These days, it seems like everything costs more. Do you find yourself wondering why, but not finding the answers?
We can’t speak for grocery prices or apartments and homes, but we can talk about your electric utility rates. Here is some background on what goes into your electric rates and the investments we’re making for a better tomorrow, as they all play a part in your utility rates.
As we continue to implement our Clean Energy Blueprint, a roadmap to transitioning to more renewable energy, it impacts all customers in a variety of ways including energy bills.
We believe – and data continues to show – this is the right path forward. This path helps sustain the economic and environmental health of the communities we serve in a number of ways. First, clean energy costs less to operate and maintain over its life. Affordability remains top of mind for us, and we believe these investments today benefit all customers because of the costs we’re able to avoid in the long run.
It’s important for us to generate electricity through various sources, like natural gas, wind, hydro and solar. Diversifying our energy mix means we can reliably produce electricity, even when the sun isn’t shining or the wind isn’t blowing.
But that’s not the only reason. Renewable energy projects allow municipalities and counties to receive shared revenue in Wisconsin and additional tax payments in Iowa. These additional funds can be used by community leaders to fund schools, parks, roads or other community priorities.
So how do these renewable energy investments show up on your electric bill?
Elements of your bill
If you've ever looked closely at your energy bill, you probably noticed that it includes many different components. Your bill may differ if you're enrolled in a demand-response program, such as Time of Day and Smart Hours. Here's a breakdown of what you might see:
| Bill Element | Definition | Wisconsin | Iowa |
|---|---|---|---|
|
Base Rate
|
Costs associated with generating electricity, maintaining our facilities and investing in new infrastructure. | Energy Charge | Summer/Winter Steps |
|
Fuel Costs
|
The costs of the coal and natural gas we need to power our generation facilities and any electricity we purchase from the grid to make up for higher-than-expected demand. | Fuel Adjustment | Energy Cost |
|
Transmission
Costs |
Third-party costs to move electricity from generation sites to substations in communities. | N/A | Regional Transmission Service |
|
Additional services and charges
|
Costs for energy efficiency or low-income programs, or taxes and fees collected by Alliant Energy and passed back to your community or state. | State-Wide Low-Income Assistance Fee; County Tax | Local Option Tax; Renewable Energy Charge |
| Your Energy Use | Many elements of your bill are multiplied by your energy use, which means reducing your usage is your best option to mitigate costs. |
Kilowatt hours (kWh) | Kilowatt hours (kWh) |
Clean energy and rates
With an understanding of the key components of your bill, we’ll now turn our attention to how our Clean Energy Blueprint investments may have an impact: Base rates and fuel costs.
The costs from constructing renewable projects can be recovered through base rates, as approved by our state regulators. But once they’re built, renewable energy projects cost less to operate and maintain over the long run, while avoiding expensive upgrades to fossil fuel facilities.
In addition, our acceleration of renewable energy development will reduce reliance on fuels that are subject to price volatility. The benefit of wind and solar power is that they are all zero-fuel cost electricity, meaning we’re using natural resources to power hundreds of thousands of homes annually.
We’re confident that these efforts are the most cost-effective, long-term solution for our customers – and increase access to locally produced energy for generations to come.