2014-2016 Rate Plan
Value Story
• When asked, our customers identify the following topics as ways MidAmerican Energy provides value– Emergency Response and Preparedness– Renewable Energy Generation– Energy Efficiency Initiatives– Investments in Iowa’s Future
• MidAmerican Energy provides electricity and service to our customers around-the-clock
• $170 million spent on storm restoration efforts during the last five years
• MidAmerican Energy is ranked in the top quartile in the nation in reliability, despite dealing with extreme weather in all seasons
Emergency Response and Preparedness
• MidAmerican Energy is No. 1 in the nation for ownership of wind generation capacity among rate-regulated utilities
• Approximately 30% of our generation capacity comes from wind
• 2,284 MW – 1,267 wind turbines have been installed in Iowa
Renewable Energy Generation
Energy Efficiency Initiatives
• MidAmerican Energy has been a leader in providing energy efficiency programs since 1990
• MidAmerican Energy has provided more than 34,000 home energy assessments in the last five years
• MidAmerican Energy has helped customers install energy-efficient CFL light bulbs that have helped them save $22 million in energy costs
Investments In Iowa’s Future
• MidAmerican Energy has invested more than $5 billion in new electric generation in Iowa in the last decade
• MidAmerican Energy’s economic development efforts have helped create 2,600 jobs since 2008
• MidAmerican Energy’s Iowa customers have enjoyed 16 years of rate stability and the seventh lowest rates in the nation
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2014-2016 Rate Plan
MidAmerican Energy’s Rate Case Objectives
• Customer Focused Approach • Balanced Outcome • Soften Customer Impact • Acceptable Financial Results
MidAmerican Energy Is a Low-Cost Provider
• Currently, we have the seventh lowest rates in the U.S., and our goal is to continue to be a low-cost provider
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2012 Average Retail Rate / kWh
2012 $/kWh
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2012 $/kWh
MidAmerican Energy’s Iowa Rate History
• MidAmerican Energy was formed by merging Midwest Power Systems, Inc. and Iowa-Illinois Gas & Electric Company in mid-1995. Each company had separate rate structures
• In 1997, the Iowa Utilities Board approved a rate settlement and introduced rate freeze/revenue-sharing concepts
• Multiple subsequent rate settlements supported continuation of the rate freeze
• In April 2009, the Iowa Utilities Board issued an order postponing rate equalization until MidAmerican Energy’s next rate case
2012-2013 Rate Plan Update
• Filed for an increase in February 2012– $38.7 million in 2012 and $76 million in 2013 collected through a rider, no
changes to base rates– For residential customers, the requested increase for March through
December 2012 was approximately $2.30 per month and the 2013 increase was another $1.30 increase per month
– Additional revenue was needed for environmental equipment costs and the increase in the costs of producing energy
– Rider no longer in effect after 2013• Final Iowa Utilities Board order was issued Oct. 8, 2012 • Deferred a general rate increase until 2014
• Rider from 2012-2013 rate filing ends by Dec. 31, 2013• MidAmerican Energy took a conservative approach and requested
approximately 50% of the increase that it could have asked for in the 2012-2013 rate filing
• Current electric rates are based on 1995 business-related expenses and need to be updated for components, such as:– Wage and benefit costs– Costs to maintain and operate generation and delivery facilities – Investments in generation and distribution, including Walter Scott, Jr.
Energy Center Unit 4; Greater Des Moines Energy Center; and all wind generation projects
Why A Rate Increase Is Needed?
Examples of Increases inInfrastructure Investment and O&M
1995 to 2011• Transmission structures and stations – $120.8 million (+39%)• Distribution structures and stations – $276.2 million (+57%)• Fuel cost per unit of energy – up 19%, despite having a significant
amount of wind, which has zero fuel cost• Generation maintenance and operation expenses – $111.8
million (+144.4%)• Transmission O&M expenses – $4.4 million (+65%)• Distribution O&M expenses – $44.9 million (+124%)
2014 Rate Case
• MidAmerican desires a three-year phase-in of rates– Phased-in approach would mean considerable savings for
customers• Adjustment clauses - energy and transmission expenses
– To account for costs outside MidAmerican's control • Continuation of revenue sharing will be proposed
– Significant customer benefit in rate base due to previous sharing• Multiple cost allocation methods and rate designs will be
included in the filing as part of the Iowa Utilities Board order on rate equalization
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Customer Class North South East
Residential 7.348¢ 8.768¢ 9.170¢
Commercial/IndustrialSmall General Service 5.840¢ 7.146¢ 6.567¢
Commercial/IndustrialLarge General Service 3.730¢ 4.300¢ 4.317¢
Lighting 12.288¢ 15.540¢ 13.188¢
Current Rate Disparities
Rate Equalization Proposal
• MidAmerican Energy’s rate equalization proposal will bring rates to levels that reflect cost of service, regardless of geographic zone, over a period of 10 years
• The 10-year period for equalization was chosen to limit impacts to the extent possible on the hardest hit groups
• MidAmerican Energy’s rate filing will contain a single set of tariffed rates that will apply across the company’s entire service territory
2014 Rate Case Timing
• Meet with customers and other stakeholders – Throughout the process
• Send customer notice – Beginning May 8, 2013• File rate case – May 17, 2013• Iowa Utilities Board will conduct public comment hearings after
filing is submitted – Estimated to begin in mid-June• Temporary rates would go into effect in August 2013• Final rates effective – April 2014• Adjustment to rates due to rate equalization will be implemented as
ordered by the Iowa Utilities Board
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