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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 20172021
or
|
| |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from to
Name of Registrant, State of Incorporation, Address of Principal Executive Offices, Telephone Number, Commission File Number, IRS Employer Identification Number |
| | | | |
Commission
File Number
| | Name of Registrant, State of Incorporation,
Address of Principal Executive Offices and Telephone Number
| | IRS Employer
Identification Number
|
1-9894 | | ALLIANT ENERGY CORPORATION | | 39-1380265 |
| | (a Wisconsin corporation) | | |
| | 4902 N. Biltmore Lane | | |
| | Madison, Wisconsin 53718 | | |
| | Telephone (608) 458-3311 | | |
| | |
1-4117 | | INTERSTATE POWER AND LIGHT COMPANY | | 42-0331370 |
| | (an Iowa corporation) | | |
| | Alliant Energy Tower | | |
| | Cedar Rapids, Iowa 52401 | | |
| | Telephone (319) 786-4411 | | |
| | |
0-337 | | WISCONSIN POWER AND LIGHT COMPANY | |
ALLIANT ENERGY CORPORATION (a Wisconsin Corporation) 4902 N. Biltmore Lane Madison, Wisconsin 53718 Telephone (608) 458-3311 Commission File Number - 1-9894 IRS Employer Identification Number - 39-1380265
INTERSTATE POWER & LIGHT COMPANY (an Iowa corporation) Alliant Energy Tower Cedar Rapids, Iowa 52401 Telephone (319) 786-4411 Commission File Number - 1-4117 IRS Employer Identification Number - 42-0331370
WISCONSIN POWER & LIGHT COMPANY (a Wisconsin corporation) 4902 N. Biltmore Lane Madison, Wisconsin 53718 Telephone (608) 458-3311 Commission File Number - 0-337 IRS Employer Identification Number - 39-0714890 |
| | (a Wisconsin corporation) | | |
| | 4902 N. Biltmore Lane | | |
| | Madison, Wisconsin 53718 | | |
| | Telephone (608) 458-3311 | | |
This combined Form 10-K is separately filed by Alliant Energy Corporation, Interstate Power and Light Company and Wisconsin Power and Light Company. Information contained in the Form 10-K relating to Interstate Power and Light Company and Wisconsin Power and Light Company is filed by each such registrant on its own behalf. Each of Interstate Power and Light Company and Wisconsin Power and Light Company makes no representation as to information relating to registrants other than itself.
Securities registered pursuant to Section 12(b) of the Act:
Alliant Energy Corporation, Common Stock, $0.01 Par Value, Trading Symbol LNT, Nasdaq Global Select Market |
| | |
| Title of Class | Name of Each Exchange on Which Registered |
Alliant Energy Corporation | Common Stock, $0.01 Par Value | New York Stock Exchange |
Interstate Power and Light Company | 5.100% Series D Cumulative Perpetual Preferred Stock, $0.01 Par Value | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrants areregistrant is a well-known seasoned issuers,issuer, as defined in Rule 405 of the Securities Act.
Alliant Energy Corporation - Yes ☒ No ☐
Interstate Power and Light Company - Yes ☒ No ☐
Wisconsin Power and Light Company - Yes ☒ No ☐
Indicate by check mark if the registrants areregistrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Alliant Energy Corporation - Yes ☐ No ☒
Interstate Power and Light Company - Yes ☐ No ☒
Wisconsin Power and Light Company - Yes ☐ No ☒
Indicate by check mark whether the registrantsregistrant (1) havehas filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports) and (2) havehas been subject to such filing requirements for the past 90 days.
Alliant Energy Corporation - Yes ☒ No ☐
Interstate Power and Light Company - Yes ☒ No ☐
Wisconsin Power and Light Company - Yes ☒ No ☐
Indicate by check mark whether the registrants haveregistrant has submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants wereregistrant was required to submit and post such files).
Alliant Energy Corporation - Yes ☒ No ☐
Interstate Power and Light Company - Yes ☒ No ☐
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein,Wisconsin Power and will not be contained, to the best of the registrants’ knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Light Company - Yes ☒ No ☐
Indicate by check mark whether the registrants areregistrant is a large accelerated filers,filer, accelerated filers,filer, non-accelerated filers,filer, smaller reporting companies,company, or emerging growth companies.company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Alliant Energy Corporation - Large Accelerated Filer ☒ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller Reporting Company ☐ Emerging Growth Company ☐ |
| | | | | | | | | |
| Large Accelerated Filer | | Accelerated Filer | | Non-accelerated Filer | | Smaller Reporting Company | | Emerging Growth Company |
Alliant Energy Corporation | ☒ | | | | | | | | |
Interstate Power and Light Company | | | | | ☒ | | | | |
Wisconsin Power and Light Company | | | | | ☒ | | | | |
Interstate Power and Light Company - Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☒ Smaller Reporting Company ☐ Emerging Growth Company ☐Wisconsin Power and Light Company - Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☒ Smaller Reporting Company ☐ Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Alliant Energy Corporation ☐
Interstate Power and Light Company ☐
Wisconsin Power and Light Company ☐
Indicate by check mark whether the registrants areregistrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (§ 15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Alliant Energy Corporation ☒
Interstate Power and Light Company ☐
Wisconsin Power and Light Company ☐
Indicate by check mark whether the registrant is a shell companiescompany (as defined in Rule 12b-2 of the Exchange Act).
Alliant Energy Corporation - Yes ☐ No ☒
Interstate Power and Light Company - Yes ☐ No ☒
Wisconsin Power and Light Company - Yes ☐ No ☒
The aggregate market value of the voting and non-voting common equity held by nonaffiliates as of June 30,
2017:2021: |
| |
Alliant Energy Corporation | $9.3Alliant Energy Corporation - $13.9 billion |
Interstate Power and Light Company | $— |
Wisconsin Power and Light Company | $— |
Interstate Power and Light Company - $0
Wisconsin Power and Light Company - $0
Number of shares outstanding of each class of common stock as of January 31, 2018:2022:
Alliant Energy Corporation, Common Stock, $0.01 par value, 250,478,681 shares outstanding |
| |
Alliant Energy Corporation | Common stock, $0.01 par value, 231,356,336Interstate Power and Light Company, Common Stock, $2.50 par value, 13,370,788 shares outstanding (all outstanding shares are owned beneficially and of record by Alliant Energy Corporation)Wisconsin Power and Light Company, Common Stock, $5 par value, 13,236,601 shares outstanding (all outstanding shares outstanding |
| |
Interstate Power and Light Company | Common stock, $2.50 par value, 13,370,788 shares outstanding (all of which are owned beneficially and of record by Alliant Energy Corporation) |
| |
Wisconsin Power and Light Company | Common stock, $5 par value, 13,236,601 shares outstanding (all of which are owned beneficially and of record by Alliant Energy Corporation) |
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement relating to Alliant Energy Corporation’s 20182022 Annual Meeting of Shareowners are, or will be upon filing with the Securities and Exchange Commission, incorporated by reference into Part III hereof.
TABLE OF CONTENTS
DEFINITIONS
The following abbreviations or acronyms used in this Form 10-Kreport are defined below: |
| | | | | | | | | | |
| Abbreviation or Acronym | Definition | Abbreviation or Acronym | Definition |
20182022 Alliant Energy Proxy Statement | Alliant Energy’s Proxy Statement for the 20182022 Annual Meeting of Shareowners | GHGFuel-related | Greenhouse gasesElectric production fuel and purchased power |
| AEF | Alliant Energy Finance, LLC | IPLGAAP | Interstate Power and Light CompanyU.S. generally accepted accounting principles |
| AFUDC | Allowance for funds used during construction | IRSGHG | Greenhouse gases |
| Alliant Energy | Alliant Energy Corporation | IPL | Interstate Power and Light Company |
| ARO | Asset retirement obligation | IRS | Internal Revenue Service |
Alliant EnergyATC | Alliant Energy Corporation | ITC | ITC Midwest LLC |
AOCL | Accumulated other comprehensive loss | IUB | Iowa Utilities Board |
ARO | Asset retirement obligation | KWh | Kilowatt-hour |
ATC | American Transmission Company LLC | MarshalltownITC | Marshalltown Generating StationITC Midwest LLC |
ATC InvestmentHoldings | InvestmentInterest in American Transmission Company LLC and ATC Holdco LLC | MDAIUB | Iowa Utilities Board |
| ATI | AE Transco Investments, LLC | KWh | Kilowatt-hour |
| CA | Certificate of authority | Marshalltown | Marshalltown Generating Station |
| CAA | Clean Air Act | MDA | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
ATICCR | AE Transco Investments, LLCCoal combustion residuals | MGP | Manufactured gas plant |
CACO2 | Certificate of authorityCarbon dioxide | MISO | Midcontinent Independent System Operator, Inc. |
CAA | Clean Air Act | MW | Megawatt |
CCR | Coal combustion residuals | MWh | Megawatt-hour |
CO2 | Carbon dioxide | N/A | Not applicable |
| Corporate Services | Alliant Energy Corporate Services, Inc. | NAAQSMW | National Ambient Air Quality StandardsMegawatt |
CPCNCOVID-19 | Novel coronavirus | MWh | Megawatt-hour |
| CPCN | Certificate of Public Convenience and Necessity | Note(s)N/A | Not applicable |
| CWIP | Construction work in progress | Note(s) | Combined Notes to Consolidated Financial Statements |
CRANDICDAEC | Cedar Rapids and Iowa City Railway Company | NOx | Nitrogen oxide |
CSAPR | Cross-State Air Pollution Rule | OIP | Alliant Energy 2010 Omnibus Incentive Plan |
CWIP | Construction work in progress | OPEB | Other postretirement benefits |
DAEC | Duane Arnold Energy Center | PPAOIP | Purchased power agreementAlliant Energy Omnibus Incentive Plan |
DATCDCP | Duke-American Transmission Company, LLC | PSCW | Public Service Commission of Wisconsin |
DCP | Alliant Energy Deferred Compensation Plan | Receivables AgreementOPEB | Receivables Purchase and Sale AgreementOther postretirement benefits |
| DLIP | Alliant Energy Director Long Term Incentive Plan | RESPPA | Renewable energy standardsPurchased power agreement |
| Dth | Dekatherm | RiversidePSCW | Public Service Commission of Wisconsin |
| EEP | Energy efficiency plan | Receivables Agreement | Receivables Purchase and Sale Agreement |
| EGU | Electric generating unit | Riverside | Riverside Energy Center |
EEPEPA | Energy efficiency planU.S. Environmental Protection Agency | SCRSEC | Selective catalytic reduction |
EGU | Electric generating unit | SEC | Securities and Exchange Commission |
EPAEPS | U.S. Environmental Protection Agency | SO2 | Sulfur dioxide |
EPB | Emissions plan and budget | Tax Reform | Tax Cuts and Jobs Act |
EPS | Earnings per weighted average common share | U.S. | United States of America |
FERCFederal Tax Reform | Tax Cuts and Jobs Act | VEBA | Voluntary Employees’ Beneficiary Association |
| FERC | Federal Energy Regulatory Commission | VEBAVIE | Voluntary Employees’ Beneficiary AssociationVariable interest entity |
| Financial Statements | Consolidated Financial Statements | VIEWhiting Petroleum | Variable interest entityWhiting Petroleum Corporation |
| FTR | Financial transmission right | WACCWPL | Weighted-average cost of capital |
Fuel-related | Electric production fuel and purchased power | Whiting Petroleum | Whiting Petroleum Corporation |
FWEC | Forward Wind Energy Center | WPL | Wisconsin Power and Light Company |
GAAP | U.S. generally accepted accounting principles | WPL Transco | WPL Transco, LLC |
FORWARD-LOOKING STATEMENTS
Statements contained in this report that are not of historical fact are forward-looking statements intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified as such because the statements include words such as “may,” “believe,” “expect,” “anticipate,” “plan,” “project,” “will,” “projections,” “estimate,” or other words of similar import. Similarly, statements that describe future financial performance or plans or strategies are forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. Some, but not all, of the risks and uncertainties of Alliant Energy, IPL and WPL that could materially affect actual results include:
IPL’s and WPL’s ability to obtain adequate and timely rate relief to allow for, among other things, earning a return on rate base additions and the recovery of costs, including fuel costs, operating costs, transmission costs, environmental compliance and remediation costs, deferred expenditures, deferred tax assets, capital expenditures, and remaining costs related to EGUs that may be permanently closed, earning their authorized rates of return, and the payments to their parent of expected levels of dividends;
federal and state regulatory or governmental actions, including the impact of energy, tax, financial and health care legislation, and regulatory agency orders;
ability to obtain regulatory approval for wind projects with acceptable conditions, to acquire sufficient transmission-ready wind sites, to complete construction within the cost caps set by regulators and to meet all requirements to qualify for the full level of production tax credits;
the impact of customer- and third party-owned generation, including alternative electric suppliers, in IPL’s and WPL’s service territories on system reliability, operating expenses and customers’ demand for electricity;
the impact of energy efficiency, franchise retention and customer disconnects on sales volumes and margins;
the impact that price changes may have on IPL’s and WPL’s customers’ demand for electric, gas and steam services and their ability to pay their bills;
the impact of adjustments made to deferred tax assets and liabilities from changes in the tax laws;
the ability to utilize tax credits and net operating losses generated to date, and those that may be generated in the future, before they expire;
the direct or indirect effects resulting from terrorist incidents, including physical attacks and cyber attacks, or responses to such incidents;
•the impact of penalties or third-party claims related to, or in connection with, a failure to maintain the security of personally identifiable information, including associated costs to notify affected persons and to mitigate their information security concerns;
•the direct or indirect effects resulting from terrorist incidents, including physical attacks and cyber attacks, or responses to such incidents;
•the impact of customer- and third party-owned generation, including alternative electric suppliers, in IPL’s and WPL’s service territories on system reliability, operating expenses and customers’ demand for electricity;
•the impact of energy efficiency, franchise retention and customer disconnects on sales volumes and margins;
•the impact that price changes may have on IPL’s and WPL’s customers’ demand for electric, gas and steam services and their ability to pay their bills;
•IPL’s and WPL’s ability to obtain adequate and timely rate relief to allow for, among other things, the recovery of and/or the return on costs, including fuel costs, operating costs, transmission costs, deferred expenditures, deferred tax assets, tax expense, capital expenditures, and remaining costs related to EGUs that may be permanently closed and certain other retired assets, decreases in sales volumes, earning their authorized rates of return, and the payments to their parent of expected levels of dividends;
•federal and state regulatory or governmental actions, including the impact of legislation, and regulatory agency orders;
•the ability to utilize tax credits and net operating losses generated to date, and those that may be generated in the future, before they expire;
•the impacts of changes in the tax code, including tax rates, minimum tax rates, and adjustments made to deferred tax assets and liabilities;
•the ability to complete construction of renewable generation and storage projects within the cost targets set by regulators due to cost increases of materials, equipment and commodities including due to tariffs, labor issues or supply shortages, the ability to successfully resolve warranty issues or contract disputes, the ability to achieve the expected level of tax benefits based on tax guidelines and project costs, and the ability to efficiently utilize the renewable generation and storage project tax benefits for the benefit of customers;
•employee workforce factors, including changes in key executives, ability to hire and retain employees with specialized skills, ability to create desired corporate culture, collective bargaining agreements and negotiations, work stoppages or restructurings;
•any material post-closing payments related to any past asset divestitures, including the sale of Whiting Petroleum, which could result from, among other things, indemnification agreements, warranties, guarantees or litigation;
•weather effects on results of utility operations;
•the direct or indirect effects resulting from the ongoing COVID-19 pandemic and the spread of variant strains, including any vaccine mandates and testing requirements, on sales volumes, margins, operations, employees, labor markets, contractors, vendors, the ability to complete construction projects, supply chains, customers’ inability to pay bills, suspension of disconnects, the market value of the assets that fund pension plans and the potential for additional funding requirements, the ability of counterparties to meet their obligations, compliance with regulatory requirements, the ability to implement regulatory plans, economic conditions and access to capital markets;
•issues associated with environmental remediation and environmental compliance, including compliance with the Consent Decree between WPL, the EPAall environmental and the Sierra Club, the Consent Decree between IPL, the EPA, the Sierra Club, the State of Iowa and Linn County in Iowa,emissions permits, the CCR rule, the Clean Power Plan, future changes in environmental laws and regulations, including the EPA’sfederal, state or local regulations for CO2 emissions reductions from new and existing fossil-fueled EGUs, and litigation associated with environmental requirements;
•increased pressure from customers, investors and other stakeholders to more rapidly reduce CO2 emissions;
•the ability to defend against environmental claims brought by state and federal agencies, such as the EPA, state natural resources agencies or third parties, such as the Sierra Club, and the impact on operating expenses of defending and resolving such claims;
•continued access to the capital markets on competitive terms and rates, and the actions of credit rating agencies;
•inflation and interest rates;
•disruptions to the supply of materials, equipment and commodities needed to construct solar generation and storage projects, including due to shortages, labor issues or transportation issues, which may impact of the economyability to meet capacity requirements and result in increased capacity expense;
•possible changes to MISO’s methodology establishing capacity planning reserve margin and capacity accreditation requirements that may impact how and when new generating facilities such as IPL’s and WPL’s service territoriesadditional solar generation may be accredited with energy capacity and may require IPL and WPL to adjust their current resource plans, the resulting impacts on sales volumes, margins andneed to add resources to comply with MISO’s proposal, or procure capacity in the ability to collect unpaid bills;market whereby such costs might not be recovered in rates;
•changes in the price of delivered natural gas, transmission, purchased electricity and coal due to shifts in supply and demand caused by market conditions and regulations;
•disruptions in the supply and delivery of natural gas, purchased electricity and coal;
changes in the price of transmission services and the ability to recover the cost of transmission services in a timely manner;
developments that adversely impact the ability to implement the strategic plan;
•the direct or indirect effects resulting from breakdown or failure of equipment in the operation of electric and gas distribution systems, such as mechanical problems and explosions or fires, and compliance with electric and gas transmission and distribution safety regulations;regulations, including regulations promulgated by the Pipeline and Hazardous Materials Safety Administration;
•issues related to the availability and operations of EGUs, including start-up risks, breakdown or failure of equipment, availability of warranty coverage for equipment breakdowns or failures; performance below expected or contracted levels of output or efficiency, operator error, employee safety, transmission constraints, compliance with mandatory reliability standards and risks related to recovery of resulting incremental costs through rates;
•impacts that excessive heat, excessive cold, storms or natural disasters inmay have on Alliant Energy’s, IPL’s and WPL’s service territories may have on their operations and recovery of costs associated with restoration activities;activities or on the operations of Alliant Energy’s investments;
any material post-closing adjustments related to any past asset divestitures, including the sales of IPL’s Minnesota electric and natural gas assets, and Whiting Petroleum, which could result from, among other things, indemnification agreements, warranties, parental guarantees or litigation;
•Alliant Energy’s ability to sustain its dividend payout ratio goal;
•changes to costs of providing benefits and related funding requirements of pension and OPEB plans due to the market value of the assets that fund the plans, economic conditions, financial market performance, interest rates, timing and form of benefits payments, life expectancies and demographics;
•material changes in employee-related benefit and compensation costs;
•risks associated with operation and ownership of non-utility investments;holdings;
•changes in technology that alter the channels through which customers buy or utilize Alliant Energy’s, IPL’s or WPL’s products and services;
•impacts on equity income from unconsolidated investments due to furtherfrom valuations and potential changes to ATC’s authorized return on equity;
•impacts of IPL’s future tax benefits from Iowa rate-making practices, including deductions for repairs expenditures, and allocation of mixed service costs and state depreciation, and recoverability of the associated regulatory assets from customers, when the differences reverse in future periods;
•changes to the creditworthiness of counterparties with which Alliant Energy, IPL and WPL have contractual arrangements, including participants in the energy markets and fuel suppliers and transporters;
•current or future litigation, regulatory investigations, proceedings or inquiries;
•reputational damage from negative publicity, protests, fines, penalties and other negative consequences resulting in regulatory and/or legal actions;
•the effect of accounting standards issued periodically by standard-setting bodies;
•the ability to successfully complete tax audits and changes in tax accounting methods with no material impact on earnings and cash flows; and
Alliant Energy, IPL and WPL each assume no obligation, and disclaim any duty, to update the forward-looking statements in this report, except as required by law.
WEBSITE ACCESS TO REPORTS
Alliant Energy, IPL and WPL make their periodic and current reports, and amendments to those reports, available, free of charge, on Alliant Energy’s website at www.alliantenergy.com/investors on the same day as such material is electronically filed with, or furnished to, the SEC. Alliant Energy, IPL and WPL are not including the information contained on Alliant Energy’s website as a part of, or incorporating it by reference into, this report.
PART I
This report includes information relating to Alliant Energy, IPL and WPL (as well as AEF and Corporate Services). Where appropriate, information relating to a specific entity has been segregated and labeled as such. Unless otherwise noted, the information herein excludes discontinued operations for all periods presented. The terms “we,” “our” and “us” used in this report refer collectively to Alliant Energy, IPL and WPL.
ITEM 1. BUSINESS
A. GENERAL
Alliant Energy was incorporated in Wisconsin in 1981 and maintains its principal executive offices in Madison, Wisconsin. Alliant Energy operates as a regulated investor-owned public utility holding company.company, and its purpose-driven strategy is to serve its customers and build strong communities. Alliant Energy’s primary focus is to provide regulated electric and natural gas service to approximately 960,000985,000 electric and approximately 410,000425,000 natural gas customers in the Midwest through its two public utility subsidiaries, IPL and WPL. The primary first tier wholly-owned subsidiaries of Alliant Energy are as follows:
1) IPL - was incorporated in 1925 in Iowa as Iowa Railway and Light Corporation. IPL is a public utility engaged principally in the generation and distribution of electricity and the distribution and transportation of natural gas to retail customers in select markets in Iowa. IPL provides utility services to incorporated communities as directed by the IUB and utilizes non-exclusive franchises, which cover the use of public right-of-ways for utility facilities in incorporated communities for a maximum term of 25 years. At December 31, 2017,2021, IPL supplied electric and natural gas service to approximately 490,000500,000 and 220,000225,000 retail customers, respectively, in Iowa. IPL also sells electricity to wholesale customers in Minnesota, Illinois and Iowa. IPL is also engaged in the generation and distribution of steam for two customers in Cedar Rapids, Iowa. In 2017, 2016 and 2015, IPL had no single customer for which electric, gas, steam and/or other sales accounted for 10% or more of IPL’s consolidated revenues.
2) WPL - was incorporated in 1917 in Wisconsin as Eastern Wisconsin Electric Company. WPL is a public utility engaged principally in the generation and distribution of electricity and the distribution and transportation of natural gas to retail customers in select markets in Wisconsin. WPL operates in municipalities pursuant to permits of indefinite duration and state statutes authorizing utility operation in areas annexed by a municipality. At December 31, 2017,2021, WPL supplied electric and natural gas service to approximately 470,000485,000 and 190,000200,000 retail customers, respectively. WPL also sells electricity to wholesale customers in Wisconsin. In 2017, 2016 and 2015, WPL had no single customer for which electric, gas and/or other sales accounted for 10% or more of WPL’s consolidated revenues.
4) CORPORATE SERVICES - was incorporated in 1997 in Iowa. Corporate Services provides administrative services to Alliant Energy, IPL, WPL and AEF.
Refer4) AEF - Alliant Energy’s non-utility holdings are organized under AEF, which manages a portfolio of wholly-owned subsidiaries and additional holdings, including the following distinct platforms:
ATI - currently holds all of Alliant Energy’s interest in ATC Holdings. ATC Holdings is comprised of a 16% ownership interest in ATC and a 20% ownership interest in ATC Holdco LLC. ATC is an independent, for-profit, transmission-only company. ATC Holdco LLC holds Duke-American Transmission Company, LLC, a joint venture between Duke Energy Corporation and ATC, that owns electric transmission infrastructure in North America.
Corporate Venture Investments - includes various minority ownership interests in regional and national venture funds, including a coalition with different energy companies across the U.S., working together to Note 17help identify and research innovative products, technologies and business models within the emerging energy economy.
Non-utility Wind Farm - includes a 50% cash equity ownership interest in a 225 MW non-utility wind farm located in Oklahoma.
Sheboygan Falls Energy Facility - is a 347 MW, simple-cycle, natural gas-fired EGU near Sheboygan Falls, Wisconsin, which is leased to WPL for further discussionan initial period of business segments,20 years ending in 2025.
Travero - is a diversified supply chain solutions company, including a short-line rail freight service in Iowa; a Mississippi River barge, rail and truck freight terminal in Illinois; freight brokerage services; and a rail-served warehouse in Iowa, which information is incorporated herein by reference.began operations in 2021.
B. INFORMATION RELATING TO ALLIANT ENERGY ON A CONSOLIDATED BASIS
1) EMPLOYEESHUMAN CAPITAL MANAGEMENT - Alliant Energy’s core purpose is to serve customers and build strong communities. We constantly strive to attract, retain and develop a diverse and qualified workforce of high-performing employees, and create and foster an environment of inclusion and belonging for all employees.
Employees - At December 31, 2017,2021, Alliant Energy, IPL and WPL had the following full- and part-time employees:
| | | | | | | | | | | | | | | | | |
| Total | | Number of | | Percentage of Employees |
| Number of | | Bargaining Unit | | Covered by Collective |
| Employees | | Employees | | Bargaining Agreements |
| Alliant Energy | 3,313 | | 1,788 | | | 54% |
| IPL | 1,185 | | 822 | | | 69% |
| WPL | 1,033 | | 854 | | | 83% |
|
| | | | | |
| | Total | | Number of | | Percentage of Employees |
| | Number of | | Bargaining Unit | | Covered by Collective |
| | Employees | | Employees | | Bargaining Agreements |
| Alliant Energy | 3,989 | | 2,222 | | 56% |
| IPL | 1,670 | | 1,074 | | 64% |
| WPL | 1,278 | | 1,038 | | 81% |
The majority of IPL’s bargaining unit employees are covered by the International Brotherhood of Electrical Workers Local 204 (Cedar Rapids) collective bargaining agreement, which expires on August 31, 2020.2024. All of WPL’s bargaining unit employees are covered by the International Brotherhood of Electrical Workers Local 965 collective bargaining agreement, which expires on May 31, 2019.2022.
Safety - Safety is integral to our company’s culture. It is one of our Values – “Live safety. Everyone. Always. Our first priority is that nobody gets hurt.” Alliant Energy is committed to providing a safe environment for our employees, visitors, customers, contractors, vendors and the communities in which we live and work. 2) CAPITAL EXPENDITURE AND INVESTMENT PLANS -
We focus on the proactive management of our safety performance. Our comprehensive behavioral safety-based program consists of leading indicators, lagging indicators and targeted focus programs. We utilize a formal safety management system to capture and track best practices, near misses, job site briefings, safety observations, safety conversations and any unsafe conditions. This system provides the insights needed to help drive a positive safety culture and help ensure compliance with safety rules, processes and procedures. We also use this system to broadly share lessons learned in support of shaping the mindsets and behaviors needed to help prevent similar events from occurring elsewhere. Collectively, this information is used to evaluate the safety performance of the executive and management teams related to their goals, and safety metrics are factored into short-term incentive awards.
We maintain executive and local safety leadership teams to establish our safety vision, strategy and priorities, and ensure education and recognition of employee actions that improve our safety culture. This leadership provides strong support for sustained growth of both employee and public safety programs and initiatives.
Public safety is equally important as we interact with our customers to provide energy to their homes and businesses. We offer awareness campaigns, natural gas and electric public safety presentations, and free online resources and training programs and guidance to assist local emergency responders.
Total Rewards - Our market-competitive Total Rewards programs are designed to meet the varied and acquisition expendituresevolving needs of our employees. Through a variety of health, welfare and compensation programs, we offer employees choice and control, while supporting their financial, physical, and mental well-being. Tools and resources are provided to employees to help maintain and improve their health. Short- and long-term incentive plans are designed with a mix of operational and financial metrics that align employees with strategic corporate and social goals.
In addition to competitive salaries and wages, our Total Rewards programs include:
•competitive short- and long-term incentive compensation;
•a 401(k) savings plan with an employer match;
•healthcare and insurance benefits, including medical, vision, dental, life, short-term disability, and long-term disability insurance;
•health savings and flexible spending accounts;
•paid time off to use for 2018vacation, personal time, sick time, holidays, bereavement, jury duty, military leave, parental leave, maternity leave, and adoption leave;
•adoption assistance;
•legal planning assistance;
•Employee Assistance program;
•tuition reimbursement;
•Vacation Donation program; and
•Volunteer Grants & Matching Gifts program.
Diversity, Equity and Inclusion (DE&I) - A diverse, equitable and inclusive workplace is crucial for the success and retention of our employees, to attract future talent and to execute our purpose-driven strategy to serve our customers and build strong communities. It is one of our Values – “Care for others: Together we create a workplace where people feel like they belong and can use their unique backgrounds, talents and perspectives to their fullest potential.” Alliant Energy is driven by DE&I and believes the achievement of its strategic objectives can only be achieved with a focused and engaged workforce. Alliant Energy’s corporate officers group currently has approximately 40% gender diversity and 27% ethnic diversity.
Our efforts to create a diverse and inclusive workforce include:
•learning opportunities for employees, such as inviting employees to participate in area diversity summits and supporting company-wide listening sessions, speakers and programs;
•Employee Resource Groups that foster a diverse and inclusive workplace that supports employee well-being while promoting professional development and enhancing community relationships; and
•a DE&I Leadership Team that partners with the Human Resources recruiting department and hiring managers to attract more diverse applicants that represent the diversity of the communities we serve.
Our DE&I initiatives also include a focus on building a diverse Board of Directors. We believe it is in our shareowners’ best interest to have a diverse Board representing a wide breadth of experiences and perspectives. Our Board currently has approximately 40% gender diversity and 20% ethnic diversity.
Our 2021 DE&I accomplishments include:
•received a perfect score on the Corporate Equality Index administered by the Human Rights Campaign Foundation to benchmark LGBTQ+ rights, policies and practices;
•selected for the 2021 Bloomberg Gender-Equality Index; and
•held a Day of Understanding where executives met with employees and held conversations around creating a culture of belonging where employees can do the best work of their lives.
Alliant Energy’s short- and long-term incentive compensation plans include diversity metrics to drive leadership accountability for efforts to advance a diverse and inclusive culture.
Talent Development and Workforce Readiness - We support employees in the growth of their careers through 2021.several training opportunities and development programs. These include tuition reimbursement, online, instructor-led and on-the-job learning formats, as well as leadership development and succession planning.
In addition, we have an apprenticeship program that combines supervised, structured on-the-job training with related instruction to produce highly skilled trade and technical workers. Our program builds lifetime skills and comprehensive knowledge in the high-demand technical trades necessary for our success. The program gives us the flexibility to tailor training to match our needs – training employees in our facilities, on our equipment, and consistent withoursafety standards and employee expectations. We instill company Values, methods and procedures from day one. 3)
2) REGULATION - Alliant Energy, IPL and WPL are subject to regulation by various federal, state and local agencies. The following includes the primary regulations impacting Alliant Energy’s, IPL’s and WPL’s businesses.
FERC -
Public Utility Holding Company Act of 2005 - Alliant Energy is registered with FERC as a public utility holding company, pursuant to the Public Utility Holding Company Act of 2005, and is required to maintain certain records and to report certain transactions involving its public utilities, service company and other entities regulated by FERC. Corporate Services, IPL and WPL are subject to regulation by FERC under the Public Utility Holding Company Act of 2005 for various matters including, but not limited to, affiliate transactions, public utility mergers, acquisitions and dispositions, and books, records and accounting requirements.
Energy Policy Act of 2005 - The Energy Policy Act of 2005 requires creation of an Electric Reliability Organization to provide oversight by FERC. FERC designated North American Electric Reliability Corporation as the overarching Electric Reliability Organization. Midwest Reliability Organization, which is a regional member of North American Electric Reliability Corporation, has direct responsibility for mandatory electric reliability standards for IPL and WPL.
Federal Power Act of 1935 - FERC also has jurisdiction, under the Federal Power Act of 1935, over certain electric utility facilities and operations, electric wholesale andsales, interstate electric transmission rates, dividend payments, issuance of IPL’s securities, and accounting practices of Corporate Services, IPL and WPL.
Electric Wholesale Rates - IPLFERC has authority over IPL's and WPL receiveWPL's wholesale electric market-based rate authority from FERC.rates. Market-based rate authorization allows for wholesale sales of electricity within FERC’s wholesale markets, including the MISO market, and in transactions directly with third parties, based on the market value of the transactions. IPL and WPL also have FERC-approved cost of service formula basedformula-based rates related to the provision of firm full- and partial-requirement wholesale electric sales, which allow for true-ups to actual costs, including fuel costs.
Electric Transmission Rates - FERC regulates the rates charged for electric transmission facilities used in interstate commerce. Neither IPL norand WPL do not own or operate FERC-regulated electric transmission facilities; however, both IPL and WPL pay for the use of the interstate electric transmission system based upon FERC-regulated rates. IPL and WPL rely primarily on the use of the ITC and ATC transmission systems, respectively. Due to the formula rates used by ITC and ATC to charge their customers and possible future changes to these rates, there is uncertainty regarding IPL’s and WPL’s future electric transmission service expense. Refer to “Other Future Considerations” in MDA for further discussion of electric transmission service expense.
Natural Gas Act - FERC regulates the transportation and sale for resale of natural gas in interstate commerce under the Natural Gas Act. Under the Natural Gas Act, FERC has authority over certain natural gas facilities and operations of IPL and WPL.
IUB - IPL is subject to regulation by the IUB for various matters including, but not limited to, retail utility rates and standards of service, accounting requirements, sales of assets with values that exceed 3% of IPL’s revenues, and approval of the location and construction of EGUs.
Retail Utility Base Rates - IPL files periodic requests with the IUB for retail rate changes which are basedand may base those requests on either historical or forward-looking test periods. The IUB must decide on requests for retail rate changes within 10 months of the date of the application for which changes are filed. The historical test periods may be adjusted for certain known and measurable changes to capital investments, cost of capital and operating and maintenance expenses consistent with IUB rules and regulations. Interim retail rates can be placed in effect 10 daysIn June 2021, the IUB adopted new rules that establish minimum filing requirements for rate reviews using a forward-looking test period, and a related subsequent proceeding review after the rate application filing, subject to refund, and must be based on previously established regulatory principles. The IUB must decide on requests for retail rate changes within 10 monthsclose of the dateforward-looking test period. The rules provide that in the subsequent proceeding review, a utility’s actual costs and revenues will be presumed to be reasonably consistent with the forward-looking test period if the utility’s actual return on common equity falls within a standard of reasonableness of 50 basis points above to 50 basis points below the application for which changes are filed, orauthorized return on common equity. If the interimutility’s actual return on common equity is outside of this range, future rates granted become permanent.could be adjusted.
Cost RecoveryEnergy Efficiency - In accordance with Iowa law, IPL is required to file an EEP every five years with the IUB. An EEP provides a utility’s plan and related budget to achieve specified levels of electric and gas energy savings. IUB approval demonstrates that IPL’s EEP is reasonably expected to achieve cost-effective delivery of the energy efficiency programs. IPL recovers energy efficiencyRefer to Note 1(g) for discussion of the recovery of these costs from itsIPL’s retail electric and gas customers. Refer to Note 1(g) for further discussion of IPL’s cost recovery mechanisms, including retail commodity costs and retail electric transmission costs.
Electric Generating Units - IPL must obtain a certificate of public convenience, use and necessity (GCU Certificate) from the IUB in order to construct a new, or significantly alter (including fuel switching) an existing, EGU located in Iowa with 25 MW or more of capacity. IPL’s ownership and operation of EGUs (including those located outside the state of Iowa) to serve Iowa customers is subject to retail utility rate regulation by the IUB.
Gas Pipeline Projects - IPL must obtain a pipeline permit from the IUB related to the siting of utility gas pipelines in Iowa that will be operated at a pressure over 150 pounds per square inch and will transport gas from a gathering or storage facility to a distribution system or single, large volume customer.
Advance Rate-making Principles - Iowa law provides Iowa utilities with rate-making principles prior to making certain generation investments in Iowa. As a result, IPL may file for, and the IUB must render a decision on, rate-making principles for certain new EGUs located in Iowa, including any newalternative energy production facility (such as a wind or solar facility), combined-cycle natural gas-fired EGU, any renewable generating resource such as a wind facility, and certain base-load (nuclear or coal-fired generation) EGUs with a nameplate generating capacity of 300 MW or more.more (such as nuclear-fired generation). Advance rate-making principles are also available for the repowering of an alternative energy production facility or certain significant alterations of an existing EGU. Upon approval of rate-making principles by the IUB, IPL must either build the EGU or repower the alternative energy production facility under the approved rate-making principles, or not at all.
Electric Generating Unit Environmental Controls Projects - IPL is required to submit an updated EPBemissions plan and budget biennially to the IUB setting out a multi-year plan and budget for managing regulated emissions from its coal-fired EGUs in a cost-effective manner. IPL must simultaneously submit this plan and budget to the Iowa Department of Natural Resources for a determination of whether the plan and budget meet state environmental requirements for regulated emissions. The reasonable and prudent costs associated with implementing the approved plan are expected to be included in IPL’s future retail electric rates.
PSCW - Alliant Energy is subject to regulation by the PSCW for the type and amount of Alliant Energy’s investments in non-utility businesses and other affiliated interest activities, among other matters. WPL is also subject to regulation by the PSCW related to its operations in Wisconsin for various matters including, but not limited to, retail utility rates and standards of service, accounting requirements, issuance and use of proceeds of securities, affiliate transactions, approval of the location and construction of EGUs and certain other additions and extensions to facilities. In addition, Alliant Energy is subject to regulation by the PSCW for the type and amount of Alliant Energy’s holdings in non-utility businesses and other affiliated interest activities, among other matters.
Retail Utility Base Rates - WPL files periodic requests with the PSCW for retail rate changes. These filings are required to be based on forward-looking test periods. There is no statutory time limit for the PSCW to decide on retail base rate requests. However, the PSCW attempts to process retail base rate reviews in approximately 10 months and has the ability to approve interim retail rate relief, subject to refund, if necessary. Currently, WPL is required to defer a portion of its earnings if its annual regulatory return on common equity exceeds certain levels. Through 2023, any such deferral is required to be offset against the remaining net book value of Edgewater Unit 5, which is currently expected to be retired by early 2023.
Cost RecoveryPublic Benefits - WPL contributes 1.2% of its annual retail utility revenues to help fund Focus on Energy, Wisconsin’s state-wide energy efficiency and renewable energy resource program. In addition, WPL contributes to a program that provides assistance to income-eligible residents in Wisconsin. These costscontributions are recovered from customers through a monthly bill surcharge of the lesser of 3% of customers’ utilities bills or $750. Refer to Note 1(g) for discussion of the recovery of these costs from WPL’s retail electric and gas customers. Refer to Note 1(g) for further discussion of WPL’s cost recovery mechanisms, including retail commodity costs and retail electric transmission costs.
New Electric Generating Units - A CA application is required to be filed with the PSCW for construction approval of any new EGU with a capacity of less than 100 MW and a project cost of $10.7$11.9 million or more. WPL must obtain a CPCN from the PSCW in order to construct a new EGU in Wisconsin with a capacity of 100 MW or more. In addition, WPL’s ownership and operation of EGUs (including those located outside the state of Wisconsin) to serve Wisconsin customers are subject to retail utility rate regulation by the PSCW.
Electric Generating Unit Upgrades and Electric Distribution Projects - A CA application is required to be filed with the PSCW for construction approval of any additions to EGUs, including environmental controls projects, as well as electric distribution projects, with estimated project costs of $10.7$11.9 million or more.
Gas Distribution Projects - A CA application is required to be filed with the PSCW for construction approval of gas projects with an estimated project cost of $2.5$5 million or more and at any time that WPL requests to extend gas service to a new portion of its service territory.
Advance Rate-making Principles - Wisconsin law provides Wisconsin utilities with the opportunity to request rate-making principles prior to the purchase or construction of any EGU utilized to serve Wisconsin customers. WPL is not obligated to file for or accept authorized rate-making principles under Wisconsin law. WPL can proceed with an approved project under traditional rate-making terms or accept authorized rate-making principles under Wisconsin law.
Environmental - ExtensiveAlliant Energy, IPL and WPL are subject to regulation of environmental lawsmatters by federal, state and regulations are applicablelocal authorities as a result of their current and past operations. TheAlliant Energy, IPL and WPL monitor these environmental lawsmatters and address them by installing controls that reduce emissions and by implementing operational modifications or other measures to address compliance obligations. There is currently significant regulatory uncertainty with respect to environmental rules and regulations relate todiscussed below. Given the protectionevolving nature of the environmentenvironmental regulations and healthother related regulatory requirements, Alliant Energy, IPL and safety matters, including those governing air emissions; water discharges; protection of habitat for potentially threatenedWPL develop and endangered species; the management, storage and disposal of hazardous materials; and the clean-up of contaminated sites, including former MGP sites. Refer to “Environmental Matters” in MDA and Note 16(e) for further discussion of electric and gas environmental matters, including current or proposed environmental regulations. Refer to “Strategic Overview” in MDA for details of future environmentalperiodically update their compliance plans to adhereaddress these environmental obligations. Prudent expenditures incurred by IPL and WPL to applicablecomply with environmental requirements.requirements are eligible to be recovered in rates from their customers. The following are major environmental matters that could potentially have a significant impact on financial condition and results of operations.
Climate Change and Greenhouse Gas Regulations - In 2007, the Supreme Court provided direction on the EPA’s authority to regulate GHG and ruled that these emissions are covered by the CAA. In 2009, the EPA issued a ruling that found GHG emissions contribute to climate change, and therefore, threaten public health and welfare, which was the prerequisite for implementing CO2 reduction standards under the CAA. While the EPA’s rules to regulate GHG issued under the authority of the CAA remain subject to further review, growing emphasis on climate change and evolving energy technologies are driving efforts to decarbonize the environment through voluntary emissions reductions. The primary GHG directly emitted from Alliant Energy’s utility operations is CO2 from the combustion of fossil fuels at their larger EGUs. 4) STRATEGIC OVERVIEW
Clean Air Act Section 111(d) - In 2015, the EPA issued the Clean Power Plan under Section 111(d) of the CAA to reduce CO2 emissions from existing fossil-fueled EGUs through broad electricity system-wide measures. This was replaced by the Affordable Clean Energy rule in 2019, to reduce CO2 emissions from existing coal-fueled EGUs through heat rate improvements. In 2021, the U.S. Court of Appeals for the District of Columbia Circuit vacated and remanded the Affordable Clean Energy rule to the EPA for reconsideration. The EPA is working on a new set of Section 111(d) emission guidelines for states to implement Best System of Emission Reduction standards for GHG emissions from existing fossil-fueled EGUs, and has stated that it intends to issue a proposed rule in 2022 and a final rule in 2023, although such a timeline cannot be predicted with certainty. In addition, the Supreme Court granted review of appeals regarding the extent of the EPA’s authority under Section 111(d) to regulate GHG emissions, with a decision anticipated by June 2022. Alliant Energy, IPL and WPL are currently unable to predict with certainty the future outcome or impact of these matters.
Clean Air Act Section 111(b) - In 2015, the EPA published final standards under Section 111(b) of the CAA, which establish CO2 emissions limits for certain new fossil-fueled EGUs. Marshalltown and West Riverside are subject to the EPA’s Section 111(b) regulation and have been designed to achieve compliance with these standards. The EPA is reviewing the Section 111(b) standards, and has stated it intends to issue a proposed rule in 2022 and a final rule in 2023, although a timeline cannot be predicted with certainty. Litigation related to Section 111(b) is suspended while the EPA revises its Section 111(b) regulations, and Alliant Energy, IPL and WPL are currently unable to predict with certainty the impact of these standards.
Water Quality -
Effluent Limitation Guidelines - In 2015, the EPA published final effluent limitation guidelines, which required changes to discharge limits for wastewater from certain IPL and WPL steam EGUs. In 2020, revised effluent limitation guidelines (2020 Reconsideration Rule) became effective, which incorporated flexibility to the 2015 rule, including a new subcategory for coal-fired EGUs that will be retired or converted to no longer burn coal before 2028. Compliance for existing steam-electric generating facilities is determined by each facility’s wastewater discharge permit and will generally be required by December 31, 2025. Projects required for compliance are facility-specific. Estimated capital expenditures to comply with the 2020 Reconsideration Rule for 2022 through 2025 are included in the “Other Generation” line in the construction and acquisition expenditures table in “Liquidity and Capital Resources” in MDA. In January 2021, the current Presidential Administration issued an Executive Order requiring the review and possible revision of environmental regulations issued during the prior Administration. As a result, the EPA will undertake a supplemental rule-making to revise the 2020 Reconsideration Rule, and has stated that it intends to issue a proposed rule in 2022. As part of the rule-making process, the EPA is expected to determine whether more stringent limitations and standards are appropriate. The 2020 Reconsideration Rule will remain in effect while the EPA undertakes this new rule-making. Alliant Energy, IPL and WPL are currently unable to predict with certainty the future outcome or impact of the anticipated supplemental rule-making.
Land and Solid Waste -
Coal Combustion Residuals Rule - The CCR Rule, which became effective in 2015, regulates CCR as a non-hazardous waste. IPL and WPL have coal-fired EGUs with coal ash ponds and active CCR landfills that are impacted by this rule. Compliance obligations associated with the CCR Rule may be subject to change due to future EPA CCR Rule updates, on-going litigation related to the CCR Rule, and any actions taken to-date that may be challenged. Alliant Energy, IPL and WPL are currently unable to predict with certainty the impact of these updates.
MGP Sites - Refer to Note 17(e) for discussion of IPL’s and WPL’s MGP sites.
Renewable Energy Standards - Iowa and Wisconsin have renewable energy standards, which establish the minimum amount of energy IPL and WPL must supply from renewable resources. IPL primarily relies upon renewable energy generated from the wind resources it owns and renewable energy acquired under PPAs to meet these requirements. WPL utilizes its current renewable portfolio, which primarily consists of wind and hydro energy, both owned and acquired under PPAs, to meet these requirements. IPL and WPL currently exceed their respective renewable energy standards requirements.
3) STRATEGY - Refer to “Strategic Overview” in MDA for discussion of various strategic actions by Alliant Energy, IPLEnergy’s strategy, which supports its mission to deliver energy solutions and WPL.exceptional service that its customers and communities count on - safely, efficiently, reliably and responsibly.
C. INFORMATION RELATING TO UTILITY OPERATIONS
Alliant Energy’s utility business (IPL and WPL) has three segments: a) electric operations; b) gas operations; and c) other, which includes IPL’s steam operations and the unallocated portions of the utility business. IPL’s and WPL’s operatingelectric, gas and other revenues as a percentage of total revenues for these utility business segments were as follows:
1) ELECTRIC UTILITY OPERATIONS
General - Electric utility operations represent the largest operating segment for Alliant Energy, IPL and WPL. Alliant Energy’s electric utility operations are located in the Midwest with IPL providing retail electric service in Iowa and WPL providing retail and wholesale electric service in Wisconsin. IPL also sells electricity to wholesale customers in Minnesota, Illinois and Iowa. Refer to the “Electric Operating Information” tables for additional details regarding electric utility operations.
Customers- IPL and WPL provide electric utility service to a diversified base of retail customers in several industries, with the largest concentrations in the farming, agriculture, industrial manufacturing, chemical (including ethanol), packaging and paperfood industries. IPL and WPL also sell electricity to wholesale customers, which primarily consist of municipalities and rural electric cooperatives. Refer to “Strategic Overview” in MDA for discussion of recent agreements with certain of WPL’s electric wholesale customers related to WPL’s West Riverside facility. Refer to “Other Future Considerations” in MDA for discussion of notifications provided to each of IPL and WPL to terminate certain of their wholesale power supply agreements.
Seasonality - Electric sales are seasonal to some extent with the annual peak normally occurring in the summer months due to air conditioning requirements. Electric sales are also impacted to a certain extent in the winter months due to heating requirements. Refer to the “Electric Operating Information” tables for additional details regarding maximum summer and winter peak hour demands.
Competition - Retail electric customers in Iowa and Wisconsin currently do not have the ability to choose their electric supplier, and IPL and WPL have obligations to serve all their retail electric customers. Although electric service in Iowa and Wisconsin is regulated, IPL and WPL still face competition from self-generation by large industrial customers, customer- and third party-owned generation (e.g. solar panels), alternative energy sources, and petitions to municipalize (Iowa) as well as service territory expansions by municipal utilities through annexations (Wisconsin). In addition, IPL’sthe wholesale power market is competitive and WPL’sIPL and WPL compete against independent power producers, other utilities and MISO market purchases to serve wholesale customers may choose to purchasefor their electric energy and capacity needs from the MISO market, independent power producers or other utilities.needs. Alliant Energy’s strategic planstrategy includes actions to retain current customers and attract new customers into IPL’s and WPL’s service territories in an effort to keep energy rates low for all of their customers. Refer to “Strategic Overview” in MDA for discussion of the growthstrategy element of the strategic plan, which includes accelerating the growth of customers’ electric usage.focusing on growing customer demand.
Renewable Energy Standards - Iowa and Wisconsin have RES, which establish the minimum amount of energy IPL and WPL must supply from renewable resources. IPL primarily relies upon renewable energy generated from the wind projects it owns and renewable energy acquired under PPAs to meet these requirements. WPL utilizes its current renewable portfolio, which primarily consists of wind and hydro energy, both owned and acquired under PPAs, to meet these requirements. IPL and WPL currently exceed their respective RES requirements.
Energy Efficiency Programs - Several energy efficiency programs and initiatives help customers reduce their energy usage and related costs through the use of new energy efficient equipment, products and practices. The following are current key energy efficiency programs:
IPL Energy Efficiency Plan - In 2013, IPL received an order from the IUB approving IPL’s EEP for 2014 through 2018. The EEP includes IPL spending approximately $400 million for electric and natural gas energy efficiency programs in Iowa from 2014 through 2018. In February 2018, IPL filed an EEP for 2019 through 2023 with the IUB. This EEP includes IPL spending approximately $290 million for electric and natural gas energy efficiency programs in Iowa from 2019 through 2023. The amount of spending requested for the EEP for 2019 through 2023 is lower than the EEP for 2014 through 2018 primarily to reflect historical customer usage of the energy efficiency programs. A decision from the IUB on IPL’s EEP for 2019 through 2023 is currently expected in 2018.
WPL Focus on Energy Program - In 2017, WPL contributed 1.2% of its annual retail utility revenues to help fund Focus on Energy, Wisconsin’s state-wide energy efficiency and renewable energy resource program.
Electric Supply - Alliant Energy, IPL and WPL have met, and expect to continue meeting, customer demand of electricity through a mix of electric supply, including owned EGUs, PPAs and additional purchases from wholesale energy markets. Alliant Energy expects its mix of electric supply to change in the next several years with WPL’s constructionits planned transition away from coal-fired EGUs by incorporating renewable energy such as solar generation, distributed energy resources including community solar and energy storage systems, as well as the actual and potential sale of partial interests in West Riverside IPL’s planned up to 1,000 MW of additional wind generation, WPL’s planned up to 200 MW of additional wind generation and the proposed retirement and/or fuel switching of various EGUs.neighboring utilities. Long-term generation plans are intended to meet customer demand, reduce CO2air emissions and water impacts, reduce reliance on wholesale market purchases and mitigate the impacts of future EGU retirements while maintaining compliance with long-term electric demand planning reserve margins, environmental requirements and RESrenewable energy standards established by regulators. Alliant Energy, IPLregulators and WPL currently expect to meet utility customer demand in the future. However, unanticipated regional or local reliability issues could still arise in the event of outages or unexpected delays in the construction of new generating and/or transmission facilities, EGU retirements, EGU outages, transmission system outages or extended periods of extreme weather conditions. Refer to the “Electric Operating Information” tables for a profile of the sources of electric supply used to meet customer demand from 2015 to 2017. Refer to “Strategic Overview” in MDA for details of recent changes in the mix of electric supply, as well as future generation plans.other various requirements.
Electric Demand Planning Reserve Margin - IPL and WPL are required to maintain a planning reserve margin above their load at the time of the MISO-wide peak to ensure reliability of electric service to their customers. The required installed capacity reserve margin is 17.1%17.9% and the required unforced capacity reserve margin is 8.4%8.7% for the June 1, 20182022 through May 31, 20192023 MISO planning year. IPL and WPL currentlyutilize accredited capacity from EGUs they own, and have adequate capacityrights to through PPAs, to meet sucha substantial portion of their current MISO planning reserve margin requirements.requirements and periodically rely on short-term market capacity purchases to supplement the accredited capacity from such EGUs.
Generation Fuel Supply - IPL and WPL own a portfolio of EGUs located in Iowa, Wisconsin and Minnesota with a diversified fuel mix that includes natural gas, renewable resources and coal. Refer to “Properties” in Item 2 for details of IPL’s and WPL’s EGUs.
Fuel Costs - The average cost of delivered fuel per million British Thermal Units used for electric generation was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IPL | | WPL |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| All fuels | $2.10 | | | $2.22 | | | $2.17 | | | $2.62 | | | $2.36 | | | $2.55 | |
| Natural gas (a) | 2.54 | | | 2.54 | | | 2.52 | | | 3.31 | | | 2.51 | | | 2.76 | |
| Coal | 1.81 | | | 1.84 | | | 1.81 | | | 2.07 | | | 2.19 | | | 2.35 | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | IPL | | WPL |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| All fuels |
| $2.22 |
| |
| $2.17 |
| |
| $2.21 |
| |
| $2.53 |
| |
| $2.61 |
| |
| $2.67 |
|
| Natural gas (a) | 2.72 |
| | 2.86 |
| | 3.37 |
| | 3.28 |
| | 3.25 |
| | 3.68 |
|
| Coal | 2.00 |
| | 1.98 |
| | 1.94 |
| | 2.38 |
| | 2.47 |
| | 2.49 |
|
| |
(a) | The average cost of natural gas includes commodity and transportation costs, as well as realized gains and losses from swap and option contracts used to hedge the price of natural gas volumes expected to be used by IPL’s and WPL’s natural gas-fired EGUs. |
(a)The average cost of natural gas includes commodity and transportation costs, as well as realized gains and losses from swap and option contracts used to hedge the price of natural gas volumes expected to be used by IPL’s and WPL’s natural gas-fired EGUs.
