Welcome to the Department of Justice, Iowa Attorney General Tom Miller

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 approved.

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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