, Grinnell, Creston, Dubuque, Clinton,
Centerville, Spirit Lake, and Mason City.
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