Alliant Building on Wind: Regional Utility Ambitious

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It's contagious. It seems just about everyone is building wind power generation, and more of it than ever before. In the past two years, slightly more than 15,000 megawatts of new U.S. wind power generation was under construction or put in service, according to the American Wind Power Association. By at least one measure, that's a lot of wind power. New wind power facilities in those years accounted for at least 40 percent of all the new generation capacity.

As might be expected, a few of the nation's bigger and better-known utilities are leading the pack, including MidAmerican Energy, the Edison Mission Group, AEP, FPL and Duke Energy.

Another big wind power builder not on anyone's list is a regional utility that rarely makes headlines even in its Madison, Wis., hometown. By the end of last year, natural gas and power provider Alliant Energy put in place more than 3,800 megawatts of wind power in 20 states, enough power to serve more than 1 million homes, or around 10 percent of the total U.S. wind power generation now in place or under construction. On top of that, the company takes credit for facility siting development work for another 5,000 megawatts of renewable energy.

The natural question is, what's a Midwest regional utility doing in the wind power business? The quick answer is, it's just "natural growth from who we were," says Steve Johannsen, president of RMT, a unit of Alliant Energy that operates as an environmental engineering consulting and construction services firm. RMT has been in business for more than 30 years.

The consulting business was part of a utility acquisition that Alliant Energy made in the 1980s. However, more than a decade ago, RMT began focusing on wind and solar energy. Although Alliant Energy also engineers and builds facilities for others, close to a third of Alliant Energy's wind power goes to its 977,000 electric customers living in the upper Midwest in and around where the states of Iowa, Wisconsin and Minnesota come together, with some customers sprinkled in southwestern Illinois. The company also provides natural gas to more than 400,000 customers.

In past years, the wind business could be expected to help out the company when times got tough. And Alliant Energy has its share of tough times. Ice storms that snap distribution wires and transmission lines pop up almost annually.

In 2008, rivers in Iowa and Wisconsin crested some 20 feet above flood stage, submerging Cedar Rapids, Iowa, and nearby communities, and costing Alliant Energy approximately $200 million and a year's worth of work to put its facilities back in working order.

Then, last year, when the nation's economy went into a tailspin, auto and associated suppliers in the company's Wisconsin service territory closed their doors permanently, causing Alliant Energy Chairman and CEO William D. Harvey to tell financial analysts recently that 7 percent of its industrial customers "are permanently lost due to plant closures."

Harvey, 60, a University of Wisconsin law school graduate, left private practice to join the company 24 years ago. He sees growth ahead for wind. Recently he told analysts, "Our research indicates that wind construction is starting to experience a rebound and analysts expect a substantial increase in wind and solar construction in 2010."

The pot of gold that everyone in the wind business is eying is the projected 30-fold growth expected in the next five years. Driving the growth are multiple state regulations requiring utilities to supply 15 to 20 percent of their power from renewable sources. Wind is even more attractive, given the 30 percent federal investment tax credit passed by Congress in late 2008 and enhanced in early 2009.

As Alliant Energy's top wind executive says: "We're in this for the long haul. While business was off this year, we continued to build our organization, hiring people that we feel will be valuable in the future."

This article originally appeared in the March/April issue of EnergyBiz magazine [3] by Al Butkus.  To view the entire issue, click here [3].

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