Alliant unit selling assets to build coal plant, boost wind power
Alliant Energy Corp.’s Iowa utility is selling transmission assets for $750 million in cash to fund construction of a coal-fired power plant and an increase in wind power generation in that state.
Interstate Power & Light Co., a utility of Madison-based Alliant Energy, said Friday that Wisconsin Power & Light Co., Alliant’s Madison utility, is also seeking to develop wind power in Iowa.
Interstate, of Cedar Rapids, Iowa, is selling transmission assets in Iowa, Minnesota and Illinois to ITC Midwest L.L.C., a newly formed subsidiary of ITC Holdings Corp.
ITC Holdings is a publicly traded electricity transmission company based in Novi, Mich.
The sale requires federal and state regulatory approvals and satisfaction of other closing conditions. The deal is expected to close late in the fourth quarter of 2007.
Interstate plans to use the proceeds of the transaction — about $475 million to $525 million — to fund investments in a new 600-megawatt coal baseload power plant and additional wind power resources to be built in Iowa.
The investment is expected to boost reliability and reduce harmful affects of the utility’s operations on the environment.
The coal plant is expected to be built next to an existing plant in Marshalltown, Iowa, and will cost about $1 billion. Interstate is expected to request approval for construction from the Iowa Utilities Board in mid-2007. Interstate will use about 40 percent of the plant’s capacity, with the remaining power to be used by other utilities through co-ownership of purchased power agreements. It is expected to begin operating in 2013.
Interstate is also seeking sites in Iowa to develop at least 100 megawatts of wind power. Wisconsin Power & Light also is seeking sites in Iowa for 200 megawatts of energy. Site selections by both utilities are expected in early 2007, with commercial operations expected in 2009.
Published January 19, 2007 by The Business Journal