Interstate Power and Light Co. has canceled plans to construct a coal power plant in Marshalltown.

The Alliant Energy Corp. subsidiary said it decided to cancel the Sutherland Generation Station Unit 4 project due to the current economic and financial climate, increasing uncertainty about environmental regulations of greenhouse gas emissions and terms placed on the proposed power plant by regulators.

In February, the Iowa Utilities Board (IUB) decided to establish a return on equity of 10.1 percent and a cost cap of $2,816 per kilowatt on the plant, lower than the 12.55 percent return and a cost cap of $3,483 per kilowatt the company had requested. At that time, Interstate Power said it would have to re-evaluate its next steps and that “the condition placed by the IUB on the proposed hybrid power plant present a number of challenges in today’s financial climate.”

Interstate Power said it will re-evalutate its energy supply options and future needs in the next six to 12 months and that it plans to proceed with developing new energy resources, including the Whispering Willow Wind Farm in north central Iowa.

“While the economic slowdown has dampened short-term forecasts for energy growth, we still have a need for baseload electric generation to serve our members,” said Dennis Murdock, executive vice president and CEO of the Central Iowa Power Cooperative, one of three cooperatives also involved in the Marshalltown project. “We will continue to pursue other opportunities to meet the growing needs of our members to foster economic growth and job creation.”

Construction of the plant was expected to create a total of 1,000 jobs.