Wisconsin Power and Light seeks rehearing of 2004 fuel rate case

MADISON, Wis., May 13, 2005 (PRNewswire-FirstCall) — Wisconsin Power and Light Company (WP&L), a subsidiary of Alliant Energy Corporation, filed a petition for rehearing with the Public Service Commission of Wisconsin (PSCW) of the company’s $9.2 million fuel case filed in December of 2004.

WP&L filed this fuel rate case to cover the increased cost of fuel and purchased power incurred in November and December, and the expectation that total costs would exceed 2004 annual projections. Earlier this year, the PSCW denied WP&L recovery of fuel and purchased power costs included in this request.

“We are seeking a rehearing because we respectfully disagree with the PSCW’s interpretation of the fuel rules and believe the PSCW did not appropriately consider the facts in their decision to reject our rate increase request,” says Barbara J. Swan, president of WP&L. “It’s important we seek rehearing to pursue recovery of these prudent costs. It’s equally important, however, to address the legal interpretation and application of the fuel rules on a broader level because the rules are not being applied as intended or envisioned.”

In the PSCW’s final written order issued on April 22, 2005, the interpretation of the fuel rules was such that it effectively bars any fuel cost rate change late in a calendar year. According to the PSCW and other intervenors in the case, the rules permit a rate increase only when there is an increase in forecasted costs for the calendar year. Once actual data becomes available at the end of the calendar year, as it did in WP&L’s case, there is no forecast and this rule requirement cannot be met.

WP&L included a revised calendar year forecast when the rate increase request was filed in December 2004 and, in the course of the January 2005 hearing, also filed an update reporting actual 2004 fuel costs.

“The interpretation used in the PSCW order raises the likelihood that it would not be possible to recover costs in any late-year fuel rate increase request,” says Swan. “The current fuel rules regulatory process, although much improved over previous rules and policies, simply does not move fast enough to complete late-year requests in the same calendar year. In this scenario, any request would be denied on the grounds that the calendar year was now over and, therefore, it cannot be forecasted.”

Swan also notes that the same outcome would hold true for rate decrease requests as customers would be unable to benefit from a decrease in fuel costs in a late-year fuel rate decrease request.

In addition, the PSCW’s final written order does not address WP&L’s argument that the fuel cost increase, primarily due to a 21-day unplanned extension of a planned outage at the Kewaunee Nuclear Power Plant, is an “extraordinary loss” which should be recovered in rates.

The PSCW is required to act on petitions for rehearing within 30 days of filing.

About Alliant Energy Corporation [ www.alliantenergy.com ]

Alliant Energy Corporation is an energy-services provider with subsidiaries serving more than three million customers. Providing its customers in the Midwest with regulated electricity and natural gas service remains the company’s primary focus. Wisconsin Power and Light, the company’s Wisconsin utility subsidiary, serves 446,000 electric and 177,000 natural gas customers. Other business platforms include the international energy market and non-regulated domestic generation. Alliant Energy, headquartered in Madison, Wis., is a Fortune 1000 company traded on the New York Stock Exchange under the symbol LNT.

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