Natural Gas - Alliant Energy, IPL and WPL own several natural gas-fired EGUs, and WPL also has exclusive rights to the output of AEF’s Sheboygan Falls Energy Facility under an affiliated lease agreement. These facilities help meet customer demand for electricity generally during peak hour demands and when natural gas prices are low enough to make natural gas-fired generation economical compared to other fuel sources. Alliant Energy manages the gas supply to these gas-fired EGUs and helps ensure an adequate supply is available at known prices through a combination of gas commodity, pipeline transportation and storage agreements held by IPL and WPL for 2018 through 2034.numerous years. Alliant Energy, IPL and WPL believe they are reasonably insulated against gas price volatility for these EGUs given their use of forward contracts and hedging practices, as well as their regulatory cost-recovery mechanisms.
Wind - IPL owns the Whispering Willow - East and Franklin County wind farms, and WPL owns the Cedar Ridge and Bent Tree wind farms. All or some of the renewable energy attributes associated with generation from these sources may be used in future years to comply with RES or other regulatory requirements, or sold to third parties in the form of renewable energy credits or other environmental commodities.
Coal - Coal is one of the fuel sources for owned EGUs. Coal contracts entered into with different suppliersentities help ensure that a specified supply of coal is available, and delivered, at known prices for IPL’s and WPL’s coal-fired EGUs for 2018 through 2020.EGUs. Alliant Energy, IPL and WPL believe their coal supply portfolio represents a reasonable balance between the risks of insufficient supplies and those associated with being unable to respond to future coal market changes. Remaining coal requirements are expected to be met from either future term contracts or purchases in the spot market. NearlyCurrently, all of the coal utilized by IPL and WPL is from the Wyoming Powder River Basin.
Alliant Energy, IPL and WPL believe they are reasonably insulated against coal price volatility given their current coal procurement process, the specific coal market in their primary purchase region and regulatory cost-recovery mechanisms. The coal procurement process supports periodic purchases, staggering of contract terms, stair-stepped levels of supply going forward and supplier diversity. Similarly, given the term lengths of their transportation agreements and strategic alignment of agreement expirations for negotiation purposes, Alliant Energy, IPL and WPL believe they are reasonably insulated against future higher coal transportation rates from the major railroads.
Purchased Power - IPL and WPL periodically enter into PPAs and purchase electricity from wholesale energy markets to meet a portion of their customer demand for electricity. IPL’s most significant PPA is for the purchase of up to 431 MWs of capacity and the resulting energy from DAEC for a term from February 2014 through December 2025. WPL’s most significant PPA is for the purchase of 150 MWs of energy for a term from January 2014 through December 2018.
IPL’s DAEC PPA- In 2013, the IUB issued an order allowing IPL to proceed with a PPA for the purchase of capacity and energy generated by DAEC located near Palo, Iowa. The IUB also authorized IPL to recover the Iowa retail portion of the cost of the DAEC PPA from Iowa retail electric customers through the energy adjustment clause. The terms of the PPA provide IPL the right to the counterparty’s entire output quantities (70% of the total plant output) in exchange for payment from IPL to the counterparty based on the amount of MWhs received by IPL. Among the terms and conditions of the PPA are guarantees by the counterparty to provide minimum amounts of capacity and energy. The PPA also contains provisions for the replacement of energy from alternative sources under certain conditions as well as provisions that convey to IPL the potential environmental attributes associated with its portion of the output from DAEC.
Electric Transmission - IPL and WPL do not own electric transmission service assets and currently receive substantially all their electric transmission services from ITC and ATC, respectively. ITC and ATC are independent, for-profit, transmission-only companies and are transmission-owning members of the MISO Regional Transmission Organization, Midwest Reliability Organization and Reliability First Corporation Regional Entities. The annual transmission service rates that ITC or ATC charges their customers are calculated each calendar year using a FERC-approved cost of service formula rate. As a result, ITC and ATC can implement new rates each calendar year without filing a request with FERC. However, new rates are subject to challenge by either FERC or customers. If the rates proposed by ITC or ATC are determined by FERC to be unjust or unreasonable, or another mechanism is determined by FERC to be just and reasonable, ITC’s or ATC’s rates would change accordingly.
Refer to Note 1(g) for discussion of a transmission cost rider utilized by IPL for recovery of its electric transmission service expense, and discussion of WPL’s electric transmission service expense, which is recovered from its retail electric customers through changes in base rates determined during periodic rate proceedings. Refer to Note 18 for details of agreements between ATC and WPL.
MISO Markets- IPL and WPL are members of MISO, a FERC-approved Regional Transmission Organization, which is responsible for monitoring and ensuring equal access to the transmission system in their footprint. IPL and WPL participate in the wholesale energy and ancillary services markets operated by MISO, which are discussed in more detail below. As agent for IPL and WPL, Corporate Services enters into energy, capacity, ancillary services, and transmission sale and purchase transactions within MISO. Corporate Services assigns such sales and purchases between IPL and WPL based on statements received from MISO. Refer to Note 18 for additional discussion of these assigned amounts.
Wholesale Energy Market - IPL and WPL sell and purchase power in the day-ahead and real-time wholesale energy markets operated by MISO. MISO’s bid-basedbid/offer-based markets compare the cost of IPL and WPL generation against other generators, which affects IPL and WPL generation operations, energy purchases and energy sales. MISO generally dispatches the lowest cost generators, while recognizing current system constraints, to reduce costs for purchasers in the wholesale energy market. In addition, MISO may dispatch generators that support reliability needs, but that would not have operated based on economic needs. In these cases, MISO’s settlement assures that these generators are made whole financially for their variable costs.
Ancillary Services Market - IPL and WPL also participate in MISO’s ancillary services market, which integrates the procurement and use of regulation and contingency reserves with the existing wholesale energy market to ensure reliability of electricity supply. Regulation reserves refer to generation available to meet the moment-to-moment changes in generation that are necessary to meet changes in electricity demand. Contingency reserves refer to additional generation or demand response resources, either on-line or that can be brought on-line within 10 minutes, to meet certain major events such as the loss of a large EGU or transmission line. MISO’s ancillary services market has had the overall impact of lowering ancillary services costs in the MISO footprint.
Financial Transmission Rights and Auction Revenue Rights- In areas of constrained transmission capacity, energy costs could be higher due to congestion and its impact on locational marginal prices. FTRs provide a hedge for certain congestion costs that occur in the MISO energy market. MISO allocates auction revenue rights to IPL and WPL annually based on a fiscal year from June 1 through May 31 and historical use of the transmission system. The allocated auction revenue rights are used by IPL and WPL to acquire FTRs through the FTR auctions operated by MISO.
Resource Adequacy- MISO conducts various studies regarding reliability of electric servicehas resource adequacy requirements to help ensure its market participants have adequate resources to meet MISO’s forecasted peak load obligations plus a reserve margin. Only accredited capacity assigned to EGUs is available to meet these requirements. To connect to the transmission system, MISO requires an EGU to obtain an interconnection agreement. In order for an EGU to receive accredited capacity, it must meet MISO capacity accreditation requirements, which can include satisfying transmission requirements identified in its interconnection agreement prior to the MISO planning year. New EGUs like West Riverside, or IPL’s
In November 2021, MISO issued proposals to change its methodology for procuring capacity in the energy market effective with the 2023/2024 MISO Planning Year, as a result of changes in the overall generation resource mix due to the shift to renewable generation and WPL’s planned additionalthe retirement of certain fossil-fueled generation. MISO proposes to change the capacity construct from the current Summer-based annual construct to four distinct seasons to help ensure the continued reliability of the electric transmission grid. MISO’s proposal includes establishing planning reserve margin requirements for all market participants on a seasonal basis and determining a seasonal accredited capacity value for certain classes of generating resources. These changes, if implemented, may require IPL and WPL to adjust their current resource plans, and may result in limited accredited capacity for solar generation during the Winter season and higher accredited capacity for wind generation during the non-Summer seasons. IPL and WPL may not initially receive fullneed to develop and/or acquire additional resources in order to comply with the new methodology, as well as procure capacity in the market until the new resources are placed in service and accredited capacity based onby MISO. Alliant Energy, IPL and WPL are currently unable to predict with certainty the inability to satisfy all identified transmission requirements. Therefore, full accredited capacity may not be granted to such EGUs until all identified transmission requirements are resolved.future outcome or impact of these matters.
Electric Environmental Matters - Refer to Note 16(e) and “Environmental Matters” in MDA for discussion of electric environmental matters, including current or proposed environmental regulations.
| | | | | | | | | | | | | | | | | |
| Electric Operating Information - Alliant Energy | 2021 | | 2020 | | 2019 |
| Revenues (in millions): | | | | | |
| Residential | $1,115 | | | $1,093 | | | $1,092 | |
| Commercial | 763 | | | 718 | | | 770 | |
| Industrial | 893 | | | 841 | | | 889 | |
| Retail subtotal | 2,771 | | | 2,652 | | | 2,751 | |
| Sales for resale | 243 | | | 204 | | | 250 | |
| Other | 67 | | | 64 | | | 63 | |
| Total | $3,081 | | | $2,920 | | | $3,064 | |
| Sales (000s MWh): | | | | | |
| Residential | 7,353 | | | 7,294 | | | 7,207 | |
| Commercial | 6,383 | | | 6,107 | | | 6,466 | |
| Industrial | 11,696 | | | 11,134 | | | 11,448 | |
| Retail subtotal | 25,432 | | | 24,535 | | | 25,121 | |
| Sales for resale | 5,805 | | | 6,046 | | | 6,594 | |
| Other | 71 | | | 71 | | | 79 | |
| Total | 31,308 | | | 30,652 | | | 31,794 | |
| Customers (End of Period): | | | | | |
| Retail | 981,570 | | | 974,144 | | | 968,485 | |
| Other | 2,878 | | | 2,841 | | | 2,816 | |
| Total | 984,448 | | | 976,985 | | | 971,301 | |
| Other Selected Electric Data: | | | | | |
| Maximum summer peak hour demand (MW) | 5,486 | | | 5,496 | | | 5,626 | |
| Maximum winter peak hour demand (MW) | 4,413 | | | 4,158 | | | 4,395 | |
| Cooling degree days (a): | | | | | |
| Cedar Rapids, Iowa (IPL) (normal - 802) | 974 | | | 800 | | | 805 | |
| Madison, Wisconsin (WPL) (normal - 687) | 845 | | | 736 | | | 657 | |
| Sources of electric energy (000s MWh): | | | | | |
| Gas | 10,055 | | | 10,440 | | | 11,060 | |
| Purchased power: | | | | | |
| Wind (b) | 3,529 | | | 3,683 | | | 2,383 | |
| Nuclear | — | | | 2,347 | | | 3,748 | |
| Other (b) | 2,642 | | | 2,521 | | | 3,264 | |
| Wind (b) | 5,231 | | | 4,872 | | | 2,896 | |
| Coal | 10,218 | | | 7,021 | | | 8,643 | |
| Other (b) | 226 | | | 254 | | | 239 | |
| Total | 31,901 | | | 31,138 | | | 32,233 | |
| Revenue per KWh sold to retail customers (cents) | 10.90 | | | 10.81 | | | 10.95 | |
(a)Cooling degree days are calculated using a simple average of the high and low temperatures each day compared to a 65 degree base. Normal degree days are calculated using a rolling 20-year average of historical cooling degree days. Refer to “Gas Operating Information” below for details of heating degree days. |
| | | | | | | | | | | |
| Electric Operating Information - Alliant Energy | 2017 | | 2016 | | 2015 |
| Operating Revenues (in millions): | | | | | |
| Retail |
| $2,569.6 |
| |
| $2,564.8 |
| |
| $2,474.1 |
|
| Sales for resale | 268.8 |
| | 266.7 |
| | 249.5 |
|
| Other | 56.3 |
| | 44.0 |
| | 46.9 |
|
| Total |
| $2,894.7 |
| |
| $2,875.5 |
| |
| $2,770.5 |
|
| Electric Sales (000s MWh): | | | | | |
| Retail | 25,095 |
| | 25,339 |
| | 25,380 |
|
| Sales for resale | 5,003 |
| | 4,399 |
| | 4,842 |
|
| Other | 94 |
| | 100 |
| | 129 |
|
| Total | 30,192 |
| | 29,838 |
| | 30,351 |
|
| Customers (End of Period): | | | | | |
| Retail | 959,295 |
| | 955,533 |
| | 950,048 |
|
| Other | 2,826 |
| | 2,785 |
| | 2,930 |
|
| Total | 962,121 |
| | 958,318 |
| | 952,978 |
|
| Other Selected Electric Data: | | | | | |
| Maximum summer peak hour demand (MW) | 5,375 |
| | 5,615 |
| | 5,385 |
|
| Maximum winter peak hour demand (MW) | 4,504 |
| | 4,559 |
| | 4,668 |
|
| Cooling degree days (a): | | | | | |
| Cedar Rapids, Iowa (IPL) (normal - 748) | 747 |
| | 971 |
| | 732 |
|
| Madison, Wisconsin (WPL) (normal - 646) | 578 |
| | 780 |
| | 665 |
|
| Sources of electric energy (000s MWh): | | | | | |
| Gas | 5,315 |
| | 4,505 |
| | 4,738 |
|
| Purchased power: | | | | | |
| Nuclear | 3,727 |
| | 3,444 |
| | 3,741 |
|
| Wind (b) | 1,268 |
| | 1,079 |
| | 1,190 |
|
| Other (b) | 6,242 |
| | 8,912 |
| | 6,675 |
|
| Wind (b) | 1,591 |
| | 1,382 |
| | 1,441 |
|
| Coal | 12,380 |
| | 11,019 |
| | 13,040 |
|
| Other (b) | 239 |
| | 228 |
| | 189 |
|
| Total | 30,762 |
| | 30,569 |
| | 31,014 |
|
| Revenue per KWh sold to retail customers (cents) | 10.24 |
| | 10.12 |
| | 9.75 |
|
| |
(a) | Cooling degree days are calculated using a simple average of the high and low temperatures each day compared to a 65 degree base. Normal degree days are calculated using a rolling 20-year average of historical cooling degree days. Refer to “Gas Utility Operations” below for details of heating degree days. |
| |
(b) | All or some of the renewable energy attributes associated with generation from these sources may be used in future years to comply with renewable energy standards or other regulatory requirements, or sold to third parties in the form of renewable energy credits or other environmental commodities. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Electric Operating Information | IPL | | WPL |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Revenues (in millions): | | | | | | | | | | | |
| Residential | $620 | | | $602 | | | $601 | | | $495 | | | $491 | | | $491 | |
| Commercial | 508 | | | 474 | | | 510 | | | 255 | | | 244 | | | 260 | |
| Industrial | 505 | | | 488 | | | 504 | | | 388 | | | 353 | | | 385 | |
| Retail subtotal | 1,633 | | | 1,564 | | | 1,615 | | | 1,138 | | | 1,088 | | | 1,136 | |
| Sales for resale | 74 | | | 88 | | | 128 | | | 169 | | | 116 | | | 122 | |
| Other | 45 | | | 43 | | | 38 | | | 22 | | | 21 | | | 25 | |
| Total | $1,752 | | | $1,695 | | | $1,781 | | | $1,329 | | | $1,225 | | | $1,283 | |
| Sales (000s MWh): | | | | | | | | | | | |
| Residential | 3,680 | | | 3,623 | | | 3,613 | | | 3,673 | | | 3,671 | | | 3,594 | |
| Commercial | 4,022 | | | 3,835 | | | 4,109 | | | 2,361 | | | 2,272 | | | 2,357 | |
| Industrial | 6,581 | | | 6,372 | | | 6,420 | | | 5,115 | | | 4,762 | | | 5,028 | |
| Retail subtotal | 14,283 | | | 13,830 | | | 14,142 | | | 11,149 | | | 10,705 | | | 10,979 | |
| Sales for resale | 1,807 | | | 3,485 | | | 4,479 | | | 3,998 | | | 2,561 | | | 2,115 | |
| Other | 35 | | | 34 | | | 36 | | | 36 | | | 37 | | | 43 | |
| Total | 16,125 | | | 17,349 | | | 18,657 | | | 15,183 | | | 13,303 | | | 13,137 | |
| Customers (End of Period): | | | | | | | | | | | |
| Retail | 496,435 | | | 494,258 | | | 492,830 | | | 485,135 | | | 479,886 | | | 475,655 | |
| Other | 858 | | | 856 | | | 855 | | | 2,020 | | | 1,985 | | | 1,961 | |
| Total | 497,293 | | | 495,114 | | | 493,685 | | | 487,155 | | | 481,871 | | | 477,616 | |
| Other Selected Electric Data: | | | | | | | | | | | |
| Maximum summer peak hour demand (MW) | 2,892 | | | 2,951 | | | 2,944 | | | 2,680 | | | 2,609 | | | 2,682 | |
| Maximum winter peak hour demand (MW) | 2,433 | | | 2,311 | | | 2,377 | | | 2,028 | | | 1,873 | | | 2,031 | |
| Cooling degree days (a): | | | | | | | | | | | |
| Cedar Rapids, Iowa (IPL) (normal - 802) | 974 | | | 800 | | | 805 | | | N/A | | N/A | | N/A |
| Madison, Wisconsin (WPL) (normal - 687) | N/A | | N/A | | N/A | | 845 | | | 736 | | | 657 | |
| Sources of electric energy (000s MWh): | | | | | | | | | | | |
| Gas | 4,011 | | | 5,296 | | | 6,362 | | | 6,044 | | | 5,144 | | | 4,698 | |
| Purchased power: | | | | | | | | | | | |
| Wind (b) | 2,285 | | | 2,359 | | | 1,788 | | | 1,244 | | | 1,324 | | | 595 | |
| Nuclear | — | | | 2,347 | | | 3,748 | | | N/A | | N/A | | N/A |
| Other (b) | 1,166 | | | 391 | | | 326 | | | 1,476 | | | 2,130 | | | 2,938 | |
| Wind (b) | 4,088 | | | 3,843 | | | 2,067 | | | 1,143 | | | 1,029 | | | 829 | |
| Coal | 4,756 | | | 3,185 | | | 4,470 | | | 5,462 | | | 3,836 | | | 4,173 | |
| Other (b) | 12 | | | 12 | | | 11 | | | 214 | | | 242 | | | 228 | |
| Total | 16,318 | | | 17,433 | | | 18,772 | | | 15,583 | | | 13,705 | | | 13,461 | |
| Revenue per KWh sold to retail customers (cents) | 11.43 | | | 11.31 | | | 11.42 | | | 10.21 | | | 10.16 | | | 10.35 | |
(a)Cooling degree days are calculated using a simple average of the high and low temperatures each day compared to a 65 degree base. Normal degree days are calculated using a rolling 20-year average of historical cooling degree days. Refer to “Gas Operating Information” below for details of heating degree days. |
| | | | | | | | | | | | | | | | | | | | | | | |
| Electric Operating Information | IPL | | WPL |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Operating Revenues (in millions): | | | | | | | | | | | |
| Retail |
| $1,448.0 |
| |
| $1,442.5 |
| |
| $1,410.2 |
| |
| $1,121.6 |
| |
| $1,122.3 |
| |
| $1,063.9 |
|
| Sales for resale | 114.6 |
| | 97.8 |
| | 61.5 |
| | 154.2 |
| | 168.9 |
| | 188.0 |
|
| Other | 36.3 |
| | 29.4 |
| | 32.1 |
| | 20.0 |
| | 14.6 |
| | 14.8 |
|
| Total |
| $1,598.9 |
| |
| $1,569.7 |
| |
| $1,503.8 |
| |
| $1,295.8 |
| |
| $1,305.8 |
| |
| $1,266.7 |
|
| Electric Sales (000s MWh): | | | | | | | | | | | |
| Retail | 14,356 |
| | 14,523 |
| | 14,824 |
| | 10,739 |
| | 10,816 |
| | 10,556 |
|
| Sales for resale | 2,169 |
| | 1,406 |
| | 1,023 |
| | 2,834 |
| | 2,993 |
| | 3,819 |
|
| Other | 38 |
| | 41 |
| | 67 |
| | 56 |
| | 59 |
| | 62 |
|
| Total | 16,563 |
| | 15,970 |
| | 15,914 |
| | 13,629 |
| | 13,868 |
| | 14,437 |
|
| Customers (End of Period): | | | | | | | | | | | |
| Retail | 489,717 |
| | 489,005 |
| | 488,582 |
| | 469,578 |
| | 466,528 |
| | 461,466 |
|
| Other | 878 |
| | 862 |
| | 1,050 |
| | 1,948 |
| | 1,923 |
| | 1,880 |
|
| Total | 490,595 |
| | 489,867 |
| | 489,632 |
| | 471,526 |
| | 468,451 |
| | 463,346 |
|
| Other Selected Electric Data: | | | | | | | | | | | |
| Maximum summer peak hour demand (MW) | 2,968 |
| | 2,996 |
| | 3,005 |
| | 2,476 |
| | 2,681 |
| | 2,564 |
|
| Maximum winter peak hour demand (MW) | 2,421 |
| | 2,479 |
| | 2,531 |
| | 2,100 |
| | 2,131 |
| | 2,153 |
|
| Cooling degree days (a): | | | | | | | | | | | |
| Cedar Rapids, Iowa (IPL) (normal - 748) | 747 |
| | 971 |
| | 732 |
| | N/A |
| | N/A |
| | N/A |
|
| Madison, Wisconsin (WPL) (normal - 646) | N/A |
| | N/A |
| | N/A |
| | 578 |
| | 780 |
| | 665 |
|
| Sources of electric energy (000s MWh): | | | | | | | | | | | |
| Gas | 3,342 |
| | 1,838 |
| | 1,874 |
| | 1,973 |
| | 2,667 |
| | 2,864 |
|
| Purchased power: | | | | | | | | | | | |
| Nuclear | 3,727 |
| | 3,444 |
| | 3,741 |
| | N/A |
| | N/A |
| | N/A |
|
| Wind (b) | 613 |
| | 635 |
| | 757 |
| | 655 |
| | 444 |
| | 433 |
|
| Other (b) | 2,456 |
| | 4,267 |
| | 3,015 |
| | 3,786 |
| | 4,645 |
| | 3,660 |
|
| Wind (b) | 851 |
| | 630 |
| | 653 |
| | 740 |
| | 752 |
| | 788 |
|
| Coal | 5,766 |
| | 5,598 |
| | 6,263 |
| | 6,614 |
| | 5,421 |
| | 6,777 |
|
| Other (b) | 22 |
| | 6 |
| | 5 |
| | 217 |
| | 222 |
| | 184 |
|
| Total | 16,777 |
| | 16,418 |
| | 16,308 |
| | 13,985 |
| | 14,151 |
| | 14,706 |
|
| Revenue per KWh sold to retail customers (cents) | 10.09 |
| | 9.93 |
| | 9.51 |
| | 10.44 |
| | 10.38 |
| | 10.08 |
|
| |
(a) | Cooling degree days are calculated using a simple average of the high and low temperatures each day compared to a 65 degree base. Normal degree days are calculated using a rolling 20-year average of historical cooling degree days. Refer to “Gas Utility Operations” below for details of heating degree days. |
| |
(b) | All or some of the renewable energy attributes associated with generation from these sources may be used in future years to comply with renewable energy standards or other regulatory requirements, or sold to third parties in the form of renewable energy credits or other environmental commodities. |
(b)All or some of the renewable energy attributes associated with generation from these sources may be used in future years to comply with renewable energy standards or other regulatory requirements.
2) GAS UTILITY OPERATIONS
General - Gas utility operations represent the second largest operating segment for Alliant Energy, IPL and WPL. Alliant Energy’s gas utility operations are located in the Midwest with IPL providing gas service in Iowa and WPL providing gas service in Wisconsin. Refer to the “Gas Operating Information” tables for additional details regarding gas utility operations. Refer to Note 1(g) for information relating to utility natural gas cost recovery mechanisms and Note 16(b)17(b) for discussion of natural gas commitments.
Customers - IPL and WPL provide gas utility service to a diversified base of retail customers and industries, including research, education, hospitality, manufacturing and chemicals (including ethanol). In addition, IPL and WPL provide transportation service to commercial and industrial customers by moving customer-owned gas through Alliant Energy’s distribution systems to the customers’ meters.
Seasonality - Gas sales follow a seasonal pattern with an annual base-load of gas and a large heating peak occurring during the winter season. Natural gas obtained from producers, marketers and brokers, as well as gas in storage, is utilized to meet the peak heating season requirements. Storage contracts generally allow IPL and WPL to purchase gas in the summer and inject it into underground storage fields, and remove it from storage fields in the winter to deliver to customers. Refer to the “Gas Operating Information” tables for details regarding maximum daily winter peak demands.
Competition- Gas customers in Iowa and Wisconsin currently do not have the ability to choose their gas distributor, and IPL and WPL have obligations to serve all their gas customers. While the gas utility distribution function is expected to remain a regulated function, sales of the natural gas commodity and related services are subject to competition from third-parties who provide alternative fuel sources (e.g. propane). However, when natural gas service is available for a given area, customers in such area have generally selected natural gas over propane as a more cost competitive solution for their fuel needs. Refer to “Strategic OverviewCustomer Investments” in MDA for discussion of plans to extendexpand gas distribution systems, as well as discussion of the growth element of Alliant Energy’s strategic plan.systems.
Gas Supply- IPL and WPL maintain purchase agreements with over 70numerous suppliers of natural gas from various gas producing regions of the U.S. and Canada. In providing gas commodity service to retail customers, Corporate Services administers a diversified portfolio of transportation and storage contracts on behalf of IPL and WPL. The tariffs for IPL’s and WPL’s retail gas customers provide for subsequent adjustments to their rates for the cost of gas sold to these customers. As a result, natural gas prices do not have a material impact on IPL’s or WPL’s gas margins.
Gas Demand Planning Reserve Margin - IPL and WPL are required to maintain adequate pipeline capacity to ensure they meet their customers’ maximum daily system demand requirements. IPL and WPL currently have planning reserve margins of 3%1% and 2%7%, respectively, above their forecasted maximum daily system demand requirements from November 20172021 through March 2018.2022.
| | | | | | | | | | | | | | | | | |
| Gas Operating Information - Alliant Energy | 2021 | | 2020 | | 2019 |
| Revenues (in millions): | | | | | |
| Residential | $257 | | | $214 | | | $259 | |
| Commercial | 139 | | | 107 | | | 133 | |
| Industrial | 17 | | | 12 | | | 16 | |
| Retail subtotal | 413 | | | 333 | | | 408 | |
| Transportation/other | 43 | | | 40 | | | 47 | |
| Total | $456 | | | $373 | | | $455 | |
| Sales (000s Dths): | | | | | |
| Residential | 26,795 | | | 27,809 | | | 30,791 | |
| Commercial | 18,516 | | | 17,996 | | | 21,611 | |
| Industrial | 2,868 | | | 3,003 | | | 3,448 | |
| Retail subtotal | 48,179 | | | 48,808 | | | 55,850 | |
| Transportation/other | 99,179 | | | 102,790 | | | 97,135 | |
| Total | 147,358 | | | 151,598 | | | 152,985 | |
| Retail Customers (End of Period) | 422,864 | | | 419,994 | | | 417,322 | |
| Other Selected Gas Data: | | | | | |
| Heating degree days (a): | | | | | |
| Cedar Rapids, Iowa (IPL) (normal - 6,705) | 6,539 | | | 6,625 | | | 7,262 | |
| Madison, Wisconsin (WPL) (normal - 6,992) | 6,620 | | | 6,789 | | | 7,397 | |
| Revenue per Dth sold to retail customers | $8.57 | | | $6.82 | | | $7.31 | |
| Purchased gas costs per Dth sold to retail customers | $5.29 | | | $3.67 | | | $3.89 | |
|
| | | | | | | | | | | |
| Gas Operating Information - Alliant Energy | 2017 | | 2016 | | 2015 |
| Operating Revenues (in millions): | | | | | |
| Retail |
| $364.6 |
| |
| $322.4 |
| |
| $349.9 |
|
| Transportation/other | 36.3 |
| | 33.0 |
| | 31.3 |
|
| Total |
| $400.9 |
| |
| $355.4 |
| |
| $381.2 |
|
| Gas Sales (000s Dths): | | | | | |
| Retail | 49,250 |
| | 47,743 |
| | 48,635 |
|
| Transportation/other | 76,916 |
| | 77,485 |
| | 74,162 |
|
| Total | 126,166 |
| | 125,228 |
| | 122,797 |
|
| Retail Customers at End of Period | 413,054 |
| | 411,758 |
| | 409,405 |
|
| Other Selected Gas Data: | | | | | |
| Heating degree days (a): | | | | | |
| Cedar Rapids, Iowa (IPL) (normal - 6,769) | 6,076 |
| | 5,933 |
| | 6,300 |
|
| Madison, Wisconsin (WPL) (normal - 7,043) | 6,569 |
| | 6,420 |
| | 6,667 |
|
| Revenue per Dth sold to retail customers |
| $7.40 |
| |
| $6.75 |
| |
| $7.19 |
|
| Purchased gas costs per Dth sold to retail customers |
| $4.23 |
| |
| $3.99 |
| |
| $4.40 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Gas Operating Information | IPL | | WPL |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Operating Revenues (in millions): | | | | | | | | | | | |
| Retail |
| $202.2 |
| |
| $183.1 |
| |
| $198.4 |
| |
| $162.4 |
| |
| $139.3 |
| |
| $151.5 |
|
| Transportation/other | 23.8 |
| | 20.9 |
| | 18.9 |
| | 12.5 |
| | 12.1 |
| | 12.4 |
|
| Total |
| $226.0 |
| |
| $204.0 |
| |
| $217.3 |
| |
| $174.9 |
| |
| $151.4 |
| |
| $163.9 |
|
| Gas Sales (000s Dths): | | | | | | | | | | | |
| Retail | 26,580 |
| | 26,230 |
| | 26,877 |
| | 22,670 |
| | 21,513 |
| | 21,758 |
|
| Transportation/other | 39,365 |
| | 37,158 |
| | 34,129 |
| | 37,551 |
| | 40,327 |
| | 40,033 |
|
| Total | 65,945 |
| | 63,388 |
| | 61,006 |
| | 60,221 |
| | 61,840 |
| | 61,791 |
|
| Retail Customers at End of Period | 224,041 |
| | 224,420 |
| | 224,914 |
| | 189,013 |
| | 187,338 |
| | 184,491 |
|
| Other Selected Gas Data: | | | | | | | | | | | |
| Maximum daily winter peak demand (Dth) | 237,203 |
| | 262,409 |
| | 267,314 |
| | 201,947 |
| | 203,655 |
| | 209,289 |
|
| Heating degree days (a): | | | | | | | | | | | |
| Cedar Rapids, Iowa (IPL) (normal - 6,769) | 6,076 |
| | 5,933 |
| | 6,300 |
| | N/A |
| | N/A |
| | N/A |
|
| Madison, Wisconsin (WPL) (normal - 7,043) | N/A |
| | N/A |
| | N/A |
| | 6,569 |
| | 6,420 |
| | 6,667 |
|
| Revenue per Dth sold to retail customers |
| $7.61 |
| |
| $6.98 |
| |
| $7.38 |
| |
| $7.16 |
| |
| $6.48 |
| |
| $6.96 |
|
| Purchased gas cost per Dth sold to retail customers |
| $4.34 |
| |
| $4.21 |
| |
| $4.53 |
| |
| $4.11 |
| |
| $3.72 |
| |
| $4.25 |
|
| |
(a) | Heating degree days are calculated using a simple average of the high and low temperatures each day compared to a 65 degree base. Normal degree days are calculated using a rolling 20-year average of historical heating degree days. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Gas Operating Information | IPL | | WPL |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Revenues (in millions): | | | | | | | | | | | |
| Residential | $146 | | | $116 | | | $149 | | | $111 | | | $98 | | | $110 | |
| Commercial | 79 | | | 59 | | | 75 | | | 60 | | | 48 | | | 58 | |
| Industrial | 12 | | | 8 | | | 12 | | | 5 | | | 4 | | | 4 | |
| Retail subtotal | 237 | | | 183 | | | 236 | | | 176 | | | 150 | | | 172 | |
| Transportation/other | 28 | | | 25 | | | 28 | | | 15 | | | 15 | | | 19 | |
| Total | $265 | | | $208 | | | $264 | | | $191 | | | $165 | | | $191 | |
| Sales (000s Dths): | | | | | | | | | | | |
| Residential | 13,873 | | | 14,521 | | | 16,078 | | | 12,922 | | | 13,288 | | | 14,713 | |
| Commercial | 9,065 | | | 8,925 | | | 10,906 | | | 9,451 | | | 9,071 | | | 10,705 | |
| Industrial | 1,943 | | | 2,062 | | | 2,514 | | | 925 | | | 941 | | | 934 | |
| Retail subtotal | 24,881 | | | 25,508 | | | 29,498 | | | 23,298 | | | 23,300 | | | 26,352 | |
| Transportation/other | 40,738 | | | 39,543 | | | 38,323 | | | 58,441 | | | 63,247 | | | 58,812 | |
| Total | 65,619 | | | 65,051 | | | 67,821 | | | 81,739 | | | 86,547 | | | 85,164 | |
| Retail Customers (End of Period) | 225,517 | | | 224,927 | | | 224,613 | | | 197,347 | | | 195,067 | | | 192,709 | |
| Other Selected Gas Data: | | | | | | | | | | | |
| Maximum daily winter peak demand (Dth) | 269,335 | | | 253,439 | | | 303,508 | | | 221,256 | | | 189,439 | | | 229,022 | |
| Heating degree days (a): | | | | | | | | | | | |
| Cedar Rapids, Iowa (IPL) (normal - 6,705) | 6,539 | | 6,625 | | 7,262 | | N/A | | N/A | | N/A |
| Madison, Wisconsin (WPL) (normal - 6,992) | N/A | | N/A | | N/A | | 6,620 | | 6,789 | | 7,397 |
| Revenue per Dth sold to retail customers | $9.53 | | $7.17 | | $8.00 | | $7.55 | | $6.44 | | $6.53 |
| Purchased gas cost per Dth sold to retail customers | $5.96 | | $3.87 | | $4.06 | | $4.58 | | $3.45 | | $3.70 |
(a)Heating degree days are calculated using a simple average of the high and low temperatures each day compared to a 65 degree base. Normal degree days are calculated using a rolling 20-year average of historical heating degree days.
3) OTHER UTILITY OPERATIONS - STEAM - IPL’s Prairie Creek facility is the primary source of steam for IPL’s two high-pressure steam customers.customers in Iowa. These customers are each under contract through 2025 for taking minimum quantities of annual steam usage, with certain conditions.
D. INFORMATION RELATING TO NON-UTILITY OPERATIONS
AEF manages a portfolio of wholly-owned subsidiaries and additional investments through the following distinct platforms:
ATI - currently holds all of Alliant Energy’s ATC Investment. ATC is an independent, for-profit, transmission-only company. Refer to Note 6(a) for discussion of DATC, joint venture between Duke Energy Corporation and ATC, which is expected to acquire, build, own and operate new electric transmission infrastructure in North America.
Non-utility Wind Investment - includes a 50% cash equity ownership interest in a 225 MW non-utility wind farm located in Oklahoma.
Sheboygan Falls Energy Facility - is a 347 MW, simple-cycle, natural gas-fired EGU near Sheboygan Falls, Wisconsin, which is leased to WPL for an initial period of 20 years ending in 2025.
Transportation - includes a short-line railway that provides freight service between Cedar Rapids, Iowa and Iowa City, Iowa; a barge terminal and hauling services on the Mississippi River; and other transfer and storage services.
ITEM 1A. RISK FACTORS
You should carefully consider each of the risks described below relating to Alliant Energy, IPL and WPL, together with all of the other information contained in this combined report, before making an investment decision with respect to our securities. If any of the following risks develop into actual events, our business, financial condition or results of operations could be materially and adversely affected, and you may lose all or part of your investment.
Risks Related to Business Operations
A cyber attack may disrupt our operations or lead to a loss or misuse of confidential and proprietary information or potential liability - We operate in an industry that requires the continuous use and operation of sophisticated information technology systems and network infrastructure. We face threats from use of malicious code (such as malware, viruses and ransomware), employee theft or misuse, advanced persistent threats, vulnerabilities such as the log4j vulnerability, fraud attempts, and phishing attacks. More of our workforce is working remotely due to the novel coronavirus (COVID-19) pandemic, which has increased the number of devices connected to the internet that impact our operations and therefore increase our cyber security risk. Incidents of ransomware attacks have been increasing in frequency and magnitude, including the ransomware attack that resulted in the operator of the Colonial Pipeline paying millions of dollars in ransom to hackers as a result of a cyber attack disabling the pipeline for several days in May 2021. Cyber attacks targeting electronic control systems used at our generating facilities and for electric and gas distribution systems could result in a full or partial disruption of our electric and/or gas operations. We have relied on a global supply chain for certain components of our operating and technology systems, which may increase our exposure to cyber attacks. Any disruption of these operations could result in a loss of service to customers and a significant decrease in revenues, as well as significant expense to repair system damage and remedy security breaches. Due to the evolving nature of cyber attacks and cyber security, our current safeguards to protect our operating systems and information technology assets may not always be effective. We rely on third parties for software to protect against cyber attacks and we are at risk if such third parties are targets of cyber attacks. If the technology systems were to fail or be breached by a cyber attack or a computer virus, and not be recovered in a timely fashion, we may be unable to fulfill critical business functions and confidential data could be compromised, adversely impacting our financial condition and results of operation.
In addition, we may collect and retain sensitive information, including personal information about our customers, shareowners and employees. In some cases, we outsource administration of certain functions to vendors that could be targets of cyber attacks. For example, we outsource administration of our employee health insurance to Anthem, which was the target of a
cyber attack in 2014. Any theft, loss and/or fraudulent use of customer, shareowner, employee or proprietary data as a result of a cyber attack could subject us to significant litigation, liability and costs, as well as adversely impact our reputation with customers and regulators, among others.
Demand for energy may decrease - Our results of operations are affected by the demand for energy in our service territories. Energy demand may decrease due to many things, including proliferation of customer and third party-owned generation, technological advances that reduce the costs of renewable energy and storage solutions for our customers, loss of service territory or franchises, energy efficiency measures, technological advances that improve energy efficiency, third-party disrupters, loss of wholesale customers, the adverse impact of tariffs on our customers, and economic conditions. The loss of sales due to lower demand for energy may increase our rates for remaining customers, as our rates must cover our fixed costs. Increased customer rates may cause decreased demand for energy as customers move to customer and third party-owned generation and implement energy efficiency measures to reduce costs. The loss of customers, the inability to replace those customers with new customers, and the decrease in demand for energy could negatively impact our financial condition and results of operations.
Our strategy includes large construction projects, which are subject to risks - Our strategy includes constructing renewable generating facilities and large-scale additions and upgrades to our electric and gas distribution systems. These construction projects are subject to various risks. These risks include: the inability to obtain necessary regulatory approvals and permits in a timely manner; adverse interpretation or enforcement of permit conditions; changes in applicable laws or regulations; changes in costs of materials, equipment, commodities, fuel or labor including due to tariffs, labor issues, or supply shortages; delays caused by construction accidents or injuries; shortages in materials, equipment, inflation and qualified labor; changes to the scope or timing of the projects; general contractors, subcontractors, or equipment not performing as required under their contracts; the inability to agree to contract terms or disputes in contract terms; the inability to successfully resolve warranty claims; poor initial cost estimates; work stoppages; adverse weather conditions; government actions; legal action; unforeseen engineering or technology issues; limited access to capital or other proposed financing arrangements such as tax equity financing; and other adverse economic conditions. We may not be able to recover all costs for the projects in rates and face increased risk of potential impairment of our project investment if a construction project is not completed or is delayed, or final costs exceed expectations or the costs approved by our regulators. Inability to recover costs, or inability to complete projects in a timely manner, could adversely impact our financial condition and results of operations.
Our utility business is seasonal and may be adversely affected by the impacts of weather - Electric and gas utility businesses are seasonal businesses. Demand for electricity is greater in the summer months associated with higher air conditioning needs and winter months associated with higher heating needs. Demand for natural gas depends significantly upon temperature patterns in winter months due to heavy use in residential and commercial heating. As a result, our overall operating results in the future may fluctuate substantially on a seasonal basis. In addition, we have historically generated less revenues and income when temperatures are warmer in the winter and/or cooler in the summer. Thus, mild winters and/or summers could have an adverse impact on our financial condition and results of operations.
We face risks associated with operating electric and natural gas infrastructure - The operation of electric generation and distribution infrastructure involves many risks, including start-up risks, breakdown or failure of equipment, fires developing from our power lines, transformers or substations, dam failure at one of our hydroelectric facilities, the dependence on a specific fuel source, including the supply and transportation of fuel, the risk of performance below expected or contracted levels of output or efficiency, public and employee safety, operator error and ruptured oil and chemical tanks. The operation of our natural gas transmission and distribution infrastructure also involves many risks, such as leaks, explosions, mechanical problems, members of the public and contractors coming into contact with our infrastructure, and employee and public safety. In addition, the North American electric transmission grid is highly interconnected and, in extraordinary circumstances, disruptions at particular points within the grid could cause an extensive power outage in our service territories. Increased utilization of customer- and third party-owned generation technologies could also disrupt the reliability and balance of the electricity grid. Further, the electric transmission system in our utilities’ service territories can experience constraints, limiting the ability to transmit electricity within our service territories. The transmission constraints could result in an inability to deliver electricity from generating facilities, particularly wind generating facilities, to the national grid, or to access lower cost sources of electricity.
These risks could cause significant harm to employees, customers and the public including loss of human life, significant damage to property, adverse impacts on the environment and impairment of our operations, all of which could result in substantial financial losses to us. We are also responsible for compliance with new and changing regulatory standards involving safety, reliability and environmental compliance, including regulations under the Pipeline and Hazardous Materials Safety Administration, the Occupational Health and Safety Administration, the North American Electric Reliability Corporation and Transportation Security Authority. Failure to meet these regulatory standards could result in substantial fines. Lastly, we have obligations to provide electric and natural gas service to customers under regulatory requirements and contractual commitments. Failure to meet our service obligations could adversely impact our financial condition and results of operations.
Storms or other natural disasters may impact our operations in unpredictable ways - Storms and other natural disasters, including events such as floods, tornadoes, windstorms like the 2020 derecho in Iowa, blizzards, ice storms, extreme hot temperatures, extreme cold temperatures, fires, solar flares or pandemics may adversely impact our ability to generate,
purchase or distribute electric energy and gas or obtain fuel or other critical supplies. In addition, we could incur large costs to repair damage to our generating facilities and electric and gas infrastructure, or costs related to environmental remediation, due to storms or other natural disasters. The restoration costs may not be fully covered by insurance policies and may not be fully recovered in rates, or recovery in rates may be delayed. Storms and natural disasters may impact our customers and the resulting reduced demand for energy could cause lower sales and revenues, which may not be replaced or recovered in rates, or rate recovery may be delayed. Any of these items could adversely impact our financial condition and results of operations.
The COVID-19 pandemic and the spread of variant strains could adversely affect our business functions, financial condition, results of operations and cash flows - The ongoing COVID-19 pandemic and the spread of variant strains has resulted in widespread impacts on the economy, including disruptions to supply chains, and reduced labor availability and productivity. The COVID-19 pandemic has impacted, and may continue to impact, the economic conditions in our service territories, which may adversely impact our sales and our customers’ abilities to pay their bills. Travel and transportation restrictions and closures of commercial spaces and industrial facilities have been imposed in and across the U.S., including in the service territories in which we operate. Governmental and regulatory responses to COVID-19 have included suspending service disconnects, which may increase customer account arrears, possibly increasing our allowance for expected credit losses and decreasing our cash flows.
Closures of commercial spaces and industrial facilities, stay-at-home trends, work-from-home trends, and business disruptions have impacted sales volumes. These trends may result in a reduction in demand for electricity and natural gas from retail customers. Negative impacts on the economy resulting from the continued pandemic could adversely impact the market value of the assets that fund our pension plans, which could necessitate accelerated funding of the plans to meet minimum federal government requirements. The negative impacts on the economy, labor markets, and supply chains could also adversely impact the ability of counterparties to meet contractual payment obligations, including guarantees, or deliver contracted commodities and other goods or services at the contracted price, which could increase company expenses. Our access to the capital markets could be adversely affected by COVID-19, which could cause us to need alternative sources of funding for our operations and for working capital, any of which could increase our cost of capital.
Travel bans and restrictions, quarantines, and vaccine mandates have caused, and may continue to cause, disruptions in supply chains or access to labor that may adversely impact our planned construction projects, our ability to satisfy compliance requirements, or our operations, including our ability to maintain reliable electric and gas service. This may cause us to miss milestones on construction projects and experience operational delays, which, in the case of renewable energy projects, could delay our completion of such projects past the in-service dates required to qualify for the maximum general renewable tax credits for investments in such renewable energy projects. We have modified certain business practices to be consistent with government restrictions and best practices encouraged by government and regulatory authorities and developed risk mitigation plans for critical items and services required to continue our operations. The effects of these government restrictions could adversely impact implementation of our regulatory plans and our operations. If our workforce contracts COVID-19, it could negatively impact our operations, including our ability to maintain reliable electric and gas service.
The degree to which COVID-19 and the spread of the variant strains may impact our business operations, financial condition and results of operations is unknown at this time and will depend on future developments, including the continued spread of COVID-19 and its variants, the severity of the disease, the duration of the pandemic, possible resurgence of the disease at a later date, emergence of variants, speed, efficacy and adoption rates of vaccines, and further actions that may be taken by governmental and regulatory authorities.
Threats of terrorism and catastrophic events that could result from terrorism may impact our operations in unpredictable ways - We are subject to direct and indirect effects of terrorist threats and activities. Generation, transmission and distribution facilities, in general, have been identified as potential targets of physical or cyber attacks. Physical attacks on transmission and distribution facilities that appeared to be terrorist-style attacks have occurred. Our gas distribution system could also be the target of terrorist threats and activities. The risks posed by such attacks could include, among other things, the inability to generate, purchase or distribute electric energy or obtain fuel sources, the increased cost of security and insurance, the disruption of, volatility in, or other effects on capital markets, and a decline in the economy and/or energy usage within our service territories, all of which could adversely impact our financial condition and results of operations. In addition, the cost of repairing damage to our facilities and infrastructure caused by acts of terrorism, and the loss of revenue if such events prevent us from providing utility service to our customers, could adversely impact our financial condition and results of operations.
We may not be able to fully recover costs related to commodity prices - We have natural gas and coal supply and transportation contracts in place for some of the natural gas and coal we require to generate electricity. We also have transportation and supply agreements in place to facilitate delivery of natural gas to our customers. Our counterparties to these contracts may not fulfill their obligations to provide natural gas or coal to us due to financial or operational problems caused by natural disasters, severe weather, economic conditions, pandemics, physical attacks or cyber attacks. If we were unable to obtain enough natural gas or coal for our electric generating facilities under our existing contracts, or to obtain electricity under existing or future purchased power agreements, we could be required to purchase natural gas or coal at higher prices or forced to purchase electricity from higher-cost generating resources in the Midcontinent Independent System Operator, Inc. (MISO) energy market. We may be obligated to pay for coal deliveries under our contracts even if our coal-fired
generating facilities do not operate enough to fully utilize the amounts of coal covered by the contracts. If, for natural gas delivery to our customers, we were unable to obtain our natural gas supply requirements under existing or future natural gas supply and transportation contracts, we could be required to purchase natural gas at higher prices from other sources. Natural gas market prices have been volatile in the past and could be volatile in the future due to additional future regulations, increased demand including due to increased liquified natural gas demand from foreign countries, periods of extremely cold temperatures or disruption in supply caused by major storms or pipeline explosions. We may not be able to pass on all of the changes in costs to our customers, especially at WPL where we do not have an automatic retail electric fuel cost adjustment clause to timely recover such costs and where electric fuel cost recovery may be limited if WPL earns in excess of its authorized return on common equity. Increases in prices and costs due to disruptions that are not recovered in rates fully, in a timely manner, may adversely impact our financial condition and results of operations.
Energy industry changes could have a negative effect on our businesses - We operate in a highly regulated business environment. The advent of new and unregulated markets has the potential to significantly impact our financial condition and results of operations. Further, competitors may not be subject to the same operating, regulatory and financial requirements that we are, potentially causing a substantial competitive disadvantage for us. Changes in public policy that could be the result of a new Presidential Administration, such as new tax incentives that we cannot take advantage of or efforts to deregulate the utility industry, could provide an advantage to competitors. Changes in technology could also alter the channels through which electric customers buy or utilize power, which could reduce the revenues or increase the expenses of our utility companies. Increased competition in our primary retail electric service territories may have an adverse impact on our financial condition and results of operations.
We face risks related to non-utility operations - We rely on our non-utility operations for a portion of our earnings. If our non-utility holdings do not perform at expected levels, we could experience an adverse impact on our financial condition and results of operations.
Risks Related to Laws and Regulations
Our utility business is significantly impacted by government legislation, regulation and oversight- Our utility financial condition is influenced by how regulatory authorities, including the IUB, the PSCW and FERC, establish the rates we can charge our customers, our authorized rates of return and common equity levels, and the amount of costs that may be recovered from customers. Our ability to timely obtain rate adjustments to earn authorized rates of return depends upon timely regulatory action under applicable statutes and regulations, and cannot be guaranteed. In future rate reviews, IPL and WPL may not receive an adequate amount of rate relief to recover all costs and earn their authorized rates of return, rates may be reduced, rate refunds may be required, rate adjustments may not be approved on a timely basis, costs may not be otherwise recovered through rates, future rates may be temporarily frozen, certain rate base items may not receive a full weighted average cost of capital, and authorized rates of return on capital may be reduced. As a result, we may experience adverse impacts on our financial condition and results of operations.
In addition, our operations are subject to extensive regulation primarily by the IUB, the PSCW and FERC. We are also subject to oversight and monitoring by organizations such as the North American Electric Reliability Corporation, the Midwest Reliability Organization, the Pipeline and Hazardous Materials Safety Administration, MISO and the Midcontinent Independent System Operator, Inc.Transportation Security Administration. The impacts on our operations include: our ability to site and construct new generating facilities, such as renewable energy projects, and recover associated costs, such asincluding our ability to continue to use a renewable energy projects; the installation of environmental controls and the recovery of associated costs;rider in Iowa; our ability to decommission generating facilities and recover related costs and the remaining carrying value of these facilities;facilities and related assets; possible changes to MISO’s methodology establishing capacity planning reserve margin requirements that may impact how and when new generating facilities such as IPL’s and WPL’s additional solar and wind generation may be accredited with energy capacity and may require IPL and WPL to adjust their current resource plans, the need to add additional resources to comply with MISO’s proposal, or procure capacity in the market whereby such costs might not be recovered in rates; the impact of the lack of availability of existing and new generating facilities has on our accredited capacity for such facilities pursuant to MISO’s methodology for establishing capacity planning reserve margin requirements; the rates paid to transmission operators and how those costs are recovered from customers, including our ability to continue to use a transmission rider in Iowa; our ability to site, construct and recover costs for new natural gas pipelines; our ability to recover costs to upgrade our electric and gas distribution systems; the amount of certain sources of energy we must use, such as renewable sources; our ability to purchase generating facilities and recover the costs associated therewith; our ability to sell utility assets and any conditions placed upon the sale of such assets; the rates paid to transmission operators and how those costs are recovered from customers; our ability to enter into purchased power agreements and recover the costs associated therewith; resource adequacy requirements, energy capacity standards, what forms of energy are considered when determining whether we meet those standards, and when new facilities such as IPL’s Marshalltown Generating Station, WPL’s West Riverside Energy Center, and IPL’s and WPL’s planned additional wind generation may be fully accredited with energy capacity; the allocation of expenditures by transmission companies on transmission network upgrades and our ability to recover costs associated therewith; reliability; safety; the issuance of securities;securities and ability to use other financing arrangements, such as tax equity financing to finance renewable energy projects; accounting matters; and transactions between affiliates. These regulatory authorities and organizations are also empowered to impose financial penalties and other sanctions, including requirements to implement new compliance programs. Failure to obtain approvals for any of these matters in a timely manner, or receipt of approvals with uneconomical conditions, may cause us not to pursue the construction of such projects or to record an impairment of our assets and may have a material adverse impact on our financial condition and results of operations. Changes to these regulations could materially increase our costs or cause us to reconsider our strategy, which could have a material adverse impact on our financial condition and results of operations.
Provisions of the Wisconsin Utility Holding Company Act may limit our ability to invest in or grow our non-utility activities and may deter potential purchasers who might be willing to pay a premium for our stock.
Our strategic plan includes large construction projects, which are subject to risks - Our strategic plan includes constructing renewable generating facilities, constructing a natural gas-fired generating facility, making other large-scale improvements to generating facilities, and large-scale additions and upgrades to our electric and gas distribution systems. These construction projects are subject to various risks. These risks include: the inability to obtain necessary permits in a timely manner; adverse interpretation or enforcement of permit conditions; changes in applicable laws or regulations; changes in costs of materials, equipment, commodities, fuel or labor; delays caused by construction accidents or injuries; shortages in materials, equipment and qualified labor; changes to the scope or timing of the projects; general contractors or subcontractors not performing as required under their contracts; the inability to agree to contract terms or disputes in contract terms; poor initial cost estimates; work stoppages; adverse weather conditions; government actions; legal action; unforeseen engineering or technology issues; limited access to capital; and other adverse economic conditions. We may not be able to recover all costs for the projects in rates and face increased risk of potential impairment of our project investment if a construction project is not completed or is delayed, or final costs exceed expectations or the costs approved by our regulators, for example, if IPL’s expansion of wind generation exceeds the respective cost cap approved by the IUB. Inability to recover costs, or inability to complete the project in a timely manner, could adversely impact our financial condition and results of operations.
