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In a stunning reversal of fortunes for the city of Marshalltown and surrounding area, Interstate Power and Light, a subsidiary of Alliant Energy, announced it is scrapping plans to build a $1.5-billion coal power plant in the city.

The news came several weeks after a decision by the Iowa Utilities Board, which did not approve a 12.5 percent return on investment, instead allowing the company only to realize a 10-percent return on investment, had the plant been built.

"Had we received what we had asked for, I think we would still be looking at a way to get to yes," said Tom Aller, president of IPL.

Aller mentioned several factors as reasons why the plans for the plant were canceled. In addition to the rate decision from the IUB, he said an elongated air quality permit process, along with pending litigation by outside groups, also played roles. Further, he said the national climate, with talk of carbon penalties and banning coal plants, further destabilized the situation.

The community was looking forward not only to the economic investment from the utility, but also to other companies that were looking to locate in the shadow of a brand new power plant.

"I had a couple [of opportunities] in the hopper that are gone because of this," said Joel Akason, president of the local economic development organization known as the Marshall Economic Development Impact Committee. "As far as our retail, restaurant and lodging, it will take a hit because of this. I think we'll be able to hold the line on everything else."

He mentioned the Emerson Data Center project was still moving forward, despite the power plant being gone.

"The new power plant was just icing on the cake for that project," he said. "We'll still be celebrating the data center in Marshalltown."

Aller spoke very positively about the city and county and the cooperation they received.

Aller said he felt he owed the community an explanation first and foremost, even before announcing his decision to the governor or other state leaders. One person at the meeting asked if the governor would be blindsided by this decision.

"I don't know if he's blindsided or not," Aller said. "But I don't owe him the first call. I owe this community the first call."

Further, Aller stated, "We have worked around the clock because of you trying too find a way to overcome all these other issues."

The IPL president also mentioned that not all hope was lost for the community. There is a Plan B that does not involve coal, but rather wind and natural gas electrical generation, or perhaps a combination of those two. While he could not say Marshalltown would be the site of that future plant, perhaps worth $750 million, the city may be on a very short list of candidate locations.

"What we learned through this process is what we have here," Aller said. "It's annexed. We've got roads. We know what the water quality is. We know what the transmission capacity is. Those are all things we know about Marshalltown."

Akason said if Alliant Energy does choose Marshalltown a second time, some of those opportunities lost may come back. But instead of being out front about it, they will likely delay serious inquiries until the process is completed and ground on a new plant is broken.

Aller, himself, realized what a boost the plant would have been for the economy not only in Marshalltown, but the entire state.

"We have a president of the United States who wants stimulus, who wants shovel-ready projects," Aller said. "We had a billion and a half one ready to go as soon as the frost was out of the ground."

Both Rep. Mark Smith, D-Marshalltown, and Sen. Steve Sodders, D-State Center, expressed disappointment in the announcement but said they were encouraged by the positive comments Aller made concerning Marshalltown.

Aller said a decision on Alliant's next power plant proposal may come within six months.

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Contact Ken Black at 641-753-6611 or kblack@timesrepublican.com