Deal for Iowa Coal Plant Signed

A proposed $1 billion coal-burning power plant in central Iowa will be owned by Alliant Energy Co., two rural electric cooperatives and a municipal electric cooperative, the companies said on Wednesday.

Wisconsin-based Alliant's Iowa subsidiary, Interstate Power and Light Co., will own the plant along with the Central Iowa Power Cooperative and the Corn Belt Power Cooperative. The three signed a joint operating agreement on Wednesday. The fourth partner, North Iowa Municipal Electric Cooperative Association, said it is conducting required public hearings to join the project.

Under the agreement, the partners will use a share of the 630 megawatt generating station to be built near an existing Alliant-owned power plant near Marshalltown. That output is estimated to be enough to power more than 472,000 homes and businesses.

Cedar Rapids-based IPL expects to use about 350 megawatts and the two rural electric cooperatives about 100 megawatts. The municipal cooperative said it expects to use about 20 megawatts.

IPL said it continues to negotiate with other potential partners for the remaining output.

Ken Kuyper, general manager of Humboldt-based Corn Belt Power Cooperative _ which is comprised of 11 rural electric and one municipal cooperative in central Iowa _ said the plant is needed because of the rapidly increasing demand for electricity driven by construction of biodiesel and ethanol plants.

"The growing rural economy, especially the renewable fuels industry, has resulted in a dramatically increased demand for electricity," he said.

The cooperatives have seen double-digit increases in electricity sales over the past few years, much of it due to biofuels production, he said.

Kuyper said wind energy and energy efficiency programs cannot keep up with the increasing demand.

One ethanol plant consumes as much energy as 1,600 farms, he said.

Opponents of coal-fired power plants said it doesn't make sense to burn coal to run plants that make ethanol, which supporters tout as an environmentally friendly fuel.

"If ethanol is going to be called a green fuel, you can't power the ethanol plants with dirty coal," said Nathaniel Baer, the energy program director for the Iowa Environmental Council, an organization that focuses on environmental issues.

Carrie LeSeur, president of Cedar Rapids-based Plains Justice, a public interest environmental law center, said experts who have analyzed the need for the plant found it unnecessary.

She said more than 1,000 megawatts of energy efficiency gains can be realized by the companies proposing to build the plant.

"It seems it's quite possible those megawatts can be gained in energy efficiency," she said.

She said the anticipated ethanol industry growth used as a reason for the plant may not be realized because it appears industry growth is slowing.

"It seems to be a significant possibility that these plants will never be built and we'll be left with the equivalent of a white elephant," she said.

IPL President Tom Aller said he believes the company can demonstrate to regulators and Iowa citizens that the plant is the most efficient way to generate electricity and meet the state's needs.

He said wind energy and other renewable sources cannot generate enough power to meet the anticipated growth.

"I know that's not the answer that people want to hear," he said. "Wind power and energy efficiency investments will not meet the baseload needs of Iowa."

The coal plant, which is designed to use pulverized coal and up to 10 percent renewable fuels such as switchgrass and corn stalks, is the most efficient and environmentally safe plant design available, Aller said.

He acknowledged that although the plant's design allows up to 10 percent renewable fuels, it will be licensed to burn only 5 percent until a market for switchgrass and other similar products is fully developed.

The Iowa Utilities Board, the state regulatory agency for electric utilities, has scheduled hearings for Jan. 14 on the proposed plant.

The Iowa Department of Natural Resources must also approve certain permits for the plant before it can be built. Decisions from the agencies are expected by the middle of next year.