Demand for energy may decrease - Our results of operations are affected by the demand for energy in our service territories. Energy demand may decrease due to many things, including economic conditions, proliferation of customer- and third party-owned generation, loss of service territory or franchises, energy efficiency measures, technological advances that increase energy efficiency, and loss of wholesale customers. The loss of sales due to lower demand for energy may increase our rates for remaining customers, as our rates must cover our fixed costs. Rate increases may cause decreased demand for energy as customers move to customer- and third party-owned generation and implement energy efficiency measures to reduce costs. The loss of customers, the inability to replace those customers with new customers, and the decrease in demand for energy could negatively impact our financial condition and results of operations.
Changes to certain tax elections, tax regulations and future taxable income could negatively impact our financial condition and results of operations - We have significantly reduced our federal and state income tax obligations over the past few years through tax planning strategies and the extensionutilization of bonus depreciation deductions for certain expenditures for property. These tax planning strategies and extensions of bonus depreciation deductions have generated large annual taxable losses and tax credits over the past few years that have resulted in significant federal and state net operating losses and tax credit carryforwards. We plan to utilize substantially all of these net operating losses and tax credit carryforwards in the future to reduce our income tax obligations. If we cannot generate enough taxable income in the future to utilize all of the net operating losses and tax credit carryforwards before they expire due to lower than expected financial performance or changes to tax regulations, we may incur material charges to earnings. In addition, our tax liability is determined by our taxable income multiplied by the current tax rates in effect. If the IRS does not agree withtax rates are increased or a minimum corporate income tax is implemented, as has been proposed by the deductions resulting from our tax planning strategies or our position on the qualification of production tax credits from planned and potential wind generating facilities,current Presidential Administration, we may experience adverse impacts to our financial condition and results of operations may be adversely impacted.operations.
Our utility business currently operates wind generating facilities, which generate production tax credits for us to use to reduce our federal tax obligations. The amount of production tax credits we earn is dependent on the date the qualifying generating facilities are placed in service, the level of electricity output generated by our wind farmsqualifying generating facilities and the applicable tax credit rate. If there is a disagreement on the in-service date, the amount of production tax credits that we can generate may be significantly reduced. A variety of operating and economic parameters, including significant transmission constraints, the imbalance of supply and demand of wind energy resulting in unfavorable pricing for wind energy, adverse weather conditions and breakdown or failure of equipment, could significantly reduce the production tax credits generated by our wind farms resulting in a material adverse impact on our financial condition and results of operations.
Also, if corporate Our strategic plan includes developing solar generating facilities, which are expected to generate investment tax ratescredits. Investment tax credits are dependent on the date the qualifying generating facilities begin and end construction and the costs of the qualifying generating facilities. If there is a disagreement on the dates construction began and ended or policies are changed with future federal or state legislation, wethe qualifying costs, the amount of investment tax credits awarded may be required to take material charges against earnings. For example, Tax Reform was enacted in December 2017, which included changes in corporate tax rates and tax policies. Tax Reform may result in changes in cash flows, which may have a negative impact on our credit ratings. There may also be further changes or amendments to Tax Reform or state tax policies and we are currently unable to determine what impacts any future changes will have on our financial condition or results of operations, including related impacts to IPL’s and WPL’s retail and wholesale electric and gas rates charged to their customers.
Finally, FERC regulates utility income tax policies, including partnership tax policies, which impact our investment in American Transmission Company LLC and ATC Holdco LLC (ATC Investment). FERC is currently investigating these income tax policies in addition to rate of return policies as a result of a court decision. The results of this investigation may lead to changes in FERC’s income tax policies, which would impact partnership entities, particularly our ATC Investment. We are currently unable to determine what impacts these potential changes will have on our financial condition or results of operations, however, it is possible that a change could reduce Alliant Energy’s equity earnings and distributions from its ATC Investment.
A cyber attack may disrupt our operations or lead to a loss or misuse of confidential and proprietary information or potential liability - We operate in an industry that requires the continuous use and operation of sophisticated information technology systems and network infrastructure. Cyber attacks targeting our electronic control systems used at our generating facilities and for electric and gas distribution systems could result in a full or partial disruption of our electric and/or gas operations. Any disruption of these operations could result in a loss of service to customers and a significant decrease in revenues, as well as significant expense to repair system damage and remedy security breaches. We have instituted certain safeguards to protect our operating systems and information technology assets, but they may not always be effective due to the evolving nature of cyber attacks and cyber security. We cannot guarantee that such protections will be completely successful in the event of a cyber attack. If the technology systems were to fail or be breached by a cyber attack or a computer virus, and not be recovered in a timely fashion, we may be unable to fulfill critical business functions and confidential data could be compromised,significantly reduced, possibly adversely impacting our financial condition and results of operation.operations.
In addition, we may collect and retain sensitive information, including personal information about our customers, shareowners and employees. In some cases, we outsource administration of certain functions to vendors that could be targets of cyber attacks. For example, we outsource administration of our employee health insurance to Anthem. Anthem was the target of a cyber attack in 2014. Any theft, loss and/or fraudulent use of customer, shareowner, employee or proprietary data as a result of a cyber attack could subject us to significant litigation, liability and costs, as well as adversely impact our reputation with customers and regulators, among others.
We are subject to employee workforce factors that could affect our businesses - We operate in an industry that requires specialized technical skills. It may be difficult to hire and retain such a skilled workforce due to labor market conditions, the length of time needed to acquire the skills, and general competition for talent. Further, we need a workforce that is innovative, customer-focused and competitive to thrive in the future. To the extent our corporate culture does not support and develop these attributes, we may not be able to successfully implement our future plans. We are also subject to collective bargaining agreements with approximately 2,200 employees. Any work stoppage experienced in connection with negotiations of collective bargaining agreements could adversely affect our financial condition and results of operations as well as our ability to implement our strategic plan.
Our utility business is seasonal and may be adversely affected by the impacts of weather - Electric and gas utility businesses are seasonal businesses. Demand for electricity is greater in the summer months associated with higher air conditioning needs. In addition, market prices for electricity generally peak in the summer due to the higher demand. Conversely, demand for natural gas depends significantly upon temperature patterns in winter months due to heavy use in residential and commercial heating. As a result, our overall operating results in the future may fluctuate substantially on a seasonal basis. In addition, we have historically generated less revenues and income when temperatures are warmer in the winter and/or cooler in the summer. Thus, unusually mild winters and/or summers could have an adverse effect on our financial condition and results of operations.
Our utility businesses are subject to numerous environmental laws and regulations - Our utilities are subject to numerous stringent environmental laws and regulations by many federal, regional, state and local authorities,environmental laws, regulations, court orders, and international treaties. These laws, regulations and regulationscourt orders generally concern emissions into the air, effluentsdischarges into the water, use of water, wetlands preservation, remediation of contamination, waste disposal and containment, disposal of coal combustion residuals, hazardous waste disposal, threatened and endangered species, and noise regulation, among others. We are also subject to Consent Decrees, which require construction of specific environmental control equipment, establish emission rate limits, require retirement or fuel switching of certain facilities and completing environmental mitigation projects. Failure to comply with such laws, regulations and Consent Decrees,court orders, or to obtain or comply with any necessary environmental permits pursuant to such laws and regulations, could result in injunctions, fines or other sanctions. Environmental laws and regulations affecting power generation and electric and gas distribution are complex and subject to continued uncertainty but have tended to become more stringent over time.and could be changed by the current Presidential Administration. These laws and regulations have imposed, and proposed laws and regulations could impose in the future, additional costs on the operation of our generating facilities.utility operations. We have incurred, and will continue to incur, capital and other expenditures to comply with these and other environmental laws and regulations. Changes in or new development of
environmental restrictions may force us to incur significant expenses or expenses that may exceed our estimates. There can be no assurance that we would be able to recover all or any increased environmental costs from our customers. Failure to comply with the laws, regulations and Consent Decrees,court orders, changes in the laws and regulations and failure to recover costs of compliance may adversely impact our financial condition and results of operations.
Actions related to global climate change and reducing greenhouse gasesgas (GHG) emissions could negatively impact us - Regulators, customers and investors continue to raise concerns about climate change and GHG emissions. National regulatory action is in flux, butand international regulatory actions continue.continue to evolve. We are focused on executing a long-term strategy to deliver reliable and affordable energy with lower carbon dioxide (CO2) emissions independent of changing policies and political landscape. However, it is unclear how these climate change concerns will ultimately impact us. We could incur costs or other obligations to comply with future GHG regulations, and could become the target of legal claims or challenges, because generating electricity using fossil fuels emits CO2 and other GHG.GHGs. Further, investors may determine that we are too reliant on fossil fuels, and not buy shares ofreducing demand for our common stock, or sell shares of our common stock, which may cause our stock price to decrease.decrease, or not buy our debt securities, which may cause our cost of capital to increase. We could face additional pressures from customers, investors or investorsother stakeholders to more rapidly reduce CO2 emissions on a voluntary-basis, including faster adoption of lower carbonCO2 emitting technologies and management of excess renewable energy credits. The timing and pace to fully achieve decarbonization is also contingent on the future development of technologies to reliably store and manage electricity, as well as electrification of other economic sectors. The EPA’s approach and timing for implementing rules to regulate carbonCO2 emissions at fossil-fueledfossil-fuel fired electric generating units remains undecided and subject to litigation.litigation and could change in the current Presidential Administration. Various legislative and regulatory proposals to address climate change at the national, state and local levels continue to be introduced. Potential future requirements to reduce CO2, methane and other GHGs from the energy and manufacturing sectors could affect our operations in various ways. Regulation or legislation mandating CO2 emissions reductions or other clean energy standards affecting utility companies could materially increase costs, causing some electric generating units to be uneconomical to operate or maintain. We are vulnerable to potential risks associated with transition to a lower-carbon economy that may extend to our supply chain and natural gas operations. Regulation of oil and gas production
could affect our upstream supply of natural gas for electricity generation and to provide directly to our residential and business customers from our local distribution company. This could result in rapid increased demand for alternative non-fossil energy sources and economy-wide electrification. Changes to regional and local climate trends such as the frequency, seasonality, and severity of weather conditions could directly and indirectly impact our company. Acute and chronic physical risks could disrupt our operations or affect our property. Furthermore, it could affect the timing of peak demand and overall energy consumption of our customers. We cannot provide any assurance regarding the potential impacts of climate change policy or related policies and regulations to reduce GHG regulationsemissions on our operations and these could have a material adverse impact on our financial condition and results of operations.
Risks Related to Economic, Financial and Labor Market Conditions
We are subject to employee workforce factors that could affect our businesses - We operate in an industry that requires specialized technical skills. Further, we must build a workforce that is innovative, customer-focused and competitive to thrive in the future in order to successfully implement our strategy. It may be difficult to hire and retain such a skilled workforce due to labor market conditions, such as low unemployment rates in our service territories, the length of time employees need to acquire the skills, and general competition for talent. We are also subject to collective bargaining agreements covering approximately 1,800 employees. Any work stoppage experienced in connection with negotiations of collective bargaining agreements could adversely affect our financial condition and results of operations as well as our ability to implement our strategy.
We are subject to limitations on our ability to pay dividends - Alliant Energy is a holding company with no significant operations of its own. The primary sources of funds for Alliant Energy to pay dividends to its shareowners are dividends and distributions from its subsidiaries, primarily its utility subsidiaries. Our subsidiaries are separate and distinct legal entities and have no obligation to pay any amounts to Alliant Energy, whether by dividends, distributions, loans or other payments. The ability of our subsidiaries to pay dividends or make distributions to Alliant Energy and, accordingly, our ability to pay dividends on Alliant Energy common stock will depend on regulatory limitations, earnings, cash flows, capital requirements and general financial condition of our subsidiaries. Our utilities have dividend payment restrictions based on the terms of regulatory limitations applicable to them. If we do not receive adequate dividends and distributions from our subsidiaries, then we may not be able to make, or may have to reduce, dividend payments on Alliant Energy common stock.
We may incur material post-closing adjustments related to past asset and business divestitures - We have sold certain non-utility subsidiaries such as Whiting Petroleum Corporation (Whiting Petroleum). We may continue to incur liabilities relating to our previous ownership of, or the transactions pursuant to which we disposed of, these subsidiaries and assets. Any potential liability depends on a number of factors outside of our control, including the financial condition of Whiting Petroleum, certain of its partners, and/or their assignees. Any required payments on retained liabilities, guarantees or indemnification obligations with respect to Whiting Petroleum or other past and future asset or business divestitures could adversely impact our financial condition and results of operations.
We are dependent on the capital markets and could be negatively impacted by disruptions in the capital markets - Successful implementation of our strategic planstrategy is dependent upon our ability to access the capital markets under competitive terms and rates.markets. We have forecasted capital expenditures of approximately $5$7 billion over the next four years. Disruption, uncertainty or volatility in thosethe capital markets could increase our cost of capital or limit the availability of capital.our ability to raise funds needed to operate our businesses. Disruptions could be caused by Federal Reserve policies and actions, currency concerns, inflation, economic downturn or uncertainty, monetary policies, a negative view of the utility industry or our company, failures of financial institutions, U.S. debt management concerns, U.S. debt limit and budget debates, including government shutdowns, European and worldwide sovereign debt concerns, other global or geopolitical events, or other factors. Increases in interest rates may cause the price of our equity securities to decline. Any disruptions in capital markets could adversely impact our ability to implement our strategic plan.strategy.
We rely on our strong credit ratings to access the credit markets. If our credit ratings are downgraded for any reason, such as Tax Reformworsening credit metric impacts, negative changes to our regulatory environment, or general negative outlook for the utility industry, we could pay higher interest rates in future financings, the pool of potential lenders could be reduced, borrowing costs under existing credit facilities could increase, our access to the commercial paper market could be limited, or we could be required to provide additional credit assurance, including cash collateral, to contract counterparties. If our access to capital were to become significantly constrained or costs of capital increased significantly due to lowered credit ratings, prevailing industry conditions, regulatory constraints, volatility of the capital markets, inflation or other factors, our financial condition and results of operations could be adversely affected.
Regional and national economic conditions could have an unfavorable impact on us - Our utility and non-utility businesses follow the economic cycles of the customers we serve and credit risk of counterparties we do business with. Adverse economic conditions in our service territories can adversely affect the financial condition of our customers and reduce their demand for electricity and natural gas. Economic conditions may not create enough growth to replace lost energy demand or to grow energy demand. Reduced volumes of electricity and natural gas sold, or the inability to collect unpaid bills from our customers due to deterioration in national or regional economic conditions, could adversely impact our financial condition and results of operations.
Threats of terrorism and catastrophic events that could result from terrorism may impact our operations in unpredictable ways - We are subject to direct and indirect effects of terrorist threats and activities. Generation, transmission and distribution facilities, in general, have been identified as potential targets of physical or cyber attacks. Physical attacks on transmission and distribution facilities that appeared to be terrorist-style attacks have occurred. The risks posed by such attacks could include, among other things, the inability to generate, purchase or distribute electric energy or obtain fuel sources, the increased cost of security and insurance, the disruption of, volatility in, or other effects on capital markets, and a decline in the economy and/or energy usage within our service territories, all of which could adversely impact our financial condition and results of operations. In addition, the cost of repairing damage to our facilities and infrastructure due to acts of terrorism, and the loss of revenue if such events prevent us from providing utility service to our customers, could adversely impact our financial condition and results of operations.
We may not be able to fully recover costs related to commodity prices - We have natural gas and coal supply and transportation contracts in place for some of the natural gas and coal we require to generate electricity. We also have transportation and supply agreements in place to facilitate delivery of natural gas to our customers. Our counterparties to these contracts may not fulfill their obligations to provide natural gas or coal to us due to financial or operational problems, such as natural disasters or severe weather. If we were unable to obtain enough natural gas or coal for our electric generating facilities under our existing contracts, or to obtain electricity under existing or future purchased power agreements, we could be required to purchase natural gas or coal at higher prices or forced to purchase electricity from higher-cost generating resources in the MISO energy market. If, for natural gas delivery to our customers, we were unable to obtain our natural gas supply requirements under existing or future natural gas supply and transportation contracts, we could be required to purchase natural gas at higher prices from other sources. Natural gas market prices have generally been stable recently, but have been volatile in the past during periods of extremely cold temperatures or disruption in supply caused by major storms or pipeline explosions. We may not be able to pass on the changes in costs to our customers, especially at WPL where we do not have a retail electric automatic fuel cost adjustment clause. Increases in prices and costs due to disruptions that are not fully and timely recovered in rates may adversely impact our financial condition and results of operations.
We may not be able to fully recover higher transmission costs - NeitherIPL nor WPL own or operate electric transmission facilities, however, both IPL and WPL pay for the use of the interstate electric transmission system based upon FERC-regulated rates. IPL and WPL rely primarily on the use of the ITC Midwest LLC (ITC) and American Transmission Company LLC (ATC) transmission systems, respectively. Due to the formula rates used by ITC and ATC to charge their customers and possible future changes to these rates, there is uncertainty regarding IPL’s and WPL’s future electric transmission service expense. In addition, FERC may change the way transmission companies set rates to socialize transmission system upgrades or to differently price generation resources necessary to maintain system reliability and resiliency. The prices that IPL and WPL charge for electricity may not totally compensate for the increase in such transmission costs. We may not be able to fully or timely pass on the increases in such transmission costs to our customers. In addition, if the transmission cost rider at IPL or escrow accounting treatment of transmission costs at WPL are amended or removed, we may not be able to fully recover transmission costs. Inability to fully recover transmission costs in a timely manner may adversely impact our financial condition and results of operations.
We face risks associated with operating electric and natural gas infrastructure - The operation of electric generating facilities involves many risks, including start-up risks, breakdown or failure of equipment, failure of generating facilities including wind turbines, the dependence on a specific fuel source, including the supply and transportation of fuel, the risk of performance below expected or contracted levels of output or efficiency, employee safety, operator error and compliance with mandatory reliability standards. Our energy delivery infrastructure is aging, which increases certain risks, including breakdown or failure of equipment and fires developing from our power lines. In addition, the North American transmission grid is highly interconnected and, in extraordinary circumstances, disruptions at particular points within the grid could cause an extensive power outage in our delivery systems. Increased utilization of customer- and third party-owned generation technologies could disrupt the reliability and balance of the electricity grid. Further, the transmission system in our utilities’ service territories can experience constraints limiting the ability to transmit electric energy within our service territories. The transmission constraints could result in an inability to deliver energy from generating facilities, particularly wind generating facilities, to the national grid, or to access lower cost sources of electric energy. We also have obligations to provide electric service under regulatory requirements and contractual commitments. Failure to meet our service obligations could adversely impact our financial condition and results of operations.
The operation of our gas transmission and distribution infrastructure also involves many risks, such as leaks, explosions, mechanical problems and employee and public safety, which could cause substantial financial losses. These risks could result in loss of human life, significant damage to property, environmental emissions, impairment of our operations and substantial losses to us. We are also responsible for compliance with new and changing mandatory reliability and safety standards, including anticipated new regulations under the Pipeline and Hazardous Materials Safety Administration. Our infrastructure is aging, which could impact safety and compliance with possible new regulations. Failure to meet these standards could result in substantial fines. Electric and gas infrastructure operations could be impacted by future compliance with the Clean Power Plan. We also have obligations to provide service under regulatory requirements and contractual commitments. Failure to meet our service obligations could adversely impact our financial condition and results of operations.
Storms or other natural disasters may impact our operations in unpredictable ways - Storms and other natural disasters, including events such as floods, tornadoes, blizzards, ice storms, droughts, fires, solar flares or pandemics may adversely impact our ability to generate, purchase or distribute electric energy and gas or obtain fuel or other critical supplies. In addition, we could incur large costs to repair damage to our generating facilities and electric and gas infrastructure, or costs related to environmental remediation, due to storms or other natural disasters. The restoration costs may not be fully covered
by insurance policies and may not be fully recovered in rates, or recovery in rates may be delayed. Storms and natural disasters may impact our customers and the resulting reduced demand for energy could cause lower sales and revenues, which may not be replaced or recovered in rates, or rate recovery may be delayed. Any of these items could adversely impact our financial condition and results of operations.
We may incur material post-closing adjustments related to past asset and business divestitures - We have sold certain non-utility subsidiaries such as Whiting Petroleum Corporation (Whiting Petroleum), as well as regulated assets such as our Minnesota electric and natural gas distribution assets. We may continue to incur liabilities relating to our previous ownership of, or the transactions pursuant to which we disposed of, these subsidiaries and assets. Any potential liability depends on a number of factors outside of our control, including the financial condition of Whiting Petroleum and/or its assignees. Any required payments on retained liabilities, guarantees or indemnification obligations with respect to Whiting Petroleum, the sales of our Minnesota electric and natural gas distribution assets, or other future asset or business divestitures, could adversely impact our financial condition and results of operations.
We are subject to limitations on our ability to pay dividends - Alliant Energy is a holding company with no significant operations of its own. The primary sources of funds for Alliant Energy to pay dividends to its shareowners are dividends and distributions from its subsidiaries, primarily its utility subsidiaries. Our subsidiaries are separate and distinct legal entities and have no obligation to pay any amounts to us, whether by dividends, distributions, loans or other payments. The ability of our subsidiaries to pay dividends or make distributions to us and, accordingly, our ability to pay dividends on Alliant Energy common stock will depend on regulatory limitations, earnings, cash flows, capital requirements and general financial condition of our subsidiaries. Our utilities have dividend payment restrictions based on the terms of any outstanding preferred stock and regulatory limitations applicable to them. If we do not receive adequate dividends and distributions from our subsidiaries, then we may not be able to make, or may have to reduce, dividend payments on Alliant Energy common stock.
Our pension and other postretirement benefits plans are subject to investment and interest rate risk that could negatively impact our financial condition - We have pension and other postretirement benefits plans that provide benefits to many of our employees and retirees. Costs of providing benefits and related funding requirements of these plans are subject to changes in the liabilities of the plans and market value of the assets that fund the plans. The funded status of the plans and the related costs reflected in our financial statements are affected by various factors, which are subject to an inherent degree of uncertainty, including economic conditions, financial market performance, interest rates, life expectancies and demographics. Recessions and volatility in the domestic and international financial markets have negatively affected the asset values of our pension plans at various times in the past. Poor investment returns or lower interest rates may necessitate
accelerated funding of the plans to meet minimum federal government requirements, which could have an adverse impact on our financial condition and results of operations.
Energy industry changes could have a negative effect on our businesses - We operate in a highly regulated business environment. The advent of new and unregulated markets has the potential to significantly impact our financial condition and results of operations. Further, competitors may not be subject to the same operating, regulatory and financial requirements that we are, potentially causing a substantial competitive disadvantage for us. Changes in technology could also alter the channels through which electric customers buy or utilize power, which could reduce the revenues or increase the expenses of our utility companies. Increased competition from any restructuring efforts in our primary retail electric service territories may have a significant adverse impact on our financial condition and results of operations.
We face risks related to non-utility operations - We rely on our non-utility operations for a portion of our earnings. If our non-utility investments do not perform at expected levels, we could experience a material adverse impact on our financial condition and results of operations.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Alliant Energy - As a holding company, Alliant Energy doesn’t directly own any significant properties other than the stock of its subsidiaries. The principal properties of those subsidiaries are as follows:
IPL and WPL
Electric - At December 31, 2017,2021, IPL’s and WPL’s EGUsfacilities by primary fuel type were as follows:
|
| | | | | | | | | | | | |
| IPL | | Expected | | | | Primary | | Nameplate | | Generating |
| | | Retirement or | | In-service | | Dispatch | | Capacity | | Capacity |
| Name of EGU and Location | | Fuel Switch (a) | | Dates | | Type (b) | | in MW | | in MW (c) |
| Marshalltown Generating Station (Units 1-3); Marshalltown, IA | | N/A | | 2017 | | IN | | 706 |
| | 630 |
|
| Emery Generating Station (Units 1-3); Mason City, IA | | N/A | | 2004 | | IN | | 603 |
| | 535 |
|
| M.L. Kapp Generating Station (Unit 2); Clinton, IA | | N/A | | 1967 | | IN | | 218 |
| | 101 |
|
| Marshalltown Combustion Turbines (Units 1-3); Marshalltown, IA | | N/A | | 1978 | | PK | | 189 |
| | 112 |
|
| Prairie Creek Generating Station (Unit 4); Cedar Rapids, IA | | N/A | | 1967 | | PK | | 149 |
| | 111 |
|
| Burlington Combustion Turbines (Units 1-4); Burlington, IA | | Retire by 6/1/18 | | 1994-1996 | | PK | | 79 |
| | 48 |
|
| Red Cedar Combustion Turbine (Unit 1); Cedar Rapids, IA | | Retire by 6/1/18 | | 1996 | | PK | | 23 |
| | 13 |
|
| Total Gas | | | | | | | | 1,967 |
| | 1,550 |
|
| | | | | | | | | | | |
| Ottumwa Generating Station (Unit 1); Ottumwa, IA (d) | | N/A | | 1981 | | BL | | 348 |
| | 330 |
|
| Lansing Generating Station (Unit 4); Lansing, IA | | N/A | | 1977 | | BL | | 275 |
| | 227 |
|
| Burlington Generating Station (Unit 1); Burlington, IA | | Fuel switch by 12/31/21 (e) | | 1968 | | BL | | 212 |
| | 199 |
|
| George Neal Generating Station (Unit 4); Sioux City, IA (f) | | N/A | | 1979 | | BL | | 179 |
| | 161 |
|
| George Neal Generating Station (Unit 3); Sioux City, IA (g) | | N/A | | 1975 | | BL | | 164 |
| | 128 |
|
| Prairie Creek Generating Station (Units 1 and 3); Cedar Rapids, IA | | Fuel switch or retire by 12/31/25 (e) | | 1958-1997 | | BL | | 65 |
| | 37 |
|
| Louisa Generating Station (Unit 1); Louisa, IA (h) | | N/A | | 1983 | | BL | | 32 |
| | 29 |
|
| Total Coal | | | | | | | | 1,275 |
| | 1,111 |
|
| | | | | | | | | | | |
| Lime Creek Combustion Turbines (Units 1-2); Mason City, IA | | N/A | | 1991 | | PK | | 90 |
| | 70 |
|
| Total Oil | | | | | | | | 90 |
| | 70 |
|
| | | | | | | | | | | |
| Whispering Willow - East (121 Units); Franklin Co., IA | | N/A | | 2009 | | IN | | 200 |
| | 32 |
|
| Franklin County (60 Units); Franklin Co., IA | | N/A | | 2012 | | IN | | 99 |
| | 17 |
|
| Total Wind | | | | | | | | 299 |
| | 49 |
|
| | | | | | | | | | | |
| Dubuque Solar Garden; Dubuque, IA (i) | | N/A | | 2017 | | IN | | 5 |
| | — |
|
| | | | | | | | | | | |
| Total capacity | | | | | | | | 3,636 |
| | 2,780 |
|
|
| | | | | | | | | | | | |
| WPL | | | | | | Primary | | Nameplate | | Generating |
| | | | | In-service | | Dispatch | | Capacity | | Capacity |
| Name of EGU and Location | | Expected Retirement (a) | | Dates | | Type (b) | | in MW | | in MW (c) |
| Riverside Energy Center (Units 1-3); Beloit, WI | | N/A | | 2004 | | IN | | 675 |
| | 542 |
|
| Neenah Energy Facility (Units 1-2); Neenah, WI | | N/A | | 2000 | | PK | | 371 |
| | 285 |
|
| South Fond du Lac Combustion Turbines (2 Units); Fond du Lac, WI (j) | | N/A | | 1994 | | PK | | 191 |
| | 147 |
|
| Rock River Combustion Turbines (Units 3-6); Beloit, WI | | Retire by 12/31/20 | | 1967-1972 | | PK | | 169 |
| | 138 |
|
| Sheepskin Combustion Turbine (Unit 1); Edgerton, WI | | Retire by 12/31/20 | | 1971 | | PK | | 42 |
| | 34 |
|
| Total Gas | | | | | | | | 1,448 |
| | 1,146 |
|
| | | | | | | | | | | |
| Columbia Energy Center (Units 1-2); Portage, WI (k) | | N/A | | 1975-1978 | | BL | | 557 |
| | 550 |
|
| Edgewater Generating Station (Unit 5); Sheboygan, WI | | N/A | | 1985 | | BL | | 414 |
| | 410 |
|
| Edgewater Generating Station (Unit 4); Sheboygan, WI (l) | | Retire by 9/30/18 (e) | | 1969 | | BL | | 239 |
| | 181 |
|
| Total Coal | | | | | | | | 1,210 |
| | 1,141 |
|
| | | | | | | | | | | |
| Bent Tree (122 Units); Freeborn Co., MN | | N/A | | 2010-2011 | | IN | | 201 |
| | 31 |
|
| Cedar Ridge (41 Units); Fond du Lac Co., WI | | N/A | | 2008 | | IN | | 68 |
| | 10 |
|
| Total Wind | | | | | | | | 269 |
| | 41 |
|
| | | | | | | | | | | |
| Prairie du Sac Hydro Plant (8 Units); Prairie due Sac, WI | | N/A | | 1914-1940 | | IN | | 33 |
| | 12 |
|
| Kilbourn Hydro Plant (4 Units); Wisconsin Dells, WI | | N/A | | 1926-1939 | | IN | | 10 |
| | 6 |
|
| Total Hydro | | | | | | | | 43 |
| | 18 |
|
| | | | | | | | | | | |
| Total capacity | | | | | | | | 2,970 |
| | 2,346 |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| IPL | | | | | | | | Nameplate | | Generating |
| | | | In-service | | | | Capacity | | Capacity |
| Name of Facility and Location | | | | Dates | | | | in MW | | in MW (a) |
| Marshalltown Generating Station (Units 1-3); Marshalltown, IA | | | | 2017 | | | | 706 | | 625 |
| Emery Generating Station (Units 1-3); Mason City, IA | | | | 2004 | | | | 603 | | 532 |
| Burlington Generating Station (Unit 1); Burlington, IA | | | | 1968 | | | | 212 | | 167 |
| Marshalltown Combustion Turbines (Units 1-3); Marshalltown, IA | | | | 1978 | | | | 189 | | 144 |
| Prairie Creek Generating Station (Unit 4); Cedar Rapids, IA | | | | 1967 | | | | 149 | | 113 |
| Burlington Combustion Turbines (Units 1-4); Burlington, IA | | | | 1994-1996 | | | | 79 | | 35 |
| Total Gas | | | | | | | | 1,938 | | 1,616 |
| Upland Prairie (121 Units); Clay and Dickinson Cos., IA | | | | 2019 | | | | 299 | | 89 |
| Whispering Willow - North (81 Units); Franklin Co., IA | | | | 2020 | | | | 201 | | 36 |
| Whispering Willow - East (121 Units); Franklin Co., IA | | | | 2009 | | | | 200 | | 28 |
| Golden Plains (82 Units); Winnebago and Kossuth Cos., IA | | | | 2020 | | | | 200 | | 33 |
| English Farms (69 Units); Poweshiek Co., IA | | | | 2019 | | | | 172 | | 27 |
| Richland (53 Units); Sac Co., IA | | | | 2020 | | | | 131 | | 21 |
| Franklin County (60 Units); Franklin Co., IA | | | | 2012 | | | | 99 | | 14 |
| Total Wind | | | | | | | | 1,302 | | 248 |
| Ottumwa Generating Station (Unit 1); Ottumwa, IA (b) | | | | 1981 | | | | 348 | | 315 |
| Lansing Generating Station (Unit 4); Lansing, IA | | | | 1977 | | | | 275 | | 206 |
| George Neal Generating Station (Unit 4); Sioux City, IA (c) | | | | 1979 | | | | 179 | | 157 |
| George Neal Generating Station (Unit 3); Sioux City, IA (d) | | | | 1975 | | | | 164 | | 140 |
| Prairie Creek Generating Station (Units 1 and 3); Cedar Rapids, IA | | | | 1958-1997 | | | | 65 | | 29 |
| Louisa Generating Station (Unit 1); Louisa, IA (e) | | | | 1983 | | | | 32 | | 28 |
| Total Coal | | | | | | | | 1,063 | | 875 |
| Lime Creek Combustion Turbines (Units 1-2); Mason City, IA | | | | 1991 | | | | 90 | | 66 |
| Total Oil | | | | | | | | 90 | | 66 |
| Dubuque Solar Garden; Dubuque, IA | | | | 2017 | | | | 5 | | 2 |
| Marshalltown Solar Garden; Marshalltown, IA | | | | 2020 | | | | 3 | | 1 |
| Total Solar | | | | | | | | 8 | | 3 |
| Battery Storage; Decorah, Wellman and Marshalltown, IA | | | | 2019-2021 | | | | 4 | | — |
| Total Battery Storage | | | | | | | | 4 | | — |
| Total capacity | | | | | | | | 4,405 | | 2,808 |
| | | | | | | | | | | | | | | | | | | | | | | | |
| WPL | | | | | | | | Nameplate | | Generating |
| | | | In-service | | | | Capacity | | Capacity |
| Name of Facility and Location | | | | Dates | | | | in MW | | in MW (a) |
| Riverside Energy Center (Units 1-3); Beloit, WI | | | | 2004 | | | | 675 | | 503 |
| West Riverside Energy Center (Units 1-3); Beloit, WI (f) | | | | 2020 | | | | 658 | | 595 |
| Neenah Energy Facility (Units 1-2); Neenah, WI | | | | 2000 | | | | 371 | | 294 |
| South Fond du Lac Combustion Turbines (2 Units); Fond du Lac, WI (g) | | | | 1994 | | | | 191 | | 161 |
| Total Gas | | | | | | | | 1,895 | | 1,553 |
| Bent Tree (122 Units); Freeborn Co., MN | | | | 2010-2011 | | | | 201 | | 26 |
| Kossuth (56 Units); Kossuth Co., IA | | | | 2020 | | | | 152 | | 25 |
| Cedar Ridge (41 Units); Fond du Lac Co., WI | | | | 2008 | | | | 68 | | 8 |
| Forward Wind Energy Center (37 Units); Dodge and Fond du Lac Cos., WI (h) | | | | 2008 | | | | 59 | | 7 |
| Total Wind | | | | | | | | 480 | | 66 |
| Columbia Energy Center (Units 1-2); Portage, WI (i) | | | | 1975-1978 | | | | 595 | | 585 |
| Edgewater Generating Station (Unit 5); Sheboygan, WI | | | | 1985 | | | | 414 | | 397 |
| Total Coal | | | | | | | | 1,009 | | 982 |
| Prairie du Sac Hydro Plant (8 Units); Prairie due Sac, WI | | | | 1914-1940 | | | | 33 | | 12 |
| Kilbourn Hydro Plant (4 Units); Wisconsin Dells, WI | | | | 1926-1939 | | | | 10 | | 6 |
| Total Hydro | | | | | | | | 43 | | 18 |
| West Riverside Solar Garden, Beloit, WI (j) | | | | 2021 | | | | 4 | | — |
| Total Solar | | | | | | | | 4 | | — |
| Total capacity | | | | | | | | 3,431 | | 2,619 |
| |
(a) | Expected dates for the retirement and fuel switching of these EGUs are subject to change depending on operational, regulatory, market and other factors. The potential retirement of other EGUs within the generation fleet continues to be evaluated. IPL and WPL are working with MISO, state regulatory commissions and other regulatory agencies, as required, to determine the final timing of certain of these actions. Final MISO studies could indicate that the retirement of an individual EGU may result in reliability issues and that transmission network upgrades for system reliability are necessary to enable such retirement. Under the current MISO tariff, the specific timing for the retirement of these EGUs could depend on the timing of the required transmission network upgrades as well as various operational, market and other factors. |
| |
(b) | Base load EGUs (BL) are designed for nearly continuous operation at or near full capacity to provide the system base load. Intermediate EGUs (IN) follow system load changes with frequent starts and curtailments of output during low demand. Peak load EGUs (PK) are generally low efficiency, quick response units that run primarily when there is high demand. |
| |
(c) |
(a)Based on the accredited generating capacity of the EGUs as of December 31, 2017 included in MISO’s resource adequacy process for the planning period from June 2017 through May 2018. |
| |
(d) | Represents IPL’s 48% ownership interest in this 726 MW (nameplate capacity) / 687 MW (generating capacity) EGU, which is operated by IPL. |
| |
(e) | Actions and plans for retirement or fuel switch meet requirements specified in IPL’s and WPL’s respective Consent Decree, which are discussed in Note 16(e). |
| |
(f) | Represents IPL’s 25.695% ownership interest in this 696 MW (nameplate capacity) / 626 MW (generating capacity) EGU, which is operated by MidAmerican Energy Company. |
| |
(g) | Represents IPL’s 28% ownership interest in this 584 MW (nameplate capacity) / 456 MW (generating capacity) EGU, which is operated by MidAmerican Energy Company. |
| |
(h) | Represents IPL’s 4% ownership interest in this 812 MW (nameplate capacity) / 730 MW (generating capacity) EGU, which is operated by MidAmerican Energy Company. |
| |
(i) | This EGU did not receive any accredited generating capacity for the planning period from June 2017 through May 2018. |
| |
(j) | Represents Units 2 and 3, which WPL owns. WPL also operates, but does not own, South Fond du Lac Combustion Turbines Units 1 and 4. |
| |
(k) | Represents WPL’s 50.1% ownership interest in this 1,112 MW (nameplate capacity) / 1,098 MW (generating capacity) EGU, which is operated by WPL. |
| |
(l) | Represents WPL’s 68.2% ownership interest in this 351 MW (nameplate capacity) / 265 MW (generating capacity) EGU, which is operated by WPL. |
At December 31, 2017, 2021 included in MISO’s resource adequacy process for the planning period from June 2021 through May 2022. IPL’s Battery Storage did not receive any accredited generating capacity for the planning period from June 2021 through May 2022. Electricity generated from the West Riverside Solar Garden is used to offset electricity usage at the West Riverside Energy Center and does not receive any accredited generating capacity.
(b)Represents IPL’s 48% ownership interest in this 726 MW (nameplate capacity) / 656 MW (generating capacity) EGU, which is operated by IPL.
(c)Represents IPL’s 25.695% ownership interest in this 696 MW (nameplate capacity) / 610 MW (generating capacity) EGU, which is operated by MidAmerican Energy Company.
(d)Represents IPL’s 28% ownership interest in this 584 MW (nameplate capacity) / 501 MW (generating capacity) EGU, which is operated by MidAmerican Energy Company.
(e)Represents IPL’s 4% ownership interest in this 812 MW (nameplate capacity) / 708 MW (generating capacity) EGU, which is operated by MidAmerican Energy Company.
(f)Represents WPL’s 91% ownership interest in this 723 MW (nameplate capacity) / 654 MW (generating capacity) EGU, which is operated by WPL.
(g)Represents Units 2 and 3, which WPL owns. WPL also operates, but does not own, South Fond du Lac Combustion Turbines Units 1 and 4.
(h)Represents WPL’s 42.64% ownership interest in this 138 MW (nameplate capacity) / 17 MW (generating capacity) EGU, which is operated by Invenergy Services, LLC.
(i)Represents WPL’s 53.5% ownership interest in this 1,112 MW (nameplate capacity) / 1,093 MW (generating capacity) EGU, which is operated by WPL.
(j)Represents WPL’s 91% ownership interest in this 4 MW (nameplate capacity) EGU, which is operated by WPL.
IPL owned approximately 17,300 miles ofand WPL own overhead electric distribution line, and approximately 3,200 miles of underground electric distribution cable as well as approximately 550and substation distribution transformers, substantially all of which are located in Iowa. At December 31, 2017, WPL owned approximately 16,100 miles of overhead electric distribution lineIowa for IPL and approximately 5,700 miles of underground electric distribution cable, as well as approximately 300 substation distribution transformers, substantially all of which are located in Wisconsin.Wisconsin for WPL.
Gas - IPL’s and WPL’s gas properties consist primarily of mains and services, meters, regulating and gate stations and other related transmission and distribution equipment. At December 31, 2017, IPL’s and WPL’s gas distribution facilities included approximately 5,100 miles ofinclude gas mains located in Iowa and WPL’s included approximately 4,500 miles of gas mains located in Wisconsin.Wisconsin, respectively.
Other - IPL’s and WPL’s other property consists primarily of operating and storeroom facilities, vehicles, computer hardware and software, communication equipment and other miscellaneous tools and equipment. IPL’s other property also includes steam service assets. Refer to Note 10(b)10 for information regarding WPL’s lease of the Sheboygan Falls Energy Facility from AEF’s Non-utility Generation business.
Corporate Services - Corporate Services’ property included in “Property, plant and equipment, net” on Alliant Energy’s balance sheet at December 31, 2021 consisted primarily of a customer billing and information system for IPL and WPL and other computer software, and the corporate headquarters building located in Madison, Wisconsin.
AEF - AEF’s principal properties included in “Property, plant and equipment, net” on Alliant Energy’s balance sheet at December 31, 20172021 were as follows:
Non-utility Generation - Includes the Sheboygan Falls Energy Facility, a 347 MW, simple-cycle, natural gas-fired facility near Sheboygan Falls, Wisconsin that was placed in service in 2005 and is leased to WPL. The Sheboygan Falls Energy Facility was accredited with 296295 MW of generating capacity for MISO’s resource adequacy process for the planning period from June 20172021 through May 2018.2022.
TransportationTravero - Includes a short-line railwayrail freight service in Iowa; a Mississippi River barge, rail and truck freight terminal in Illinois; freight brokerage services; and a rail-served warehouse in Iowa, with 114 miles of railroad track and 10 active locomotives; and a barge terminal on the Mississippi River.which began operations in 2021.
Corporate Services - Corporate Services’ property included in “Property, plant and equipment, net” on Alliant Energy’s balance sheet at December 31, 2017 consisted primarily of a customer billing and information system for IPL and WPL and other computer software, and the corporate headquarters building located in Madison, Wisconsin.
ITEM 3. LEGAL PROCEEDINGS
Alliant Energy -None.
IPL - None.
WPL - None.
Other- SEC regulations require Alliant Energy, IPL and WPL to disclose information about certain proceedings arising under federal, state or local environmental provisions when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that Alliant Energy, IPL and WPL reasonably believe will exceed a specified threshold. Pursuant to the SEC regulations, Alliant Energy, IPL and WPL use a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required. Applying this threshold, there are involved inno environmental matters to disclose for this period. Refer to Note 17(c) for discussion of legal and administrative proceedings before various courts and agencies with respect to matters arising in the ordinary course of business. Although unable to predict the outcome of these matters, Alliant Energy, IPL and WPL believe that final disposition of these actions will not have a material effect on their financial condition or results of operations.
ITEM 4. MINE SAFETY DISCLOSURES
None.
INFORMATION ABOUT EXECUTIVE OFFICERS OF THE REGISTRANTS
The executive officers of Alliant Energy, IPL and WPL for which information must be included are the same; however, different positions may be held at the various registrants. None of the executive officers for Alliant Energy, IPL or WPL listed below are related to any member of the Board of Directors or nominee for director or any other executive officer. All of the executive officers have no definite terms of office and serve at the pleasure of the Board of Directors. The executive officers of Alliant Energy, IPL and WPL as of the date of this filing are as follows:
|
| | | | | | | | | | | | | | | | | | | |
| Name | | Age as of Filing Date | | Registrant | | Positions |
Patricia L. KamplingJohn O. Larsen | | 58 | | Alliant Energy | | Ms. KamplingMr. Larsen has served as a director since January 2012,February 2019, and as Chairman of the Board, President and Chief Executive Officer (CEO) since April 2012,July 2019. He previously served as President and Chief Operating Officer since January 2019, as President from January 2018 to January 2019, and as Senior Vice President (VP) from February 20112014 to December 2017.January 2018. |
| | | | IPL and WPL | | Ms. KamplingMr. Larsen has served as CEO since January 2019, as a director since January 2012,February 2019, and as Chairman of the Board and CEO since April 2012. |
John O. Larsen | | 54 | | Alliant Energy | | Mr. Larsen has served as President since January 2018.July 2019. He previously served as Senior Vice President (VP) since February 2014 and as Senior VP-Generation from January 2010 to February 2014. |
| | | | IPL | | Mr. Larsen has served as Senior VP since February 2014. |
| | | | WPL | | Mr. Larsen has served as CEO since January 2019, as a director since February 2019, and as Chairman of the Board since July 2019. He previously served as President since December 2010. |
| Robert J. Durian | | 51 | | Alliant Energy, IPL and WPL | | Mr. Durian has served as Executive VP and Chief Financial Officer (CFO) since February 2020. He previously served as Senior VP-GenerationVP and CFO since January 2010. |
| | | | WPL | | Mr. Larsen has served as President since December 2010. |
Robert J. Durian | | 47 | | Alliant Energy, IPL and WPL | | Mr. Durian has servedFebruary 2019; as Senior VP, Chief Financial Officer (CFO)CFO and Treasurer sincefrom January 2018. He previously served2018 to February 2019; and as VP, CFO and Treasurer sincefrom December 2016; as VP, Chief Accounting Officer (CAO) and Treasurer from July 2016 to December 2016; as VP, CAO and Controller from July 2015 to July 2016; and as Controller and CAO from February 2011 to July 2015.January 2018. |
| James H. Gallegos | | 5761 | | Alliant Energy, IPL and WPL | | Mr. Gallegos has served as Executive VP, General Counsel and Corporate Secretary since February 2020. He previously served as Senior VP, General Counsel and Corporate Secretary since February 2015. He previously served as Senior VP and General Counsel since February 2014 and as VP and General Counsel from November 2010 to February 2014. |
Douglas R. KoppDavid A. de Leon | | 6459 | | Alliant Energy and WPLIPL | | Mr. Koppde Leon has served as Senior VP since March 2014.January 2019. He previously served as VP-Environmental AffairsVP since January 2013.April 2017 and as Director-Generation Construction from February 2014 to April 2017. |
| | | | IPLWPL | | Mr. Koppde Leon has served as President since January 2019. He previously served as VP since April 2014.2017 and as Director-Generation Construction from February 2014 to April 2017. |
| Terry L. Kouba | | 63 | | Alliant Energy and WPL | | Mr. Kouba has served as Senior VP since January 2019. He previously served as VP since February 2014. |
| | | | IPL | | Mr. Kouba has served as President since January 2019. He previously served as VP since February 2014. |
| Benjamin M. Bilitz | | 4346 | | Alliant Energy, IPL and WPL | | Mr. Bilitz has served as CAOChief Accounting Officer and Controller since December 2016. He previously served as Controller since July 2016 and as Assistant Controller from March 2011 to July 2016. |
PART II
ITEM 5. MARKET FOR REGISTRANTS’ COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Common Stock Data - Alliant Energy’s common stock trades on the New York Stock ExchangeNasdaq Global Select Market under the symbol “LNT.“LNT,” Quarterly sales price high and low ranges and dividends with respect to Alliant Energy’s common stock were as follows:
Closingthe closing sales price at December 31, 2017: $42.612021 was $61.47.
Shareowners - At December 31, 2017,2021, there were 26,16522,334 holders of record of Alliant Energy’s common stock, including holders through Alliant Energy’s Shareowner Direct Plan. Alliant Energy is the sole common shareowner of all 13,370,788 and 13,236,601 shares of IPL and WPL common stock, respectively, currently outstanding. As a result, there is no established public trading market for the common stock of either IPL or WPL.
Dividends - In November 2017,2021, Alliant Energy announced an increase in its targeted 20182022 annual common stock dividend to $1.34$1.71 per share, which is equivalent to a quarterly rate of $0.335$0.4275 per share, beginning with the February 20182022 dividend payment. The timing and amount of future dividends is subject to an approved dividend declaration from Alliant Energy’s Board of Directors, and is dependent upon earnings expectations, capital requirements, and general financial business conditions, among other factors.
Alliant Energy does not have any significant common stock dividend restrictions. Refer to Note 7 for information about IPL’s and WPL’s dividend restrictions and limitations on distributions to their parent company.
Common Stock Repurchases - A summary of Alliant Energy common stock repurchases for the quarter ended December 31, 20172021 was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Total Number | | Average Price | | Total Number of Shares | | Maximum Number (or Approximate |
| | of Shares | | Paid Per | | Purchased as Part of | | Dollar Value) of Shares That May |
| Period | | Purchased (a) | | Share | | Publicly Announced Plan | | Yet Be Purchased Under the Plan (a) |
| October 1 to October 31 | | 3,833 | | $55.96 | | — | | N/A |
| November 1 to November 30 | | 2,800 | | 56.28 | | — | | N/A |
| December 1 to December 31 | | 72 | | 59.22 | | — | | N/A |
| | 6,705 | | 56.13 | | — | | |
|
| | | | | | | | | | | |
| | | Total Number | | Average Price | | Total Number of Shares | | Maximum Number (or Approximate |
| | | of Shares | | Paid Per | | Purchased as Part of | | Dollar Value) of Shares That May |
| Period | | Purchased (a) | | Share | | Publicly Announced Plan | | Yet Be Purchased Under the Plan (a) |
| October 1 to October 31 | | 2,125 |
| |
| $42.99 |
| | — | | N/A |
| November 1 to November 30 | | 3,542 |
| | 44.66 |
| | — | | N/A |
| December 1 to December 31 | | 491 |
| | 43.94 |
| | — | | N/A |
| | | 6,158 |
| | 44.02 |
| | — | | |
(a)All shares were purchased on the open market and held in a rabbi trust under the DCP. There is no limit on the number of shares of Alliant Energy common stock that may be held under the DCP, which currently does not have an expiration date.
| |
(a) | All shares were purchased on the open market and held in a rabbi trust under the DCP. There is no limit on the number of shares of Alliant Energy common stock that may be held under the DCP, which currently does not have an expiration date. |
ITEM 6. SELECTED FINANCIAL DATA[RESERVED]
Financial Information
|
| | | | | | | | | | | | | | | | | | | |
| Alliant Energy | 2017 (a) | | 2016 (a) | | 2015 (a) | | 2014 | | 2013 |
| | (dollars in millions, except per share data) |
| Income Statement Data: | |
| Operating revenues |
| $3,382.2 |
| |
| $3,320.0 |
| |
| $3,253.6 |
| |
| $3,350.3 |
| |
| $3,276.8 |
|
| Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | |
| Income from continuing operations, net of tax | 455.9 |
| | 373.8 |
| | 380.7 |
| | 385.5 |
| | 364.2 |
|
| Income (loss) from discontinued operations, net of tax | 1.4 |
| | (2.3 | ) | | (2.5 | ) | | (2.4 | ) | | (5.9 | ) |
| Net income | 457.3 |
| | 371.5 |
| | 378.2 |
| | 383.1 |
| | 358.3 |
|
| Common Stock Data: | | | | | | | | | |
| Earnings per weighted average common share attributable to Alliant Energy common shareowners (basic and diluted): | | | | | | | | | |
| Income from continuing operations, net of tax |
| $1.99 |
| |
| $1.65 |
| |
| $1.69 |
| |
| $1.74 |
| |
| $1.64 |
|
| Loss from discontinued operations, net of tax |
| $— |
| |
| ($0.01 | ) | |
| ($0.01 | ) | |
| ($0.01 | ) | |
| ($0.02 | ) |
| Net income |
| $1.99 |
| |
| $1.64 |
| |
| $1.68 |
| |
| $1.73 |
| |
| $1.62 |
|
| Common shares outstanding at year-end (000s) | 231,349 |
| | 227,674 |
| | 226,918 |
| | 221,871 |
| | 221,887 |
|
| Dividends declared per common share |
| $1.26 |
| |
| $1.175 |
| |
| $1.10 |
| |
| $1.02 |
| |
| $0.94 |
|
| Market value per share at year-end |
| $42.61 |
| |
| $37.89 |
| |
| $31.225 |
| |
| $33.21 |
| |
| $25.80 |
|
| Book value per share at year-end |
| $18.08 |
| |
| $16.96 |
| |
| $16.41 |
| |
| $15.50 |
| |
| $14.79 |
|
| Market capitalization at year-end |
| $9,857.8 |
| |
| $8,626.6 |
| |
| $7,085.5 |
| |
| $7,368.3 |
| |
| $5,724.7 |
|
| Other Selected Financial Data: | | | | | | | | | |
| Cash flows from operating activities |
| $983.4 |
| |
| $859.6 |
| |
| $871.2 |
| |
| $891.6 |
| |
| $731.0 |
|
| Construction and acquisition expenditures |
| $1,466.9 |
| |
| $1,196.8 |
| |
| $1,034.3 |
| |
| $902.8 |
| |
| $798.3 |
|
| Total assets at year-end |
| $14,187.8 |
| |
| $13,373.8 |
| |
| $12,495.2 |
| |
| $12,063.5 |
| |
| $11,092.5 |
|
| Long-term obligations, net |
| $4,870.6 |
| |
| $4,325.1 |
| |
| $3,837.0 |
| |
| $3,768.7 |
| |
| $3,318.2 |
|
|
| | | | | | | | | | | | | | | | | | | |
| IPL | | | | | | | | | |
| Operating revenues |
| $1,870.3 |
| |
| $1,820.4 |
| |
| $1,774.5 |
| |
| $1,848.1 |
| |
| $1,818.8 |
|
| Earnings available for common stock | 216.8 |
| | 215.6 |
| | 186.0 |
| | 181.6 |
| | 172.0 |
|
| Cash dividends declared on common stock | 156.1 |
| | 151.9 |
| | 140.0 |
| | 140.0 |
| | 128.1 |
|
| Cash flows from operating activities | 440.0 |
| | 361.9 |
| | 385.0 |
| | 406.1 |
| | 232.6 |
|
| Total assets | 7,606.0 |
| | 7,304.7 |
| | 6,709.1 |
| | 6,450.2 |
| | 5,793.9 |
|
| Long-term obligations, net | 2,406.6 |
| | 2,154.0 |
| | 1,857.4 |
| | 1,758.6 |
| | 1,549.5 |
|
| | | | | | | | | | |
| WPL | | | | | | | | | |
| Operating revenues |
| $1,472.8 |
| |
| $1,459.1 |
| |
| $1,435.1 |
| |
| $1,449.1 |
| |
| $1,406.3 |
|
| Earnings available for common stock | 186.6 |
| | 190.4 |
| | 176.3 |
| | 180.4 |
| | 177.5 |
|
| Cash dividends declared on common stock | 125.9 |
| | 135.0 |
| | 126.9 |
| | 118.7 |
| | 116.3 |
|
| Cash flows from operating activities | 465.7 |
| | 521.4 |
| | 449.8 |
| | 424.4 |
| | 423.3 |
|
| Total assets | 5,756.5 |
| | 5,290.3 |
| | 5,270.4 |
| | 5,117.6 |
| | 4,796.2 |
|
| Long-term obligations, net | 1,914.3 |
| | 1,623.2 |
| | 1,624.2 |
| | 1,658.3 |
| | 1,423.2 |
|
Alliant Energy is the sole common shareowner of all 13,370,788 and 13,236,601 shares of IPL’s and WPL’s common stock outstanding, respectively. As such, earnings per share data is not disclosed herein for IPL and WPL.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This MDA includes information relating to Alliant Energy, IPL and WPL, as well as AEF and Corporate Services. Where appropriate, information relating to a specific entity has been segregated and labeled as such. The following discussion and analysis should be read in conjunction with the Financial Statements and Notes included in this report. Unless otherwise noted, all “per share” references in MDA refer to earnings per diluted share. In addition, this MDA includes certain financial information for 2021 compared to 2020. Refer to MDA in the combined 2020 Form 10-K for details on certain financial information for 2020 compared to 2019.
