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IOWA POWER REQUESTS INCREASE IN ELECTRIC RATES

 IOWA POWER REQUESTS INCREASE IN ELECTRIC RATES
 DES MOINES, Iowa, March 17 /PRNewswire/ -- Iowa Power today


announced that it is requesting an increase in its electric rates.
 Lynn Vorbrich, president of Iowa Power, said a 10 percent rate increase request was filed today with the Iowa Utilities Board (IUB). If approved, the new rates would increase annual revenues by $36.1 million.
 For a typical customer who uses 635 kilowatt hours of energy per month, the new rate would add approximately $6.20 to their monthly bill. Iowa Power is asking that a portion of this request, $19 million or approximately $3.26 per month to the typical residential customer, be implemented on an interim basis while the full request is being considered.
 "It's been nearly four years since we requested a rate change," Vorbrich said. "We've worked diligently to control expenses without sacrificing our level of service to customers. But a variety of factors, including inflation, require that we adjust our rates."
 Vorbrich said that in the period 1987 to 1991, inflation increased more than 17 percent, so even with approval of the rate increase, Iowa Power rates would increase at only 57 percent of the inflation rate. In addition to inflation, Vorbrich pointed to two other primary expenses affecting Iowa Power: (1) non-energy costs involved in the purchase of energy from the Nebraska Public Power District (NPPD); and (2) construction of generation, transmission and distribution facilities.
 Non-energy costs billed to Iowa Power by NPPD have increased $25.4 million since the company's last rate filing in 1988, Vorbrich said.
 "Our purchase agreement with NPPD has been very beneficial to our customers, but because we don't have ownership in NPPD, we don't earn a return for our shareholders on our initial investment with NPPD. When these non-energy costs exceed the levels approved in our rates, our shareholders have to absorb the costs," he said.
 Iowa Power has made substantial investments in construction projects designed to upgrade distribution and transmission systems and meet increasing demand for electrical service. Two combustion turbine generators were added to the company's generating capacity in 1990 at the Pleasant Hill Energy Center near Des Moines.
 "These and other projects are designed to enhance the reliability of our system and to help accommodate continuing growth, particularly in the Des Moines area," Vorbrich said. "While additional revenue is needed to finance these improvements, in the long run, our growth will help keep our electric rates stable."
 Vorbrich pointed out that Iowa Power's efforts to hold down cost increases include aggressive promotion of energy efficiency, a 6 percent reduction in the number of employees since 1984, increased safety training to reduce work time lost due to injuries, and the proposed merger of Iowa Power and Iowa Public Service Co. The merger, approved by the IUB and the Minnesota Public Utilities Commission, is pending before the Federal Energy Regulatory Commission.
 Iowa Power's 1988 rate filing was prompted by a 1987 rate reduction. The rates approved in the 1988 request did not fully recover the revenues lost in the rate reduction. Prior to 1988, the last rate increase request was filed in 1983. The Consumer Price Index has increased 41 percent since the 1983 rate filing.
 The IUB has 90 days to decide on an interim rate. If approved, the interim rate would be collected subject to refund while the IUB decides the final rate increase. The IUB has 10 months to set a final rate.
 Iowa Power provides electric service to 254,000 customers in central and southwest Iowa, including the Des Moines and Council Bluffs metropolitan areas. Iowa Power is a subsidiary of Midwest Resources Inc., (NYSE: MWR) a Des Moines-based utility holding company.
 -0- 3/17/92
 /CONTACT: John F. McCarroll of Iowa Power, 515-281-2785/
 (MWR) CO: Iowa Power ST: Iowa IN: UTI SU:


BB -- DV007 -- 8877 03/17/92 15:54 EST
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Publication:PR Newswire
Date:Mar 17, 1992
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