American power utility drops plans for $1.3-billion power plant

06 March 2009

Alliant Energy Corp. today said that its Iowa utility, Interstate Power and Light Co, has cancelled plans to construct the proposed coal-fired Sutherland Generating Station Unit 4 in Marshalltown, Iowa.

The company said in a press release that the decision was based on "current economic and financial climate; increasing environmental, legislative and regulatory uncertainty regarding regulation of future greenhouse gas emissions and the terms placed on the proposed power plant by regulators."

"At the end of the day it's economic condition, uncertainty regarding future regulatory and legislative treatment of environmental issues, meaning greenhouses gases," said spokesman Ryan Stensland.

Other factors were terms placed on the power plant by the Iowa Utilities Board, including a 10.1-per cent return on equity for investors.

"It would have made it very challenging to attract the capital necessary to build these types of investments. The cost and the return laid out by the board just did not whet the appetite of the investment community to move forward with this project," Stensland said.

The decision follows Wisconsin regulators' denial in December of a proposed 300-megawatt expansion of the Nelson Dewey Generating Station by Wisconsin Power and Light Co, Alliant's Madison-based utility. The Public Service Commission of Wisconsin ruled that the $1.26-billion project was too costly when weighing it against other alternatives such as natural gas generation and the possibility of purchasing power from existing sources.