EXECUTIVE OVERVIEW
Description of BusinessStrategy and Mission
General - Alliant Energy is a Midwest U.S. energy holding company whose primary subsidiaries are IPL, WPL, AEF and Corporate Services. IPL and WPL are public utilities, and AEF is the parent company for Alliant Energy’s non-utility businessesmission is to deliver affordable energy solutions and holds allexceptional service that its customers and communities count on - safely, efficiently, reliably and responsibly. The mission is supported by a strategy focused on meeting the evolving expectations of customers while providing an attractive return for investors, as well as serving its customers and building strong communities. This strategy includes the following key elements:
Providing affordable energy solutions to customers - Alliant Energy’s ATC Investment. Corporate Services provides administrative servicesstrategy focuses on affordable energy solutions that support retention and growth of its existing customers and attract new customers to Alliant Energy and its subsidiaries. An illustration of service territories.
Key Highlights -
•Alliant Energy’s primary businessesClean Energy Blueprints, also known as its cleaner energy strategy, is shown below.expected to result in cost savings for its utility customers through the planned transition away from coal-fired EGUs and incorporation of additional renewable energy, renewable tax credits for investments in renewable energy projects, and utilization of renewable project tax equity financing under the current tax regulations.
•WPL maintaining flat base rates in 2021 by utilizing Federal Tax Reform benefits and expected lower fuel costs to offset higher revenue requirements from rate base additions.
•IPL’s renewable energy rider became effective February 26, 2020, which allows for annual adjustments to electric rates charged to IPL’s retail electric customers for actual renewable energy costs incurred to fund IPL’s 1,000 MW of wind EGUs placed in service in 2019 and 2020, and related tax benefits, including production tax credits.
|
| | | | | | | |
| 24 | Alliant Energy | | |
| | | | | |
| | | | |
Utilities and Corporate Services | | ATC Investment, Non-utility and Parent |
- Retail electric and gas services in IA (IPL) | | - ATC Investment (ATI) |
- Retail electric and gas services in WI (WPL) | | - Transportation (AEF) |
- Wholesale electric service in MN, IL & IA (IPL) | | - Non-utility wind investment (AEF) |
- Wholesale electric service in WI (WPL) | | - Sheboygan Falls Energy Facility (AEF) |
- Corporate Services | | - Parent Company |
Utilities•Providing $35 million of billing credits to IPL’s retail electric customers beginning in the third quarter of 2020 through June 2021, largely driven by Federal Tax Reform benefits for customers.
•Significant fuel cost reductions achieved in 2021 as a result of expansion of renewable generation and Corporate Services shortening the term of IPL’s DAEC PPA by 5 years.
•Issuance of new long-term debt in 2021 at historically low interest rates for IPL ($300 million of 3.1% senior debentures due 2051) and WPL ($300 million of 1.95% green bonds due 2031).
•Redemption of IPL’s 5.1% cumulative preferred stock in 2021.
•Levelized cost recovery mechanism for the remaining net book value of Edgewater Unit 5, which helps reduce customer costs in 2022 and 2023.
Making customer-focused investments -Alliant Energy’s strategic priorities include making significant customer-focused investments toward cleaner energy and sustainable customer solutions. Alliant Energy’s strategy drives a capital allocation process focused on: 1) transitioning its generation portfolio to meet the growing interest of customers for cleaner sources of energy, 2) upgrading its electric and gas distribution systems to strengthen safety and resiliency, as well as enable distributed energy solutions in its service territories, and 3) enhancing its customers’ experience with evolving technology and greater flexibility.
•Planned development and acquisition of additional renewable energy, including approximately 1,100 MW of solar generation at WPL with in-service dates in 2022 and 2023, approximately 400 MW of solar generation at IPL with in-service dates in 2023 and 2024 and approximately 75 MW of battery storage in 2024 at IPL. In addition, IPL and WPL own a portfoliocontinue to evaluate additional opportunities to add more renewable generation, including repowering of EGUs locatedexisting wind farms and additional solar generation and distributed energy resources, including community solar and energy storage systems.
•IPL’s December 2021 completion of the fuel switch of the Burlington Generating Station (212 MW) from coal to natural gas.
Growing customer demand - Alliant Energy’s strategy supports expanding electric and gas usage in Iowa, Wisconsinits service territories by promoting electrification initiatives and Minnesota with a diversified fuel mix including natural gas, renewable resources and coal. The output from these EGUs, supplemented with purchased power, is used to provide electric service to approximately 960,000 electric customerseconomic development in the upper Midwest.communities it serves.
Key Highlights -
•WPL entered into a new wholesale power supply agreement, which was effective January 1, 2021 and brought approximately 55 MW of load to WPL’s electric system in 2021.
•Alliant Energy has various development-ready sites throughout Iowa and Wisconsin, including the 1,300-acre Big Cedar Industrial Center Mega-site in Cedar Rapids, Iowa, and the 730-acre Prairie View Industrial Center Super Park in Ames, Iowa, which are rail-served ready-to-build manufacturing and industrial sites in close proximity to the regional airport and interstate freeways and access IPL’s electric services. The utilityBig Cedar Industrial Center Mega-site also accesses Travero’s rail-served warehouse in Iowa. In addition, the Beaver Dam Commerce Park is a 520-acre ready-to-build manufacturing and industrial site in Beaver Dam, Wisconsin, with access to commercial and freight airports, interstate freeways and WPL’s electric services.
COVID-19
The outbreak of COVID-19 has become a global pandemic and Alliant Energy’s service territories are not immune to the challenges presented by COVID-19. Despite these challenges, Alliant Energy, IPL and WPL continue to focus on providing the critical, reliable service their customers depend on, while emphasizing the health and welfare of their employees, customers and communities. Alliant Energy, IPL and WPL have not experienced significant impacts on their overall business also procures natural gas from various suppliersoperations, financial condition, results of operations or cash flows; however, the degree to provide service to approximately 410,000 retail gas customerswhich the COVID-19 pandemic may impact such items in the upper Midwest.future is currently unknown and will depend on future developments of the pandemic as well as possible additional actions by government and regulatory authorities. Alliant Energy’s utility business is its primary sourceEnergy has mitigated the impact of earningsany sales declines from COVID-19 by accelerating planned cost transformation activities. Actual and cash flows. The earnings and cash flowspotential impacts from the utilities and Corporate Services businessCOVID-19 include, but are sensitive to various external factors including, but not limited to, the amountfollowing:
Operational and timingSupply Chain Impacts - Alliant Energy has modified certain business practices to help ensure the health and safety of rates approvedits employees, contractors, customers and vendors consistent with orders and best practices issued by government and regulatory authorities, the impactauthorities. For example, Alliant Energy implemented its business continuity and pandemic plans for critical items and services, including travel restrictions, physical distancing, working-from-home protocols, and rescheduling of weatherplanned EGU outages. Alliant Energy also temporarily suspended service disconnects, waived late payment fees for its customers, and economic conditions on electricmodified reconnect service procedures to ensure continuity of service for customers unable to pay their bills and gas sales volumesconsistency with regulatory orders.
While Alliant Energy has not experienced any significant issues to-date, it continues to monitor potential disruptions or constraints in materials and other factors listed in “Risk Factors” in Item 1A and “Forward-looking Statements.”
ATC Investment, Non-utility Business and Parent - AEF holds all ofsupplies from key suppliers. Alliant Energy’s ATC Investment. AEF also manages various businesses including Transportation (short-line railwayconstruction projects are currently progressing as planned with added safety protocols, and barge transportation services), a non-utility wind investment,while it continues to monitor its supply chain, Alliant Energy has experienced supply constraints and commodity inflation in the Sheboygan Falls Energy Facility and several other modest investments.
Financial Results - solar market. Alliant Energy’s net income and EPS attributablewind farms under construction during the pandemic were placed in service in 2020 as previously planned to meet the timing requirements to qualify for the maximum renewable tax credits. In addition, Alliant Energy common shareowners were as follows (dollarsdoes not currently expect any material changes to its construction and acquisition expenditures plans disclosed in millions, except per share amounts):
|
| | | | | | | | | | | | | | | |
| | 2017 | | 2016 |
| | Income | | EPS | | Income (Loss) | | EPS |
| Continuing operations: | | | | | | | |
| Utilities and Corporate Services |
| $416.7 |
| |
| $1.82 |
| |
| $397.3 |
| |
| $1.75 |
|
| ATC Investment | 25.4 |
| | 0.11 |
| | 23.1 |
| | 0.10 |
|
| Non-utility and Parent | 13.8 |
| | 0.06 |
| | (46.6 | ) | | (0.20 | ) |
| Income from continuing operations | 455.9 |
| | 1.99 |
| | 373.8 |
| | 1.65 |
|
| Income (loss) from discontinued operations | 1.4 |
| | — |
| | (2.3 | ) | | (0.01 | ) |
| Net income |
| $457.3 |
| |
| $1.99 |
| |
| $371.5 |
| |
| $1.64 |
|
The table above includes EPS“Liquidity and Capital Resources” resulting from continuing operations for utilities and Corporate Services, ATC Investment, and non-utility and parent, which are non-GAAP financial measures. Alliant Energy believes these non-GAAP financial measures are useful to investors because they facilitate an understanding of segment performance and trends, and provide additional information about Alliant Energy’s operations on a basis consistent with the measures that management uses to manage its operations and evaluate its performance.
COVID-19.
Alliant Energy’s, IPL’sEnergy has not experienced, and WPL’s income from continuing operations increased (decreased) by $82 million, $1 millioncurrently does not expect, an interruption in its ability to provide electric and ($4) million, respectively,natural gas services to its customers. Alliant Energy currently expects to incur incremental direct expenses related to certain of these operational and supply chain impacts but does not expect them to have a material impact on its results of operations.
Customer Impacts - COVID-19 has resulted in 2017 compared to 2016.various travel restrictions and closures of commercial spaces and industrial facilities in Alliant Energy’s service territories, especially early on in the pandemic. While the total expected impact of COVID-19 on future sales is currently unknown, Alliant Energy experienced higher electric residential sales and lower electric commercial and industrial sales in 2020, and lower electric residential sales and higher electric commercial and industrial sales in 2021. In addition, Alliant Energy has not experienced a material increase was primarily duein customer bankruptcies in 2020 or 2021.
Liquidity and Capital Resources Impacts - Alliant Energy maintains a single credit facility, which allows borrowing capacity to asset valuation charges at AEF relatedshift among Alliant Energy (at the parent company level), IPL and WPL, as needed. In addition, IPL maintains a sales of accounts receivable program as an alternative financing source; however, if customer arrears were to exceed certain levels, IPL’s access to the Franklin County wind farm in 2016, higher margins resulting from IPL’s interim retail electric base rate increase implemented in April 2017 and WPL’s retail electric and gas base rate increases implemented in January 2017, and the effects of Tax Reform, partially offset by higher depreciation expense, higher energy efficiency cost recovery amortization at WPL, and the estimated temperature impacts on IPL’s and WPL’s retail electric and gas sales. WPL’s decrease was also impacted by reduced equity income resulting from the transfer of WPL’s investment in ATC to ATI on December 31, 2016.
Refer to “Results of Operations” for additional details regarding the various factors impacting earnings during 2017, 2016 and 2015.
2017Overview - In 2017,program may be restricted. Alliant Energy, IPL and WPL focused on achieving financial objectives and executing their strategic plan. Key developments in 2017 include the following:
| |
• | Tax Reform - In December 2017, Tax Reform was enacted. The enactment of Tax Reform had a material impact on the 2017 financial statements since changes in tax laws must be recognized in the period in which the law is enacted. The most significant provision of Tax Reform was the reduction in the federal corporate tax rate from 35% to 21%, which required a re-measurement of deferred tax assets and liabilities in December 2017. The net impacts of re-measuring deferred taxes associated with regulated utility operations were recorded in regulatory assets and regulatory liabilities and will be utilized to provide benefits to customers in the future. Refer to Note 11 for further discussion of the impacts of Tax Reform. |
IPL’s Marshalltown Generating Station - Marshalltown, a 706 MW natural gas-fired combined-cycle EGU, was placed into service in April 2017. Final capital expenditures were $645 millioncurrently expect to construct the EGU and a pipeline to supply natural gas to the EGU, excluding transmission network upgrades and AFUDC.
Franklin County Wind Farm - In April 2017, the 99 MW Franklin County wind farm was transferred from AEF to IPL.
| |
• | IPL’s and WPL’s Potential Expansion of Wind Generation - IPL and WPL currently plan on expanding their wind generation by up to 1,000 MW and 200 MW, respectively, by the end of 2020. In 2016, IPL received approval from the IUB for the first 500 MW of wind generation. In August 2017, IPL filed an application with the IUB for advance rate-making principles for a second 500 MW of wind generation, and is currently expecting a decision from the IUB in the first quarter of 2018. In November 2017, WPL filed for approval from the PSCW and FERC to acquire 55 MW of FWEC, which is a 129 MW wind farm located in Wisconsin. WPL received approval from FERC for the FWEC acquisition in January 2018 and is currently expecting a decision from the PSCW in the first half of 2018. WPL currently expects to file for approval from the PSCW for the remaining portion of its wind expansion plan in the first half of 2018. Refer to “Strategic Overview” for further discussion. The amount and timing of these wind projects will largely depend on regulatory approvals and the acquisition of wind sites. |
WPL’s Construction of West Riverside - In October 2017, WPL received an order from the PSCW authorizing various electric cooperatives, which currently have wholesale power supply agreements with WPL, to acquire approximately 65 MW of West Riverside while the EGU is being constructed. As part of the electric cooperatives’ acquisitions, which were finalized in January 2018, the current wholesale power supply agreementsmaintain compliance with the various electric cooperatives were extended by at least four years until 2026 with automatic continuationfinancial covenants of such agreements unless terminated by either party, with a five-year notice requirement.
| |
• | Non-utility Wind Investment in Oklahoma - In July 2017, a wholly-owned subsidiary of AEF acquired a 50% cash equity ownership interest in a 225 MW non-utility wind farm located in Oklahoma. Refer to Note 6(a) for further discussion. |
IPL’s Retail Electric Rate Review (2016 Test Year) - In April 2017, IPL filed a request with the IUB to increase annual electric base rates for its Iowa retail electric customers. The request was based on a 2016 historical Test Year as adjusted for certain known and measurable changes occurring up to 12 months after the commencement of the proceeding. The key drivers for the filing included recovery of capital projects, primarily power grid modernization and investments that advance cleaner energy, including Marshalltown. An interim retail electric base rate increase of $102 million, or approximately 7%, on an annual basis, was implemented effective April 13, 2017. In September 2017, IPL reached a partial, non-unanimous settlement agreement with the Iowa Office of Consumer Advocate, the Iowa Business Energy Coalition and the Large Energy Group to increase annual retail electric base rates by $130 million, or approximately 9%. In February 2018, the IUB issued an order approving the settlement. Final rates are currently expected to be effective in the first half of 2018 once all motions for reconsideration have been addressed and final tariffs have been approved by the IUB.
MISO Transmission Owner Return on Equity Complaints - A group of MISO cooperative and municipal utilities previously filed two complaints with FERC requesting a reduction to the base return on equity used by MISO transmission owners, including ITC and ATC, to determine electric transmission costs billed to utilities, including IPL and WPL. In 2016, FERC issued an order on the first complaint and established a base return on equity of 10.32%, excluding any incentive adders granted by FERC, effective September 28, 2016, and for the refund period from November 12, 2013 through February 11, 2015 (first complaint period). In 2017, Alliant Energy, IPL and WPL received the refunds for the first complaint period of $50 million, $39 million and $11 million, respectively, after final true-ups. Pursuant to IUB approval, IPL’s retail portion of the refund from ITC was refunded to its retail customers in 2017. WPL’s retail portion of the refund from ATC will remain in a regulatory liability until such refunds are approved to be returned to retail customers in a future rate proceeding. A decision from FERC on the second complaint is currently expected in 2018.
Credit Facility Agreement - In August 2017, Alliant Energy, IPL and WPL entered into a single new credit facility agreement, which expires in August 2022. The new credit facility agreement includes financial covenants similar to those that were included in the previous credit facility agreements. As of December 31, 2017, the short-term borrowing capacity totaled $1 billion ($400 million for Alliant Energy at the parent company level, $250 million for IPL and $350 million for WPL).
At-the-Market Offering Program - In 2017, Alliant Energy issued 3.1 million shares of common stock through an at-the-market offering program and received cash proceeds of $124 million, net of $1 million in commissions and fees. The proceeds from the issuances of common stock were used for general corporate purposes.
Future Developments - The following includes key items expected to impact Alliant Energy, IPL and WPL in the future:
| |
• | Planned Utility Rate Reviews - IPL currently expects to make a retail gas rate filing in the second quarter of 2018 based on a 2017 historical Test Year. WPL currently expects to make a retail electric and gas rate filing in the second quarter of 2018 for the 2019/2020 Test Period. Refer to “Rate Matters” for further discussion. |
2018 Forecast - In 2018, the following financing activities, and impacts to results of operations, are currently anticipated to occur:
Financing Plans - Alliant Energy currently expects to issue up to $200 million of common stockmaintain compliance with the financial covenants in 2018 through one or more offerings and its Shareowner Direct Plan. IPLAEF’s term loan credit agreement. In addition, Alliant Energy currently expects to issue uphave adequate liquidity to $700 million of long-term debt securities in 2018, of which $350 million would be usedfulfill its contractual obligations, access to retire long-term debt maturing in 2018. AEF currently expects to issue up to $1.0 billion of long-term debt in 2018, of which $595 million would be used to refinance expiring term loans.
capital markets and continue with its planned quarterly dividend payments.
Common Stock DividendsCredit Risk Impacts -Alliant Energy announced a 6% increase in its targeted 2018 annual common stock dividendhas not experienced any material negative impacts related to $1.34 per share, which is equivalent to a quarterly rate of $0.335 per share, beginning with the February 2018 dividend payment. The timingcustomer arrears and amount of future dividends is subject to an approved dividend declaration from Alliant Energy’s Board of Directors, and is dependent upon earnings expectations, capital requirements, and general financial business conditions, among other factors.
| |
• | Utility Electric and Gas Margins - Alliant Energy and IPL currently expect an increase in electric and gas margins in 2018 compared to 2017 as a result of base rate increases from final rates implemented for IPL’s retail electric rate review (2016 Test Year) and interim rates for IPL’s planned retail gas rate review (2017 Test Year). Alliant Energy and WPL currently expect an increase in electric margins from lower electric transmission service expense in 2018 compared to 2017 due to amortizations of previously over-recovered transmission expenses as approved in WPL’s retail electric rate review (2017/2018 Test Year). Refer to “Rate Matters” for further discussion of these rate reviews. |
Depreciation and Amortization Expenses - Alliant Energy and IPL currently expect an increase in depreciation and amortization expenses in 2018 compared to 2017 due to property additions, and the implementation of updated depreciation rates for IPLbad debts as a result of a recently completed depreciation study,the pandemic; however, if government funds are no longer available for customers to help pay their utility bills, it may negatively impact Alliant Energy’s customers’ willingness and ability to pay, which are currently expected to be effective in the first half of 2018.
Interest Expense - could negatively impact Alliant Energy’s cash flows from operations. Currently, Alliant Energy currently expects interest expense to increase in 2018 compared to 2017 primarily due to financings completed in 2017 and planned in 2018 as discussed above.
AFUDC - Alliant Energy currently expects AFUDC to increase in 2018 compared to 2017 primarily due to increased CWIP balancesdoes not anticipate any material credit risk related to IPL’s expansionits commodity transactions.
Legislative Impacts - Refer to “Legislative Matters” for discussion of wind generation and WPL’s West Riverside facility. legislation that was enacted in 2020 related to impacts from COVID-19.
RESULTS OF OPERATIONS
Overview - “Executive Overview” provides an overview of Alliant Energy’s, IPL’s and WPL’s 2017 and 2016 earnings. Additional earnings details for 2017, 2016 and 2015 are discussed below.
Results of operations include financial information prepared in accordance with GAAP as well as utility electric margins and utility gas margins, which are not measures of financial performance under GAAP. Utility electric margins are defined as electric operating revenues less electric production fuel, purchased power and electric transmission service expenses. Utility gas margins are defined as gas operating revenues less cost of gas sold. Utility electric margins and utility gas margins are non-GAAP financial measures because they exclude other utility and non-utility operating revenues, other operation and maintenance expenses, depreciation and amortization expenses, and taxes other than income tax expense.
Management believes that utility electric and gas margins provide a meaningful basis for evaluating and managing utility operations since electric production fuel, purchased power and electric transmission service expenses and cost of gas sold are generally passed through to customers, and therefore, result in changes to electric and gas operating revenues that are comparable to changes in such expenses. The presentation of utility electric and gas margins herein is intended to provide supplemental information for investors regarding operating performance. These utility electric and gas margins may not be comparable to how other entities define utility electric and gas margin. Furthermore, these measures are not intended to replace operating income as determined in accordance with GAAP as an indicator of operating performance.
Additionally, the table below includes EPS for Utilities and Corporate Services, ATC Holdings, and Non-utility and Parent, which are non-GAAP financial measures. Alliant Energy believes these non-GAAP financial measures are useful to investors because they facilitate an understanding of segment performance and trends, and provide additional information about Alliant Energy’s operations on a basis consistent with the measures that management uses to manage its operations and evaluate its performance.
Financial Results Overview - Alliant Energy’s net income and EPS attributable to Alliant Energy common shareowners were as follows (dollars in millions, except per share amounts):
| | | | | | | | | | | | | | | | | | | | | | | |
| 2021 | | 2020 |
| Income (Loss) | | EPS | | Income (Loss) | | EPS |
| | | | | | | |
| Utilities and Corporate Services | $632 | | $2.52 | | | $586 | | $2.36 | |
| ATC Holdings | 31 | | 0.12 | | | 34 | | 0.14 | |
| Non-utility and Parent | (4) | | (0.01) | | | (6) | | (0.03) | |
| | | | | | | |
| | | | | | | |
| Alliant Energy Consolidated | $659 | | $2.63 | | | $614 | | $2.47 | |
Alliant Energy’s Utilities and Corporate Services income increased $46 million in 2021 compared to 2020. The increase was primarily due to higher earnings resulting from IPL’s and WPL’s increasing rate base, as well as higher sales due in part to the derecho windstorm in Iowa and COVID-19 sales impacts in 2020. These items were partially offset by higher depreciation expense and lower AFUDC.
Operating income and a reconciliation of utility electric and gas margins to the most directly comparable GAAP measure, operating income, was as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | | | 2021 | | 2020 | | | | 2021 | | 2020 | | |
| Operating income | $795 | | | $740 | | | | | $460 | | | $410 | | | | | $308 | | | $306 | | | |
| Electric utility revenues | $3,081 | | | $2,920 | | | | | $1,752 | | | $1,695 | | | | | $1,329 | | | $1,225 | | | |
| Electric production fuel and purchased power expenses | (642) | | | (652) | | | | | (295) | | | (352) | | | | | (347) | | | (300) | | | |
| Electric transmission service expense | (537) | | | (449) | | | | | (367) | | | (298) | | | | | (170) | | | (151) | | | |
| Utility Electric Margin (non-GAAP) | 1,902 | | | 1,819 | | | | | 1,090 | | | 1,045 | | | | | 812 | | | 774 | | | |
| Gas utility revenues | 456 | | | 373 | | | | | 265 | | | 208 | | | | | 191 | | | 165 | | | |
| Cost of gas sold | (258) | | | (182) | | | | | (149) | | | (99) | | | | | (109) | | | (83) | | | |
| Utility Gas Margin (non-GAAP) | 198 | | | 191 | | | | | 116 | | | 109 | | | | | 82 | | | 82 | | | |
| Other utility revenues | 49 | | | 49 | | | | | 46 | | | 44 | | | | | 3 | | | 5 | | | |
| Non-utility revenues | 83 | | | 74 | | | | | — | | | — | | | | | — | | | — | | | |
| Other operation and maintenance expenses | (676) | | | (670) | | | | | (362) | | | (375) | | | | | (268) | | | (254) | | | |
| Depreciation and amortization expenses | (657) | | | (615) | | | | | (375) | | | (356) | | | | | (276) | | | (254) | | | |
| Taxes other than income tax expense | (104) | | | (108) | | | | | (55) | | | (57) | | | | | (45) | | | (47) | | | |
| Operating income | $795 | | | $740 | | | | | $460 | | | $410 | | | | | $308 | | | $306 | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Operating income |
| $653.4 |
| |
| $537.0 |
| |
| $577.0 |
| |
| $296.9 |
| |
| $270.8 |
| |
| $241.9 |
| |
| $323.2 |
| |
| $327.0 |
| |
| $308.7 |
|
| | | | | | | | | | | | | | | | | | |
| Electric utility operating revenues |
| $2,894.7 |
| |
| $2,875.5 |
| |
| $2,770.5 |
| |
| $1,598.9 |
| |
| $1,569.7 |
| |
| $1,503.8 |
| |
| $1,295.8 |
| |
| $1,305.8 |
| |
| $1,266.7 |
|
| Electric production fuel and purchased power expenses | (818.1 | ) | | (854.0 | ) | | (837.7 | ) | | (443.6 | ) | | (430.5 | ) | | (428.4 | ) | | (374.5 | ) | | (423.5 | ) | | (409.3 | ) |
| Electric transmission service expense | (480.9 | ) | | (527.9 | ) | | (485.3 | ) | | (310.4 | ) | | (359.7 | ) | | (328.2 | ) | | (170.5 | ) | | (168.2 | ) | | (157.1 | ) |
| Utility Electric Margin (non-GAAP) | 1,595.7 |
| | 1,493.6 |
| | 1,447.5 |
| | 844.9 |
| | 779.5 |
| | 747.2 |
| | 750.8 |
| | 714.1 |
| | 700.3 |
|
| | | | | | | | | | | | | | | | | | |
| Gas utility operating revenues | 400.9 |
| | 355.4 |
| | 381.2 |
| | 226.0 |
| | 204.0 |
| | 217.3 |
| | 174.9 |
| | 151.4 |
| | 163.9 |
|
| Cost of gas sold | (211.4 | ) | | (194.3 | ) | | (219.1 | ) | | (115.6 | ) | | (111.0 | ) | | (123.3 | ) | | (95.8 | ) | — |
| (83.3 | ) | — |
| (95.8 | ) |
| Utility Gas Margin (non-GAAP) | 189.5 |
| | 161.1 |
| | 162.1 |
| | 110.4 |
| | 93.0 |
| | 94.0 |
| | 79.1 |
| | 68.1 |
| | 68.1 |
|
| | | | | | | | | | | | | | | | | | |
| Other utility operating revenues | 47.5 |
| | 48.6 |
| | 57.9 |
| | 45.4 |
| | 46.7 |
| | 53.4 |
| | 2.1 |
| | 1.9 |
| | 4.5 |
|
| Non-utility operating revenues | 39.1 |
| | 40.5 |
| | 44.0 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Asset valuation charges for Franklin County wind farm | — |
| | (86.4 | ) | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Other operation and maintenance expenses | (651.0 | ) | | (606.5 | ) | | (629.5 | ) | | (403.8 | ) | | (383.7 | ) | | (389.9 | ) | | (249.0 | ) | | (219.8 | ) | | (235.4 | ) |
| Depreciation and amortization expenses | (461.8 | ) | | (411.6 | ) | | (401.3 | ) | | (245.0 | ) | | (210.8 | ) | | (207.2 | ) | | (212.9 | ) | | (192.5 | ) | | (184.3 | ) |
| Taxes other than income tax expense | (105.6 | ) | | (102.3 | ) | | (103.7 | ) | | (55.0 | ) | | (53.9 | ) | | (55.6 | ) | | (46.9 | ) | | (44.8 | ) | | (44.5 | ) |
| Operating income |
| $653.4 |
| |
| $537.0 |
| |
| $577.0 |
| |
| $296.9 |
| |
| $270.8 |
| |
| $241.9 |
| |
| $323.2 |
| |
| $327.0 |
| |
| $308.7 |
|
Operating Income Variances - Variances between periods in operating income for 2021 compared to 2020 were as follows (in millions):
| | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| Total higher utility electric margin variance (Refer to details below) | $83 | | $45 | | $38 |
| Total higher utility gas margin variance (Refer to details below) | 7 | | 7 | | — |
| Total (higher) lower other operation and maintenance expenses variance (Refer to details below) | (6) | | 13 | | (14) |
| Higher depreciation and amortization expense primarily due to additional plant in service in 2020 and 2021, including IPL’s new wind generation, and WPL’s West Riverside Energy Center and Kossuth wind farm | (42) | | (19) | | (22) |
| Other | 13 | | 4 | | — |
| $55 | | $50 | | $2 |
|
| | | | | | | | | | | |
| 2017 vs. 2016: | Alliant Energy | | IPL | | WPL |
Asset valuation charges for Franklin County wind farm in 2016 (Refer to Note 3 for details) |
| $86 |
| |
| $— |
| |
| $— |
|
| Total higher utility electric margin variance (Refer to details below) | 102 |
| | 65 |
| | 37 |
|
| Total higher utility gas margin variance (Refer to details below) | 28 |
| | 17 |
| | 11 |
|
| Higher other operation and maintenance expenses variance (Refer to details below) | (45 | ) | | (20 | ) | | (29 | ) |
| Higher depreciation and amortization expense primarily due to additional plant in service in 2017, including impacts from Marshalltown | (33 | ) | | (29 | ) | | (8 | ) |
Higher depreciation expense at WPL due to updated depreciation rates effective January 2017 approved by the PSCW and FERC (Refer to Note 1(e) for details) | (12 | ) | | — |
| | (12 | ) |
Higher depreciation expense at IPL due to write-down of regulatory assets resulting from the IPL electric rate review settlement in 2017 (Refer to Note 2 for details) | (5 | ) | | (5 | ) | | — |
|
| Other | (5 | ) | | (2 | ) | | (3 | ) |
| |
| $116 |
| |
| $26 |
| |
| ($4 | ) |
|
| | | | | | | | | | | |
| 2016 vs. 2015: | Alliant Energy | | IPL | | WPL |
Asset valuation charges for Franklin County wind farm in 2016 (Refer to Note 3 for details) |
| ($86 | ) | |
| $— |
| |
| $— |
|
| Total higher utility electric margin variance (Refer to details below) | 46 |
| | 32 |
| | 14 |
|
| Total lower utility gas margin variance (Refer to details below) | (1 | ) | | (1 | ) | | — |
|
| Total lower other operation and maintenance expenses variance (Refer to details below) | 23 |
| | 6 |
| | 16 |
|
| Higher amortization expense from the new customer billing and information system placed in service in 2015 | (8 | ) | | (4 | ) | | (4 | ) |
| Higher depreciation and amortization expense primarily due to additional plant in service in 2016 | (2 | ) | | — |
| | (4 | ) |
| Other | (12 | ) | | (4 | ) | | (4 | ) |
| |
| ($40 | ) | |
| $29 |
| |
| $18 |
|
Electric and Gas Revenues and Sales Summary - Electric and gas revenues (in millions), and MWh sales (in thousands), were as follows:
|
| | | | | | | | | | | | | | | | | | | | |
| | Revenues | | MWhs Sold |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Alliant Energy | | | | | | | | | | | |
| Retail |
| $2,569.6 |
| |
| $2,564.8 |
| |
| $2,474.1 |
| | 25,095 |
| | 25,339 |
| | 25,380 |
|
| Sales for resale | 268.8 |
| | 266.7 |
| | 249.5 |
| | 5,003 |
| | 4,399 |
| | 4,842 |
|
| Other | 56.3 |
| | 44.0 |
| | 46.9 |
| | 94 |
| | 100 |
| | 129 |
|
| |
| $2,894.7 |
| |
| $2,875.5 |
| |
| $2,770.5 |
| | 30,192 |
| | 29,838 |
| | 30,351 |
|
| IPL | | | | | | | | | | | |
| Retail |
| $1,448.0 |
| |
| $1,442.5 |
| |
| $1,410.2 |
| | 14,356 |
| | 14,523 |
| | 14,824 |
|
| Sales for resale | 114.6 |
| | 97.8 |
| | 61.5 |
| | 2,169 |
| | 1,406 |
| | 1,023 |
|
| Other | 36.3 |
| | 29.4 |
| | 32.1 |
| | 38 |
| | 41 |
| | 67 |
|
| |
| $1,598.9 |
| |
| $1,569.7 |
| |
| $1,503.8 |
| | 16,563 |
| | 15,970 |
| | 15,914 |
|
| WPL | | | | | | | | | | | |
| Retail |
| $1,121.6 |
| |
| $1,122.3 |
| |
| $1,063.9 |
| | 10,739 |
| | 10,816 |
| | 10,556 |
|
| Sales for resale | 154.2 |
| | 168.9 |
| | 188.0 |
| | 2,834 |
| | 2,993 |
| | 3,819 |
|
| Other | 20.0 |
| | 14.6 |
| | 14.8 |
| | 56 |
| | 59 |
| | 62 |
|
| |
| $1,295.8 |
| |
| $1,305.8 |
| |
| $1,266.7 |
| | 13,629 |
| | 13,868 |
| | 14,437 |
|
Gas Revenues and Sales Summary - Gas revenues (in millions), and Dth sales (in thousands), were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Electric | | | | Gas |
| Revenues | | MWhs Sold | | | | Revenues | | Dths Sold |
| 2021 | | 2020 | | | | 2021 | | 2020 | | | | 2021 | | 2020 | | 2021 | | 2020 |
| Alliant Energy | | | | | | | | | | | | | | | | | | | |
| Retail | $2,771 | | | $2,652 | | | | | 25,432 | | | 24,535 | | | | | $413 | | | $333 | | | 48,179 | | | 48,808 | |
| Sales for resale | 243 | | | 204 | | | | | 5,805 | | | 6,046 | | | | | N/A | | N/A | | N/A | | N/A |
| Transportation/Other | 67 | | | 64 | | | | | 71 | | | 71 | | | | | 43 | | | 40 | | | 99,179 | | | 102,790 | |
| $3,081 | | | $2,920 | | | | | 31,308 | | | 30,652 | | | | | $456 | | | $373 | | | 147,358 | | | 151,598 | |
| IPL | | | | | | | | | | | | | | | | | | | |
| Retail | $1,633 | | | $1,564 | | | | | 14,283 | | | 13,830 | | | | | $237 | | | $183 | | | 24,881 | | | 25,508 | |
| Sales for resale | 74 | | | 88 | | | | | 1,807 | | | 3,485 | | | | | N/A | | N/A | | N/A | | N/A |
| Transportation/Other | 45 | | | 43 | | | | | 35 | | | 34 | | | | | 28 | | | 25 | | | 40,738 | | | 39,543 | |
| $1,752 | | | $1,695 | | | | | 16,125 | | | 17,349 | | | | | $265 | | | $208 | | | 65,619 | | | 65,051 | |
| WPL | | | | | | | | | | | | | | | | | | | |
| Retail | $1,138 | | | $1,088 | | | | | 11,149 | | | 10,705 | | | | | $176 | | | $150 | | | 23,298 | | | 23,300 | |
| Sales for resale | 169 | | | 116 | | | | | 3,998 | | | 2,561 | | | | | N/A | | N/A | | N/A | | N/A |
| Transportation/Other | 22 | | | 21 | | | | | 36 | | | 37 | | | | | 15 | | | 15 | | | 58,441 | | | 63,247 | |
| $1,329 | | | $1,225 | | | | | 15,183 | | | 13,303 | | | | | $191 | | | $165 | | | 81,739 | | | 86,547 | |
|
| | | | | | | | | | | | | | | | | | | | |
| | Revenues | | Dths Sold |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Alliant Energy | | | | | | | | | | | |
| Retail |
| $364.6 |
| |
| $322.4 |
| |
| $349.9 |
| | 49,250 |
| | 47,743 |
| | 48,635 |
|
| Transportation/Other | 36.3 |
| | 33.0 |
| | 31.3 |
| | 76,916 |
| | 77,485 |
| | 74,162 |
|
| |
| $400.9 |
| |
| $355.4 |
| |
| $381.2 |
| | 126,166 |
| | 125,228 |
| | 122,797 |
|
| IPL | | | | | | | | | | | |
| Retail |
| $202.2 |
| |
| $183.1 |
| |
| $198.4 |
| | 26,580 |
| | 26,230 |
| | 26,877 |
|
| Transportation/Other | 23.8 |
| | 20.9 |
| | 18.9 |
| | 39,365 |
| | 37,158 |
| | 34,129 |
|
| |
| $226.0 |
| |
| $204.0 |
| |
| $217.3 |
| | 65,945 |
| | 63,388 |
| | 61,006 |
|
| WPL | | | | | | | | | | | |
| Retail |
| $162.4 |
| |
| $139.3 |
| |
| $151.5 |
| | 22,670 |
| | 21,513 |
| | 21,758 |
|
| Transportation/Other | 12.5 |
| | 12.1 |
| | 12.4 |
| | 37,551 |
| | 40,327 |
| | 40,033 |
|
| |
| $174.9 |
| |
| $151.4 |
| |
| $163.9 |
| | 60,221 |
| | 61,840 |
| | 61,791 |
|
Sales Trends and Temperatures -Alliant Energy’s retail electric sales volumes increased 4% in 2021 compared to 2020, primarily due to changes in temperatures, COVID-19 impacts in Alliant Energy’s service territories and impacts from the derecho windstorm in IPL’s service territory in August 2020, partially offset by the impact on sales of the additional day due to leap year in 2020. Alliant Energy’s retail gas sales volumes decreased 1% in 2021 compared to 2020, primarily due to changes in temperatures and the impact on sales of the additional day due to leap year in 2020, partially offset by COVID-19 impacts in Alliant Energy’s service territories. In 2021, changes in COVID-19 impacts resulted in decreases for retail electric residential sales volumes and increases for retail electric commercial and industrial sales.
Estimated increases (decreases) to electric and gas margins from the impacts of temperatures were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Electric Margins | | | Gas Margins | |
| 2021 | | 2020 | | | | | | 2021 | | 2020 | | | | |
| IPL | $12 | | $1 | | | | | | ($1) | | $— | | | | |
| WPL | 7 | | 3 | | | | | | (2) | | (1) | | | | |
| Total Alliant Energy | $19 | | $4 | | | | | | ($3) | | ($1) | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Electric Margins | | Gas Margins |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| IPL |
| ($8 | ) | |
| $3 |
| |
| ($7 | ) | |
| ($4 | ) | |
| ($4 | ) | |
| ($2 | ) |
| WPL | (8 | ) | | 1 |
| | (4 | ) | | (2 | ) | | (3 | ) | | (2 | ) |
| Total Alliant Energy |
| ($16 | ) | |
| $4 |
| |
| ($11 | ) | |
| ($6 | ) | |
| ($7 | ) | |
| ($4 | ) |
Electric Sales for Resale - Electric sales for resale volume changes were largely due to changes in sales in the wholesale energy markets operated by MISO. These changes are impacted by several factors, including the availability and dispatch of Alliant Energy’s EGUs and electricity demand within these wholesale energy markets. Changes in sales for resale revenues were largely offset by changes in fuel-related costs, and therefore, did not have a significant impact on electric margins.
Gas Transportation/Other - Gas transportation/other sales volume changes were largely due to changes in the gas volumes supplied to Alliant Energy’s natural gas-fired EGUs caused by the availability and dispatch of such EGUs. Changes in these transportation/other revenues did not have a significant impact on gas margins.
Utility Electric Margin Variances - The following items contributed to increased (decreased) utility electric margins as followsfor 2021 compared to 2020 (in millions):
| | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| Higher revenue requirements due to increasing rate base (a) (b) | $43 | | $29 | | $14 |
| Estimated changes in sales volumes caused by temperatures | 15 | | 11 | | 4 |
| Higher wholesale margins at WPL partially due to a new wholesale customer in 2021 | 8 | | — | | 8 |
| Lower revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (mostly offset by changes in energy efficiency expense) | (14) | | (14) | | — |
| | | | | |
| | | | | |
| Other (includes higher temperature-normalized sales primarily due to the derecho windstorm in 2020 and COVID-19 impacts) | 31 | | 19 | | 12 |
| $83 | | $45 | | $38 |
|
| | | | | | | | | | | |
| 2017 vs. 2016: | Alliant Energy | | IPL | | WPL |
Higher margins at IPL from the impact of its 2016 Test Year interim retail electric base rate increase (Refer to Note 2 for details) |
| $77 |
| |
| $77 |
| |
| $— |
|
Higher margins at WPL from the impact of its 2017/2018 Test Period retail electric base rate increase (Refer to Note 2 for details) | 63 |
| | — |
| | 63 |
|
Higher revenues at IPL due to 2016 retail electric customer billing credits related to the approved retail electric base rate freeze through 2016 (Refer to Note 2 for details) | 9 |
| | 9 |
| | — |
|
| Higher electric revenues from reimbursements for hurricane assistance relief in 2017 (hurricane assistance electric revenues are offset in other operation and maintenance expenses) | 6 |
| | 3 |
| | 3 |
|
| Estimated changes in sales volumes caused by temperatures (Refer to “Temperatures” above for details) | (20 | ) | | (11 | ) | | (9 | ) |
Revenue requirement adjustment in 2016 related to certain tax benefits (Refer to Note 2 for details) | (14 | ) | | (14 | ) | | — |
|
| Changes in electric fuel-related costs, net of recoveries at WPL (a) | (12 | ) | | — |
| | (12 | ) |
| Lower wholesale margins at WPL primarily due to the expiration of a wholesale power supply agreement on May 31, 2017 | (8 | ) | | — |
| | (8 | ) |
| Other | 1 |
| | 1 |
| | — |
|
| |
| $102 |
| |
| $65 |
| |
| $37 |
|
|
| | | | | | | | | | | |
| 2016 vs. 2015: | Alliant Energy | | IPL | | WPL |
Higher revenues at IPL due to lower retail electric customer billing credits related to the approved retail electric base rate freeze through 2016 (Refer to Note 2 for details) |
| $15 |
| |
| $15 |
| |
| $— |
|
| Estimated changes in sales volumes caused by temperatures (Refer to “Temperatures” above for details) | 15 |
| | 10 |
| | 5 |
|
Higher revenues at IPL due to fewer electric tax benefit rider credits on customers’ bills (Refer to Note 2 for details) | 8 |
| | 8 |
| | — |
|
| Higher electric transmission service expense at WPL | (11 | ) | | — |
| | (11 | ) |
| Other (b) | 19 |
| | (1 | ) | | 20 |
|
| |
| $46 |
| |
| $32 |
| |
| $14 |
|
| |
(a) | WPL estimates the increase (decrease) to electric margins from amounts within the approved bandwidth of plus or minus 2% of forecasted fuel-related expenses determined by the PSCW each year was approximately ($6) million, $6 million and $6 million in 2017, 2016 and 2015, respectively. |
| |
(b) | Includes increases in temperature-normalized retail sales volumes at WPL in 2016. Refer to “Electric Sales Trends” below for more information. |
Electric Sales Trends - Alliant Energy’s(a)IPL’s final retail electric sales volumes decreased 1%base rate increase was effective February 26, 2020. Effective with final rates, the recovery of, and return on, IPL’s new wind generation placed in 2017service in 2019 and remained unchanged in 2016. During 2017,2020 is provided through the decrease was primarily duerenewable energy rider. The final rate increase includes a reduction for anticipated production tax credits for IPL’s new wind generation. This reduction is expected to the impact of lower residential and commercial sales due to cooler summer temperatures during 2017 compared to the same period in 2016 and an extra day of retail sales during 2016 due to the leap year, partiallybe offset by increasesa reduction in WPL’s industrial salesincome tax expense resulting from production tax credits recognized from this new wind generation. In September 2020, IPL made a buyout payment of $110 million in exchange for shortening the terms of its DAEC PPA by 5 years. The higher customer production and customer expansions.revenue requirements from the buyout payment, including a return on such costs, is being recovered from IPL’s retail customers from 2021 through the end of 2025. Refer to Note 2 for further discussion.
During 2016,(b)In December 2020, the PSCW issued an order authorizing WPL to maintain its current retail electric sales remained unchanged. Increases frombase rates through the impactend of temperatures on residential2021. WPL utilized anticipated fuel-related cost savings and commercial sales resultingexcess deferred income tax benefits in higher cooling demand, an extra day2021 to offset the revenue requirement impacts of retail sales duringincreasing electric rate base, including the first quarterKossuth wind farm, which was placed in service in October 2020. The lower fuel expense benefits are recognized in electric margin and the additional amount of 2016 due to the leap year, and higher commercial and industrial sales driven by customer expansions were offset by decreases from IPL’s sale of its Minnesota electric distribution assetsexcess deferred income tax benefits is recognized as a reduction in 2015.income tax expense.
Utility Gas Margin Variances - The following items contributed to increased (decreased) utility gas margins as followsfor 2021 compared to 2020 (in millions):
| | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| Higher revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (mostly offset by changes in energy efficiency expense) | $7 | | $7 | | $— |
| Estimated changes in sales volumes caused by temperatures | (2) | | (1) | | (1) |
| Other | 2 | | 1 | | 1 |
| $7 | | $7 | | $— |
|
| | | | | | | | | | | |
| 2017 vs. 2016: | Alliant Energy | | IPL | | WPL |
Higher margins at WPL from the impact of its 2017/2018 Test Period retail gas base rate increase (Refer to Note 2 for details) |
| $9 |
| |
| $— |
| |
| $9 |
|
| Higher revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (a) | 8 |
| | 8 |
| | — |
|
Higher revenues at IPL due to lower gas tax benefit rider credits on customer’s bills (Refer to Note 2 for details) | 6 |
| | 6 |
| | — |
|
| Estimated changes in sales volumes caused by temperatures (Refer to “Temperatures” above for details) | 1 |
| | — |
| | 1 |
|
| Other | 4 |
| | 3 |
| | 1 |
|
| |
| $28 |
| |
| $17 |
| |
| $11 |
|
|
| | | | | | | | | | | |
| 2016 vs. 2015: | Alliant Energy | | IPL | | WPL |
| Estimated changes in sales volumes caused by temperatures (Refer to “Temperatures” above for details) |
| ($3 | ) | |
| ($2 | ) | |
| ($1 | ) |
| Other | 2 |
| | 1 |
| | 1 |
|
| |
| ($1 | ) | |
| ($1 | ) | |
| $— |
|
| | | | | | | | |
(a) | Changes in gas energy efficiency revenues were mostly offset by changes in energy efficiency expense included in other operation and maintenance expenses.28 | |
Other Operation and Maintenance Expenses Variances- The following items contributed to (increased) decreased other operation and maintenance expenses as followsfor 2021 compared to 2020 (in millions):
| | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| Higher generation operation and maintenance expenses | ($17) | | ($12) | | ($5) |
Credit loss adjustments in 2020 related to guarantees for an affiliate of Whiting Petroleum (Refer to Note 17(d)) | (7) | | — | | — |
| Lower bad debt expense at IPL | 13 | | 13 | | — |
| Lower energy efficiency expense at IPL (primarily offset by changes in electric and gas revenues) | 7 | | 7 | | — |
| Other | (2) | | 5 | | (9) |
| ($6) | | $13 | | ($14) |
|
| | | | | | | | | | | |
| 2017 vs. 2016: | Alliant Energy | | IPL | | WPL |
| Higher energy efficiency cost recovery amortizations at WPL (a) |
| ($27 | ) | |
| $— |
| |
| ($27 | ) |
| Charges related to cancelled software projects in 2017 | (6 | ) | | (3 | ) | | (3 | ) |
| Higher distribution expense for hurricane assistance relief in 2017 (hurricane assistance relief expenses are offset in electric margins) | (6 | ) | | (3 | ) | | (3 | ) |
Write-down of regulatory assets due to the IPL electric rate review settlement in 2017 (Refer to Note 2 for details) | (4 | ) | | (4 | ) | | — |
|
| Higher energy efficiency expense at IPL (primarily offset by gas revenues) | (3 | ) | | (3 | ) | | — |
|
| Other | 1 |
| | (7 | ) | | 4 |
|
| |
| ($45 | ) | |
| ($20 | ) | |
| ($29 | ) |
|
| | | | | | | | | | | |
| 2016 vs. 2015: | Alliant Energy | | IPL | | WPL |
| Lower energy efficiency cost recovery amortizations at WPL (a) |
| $15 |
| |
| $— |
| |
| $15 |
|
Losses on sales of IPL’s Minnesota distribution assets recorded in 2015 (Refer to Note 3 for details) | 14 |
| | 14 |
| | — |
|
Voluntary employee separation charges in 2015 (Refer to Note 12(a) for details) | 8 |
| | 5 |
| | 3 |
|
| Higher bad debt expense at IPL (b) | (9 | ) | | (9 | ) | | — |
|
Higher stock-based performance compensation expense (Refer to Note 12(b) for details) | (7 | ) | | (4 | ) | | (3 | ) |
| Higher employee benefits-related expense (c) | (7 | ) | | (5 | ) | | (2 | ) |
| Other (includes lower costs due to cost controls and operational efficiencies) | 9 |
| | 5 |
| | 3 |
|
| |
| $23 |
| |
| $6 |
| |
| $16 |
|
| |
(a) | The December 2016 PSCW order for WPL’s 2017/2018 Test Period electric and gas base rate review authorized changes in energy efficiency cost recovery amortizations for 2017 and 2018. The July 2014 PSCW order for WPL’s 2015/2016 Test Period electric and gas base rate review authorized changes in energy efficiency cost recovery amortizations for 2015 and 2016. Regulatory amortizations at WPL related to energy efficiency costs were $16 million, ($11) million and $4 million in 2017, 2016 and 2015, respectively. |
| |
(b) | Primarily due to an increase in IPL’s allowance for doubtful accounts as a result of increases in past due accounts receivable. |
| |
(c) | Primarily due to an increase in retirement plans costs and other employee benefits-related costs. The increased retirement plan costs in 2016 were largely due to lower than expected returns on plan assets in 2015. |
Interest ExpenseOther Income and OtherDeductions Variances- The following items contributed to (increased) decreased interest expenseother income and other as followsdeductions for 2021 compared to 2020 (in millions):
| | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| | | | | |
| Lower AFUDC primarily due to changes in CWIP balances related to IPL’s new wind generation, and WPL’s West Riverside Energy Center and Kossuth wind farm, placed in service in 2020 | ($30) | | ($15) | | ($15) |
| Other | 8 | | 7 | | — |
| ($22) | | ($8) | | ($15) |
|
| | | | | | | | | | | |
| 2017 vs. 2016: | Alliant Energy | | IPL | | WPL |
Higher interest expense primarily due to higher average outstanding long-term debt balances (Refer to Note 9(b) for details) |
| ($19 | ) | |
| ($9 | ) | |
| ($2 | ) |
| Higher (lower) equity income from ATC Investment (a) | 3 |
| | — |
| | (39 | ) |
| Higher (lower) AFUDC primarily due to increased (decreased) CWIP balances (b) | (13 | ) | | (21 | ) | | 8 |
|
| Other | 2 |
| | — |
| | (1 | ) |
| |
| ($27 | ) | |
| ($30 | ) | |
| ($34 | ) |
|
| | | | | | | | | | | |
| 2016 vs. 2015: | Alliant Energy | | IPL | | WPL |
| Higher (lower) interest expense primarily due to higher (lower) average outstanding long-term debt balances |
| ($9 | ) | |
| ($6 | ) | |
| $1 |
|
| Higher AFUDC primarily due to increased CWIP balances (b) | 26 |
| | 24 |
| | 2 |
|
| Other | 5 |
| | — |
| | 4 |
|
| |
| $22 |
| |
| $18 |
| |
| $7 |
|
| |
(a) | Alliant Energy’s increase was primarily due to return on equity complaint reserves recorded in 2016, partially offset by a reserve established in 2017 for an anticipated future refund to be made to ATC’s customers. WPL’s decrease was due to the transfer of its investment in ATC to ATI on December 31, 2016. Refer to Note 6(a) for details. |
| |
(b) | Changes in AFUDC were primarily due to AFUDC recognized for Marshalltown. |
Income Taxes - Refer to Note 1112 for details of effective income tax ratesrates.
Preferred Dividend Requirements of IPL - Refer to Note 8 for continuing operations.details of the redemption of IPL’s 5.1% cumulative preferred stock in December 2021, including a $5 million non-cash charge recorded in 2021 related to this transaction.
STRATEGIC OVERVIEW
Strategic PlanOther Future Considerations - The strategic plan focuses on creating customer value acrossIn addition to items discussed in this report, the following key items could impact Alliant Energy’s, IPL’s and WPL’s service territories. Customersfuture financial condition or results of operations:
•Financing Plans - WPL and AEF currently expect to issue up to $600 million and $800 million of long-term debt, respectively, in 2022. WPL, AEF and Corporate Services have evolving$250 million, $300 million and $75 million of long-term debt maturing in 2022, respectively. Alliant Energy currently expects to issue approximately $25 million of common stock in 2022 through its Shareowner Direct Plan.
