Interstate Power and Light Company (IPL), a subsidiary of Alliant Energy, has signed a power purchase agreement with Duane Arnold Energy Center (DAEC) owner NextEra Energy.
As per the 11-year deal, which starts in 2014, IPL will purchase power from DAEC in Palo, Iowa, US.
IPL president Tom Aller said that the deal will save the customers money over the long term and provides them a reliable, local source of clean energy.
IPL has also filed a request with the Iowa Utilities Board (IUB) to construct a new $700m natural gas-fired generating station in Marshalltown.
The IUB is expected to take a decision on IPL’s request later in 2013.
Apart from the Marshalltown plant, IPL is also planning to invest $440m over four years to increase efficiency and reduce emissions in its coal-fired power plants.
"The DAEC agreement is an important step to successfully executing our long-term strategy," Aller added.
"We are committed to working with customers, stakeholders and regulators to implement the remaining components of our long-term plan."