Alliant Energy acknowledged widespread criticism of its rate increase plan Thursday, blaming a bad public reaction partly on its timing.

The Iowa Utilities Board will conduct a public hearing at 5:30 p.m. Thursday on the company's rate hike at the Kirkwood Training and Outreach Services Center, 3375 Armar Dr., Marion.

Alliant implemented a 7 percent temporary rate hike this month, the first installment on an overall rate hike request of 16.6 percent, or $171 million. The increase will cover rising costs for transmission, recovery from natural disasters, rising labor costs, environmental compliance costs, and other factors.

The biggest single factor is $76 million in higher transmission costs, which have soared after Alliant's sale of its Iowa transmission system to ITC Midwest at the end of 2007.

Alliant is seeking $14 million in revenue annually for the next four years to cover uninsured costs of recovery from the record 2008 flooding in Iowa.

An average residential customer will see an 18.1 percent rate hike if Alliant's full request is granted by the Iowa Utilities Board.

In 2010, Alliant Energy expects to ask for another rate increase to pay the costs of building its Whispering Willow Wind Farm in north central Iowa.

"Raising rates right now, with the way the economy is, is something you would not want to do if you had your druthers," said Tom Aller, president of Alliant's Interstate Power & Light subsidiary, to The Gazette's editorial board.

Alliant had planned to wait until 2010 to seek a single rate increase instead of seeking two successive rate increases. The combination of the 2007 ice storms and 2008 flood caused so much expense that Alliant could not wait until 2010 to begin recovering costs, Aller said.

"Do I think back-to-back rate increases will be confusing to customers?" Aller asked rhetorically. "Yes I do."

Aller said it's been five years since the company's last rate increase, however. The company has saved $70 million in three years with efficiency programs, he added

Alliant is seeking an 11.4 percent return on equity in the rate case, arguing that it is in a riskier investment climate than at the time of its last rate case, which set its return on equity at 10.7 percent.