•Common Stock Dividends - Alliant Energy announced a 6% increase in its targeted 2022 annual common stock dividend to $1.71 per share, which is equivalent to a quarterly rate of $0.4275 per share, beginning with the February 2022 dividend payment. The timing and amount of future dividends is subject to an approved dividend declaration from Alliant Energy’s Board of Directors, and is dependent upon earnings expectations, capital requirements, and accessgeneral financial business conditions, among other factors.
•Higher Earnings on Increasing Rate Base - Alliant Energy and WPL currently expect an increase in earnings in 2022 compared to increasingly competitive alternatives for energy. As2021 due to impacts from increasing revenue requirements related to investments in the utility business, including WPL’s solar investments. WPL’s increased revenue requirements are expected to be offset by higher income tax expense as a result providing customized energy solutions, while aggressively managing customer prices, remains at the center of the strategic plan. lower tax benefits.
•Depreciation and Amortization Expenses - Alliant Energy, IPL and WPL arecurrently expect an increase in depreciation and amortization expenses in 2022 compared to 2021 due to property additions, including WPL’s expansion of solar generation.
•Interest Expense - Alliant Energy, IPL and WPL currently expect an increase in interest expense in 2022 compared to 2021 due to financings completed in 2021 and planned in 2022 as discussed above.
•Allowance for Funds Used During Construction - Alliant Energy and WPL currently expect AFUDC to increase in 2022 compared to 2021 primarily due to increased CWIP balances related to WPL’s solar generation.
•Preferred Dividend Requirements of IPL - Alliant Energy and IPL currently expect a decrease in preferred dividend requirements in 2022 compared to 2021 due to the redemption of IPL’s 5.1% cumulative preferred stock in December 2021.
CUSTOMER INVESTMENTS
Alliant Energy’s, IPL’s and WPL’s strategic priorities include making significant customer-focused investments toward cleaner energy and sustainable customer solutions. These priorities include:
Environmental Stewardship
Alliant Energy’s environmental stewardship is focused on deliveringmeeting its customers’ energy needs in an economical, efficient, reliable and sustainable manner. Alliant Energy proactively considers future environmental compliance requirements and proposed regulations in its planning, decision-making, construction and ongoing operations activities. Alliant Energy is focused on executing a long-term strategy to deliver reliable and affordable electricityenergy with lower electric generation CO2 emissions. By adopting a long-term strategyemissions independent of changing policies and political landscape,landscape. To achieve these long-term goals, Alliant Energy IPL and WPL remain flexible on environmental compliance plans, while ensuring their electric supply provides economic and sustainable value to their customers and service territories. The strategic plan is evaluated through the integrated resource planning process, subject to review and approvalwill transition away from coal-fired EGUs by regulatory agencies and Alliant Energy’s Board of Directors. Successful implementation of the strategic plan is expected to result in increased earnings for Alliant Energy, IPL and WPL while limiting cost increases for IPL’s and WPL’s customers. The strategic plan is built upon two key elements: Growth and Optimization.
Growth - The growth element of the strategic plan includes accelerating the growth of customers’ electric and gas usage and expanding the portfolio of energy resources by adding cleaner and renewable energy, with a focus on long-term generation solutions. Increasing electric and gas usage in IPL’s and WPL’s service territories is expected to help minimize individual customer prices. Expanding cleaner and renewable energy is part of Alliant Energy’s long-term plan to reduce fossil-fueled EGU CO2 emissions and may also help support customers’ electric usage sustainability efforts.
Accelerate Electric and Gas Usage Growth - Actions to accelerate the growth of customers’ electric and gas usage include: retention and growth of current customers, as well as growth of new customers; economic development opportunities designed to attract new customers (e.g. industrial park expansions); and efforts to promote additional markets for electricity and gas, such as the electrification of the transportation sector (e.g. electric vehicles and charging stations).
To help support retention and growth of current customers, the strategic plan focuses on promoting energy efficiency and using new and existing technologies and customized energy solutions, which are expected to help reduce energy costs, provide flexibility, increase productivity, and focus on responding to customers’ increased interest in energy-related sustainability initiatives.
Economic development across Iowa and Wisconsin is focused on attracting new businesses by providing planning resources and energy solutions that encourage companies to invest in IPL’s and WPL’s service territories. For example, the Big Cedar Industrial Center is a 1,300 acre rail-served manufacturing and industrial site in Cedar Rapids, Iowa. This ready-to-build site is in close proximity to regional airport and interstate freeways and offers access to IPL’s electric services. IPL has also identified various other development-ready sites, including Prairie View Industrial Center, a 730 acre site in Ames, Iowa;
incorporating renewable energy, distributed energy resources, energy efficiency, demand response, highly-efficient natural gas-fired EGUs and other emerging technologies such as energy storage. Alliant Energy’s voluntary environmental-related goals and achievements include the following:
Indianhead South, a 145 acre site in Mason City, Iowa;
•Exceeded its 2020 targets by reducing air emissions for sulfur dioxide by over 90%, nitrogen oxide by over 80% and Helgerson Flats Industrial Center, an 80 acre site in Ottumwa, Iowa. WPL is also exploring development-ready sites in Wisconsin.mercury by over 90% from 2005 levels.
In addition, investments are expected•By 2030, reduce CO2 emissions by 50% from its owned fossil-fueled EGUs and reduce electric utility water supply by 75% from 2005 levels, and transition 100% of its owned light-duty fleet vehicles to be madeelectric, as well as partner to extend various gas distribution systemsplant more than 1 million trees by the end of 2030.
•By 2040, eliminate all coal-fired EGUs from its generating fleet.
•By 2050, achieve an aspirational goal of net-zero CO2 emissions from the electricity it generates.
Future updates to sustainable energy plans and attaining these goals will depend on future economic developments, evolving energy technologies and emerging trends in IPL’s and WPL’sAlliant Energy’s service territoriesterritories.
Renewable Generation
Alliant Energy has developed Clean Energy Blueprints, or its cleaner energy strategy, as a guide to serve newmeet customer demand for natural gas.
Expand Cleaneraffordable, reliable and Renewable Energy - The expansioncleaner energy in Iowa and Wisconsin. This strategy includes the planned development and acquisition of cleaner andadditional renewable energy, contributesincluding approximately 1,100 MW of solar generation at WPL with in-service dates in 2022 and 2023, approximately 400 MW of solar generation at IPL with in-service dates in 2023 and 2024 and approximately 75 MW of battery storage in 2024 at IPL. In addition, WPL’s plans include up to a more diverse energy portfolio and over the long-term, reduces emissions from EGUs.300 MW of additional capacity. Alliant Energy, is expanding itsIPL and WPL continue to evaluate additional opportunities to add more renewable generation, portfolio withrepowering of existing wind farms, and distributed energy resources, including community solar and energy storage systems. Estimated capital expenditures for these planned projects for 2022 through 2025 are included in the planned expansion“Renewable projects” line in the construction and acquisition table in “Liquidity and Capital Resources.” These estimates include current expectations for higher costs for various projects, as supply constraints and commodity inflation continue to be prevalent in the solar market. IPL and WPL currently assume that a portion of up tothe construction costs for the new solar generation will be financed by a tax equity partner, which is discussed in “IPL and WPL Solar Project Tax Equity Financing” in “Liquidity and Capital Resources.” In addition, Alliant Energy completed the construction and acquisition of approximately 1,200 MW of wind generation in aggregate (approximately 1,000 MW at IPL and WPL in aggregate. approximately 200 MW at WPL) from 2018 through 2020.
WPL’s Solar Generation and Distributed Energy Resources - In addition, Alliant Energy completed construction of Marshalltown in 2017 and is currently constructing West Riverside, which are highly efficient natural gas-fired combined-cycle EGUs. IPL and WPL have also completed various solar projects, and have plans to construct additional solar generation at Marshalltown and West Riverside, respectively. These new generation projects are expected to increase customer access to low-cost energy resources, and also support the retirement of various older, smaller and less efficient coal-fired EGUs, resulting in Alliant Energy reducing its CO2 emissions. These new generation projects and EGU retirements also support a cleaner electricity supply portfolio, which may assist with Alliant Energy’s customers’ increasing sustainability efforts.
Optimization - The second key element of the strategic plan focuses resources on providing reliable electric and natural gas service to customers in IPL’s and WPL’s service territories in a cost effective manner through continued modernization of the power grid and gas distribution system, and optimization of the generation fleet. Modernizing, upgrading and optimizing the distribution and generation assets are expected to maximize the value of Alliant Energy’s existing infrastructure, strengthen and enhance the safety of its systems, expand customer options with smart technology, and be more price-competitive and market-responsive for customers. For example, customer engagement initiatives include new pricing options and enhanced communication through mobile devices for customers. In addition, IPL and WPL are working with their respective regulatory commissions to determine the appropriate treatment for Tax Reform impacts, which are currently expected to be utilized for future customer benefits.
Alliant Energy is modernizing the power grid to accommodate a growing two-way flow of electricity and information. This includes targeted investments to replace and upgrade aging infrastructure in the electric distribution system. This also includes investments in advanced metering infrastructure, which support the integration of new technologies, as well as improve the security, reliability and resiliency of the power grid.
Since 2010, Alliant Energy has retired or fuel-switched approximately 40% of its older, smaller, less efficient and more costly coal-fired EGUs, and has made investments in its newer, more efficient coal-fired EGUs. Additionally, Alliant Energy has retired or fuel-switched approximately 75% of its combustion turbines and oil-fired EGUs. Alliant Energy is also investing in responsive and cost-effective natural gas-fired generation, which complements its growing investments in renewable energy. These investments are expected to help reduce costs and provide competitively-priced electricity for customers.
Generation Plans - A diversified fuel mix for EGUs is important to meeting the energy needs of customers and also recognizes the importance of using resources in efficient and environmentally responsible ways for the benefit of future generations. The current strategic plan includes the following portfolio of energy resources:
Natural gas - operating, constructing, and/or converting to, natural gas-fired EGUs.
Renewables - operating wind farms, solar projects and hydroelectric generators, as well as developing future wind sites and solar projects.
PPAs - purchasing electricity to meet a portion of customers’ demand for electricity, including wind, solar power and nuclear generation PPAs.
Coal - completing the installation of remaining environmental controls at newer, larger and more efficient coal-fired EGUs, and fuel switching at, and retirement of, certain older, smaller and less efficient coal-fired EGUs.
Increasing levels of energy produced by natural gas-fired EGUs, wind farms and other renewable energy resources, and installing environmental controls at the more efficient coal-fired EGUs, result in significant environmental benefits. As a result of these efforts, mercury emissions have been reduced by approximately 95% from 2005 levels. In addition, SO2 and NOx emissions are currently targeted to be reduced by approximately 90% and 80%, respectively, from 2005 levels by 2020. Electric generation CO2 emissions are currently targeted to be reduced by approximately 40% from 2005 levels by 2030. Water withdrawals at fossil-fueled EGUs are currently targeted to be reduced by approximately 75% from 2005 levels by 2030.
Alliant Energy, IPL and WPL are currently evaluating the types of capacity and energy additions they will pursue to meet their customers’ long-term electricity needs, with a focus on clean, reliable and affordable energy, and are monitoring several related external factors that could influence those evaluations. Some of the external factors impacting these plans include regulatory policies and decisions; changes in long-term projections of customer demand; changing customer demand for renewable energy; availability and cost effectiveness of different generation and emission reduction technologies; developments related to environmental regulations; settlements reached with environmental agencies and citizens groups; forward market prices for fossil fuels and electricity; market conditions for obtaining financing; developments related to federal and state renewable portfolio standards; environmental requirements, such as any future requirements relating to GHG emissions or renewable energy sources; and federal and state tax incentives. Environmental compliance plans have also been developed to ensure cost effective compliance with current and proposed environmental laws and regulations impacting existing EGUs. Refer to “Environmental Matters” for details of current and proposed environmental regulations and requirements.
Natural Gas-Fired Generation -
IPL’s Construction of Marshalltown - In 2013, the IUB issued an order approving a siting certificate and establishing rate-making principles for IPL’s construction of the 706 MW natural gas-fired combined-cycle EGU in Marshalltown, Iowa, referred to as Marshalltown. IPL’s construction of Marshalltown began in 2014 and the EGU was placed into service in April 2017. Marshalltown replaces energy and capacity being eliminated with the 2017 and 2018 retirements of Sutherland Units 1 and 3, Fox Lake Units 1 and 3, Burlington Combustion Turbines Units 1-4, Dubuque Units 3 and 4, Centerville Combustion Turbines Units 1 and 2, Grinnell Combustion Turbines Units 1 and 2, and Red Cedar Combustion Turbine Unit 1, which in aggregate had a nameplate capacity of approximately 480 MW.
ITC constructed the majority of the required transmission network upgrades for Marshalltown and elected to pursue an option under the terms of MISO’s Attachment “X” tariff to self-fund these transmission network upgrades. As a result, ITC has incurred the capital expenditures to construct the transmission network upgrades and has started billing IPL a direct charge for such transmission network upgrade costs.
Refer to Note 3 for further discussion of Marshalltown.
WPL’s Construction of West Riverside - In 2016,June 2021, WPL received an order from the PSCW for its first CA authorizing WPL to acquire, own, and operate 675 MW of new solar generation in the following Wisconsin counties: Grant (200 MW), Sheboygan (150 MW), Wood (150 MW), Jefferson (75 MW), Richland (50 MW) and Rock (50 MW). In July 2021, WPL notified the PSCW that it currently expects estimated construction costs and related rate base additions associated with its 675 MW of new solar generation will exceed amounts approved by the PSCW in June 2021 by approximately 7-10%. In September 2021 and January 2022, WPL filed revised estimated construction costs and related rate base additions for its second CA with the PSCW for approval to acquire, construct, an approximate 730own, and operate up to 414 MW natural gas-fired combined-cycle EGUof new solar generation in Beloit,the following Wisconsin referred to as West Riverside. WPL’s construction of West Riverside begancounties: Dodge (150 MW), Waushara (99 MW), Rock (65 MW), Grant (50 MW) and Green (50 MW). These projects in 2016the first and the EGU is currentlysecond CAs are expected to be placed in service by early 2020. WPL’s estimated portionin 2022 and 2023. The 1,089 MW of capital expenditures is currently expected to be approximately $640 million. The capital expenditures include costs to construct the EGU and a pipeline to supply natural gas to the EGU, and exclude transmission network upgrades and AFUDC. West Riverside willnew solar generation would replace energy and capacity being eliminated with the 2015 retirementsplanned retirement of Nelson Dewey Unitsthe coal-fired Edgewater Generating Station (414 MW) by early 2023, and Columbia Unit 1 by the end of 2023 and Columbia Unit 2 by the end of 2024 (595 MW in aggregate), which are the last coal-fired EGUs at WPL. The retirement of these coal-fired EGUs supports Alliant Energy’s strategy, which is focused on meeting its customers’ energy needs in an economical, efficient, reliable and Edgewater Unit 3,sustainable manner. As a result of WPL’s neighboring utilities’ anticipated purchase of a partial ownership interest in West Riverside and any requirements resulting from MISO’s resource adequacy proposal that was issued in 2021, WPL anticipates additional capacity needs by 2024, which is expected to result in additional renewable energy resources and energy storage systems. WPL currently expects to request approval from the PSCW in 2022 for up to 300 MW of additional capacity.
IPL’s Solar Generation and Distributed Energy Resources - In November 2021, IPL filed for advance rate-making principles with the IUB for up to 400 MW of solar generation with in-service dates in 2023 and 2024 and approximately 75 MW of battery storage in 2024. The advance rate-making principles filing included requests for a fixed cost cap of $1,575/kilowatt, including AFUDC and transmission upgrade costs among other costs, and a return on common equity of 11.40%, and proposes that a portion of the construction be financed by tax equity partners. In addition, the filing included a request that any costs incurred in excess of the cost cap be incorporated into rates if determined to be reasonable and prudent. The 400 MW of new solar generation and 75 MW of battery storage would help replace a portion of the energy and capacity expected to be eliminated with the planned retirement of the coal-fired Lansing Generating Station (275 MW) by the end of 2022 and the planned retirementsexpected reduction of Edgewater Unit 4energy and capacity resulting from the Rock RiverDecember 2021 fuel switch of the Burlington Generating Station (212 MW) from coal to natural gas. In addition, IPL’s plans include additional renewables and Sheepskin Combustion Turbine Units, whichdistributed energy resources, including community solar and energy storage systems, to add energy and capacity.
Complementary Generation Investments
WPL’s West Riverside Natural Gas-fired Generating Station - In 2020, WPL completed the construction of West Riverside, a 723 MW natural gas-fired combined-cycle EGU in aggregate have a nameplate capacity of approximately 700 MW.
Beloit, Wisconsin. WPL entered into agreements with neighboring utilities and electric cooperatives that provide each of the neighboring utilities and electric cooperativesthem options to purchase a partial ownership interest in West Riverside. The
purchase price for such options is based on the ownership interest acquired and the net book value of West Riverside on the date of the purchase. The exercise of each optionthe WPSC and MGE options is subject to PSCW approval, which is currently expected by early 2023, and the timing and ownership amounts of the options are as follows:
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| | | | | | | |
| Counterparty | | Option Amount | | Option and Timing |
| Wisconsin Public Service Corporation (WPSC) | | Up to 200 MW (no more than 100 MW were exercised January 2022; additionally, up to 100 MW may be acquired in first two years)exercised between May 15, 2022 and May 15, 2024 (a) | | 2020-2024 (b) |
| Madison Gas and Electric Company (MGE) | | Up to 50 MW (no more than 25 MW were exercised January 2022; additionally, up to 25 MW may be acquired in first two years) | | 2020-2025 (b)exercised between May 15, 2022 and May 15, 2025 |
| Electric cooperatives | | Approximately 6560 MW | | During construction of the EGU were acquired January 2018 |
| |
(a) | If WPSC exercises(a)Upon WPSC’s exercise of its options, WPL may exercise reciprocal options, subject to approval by the PSCW, to purchase up to 200 MW of any natural-gas combined-cycle EGU that either WPSC or its affiliated utility, Wisconsin Electric Power Company (Wisconsin Electric), places in service within 10 years of the date West Riverside is placed in service. |
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(b) | Assumes an in-service date by early 2020. |
WPSC and MGE Options - In conjunction with the agreements WPL entered into with WPSC and MGE associated with West Riverside, WPL also entered into amendments to the Columbia joint operating agreement. In November 2016, WPL received an order from the PSCW approving amendments to the Columbia joint operating agreement, which allow WPSC and MGE to forgo certain capital expenditures at Columbia. Based on the additional capital expenditures WPL currently expects to incur through June 1, 2020, WPL’s ownership interest in Columbia is expected to increase from 46.2% (as of December 31, 2016) to 53.4%. Refer to Note 4 for further discussion of these amendments.
Renewable Generation Joint Development Agreement - In 2016, WPL, Wisconsin Electric and WPSC executed a separate joint development agreement for the purpose of cooperatively developing any renewable resources greater than 50 MW in Wisconsin for the benefit of their respective customers. The agreement has a 10-year term beginning June 1, 2016, and the utility that originates such renewable resource would hold a majority ownership and operational control of the renewable resource. The other two utilities would have the right to acquire a minority interest in the other utility’s renewable resource. Refer to “WPL’s Expansion of Wind Generation” below for discussion of definitive agreements entered into by WPL, WPSC and MGE to acquire the assets of FWEC, which is a 129 MW wind farm located in Wisconsin.
Electric Cooperatives’ Options - In October 2017, WPL received an order from the PSCW authorizing various electric cooperatives, which currently have wholesale power supply agreements with WPL, to acquire approximately 65 MW of West Riverside while the EGU is being constructed. As part of the electric cooperatives’ acquisitions, which were finalized in January 2018, the current wholesale power supply agreements with the various electric cooperatives were extended by at least four years until 2026 with automatic continuation of such agreements unless terminated by either party, with a five-year notice requirement.
Wind Generation - The strategic plan includes the planned expansion of up to 1,200 MW of wind generation in aggregate (up to 1,000 MW at IPL and up to 200 MW at WPL). IPL and WPL believe their respective planned expansion of wind generation will qualify for the full level of production tax credits as a result of progress payments in 2016 for wind turbines, and plan to place these wind projects into service by the end of 2020. The amount and timing of these wind projects will largely depend on regulatory approvals, federal and state tax incentives and the acquisition of wind sites. Estimated capital expenditures for the planned wind generation projects for 2018 through 2020 are included in the “Renewable projects” line in the construction and acquisition expenditures table in “Liquidity and Capital Resources.”
IPL’s Expansion of Wind Generation - In October 2016, IPL received approval from the IUB for up to 500 MW of new wind generation. In August 2017, IPL filed an application with the IUB for advance rate-making principles for up to 500 MW of additional wind generation, and a decision from the IUB is currently expected in the first quarter of 2018. The advance rate-making principles approved by the IUB in October 2016 and requested by IPL in the August 2017 application were as follows:
Additional wind generationany natural-gas combined-cycle EGU that qualifies for the full level of production tax credits, as long as the projects are located in Iowa. The October 2016 IUB approval has a cost cap of $1,830/kilowatt, including AFUDC and transmission costs, and the August 2017 application has a cost cap of $1,780/kilowatt, including AFUDC and transmission costs. Any costs incurred in excess of the respective cost cap are expected to be incorporated into rates if determined to be reasonable and prudent.
A depreciable life of the wind generation facilities of 40 years, unless changed as a result of a contested case before the IUB.
An 11.0% return on common equity, with the exception of certain transmission facilities classified as intangible assets, which would earn the rate of return on common equity the IUB finds reasonable in each future retail electric rate proceeding.
A return on common equity for the calculation of AFUDC during the construction period that is the greater of 10.0%either WPSC or whatever percentage the IUB finds reasonable during IPL’s most recent retail electric rate proceeding.
The application of double leverage is deferred until a future retail electric rate proceeding.
Amortization over a 10-year period of IPL’s prudently incurred and unreimbursed costs, effective with IPL’s next retail electric base rate proceeding, if IPL cancels the construction of the wind generation facilities.
IPL currently has on-going, new wind project development as follows:
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| | | | |
Wind Site | | Nameplate Capacity | | Location |
Upland Prairie | | Up to 300 MW | | Clay and Dickinson Counties, Iowa |
Whispering Willow | | Up to 200 MW | | Franklin County, Iowa |
English Farms | | Up to 170 MW | | Poweshiek County, Iowa |
IPL continues to explore other development opportunities for its planned expansion of wind generation.
WPL’s Expansion of Wind Generation - In October 2017, WPL, along with WPSC and MGE, entered into definitive agreements, subject to regulatory approval, to acquire the assets of FWEC, which is a 129 MW wind farm located in Wisconsin. WPL currently expects to acquire 55 MW of FWEC for approximately $74 million. In November 2017, WPL filed for approval from the PSCW to acquire the assets of FWEC, and a decision from the PSCW is currently expected in the first half of 2018. In January 2018, FERC approved WPL’s request to acquire the assets of FWEC. WPL, WPSC and MGE have been receiving electricity from FWEC under PPAs since FWEC began commercial operations in 2008. Upon completion of the acquisitions, such PPAs will terminate.
WPL currently expects to file for approval from the PSCW for the remaining portion of its wind expansion plan in the first half of 2018.
Franklin County Wind Farm - Refer to Note 3 for discussion of the transfer of the 99 MW Franklin County wind farm assets from AEF to IPL in April 2017.
Solar Generation - In 2016, WPL began providing customers with energy from the 2.3 MW Rock River solar project through a 10-year PPA. The solar field is located at WPL’s Rock River landfill site in Beloit, Wisconsin. In 2017, IPL installed approximately 5 MW of solar arrays in Dubuque, Iowa. In addition, IPL and WPL have plans to construct solar generation at Marshalltown and West Riverside, respectively.
Coal-Fired Generation -
Environmental Controls Projects - The strategic plan includes adding environmental controls at newer, larger and more efficient coal-fired EGUs to continue producing affordable energy for customers and to benefit the environment. Current projects include installing SCRs at IPL’s Ottumwa Unit 1 and WPL’s Columbia Unit 2 to achieve compliance obligations under CSAPR and the Consent Decrees. SCR is a post-combustion process that injects ammonia or urea into the stream of gases leaving the EGU boiler to convert NOx emissions into nitrogen and water. The use of a catalyst enhances the effectiveness of the conversion, enabling NOx emissions reductions of up to 90%. Refer to Note 16(e) for discussion of the Consent Decrees.
IPL - Under Iowa law, IPL is required to file an EPB biennially. Filing of periodic reports regarding the implementation of IPL’s compliance plan and related budget identified in an EPB is also currently required under a settlement agreement between IPL and the Iowa Office of Consumer Advocate, among others. An EPB provides a utility’s compliance plan and related budget for managing regulated emissions from its coal-fired EGUs in a cost-effective manner. IUB approval of an EPB demonstrates that the EPB is reasonably expected to achieve cost-effective compliance with applicable state environmental requirements. In May 2017, the IUB approved IPL’s most recent emissions plan and budget, which includes the SCR for Ottumwa Unit 1. The SCR at Ottumwa Unit 1 is currently expected to be placedaffiliated utility, Wisconsin Electric Power Company, places in service in 2018. IPL’s portion of capital expenditures (past and future) for the SCR is expectedprior to be $60 million to $70 million.May 2030.
WPL - WPL must file a CA application and receive authorization from the PSCW to proceed with any individual environmental controls project with an estimated project cost of $10.7 million or more. WPL is currently constructing the SCR at Columbia Unit 2 pursuant to a 2015 PSCW order and expects to place it in service in 2018. WPL’s portion of capital expenditures (past and future) for the SCR is expected to be $40 million to $50 million.
Plant Retirements and Fuel Switching - In 2017, IPL retired Sutherland Units 1 and 3, Dubuque Units 3 and 4, Fox Lake Units 1 and 3, and various other units, as well as fuel switched Prairie Creek Unit 4 from coal to natural gas and Marshalltown Combustion Turbine Units 1-3 from oil to natural gas. The current strategic planstrategy includes the retirement, or fuel switch from coal to natural gas, of several older, smaller and less efficientvarious EGUs in the next several years. The plan includesIn December 2021, completed the following EGUs, with net book values asfuel switch of December 31, 2017 (dollars in millions; Combustion Turbine (CT)). Referthe Burlington Generating Station (212 MW) from coal to “Properties” in Itemnatural gas. IPL currently expects to retire the coal-fired Lansing Generating Station (275 MW) by the end of 2022. WPL currently expects to retire the coal-fired Edgewater Generating Station (414 MW) by early 2023, Columbia Unit 1 by the end of 2023 and Columbia Unit 2 for additional details, including nameplate capacity. |
| | | | | | | | | | | | | | |
| IPL | | WPL |
| | | Expected | | Net Book | | | | Expected | | Net Book |
| EGU | | Action | | Value | | EGU | | Action | | Value |
| Red Cedar CT Unit 1 | | Retire by 6/1/18 | |
| $3 |
| | Edgewater Unit 4 | | Retire by 9/30/18 | |
| $33 |
|
| Burlington CT Units 1-4 | | Retire by 6/1/18 | | — |
| | Rock River CT Units 3-6 | | Retire by 12/31/20 | | 1 |
|
| Burlington Unit 1 | | Fuel switch by 12/31/21 | | 60 |
| | Sheepskin CT Unit 1 | | Retire by 12/31/20 | | — |
|
| Prairie Creek Units 1 and 3 | | Fuel switch or retire by 12/31/25 | | 89 |
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2024. Alliant Energy, IPL and WPL are working with MISO, state regulatory commissions and other regulatory agencies, as required, to determine the
final timing of these
actions. The expected dates for the retirement and fuel switching of these EGUsactions, which are subject to change depending on operational, regulatory, market and other factors.
The potential retirement of other EGUs within the generation fleet continuesRefer to
be evaluated.Note 3 for additional details on these EGUs.
Other Customer-focused Investments
Electric and Gas Distribution Systems - The strategic plan includesCustomer-focused investments targeted atinclude replacing, modernizing and upgrading infrastructure in the electric and gas distribution systems. Electric system investments will focus on areas such as improving reliability and resiliency with more underground electric distribution and enabling distributed energy solutions with higher capacity lines. Gas system investments will focus on pipeline replacement to ensure safety and pipeline expansion to support reliability and economic development. Estimated capital expenditures for expected and current electric and gas distribution infrastructure projects for 20182022 through 20212025 are included in the “Electric and gas distributionsdistribution systems” lines in the construction and acquisition expenditures table in “Liquidity and Capital Resources.”
Fiber Optic Telecommunication Network - Alliant Energy is currently installing fiber optic routes between its facilities to enhance its communications network to improve resiliency and reliability of, and enable and strengthen, the integrated grid network to help serve its customers.
Gas Pipeline Expansion - IPL and WPL currently expect to make investments to extend various gas distribution systems to provide natural gas to unserved or underserved areas in their service territories. For example, in March 2017, IPL placed into service the Clinton natural gas pipeline, located in Scott and Clinton Counties in Iowa, which provides capacity for anticipated customer growth in Clinton County.
Gas Pipeline and Hazardous Materials Safety Administration - In April 2016,2019, the Pipeline and Hazardous Materials Safety Administration published proposed regulations to updatea final rule that updates safety requirements for gas transmission pipelines, which would add new assessment and repair criteriavarious updated procedures were implemented in 2020. Plans to address certain requirements for gasspecific pipelines were developed and require a systematic approach to verify a pipeline’s maximum allowable operating pressure. Given that the Pipelineimplemented, and Hazardous Materials Safety Administration has not finalized these gas transmission regulations, Alliant Energy, IPL and WPL are currently unable to predict with certainty the impact of these regulations on their financial condition and results of operations.remediation efforts must be completed by July 2035. In anticipation of these pending rule changes, Alliant Energy, IPL and WPL have startedbeen proactively replacing certain of IPL’s transmission pipelines and making modifications to certain of WPL’s transmission pipelines. Alliant Energy, IPL, and WPL also continue to evaluate the impact of this final rule and resulting remediation plans on their financial condition and results of operations.
Advanced Metering Infrastructure (AMI)Technology - Alliant Energy, IPL and WPL currently plansplan to install AMImake investments in its electric and gas service territories in Iowa through a phased approach from 2017 through 2019. AMI is a system of meters, communications networks and data management systems that enables two-way communication between utilities and its customers. AMI allows for remote meter reading, automatic outage notification, and remote disconnects and reconnects. AMI technology is expected to enhance productivity and efficiency through automation, customer self-service and telework. Estimated capital expenditures for expected and current technology projects for 2022 through 2025 are included in the communication infrastructure“Other” line in the construction and acquisition expenditures table in “Liquidity and Capital Resources.”
Non-utility business - Alliant Energy continues to explore growth of its Travero businesses and other limited scope opportunities outside of, but complimentary to, Alliant Energy’s service territories, improve customer service, enhance energy management initiatives and provide operational savingscore utility business. This non-utility strategy continues to evolve through increased efficiencies.
Non-utility Operations - Theexploration of modest strategic plan for Alliant Energy’s non-utility operations involves maintaining a modest portfolio of businessesopportunities that are accretive to earnings and cash flows. The non-utility strategic plan continues to evolve through exploration of modest investment opportunities within and outside of Alliant Energy’s service territories.
RATE MATTERS
Overview - IPL and WPL are subject to federal regulation by FERC, which has jurisdiction over wholesale electric rates and certain natural gas facilities, and state regulation in Iowa and Wisconsin for retail utility rates and standards of service. Such regulatory oversight also covers IPL’s and WPL’s plans for construction and financing of new EGUs and related activities.Rate Reviews
Retail Base Rate Filings - Base rate changes reflect both returns on additions to infrastructure and recovery of changes in costs incurred or expected to be incurred. Given that a portion of the rate changes will offset changes in costs, revenues from rate changes should not be expected to result in an equal change in net income for either IPL or WPL.
IPL’s Retail Electric Rate Review (2016 Test Year) - In April 2017, IPL filed a request with the IUB to increase annual electric base rates for its Iowa retail electric customers and interim rates were implemented effective April 13, 2017. In September 2017, IPL reached a partial, non-unanimous settlement agreement with the Iowa Office of Consumer Advocate, the Iowa Business Energy Coalition and the Large Energy Group. In February 2018, the IUB issued an order approving the settlement. Final rates are currently expected to be effective in the first half of 2018 once all motions for reconsideration have been addressed and final tariffs have been approved by the IUB. The requested interim and final rate increases were calculated based on the following (Return on Common Equity (ROE)):
|
| | | |
| | Interim Rates | | Final Rates |
| Annual retail electric base rate increase | $102 million | | $130 million |
| Regulatory capital structure: | | | |
| Common equity | 49.1% | | 49.0% |
| Long-term debt | 46.3% | | 46.8% |
| Preferred equity | 4.6% | | 4.2% |
| After-tax weighted-average cost of capital: | | | |
| Marshalltown (ROE - 11.0%) | 8.1% | | 8.0% |
| Emery (ROE - 12.23%) | 8.7% | | 8.6% |
| Whispering Willow - East (ROE - 11.7%) | 8.4% | | 8.3% |
| Other (ROE - 9.6%) (a) | 7.4% | | 7.3% |
| Retail electric rate base (b) | $3.8 billion | | $4.0 billion |
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(a) | Other ROE of 9.6% for interim rates reflects the application of double leverage. Prior to application of double leverage, Other ROE for interim rates was 10.0%. Other ROE of 9.6% for final rates does not reflect the application of double leverage. |
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(b) | The retail electric rate base for interim rates includes post-test year capital additions placed in service prior to the rate filing in April 2017, including Marshalltown and the Franklin County wind farm. The retail electric rate base for final rates also includes deferred tax assets for production tax credits generated by Whispering Willow - East and post-test year capital additions placed in service by September 30, 2017. |
Refer to Note 2 for discussion of IPL’s initial request, interim rates, settlement and final rates, as well as details for a write-down of regulatory assets recorded by IPL in 2017 related to the settlement.
WPL’s Retail Electric and Gas Rate Review (2017/2018Reviews (2022/2023 Forward-looking Test Period) - In December 2016,WPL received2021, the PSCW issued an order fromauthorizing annual base rate increases of $114 million and $15 million for WPL’s retail electric and gas customers, respectively, covering the 2022/2023 forward-looking Test Period, which was based on a stipulated agreement between WPL and certain intervenor groups. The key drivers for the annual base rate increases include higher retail fuel-related costs in 2022, lower excess deferred income tax benefits in 2022 and 2023 and revenue requirement impacts of increasing electric and gas rate base, including investments in solar generation. In addition, the PSCW authorizingauthorized WPL to implement an increase in annual retail electric ratesreceive a recovery of $9 million, or approximately 1%, and an increase in annual retail gas ratesa return on the remaining net book value of $9 million, or approximately 13%. The $9 million net annual retailEdgewater Unit 5 through 2023. Retail electric rate increase reflects a $60 million increase in base rates, partially offset by a $51 million reduction in fuel-related costs, using an estimate for 2017 fuel-related costs. These increases arechanges were effective on January 1, 20172022 and extend through the end of 2018. The increases reflect recovery2023. Retail gas rate changes were effective on January 1, 2022 and extend through the end of 2022. WPL expects to file a limited reopener by August 2022 to adjust retail gas rates for the costs for environmental controls projects at Edgewater2023 forward-looking Test Period, which will be limited to changes in weighted average cost of capital, updated depreciation rates and Columbia,modifications to certain regulatory asset and investments in electric and gas distribution systems, including expansion of natural gas pipeline infrastructure. These rate increases were partially offset by utilization of amounts that WPL previously over-recovered from its customers for energy efficiency cost recovery and electric transmission cost recovery, as well as amounts deferred underregulatory liability amortizations. WPL’s settlement extends, with certain modifications, an earnings sharing mechanism through 2023. Under the earnings sharing mechanism, for the 2013/2014 Test Period. The order included a return on common equity of 10.0% and continues an earnings sharing mechanism, whereby WPL must defer a portion of its earnings and return this amount to its retail electric and gas customers if its annual regulatory return on common equity exceeds 10.25% during the 2017 and 2018 Test Period. WPL must defer 50% of its excess earnings between 10.25% and 11.00%, and 100% of any excess earnings above 11.00%. As of December 31, 2017, WPL has not deferred any 2017 earnings for this provision. Refer to Note 7 for details of WPL’s regulatory limitation on distributions of common stock dividends to its parent company in 2018.
The order reflected the impact of the transfer of WPL’s investment in ATC to ATI on December 31, 2016 as discussed in Note 6(a), approved changes to depreciation rates pursuant to a September 2016 PSCW order, continued escrow treatment of transmission and energy conservation charges, and application of AFUDC rates to 100% of the retail portion of the CWIP balances for West Riverside. The order also requires deferral of any potential changes in revenue requirement due to anticipated increases in WPL’s ownership share of Columbia resulting from the West Riverside agreements WPL previously entered into with neighboring utilities. As of December 31, 2017, WPL’s deferral amount related to such provision was not material. The order also approved changes to retail rates, which result in a higher percentage of costs being recovered from customers through fixed and demand charges.
WPL’s Retail Electric and Gas Rate Review (2015/2016 Test Period) - Refer to Note 2 for details of a July 2014 PSCW order, which included a provision that required WPL towill defer a portion of its earnings if its annual regulatory return on common equity exceeded 10.65%exceeds 10.25% during 2015the 2022/2023 Test Period. WPL must defer 50% of its excess earnings between 10.25% and 2016. As10.75%, and 100% of December 31, 2017, Alliant Energy and WPL deferred $5 million of WPL’s 2016any excess earnings for this provision, which WPL currently expects willabove 10.75%. Through 2023, any such deferral is required to be refunded to its customers in a future rate review or other proceeding.
IPL’s 2014 Retail Electric Rate Settlement Agreement - The IUB approved a settlement agreement in 2014 related to rates charged to IPL’s Iowa retail electric customers. The settlement agreement extended IPL’s Iowa retail electric base rates authorized in its 2009 Test Year rate review through 2016 and provided targeted retail electric customer billing credits of $105 million in aggregate. In 2016, 2015 and 2014, IPL recorded $9 million, $24 million and $72 million of such credits, respectively.
WPL’s Retail Fuel-related Rate Filings - Refer to Note 2 for discussion of WPL’s retail fuel-related rate filings for Test Years 2016 through 2018.
Tax Reform - In January 2018, the IUB issued an order initiating investigation of the impacts of Tax Reform. The order requires IPL and other investor-owned utilities in Iowa to track all calculated differences since January 1, 2018 resulting from Tax Reform, such that any over-collections can be refunded to its customers at a future date, if appropriate. In January 2018, the PSCW issued an order directing WPL and other investor-owned utilities in Wisconsin to defer and to accrue carrying costs on the revenue requirement impacts resulting from Tax Reform since its inception. IPL and WPL are working with the IUB and PSCW, respectively, to determine the amount and appropriate mechanism to provide these benefits to their customers. Refer to Note 11 for further discussion of customer benefits related to Tax Reform.
Depreciation Studies - In September 2016, the PSCW issued an order approving the implementation of updated depreciation rates for WPL effective January 1, 2017 as a result of a recently completed depreciation study. The September 2016 PSCW order also authorized WPL to recoveroffset against the remaining net book value of Edgewater Unit 4 over a 10-year period beginning the later of the retirement date of the EGU or January 1, 2019. In December 2016, FERC issued an order approving the implementation and inclusion of the updated depreciation rates in WPL’s wholesale formula rates effective January 1, 2017.
Refer to Note 1(e) for discussion of the IUB’s February 2018 order approving the implementation of updated depreciation rates for IPL,5, which areis currently expected to be effective in the first half of 2018, as a result of a recently completed depreciation study.retired by early 2023.
IPL’s Tax Benefit Riders - The IUB has approved electric and gas tax benefit riders proposed by IPL, which utilize regulatory liabilities generated from tax benefits and rate-making accounting changes to credit bills of IPL’s Iowa retail electric customers (beginning in 2011) and gas customers (beginning in 2013) to help offset the impact of rate increases on such customers. IPL’s tax benefit riders regulatory liability account has been, and plans to be, utilized to credit bills of Iowa retail electric and gas customers as follows (in millions):
|
| | | | | | | | | | | |
| | Electric | | Gas | | Total |
| Regulatory liability account balance approved by IUB |
| $520 |
| |
| $55 |
| |
| $575 |
|
| 2011 through 2017 customer billing credits | (509 | ) | | (53 | ) | | (562 | ) |
| Regulatory liability benefits recorded in 2017 from rate-making accounting change | 16 |
| | 1 |
| | 17 |
|
| Tax Reform adjustment recorded in 2017 | (5 | ) | | — |
| | (5 | ) |
| 2018 customer billing credits (estimate) | (19 | ) | | (3 | ) | | (22 | ) |
| Remaining balance available for future periods |
| $3 |
| |
| $— |
| |
| $3 |
|
Refer to Notes 2 and 11 for additional discussion of the impacts of the electric and gas tax benefit riders on Alliant Energy’s and IPL’s regulatory assets and regulatory liabilities, income tax expense and effective income tax rates, as well as impacts from Tax Reform.
Planned Utility Rate Reviews -
IPL’s Retail Gas Rate Review (2017 Test Year) - IPL currently expects to make a retail gas rate filing in the second quarter of 2018 based on a 2017 historical Test Year. The key drivers for the anticipated filing include recovery of capital projects, partially offset by the benefits of Tax Reform. Any rate changes are expected to be implemented in two phases with interim rates effective approximately 10 days after the filing and final rates effective after IUB approval. The IUB must decide on requests for retail rate changes within 10 months of the date of the application for which changes are filed, or the interim rates granted become permanent.
WPL’s Retail Electric and Gas Rate Review (2019/2020Reviews (2020 Forward-looking Test Period) - WPL currently expects to make a In 2019, IPL filed retail electric and gas rate filing inreview requests with the second quarter of 2018 forIUB covering the 2019/2020 forward-looking Test Period. The key drivers for the anticipated filing include recovery of capital projects, offset by the benefits of Tax Reform and fuel-related cost savings. Any rate changes granted from this request are expected to be effective onIn January 1, 2019. WPL currently expects a decision2020, IPL received an order from the PSCW regarding thisIUB approving IPL’s proposed settlement for its retail electric rate filingreview. Final retail electric rates were effective February 26, 2020. In December 2019, IPL received an order from the IUB approving IPL’s proposed settlement for its retail gas rate review. Final retail gas rates were effective January 10, 2020. In 2021, the IUB issued orders for IPL’s 2020 forward-looking Test Period electric and gas subsequent proceedings, which compared actual revenues and costs to those initially forecasted by the end of 2018.IPL, and authorized IPL to main its current retail electric and gas rates. Refer to Note 2 for details.
Rate Review Details - Details related to IPL’s and WPL’s key jurisdictions were as follows (Common Equity (CE); Preferred Equity (PE); Long-term Debt (LD); Short-term Debt (SD)):follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Average | | Authorized Return | | Common Equity | | |
| Regulatory | | Rate Base | | on Common | | Component of Regulatory | | Effective |
| Body | | (in millions) | | Equity (a) | | Capital Structure | | Date |
| IPL Retail Electric (2020 Test Period) | | | | | | | | | |
| Marshalltown (b) | IUB | | $559 | | 11.00% | | 51.0% | | 2/26/2020 |
| Emery (b) | IUB | | 165 | | 12.23% | | 51.0% | | 2/26/2020 |
| Whispering Willow - East (b) | IUB | | 163 | | 11.70% | | 51.0% | | 2/26/2020 |
| Renewable energy rider (c) | IUB | | 1,573 | | 10.40% | | 51.0% | | 2/9/2021 |
| Other (b) | IUB | | 3,767 | | 9.50% | | 51.0% | | 2/26/2020 |
| IPL Retail Gas (2020 Test Period) (b) | IUB | | 557 | | 9.60% | | 51.0% | | 1/10/2020 |
| IPL Wholesale Electric | FERC | | 198 | | 10.97% | | 51.0% | | 1/1/2021 |
| WPL Retail Electric and Gas | | | | | | | | | |
| Electric (2022 Test Period) (d) | PSCW | | 4,196 | | 10.00% | | 53.8% | | 1/1/2022 |
| Gas (2022 Test Period) (d) | PSCW | | 471 | | 10.00% | | 53.8% | | 1/1/2022 |
| | | | | | | | | |
| WPL Wholesale Electric | FERC | | 373 | | 10.90% | | 55.0% | | 1/1/2021 |
(a)Authorized returns on common equity may not be indicative of actual returns earned or projections of future returns.
(b)Average rate base amounts reflect IPL’s allocated retail share of rate base and do not include CWIP, and were calculated using a forecasted 13-month average for the test period.
(c)Average rate base amounts recovered through IPL’s renewable energy rider mechanism include construction costs incurred to fund IPL’s 1,000 MW of wind generation facilities placed in service in 2019 and 2020 (11.00% return on common equity), production tax credit carryforwards for the 1,000 MW of wind generation facilities (5.00% return on common equity) and certain transmission facilities classified as intangible assets (9.50% return on common equity), and were calculated using a 13-month average.
(d)Average rate base amounts reflect WPL’s allocated retail share of rate base and do not include CWIP or a cash working capital allowance, and were calculated using a forecasted 13-month average for the test period. The PSCW provides a return on selected CWIP and a cash working capital allowance by adjusting the percentage return on rate base.
|
| | | | | | | | | | | | | | | | | |
| | | | | Authorized Return | | | | | | | | | | | | Average |
| | | Test | | on Common | | Regulatory Capital Structure | | After-tax | | Rate Base |
| Jurisdictions | | Period/Year | | Equity (a) | | CE | | PE | | LD | | SD | | WACC | | (in millions) |
| IPL: | | | | | | | | | | | | | | | | |
| Iowa retail (IUB): | | | | | | | | | | | | | | | | |
| Electric: | | | | | | | | | | | | | | | | |
| Marshalltown | | 2016 | | 11.00 | % | | 49.0% | | 4.2% | | 46.8% | | N/A | | 7.99% | | $597 (b) |
| Emery | | 2016 | | 12.23 | % | | 49.0% | | 4.2% | | 46.8% | | N/A | | 8.59% | | 197 (b) |
| Whispering Willow - East | | 2016 | | 11.70 | % | | 49.0% | | 4.2% | | 46.8% | | N/A | | 8.33% | | 213 (b) |
| Other | | 2016 | | 9.60 | % | | 49.0% | | 4.2% | | 46.8% | | N/A | | 7.30% | | 3,020 (b) |
| Gas (c) | | 2011 | | 9.56 | % | | 48.8% | | 5.0% | | 46.2% | | N/A | | 7.76% | | 255 (b) |
| Wholesale electric (FERC) (d) | | 2017 | | 10.97 | % | | 48.3% | | 4.0% | | 47.7% | | N/A | | 7.75% | | 141 (e) |
| WPL: | | | | | | | | | | | | | | | | |
| Wisconsin retail (PSCW): | | | | | | | | | | | | | | | | |
| Electric | | 2018 | | 10.00 | % | | 52.2% | | N/A | | 45.2% | | 2.6% | | 7.59% | | 2,851 (f) |
| Gas | | 2018 | | 10.00 | % | | 52.2% | | N/A | | 45.2% | | 2.6% | | 7.59% | | 284 (f) |
| Wholesale electric (FERC) (g) | | 2017 | | 10.90 | % | | 55.0% | | N/A | | 45.0% | | N/A | | 8.30% | | 274 (e) |
| |
(a) | Authorized returns on common equity may not be indicative of actual returns earned or projections of future returns. |
| |
(b) | Average rate base was calculated using balances as of the end of the test year, adjusted for post-test year capital additions placed in service by September 30 following the end of the test year. |
| |
(c) | Authorized returns on common equity and after-tax WACC reflect application of double leverage pursuant to the unanimous settlement agreement approved in the IUB’s November 2012 order. Prior to the application of double leverage, authorized return on common equity was 10.0% and after-tax WACC was 8.0%. |
| |
(d) | IPL’s wholesale formula rates reflect annual changes in CE, PE, LD, WACC and estimated rate base, effective July 1, 2018. |
| |
(e) | Wholesale average rate base reflects production-related rate base calculated as the simple average of the beginning of the test year and end of the test year balances in accordance with the respectively approved formula rates. |
| |
(f) | Average rate base amounts do not include CWIP or a cash working capital allowance and were calculated using a forecasted 13-month average for the test period. The PSCW provides a return on selected CWIP and a cash working capital allowance by adjusting the percentage return on rate base. |
| |
(g) | WPL’s wholesale formula rates reflect annual changes in WACC and rate base, which includes the wholesale jurisdictional share impacted by the departure of a wholesale customer in 2017. |
ENVIRONMENTALLEGISLATIVE MATTERS
Overview - In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted. The most significant provision of the CARES Act for Alliant Energy IPL and WPL are subjectrelates to regulationan acceleration of environmental matters by federal, state and local authorities as a resultrefunds of their current and past operations.existing alternative minimum tax credits to increase liquidity. In 2020, Alliant Energy IPLreceived $11 million of credits that otherwise would have been received in 2021 and WPL monitor these environmental matters and address them by installing controls that reduce emissions and by implementing operational modifications or other measures to address compliance obligations. There is currently significant regulatory uncertainty with respect to a number of environmental rules and regulations discussed below. Given the dynamic nature of environmental regulations and other related regulatory requirements,2022. In addition, Alliant Energy IPLdeferred certain 2020 payroll taxes to 2021 and WPL have compliance plans to address these environmental obligations. Prudent expenditures incurred by IPL and WPL to comply with environmental requirements would likely be recovered in rates from their customers. Refer to “Strategic Overview” for details of environmental compliance plans.2022. The following are major environmental matters that could potentially have a significant impact on financial condition and results of operations.
Air Quality - The CAA and its amendments mandate preservation or enhancement of air quality through existing regulations and periodic reviews to ensure adequacy of the CAA provisions based on scientific data. As part of the basic framework under the CAA, the EPA is required to establish NAAQS, which serve to protect public health and welfare. These standards address six “criteria” pollutants, four of which (NOx, SO2, particulate matter and ozone) are particularly relevant to electric utility operations. Ozone is not directly emitted from EGUs; however, NOx emissions may contribute to its formation in the atmosphere. Fine particulate matter mayCARES Act also be formed in the atmosphere from SO2 and NOx emissions. Alliant Energy, IPL and WPL also maintain compliance withprovides additional emissions standards that apply under the CAA regulatory framework beyond NAAQS. The specific federal and state air quality rules that may materially affect future operations are listed in the table below. Referfunding to the sections below the following tableLow Income Home Energy Assistance Program, which assists certain of Alliant Energy’s customers with managing their energy costs, as well as financial support for detailed discussioncertain of these air quality rules.Alliant Energy’s residential, small business and non-profit customers.
|
| | | | | | |
Environmental Rule | 32 | Emissions Regulated | | Alliant Energy’s Primary Facilities Potentially Affected | | Actual/Anticipated Compliance Deadline |
CSAPR | | SO2, NOx | | Fossil-fueled EGUs over 25 MW capacity in IA and WI | | Phase I - 2015; Phase II - 2017 |
CAA Section 111(d) | | CO2 | | Existing fossil-fueled EGUs over 25 MW capacity | | Phase I - 2022-2029; Phase II - 2030 |
CAA Section 111(b) | | CO2 | | IPL’s Marshalltown facility and WPL’s West Riverside facility | | Upon startup of EGU |
ReferIn December 2020, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSA) was enacted. The most significant provision of the CRRSA Act for Alliant Energy relates to “Properties” in Item 2the extension of certain renewable tax credits, and as a result, Alliant Energy will evaluate additional opportunities for a listrepowering of IPL’sits existing wind farms and WPL’s EGUs by primary fuel type that they currently own or operate,additional solar projects beyond 2023. The CRRSA Act also provides additional funding to the Low Income Home Energy Assistance Program, as well as discussion of various EGUs that may be retired or changed from coal-fired to an alternative fuel source in the future.
CSAPR - CSAPR is a regional SO2 and NOx cap-and-trade program, where compliance with emission limits may be achieved by purchasing emission allowances and/or reducing emissions through changes in operations or the additions of environmental controls. CSAPR emission allowances may be bankedfinancial support for future year compliance. CSAPR establishes state-specific annual SO2 and NOx emission caps and ozone season NOx emission caps. Compliance with CSAPR emission limits began in 2015, with additional emission limits reductions beginning in 2017. Alliant Energy, IPL and WPL are currently in compliance with applicable CSAPR emission limits. Alliant Energy, IPL and WPL will continue to monitor legal and regulatory developments related to CSAPR and currently expect to continue meeting the existing CSAPR compliance requirements.
GHG Emissions- There is continued debate regarding the public policy response that the U.S. should adopt to address climate change, involving both domestic actions and international efforts. In 2007, the Supreme Court provided direction on the EPA’s authority to regulate GHG and ruled that these emissions are covered by the CAA. In 2009, the EPA issued a ruling that found GHG emissions contribute to climate change, and therefore, threaten public health and welfare, which was the prerequisite for implementing carbon reduction standards under the CAA. While the EPA’s rules to regulate GHG issued under the authority of the CAA remain subject to further review, growing awareness of climate change is driving efforts to decarbonize the environment through voluntary emissions reductions. The primary GHG emitted from Alliant Energy’s, IPL’s and WPL’s utility operations is CO2 from the combustion of fossil fuels at their larger EGUs. Refer to “Strategic Overview” for discussioncertain of Alliant Energy’s IPL’sresidential, small business and WPL’s voluntary targetnon-profit customers.
In March 2021, the American Rescue Plan Act of 2021 (Act) was enacted. The most significant provision of the Act for Alliant Energy is reduced minimum pension plan funding requirements, which Alliant Energy adopted in August 2021. The Act also provides additional funding to reduce CO2 emissions,the Low Income Home Energy Assistance Program, which assists certain of Alliant Energy’s customers with managing their energy costs, as well as their long-term strategyprovides financial support for certain of Alliant Energy’s residential, small business and non-profit customers.
In April 2021, legislation was enacted in Iowa prohibiting counties and cities from regulating the sale of natural gas and propane, which supports IPL’s ability to meetprovide gas utility service to a diversified base of retail customers and industries.
In November 2021, the energy needs of customers while recognizing the importance of using resources in efficientInfrastructure Investment and environmentally responsible ways.
