FOR IMMEDIATE RELEASE
Thursday, September 10, 2026
Contact: Bob Rafferty (515.314.9462)
While Data Centers Get Secret Electric Rates, Iowa Families and Small Businesses Will Shoulder the Cost of Alliant’s $3.5 Billion Planned Buildout
DES MOINES, Iowa –While the data centers have pledged to pay 100% of the cost for new power generation, Alliant Energy is choosing a more expensive path that threatens to shift costs to Iowa’s families and small businesses.
“Alliant is using loopholes and secret rate agreements with data centers to shield the entire process from accountability. It’s hard to see how ratepayers don’t get taken for a ride – and not on Alliant’s corporate jets,” said Bob Rafferty, Executive Director of Iowa Business for Clean Energy.
The Madison, Wis.-based utility is using the growth of data centers as justification for plans to build 2640 MW of new gas peaker plants that will produce eight times its current peaker capacity, at an estimated cost of $3.5 billion, an almost 50% increase to its current rate base.
“Alliant doesn’t even need to show the gas plants are needed, that the plants are the best option or that the data centers will pay their fair share to receive Iowa Utility Commission approval to build that massive amount of added capacity,” Rafferty said. “The company is simply using data centers as the excuse for an expense that will increase Alliant’s annual profits by roughly $17 million, but cost Alliant’s customers billions.”
He added, “The question is simple: why shouldn’t Alliant be required to show this large investment is in the best interests of ratepayers and if it is, that the data centers are paying their share of the cost? Iowa needs transparency before ratepayers are locked into decades of higher costs.”
The following three key factors put ratepayers at great risk:
First, Alliant is building combustion turbine gas plants. Because they are “gas peaker” plants, they do not require a finding that the capital expense is in the ratepayer’s best interest before they are built. These “gas peaker” plants are the most expensive way to generate electricity – equivalent to the expense of a new nuclear plant. (see (https://www.lazard.com/media/kcfconhf/lazards-lcoeplus_vf.pdf p. 7)
Second, current Iowa Utility Commission (IUC) standards only require the “secret” rates for the data centers to cover marginal costs. While minimal information is shared in the public dockets, according to Lazard’s, a widely cited industry source “marginal costs” are approximately half of the full costs of this new development (https://www.lazard.com/media/kcfconhf/lazards-lcoeplus_vf.pdf p. 7). Ratepayers could be stuck paying the rest.
Third, the IUC’s position is that the appropriateness of Alliant’s decision will be determined at the next rate case – after the plants are built. Unfortunately, under Iowa’s utility friendly laws, as the utilities recently stated to the Commission, “(t)he utility need not prove, and the IUC need not find, that the proposed resources are the most reasonable alternative,” in order for the utilities to bill ratepayers for the expense.
Rafferty warned that if projected data center usage does not materialize over the life of the assets, Iowans would be left responsible for even more of the cost. “Those expenses would show up I public rates paid by Iowa households, small businesses, manufacturers, farms, schools, and local governments. This would compound Alliant’s high residential and small business rates, which are already 60% higher than MidAmerican Energy’s.” he said.
“A common best practice in other states is to require the utility to prove the need and identify the least cost options before this type of expenditure. And with the large data center buildout, the new best practices are to rely on the data centers themselves to bring their own capacity,incentivize other customers to bring capacity, and use large-load public rates, rather than secret deals.” Rafferty further added “Those strategies are less risky and costly than Alliant’s proposed approach. However, using the less expensive options will not increase their profits by $175 million,” Rafferty said.
Iowa Business for Clean Energy is calling on the Iowa Utilities Commission and state policymakers to require greater disclosure, rigorous review of alternatives, and stronger safeguards to ensure Alliant does not use data center growth to build a massive amount of peak generation paid for by Iowa’s families and small businesses.
“Iowa law does not require Alliant to prove this is the best option for ratepayers, nor do they need to prove the data center rates will cover the cost before these plants are built. That’s backwards, it’s unfair and it’s wrong.” Rafferty said and added further “If these projects are good for Iowa, the numbers should be able to withstand public scrutiny,” Rafferty said.
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