Clean AirJobs Act Section 111(d) - In 2015, the EPA published final standards under Section 111(d)(IIJA Act) was enacted. The most significant provisions of the CAA, referred to as the Clean Power Plan, which establish guidelinesIIJA Act for states to follow in developing plans to reduce CO2 emissions from existing fossil-fueled EGUs. In 2016, the Supreme Court issued a stay of the Clean Power Plan, which placed implementation of the final standards on hold indefinitely. The EPA is currently expected to publish a proposed Clean Power Plan replacement, as well as repeal the original Clean Power Plan, in 2018. Litigation related to the Clean Power Plan is suspended while the EPA proceeds with its repeal and replacement rulemaking processes. Alliant Energy IPLrelate to a variety of infrastructure-related priorities, including transportation, environmental, energy and WPL are currently unable to predict with certainty the final outcome of the Clean Power Plan, or the impact of the final compliance requirements on their financial condition and results of operations, but expect that expenditures to comply with such requirements could be significant.
Clean Air Act Section 111(b) - In 2015, the EPA published final standards under Section 111(b) of the CAA, which establish CO2 emissions limits for certain new fossil-fueled EGUs. Marshalltown and West Riverside are subject to the EPA’s Section 111(b) regulation and have been designed to achieve compliance with these standards. Litigation related to Section 111(b) is suspended while the EPA proceeds with an administrative review of Section 111(b). Given the EPA’s Section 111(b) rulemaking remains subject to the EPA’s review, Alliant Energy, IPL and WPL are currently unable to predict with certainty the impact of these standards.
broadband infrastructure. In addition, in order for the EPAIIJA Act is intended to regulate existing fossil-fueled EGUs under Section 111(d)accelerate research, development, demonstration and deployment of the CAA, the EPA must have valid regulation of new fossil-fueled EGUs under Section 111(b) of the CAA. If Section 111(b) is vacated, the EPA’s ability to implement regulations for CO2 emissions at existing fossil-fueled EGUs, as well as any future Clean Power Plan replacement rule, could be limited.carbon-free technologies, including hydrogen and carbon capture and storage.
WPL Consent Decree - Refer to Note 16(e) for discussion of a Consent Decree approved by the U.S. District Court for the Western District of Wisconsin in 2013 and WPL’s obligations thereunder. The Consent Decree resolves a notice of violation issued by the EPA in 2009 and complaints filed by the Sierra Club in 2010 regarding alleged air permitting violations at Columbia, Edgewater and Nelson Dewey.
IPL Consent Decree - Refer to Note 16(e) for discussion of a Consent Decree approved by the U.S. District Court for the Northern District of Iowa in 2015 and IPL’s obligations thereunder. The Consent Decree resolves potential CAA issues associated with emissions from IPL’s coal-fired generating facilities in Iowa.
Water Quality -
Effluent Limitation Guidelines - In 2015, the EPA published final effluent limitation guidelines, which are expected to require changes to discharge limits for wastewater from certain IPL and WPL steam generating facilities. Compliance with the final guidelines for existing steam generating facilities is determined by each facility’s wastewater discharge permit, and will be required by December 31, 2023. Effective January 2016, compliance for new steam generating facilities is required immediately upon operation. Projects required for compliance with these guidelines are facility specific. Alliant Energy, IPL and WPL currently believe the expenditures to comply with these guidelines could be significant.
Land and Solid Waste -
Coal Combustion Residuals Rule - The final CCR Rule, which regulates CCR as a non-hazardous waste, was published and became effective in 2015. IPL and WPL have seven and three coal-fired EGUs, respectively, with coal ash ponds that are impacted by this rule. In addition, IPL and WPL have three and two active CCR landfills, respectively, that are impacted by this rule. Actual costs resulting from the CCR Rule may be different than the amounts recorded due to potential changes in compliance strategies that will be used, as well as other potential cost estimate changes. Expenditures incurred by IPL and WPL to comply with the CCR Rule are anticipated to be recovered in rates from their customers.
MGP Sites - Refer to Note 16(e) for discussion of IPL’s and WPL’s MGP sites.
LIQUIDITY AND CAPITAL RESOURCES
Overview - Alliant Energy, IPL and WPL expect to maintain adequate liquidity to operate their businesses and implement their strategic planstrategy as a result of operating cash flows generated by their utility business, and available capacity under a single revolving credit facility and IPL’s sales of accounts receivable program, supplemented by periodic issuances of long-term debt and Alliant Energy equity securities. As summarized below, Alliant Energy, IPL and WPL believe they have the ability to generate and obtain adequate amounts of cash to meet their requirements and plans for cash in the next 12 months and beyond.
COVID-19 Considerations - Refer to “Overview” in MDA for discussion of COVID-19 and the impacts on Alliant Energy’s, IPL’s and WPL’s liquidity and capital resources.
Liquidity Position - At December 31, 2017,2021, Alliant Energy had $28$39 million of cash and cash equivalents, $680$485 million ($105171 million at the parent company, $250 million at IPL and $325$64 million at WPL) of available capacity under the single revolving credit facility and $92$109 million of available capacity at IPL under its sales of accounts receivable program. Refer to “Short-term Debt” below and Note 9(a) for further discussion of the credit facility. Refer to Note 5(b) for additional information on IPL’s sales of accounts receivable program.
Capital Structure - Alliant Energy, IPL and WPL plan to maintain debt-to-total capitalization ratios that are consistent with investment-grade credit ratings. IPL and WPL expect to maintain capital structures consistent with their authorized levels. Alliant Energy expects to maintain consolidated debt at approximately 55% of total capital and consolidated preferred stock at less than 10% of total capital. These targets may be adjusted depending on subsequent developments and the impact on their respective WACC and investment-grade credit ratings. Capital structures as of December 31, 20172021 were as follows (Common Equity (CE); IPL’s Preferred Stock (PS); Long-term Debt (including current maturities) (LD); Short-term Debt (SD)):
Alliant Energy, IPL and WPL intend to manage their capital structures and liquidity positions in such a way that facilitates their ability to raise the necessary funds reliably and on reasonable terms and conditions, while maintaining capital structures consistent with those approved by regulators. In addition to capital structures, other important factors used to determine the characteristics of future financings include financial coverage ratios, capital spending plans and solar construction that is expected to be partially financed by tax equity partners, regulatory orders and rate-making considerations, levels of debt imputed by rating agencies, market conditions, the impact of tax initiatives and legislation, and anticipatedany potential proceeds from asset sales. The PSCW factors certain imputed debt adjustments, including certain lease obligations, in establishing a regulatory capital structure as part of WPL’s retail rate reviews. The IUB does not make any explicit adjustments for imputed debt in establishing capital ratios used in determining customer rates, although such adjustments are considered by IPL in recommending an appropriate capital structure. The most significant debtDebt imputations by rating agencies or state regulators relate to the DAEC PPA,include, among others, pension and OPEB obligations and the sales of accounts receivable program.
Credit and Capital Markets - Alliant Energy, IPL and WPL are aware of the potential implications that credit and capital market disruptions might have on their ability to raise external funding required for their respective operations and capital expenditure plans. Alliant Energy, IPL and WPL maintain a single revolving credit facility to provide backstop liquidity to their commercial paper programs, and ensure a committed source of liquidity in the event the commercial paper market becomes disrupted. In addition, IPL maintains a sales of accounts receivable program as an alternative financing source.source; however, if customer arrears were to exceed certain levels, IPL’s access to the program may be restricted.
Primary Sources and Uses of Cash - Alliant Energy’s most significant source of cash is from electric and gas sales to IPL’s and WPL’s customers. Cash from these sales reimburses IPL and WPL for prudently-incurred expenses to provide service to their utility customers and generally provides IPL and WPL a return of and a return on the assets used to provide such services. Utility operating cash flows are expected to cover IPL’s and WPL’s capital expenditures required to maintain their current infrastructure and dividends paid to Alliant Energy’s shareowners. Capital needed to retire debt and fund capital expenditures related to large strategic projects is expected to be met primarily through external financings.
Tax Reform - In December 2017, Tax Reform was enacted. The net impacts of re-measuring deferred taxes associated with regulated utility operations were recorded in regulatory assets and regulatory liabilities and will be utilized to provide benefits to customers in the future. Alliant Energy, IPL and WPL are awaiting decisions from state and federal regulators regarding the timing, amount and method of delivering net tax benefits from utility operations to its utility customers; however, impacts from these decisions may include changes in cash flow from operations, credit ratings, liquidity, and capital needs. Alliant Energy, IPL and WPL are currently unable to quantify these impacts. Refer to Note 11 for further discussion of Tax Reform.
Cash Flows - Selected information from the cash flows statements was as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | | 2021 | | 2020 | | | 2021 | | 2020 | |
| Cash, cash equivalents and restricted cash, January 1 | $56 | | | $18 | | | | $50 | | | $9 | | | | $3 | | | $4 | | |
| Cash flows from (used for): | | | | | | | | | | | | | | |
| Operating activities | 582 | | | 501 | | | | 153 | | | (6) | | | | 371 | | | 466 | | |
| Investing activities | (728) | | | (951) | | | | 91 | | | (301) | | | | (716) | | | (613) | | |
| Financing activities | 130 | | | 488 | | | | (260) | | | 348 | | | | 344 | | | 146 | | |
| Net increase (decrease) | (16) | | | 38 | | | | (16) | | | 41 | | | | (1) | | | (1) | | |
| Cash, cash equivalents and restricted cash, December 31 | $40 | | | $56 | | | | $34 | | | $50 | | | | $2 | | | $3 | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | 2016 | 2015 | | 2017 | 2016 | 2015 | | 2017 | 2016 | 2015 |
| Cash and cash equivalents, January 1 |
| $8.2 |
|
| $5.8 |
|
| $56.9 |
| |
| $3.3 |
|
| $4.5 |
|
| $5.3 |
| |
| $4.2 |
|
| $0.4 |
|
| $46.7 |
|
| Cash flows from (used for): | | | | | | | | | | | |
| Operating activities | 983.4 |
| 859.6 |
| 871.2 |
| | 440.0 |
| 361.9 |
| 385.0 |
| | 465.7 |
| 521.4 |
| 449.8 |
|
| Investing activities | (1,496.3 | ) | (1,186.5 | ) | (919.2 | ) | | (706.4 | ) | (693.6 | ) | (511.9 | ) | | (665.7 | ) | (478.9 | ) | (358.2 | ) |
| Financing activities | 532.6 |
| 329.3 |
| (3.1 | ) | | 266.7 |
| 330.5 |
| 126.1 |
| | 218.9 |
| (38.7 | ) | (137.9 | ) |
| Net increase (decrease) | 19.7 |
| 2.4 |
| (51.1 | ) | | 0.3 |
| (1.2 | ) | (0.8 | ) | | 18.9 |
| 3.8 |
| (46.3 | ) |
| Cash and cash equivalents, December 31 |
| $27.9 |
|
| $8.2 |
|
| $5.8 |
| |
| $3.6 |
|
| $3.3 |
|
| $4.5 |
| |
| $23.1 |
|
| $4.2 |
|
| $0.4 |
|
Operating Activities - The following items contributed to increased (decreased) operating activity cash flows for 2021 compared to 2020 (in millions):
| | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
DAEC PPA amendment buyout payment in 2020 (Refer to Note 2) | $110 | | $110 | | $— |
Credits issued to IPL’s retail electric customers in 2020 through its transmission cost rider for amounts previously collected in rates (Refer to Note 2) | 42 | | 42 | | — |
| | | | | |
| Increased collections from IPL’s and WPL’s retail customers caused by temperature impacts on electric and gas sales | 13 | | 10 | | 3 |
| Changes in levels of production fuel | 4 | | 21 | | (17) |
| Changes in the sales of accounts receivable at IPL | (70) | | (70) | | — |
| Timing of WPL’s fuel-related cost recoveries from customers | (27) | | — | | (27) |
| Refunds received in 2020 related to the MISO transmission owner return on equity complaint FERC orders | (20) | | (15) | | (5) |
| Credits issued to IPL’s retail electric customers in 2021 through its transmission cost rider for refunds received in 2020 for MISO transmission owner return on equity complaints | (14) | | (14) | | — |
| Changes in income taxes paid/refunded | (8) | | 65 | | (51) |
| Other (primarily due to other changes in working capital) | 51 | | 10 | | 2 |
| $81 | | $159 | | ($95) |
|
| | | | | | | | | | | |
| 2017 vs. 2016 | Alliant Energy | | IPL | | WPL |
| Higher collections at IPL due to interim retail electric base rate increase effective April 13, 2017 |
| $77 |
| |
| $77 |
| |
| $— |
|
| Higher collections at WPL due to new retail electric and gas base rates in 2017 | 72 |
| | — |
| | 72 |
|
| Changes in cash collateral balances | 30 |
| | — |
| | — |
|
| Timing of WPL’s fuel-related cost recoveries from customers | (50 | ) | | — |
| | (50 | ) |
| Changes in the level of cash proceeds from IPL’s sales of accounts receivable | (25 | ) | | (25 | ) | | — |
|
| Lower distributions received at WPL from its investment in ATC due to the transfer of the investment in ATC to ATI on December 31, 2016 | — |
| | — |
| | (27 | ) |
| Changes in income taxes paid/refunded | (1 | ) | | 20 |
| | (36 | ) |
| Other (primarily due to other changes in working capital) | 21 |
| | 6 |
| | (15 | ) |
| |
| $124 |
| |
| $78 |
| |
| ($56 | ) |
|
| | | | | | | | | | | |
| 2016 vs. 2015 | Alliant Energy | | IPL | | WPL |
| Decreased collections from IPL’s retail customers due to increased past due amounts |
| ($33 | ) | |
| ($33 | ) | |
| $— |
|
| Changes in cash collateral balances | (27 | ) | | — |
| | — |
|
| Changes in income taxes paid/refunded | (10 | ) | | (30 | ) | | 35 |
|
| Changes in the level of cash proceeds from IPL’s sales of accounts receivable | 33 |
| | 33 |
| | — |
|
| Timing of WPL’s fuel-related cost recoveries from customers | 17 |
| | — |
| | 17 |
|
| Changes in collections at IPL from higher revenues from retail electric customer billing credits related to the approved retail electric base rate freeze through 2016 | 15 |
| | 15 |
| | — |
|
| Other (includes other changes in working capital largely related to changes in inventory levels) | (7 | ) | | (8 | ) | | 20 |
|
| |
| ($12 | ) | |
| ($23 | ) | |
| $72 |
|
Income Tax Payments and Refunds - Income tax (payments) refunds, including refunds of alternative minimum tax credits, were as follows (in millions):
| | | | | | | | | | | | | |
| 2021 | | 2020 | | |
| IPL | $47 | | ($18) | | |
| WPL | (38) | | 13 | | |
| Other subsidiaries | (12) | | 10 | | |
| Alliant Energy | ($3) | | $5 | | |
|
| | | | | | | | | | | |
| | 2017 | | 2016 | | 2015 |
| IPL |
| $9 |
| |
| ($11 | ) | |
| $19 |
|
| WPL | (8 | ) | | 28 |
| | (7 | ) |
| Other subsidiaries | (12 | ) | | (27 | ) | | (12 | ) |
| Alliant Energy |
| ($11 | ) | |
| ($10 | ) | |
| $— |
|
Alliant Energy, IPL and WPL currently do not expect to make any significant federal income tax payments through 20242023 based on their current federal net operating loss and credit carryforward positions. While no significant federal income tax payments through 20242023 are expected to occur, some tax payments and refunds may occur for state taxes and between consolidated group members (including IPL and WPL) under the tax sharing agreement between Alliant Energy and its subsidiaries. Refer to Note 1112 for discussion of the carryforward positions.
Pension Plan Contributions - Alliant Energy, IPL and WPL currently do not expect to make any significant$2 million, $0 and $0 of pension plan contributions in 20182022, respectively, based on the funded status and assumed return on assets for each plan as of the December 31, 20172021 measurement date. Refer to Note 12(a)13(a) for discussion of pension plan contributions in 2021 and the current funded levels of pension plans.
Investing Activities - The following items contributed to increased (decreased) investing activity cash flows for 2021 compared to 2020 (in millions):
| | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| (Higher) lower utility construction and acquisition expenditures (a) | $223 | | $303 | | ($80) |
| Changes in the amount of cash receipts on sold receivables | 44 | | 44 | | — |
| Refund from ATC in 2020 for construction deposits WPL previously provided to ATC for transmission network upgrades for West Riverside | (42) | | — | | (42) |
| Other | (2) | | 45 | | 19 |
| $223 | | $392 | | ($103) |
|
| | | | | | | | | | | |
| 2017 vs. 2016 | Alliant Energy | | IPL | | WPL |
| Lower (higher) utility construction expenditures (a) |
| ($151 | ) | |
| $14 |
| |
| ($184 | ) |
Non-utility wind investment in Oklahoma (Refer to Note 6(a) for details) | (98 | ) | | — |
| | — |
|
| Proceeds from the liquidation of company-owned life insurance policies in 2016 | (31 | ) | | (19 | ) | | — |
|
| Other | (30 | ) | | (8 | ) | | (3 | ) |
| |
| ($310 | ) | |
| ($13 | ) | |
| ($187 | ) |
(a)Largely due to lower expenditures for IPL’s and WPL’s expansion of wind generation, IPL’s and WPL’s electric and gas distribution systems and WPL’s West Riverside Energy Center, partially offset by higher expenditures for WPL’s solar generation. |
| | | | | | | | | | | |
| 2016 vs. 2015 | Alliant Energy | | IPL | | WPL |
| Higher utility construction expenditures (b) |
| ($171 | ) | |
| ($70 | ) | |
| ($109 | ) |
Proceeds from IPL’s Minnesota distribution asset sales in 2015 (Refer to Note 3 for details) | (140 | ) | | (140 | ) | | — |
|
| Proceeds from the liquidation of company-owned life insurance policies in 2016 | 31 |
| | 19 |
| | — |
|
| Other | 13 |
| | 9 |
| | (12 | ) |
| |
| ($267 | ) | |
| ($182 | ) | |
| ($121 | ) |
| |
(a) | Largely due to higher expenditures for WPL’s West Riverside facility, IPL’s and WPL’s electric and gas distribution systems and IPL’s expansion of wind generation, partially offset by lower expenditures for IPL’s Marshalltown facility. |
| |
(b) | Largely due to higher expenditures for IPL’s expansion of wind generation, IPL’s and WPL’s electric and gas distribution systems, and WPL’s West Riverside facility, partially offset by lower expenditures for IPL’s Marshalltown facility and environmental controls projects at WPL’s Edgewater Unit 5. |
Construction and Acquisition Expenditures - Construction and acquisition expenditures and financing plans are reviewed, approved and updated as part of the financialstrategic planning processes.process. Changes may result from a number of reasons, including regulatory requirements, changing legislation, not obtaining favorable and acceptable regulatory approval on certain projects, improvements in technology and improvements to ensure reliability of the electric and gas distribution systems, and new opportunities.systems. Alliant Energy, IPL and WPL have not yet entered into contractual commitments relating to the majority of their anticipated future construction and acquisition expenditures. As a result, they have some discretion with regard to the level and timing of these expenditures. The table below summarizes anticipated construction and acquisition expenditures (in millions)., which are focused on the transition to cleaner energy and strengthening the resiliency of Alliant Energy’s, IPL’s and WPL’s electric grid. Cost estimates represent Alliant Energy’s, IPL’s and WPL’s portion of total escalated construction expenditures and exclude AFUDC and capitalized interest, if applicable. Such estimates do not reflect impacts to Alliant Energy’s and WPL’s capital expenditures resulting from purchase options by certain electric cooperatives forthe assumption that a partial ownership interest in West Riverside, as well as additional capital expenditures related to Columbia that WPLportion of the construction is expected to incur related to agreements entered into with WPSCbe financed by tax equity partners, which is described in more detail below in “IPL and MGE.WPL Solar Project Tax Equity Financing.” Refer to “Strategic OverviewCustomer Investments” for further discussion of certain key projects impacting construction and acquisition plans related to the utility business. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2022 | 2023 | 2024 | 2025 | | 2022 | 2023 | 2024 | 2025 | | 2022 | 2023 | 2024 | 2025 |
| Generation: | | | | | | | | | | | | | | |
| Renewable projects | $845 | | $980 | | $1,135 | | $800 | | | $80 | | $150 | | $505 | | $450 | | | $765 | | $830 | | $630 | | $350 | |
| Other | 100 | | 90 | | 95 | | 80 | | | 55 | | 50 | | 45 | | 35 | | | 45 | | 40 | | 50 | | 45 | |
| Distribution: | | | | | | | | | | | | | | |
| Electric systems | 435 | | 555 | | 590 | | 615 | | | 210 | | 300 | | 330 | | 350 | | | 225 | | 255 | | 260 | | 265 | |
| Gas systems | 75 | | 110 | | 75 | | 75 | | | 30 | | 35 | | 35 | | 35 | | | 45 | | 75 | | 40 | | 40 | |
| Other | 185 | | 190 | | 190 | | 185 | | | 30 | | 30 | | 35 | | 35 | | | 25 | | 20 | | 35 | | 30 | |
| $1,640 | | $1,925 | | $2,085 | | $1,755 | | | $405 | | $565 | | $950 | | $905 | | | $1,105 | | $1,220 | | $1,015 | | $730 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2018 | 2019 | 2020 | 2021 | | 2018 | 2019 | 2020 | 2021 | | 2018 | 2019 | 2020 | 2021 |
| Generation: | | | | | | | | | | | | | | |
| Renewable projects |
| $655 |
|
| $850 |
|
| $140 |
|
| $85 |
| |
| $565 |
|
| $725 |
|
| $50 |
|
| $85 |
| |
| $90 |
|
| $125 |
|
| $90 |
|
| $— |
|
| West Riverside | 225 |
| 90 |
| 10 |
| — |
| | — |
| — |
| — |
| — |
| | 225 |
| 90 |
| 10 |
| — |
|
| Other | 140 |
| 95 |
| 150 |
| 140 |
| | 60 |
| 50 |
| 80 |
| 75 |
| | 80 |
| 45 |
| 70 |
| 65 |
|
| Distribution: | | | | | | | | | | | | | | |
| Electric systems | 440 |
| 435 |
| 485 |
| 560 |
| | 260 |
| 250 |
| 290 |
| 345 |
| | 180 |
| 185 |
| 195 |
| 215 |
|
| Gas systems | 130 |
| 95 |
| 90 |
| 115 |
| | 75 |
| 50 |
| 55 |
| 65 |
| | 55 |
| 45 |
| 35 |
| 50 |
|
| Other | 130 |
| 110 |
| 125 |
| 100 |
| | 25 |
| 20 |
| 25 |
| 20 |
| | 10 |
| 10 |
| 10 |
| 10 |
|
| |
| $1,720 |
|
| $1,675 |
|
| $1,000 |
|
| $1,000 |
| |
| $985 |
|
| $1,095 |
|
| $500 |
|
| $590 |
| |
| $640 |
|
| $500 |
|
| $410 |
|
| $340 |
|
Alliant Energy’s and IPL’s construction and acquisition expenditures for renewable projects in 2022 through 2024 include approximately $300 million in aggregate, a portion of which is expected to be reflected as “Other” cash flows used for investing activities in Alliant Energy’s and IPL’s cash flows.
West Riverside Options - WPL entered into agreements with neighboring utilities that provide them options to purchase a partial ownership interest in West Riverside. Upon exercise of such options, WPL will receive proceeds from the sale. Refer to “Customer Investments” for additional information, including timing for the actual and potential exercise of options.
Financing Activities - The following items contributed to increased (decreased) financing activity cash flows for 2021 compared to 2020 (in millions):
| | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| Lower net proceeds from issuance of long-term debt | ($650) | | ($100) | | ($50) |
| Lower net proceeds from common stock issuances | (219) | | — | | — |
| Payments to redeem cumulative preferred stock of IPL in 2021 | (200) | | (200) | | — |
| Higher common stock dividends | (26) | | (164) | | (8) |
| Lower payments to retire long-term debt | 649 | | 200 | | 150 |
| Net changes in the amount of commercial paper outstanding | 74 | | — | | (110) |
| Higher (lower) capital contributions from IPL’s and WPL’s parent company, Alliant Energy | — | | (354) | | 220 |
| Other | 14 | | 10 | | (4) |
| ($358) | | ($608) | | $198 |
|
| | | | | | | | | | | |
| 2017 vs. 2016 | Alliant Energy | | IPL | | WPL |
| Lower payments to retire long-term debt |
| $309 |
| |
| $— |
| |
| $— |
|
| Higher net proceeds from common stock issuances | 123 |
| | — |
| | — |
|
| Net changes in the amount of commercial paper outstanding and other short-term borrowings outstanding | 87 |
| | — |
| | (60 | ) |
| Higher (lower) net proceeds from issuance of long-term debt | (250 | ) | | (50 | ) | | 300 |
|
| Higher capital contributions from IPL’s and WPL’s parent company, Alliant Energy | — |
| | 10 |
| | 30 |
|
| Other (includes higher dividend payments in 2017) | (66 | ) | | (24 | ) | | (12 | ) |
| |
| $203 |
| |
| ($64 | ) | |
| $258 |
|
|
| | | | | | | | | | | |
| 2016 vs. 2015 | Alliant Energy | | IPL | | WPL |
| Proceeds from long-term debt issued in 2016 (Refer to “Long-term Debt” below) |
| $800 |
| |
| $300 |
| |
| $— |
|
| Payments to retire long-term debt in 2015 (Refer to “Long-term Debt” below) | 181 |
| | 150 |
| | 31 |
|
| Net changes in the amount of commercial paper outstanding | 66 |
| | — |
| | 13 |
|
| Payments to retire long-term debt in 2016 (Refer to “Long-term Debt” below) | (310 | ) | | — |
| | — |
|
| Proceeds from long-term debt issued in 2015 (Refer to “Long-term Debt” below) | (250 | ) | | (250 | ) | | — |
|
| Lower net proceeds from common stock issuances | (125 | ) | | — |
| | — |
|
| Higher capital contributions from IPL’s and WPL’s parent company, Alliant Energy | — |
| | 25 |
| | 60 |
|
| Other (includes higher dividend payments in 2016) | (30 | ) | | (21 | ) | | (5 | ) |
| |
| $332 |
| |
| $204 |
| |
| $99 |
|
FERC and Public Utility Holding Company Act Financing Authorizations - Under the Public Utility Holding Company Act of 2005, FERC has authority over the issuance of utility securities, except to the extent that a public utility’s primary state regulatory commission has retained jurisdiction over such matters. FERC currently has authority over the issuance of securities by IPL. FERC does not have authority over the issuance of securities by Alliant Energy, WPL, AEF or Corporate Services.
In November 2017,2021, IPL received authorization and has current remaining authority, from FERC through December 31, 2019 for the followingto issue securities in 2022 and 2023 as follows (in millions):
| | | | | | | |
| | | |
| Long-term debt securities issuances in aggregate |
$700 | $1,100 |
|
| Short-term debt securities outstanding at any time (including borrowings from its parent) | 300400 |
| |
| Preferred stock issuances in aggregate | 300 |
| |
State Regulatory Financing Authorizations - In August 2017, WPL received authorization from the PSCW to have up to $400 million of short-term borrowings and/or letters of credit outstanding at any time through the earlier of the expiration date of WPL’s credit facility agreement (including extensions) or December 2024. InAs of December 2016,31, 2021, WPL received authorization from the PSCWalso had authority to issue up to $1 billion$700 million of long-term debt securities in aggregate during 2017 through 2019, with no more than $650 millionDecember 2023 pursuant to be issued in any year. WPL’s current remaining authority for issuances of long-term debt securities is $700 million in aggregate through 2019.a September 2020 PSCW order.
Shelf Registrations - Alliant Energy, IPL and WPL have current shelf registration statements on file with the SEC for availability to issue unspecified amounts of securities through December 2020.2023. Alliant Energy’s shelf registration statement may be used to issue common stock, debt and other securities. IPL’s and WPL’s shelf registration statements may be used to issue preferred stock and debt securities.
Common Stock Dividends - Payment of common stock dividends is subject to dividend declaration by Alliant Energy’s Board of Directors.Directors and is dependent upon, among other factors, regulatory limitations, earnings, cash flows, capital requirements and general financial condition of subsidiaries. Alliant Energy’s general long-term goal is to maintain a dividend payout ratio that is competitive with the industry average. Based on that, Alliant Energy’s goal is to maintain a dividend payout ratio of approximately 60% to 70% of consolidated earnings from continuing operations. IPL’s and WPL’s goal is to maintain dividend payout ratios of approximately 65% to 75%. Alliant Energy’s, IPL’s and WPL’s dividend payout ratios were 63%, 72% and 67% of their consolidated earnings from continuing operations in 2017, respectively. Refer to “Executive OverviewResults of Operations” for discussion of expected common stock dividends in 2018. Refer to Note 7 for discussion of IPL’s and WPL’s dividend payment restrictions based on the terms of applicable regulatory limitations and IPL’s outstanding preferred stock.2022.
Common Stock Issuances - Refer to Note 7 for discussion of common stock issuances by Alliant Energy in 2015 through 2017. Refer to2020 and 2021, and “Executive OverviewResults of Operations” for discussion of expected issuances of common stock in 2018.2022.
Short-term Debt - In August 2017,December 2021, Alliant Energy, IPL and WPL entered into a single new revolving credit facility agreement, which expires in August 2022, to provide short-term borrowing flexibilityDecember 2026 and backstop liquidity for commercial paper outstanding. As of December 31, 2017, the short-term borrowing capacity totaled $1 billion ($400 million for Alliant Energy at the parent company level, $250 million for IPL and $350 million for WPL)is discussed in Note 9(a). There are currently 13 lenders that participate in the credit facility, with aggregate respective commitments ranging from $20 million to $130 million. The credit facility includes a $100 million letter of credit commitment and $50 million swingline commitment, which are available to each of Alliant Energy, IPL and WPL. Subject to certain conditions, Alliant Energy, IPL and WPL may each reallocate and change its sublimit up to $500 million, $400 million and $500 million, respectively, within the $1 billion total commitment. Subject to certain conditions, Alliant Energy, IPL and WPL may exercise two extension options, each extending the maturity date by one year. The credit facility has a provision to expand the facility size up to an additional $300 million, for a potential total commitment of $1.3 billion, subject to lender approval for Alliant Energy and subject to lender and regulatory approvals for IPL and WPL.
The credit agreement contains provisions that prohibit placing liens on any of the property of Alliant Energy, IPL or WPL or their respective subsidiaries with certain exceptions. Exceptions include among others, liens to secure obligations of up to 10% of the consolidated tangible assets of the applicable borrower (valued at carrying value), liens imposed by government entities, materialmen’s and similar liens, judgment liens, liens to secure additional non-recourse debt not to exceed $100 million outstanding at any one time at each of Alliant Energy, IPL and WPL, and purchase money liens.
The credit agreement contains provisions that require, during its term, any proceeds from asset sales, with certain exclusions, in excess of 25% of Alliant Energy’s, IPL’s and WPL’s respective consolidated assets be used to reduce certain of their respective debt commitments. Exclusions include, among others, certain sale and lease-back transactions, sales of non-utility assets, intercompany asset sales and sales of certain contracts and accounts receivable.
The credit agreement contains customary events of default, including a cross-default provision that would be triggered if Alliant Energy or certain of its significant subsidiaries (including IPL and WPL) defaults on debt (other than non-recourse debt) totaling $100 million or more. IPL and WPL are subject to a similar cross-default provision with respect to their own respective consolidated debt. A default by Alliant Energy or its non-utility subsidiaries would not trigger a cross-default at IPL or WPL, nor would a default by either of IPL or WPL constitute a cross-default event for the other. If an event of default under the credit agreement occurs and is continuing, then the lenders may declare any outstanding obligations of the defaulting borrower under the credit agreement immediately due and payable. In addition, if any order for relief is entered under bankruptcy laws with respect to (a) Alliant Energy, IPL or WPL, then any outstanding obligations of Alliant Energy under the credit agreement would be immediately due and payable, or (b) IPL or WPL, then any outstanding obligations of IPL or WPL, respectively, under the credit agreement would be immediately due and payable.
A material adverse change representation is not required for borrowings under the credit agreement.
Refer to Note 9(a) for discussion of financial covenants required under the credit agreement, as well as additional information on theThe single credit facility commercial paper outstanding and AEF’s $95 million, 364-day variable-rate term loan credit agreement related to the acquisition of an equity ownership interest incontains a non-utility wind farm located in Oklahoma. At December 31, 2017,financial covenant, which requires Alliant Energy, IPL and WPL wereto maintain certain debt-to-capital ratios in compliance with financial covenants oforder to borrow under the credit agreement.
Long-term Debt - Referfacility. AEF’s term loan credit agreement contains a financial covenant, which requires Alliant Energy to Note 9(b) for discussion of IPL’s and WPL’s issuances of long-term debtmaintain a certain debt-to-capital ratio in 2017. Significant issuances of long-term debt in 2016 and 2015order to borrow under the term loan credit agreement. The required debt-to-capital ratios compared to the actual debt-to-capital ratios at December 31, 2021 were as follows (dollars in millions):follows: |
| | | | | | | | | | | | |
| Company | | Principal Amount | | Type | | Interest Rate | | Maturity Date | | Use of Proceeds |
| 2016: | | | | | | | | | | |
| AEF | |
| $500 |
| | Variable-rate term loan credit agreement | | 2% at December 31, 2017 | | Oct-2018 | | Retire borrowings under Alliant Energy’s and Franklin County Holdings LLC’s variable-rate term loan credit agreements that matured in 2016, reduce outstanding commercial paper and for general corporate purposes |
| IPL | | 300 |
| | Senior debentures | | 3.7% | | Sep-2046 | | Reduce cash amounts received from its sales of accounts receivable program, reduce commercial paper classified as long-term debt and for general corporate purposes |
| 2015: | | | | | | | | | | |
| IPL | | 250 |
| | Senior debentures | | 3.4% | | Aug-2025 | | Reduce commercial paper classified as long-term debt, reduce cash amounts received from its sales of accounts receivable program and for general corporate purposes |
| | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| Requirement, not to exceed | 65% | | 65% | | 65% |
| Actual | 57% | | 49% | | 49% |
AEF’s $500 million term loanThe debt component of the capital ratios includes, when applicable, long- and short-term debt (excluding non-recourse debt and hybrid securities to the extent the total carrying value of such hybrid securities does not exceed 15% of consolidated capital of the applicable borrower), finance lease obligations, certain letters of credit, agreement (with Alliant Energy as guarantor) includes substantiallyguarantees of the same covenantsforegoing and eventsnew synthetic leases. Unfunded vested benefits under qualified pension plans and sales of defaultaccounts receivable are not included in the revolving credit facility financial covenants discussed above and in Note 9(a). At December 31, 2017, Alliant Energy was in compliance with financial covenantsdebt-to-capital ratios. The equity component of the term loan credit agreement.capital ratios excludes accumulated other comprehensive income (loss).
|
| | | | | | | | | | |
| Company | | Principal Amount | | Type | | Interest Rate | | Retirement Date |
| 2016: | | | | | | | | |
| Alliant Energy | |
| $250 |
| | Variable-rate term loan credit agreement | | 1% at December 31, 2015 | | Oct-2016 |
| Franklin County Holdings LLC | | 60 |
| | Variable-rate term loan credit agreement | | 1% at December 31, 2015 | | Oct-2016 |
| 2015: | | | | | | | | |
| IPL | | 150 |
| | Senior debentures | | 3.3% | | Jun-2015 |
| WPL | | 16 |
| | Pollution control revenue bonds | | 5% | | Sep-2015 |
| WPL | | 15 |
| | Pollution control revenue bonds | | 5.375% | | Aug-2015 |
Refer to Note 9(b)Operations for further discussion of long-term debt and “Executive Overview” for discussion of expected issuances of long-term debt in 2018.2022. In 2020, IPL issued $400 million of 2.3% senior debentures due 2030, and a portion of the proceeds from the issuance was used by IPL to retire its $200 million 3.65% senior debentures that matured in 2020. In 2020, WPL issued $350 million of 3.65% debentures due 2050, and a portion of the proceeds from the issuance was used by WPL to reduce borrowings under the single revolving credit facility. In 2020, AEF entered into a $300 million variable-rate term loan credit agreement and used the borrowings under this agreement to retire its $300 million variable-rate term loan credit agreement that expired in 2020. In 2020, AEF issued $200 million of 1.4% senior notes due 2026, and a portion of the proceeds from the issuance was used to reduce Alliant Energy’s outstanding commercial paper.
Impact of Credit Ratings on Liquidity and Collateral Obligations -
Ratings Triggers - The long-term debt of Alliant Energy and its subsidiaries is not subject to any repayment requirements as a result of explicit credit rating downgrades or so-called “ratings triggers.” However, Alliant Energy and its subsidiaries are parties to various agreements that contain provisions dependent on credit ratings. In the event of a significant downgrade, Alliant Energy or its subsidiaries may need to provide credit support, such as letters of credit or cash collateral equal to the amount of theany exposure, or may need to unwind the contractcontracts or pay the underlying obligation.obligations. In the event of a significant downgrade, management believes Alliant Energy, IPL and WPL have sufficient liquidity to cover counterparty credit support or collateral requirements under these various agreements. In addition, a downgrade in the credit ratings of Alliant Energy, IPL or WPL including those that may result from the impacts of Tax Reform, could also result in them paying higher interest rates in future financings, reduce flexibility with future financing plans, reduce their pool of potential lenders, increase their borrowing costs under existing credit facilities or limit their access to the commercial paper market. Credit ratings and outlooks as of the date of this report are as follows:
| | | | | | | | | | | | | | |
| | Standard & Poor’s Ratings Services | | Moody’s Investors Service |
| Alliant Energy: | Corporate/issuer | A- | | Baa2 |
| Commercial paper | A-2 | | P-2 |
| Senior unsecured long-term debt | N/A | | N/A |
| Outlook | Stable | | Stable |
| IPL: | Corporate/issuer | A- | | Baa1 |
| Commercial paper | A-2 | | P-2 |
| Senior unsecured long-term debt | A- | | Baa1 |
| | | | |
| Outlook | Standard & Poor’s Ratings ServicesStable | | Moody’s Investors ServiceStable |
Alliant Energy:WPL: | Corporate/issuer | A-A | | Baa1A3 |
| Commercial paper | A-2A-1 | | P-2 |
| Senior unsecured long-term debt | N/A | | N/AA3 |
| Outlook | Stable | | Stable |
IPL: | Corporate/issuer | A- | | Baa1 |
| Commercial paper | A-2 | | P-2 |
| Senior unsecured long-term debt | A- | | Baa1 |
| Preferred stock | BBB | | Baa3 |
| Outlook | Stable | | Stable |
WPL: | Corporate/issuer | A | | A2 |
| Commercial paper | A-1 | | P-1 |
| Senior unsecured long-term debt | A | | A2 |
| Outlook | Stable | | Stable |
Standard & Poor’s Ratings Services and Moody’s Investors Service issued credit ratings of BBB+ and Baa2, respectively, for the senior notes issued by AEF in 2018 and 2020 (with Alliant Energy as guarantor). Credit ratings are not recommendations to buy or sell securities and are subject to change, and each rating should be evaluated independently of any other rating. Each of Alliant Energy, IPL or WPL assumes no obligation to update their respective credit ratings. Refer to Note 15 for additional information on ratings triggers for commodity contracts accounted for as derivatives.
Off-Balance Sheet Arrangements -
Special Purpose Entities - IPL maintains a Receivables Agreement whereby it may sell its customer accounts receivables, unbilled revenues and certain other accounts receivables to a third party through wholly-owned and consolidated special purpose entities. The purchase commitment from the third party to which IPL sells its receivables expires in March 2018. IPL currently expects to amend2023. In 2021 and extend the purchase commitment. In 2017, 2016 and 2015,2020, IPL evaluated the third party that purchases IPL’s receivable assets under the Receivables Agreement and believes that the third party is a VIE. However,VIE; however, IPL concluded consolidation of the third party was not required.
In addition, IPL’s sales of accounts receivable program agreement contains a cross-default provision that is triggered if IPL or Alliant Energy incurs an event of default on debt totaling $50$100 million or more. If an event of default under IPL’s sales of accounts receivable program agreement occurs, then the counterparty could terminate such agreement. Refer to Note 5(b) for additional information regarding IPL’s sales of accounts receivable program.
Guarantees and Indemnifications - At December 31, 2017,2021, various guarantees and indemnifications are outstanding related to Alliant Energy’s cash equity ownership interest in a non-utility wind farm and Alliant Energy’s and IPL’s prior divestiture activities. Refer to Note 16(d)17(d) for additional information.
Certain Financial Commitments -
Contractual Obligations - ConsolidatedAlliant Energy, IPL and WPL have various long-term contractual obligations as of December 31, 2017 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | Thereafter | | Total |
|
| $545 |
| |
| $364 |
| |
| $292 |
| |
| $267 |
| |
| $226 |
| |
| $716 |
| |
| $2,410 |
|
| 856 |
| | 256 |
| | 357 |
| | 8 |
| | 333 |
| | 3,093 |
| | 4,903 |
|
| Interest - long-term debt obligations | 217 |
| | 184 |
| | 168 |
| | 157 |
| | 157 |
| | 1,998 |
| | 2,881 |
|
| 82 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 82 |
|
| 6 |
| | 5 |
| | 2 |
| | 2 |
| | 1 |
| | 13 |
| | 29 |
|
| Capital leases | 2 |
| | 1 |
| | 1 |
| | 1 |
| | — |
| | — |
| | 5 |
|
| |
| $1,708 |
| |
| $810 |
| |
| $820 |
| |
| $435 |
| |
| $717 |
| |
| $5,820 |
| |
| $10,310 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IPL | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | Thereafter | | Total |
|
| $322 |
| |
| $236 |
| |
| $193 |
| |
| $189 |
| |
| $164 |
| |
| $565 |
| |
| $1,669 |
|
| 350 |
| | — |
| | 200 |
| | — |
| | — |
| | 1,875 |
| | 2,425 |
|
| Interest - long-term debt obligations | 115 |
| | 91 |
| | 91 |
| | 83 |
| | 83 |
| | 1,060 |
| | 1,523 |
|
| 15 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 15 |
|
| 3 |
| | 2 |
| | 1 |
| | 1 |
| | 1 |
| | 13 |
| | 21 |
|
| Capital leases | 1 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 1 |
|
| |
| $806 |
| |
| $329 |
| |
| $485 |
| |
| $273 |
| |
| $248 |
| |
| $3,513 |
| |
| $5,654 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| WPL | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | Thereafter | | Total |
|
| $222 |
| |
| $126 |
| |
| $96 |
| |
| $78 |
| |
| $62 |
| |
| $151 |
| |
| $735 |
|
| — |
| | 250 |
| | 150 |
| | — |
| | 250 |
| | 1,200 |
| | 1,850 |
|
| Interest - long-term debt obligations | 89 |
| | 89 |
| | 73 |
| | 69 |
| | 69 |
| | 938 |
| | 1,327 |
|
| 67 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 67 |
|
| 3 |
| | 3 |
| | 1 |
| | — |
| | — |
| | — |
| | 7 |
|
Capital lease - Sheboygan Falls Energy Facility (Note 10(b)) | 15 |
| | 15 |
| | 15 |
| | 15 |
| | 15 |
| | 35 |
| | 110 |
|
| Capital leases - other | 1 |
| | 1 |
| | 1 |
| | 1 |
| | — |
| | — |
| | 4 |
|
| |
| $397 |
| |
| $484 |
| |
| $336 |
| |
| $163 |
| �� |
| $396 |
| |
| $2,324 |
| |
| $4,100 |
|
2021, which include long-term debt maturities in Note 9(b), operating and finance leases in Note 10, capital purchase obligations in Note 17(a), and other purchase obligations in Note 17(b). At December 31, 2017,2021, Alliant Energy, IPL and WPL had no uncertain tax positions recorded as liabilities. Refer to Note 12(a)13(a) for anticipated pension and OPEB funding amounts, which are not included in the above tables.amounts. Refer to “Construction and Acquisition Expenditures” above for additional information on construction and acquisition programs. In addition, at December 31, 2017,2021, there were various other liabilities included on the balance sheets that, due to the nature of the liabilities, the timing of payments cannot be estimated and are therefore excluded from the above tables.estimated.
OTHER MATTERS
Market Risk Sensitive Instruments and Positions - Primary market risk exposures are associated with commodity prices, investment prices and interest rates. Risk management policies are used to monitor and assist in mitigating these market risks and derivative instruments are used to manage some of the exposures related to commodity prices. Refer to Notes 1(h) and 15 for further discussion of derivative instruments.instruments, and Note 1(g) for details of utility cost recovery mechanisms that significantly reduce commodity risk.
Commodity Price - Alliant Energy, IPL and WPL are exposed to the impact of market fluctuations in the price and transportation costs of commodities they procure and market. Established policies and procedures mitigate risks associated with these market fluctuations, including the use of various commodity derivatives and contracts of various durations for the forward sale and purchase of these commodities. Exposure to commodity price risks in the utility businesses is also significantly mitigated by current rate-making structures in place for recovery of fuel-related costs as well as the cost of natural gas purchased for resale. IPL’s electric and gas tariffs and WPL’s wholesale electric and gas tariffs provide for subsequent monthly adjustments to their tariff rates for material changes in prudently incurred commodity costs. IPL’s and WPL’s rate mechanisms, combined with commodity derivatives, significantly reduce commodity risk associated with their electric and gas margins.
WPL’s retail electric margins have modest exposure to the impact of changes in commodity prices due largely to the current retail recovery mechanism in place in Wisconsin for fuel-related costs. In December 2017, the PSCW approved annual forecasted fuel-related costs per MWh of $26.75 based on $356 million of variable fuel-related costs applicable for retail and wholesale customers for WPL’s 2018 Test Period. The retail portion of the 2018 fuel-related costs will be monitored using an annual bandwidth of plus or minus 2%. Based on the cost recovery mechanism in Wisconsin, the annual forecasted fuel-related costs approved by the PSCW in December 2017 and an annual bandwidth of plus or minus 2%, Alliant Energy and WPL currently estimate the commodity risk exposure to their retail electric margins in 2018 is approximately $6 million. However, the commodity risk exposure to WPL’s electric margins in 2018 could increase if WPL’s return on common equity in 2018 exceeds the most recently authorized return on common equity.
Refer to Note 2 for discussion of WPL’s retail fuel-related rate filings for Test Years 2016 through 2018, and Note 1(g) for additional details of utility cost recovery mechanisms that significantly reduce commodity risk.
Investment Price - Alliant Energy, IPL and WPL are exposed to investment price risk as a result of their investments in securities, largely related to securities held by their pension and OPEB plans. Refer to Note 12(a)13(a) for details of the securities held by their pension and OPEB plans. Refer to “Critical Accounting Policies and Estimates” for the impact on retirement plan costs of changes in the rate of returns earned by plan assets.
Interest Rate - Alliant Energy, IPL and WPL are exposed to risk resulting from changes in interest rates associated with variable-rate borrowings. In addition, Alliant Energy and IPL are exposed to risk resulting from changes in interest rates on cash amounts outstanding under IPL’s sales of accounts receivable program. Assuming the impact of a hypothetical 100 basis point increase in interest rates on variable-rate borrowings and cash proceedsamounts outstanding under IPL’s sales of accounts receivable program at December 31, 2017,2021, Alliant Energy’s, IPL’s and WPL’s annual pre-tax expense would increase by approximately $9$8 million, $0 and $0,$2 million, respectively. Refer to Notes 5(b) and 9 for additional information on cash proceedsamounts outstanding under IPL’s sales of accounts receivable program, and short- and long-term variable-rate borrowings, respectively. Refer to “Critical Accounting Policies and Estimates” for the impacts of changes in discount rates on retirement plan obligations and costs.
New Accounting Standards - Refer to Note 1(n) for discussion of new accounting standards impacting Alliant Energy, IPL and WPL.
Critical Accounting Policies and Estimates - The preparation ofAlliant Energy’s, IPL’s and WPL’s financial statements are prepared in conformity with GAAP, which requires management to apply accounting policies, judgments and assumptions, and make estimates that affect results of operations and the amounts of assets and liabilities reported in the financial statements. The following accounting policies and estimates are critical to the business and the understanding of financial results as they require critical assumptions and judgments by management. The results of these assumptions and judgments form the basis for making estimates regarding the results of operations and the amounts of assets and liabilities that are not readily apparent from other sources. Actual financial results may differ materially from these estimates. Management has discussed these critical accounting policies and estimates with the Audit Committee of the Board of Directors. Refer to Note 1 for additional discussion of accounting policies and the estimates used in the preparation of the financial statements.
Contingencies - Assumptions and judgments are made each reporting period regarding the future outcome of contingent events. Loss contingency amounts are recorded for any contingent events for which the likelihood of loss is probable and able to be reasonably estimated based upon current available information. The amounts recorded may differ from actuals when the uncertainty is resolved. The estimates made in accounting for contingencies, and the gains and losses that are recorded upon the ultimate resolution of these uncertainties, could have a significant effect on results of operations and the amount of assets and liabilities in the financial statements. Note 16 provides further discussion of contingencies assessed at
December 31, 2017, including various pending legal proceedings, guarantees and indemnifications that may have a material impact on financial condition and results of operations.
Regulatory Assets and Regulatory Liabilities - IPL and WPL are regulated by various federal and state regulatory agencies. As a result, they are subject to GAAP for regulated operations, which recognizes that the actions of a regulator can provide reasonable assurance of the existence of an asset or liability. Regulatory assets or regulatory liabilities arise as a result of a difference between GAAP and actions imposed by the regulatory agencies in the rate-making process. Regulatory assets generally represent incurred costs that have been deferred as such costs are probable of recovery in future customer rates. Regulatory liabilities generally represent obligations to make refunds to customers or amounts collected in rates for which the related costs have not yet been incurred. Regulatory assets and regulatory liabilities are recognized in accordance with the rulings of applicable federal and state regulators, and future regulatory rulings may impact the carrying value and accounting treatment of regulatory assets and regulatory liabilities.
Assumptions and judgments are made each reporting period regarding whether regulatory assets are probable of future recovery and regulatory liabilities are probable future obligations by considering factors such as regulatory environment
changes, rate orders issued by the applicable regulatory agencies, historical decisions by such regulatory agencies regarding similar regulatory assets and regulatory liabilities, and subsequent events of such regulatory agencies. The decisions made by regulatory authorities have an impact on the recovery of costs, the rate of return on invested capital and the timing and amount of assets to be recovered by rates. A change in these decisions may result in a material impact on results of operations and the amount of assets and liabilities in the financial statements. Note 2 provides details of the nature and amounts of regulatory assets and regulatory liabilities assessed at December 31, 2017, as well as discussion2021.
Income Taxes - Alliant Energy, IPL and WPL are subject to income taxes in various jurisdictions. Assumptions and judgments are made each reporting period to estimate income tax assets, liabilities, benefits and expenses. Judgments and assumptions are supported by historical data and reasonable projections. Significant changes in these judgments and assumptions could have a material impact on financial condition and results of a write-downoperations. Alliant Energy’s and IPL’s critical assumptions and judgments for 2021 include estimates of regulatory assets in 2017 related to the recoveryqualifying deductions for repairs expenditures and allocation of Sutherland Units 1 and 3, and AROs deemed no longer probable of recovery in future rates,mixed service costs due to the impact of Iowa rate-making principles on such property-related differences. Critical assumptions and judgments also include projections of future taxable income used to determine the ability to utilize net operating losses and credit carryforwards prior to their expiration. Refer to Note 12 for further discussion of tax matters.
Effect of Rate-making on Property-related Differences - Alliant Energy’s and IPL’s effective income tax rates are normally impacted by certain property-related differences at IPL retail electric rate review settlement,for which was approveddeferred tax is not recorded in the income statement pursuant to Iowa rate-making principles. Changes in methods or assumptions regarding the amount of IPL’s qualifying repairs expenditures, allocation of mixed service costs, and costs related to retirement or removal of depreciable property could result in a material impact on Alliant Energy’s and IPL’s financial condition and results of operations.
Carryforward Utilization - Significant federal tax credit carryforwards and federal and state net operating loss carryforwards exist for Alliant Energy, IPL and WPL as of December 31, 2021. Based on projections of current and future taxable income, Alliant Energy, IPL and WPL plan to utilize substantially all of these carryforwards prior to their expiration. Taxable income must be reduced by federal net operating losses carryforwards prior to utilizing federal tax credit carryforwards. Alliant Energy does not expect to utilize all of its federal net operating loss carryforwards until 2023, and therefore, currently does not expect to utilize 2002 vintage federal credit carryforwards prior to their expiration in 2022, resulting in valuation allowances that remain as of December 31, 2021. Federal credit carryforwards generated from 2003 through 2008, which amount to $12 million for Alliant Energy, are expected to be utilized within five years of expiration. All other federal credit carryforwards and federal net operating loss carryforwards are expected to be utilized more than five years before expiration. Changes in tax regulations or assumptions regarding current and future taxable income could require changes to valuation allowances in the IUBfuture resulting in February 2018.a material impact on financial condition and results of operations.
Long-Lived Assets- Periodic assessments regarding the recoverability of certain long-lived assets are completed when factors indicate the carrying value of such assets may not be impairedrecoverable or such assets are planned to be sold. These assessments require significant assumptions and judgments by management. The long-lived assets assessed for impairment generally include certain assets within regulated operations that may not be fully recovered from IPL’s and WPL’s customers as a result of regulatory decisions in the future, and assets within non-utility operations that are proposed to be sold or are currently generating operating losses.
Regulated Operations - Certain long-lived assets within regulated operations are reviewed for possible impairment whenever events or changes in circumstances indicate all or a portion of the carrying value of the assets may be disallowed for rate-making purposes. If IPL or WPL is disallowed recovery of any portion of the carrying value of its regulated property, plant and equipment that is under construction, has been recently completed or is probable of being retired early, an impairment charge is recognized equal to the amount of the carrying value that was disallowed recovery. If IPL or WPL is disallowed a full or partial return on the carrying value of its regulated property, plant and equipment that is under construction, has been recently completed or is probable of being retired early, an impairment charge is recognized equal to the difference between the carrying amount of the asset and the present value of the future revenues expected from its regulated property, plant and equipment. Alliant Energy’s, IPL’s and WPL’s long-lived assets within their regulated operations that were assessed for impairment and plant abandonment in 20172021 included IPL’s and WPL’s generating units subject to early retirement.
Generating Units Subject to Early Retirement - Alliant Energy, IPL and WPL evaluate future plans for their electric generation fleet and have announced the early retirement of certain older and less-efficient EGUs. When it becomes probable that an EGU will be retired before the end of its useful life, Alliant Energy, IPL and WPL must assess whether the EGU meets the criteria to be considered probable of abandonment. EGUs that are considered probable of abandonment generally have material remaining net book values and are expected to cease operations in the near term significantly before the end of their original estimated useful lives. If an EGU meets such criteria to be considered probable of abandonment, Alliant Energy, IPL and WPL must assess the probability of full recovery of the remaining carrying value of such EGU. If it is probable that regulators will not allow full recovery of and a full return on the remaining net book value of the abandoned EGU, an impairment charge is recognized equal to the difference between the remaining carrying value and the present value of the future revenues expected from the abandoned EGU.
Alliant Energy and IPL concluded that Lansing, and Alliant Energy and WPL concluded that Edgewater Unit 45 and Columbia Units 1 and 2, met the criteria to be considered probable of abandonment in 2017.as of December 31, 2021. IPL and WPL isare currently allowed a full recovery of and a full return on this EGUits respective EGUs from both its retail and wholesale customers, and as a result, Alliant Energy, IPL and WPL concluded that no impairment was required as of December 31, 2017.2021. Alliant Energy, IPL and WPL evaluated their other EGUs that are subject to early retirement and determined that no other EGUs met the criteria to be considered probable of abandonment as of December 31, 2017. Refer2021. Note 3 provides additional details of these assets anticipated to “Strategic Overview” for discussion of additional EGUs that may be retired early and could be considered probableearly.
Unbilled Revenues - Unbilled revenues are primarily associated with utility operations. Energy sales to individual customers are based on the reading of customers’ meters, which occurs on a systematic basis throughout the month. Amounts of energy delivered to customers since the date of the last meter reading are estimated at the end of each reporting period and the corresponding estimated unbilled revenue is recorded. The unbilled revenue estimate is based on estimates of daily system demand volumes, estimated customer usage by class, temperature impacts, line losses and the most recent customer rates. Such process involves the use of various judgments and assumptions and significant changes in these judgments and assumptions could have a material impact on results of operations. As of December 31, 2017,2021, unbilled revenues related to Alliant Energy’s utility operations were $198$195 million ($113104 million at IPL and $85$91 million at WPL).Note 5(b) provides discussion of IPL’s unbilled revenues as of December 31, 2017 sold to a third party related to its sales of accounts receivable program.
Pensions and Other Postretirement Benefits - Alliant Energy, IPL and WPL sponsor various defined benefit pension and OPEB plans that provide benefits to a significant portion of their employees and retirees. Assumptions and judgments are made periodically to estimate the obligations and costs related to their retirement plans. There are many judgments and assumptions involved in determining an entity’s pension and other postretirement liabilities and costs each period including employee demographics (including life expectancies and compensation levels), discount rates, assumed rates of return and funding. Changes made to plan provisions may also impact current and future benefits costs. Judgments and assumptions are supported by historical data and reasonable projections and are reviewed at least annually. The following table shows the impacts of changing certain key actuarial assumptions discussed above (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Defined Benefit Pension Plans | | OPEB Plans |
| Change in Actuarial Assumption | | Impact on Projected Benefit Obligation at December 31, 2021 | | Impact on 2022 Net Periodic Benefit Costs | | Impact on Accumulated Benefit Obligation at December 31, 2021 | | Impact on 2022 Net Periodic Benefit Costs |
| Alliant Energy | | | | | | | | |
| 1% change in discount rate | | $161 | | $11 | | $20 | | $2 |
| 1% change in expected rate of return | | N/A | | 10 | | N/A | | 1 |
| IPL | | | | | | | | |
| 1% change in discount rate | | 75 | | 6 | | 7 | | 1 |
| 1% change in expected rate of return | | N/A | | 4 | | N/A | | 1 |
| WPL | | | | | | | | |
| 1% change in discount rate | | 71 | | 6 | | 7 | | 1 |
| 1% change in expected rate of return | | N/A | | 4 | | N/A | | — |
|
| | | | | | | | | | | | | | | | |
| | | Defined Benefit Pension Plans | | OPEB Plans |
| Change in Actuarial Assumption | | Impact on Projected Benefit Obligation at December 31, 2017 | | Impact on 2018 Net Periodic Benefit Costs | | Impact on Projected Benefit Obligation at December 31, 2017 | | Impact on 2018 Net Periodic Benefit Costs |
| Alliant Energy | | | | | | | | |
| 1% change in discount rate | |
| $173 |
| |
| $11 |
| |
| $22 |
| |
| $2 |
|
| 1% change in expected rate of return | | N/A |
| | 9 |
| | N/A |
| | 1 |
|
| IPL | | | | | | | | |
| 1% change in discount rate | | 80 |
| | 5 |
| | 8 |
| | 1 |
|
| 1% change in expected rate of return | | N/A |
| | 4 |
| | N/A |
| | 1 |
|
| WPL | | | | | | | | |
| 1% change in discount rate | | 76 |
| | 6 |
| | 8 |
| | 1 |
|
| 1% change in expected rate of return | | N/A |
| | 4 |
| | N/A |
| | — |
|
Note 12(a) provides additional details of pension and OPEB plans.
Income TaxesContingencies - Alliant Energy, IPL and WPL are subject to income taxes in various jurisdictions. Assumptions and judgments are made each reporting period regarding the future outcome of contingent events. Loss contingency amounts are recorded for any contingent events for which the likelihood of loss is probable and able to be reasonably estimated based upon current available information. The amounts recorded may differ from actuals when the uncertainty is resolved. The estimates made in accounting for contingencies, and the gains and losses that are recorded upon the ultimate resolution of these uncertainties, could have a significant effect on results of operations and the amount of assets and liabilities in the financial statements.
Effective January 1, 2020 upon the adoption of the new accounting standard for credit losses, certain contingencies, such as Alliant Energy Resources, LLC’s guarantees of the partnership obligations of an affiliate of Whiting Petroleum, require estimation each reporting period of the expected credit losses on those contingencies. These estimates require significant judgment and result in recognition of a credit loss liability sooner than the previous accounting standards, which required recognition when the contingency became probable and could be reasonably estimated based on then currently available information. With respect to Alliant Energy’s guarantees of the partnership obligations of an affiliate of Whiting Petroleum, the most significant judgments in determining the credit loss liability were the estimate income tax assets, liabilities, benefitsof the exposure under the guarantees and expenses. Judgmentsthe methodology used for calculating the credit loss liability. As of December 31, 2021, Alliant Energy currently estimates the exposure to be a portion of the known partnership abandonment obligations. The methodology used to determine the credit loss liability considers both quantitative and assumptions are supported by historicalqualitative information, which utilizes potential outcomes in a range of possible estimated amounts. Factors considered include market and external data points, the creditworthiness of the other partners, Whiting Petroleum’s emergence from bankruptcy in the third quarter of 2020, and reasonable projections. Significant changes in these judgments and assumptions couldforecasted cash flow expenditures associated with the abandonment obligations based on information made available to Alliant Energy. Note 1(l) provides discussion of the adoption of the new accounting standard for credit losses.
Note 17 provides further discussion of contingencies assessed at December 31, 2021 that may have a material impact on financial condition and results of operations. Alliant Energy’soperations, including various pending legal proceedings, guarantees and IPL’s critical assumptions and judgments for 2017 include estimates of qualifying deductions for repairs expenditures and allocation of mixed service costs due to the impact of Iowa rate-making principles on such property-related differences. Critical assumptions and judgments also include projections of future taxable income used to determine the ability to utilize net operating losses and credit carryforwards prior to their expiration, and accounting for the impacts of Tax Reform.indemnifications.
Effect of Rate-making on Property-related Differences - Alliant Energy’s and IPL’s effective income tax rates are normally impacted by certain property-related differences at IPL for which deferred tax is not recorded in the income statement pursuant to Iowa rate-making principles. Changes in methods or assumptions regarding the amount of IPL’s qualifying repairs expenditures, allocation of mixed service costs, and costs related to retirement or removal of depreciable property could result in a material impact on Alliant Energy’s and IPL’s financial condition and results of operations. Refer to Note 1(c) for further discussion of regulatory accounting for taxes. Refer to Note 11 for details of how the effect of rate-making on property-related differences impacted Alliant Energy’s and IPL’s effective income tax rates for 2017, 2016 and 2015.
Carryforward Utilization - Significant federal tax credit carryforwards and federal and state net operating loss carryforwards exist for Alliant Energy, IPL and WPL as of December 31, 2017. Based on projections of current and future taxable income, Alliant Energy, IPL and WPL plan to utilize substantially all of these carryforwards prior to their expiration. Due to the anticipated future reductions in revenues from utility customers due to Tax Reform, Alliant Energy expects a reduction in its future consolidated taxable income, which will extend the period to which prior unutilized operating losses will be utilized. Taxable income must be reduced by net operating losses carryforwards prior to utilizing federal tax credit carryforwards. Alliant Energy expects to utilize its net operating losses carryforwards by 2024 and therefore, currently does not expect to utilize 2002 and 2003 vintage federal credit carryforwards prior to their expiration in 2022 and 2023, respectively. This has resulted in valuation allowance charges recorded to “Income tax expense (benefit)” on the income statements. Federal credit carryforwards generated from 2004 through 2008, which amount to $7 million for Alliant Energy, are expected to be utilized within five years of expiration. All other federal credit carryforwards and federal net operating loss carryforwards are expected to be utilized more than five years before expiration. Changes in tax regulations or assumptions regarding current and future taxable income could require additional valuation allowances in the future resulting in a material impact on financial condition and results of operations. Refer to Note 11 for further discussion of Tax Reform, federal tax credit carryforwards, and federal and state net operating loss carryforwards.
Other Future Considerations - In addition to items discussed earlier in MDA, the Notes in Item 8 and “Risk Factors” in Item 1A, the following items could impact future financial condition or results of operations:
Electric Transmission Service Expense - IPL and WPL currently receive substantially all their transmission services from ITC and ATC, respectively. Due to the use of formula rates that allow ITC and ATC to change the amount they charge to their customers based upon changes to the costs they incur, there is uncertainty regarding the long-term trends of IPL’s and WPL’s future electric transmission service expense. In 2018, IPL and WPL expect amounts billed by ITC and ATC, respectively, to decrease as a result of anticipated impacts from Tax Reform and MISO transmission owner return on equity complaints. However, based on IPL’s and WPL’s electric transmission cost recovery mechanisms discussed in Note 1(g), IPL and WPL currently do not expect that any changes to electric transmission service costs billed by ITC and ATC will have a material impact on their financial condition and results of operations. Refer to Note 2 for further discussion of the MISO transmission owner return on equity complaints.
Sales Trends -
Jo-Carroll Energy, Inc. - In 2014, Jo-Carroll Energy, Inc. provided notice of termination of its wholesale power supply agreement with IPL effective April 1, 2018. Sales to Jo-Carroll Energy, Inc. represented 3% of IPL’s total electric sales in 2017.
Great Lakes Utilities - In 2014, Great Lakes Utilities provided notice of termination of its wholesale power supply agreement with WPL effective December 31, 2017. Sales to Great Lakes Utilities represented approximately 2% of WPL’s total electric sales in 2017.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareowners and the Board of Directors and Shareowners of Alliant Energy CorporationCorporation:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Alliant Energy Corporation and subsidiaries (the “Company”) as of December 31, 20172021 and 2016,2020, the related consolidated statements of income, common equity, and cash flows, for each of the three years in the period ended December 31, 2017,2021, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20172021 and 2016,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017,2021, in conformity with accounting principles generally accepted in the United States of America (U.S.).America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (U.S.)(United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2017,2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2018,18, 2022, expressed an unqualified opinion on the Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the auditaudits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Regulatory Assets and Regulatory Liabilities - Impact of rate regulation on the financial statements - Refer to Notes 1 and 2 to the financial statements
Critical Audit Matter Description
Alliant Energy Corporation, through its wholly-owned subsidiaries Interstate Power and Light Company and Wisconsin Power and Light Company, is subject to rate regulation by the Federal Energy Regulatory Commission and the respective state commissions in Iowa and Wisconsin (collectively the “regulatory agencies”). Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the Regulated Operations Topic 980 of the Financial Accounting Standards Board’s Accounting Standards Codification. As of December 31, 2021, the Company had a recorded consolidated regulatory assets balance of $1,940 million and regulatory liabilities balance of $1,271 million.
The Company’s rates are subject to regulatory rate-setting processes and periodic earnings oversight. The regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. Regulatory assets represent incurred costs that have been deferred and are probable of recovery in future customer rates. Regulatory liabilities represent obligations to make refunds to customers or amounts collected in rates for which the costs have not yet been incurred. The Company’s regulatory assets and regulatory liabilities are recognized in accordance with the rulings of the regulatory agencies. A change in these rulings may result in a material impact on results of operations and the amount of assets and liabilities in the financial statements. Future regulatory rulings may impact the carrying value and accounting treatment of the regulatory assets and regulatory liabilities.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of the recovery of incurred costs and refund of obligations to customers in future rates. Given that management’s accounting judgments are based on assumptions about the outcome of future decisions by the regulatory agencies, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate-setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the regulatory filings by management and the uncertainty of future decisions by the regulatory agencies included the following, among others:
•We tested the design and operating effectiveness of management’s controls over the evaluation of regulatory assets and liabilities, including the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
•We obtained and evaluated the Company’s analysis supporting the probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess the reasonability of management’s assertions.
•We inquired of management regarding current events impacting the Company and inspected minutes of the board of directors and other committees of the Company and evaluated whether matters were identified that may have an impact on recorded regulatory asset and liability balances.
•We read relevant regulatory orders, regulatory statutes, interpretations, procedural memorandums, filings made by interveners, and other publicly available information issued by the regulatory agencies that pertain to the Company as well as to other relevant public utilities. We evaluated the external information and assessed whether there were matters in such information that would be contradictory to the assessment of recovery of the Company’s regulatory assets or refund of regulatory liabilities.
•We inquired of management about property, plant, and equipment, net that may be abandoned. We inspected minutes of the board of directors and other committees of the Company, regulatory orders and other filings with the regulatory agencies to identify evidence that may contradict management’s assertion regarding probability of an abandonment or that may have an impact on the recorded balances.
•We evaluated the Company’s disclosures related to the impacts of rate regulation and regulatory developments, including disclosures related to the regulatory balances recorded.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
February 23, 201818, 2022
We have served as the Company’s auditor since 2002.
ALLIANT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2021 | | 2020 | | 2019 |
| (in millions, except per share amounts) |
| Revenues: | | | | | |
| Electric utility | $3,081 | | | $2,920 | | | $3,064 | |
| Gas utility | 456 | | | 373 | | | 455 | |
| Other utility | 49 | | | 49 | | | 46 | |
| Non-utility | 83 | | | 74 | | | 83 | |
| Total revenues | 3,669 | | | 3,416 | | | 3,648 | |
| Operating expenses: | | | | | |
| Electric production fuel and purchased power | 642 | | | 652 | | | 777 | |
| Electric transmission service | 537 | | | 449 | | | 481 | |
| Cost of gas sold | 258 | | | 182 | | | 222 | |
| Other operation and maintenance | 676 | | | 670 | | | 712 | |
| Depreciation and amortization | 657 | | | 615 | | | 567 | |
| Taxes other than income taxes | 104 | | | 108 | | | 111 | |
| Total operating expenses | 2,874 | | | 2,676 | | | 2,870 | |
| Operating income | 795 | | | 740 | | | 778 | |
| Other (income) and deductions: | | | | | |
| Interest expense | 277 | | | 275 | | | 273 | |
| Equity income from unconsolidated investments, net | (62) | | | (61) | | | (53) | |
| Allowance for funds used during construction | (25) | | | (55) | | | (93) | |
| Other | 5 | | | 14 | | | 15 | |
| Total other (income) and deductions | 195 | | | 173 | | | 142 | |
| Income before income taxes | 600 | | | 567 | | | 636 | |
| Income tax expense (benefit) | (74) | | | (57) | | | 69 | |
| | | | | |
| | | | | |
| Net income | 674 | | | 624 | | | 567 | |
| Preferred dividend requirements of Interstate Power and Light Company | 15 | | | 10 | | | 10 | |
| Net income attributable to Alliant Energy common shareowners | $659 | | | $614 | | | $557 | |
| Weighted average number of common shares outstanding: | | | | | |
| Basic | 250.2 | | | 248.4 | | | 238.5 | |
| Diluted | 250.7 | | | 248.7 | | | 239.0 | |
| Earnings per weighted average common share attributable to Alliant Energy common shareowners: | | | | | |
| | | | | |
| | | | | |
| | | | | |
| Basic | $2.63 | | | $2.47 | | | $2.34 | |
| Diluted | $2.63 | | | $2.47 | | | $2.33 | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
|
| | | | | | | | | | | |
| | Year Ended December 31, |
| | 2017 | | 2016 | | 2015 |
| | (in millions, except per share amounts) |
| Operating revenues: | | | | | |
| Electric utility |
| $2,894.7 |
| |
| $2,875.5 |
| |
| $2,770.5 |
|
| Gas utility | 400.9 |
| | 355.4 |
| | 381.2 |
|
| Other utility | 47.5 |
| | 48.6 |
| | 57.9 |
|
| Non-utility | 39.1 |
| | 40.5 |
| | 44.0 |
|
| Total operating revenues | 3,382.2 |
| | 3,320.0 |
| | 3,253.6 |
|
| Operating expenses: | | | | | |
| Electric production fuel and purchased power | 818.1 |
| | 854.0 |
| | 837.7 |
|
| Electric transmission service | 480.9 |
| | 527.9 |
| | 485.3 |
|
| Cost of gas sold | 211.4 |
| | 194.3 |
| | 219.1 |
|
| Asset valuation charges for Franklin County wind farm | — |
| | 86.4 |
| | — |
|
| Other operation and maintenance | 651.0 |
| | 606.5 |
| | 629.5 |
|
| Depreciation and amortization | 461.8 |
| | 411.6 |
| | 401.3 |
|
| Taxes other than income taxes | 105.6 |
| | 102.3 |
| | 103.7 |
|
| Total operating expenses | 2,728.8 |
| | 2,783.0 |
| | 2,676.6 |
|
| Operating income | 653.4 |
| | 537.0 |
| | 577.0 |
|
| Interest expense and other: | | | | | |
| Interest expense | 215.6 |
| | 196.2 |
| | 187.1 |
|
| Equity income from unconsolidated investments, net | (44.8 | ) | | (39.6 | ) | | (33.8 | ) |
| Allowance for funds used during construction | (49.7 | ) | | (62.5 | ) | | (36.9 | ) |
| Interest income and other | (0.5 | ) | | (0.5 | ) | | (0.7 | ) |
| Total interest expense and other | 120.6 |
| | 93.6 |
| | 115.7 |
|
| Income from continuing operations before income taxes | 532.8 |
| | 443.4 |
| | 461.3 |
|
| Income taxes | 66.7 |
| | 59.4 |
| | 70.4 |
|
| Income from continuing operations, net of tax | 466.1 |
| | 384.0 |
| | 390.9 |
|
| Income (loss) from discontinued operations, net of tax | 1.4 |
| | (2.3 | ) | | (2.5 | ) |
| Net income | 467.5 |
| | 381.7 |
| | 388.4 |
|
| Preferred dividend requirements of Interstate Power and Light Company | 10.2 |
| | 10.2 |
| | 10.2 |
|
| Net income attributable to Alliant Energy common shareowners |
| $457.3 |
| |
| $371.5 |
| |
| $378.2 |
|
| Weighted average number of common shares outstanding (basic and diluted) | 229.7 |
| | 227.1 |
| | 225.4 |
|
| Earnings per weighted average common share attributable to Alliant Energy common shareowners (basic and diluted): | | | | | |
| Income from continuing operations, net of tax |
| $1.99 |
| |
| $1.65 |
| |
| $1.69 |
|
| Loss from discontinued operations, net of tax | — |
| | (0.01 | ) | | (0.01 | ) |
| Net income |
| $1.99 |
| |
| $1.64 |
| |
| $1.68 |
|
| Amounts attributable to Alliant Energy common shareowners: | | | | | |
| Income from continuing operations, net of tax |
| $455.9 |
| |
| $373.8 |
| |
| $380.7 |
|
| Income (loss) from discontinued operations, net of tax | 1.4 |
| | (2.3 | ) | | (2.5 | ) |
| Net income |
| $457.3 |
| |
| $371.5 |
| |
| $378.2 |
|
TheRefer to accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
Statements.
ALLIANT ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
| | | | | | | | | | | |
| December 31, |
| 2021 | | 2020 |
| (in millions, except per
share and share amounts) |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents | $39 | | | $54 | |
| Accounts receivable, less allowance for expected credit losses | 440 | | | 412 | |
| Production fuel, at weighted average cost | 51 | | | 66 | |
| Gas stored underground, at weighted average cost | 82 | | | 46 | |
| Materials and supplies, at weighted average cost | 113 | | | 105 | |
| Regulatory assets | 104 | | | 81 | |
| | | |
| Other | 240 | | | 123 | |
| Total current assets | 1,069 | | | 887 | |
| Property, plant and equipment, net | 14,987 | | | 14,336 | |
| Investments: | | | |
| ATC Holdings | 338 | | | 331 | |
| Other | 179 | | | 154 | |
| Total investments | 517 | | | 485 | |
| Other assets: | | | |
| Regulatory assets | 1,836 | | | 1,929 | |
| Deferred charges and other | 144 | | | 73 | |
| Total other assets | 1,980 | | | 2,002 | |
| Total assets | $18,553 | | | $17,710 | |
|
| | | | | | | |
| | December 31, |
| | 2017 | | 2016 |
| | (in millions, except per share and share amounts) |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents |
| $27.9 |
| |
| $8.2 |
|
| Accounts receivable, less allowance for doubtful accounts | 482.8 |
| | 493.3 |
|
| Production fuel, at weighted average cost | 72.3 |
| | 98.1 |
|
| Gas stored underground, at weighted average cost | 44.5 |
| | 37.6 |
|
| Materials and supplies, at weighted average cost | 105.6 |
| | 86.6 |
|
| Regulatory assets | 84.3 |
| | 57.8 |
|
| Other | 87.7 |
| | 95.5 |
|
| Total current assets | 905.1 |
| | 877.1 |
|
| Property, plant and equipment, net | 11,234.5 |
| | 10,279.2 |
|
| Investments: | | | |
| ATC Investment | 274.2 |
| | 317.6 |
|
| Other | 121.9 |
| | 20.0 |
|
| Total investments | 396.1 |
| | 337.6 |
|
| Other assets: | | | |
| Regulatory assets | 1,582.4 |
| | 1,857.3 |
|
| Deferred charges and other | 69.7 |
| | 22.6 |
|
| Total other assets | 1,652.1 |
| | 1,879.9 |
|
| Total assets |
| $14,187.8 |
| |
| $13,373.8 |
|
| | | | | | | | | | | |
| LIABILITIES AND EQUITY | | | |
| Current liabilities: | | | |
| Current maturities of long-term debt | $633 | | | $8 | |
| Commercial paper | 515 | | | 389 | |
| | | |
| Accounts payable | 436 | | | 377 | |
| Accrued taxes | 58 | | | 67 | |
| | | |
| Regulatory liabilities | 186 | | | 249 | |
| Other | 226 | | | 207 | |
| Total current liabilities | 2,054 | | | 1,297 | |
| Long-term debt, net (excluding current portion) | 6,735 | | | 6,769 | |
| Other liabilities: | | | |
| Deferred tax liabilities | 1,927 | | | 1,814 | |
| Regulatory liabilities | 1,085 | | | 1,057 | |
| Pension and other benefit obligations | 374 | | | 511 | |
| Other | 388 | | | 374 | |
| Total other liabilities | 3,774 | | | 3,756 | |
Commitments and contingencies (Note 17) | 0 | | 0 |
| Equity: | | | |
| Alliant Energy Corporation common equity: | | | |
| Common stock - $0.01 par value - 480,000,000 shares authorized; 250,474,529 and 249,868,415 shares outstanding | 3 | | | 2 | |
| Additional paid-in capital | 2,749 | | | 2,704 | |
| Retained earnings | 3,250 | | | 2,994 | |
| Accumulated other comprehensive loss | — | | | (1) | |
| Shares in deferred compensation trust - 383,532 and 380,542 shares at a weighted average cost of $30.59 and $28.73 per share | (12) | | | (11) | |
| Total Alliant Energy Corporation common equity | 5,990 | | | 5,688 | |
| Cumulative preferred stock of Interstate Power and Light Company | — | | | 200 | |
| Total equity | 5,990 | | | 5,888 | |
| Total liabilities and equity | $18,553 | | | $17,710 | |
|
| | | | | | | |
| LIABILITIES AND EQUITY | | | |
| Current liabilities: | | | |
| Current maturities of long-term debt |
| $855.7 |
| |
| $4.6 |
|
| Commercial paper | 320.2 |
| | 244.1 |
|
| Other short-term borrowings | 95.0 |
| | — |
|
| Accounts payable | 477.3 |
| | 445.3 |
|
| Regulatory liabilities | 140.0 |
| | 186.2 |
|
| Other | 260.8 |
| | 281.8 |
|
| Total current liabilities | 2,149.0 |
| | 1,162.0 |
|
| Long-term debt, net (excluding current portion) | 4,010.6 |
| | 4,315.6 |
|
| Other liabilities: | | | |
| Deferred tax liabilities | 1,478.4 |
| | 2,570.2 |
|
| Regulatory liabilities | 1,357.2 |
| | 494.8 |
|
| Pension and other benefit obligations | 504.0 |
| | 489.9 |
|
| Other | 306.4 |
| | 279.3 |
|
| Total other liabilities | 3,646.0 |
| | 3,834.2 |
|
Commitments and contingencies (Note 16) |
| |
|
| Equity: | | | |
| Alliant Energy Corporation common equity: | | | |
| Common stock - $0.01 par value - 480,000,000 shares authorized; 231,348,646 and 227,673,654 shares outstanding | 2.3 |
| | 2.3 |
|
| Additional paid-in capital | 1,845.5 |
| | 1,693.1 |
|
| Retained earnings | 2,346.0 |
| | 2,177.0 |
|
| Accumulated other comprehensive loss | (0.5 | ) | | (0.4 | ) |
| Shares in deferred compensation trust - 463,365 and 441,695 shares at a weighted average cost of $23.91 and $22.71 per share | (11.1 | ) | | (10.0 | ) |
| Total Alliant Energy Corporation common equity | 4,182.2 |
| | 3,862.0 |
|
| Cumulative preferred stock of Interstate Power and Light Company | 200.0 |
| | 200.0 |
|
| Total equity | 4,382.2 |
| | 4,062.0 |
|
| Total liabilities and equity |
| $14,187.8 |
| |
| $13,373.8 |
|
TheRefer to accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
Statements.
ALLIANT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2021 | | 2020 | | 2019 |
| (in millions) |
| Cash flows from operating activities: | | | | | |
| Net income | $674 | | | $624 | | | $567 | |
| Adjustments to reconcile net income to net cash flows from operating activities: | | | | | |
| Depreciation and amortization | 657 | | | 615 | | | 567 | |
| | | | | |
| Deferred tax expense (benefit) and tax credits | (78) | | | (66) | | | 56 | |
| | | | | |
| | | | | |
| Equity component of allowance for funds used during construction | (18) | | | (39) | | | (66) | |
| Other | 35 | | | 37 | | | 20 | |
| Other changes in assets and liabilities: | | | | | |
| Accounts receivable | (530) | | | (468) | | | (472) | |
| Derivative assets | (142) | | | (7) | | | 2 | |
| Regulatory assets | 51 | | | (130) | | | (16) | |
| Regulatory liabilities | (66) | | | (113) | | | (40) | |
| Deferred income taxes | 193 | | | 171 | | | 54 | |
| Pension and other benefit obligations | (137) | | | 27 | | | (25) | |
| DAEC PPA amendment buyout payment | — | | | (110) | | | — | |
| Other | (57) | | | (40) | | | 13 | |
| Net cash flows from operating activities | 582 | | | 501 | | | 660 | |
| Cash flows used for investing activities: | | | | | |
| Construction and acquisition expenditures: | | | | | |
| Utility business | (1,070) | | | (1,293) | | | (1,539) | |
| Other | (99) | | | (73) | | | (101) | |
| Cash receipts on sold receivables | 502 | | | 458 | | | 413 | |
| Other | (61) | | | (43) | | | (60) | |
| Net cash flows used for investing activities | (728) | | | (951) | | | (1,287) | |
| Cash flows from financing activities: | | | | | |
| Common stock dividends | (403) | | | (377) | | | (337) | |
| Proceeds from issuance of common stock, net | 28 | | | 247 | | | 390 | |
| Payments to redeem cumulative preferred stock of IPL | (200) | | | — | | | — | |
| Proceeds from issuance of long-term debt | 600 | | | 1,250 | | | 950 | |
| Payments to retire long-term debt | (8) | | | (657) | | | (256) | |
| Net change in commercial paper | 126 | | | 52 | | | (104) | |
| Other | (13) | | | (27) | | | (24) | |
| Net cash flows from financing activities | 130 | | | 488 | | | 619 | |
| Net increase (decrease) in cash, cash equivalents and restricted cash | (16) | | | 38 | | | (8) | |
| Cash, cash equivalents and restricted cash at beginning of period | 56 | | | 18 | | | 26 | |
| Cash, cash equivalents and restricted cash at end of period | $40 | | | $56 | | | $18 | |
| Supplemental cash flows information: | | | | | |
| Cash (paid) refunded during the period for: | | | | | |
| Interest | ($272) | | | ($274) | | | ($268) | |
| Income taxes, net | ($3) | | | $5 | | | $21 | |
| Significant non-cash investing and financing activities: | | | | | |
| Accrued capital expenditures | $141 | | | $131 | | | $196 | |
| Beneficial interest obtained in exchange for securitized accounts receivable | $214 | | | $188 | | | $188 | |
|
| | | | | | | | | | | |
| | Year Ended December 31, |
| | 2017 | | 2016 | | 2015 |
| | (in millions) |
| Cash flows from operating activities: | | | | | |
| Net income |
| $467.5 |
| |
| $381.7 |
| |
| $388.4 |
|
| Adjustments to reconcile net income to net cash flows from operating activities: | | | | | |
| Depreciation and amortization | 461.8 |
| | 411.6 |
| | 401.3 |
|
| Other amortizations | 21.7 |
| | (4.8 | ) | | 12.4 |
|
| Deferred tax expense and tax credits | 139.6 |
| | 84.6 |
| | 114.2 |
|
| Equity income from unconsolidated investments, net | (44.8 | ) | | (39.6 | ) | | (33.8 | ) |
| Distributions from equity method investments | 38.1 |
| | 28.3 |
| | 30.6 |
|
| Equity component of allowance for funds used during construction | (33.6 | ) | | (42.3 | ) | | (24.4 | ) |
| Asset valuation charges for Franklin County wind farm | — |
| | 86.4 |
| | — |
|
| Other | 6.7 |
| | 0.8 |
| | 15.7 |
|
| Other changes in assets and liabilities: | | | | | |
| Accounts receivable | 29.6 |
| | (121.4 | ) | | 36.8 |
|
| Sales of accounts receivable | (9.0 | ) | | 16.0 |
| | (17.0 | ) |
| Regulatory assets | (130.8 | ) | | (3.6 | ) | | (104.5 | ) |
| Regulatory liabilities | (83.8 | ) | | (63.0 | ) | | (67.8 | ) |
| Deferred income taxes | 81.7 |
| | 102.4 |
| | 94.6 |
|
| Other | 38.7 |
| | 22.5 |
| | 24.7 |
|
| Net cash flows from operating activities | 983.4 |
| | 859.6 |
| | 871.2 |
|
| Cash flows used for investing activities: | | | | | |
| Construction and acquisition expenditures: | | | | | |
| Utility business | (1,281.8 | ) | | (1,131.2 | ) | | (960.3 | ) |
| Other | (185.1 | ) | | (65.6 | ) | | (74.0 | ) |
| Proceeds from Minnesota electric and natural gas distribution asset sales | — |
| | — |
| | 139.9 |
|
| Other | (29.4 | ) | | 10.3 |
| | (24.8 | ) |
| Net cash flows used for investing activities | (1,496.3 | ) | | (1,186.5 | ) | | (919.2 | ) |
| Cash flows from (used for) financing activities: | | | | | |
| Common stock dividends | (288.3 | ) | | (266.5 | ) | | (247.3 | ) |
| Proceeds from issuance of common stock, net | 149.6 |
| | 26.6 |
| | 151.2 |
|
| Proceeds from issuance of long-term debt | 550.0 |
| | 800.0 |
| | 250.7 |
|
| Payments to retire long-term debt | (4.6 | ) | | (313.4 | ) | | (183.0 | ) |
| Net change in commercial paper and other short-term borrowings | 171.1 |
| | 84.3 |
| | 18.5 |
|
| Other | (45.2 | ) | | (1.7 | ) | | 6.8 |
|
| Net cash flows from (used for) financing activities | 532.6 |
| | 329.3 |
| | (3.1 | ) |
| Net increase (decrease) in cash and cash equivalents | 19.7 |
| | 2.4 |
| | (51.1 | ) |
| Cash and cash equivalents at beginning of period | 8.2 |
| | 5.8 |
| | 56.9 |
|
| Cash and cash equivalents at end of period |
| $27.9 |
| |
| $8.2 |
| |
| $5.8 |
|
| Supplemental cash flows information: | | | | | |
| Cash paid during the period for: | | | | | |
| Interest, net of capitalized interest |
| ($212.6 | ) | |
| ($192.4 | ) | |
| ($184.8 | ) |
| Income taxes, net |
| ($11.3 | ) | |
| ($9.8 | ) | |
| $— |
|
| Significant non-cash investing and financing activities: | | | | | |
| Accrued capital expenditures |
| $196.5 |
| |
| $154.4 |
| |
| $148.3 |
|
TheRefer to accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
Statements.
ALLIANT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF COMMON EQUITY
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total Alliant Energy Common Equity | | | | |
| | | | | | | Accumulated | | Shares in | | Cumulative | | |
| | | Additional | | | | Other | | Deferred | | Preferred | | |
| Common | | Paid-In | | Retained | | Comprehensive | | Compensation | | Stock | | Total |
| Stock | | Capital | | Earnings | | Income (Loss) | | Trust | | of IPL | | Equity |
| (in millions) |
| 2019: | | | | | | | | | | | | | |
| Beginning balance | $2 | | $2,046 | | $2,546 | | $2 | | ($10) | | $200 | | $4,786 | |
| Net income attributable to Alliant Energy common shareowners | | | | | 557 | | | | | | | | | 557 | |
| Common stock dividends ($1.42 per share) | | | | | (337) | | | | | | | | | (337) | |
| Equity forward settlements and Shareowner Direct Plan issuances | | | 390 | | | | | | | | | | | 390 | |
| Equity-based compensation plans and other | | | 10 | | | | | | | | | | | 10 | |
| Other comprehensive loss, net of tax | | | | | | | (1) | | | | | | (1) | |
| Ending balance | 2 | | 2,446 | | | 2,766 | | | 1 | | (10) | | 200 | | 5,405 | |
| 2020: | | | | | | | | | | | | | |
| Net income attributable to Alliant Energy common shareowners | | | | | 614 | | | | | | | | | 614 | |
| Common stock dividends ($1.52 per share) | | | | | (377) | | | | | | | | | (377) | |
| Equity forward settlements and Shareowner Direct Plan issuances | | | 247 | | | | | | | | | | | 247 | |
| Equity-based compensation plans and other | | | 11 | | | | | | | (1) | | | | 10 | |
Adoption of new accounting standard, net of tax (refer to Note 1(l)) | | | | | (9) | | | | | | | | | (9) | |
| Other comprehensive loss, net of tax | | | | | | | (2) | | | | | | (2) | |
| Ending balance | 2 | | 2,704 | | | 2,994 | | | (1) | | (11) | | 200 | | 5,888 | |
| 2021: | | | | | | | | | | | | | |
| Net income attributable to Alliant Energy common shareowners | | | | | 659 | | | | | | | | | 659 | |
| Common stock dividends ($1.61 per share) | | | | | (403) | | | | | | | | | (403) | |
| Shareowner Direct Plan issuances | 1 | | 27 | | | | | | | | | | | 28 | |
| Equity-based compensation plans and other | | | 18 | | | | | | | (1) | | | | 17 | |
| Redemption of IPL’s cumulative preferred stock | | | | | | | | | | | (200) | | (200) | |
| Other comprehensive income, net of tax | | | | | | | 1 | | | | | | 1 | |
| Ending balance | $3 | | $2,749 | | | $3,250 | | | $— | | ($12) | | $— | | $5,990 | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | Total |
| | | | | | | | Accumulated | | Shares in | | Alliant |
| | | | Additional | | | | Other | | Deferred | | Energy |
| | Common | | Paid-In | | Retained | | Comprehensive | | Compensation | | Common |
| | Stock | | Capital | | Earnings | | Income (Loss) | | Trust | | Equity |
| | (in millions) |
| 2015: | | | | | | | | | | | |
| Beginning balance |
| $2.2 |
| |
| $1,508.0 |
| |
| $1,938.0 |
| |
| ($0.6 | ) | |
| ($8.9 | ) | |
| $3,438.7 |
|
| Net income attributable to Alliant Energy common shareowners | | | | | 378.2 |
| | | | | | 378.2 |
|
| Common stock dividends ($1.10 per share) | | | | | (247.3 | ) | | | | | | (247.3 | ) |
| Common stock issued, net | 0.1 |
| | 151.1 |
| | | | | | | | 151.2 |
|
| Other | | | 2.7 |
| | | | | | 0.4 |
| | 3.1 |
|
| Other comprehensive income, net of tax | | | | | | | 0.2 |
| | | | 0.2 |
|
| Ending balance | 2.3 |
| | 1,661.8 |
| | 2,068.9 |
| | (0.4 | ) | | (8.5 | ) | | 3,724.1 |
|
| 2016: | | | | | | | | | | | |
| Net income attributable to Alliant Energy common shareowners | | | | | 371.5 |
| | | | | | 371.5 |
|
| Common stock dividends ($1.175 per share) | | | | | (266.5 | ) | | | | | | (266.5 | ) |
| Common stock issued, net | | | 26.6 |
| | | | | | | | 26.6 |
|
| Other | | | 4.7 |
| | 3.1 |
| | | | (1.5 | ) | | 6.3 |
|
| Ending balance | 2.3 |
| | 1,693.1 |
| | 2,177.0 |
| | (0.4 | ) | | (10.0 | ) | | 3,862.0 |
|
| 2017: | | | | | | | | | | | |
| Net income attributable to Alliant Energy common shareowners | | | | | 457.3 |
| | | | | | 457.3 |
|
| Common stock dividends ($1.26 per share) | | | | | (288.3 | ) | | | | | | (288.3 | ) |
| Common stock issued, net | | | 149.6 |
| | | | | | | | 149.6 |
|
| Other | | | 2.8 |
| |
| | | | (1.1 | ) | | 1.7 |
|
| Other comprehensive loss, net of tax | | | | | | | (0.1 | ) | | | | (0.1 | ) |
| Ending balance |
| $2.3 |
| |
| $1,845.5 |
| |
| $2,346.0 |
| |
| ($0.5 | ) | |
| ($11.1 | ) | |
| $4,182.2 |
|
TheRefer to accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
Statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareowner and the Board of Directors and Shareowners of Interstate Power and Light CompanyCompany:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Interstate Power and Light Company and subsidiarysubsidiaries (the “Company”) as of December 31, 20172021 and 2016,2020, the related consolidated statements of income, common equity, and cash flows, for each of the three years in the period ended December 31, 2017,2021, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20172021 and 2016,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017,2021, in conformity with accounting principles generally accepted in the United States of America (U.S.).America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (U.S.)(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Regulatory Assets and Regulatory Liabilities - Impact of rate regulation on the financial statements - Refer to Notes 1 and 2 to the financial statements
Critical Audit Matter Description
Interstate Power and Light Company is subject to rate regulation by the Federal Energy Regulatory Commission and state commission in Iowa (collectively the “regulatory agencies”). Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the Regulated Operations Topic 980 of the Financial Accounting Standards Board’s Accounting Standards Codification. As of December 31, 2021, the Company had a recorded consolidated regulatory assets balance of $1,443 million and regulatory liabilities balance of $691 million.
The Company’s rates are subject to regulatory rate-setting processes and periodic earnings oversight. The regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. Regulatory assets represent incurred costs that have been deferred and are probable of recovery in future customer rates. Regulatory liabilities represent obligations to make refunds to customers or amounts collected in rates for which the costs have not yet been incurred. The Company’s regulatory assets and regulatory liabilities are recognized in accordance with the rulings of the regulatory agencies. A change in these rulings may result in a material impact on results of operations and the amount of assets and liabilities in the financial statements. Future regulatory rulings may impact the carrying value and accounting treatment of the regulatory assets and regulatory liabilities.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of the recovery of incurred costs and refund of obligations to customers in future rates. Given that management’s accounting judgments are based on assumptions about the outcome of future decisions by the regulatory agencies, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate-setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the regulatory filings by management and the uncertainty of future decisions by the regulatory agencies included the following, among others:
•We tested the design and operating effectiveness of management’s controls over the evaluation of regulatory assets and liabilities, including the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
•We obtained and evaluated the Company’s analysis supporting the probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess the reasonability of management’s assertions.
•We inquired of management regarding current events impacting the Company and inspected minutes of the board of directors and other committees of the Company and evaluated whether matters were identified that may have an impact on recorded regulatory asset and liability balances.
•We read relevant regulatory orders, regulatory statutes, interpretations, procedural memorandums, filings made by interveners, and other publicly available information issued by the regulatory agencies that pertain to the Company as well as to other relevant public utilities. We evaluated the external information and assessed whether there were matters in such information that would be contradictory to the assessment of recovery of the Company’s regulatory assets or refund of regulatory liabilities.
•We inquired of management about property, plant, and equipment, net that may be abandoned. We inspected minutes of the board of directors and other committees of the Company, regulatory orders, and other filings with the regulatory agencies to identify evidence that may contradict management’s assertion regarding probability of an abandonment or that may have an impact on the recorded balances.
•We evaluated the Company’s disclosures related to the impacts of rate regulation and regulatory developments, including disclosures related to the regulatory balances recorded.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
February 23, 201818, 2022
We have served as the Company’s auditor since 2002.
INTERSTATE POWER AND LIGHT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | Year Ended December 31, |
| | Year Ended December 31, | | 2021 | | 2020 | | 2019 |
| | 2017 | | 2016 | | 2015 | | (in millions) |
| | (in millions) | |
| Operating revenues: | | | | | | |
| Revenues: | | Revenues: | |
| Electric utility |
| $1,598.9 |
| |
| $1,569.7 |
| |
| $1,503.8 |
| Electric utility | $1,752 | | | $1,695 | | | $1,781 | |
| Gas utility | 226.0 |
| | 204.0 |
| | 217.3 |
| Gas utility | 265 | | | 208 | | | 264 | |
| Steam and other | 45.4 |
| | 46.7 |
| | 53.4 |
| Steam and other | 46 | | | 44 | | | 44 | |
| Total operating revenues | 1,870.3 |
| | 1,820.4 |
| | 1,774.5 |
| |
| Total revenues | | Total revenues | 2,063 | | | 1,947 | | | 2,089 | |
| Operating expenses: | | | | | | Operating expenses: | | | | | |
| Electric production fuel and purchased power | 443.6 |
| | 430.5 |
| | 428.4 |
| Electric production fuel and purchased power | 295 | | | 352 | | | 435 | |
| Electric transmission service | 310.4 |
| | 359.7 |
| | 328.2 |
| Electric transmission service | 367 | | | 298 | | | 340 | |
| Cost of gas sold | 115.6 |
| | 111.0 |
| | 123.3 |
| Cost of gas sold | 149 | | | 99 | | | 120 | |
| Other operation and maintenance | 403.8 |
| | 383.7 |
| | 389.9 |
| Other operation and maintenance | 362 | | | 375 | | | 404 | |
| Depreciation and amortization | 245.0 |
| | 210.8 |
| | 207.2 |
| Depreciation and amortization | 375 | | | 356 | | | 327 | |
| Taxes other than income taxes | 55.0 |
| | 53.9 |
| | 55.6 |
| Taxes other than income taxes | 55 | | | 57 | | | 60 | |
| Total operating expenses | 1,573.4 |
| | 1,549.6 |
| | 1,532.6 |
| Total operating expenses | 1,603 | | | 1,537 | | | 1,686 | |
| Operating income | 296.9 |
| | 270.8 |
| | 241.9 |
| Operating income | 460 | | | 410 | | | 403 | |
| Interest expense and other: | | | | | | |
| Other (income) and deductions: | | Other (income) and deductions: | | | | | |
| Interest expense | 112.4 |
| | 103.2 |
| | 96.8 |
| Interest expense | 139 | | | 139 | | | 127 | |
| Allowance for funds used during construction | (31.4 | ) | | (52.0 | ) | | (28.2 | ) | Allowance for funds used during construction | (9) | | | (24) | | | (50) | |
| Interest income and other | (0.2 | ) | | (0.3 | ) | | (0.2 | ) | |
| Total interest expense and other | 80.8 |
| | 50.9 |
| | 68.4 |
| |
| Other | | Other | 1 | | | 8 | | | 8 | |
| Total other (income) and deductions | | Total other (income) and deductions | 131 | | | 123 | | | 85 | |
| Income before income taxes | 216.1 |
| | 219.9 |
| | 173.5 |
| Income before income taxes | 329 | | | 287 | | | 318 | |
| Income tax benefit | (10.9 | ) | | (5.9 | ) | | (22.7 | ) | |
| Income tax expense (benefit) | | Income tax expense (benefit) | (36) | | | (47) | | | 24 | |
| Net income | 227.0 |
| | 225.8 |
| | 196.2 |
| Net income | 365 | | | 334 | | | 294 | |
| Preferred dividend requirements | 10.2 |
| | 10.2 |
| | 10.2 |
| Preferred dividend requirements | 15 | | | 10 | | | 10 | |
| Earnings available for common stock |
| $216.8 |
| |
| $215.6 |
| |
| $186.0 |
| |
| Net income available for common stock | | Net income available for common stock | $350 | | | $324 | | | $284 | |
Earnings per share data is not disclosed given Alliant Energy Corporation is the sole shareowner of all shares of IPL’s common stock outstanding during the periods presented.
TheRefer to accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
Statements.
INTERSTATE POWER AND LIGHT COMPANY
CONSOLIDATED BALANCE SHEETS
| | | | | | | | | | | |
| December 31, |
| 2021 | | 2020 |
| (in millions, except per
share and share amounts) |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents | $34 | | | $50 | |
| Accounts receivable, less allowance for expected credit losses | 241 | | | 210 | |
| Income tax refunds receivable | 8 | | | 26 | |
| Production fuel, at weighted average cost | 29 | | | 48 | |
| Gas stored underground, at weighted average cost | 40 | | | 20 | |
| Materials and supplies, at weighted average cost | 70 | | | 63 | |
| Regulatory assets | 73 | | | 52 | |
| Other | 69 | | | 27 | |
| Total current assets | 564 | | | 496 | |
| Property, plant and equipment, net | 7,983 | | | 7,889 | |
| Other assets: | | | |
| Regulatory assets | 1,370 | | | 1,431 | |
| Deferred charges and other | 79 | | | 33 | |
| Total other assets | 1,449 | | | 1,464 | |
| Total assets | $9,996 | | | $9,849 | |
|
| | | | | | | |
| | December 31, |
| | 2017 | | 2016 |
| | (in millions, except per share and share amounts) |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents |
| $3.6 |
| |
| $3.3 |
|
| Accounts receivable, less allowance for doubtful accounts | 264.9 |
| | 240.7 |
|
| Production fuel, at weighted average cost | 52.4 |
| | 70.3 |
|
| Gas stored underground, at weighted average cost | 20.3 |
| | 16.3 |
|
| Materials and supplies, at weighted average cost | 60.6 |
| | 46.5 |
|
| Regulatory assets | 41.9 |
| | 17.7 |
|
| Other | 32.3 |
| | 27.7 |
|
| Total current assets | 476.0 |
| | 422.5 |
|
| Property, plant and equipment, net | 5,926.2 |
| | 5,435.6 |
|
| Other assets: | | | |
| Regulatory assets | 1,189.7 |
| | 1,441.1 |
|
| Deferred charges and other | 14.1 |
| | 5.5 |
|
| Total other assets | 1,203.8 |
| | 1,446.6 |
|
| Total assets |
| $7,606.0 |
| |
| $7,304.7 |
|
| | | | | | | | | | | |
| LIABILITIES AND EQUITY | | | |
| Current liabilities: | | | |
| | | |
| | | |
| Accounts payable | $173 | | | $162 | |
| Accounts payable to associated companies | 39 | | | 45 | |
| Regulatory liabilities | 84 | | | 103 | |
| Accrued taxes | 56 | | | 54 | |
| Accrued interest | 36 | | | 34 | |
| Other | 67 | | | 49 | |
| Total current liabilities | 455 | | | 447 | |
| Long-term debt, net | 3,643 | | | 3,345 | |
| Other liabilities: | | | |
| Deferred tax liabilities | 1,083 | | | 1,035 | |
| Regulatory liabilities | 607 | | | 573 | |
| Pension and other benefit obligations | 127 | | | 186 | |
| Other | 312 | | | 299 | |
| Total other liabilities | 2,129 | | | 2,093 | |
Commitments and contingencies (Note 17) | 0 | | 0 |
| Equity: | | | |
| Interstate Power and Light Company common equity: | | | |
| Common stock - $2.50 par value - 24,000,000 shares authorized; 13,370,788 shares outstanding | 33 | | | 33 | |
| Additional paid-in capital | 2,807 | | | 2,752 | |
| Retained earnings | 929 | | | 979 | |
| Total Interstate Power and Light Company common equity | 3,769 | | | 3,764 | |
| Cumulative preferred stock | — | | | 200 | |
| Total equity | 3,769 | | | 3,964 | |
| Total liabilities and equity | $9,996 | | | $9,849 | |
|
| | | | | | | |
| LIABILITIES AND EQUITY | | | |
| Current liabilities: | | | |
| Current maturities of long-term debt |
| $350.0 |
| |
| $— |
|
| Accounts payable | 220.3 |
| | 186.3 |
|
| Accounts payable to associated companies | 50.1 |
| | 43.3 |
|
| Regulatory liabilities | 69.7 |
| | 149.6 |
|
| Accrued taxes | 47.1 |
| | 53.8 |
|
| Other | 90.5 |
| | 88.8 |
|
| Total current liabilities | 827.7 |
| | 521.8 |
|
| Long-term debt, net (excluding current portion) | 2,056.0 |
| | 2,153.5 |
|
| Other liabilities: | | | |
| Deferred tax liabilities | 910.7 |
| | 1,511.8 |
|
| Regulatory liabilities | 685.7 |
| | 281.2 |
|
| Pension and other benefit obligations | 173.8 |
| | 173.2 |
|
| Other | 242.4 |
| | 214.2 |
|
| Total other liabilities | 2,012.6 |
| | 2,180.4 |
|
Commitments and contingencies (Note 16) |
| |
|
| Equity: | | | |
| Interstate Power and Light Company common equity: | | | |
| Common stock - $2.50 par value - 24,000,000 shares authorized; 13,370,788 shares outstanding | 33.4 |
| | 33.4 |
|
| Additional paid-in capital | 1,797.8 |
| | 1,597.8 |
|
| Retained earnings | 678.5 |
| | 617.8 |
|
| Total Interstate Power and Light Company common equity | 2,509.7 |
| | 2,249.0 |
|
| Cumulative preferred stock | 200.0 |
| | 200.0 |
|
| Total equity | 2,709.7 |
| | 2,449.0 |
|
| Total liabilities and equity |
| $7,606.0 |
| |
| $7,304.7 |
|
TheRefer to accompanying Combined Notes to Consolidated Financial Statements are anintegral part of these statements.
Statements.
INTERSTATE POWER AND LIGHT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2021 | | 2020 | | 2019 |
| (in millions) |
| Cash flows from (used for) operating activities: | | | | | |
| Net income | $365 | | | $334 | | | $294 | |
| Adjustments to reconcile net income to net cash flows from (used for) operating activities: | | | | | |
| Depreciation and amortization | 375 | | | 356 | | | 327 | |
| Deferred tax expense (benefit) and tax credits | (14) | | | (52) | | | 15 | |
| Equity component of allowance for funds used during construction | (7) | | | (17) | | | (35) | |
| Other | 11 | | | 12 | | | 1 | |
| Other changes in assets and liabilities: | | | | | |
| Accounts receivable | (539) | | | (466) | | | (467) | |
| Derivative assets | (55) | | | (7) | | | (5) | |
| Regulatory assets | 30 | | | (93) | | | (11) | |
| Accounts payable | 15 | | | 6 | | | (21) | |
| Regulatory liabilities | 1 | | | (20) | | | 2 | |
| Deferred income taxes | 62 | | | 79 | | | 35 | |
| Pension and other benefit obligations | (59) | | | 18 | | | (11) | |
| DAEC PPA amendment buyout payment | — | | | (110) | | | — | |
| Other | (32) | | | (46) | | | 49 | |
| Net cash flows from (used for) operating activities | 153 | | | (6) | | | 173 | |
| Cash flows from (used for) investing activities: | | | | | |
| Construction and acquisition expenditures | (384) | | | (687) | | | (1,020) | |
| Cash receipts on sold receivables | 502 | | | 458 | | | 413 | |
| Other | (27) | | | (72) | | | (60) | |
| Net cash flows from (used for) investing activities | 91 | | | (301) | | | (667) | |
| Cash flows from (used for) financing activities: | | | | | |
| Common stock dividends | (400) | | | (236) | | | (168) | |
| Capital contributions from parent | 50 | | | 404 | | | 125 | |
| Payments to redeem cumulative preferred stock | (200) | | | — | | | — | |
| Proceeds from issuance of long-term debt | 300 | | | 400 | | | 600 | |
| Payments to retire long-term debt | — | | | (200) | | | — | |
| Net change in commercial paper | — | | | — | | | (50) | |
| Other | (10) | | | (20) | | | (16) | |
| Net cash flows from (used for) financing activities | (260) | | | 348 | | | 491 | |
| Net increase (decrease) in cash, cash equivalents and restricted cash | (16) | | | 41 | | | (3) | |
| Cash, cash equivalents and restricted cash at beginning of period | 50 | | | 9 | | | 12 | |
| Cash, cash equivalents and restricted cash at end of period | $34 | | | $50 | | | $9 | |
| Supplemental cash flows information: | | | | | |
| Cash (paid) refunded during the period for: | | | | | |
| Interest | ($138) | | | ($141) | | | ($122) | |
| Income taxes, net | $47 | | | ($18) | | | $7 | |
| Significant non-cash investing and financing activities: | | | | | |
| Accrued capital expenditures | $57 | | | $73 | | | $112 | |
| Beneficial interest obtained in exchange for securitized accounts receivable | $214 | | | $188 | | | $188 | |
|
| | | | | | | | | | | |
| | Year Ended December 31, |
| | 2017 | | 2016 | | 2015 |
| | (in millions) |
| Cash flows from operating activities: | | | | | |
| Net income |
| $227.0 |
| |
| $225.8 |
| |
| $196.2 |
|
| Adjustments to reconcile net income to net cash flows from operating activities: | | | | | |
| Depreciation and amortization | 245.0 |
| | 210.8 |
| | 207.2 |
|
| Deferred tax expense and tax credits | 55.8 |
| | 35.6 |
| | 28.9 |
|
| Equity component of allowance for funds used during construction | (21.1 | ) | | (35.2 | ) | | (18.6 | ) |
| Other | 1.5 |
| | 2.9 |
| | 19.5 |
|
| Other changes in assets and liabilities: | | | | | |
| Accounts receivable | (7.9 | ) | | (59.7 | ) | | 20.4 |
|
| Sales of accounts receivable | (9.0 | ) | | 16.0 |
| | (17.0 | ) |
| Regulatory assets | (126.2 | ) | | (54.7 | ) | | (76.3 | ) |
| Accounts payable | 24.0 |
| | 8.0 |
| | (42.7 | ) |
| Regulatory liabilities | (71.2 | ) | | (67.3 | ) | | (75.5 | ) |
| Deferred income taxes | 103.7 |
| | 97.7 |
| | 82.1 |
|
| Other | 18.4 |
| | (18.0 | ) | | 60.8 |
|
| Net cash flows from operating activities | 440.0 |
| | 361.9 |
| | 385.0 |
|
| Cash flows used for investing activities: | | | | | |
| Construction and acquisition expenditures | (676.0 | ) | | (689.7 | ) | | (619.3 | ) |
| Proceeds from Minnesota electric and natural gas distribution asset sales | — |
| | — |
| | 139.9 |
|
| Other | (30.4 | ) | | (3.9 | ) | | (32.5 | ) |
| Net cash flows used for investing activities | (706.4 | ) | | (693.6 | ) | | (511.9 | ) |
| Cash flows from financing activities: | | | | | |
| Common stock dividends | (156.1 | ) | | (151.9 | ) | | (140.0 | ) |
| Capital contributions from parent | 200.0 |
| | 190.0 |
| | 165.0 |
|
| Proceeds from issuance of long-term debt | 250.0 |
| | 300.0 |
| | 250.0 |
|
| Payments to retire long-term debt | — |
| | — |
| | (150.0 | ) |
| Other | (27.2 | ) | | (7.6 | ) | | 1.1 |
|
| Net cash flows from financing activities | 266.7 |
| | 330.5 |
| | 126.1 |
|
| Net increase (decrease) in cash and cash equivalents | 0.3 |
| | (1.2 | ) | | (0.8 | ) |
| Cash and cash equivalents at beginning of period | 3.3 |
| | 4.5 |
| | 5.3 |
|
| Cash and cash equivalents at end of period |
| $3.6 |
| |
| $3.3 |
| |
| $4.5 |
|
| Supplemental cash flows information: | | | | | |
| Cash (paid) refunded during the period for: | | | | | |
| Interest |
| ($111.8 | ) | |
| ($99.7 | ) | |
| ($93.9 | ) |
| Income taxes, net |
| $8.6 |
| |
| ($11.1 | ) | |
| $19.3 |
|
| Significant non-cash investing and financing activities: | | | | | |
| Accrued capital expenditures |
| $76.4 |
| |
| $53.8 |
| |
| $77.0 |
|
TheRefer to accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.Statements.
INTERSTATE POWER AND LIGHT COMPANY
CONSOLIDATED STATEMENTS OF COMMON EQUITY
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total IPL Common Equity | | | | |
| | | Additional | | | | Cumulative | | |
| Common | | Paid-In | | Retained | | Preferred | | Total |
| Stock | | Capital | | Earnings | | Stock | | Equity |
| (in millions) |
| 2019: | | | | | | | | | |
| Beginning balance | $33 | | $2,223 | | | $775 | | $200 | | $3,231 | |
| Net income available for common stock | | | | | 284 | | | | 284 | |
| Common stock dividends | | | | | (168) | | | | (168) | |
| Capital contributions from parent | | | 125 | | | | | | | 125 | |
| | | | | | | | | |
| Ending balance | 33 | | 2,348 | | | 891 | | 200 | | 3,472 | |
| 2020: | | | | | | | | | |
| Net income available for common stock | | | | | 324 | | | | 324 | |
| Common stock dividends | | | | | (236) | | | | (236) | |
| Capital contributions from parent | | | 404 | | | | | | | 404 | |
| Ending balance | 33 | | 2,752 | | | 979 | | 200 | | 3,964 | |
| 2021: | | | | | | | | | |
| Net income available for common stock | | | | | 350 | | | | 350 | |
| Common stock dividends | | | | | (400) | | | | (400) | |
| Capital contributions from parent | | | 50 | | | | | | | 50 | |
| Redemption of cumulative preferred stock | | | | | | | (200) | | (200) | |
| Other | | | 5 | | | | | | | 5 | |
| Ending balance | $33 | | $2,807 | | | $929 | | $— | | $3,769 | |
|
| | | | | | | | | | | | | | | |
| | | | | | | | Total |
| | | | Additional | | | | IPL |
| | Common | | Paid-In | | Retained | | Common |
| | Stock | | Capital | | Earnings | | Equity |
| | (in millions) |
| 2015: | | | | | | | |
| Beginning balance |
| $33.4 |
| |
| $1,242.8 |
| |
| $508.1 |
| |
| $1,784.3 |
|
| Earnings available for common stock | | | | | 186.0 |
| | 186.0 |
|
| Common stock dividends | | | | | (140.0 | ) | | (140.0 | ) |
| Capital contribution from parent | | | 165.0 |
| | | | 165.0 |
|
| Ending balance | 33.4 |
| | 1,407.8 |
| | 554.1 |
| | 1,995.3 |
|
| 2016: | | | | | | | |
| Earnings available for common stock | | | | | 215.6 |
| | 215.6 |
|
| Common stock dividends | | | | | (151.9 | ) | | (151.9 | ) |
| Capital contribution from parent | | | 190.0 |
| | | | 190.0 |
|
| Ending balance | 33.4 |
| | 1,597.8 |
| | 617.8 |
| | 2,249.0 |
|
| 2017: | | | | | | | |
| Earnings available for common stock | | | | | 216.8 |
| | 216.8 |
|
| Common stock dividends | | | | | (156.1 | ) | | (156.1 | ) |
| Capital contribution from parent | | | 200.0 |
| | | | 200.0 |
|
| Ending balance |
| $33.4 |
| |
| $1,797.8 |
| |
| $678.5 |
| |
| $2,509.7 |
|
TheRefer to accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.Statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareowner and the Board of Directors and Shareowner of Wisconsin Power and Light CompanyCompany:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Wisconsin Power and Light Company and subsidiary (the “Company”) as of December 31, 20172021 and 2016,2020, the related consolidated statements of income, equity, and cash flows, for each of the three years in the period ended December 31, 2017,2021, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20172021 and 2016,2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2017,2021, in conformity with accounting principles generally accepted in the United States of America (U.S.).America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (U.S.)(United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Regulatory Assets and Regulatory Liabilities - Impact of rate regulation on the financial statements - Refer to Notes 1 and 2 to the financial statements
Critical Audit Matter Description
Wisconsin Power and Light Company is subject to rate regulation by the Federal Energy Regulatory Commission and state commission in Wisconsin (collectively the “regulatory agencies”). Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the Regulated Operations Topic 980 of the Financial Accounting Standards Board’s Accounting Standards Codification. As of December 31, 2021, the Company had a recorded consolidated regulatory assets balance of $497 million and regulatory liabilities balance of $580 million.
The Company’s rates are subject to regulatory rate-setting processes and periodic earnings oversight. The regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. Regulatory assets represent incurred costs that have been deferred and are probable of recovery in future customer rates. Regulatory liabilities represent obligations to make refunds to customers or amounts collected in rates for which the costs have not yet been incurred. The Company’s regulatory assets and regulatory liabilities are recognized in accordance with the rulings of the regulatory agencies. A change in these rulings may result in a material impact on results of operations and the amount of assets and liabilities in the financial statements. Future regulatory rulings may impact the carrying value and accounting treatment of the regulatory assets and regulatory liabilities.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of the recovery of incurred costs and refund of obligations to customers in future rates. Given that management’s accounting judgments are based on assumptions about the outcome of future decisions by the regulatory agencies, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate-setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the regulatory filings by management and the uncertainty of future decisions by the regulatory agencies included the following, among others:
•We tested the design and operating effectiveness of management’s controls over the evaluation of regulatory assets and liabilities, including the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
•We obtained and evaluated the Company’s analysis supporting the probability of recovery for regulatory assets or refund or future reduction in rates for regulatory liabilities not yet addressed in a regulatory order to assess the reasonability of management’s assertions.
•We inquired of management regarding current events impacting the Company and inspected minutes of the board of directors and other committees of the Company and evaluated whether matters were identified that may have an impact on recorded regulatory asset and liability balances.
•We read relevant regulatory orders, regulatory statutes, interpretations, procedural memorandums, filings made by interveners, and other publicly available information issued by the regulatory agencies that pertain to the Company as well as to other relevant public utilities. We evaluated the external information and assessed whether there were matters in such information that would be contradictory to the assessment of recovery of the Company’s regulatory assets or refund of regulatory liabilities.
•We inquired of management about property, plant, and equipment, net that may be abandoned. We inspected minutes of the board of directors and other committees of the Company, regulatory orders, and other filings with the regulatory agencies to identify evidence that may contradict management’s assertion regarding probability of an abandonment or that may have an impact on the recorded balances.
•We evaluated the Company’s disclosures related to the impacts of rate regulation and regulatory developments, including disclosures related to the regulatory balances recorded.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
February 23, 201818, 2022
We have served as the Company’s auditor since 2002.
WISCONSIN POWER AND LIGHT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2021 | | 2020 | | 2019 |
| (in millions) |
| Revenues: | | | | | |
| Electric utility | $1,329 | | | $1,225 | | | $1,283 | |
| Gas utility | 191 | | | 165 | | | 191 | |
| Other | 3 | | | 5 | | | 2 | |
| Total revenues | 1,523 | | | 1,395 | | | 1,476 | |
| Operating expenses: | | | | | |
| Electric production fuel and purchased power | 347 | | | 300 | | | 342 | |
| Electric transmission service | 170 | | | 151 | | | 141 | |
| Cost of gas sold | 109 | | | 83 | | | 102 | |
| Other operation and maintenance | 268 | | | 254 | | | 261 | |
| Depreciation and amortization | 276 | | | 254 | | | 236 | |
| Taxes other than income taxes | 45 | | | 47 | | | 47 | |
| Total operating expenses | 1,215 | | | 1,089 | | | 1,129 | |
| Operating income | 308 | | | 306 | | | 347 | |
| Other (income) and deductions: | | | | | |
| Interest expense | 105 | | | 104 | | | 102 | |
| | | | | |
| Allowance for funds used during construction | (16) | | | (31) | | | (43) | |
| Other | 2 | | | 3 | | | 6 | |
| Total other (income) and deductions | 91 | | | 76 | | | 65 | |
| Income before income taxes | 217 | | | 230 | | | 282 | |
| Income tax expense (benefit) | (51) | | | (19) | | | 49 | |
| Net income | $268 | | | $249 | | | $233 | |
| | | | | |
| | | | | |
|
| | | | | | | | | | | |
| | Year Ended December 31, |
| | 2017 | | 2016 | | 2015 |
| | (in millions) |
| Operating revenues: | | | | | |
| Electric utility |
| $1,295.8 |
| |
| $1,305.8 |
| |
| $1,266.7 |
|
| Gas utility | 174.9 |
| | 151.4 |
| | 163.9 |
|
| Other | 2.1 |
| | 1.9 |
| | 4.5 |
|
| Total operating revenues | 1,472.8 |
| | 1,459.1 |
| | 1,435.1 |
|
| Operating expenses: | | | | | |
| Electric production fuel and purchased power | 374.5 |
| | 423.5 |
| | 409.3 |
|
| Electric transmission service | 170.5 |
| | 168.2 |
| | 157.1 |
|
| Cost of gas sold | 95.8 |
| | 83.3 |
| | 95.8 |
|
| Other operation and maintenance | 249.0 |
| | 219.8 |
| | 235.4 |
|
| Depreciation and amortization | 212.9 |
| | 192.5 |
| | 184.3 |
|
| Taxes other than income taxes | 46.9 |
| | 44.8 |
| | 44.5 |
|
| Total operating expenses | 1,149.6 |
| | 1,132.1 |
| | 1,126.4 |
|
| Operating income | 323.2 |
| | 327.0 |
| | 308.7 |
|
| Interest expense and other: | | | | | |
| Interest expense | 93.8 |
| | 91.4 |
| | 92.4 |
|
| Equity income from unconsolidated investments | (0.7 | ) | | (39.8 | ) | | (35.1 | ) |
| Allowance for funds used during construction | (18.3 | ) | | (10.5 | ) | | (8.7 | ) |
| Interest income and other | (0.1 | ) | | (0.2 | ) | | (0.4 | ) |
| Total interest expense and other | 74.7 |
| | 40.9 |
| | 48.2 |
|
| Income before income taxes | 248.5 |
| | 286.1 |
| | 260.5 |
|
| Income taxes | 61.9 |
| | 93.3 |
| | 82.9 |
|
| Net income | 186.6 |
| | 192.8 |
| | 177.6 |
|
| Net income attributable to noncontrolling interest | — |
| | 2.4 |
| | 1.3 |
|
| Earnings available for common stock |
| $186.6 |
| |
| $190.4 |
| |
| $176.3 |
|
Earnings per share data is not disclosed given Alliant Energy Corporation is the sole shareowner of all shares of WPL’s common stock outstanding during the periods presented.
TheRefer to accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
Statements.
WISCONSIN POWER AND LIGHT COMPANY
CONSOLIDATED BALANCE SHEETS
| | | | | | | | | | | |
| December 31, |
| 2021 | | 2020 |
| (in millions, except per
share and share amounts) |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents | $2 | | | $3 | |
| Accounts receivable, less allowance for expected credit losses | 188 | | | 192 | |
| Production fuel, at weighted average cost | 23 | | | 18 | |
| Gas stored underground, at weighted average cost | 42 | | | 26 | |
| Materials and supplies, at weighted average cost | 41 | | | 40 | |
| Regulatory assets | 31 | | | 29 | |
| Prepaid gross receipts tax | 40 | | | 42 | |
| Other | 86 | | | 12 | |
| Total current assets | 453 | | | 362 | |
| Property, plant and equipment, net | 6,538 | | | 6,022 | |
| Other assets: | | | |
| Regulatory assets | 466 | | | 498 | |
| Deferred charges and other | 61 | | | 30 | |
| Total other assets | 527 | | | 528 | |
| Total assets | $7,518 | | | $6,912 | |
|
| | | | | | | |
| | December 31, |
| | 2017 | | 2016 |
| | (in millions, except per share and share amounts) |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents |
| $23.1 |
| |
| $4.2 |
|
| Accounts receivable, less allowance for doubtful accounts | 212.2 |
| | 226.3 |
|
| Production fuel, at weighted average cost | 19.9 |
| | 27.8 |
|
| Gas stored underground, at weighted average cost | 24.2 |
| | 21.3 |
|
| Materials and supplies, at weighted average cost | 42.1 |
| | 36.3 |
|
| Regulatory assets | 42.4 |
| | 40.1 |
|
| Prepaid gross receipts tax | 41.3 |
| | 39.8 |
|
| Other | 13.4 |
| | 20.7 |
|
| Total current assets | 418.6 |
| | 416.5 |
|
| Property, plant and equipment, net | 4,917.9 |
| | 4,426.7 |
|
| Other assets: | | | |
| Regulatory assets | 392.7 |
| | 416.2 |
|
| Deferred charges and other | 27.3 |
| | 30.9 |
|
| Total other assets | 420.0 |
| | 447.1 |
|
| Total assets |
| $5,756.5 |
| |
| $5,290.3 |
|
| | | | | | | | | | | |
| LIABILITIES AND EQUITY | | | |
| Current liabilities: | | | |
| Current maturities of long-term debt | $250 | | | $— | |
| Commercial paper | 236 | | | 257 | |
| Accounts payable | 190 | | | 154 | |
| Accounts payable to associated companies | 39 | | | 35 | |
| Regulatory liabilities | 102 | | | 146 | |
| | | |
| Other | 73 | | | 82 | |
| Total current liabilities | 890 | | | 674 | |
| Long-term debt, net (excluding current portion) | 2,179 | | | 2,130 | |
| Other liabilities: | | | |
| Deferred tax liabilities | 753 | | | 702 | |
| Regulatory liabilities | 478 | | | 484 | |
| | | |
| Pension and other benefit obligations | 159 | | | 222 | |
| Other | 236 | | | 222 | |
| Total other liabilities | 1,626 | | | 1,630 | |
Commitments and contingencies (Note 17) | 0 | | 0 |
| Equity: | | | |
| Wisconsin Power and Light Company common equity: | | | |
| Common stock - $5 par value - 18,000,000 shares authorized; 13,236,601 shares outstanding | 66 | | | 66 | |
| Additional paid-in capital | 1,704 | | | 1,459 | |
| Retained earnings | 1,053 | | | 953 | |
| Total Wisconsin Power and Light Company common equity | 2,823 | | | 2,478 | |
| Total liabilities and equity | $7,518 | | | $6,912 | |
|
| | | | | | | |
| LIABILITIES AND EQUITY | | | |
| Current liabilities: | | | |
| Commercial paper |
| $25.0 |
| |
| $52.3 |
|
| Accounts payable | 201.7 |
| | 192.9 |
|
| Accounts payable to associated companies | 22.2 |
| | 34.6 |
|
| Regulatory liabilities | 70.3 |
| | 36.6 |
|
| Accrued interest | 25.6 |
| | 23.6 |
|
| Other | 51.4 |
| | 54.7 |
|
| Total current liabilities | 396.2 |
| | 394.7 |
|
| Long-term debt, net | 1,833.4 |
| | 1,535.2 |
|
| Other liabilities: | | | |
| Deferred tax liabilities | 522.4 |
| | 971.6 |
|
| Regulatory liabilities | 671.5 |
| | 213.6 |
|
| Capital lease obligations - Sheboygan Falls Energy Facility | 70.2 |
| | 77.2 |
|
| Pension and other benefit obligations | 213.7 |
| | 207.8 |
|
| Other | 167.6 |
| | 159.4 |
|
| Total other liabilities | 1,645.4 |
| | 1,629.6 |
|
Commitments and contingencies (Note 16) |
| |
|
| Equity: | | | |
| Wisconsin Power and Light Company common equity: | | | |
| Common stock - $5 par value - 18,000,000 shares authorized; 13,236,601 shares outstanding | 66.2 |
| | 66.2 |
|
| Additional paid-in capital | 1,109.0 |
| | 1,019.0 |
|
| Retained earnings | 706.3 |
| | 645.6 |
|
| Total Wisconsin Power and Light Company common equity | 1,881.5 |
| | 1,730.8 |
|
| Total liabilities and equity |
| $5,756.5 |
| |
| $5,290.3 |
|
TheRefer to accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
Statements.
WISCONSIN POWER AND LIGHT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
| | | | | | | | | | | | | | | | | |
| Year Ended December 31, |
| 2021 | | 2020 | | 2019 |
| (in millions) |
| Cash flows from operating activities: | | | | | |
| Net income | $268 | | | $249 | | | $233 | |
| Adjustments to reconcile net income to net cash flows from operating activities: | | | | | |
| Depreciation and amortization | 276 | | | 254 | | | 236 | |
| | | | | |
| Deferred tax expense (benefit) and tax credits | (79) | | | (15) | | | 24 | |
| | | | | |
| | | | | |
| Other | 11 | | | 2 | | | (12) | |
| Other changes in assets and liabilities: | | | | | |
| | | | | |
| | | | | |
| Derivative assets | (87) | | | — | | | 6 | |
| Regulatory liabilities | (67) | | | (93) | | | (42) | |
| Deferred income taxes | 132 | | | 90 | | | 20 | |
| Pension and other benefit obligations | (63) | | | 11 | | | (7) | |
| Other | (20) | | | (32) | | | (35) | |
| Net cash flows from operating activities | 371 | | | 466 | | | 423 | |
| Cash flows used for investing activities: | | | | | |
| Construction and acquisition expenditures | (686) | | | (606) | | | (519) | |
| Other | (30) | | | (7) | | | (38) | |
| Net cash flows used for investing activities | (716) | | | (613) | | | (557) | |
| Cash flows from financing activities: | | | | | |
| Common stock dividends | (168) | | | (160) | | | (144) | |
| Capital contributions from parent | 245 | | | 25 | | | 125 | |
| Proceeds from issuance of long-term debt | 300 | | | 350 | | | 350 | |
| Payments to retire long-term debt | — | | | (150) | | | (250) | |
| Net change in commercial paper | (21) | | | 89 | | | 63 | |
| Other | (12) | | | (8) | | | (15) | |
| Net cash flows from financing activities | 344 | | | 146 | | | 129 | |
| Net decrease in cash, cash equivalents and restricted cash | (1) | | | (1) | | | (5) | |
| Cash, cash equivalents and restricted cash at beginning of period | 3 | | | 4 | | | 9 | |
| Cash, cash equivalents and restricted cash at end of period | $2 | | | $3 | | | $4 | |
| Supplemental cash flows information: | | | | | |
| Cash (paid) refunded during the period for: | | | | | |
| Interest | ($101) | | | ($102) | | | ($103) | |
| Income taxes, net | ($38) | | | $13 | | | ($29) | |
| Significant non-cash investing and financing activities: | | | | | |
| Accrued capital expenditures | $81 | | | $55 | | | $82 | |
|
| | | | | | | | | | | |
| | Year Ended December 31, |
| | 2017 | | 2016 | | 2015 |
| | (in millions) |
| Cash flows from operating activities: | | | | | |
| Net income |
| $186.6 |
| |
| $192.8 |
| |
| $177.6 |
|
| Adjustments to reconcile net income to net cash flows from operating activities: | | | | | |
| Depreciation and amortization | 212.9 |
| | 192.5 |
| | 184.3 |
|
| Other amortizations | 17.7 |
| | (8.7 | ) | | 5.3 |
|
| Deferred tax expense and tax credits | 53.9 |
| | 114.5 |
| | 77.6 |
|
| Other | (13.3 | ) | | (17.8 | ) | | (10.2 | ) |
| Other changes in assets and liabilities: | | | | | |
| Accounts receivable | 17.7 |
| | (47.6 | ) | | 3.7 |
|
| Regulatory assets | (4.7 | ) | | 51.1 |
| | (28.2 | ) |
| Other | (5.1 | ) | | 44.6 |
| | 39.7 |
|
| Net cash flows from operating activities | 465.7 |
| | 521.4 |
| | 449.8 |
|
| Cash flows used for investing activities: | | | | | |
| Construction and acquisition expenditures | (637.4 | ) | | (453.0 | ) | | (344.3 | ) |
| Other | (28.3 | ) | | (25.9 | ) | | (13.9 | ) |
| Net cash flows used for investing activities | (665.7 | ) | | (478.9 | ) | | (358.2 | ) |
| Cash flows from (used for) financing activities: | | | | | |
| Common stock dividends | (125.9 | ) | | (135.0 | ) | | (126.9 | ) |
| Capital contribution from parent | 90.0 |
| | 60.0 |
| | — |
|
| Proceeds from issuance of long-term debt | 300.0 |
| | — |
| | — |
|
| Net change in commercial paper | (27.3 | ) | | 32.4 |
| | 19.9 |
|
| Other | (17.9 | ) | | 3.9 |
| | (30.9 | ) |
| Net cash flows from (used for) financing activities | 218.9 |
| | (38.7 | ) | | (137.9 | ) |
| Net increase (decrease) in cash and cash equivalents | 18.9 |
| | 3.8 |
| | (46.3 | ) |
| Cash and cash equivalents at beginning of period | 4.2 |
| | 0.4 |
| | 46.7 |
|
| Cash and cash equivalents at end of period |
| $23.1 |
| |
| $4.2 |
| |
| $0.4 |
|
| Supplemental cash flows information: | | | | | |
| Cash (paid) refunded during the period for: | | | | | |
| Interest |
| ($91.7 | ) | |
| ($91.5 | ) | |
| ($93.1 | ) |
| Income taxes, net |
| ($8.4 | ) | |
| $27.8 |
| |
| ($7.4 | ) |
| Significant non-cash investing and financing activities: | | | | | |
| Accrued capital expenditures |
| $114.5 |
| |
| $93.1 |
| |
| $55.2 |
|
| Transfer of investment in ATC and tax liability to ATI |
| $— |
| |
| ($163.6 | ) | |
| $— |
|
TheRefer to accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.
Statements.
WISCONSIN POWER AND LIGHT COMPANY
CONSOLIDATED STATEMENTS OF EQUITY
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Additional | | | | | | Total |
| Common | | Paid-In | | Retained | | | | Common |
| Stock | | Capital | | Earnings | | | | Equity |
| (in millions) |
| 2019: | | | | | | | | | |
| Beginning balance | $66 | | $1,309 | | $775 | | | | $2,150 | |
| Net income | | | | | 233 | | | | 233 | |
| Common stock dividends | | | | | (144) | | | | (144) | |
| Capital contributions from parent | | | 125 | | | | | | 125 | |
| | | | | | | | | |
| Ending balance | 66 | | 1,434 | | 864 | | | | 2,364 | |
| 2020: | | | | | | | | | |
| Net income | | | | | 249 | | | | 249 | |
| Common stock dividends | | | | | (160) | | | | (160) | |
| Capital contributions from parent | | | 25 | | | | | | 25 | |
| Ending balance | 66 | | 1,459 | | 953 | | | | 2,478 | |
| 2021: | | | | | | | | | |
| Net income | | | | | 268 | | | | 268 | |
| Common stock dividends | | | | | (168) | | | | (168) | |
| Capital contributions from parent | | | 245 | | | | | | 245 | |
| | | | | | | | | |
| Ending balance | $66 | | $1,704 | | $1,053 | | | | $2,823 | |
|
| | | | | | | | | | | | | | | | | | | |
| | Total WPL Common Equity | | | | |
| | | | Additional | | | | | | |
| | Common | | Paid-In | | Retained | | Noncontrolling | | Total |
| | Stock | | Capital | | Earnings | | Interest | | Equity |
| | (in millions) |
| 2015: | | | | | | | | | |
| Beginning balance |
| $66.2 |
| |
| $959.0 |
| |
| $681.7 |
| |
| $8.5 |
| |
| $1,715.4 |
|
| Net income | | | | | 176.3 |
| | 1.3 |
| | 177.6 |
|
| Common stock dividends | | | | | (126.9 | ) | | | | (126.9 | ) |
| Contributions from noncontrolling interest | | | | | | | 3.4 |
| | 3.4 |
|
| Distributions to noncontrolling interest | | | | | | | (1.9 | ) | | (1.9 | ) |
| Ending balance | 66.2 |
| | 959.0 |
| | 731.1 |
| | 11.3 |
| | 1,767.6 |
|
| 2016: | | | | | | | | | |
| Net income | | | | | 190.4 |
| | 2.4 |
| | 192.8 |
|
| Common stock dividends | | | | | (135.0 | ) | | | | (135.0 | ) |
| Capital contribution from parent | | | 60.0 |
| | | | | | 60.0 |
|
| Contributions from noncontrolling interest | | | | | | | 11.5 |
| | 11.5 |
|
| Distributions to noncontrolling interest | | | | | | | (2.5 | ) | | (2.5 | ) |
| Transfer of investment in ATC to ATI | | | | | (140.9 | ) | | (22.7 | ) | | (163.6 | ) |
| Ending balance | 66.2 |
| | 1,019.0 |
| | 645.6 |
| | — |
| | 1,730.8 |
|
| 2017: | | | | | | | | | |
| Net income | | | | | 186.6 |
| | | | 186.6 |
|
| Common stock dividends | | | | | (125.9 | ) | | | | (125.9 | ) |
| Capital contribution from parent | | | 90.0 |
| | | | | | 90.0 |
|
| Ending balance |
| $66.2 |
| |
| $1,109.0 |
| |
| $706.3 |
| |
| $— |
| |
| $1,881.5 |
|
TheRefer to accompanying Combined Notes to Consolidated Financial Statements are an integral part of these statements.Statements.
ALLIANT ENERGY CORPORATION
INTERSTATE POWER AND LIGHT COMPANY
WISCONSIN POWER AND LIGHT COMPANY
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 1(a) General -
Description of Business - Alliant Energy’s financial statements include the accounts of Alliant Energy and its consolidated subsidiaries. Alliant Energy is a Midwest U.S. energy holding company, whose primary wholly-owned subsidiaries are IPL, WPL, AEF and Corporate Services.
IPL’s financial statements include the accounts of IPL and its consolidated subsidiary,subsidiaries, including IPL SPE LLC, which is used for IPL’s sales of accounts receivable program. IPL is a direct subsidiary of Alliant Energy and is a public utility engaged principally in the generation and distribution of electricity and the distribution and transportation of natural gas to retail customers in select markets in Iowa. IPL also sells electricity to wholesale customers in Minnesota, Illinois and Iowa, and is engaged in the generation and distribution of steam for two2 customers in Cedar Rapids, Iowa.
WPL’s financial statements include the accounts of WPL and its consolidated subsidiary, WPL Transco, which held Alliant Energy’s investment in ATC until December 31, 2016. Refer to Note 6(a) for discussion of WPL’s transfer of its investment in ATC to ATI on December 31, 2016.subsidiary. WPL is a direct subsidiary of Alliant Energy and is a public utility engaged principally in the generation and distribution of electricity and the distribution and transportation of natural gas to retail customers in select markets in Wisconsin. WPL also sells electricity to wholesale customers in Wisconsin.
AEF is comprised of Transportation,Travero, ATI, corporate venture investments, a non-utility wind investment,farm, the Sheboygan Falls Energy Facility and other non-utility investments. Transportationholdings. Travero includes a short-line railway that providesrail freight service between Cedar Rapids,in Iowa; a Mississippi River barge, rail and truck freight terminal in Illinois; freight brokerage services; and a rail-served warehouse in Iowa, and Iowa City, Iowa; barge terminal and hauling services on the Mississippi River; and other transfer and storage services.which began operations in 2021. ATI, a wholly-owned subsidiary of AEF, holds all of Alliant Energy’s interest in ATC Investment.Holdings. Corporate venture investments includes various minority ownership interests in regional and national venture funds, including a coalition with different energy companies across the U.S., working together to help identify and research innovative products, technologies and business models within the emerging energy economy. The non-utility wind investmentfarm includes a 50% cash equity ownership interest in a 225 MW non-utility wind farm located in Oklahoma. The Sheboygan Falls Energy Facility is a 347 MW, simple-cycle, natural gas-fired EGU near Sheboygan Falls, Wisconsin, which is leased to WPL for an initial period of 20 years ending in 2025.
Corporate Services is the subsidiary formed to provide administrative services to Alliant Energy and its subsidiaries.
In March 2020, COVID-19 was declared a global pandemic, which has resulted in widespread travel restrictions, closures of commercial spaces and industrial facilities, and more people working from home in Alliant Energy’s service territories. For 2020 and 2021, Alliant Energy, IPL and WPL considered the impact of COVID-19 on their overall business operations, financial condition, results of operations and cash flows, along with assumptions and estimates used. In 2020, Alliant Energy, IPL and WPL experienced higher electric residential sales and lower electric commercial and industrial sales as a result of the pandemic. In 2021, changes in COVID-19 impacts resulted in lower electric residential sales and higher electric commercial and industrial sales. The degree to which the COVID-19 pandemic may impact Alliant Energy, IPL and WPL in the future is currently unknown and will depend on future developments of the pandemic as well as possible additional actions by government and regulatory authorities.
Basis of Presentation - The financial statements reflect investments in controlled subsidiaries on a consolidated basis and Alliant Energy’s, IPL’s and WPL’s proportionate shares of jointly-owned utility EGUs. Unconsolidated investments whichthat Alliant Energy and WPL do not control but have the ability to exercise significant influence over operating and financial policies, are accounted for under the equity method of accounting. Under the equity method of accounting, Alliant Energy and WPL initially record the investment at cost, and adjust the carrying amount of the investment to recognize their respective share of the earnings or losses of the investee. Dividends received from an investee reduce the carrying amount of the equity investment. Investments that do not meet the criteria for consolidation or the equity method of accounting are accounted for under the cost method. Refer to Notes 1(m) and 6(a) for further discussion of VIEs and equity method investments, respectively.
All intercompany balances and transactions, other than certain transactions affecting the rate-making process at IPL and WPL, have been eliminated from the financial statements. Such transactions not eliminated include costs that are recoverable from customers through rate-making processes. The financial statements are prepared in conformity with GAAP, which give recognition to the rate-making and accounting practices of FERC and state commissions having regulatory jurisdiction.
Certain prior period amounts in the Financial Statements and Notes have been reclassified to conform to the current period presentation for comparative
purposes, including reclassifications resulting from modifications to segment reporting as discussed in Note 17.purposes.
Discontinued operations reported in Alliant Energy’s income statements is related to various warranty claims associated with the sale of RMT, Inc. in 2013, which have resulted in operating expenses and income subsequent to the sale. Alliant Energy presents cash flows from continuing operations together with cash flows from discontinued operations in its cash flows statements.
Use of Estimates - The preparation of the financial statements requires management to make estimates and assumptions that affect: (a) the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements; and (b) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NOTE 1(b) Regulatory Assets and Regulatory Liabilities - Alliant Energy, IPL and WPL are subject to regulation by FERC and various state regulatory commissions. As a result, Alliant Energy, IPL and WPL are subject to GAAP provisions for regulated operations, which provide that rate-regulated public utilities record certain costs and credits allowed in the rate-making process in different periods than for non-utility entities. Regulatory assets generally represent incurred costs that have been deferred as such costs are probable of recovery in future customer rates. Regulatory liabilities generally represent obligations to make refunds to customers or amounts collected in rates for which the related costs have not yet been incurred. Amounts recorded as regulatory assets or regulatory liabilities are generally recognized in the income statements at the time they are reflected in rates. Refer to Note 2 for additional discussion of regulatory assets and regulatory liabilities.
NOTE 1(c) Income Taxes - The liability method of accounting is followed for deferred taxes, which requires the establishment of deferred tax assets and liabilities, as appropriate, for temporary differences between the tax basis of assets and liabilities and the amounts reported in the financial statements. Deferred taxes are recorded using currently enacted tax rates including impacts from Tax Reform and estimates of state apportionment. Changes in deferred tax assets and liabilities associated with certain property-related differences at IPL are accounted for differently than other subsidiaries of Alliant Energy due to rate-making practices in Iowa. Rate-making practices in Iowa do not includeallow the impact of certain deferred tax expenses (benefits) to be included in the determination of retail rates. Based on these rate-making practices, deferred tax expense (benefit) related to these property-related differences at IPL is not recorded in the income statement but instead recorded to regulatory assets or regulatory liabilities until these temporary differences reverse. Refer to Note 2 for further discussion of these tax-related regulatory assets and regulatory liabilities associated with property-related differences at IPL. In Wisconsin, the PSCW allows rate recovery of deferred tax expense on all temporary differences.
Investment tax credits are deferred and amortized to income over the average lives of the related property. Federal Tax Reform repealed corporate federal AMTalternative minimum tax and allowsallowed unutilized AMTalternative minimum tax credits to be refunded over the next four tax years beginning with the U.S. federal tax return for calendar year 2018. Pursuant to the Coronavirus Aid, Relief, and Economic Security Act, Alliant Energy received the remaining alternative minimum tax credits refunds in 2020. Other tax credits reduce income tax expense in the year claimed.
Alliant Energy files a consolidated federal income tax return and a combined return in Wisconsin, which include Alliant Energy and its subsidiaries. Alliant Energy subsidiaries with a presence in Iowa file as part of a consolidated return in Iowa.
Alliant Energy allocates consolidated income tax expense to its subsidiaries that are members of the group that file a consolidated or combined income tax return. IPL and WPL use the modified separate return approach for calculating their income tax provisions and related deferred tax assets and liabilities. IPL and WPL are assumed to file separate tax returns with the federal and state taxing authorities, except that net operating losses (and other current or deferred tax attributes) are characterized as realized (or realizable) by IPL and WPL when those tax attributes are realized (or realizable) by the consolidated tax return group of Alliant Energy (even if IPL and WPL would not otherwise have realized the attributes on a stand-alone basis). The difference in the income taxes recorded for IPL and WPL under the modified separate return method compared to the income taxes recorded on a separate return basis was not material in 2017, 20162021, 2020 and 2015.2019.
Refer to Note 11 for further discussion of Tax Reform, which was enacted in December 2017.
NOTE 1(d) Cash, and Cash Equivalents and Restricted Cash - Cash and cash equivalents include short-term liquid investments that have original maturities of less than 90 days. At December 31, 2021, Alliant Energy’s and IPL’s cash and cash equivalents included $32 million of money market fund investments, with an interest rate of 0.04%. At December 31, 2021 and 2020, Alliant Energy’s restricted cash related to requirements in Sheboygan Power, LLC’s debt agreement.
NOTE 1(e) Property, Plant and Equipment -
Utility Plant -
General - Utility plant is recorded at the original cost of acquisition or construction, which includes material, labor, contractor services, AFUDC and allocable overheads, such as supervision, engineering, benefits, certain taxes and transportation. Repairs, replacements and renewals of items of property determined to be less than a unit of property or that do not increase the property’s life or functionality are charged to maintenance expense. Property, plant and equipment that is probable of being retired early is classified as plant anticipated to be retired early. Generally, ordinary retirements of utility plant and salvage value are netted and charged to accumulated depreciation upon removal from utility plant accounts and no gain or loss is recognized consistent with rate-making principles. However, if regulators have approved recovery of the remaining net book value of property, plant and equipment that is retired early, or such approval by regulators is probable, the remaining net book value is reclassified from property, plant and equipment to regulatory assets upon retirement. Property, plant and equipment that is probable of being retired early is classified as plant anticipated to be retired early.
Depreciation - IPL and WPL use a combination of remaining life and straight-line depreciation methods as approved by their respective regulatory commissions. The composite or group method of depreciation is used, in which a single depreciation rate is applied to the gross investment in a particular class of property. This method pools similar assets and then depreciates each group as a whole. Periodic depreciation studies are performed to determine the appropriate group lives, net salvage, estimated cost of removal and group depreciation rates. These depreciation studies are subject to review and approval by IPL’s and WPL’s respective regulatory commissions. Depreciation expense is included within the recoverable cost of service component of rates charged tocollected from customers. The average rates of depreciation for electric, gas and other properties, consistent with current rate-making practices, were as follows:
|
| | | | | | | | | | | |
| | IPL | | WPL |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Electric - generation | 3.5% | | 3.5% | | 3.6% | | 3.5% | | 3.1% | | 3.2% |
| Electric - distribution | 2.4% | | 2.4% | | 2.4% | | 2.6% | | 2.6% | | 2.7% |
| Electric - other | 4.5% | | 4.2% | | 4.0% | | 6.9% | | 4.7% | | 4.5% |
| Gas | 3.4% | | 3.3% | | 3.2% | | 2.5% | | 2.5% | | 2.5% |
| Other | 4.0% | | 3.9% | | 3.9% | | 6.0% | | 5.9% | | 6.0% |
In September 2016, the PSCW issued an order approving the implementation of updated depreciation rates for WPL effective January 1, 2017 as a result of an updated depreciation study. In February 2018, the IUB issued an order approving the implementation of updated depreciation rates for IPL, which are currently expected to be effective in the first half of 2018, as a result of an updated depreciation study. IPL estimates the new average rates of depreciation for its electric generation and electric distribution properties will be approximately 3.8% and 2.8%, respectively, during 2018. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IPL | | WPL |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Electric - generation | 3.4% | | 3.5% | | 3.8% | | 3.5% | | 3.5% | | 3.6% |
| Electric - distribution | 2.9% | | 2.8% | | 2.9% | | 2.6% | | 2.6% | | 2.6% |
| Electric - other | 5.7% | | 5.2% | | 5.3% | | 7.4% | | 6.1% | | 5.8% |
| Gas | 3.3% | | 3.3% | | 3.3% | | 2.4% | | 2.4% | | 2.5% |
| Other | 6.1% | | 6.3% | | 5.9% | | 5.4% | | 5.9% | | 5.6% |
AFUDC - AFUDC represents costs to finance construction additions, including a return on equity component and cost of debt component as required by regulatory accounting. AFUDC for IPL’s construction projects is calculated in accordance with FERC guidelines. AFUDC for WPL’s retail and wholesale jurisdiction construction projects is calculated in accordance with PSCW and FERC guidelines, respectively. The AFUDC rates, computed in accordance with the prescribed regulatory formula, were as follows:
| | | | | | | | | | | | | | | | | |
| 2021 | | 2020 | | 2019 |
| | | | | |
| IPL (Wind generation CWIP) | 7.0% | | 7.1% | | 7.4% |
| IPL (other CWIP) | 7.2% | | 7.2% | | 7.5% |
| WPL (retail jurisdiction) | 7.0% | | 7.0% | | 6.8% |
| WPL (wholesale jurisdiction) | 5.6% | | 6.3% | | 6.9% |
|
| | | | | |
| | 2017 | | 2016 | | 2015 |
| IPL (Marshalltown CWIP) (a) | 7.8% | | 7.9% | | 7.9% |
| IPL (Wind generation CWIP) (b) | 7.6% | | N/A | | N/A |
| IPL (other CWIP) | 7.6% | | 7.7% | | 7.7% |
| WPL (retail jurisdiction) | 7.6% | | 8.2% | | 8.2% |
| WPL (wholesale jurisdiction) | 6.0% | | 6.7% | | 7.9% |
| |
(a) | In 2013, the IUB issued an order establishing rate-making principles that require a 10.3% return on common equity for the calculation of AFUDC related to the construction of Marshalltown. |
| |
(b) | In 2016, the IUB issued an order establishing rate-making principles that require a return on common equity for the calculation of AFUDC related to the construction of up to 500 MW of new wind generation equal to the greater of 10.0% or whatever percentage the IUB finds reasonable during IPL’s most recent retail electric rate proceeding. |
In accordance with their most recent rate orders,respective regulatory commission decisions, IPL applies its AFUDC rates to 100% of applicable CWIP balances and WPL generally applies its AFUDC rates to 50% of applicable CWIP balances. WPL may apply its AFUDC rates to 100% of the retail portion of the CWIP balances for construction projects requiring a CA or CPCN that were approved by the PSCW after its then most recent rate order, including West Riverside.Riverside and the first and second solar generation CAs.
Non-utility and Other Property -
General - Non-utility property is recorded at the original cost of acquisition or construction, which includes material, labor and contractor services. Repairs, replacements and renewals of items of property determined to be less than a unit of property or that do not increase the property’s life or functionality are charged to maintenance expense. Upon retirement or sale of non-utility property, the original cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in the income statements.
Costs related to software developed or obtained for internal use are capitalized and amortized on a straight-line basis over the estimated useful life of the related software. If software is retired prior to being fully amortized, the differenceremaining book value is recorded as a loss in the income statements.
NOTE 1(f) Operating RevenuesRevenue Recognition -
Utility - Revenues from Alliant Energy’s utility business are primarily from electricityelectric and natural gas sales andto customers. Utility revenues are recognized on an accrual basisover time as services are rendered or commodities are delivered to customers. Energy sales to individual customers, areand include billed and unbilled components. The billed component is based on the reading of customers’ meters, which occurs on a systematic basis throughout each reporting period. Amountsperiod and represents the fair value of the services provided or commodities delivered. The unbilled component is estimated and recorded at the end of each reporting period based on estimated amounts of energy delivered to customers since the date of the last meter reading are estimated at the end of each reporting period and the corresponding estimated unbilled revenue is recorded in such reportingcustomer’s last billing period. The unbilled revenue estimatecomponent is based on estimates of daily system demand volumes, estimated customer usage by class, temperature impacts, line losses and the most recent customer rates.
IPL and WPL accrue revenues from their wholesale customers to the extent that the actual net revenue requirements calculated in accordance with FERC-approved formula rates for the reporting period are higher or lower than the amounts billed to wholesale customers during such period. Regulatory assets or regulatory liabilities are recorded as the offset for these accrued revenues under formulaic rate-making programs. IPL’s estimated recovery amount is recorded inAs of December 31, 2021, the current period of servicerelated amounts accrued for IPL and is reflected in customer bills within two years under the provisions of approved formula rates. WPL’s estimated recovery amount is recorded in the current period of service and subject to final adjustments after a customer audit period in the subsequent year. Final settled recovery amounts are reflected in WPL’s customer bills within two years under the provisions of approved formula rates.WPL were not material.
IPL and WPL participate in bid/offer-based wholesale energy and ancillary services markets operated by MISO. MISO requires that all load serving entities and generation owners, including IPL and WPL, submit hourly bids and offers for energy and ancillary services. The MISO transactions are grouped together, resulting in a net supply to or net purchase from MISO for each hour of each day. The net supply to MISO is recorded as bulk power sales in “Electric utility operating revenues” and the net purchase from MISO is recorded in “Electric production fuel and purchased power” in the income statements.
Non-utility - Revenues from Alliant Energy’s non-utility businesses are primarily from its TransportationTravero business and are recognized on an accrual basisover time as services are rendered or goods are delivered to customers.
Taxes Collected from Customers - Sales or various other taxes collected by certain of Alliant Energy’s subsidiaries on behalf of other agencies are recorded on a net basis and are not included in operating revenues.
Other - Refer to Note 1(n) for discussion of a new accounting standard related to revenue recognition, which Alliant Energy, IPL and WPL adopted on January 1, 2018.do not disclose the value of unsatisfied performance obligations for: (i) contracts with an original expected length of one year or less; and (ii) contracts for which revenue is recognized at the amount to which they have the right to invoice for services performed.
NOTE 1(g) Utility Cost Recovery Mechanisms -
Electric Production Fuel and Purchased Power (Fuel-related Costs) - Fuel-related costs are incurred to generate and purchase electricity to meet the demand of IPL’s and WPL’s electric customers. These fuel-related costs include the cost of fossil fuels (primarily natural gas and coal) used to produce electricity at their EGUs, and electricity purchased from MISO wholesale energy markets and under PPAs. These fuel-related costs are recorded in “Electric production fuel and purchased power” in the income statements.
IPL Retail - The cost recovery mechanisms for IPL’s retail electric customers provide for monthly adjustments to their electric rates for changes in fuel-related costs. Changes in the under-/over-collection of these costs are recognized in “Electric production fuel and purchased power” in Alliant Energy’s and IPL’s income statements. The cumulative effects of the under-/over-collection of these costs are recorded in regulatory assets or regulatory liabilities on Alliant Energy’s and IPL’s balance sheets until they are reflected in future billings to customers.
WPL Retail - The cost recovery mechanism for WPL’s retail electric customers is based on forecasts of certain fuel-related costs expected to be incurred during forward-looking test year periods and fuel monitoring ranges determined by the PSCW during each retail electric rate proceeding or in a separate fuel cost plan approval proceeding. If WPL’s actual fuel-related costs fall outside these fuel monitoring ranges, WPL is authorized to defer the incremental under-/over-collection of fuel-related costs that are outside the approved ranges. Deferral of under-collections are reduced to the extent actual return on common equity earned by WPL during the fuel cost plan year exceeds the most recently authorized return on common equity. Deferred amounts for fuel-related costs outside the approved fuel monitoring ranges are recognized in “Electric production fuel and purchased power” in Alliant Energy’s and WPL’s income statements. The cumulative effects of these deferred amounts are recorded in regulatory assets or regulatory liabilities on Alliant Energy’s and WPL’s balance sheets until they are reflected in future billings to customers.
IPL and WPL Wholesale - The cost recovery mechanisms for IPL’s and WPL’s wholesale electric customers provide for subsequent adjustments to their electric rates for changes in fuel-related costs. Changes in the under-/over-collection of these costs are recognized in “Electric production fuel and purchased power” in the income statements. The cumulative effects of the under-/over-collection of these costs are recorded in regulatory assets or regulatory liabilities on the balance sheets until they are reflected in future billings to customers.
Purchased Electric Capacity - PPAs help meet the electricity demand of IPL’s and WPL’s customers. Certain of these PPAs include minimum payments for IPL’s and WPL’s rights to electric generating capacity, which are charged each period to “Electric production fuel and purchased power” in the income statements. Purchased electric capacity expenses are recovered from IPL’s and WPL’s retail electric customers through changes in base rates determined during periodic rate proceedings. Purchased electric capacity expenses are recovered from IPL’s and WPL’s wholesale electric customers through annual changes in base rates determined by a formula rate structure.
Electric Transmission Service - Costs incurred for the transmission of electricity to meet the demands of IPL’s and WPL’s customers are charged to “Electric transmission service” in the income statements.
IPL Retail - Electric transmission service expense is recovered from IPL’s retail electric customers through a transmission cost rider. This cost recovery mechanism provides for annualperiodic adjustments to electric rates charged to retail electric customers for changes in electric transmission service expense. Changes in the under-/over-collection of these costs are recognized in “Electric transmission service” in Alliant Energy’s and IPL’s income statements. The cumulative effects of the under-/over-collection of these costs are recorded in regulatory assets or regulatory liabilities on Alliant Energy’s and IPL’s balance sheets until they are reflected in future billings to customers.
WPL Retail - Electric transmission service expense is recovered from WPL’s retail electric customers through changes in base rates determined during periodic rate proceedings. Pursuant to escrow accounting treatment approved by the PSCW, the difference between actual electric transmission service expense incurred and the amount of electric transmission service costs collected from customers as electric revenues is recognized in “Electric transmission service” in Alliant Energy’s and WPL’s income statements. An offsetting amount is recorded in regulatory assets or regulatory liabilities on Alliant Energy’s and WPL’s balance sheets until reflected in future billings to customers. The PSCW’s December 2016 order for WPL’s retail electric rate review (2017/2018 Test Period) extends this escrow accounting treatment through 2018.
IPL and WPL Wholesale - IPL and WPL arrange transmission service for the majority of their respective wholesale electric customers. Electric transmission service expense is allocated to and recovered from these customers based on a load ratio share computation.
Cost of Gas Sold - Costs are incurred for the purchase, transportation and storage of natural gas to serve IPL’s and WPL’s gas customers and the costs associated with the natural gas delivered to customers are charged to “Cost of gas sold” in the income statements. The tariffs for IPL’s and WPL’s retail gas customers provide for subsequent adjustments to their rates each monthperiodically for changes in the cost of gas sold. Changes in the under-/over-collection of these costs are also recognized in “Cost of gas sold” in the income statements. The cumulative effects of the under-/over-collection of these costs are recorded in regulatory assets or regulatory liabilities on the balance sheets until they are reflected in future billings to customers.
Energy Efficiency Costs - Costs are incurred to fund energy efficiency programs and initiatives that help customers reduce their energy usage. The costs incurred for these programs and initiativesusage are charged to “Other operation and maintenance” in the income statements. Energy efficiency costs incurred by IPL are recovered from its retail electric and gas customers through an additional tariff called an energy efficiency and demand response cost recovery factor tariffs, which isare revised annually and includesinclude a reconciliation to eliminate any under-/over-collection of energy efficiency costs from prior periods. Energy efficiency costs incurred by WPL are recovered from retail electric and gas customers through changes in base rates determined during periodic rate proceedings. Reconciliations of any under-/over-collection of energy efficiency costs from prior periods are also addressed in WPL’s periodic rate proceedings. Changes in the under-/over-collection of energy efficiency costs for IPL and WPL are recognized in “Other operation and maintenance” in the income statements. The cumulative effects of the under-/over-collection of these costs for IPL and WPL are recorded in regulatory assets or regulatory liabilities on the balance sheets until they are reflected in future billings to customers.
Refer to Note 2 for additional information regarding these utilityRenewable Energy Rider - Effective with the implementation of final rates covering the 2020 forward-looking Test Period, IPL recovers a return of, as well as earn a return on, its new wind generation placed in service in 2019 and 2020 from its retail electric customers through a renewable energy rider. Other applicable costs and tax benefits associated with the new wind generation, excluding operation and maintenance expenses, are also included in the rider. This cost recovery mechanisms.mechanism provides for annual adjustments to electric rates charged to IPL’s retail electric customers for actual renewable energy costs and tax benefits. Changes in the under-/over-collection of these costs are recognized in “Electric utility revenue” in Alliant Energy’s and IPL’s income statements. The cumulative effects of the under-/over-collection of these costs for IPL are recorded in regulatory assets or regulatory liabilities on Alliant Energy’s and IPL’s balance sheets until they are reflected in future billings to customers.
NOTE 1(h) Financial Instruments - Financial instruments are periodically used for risk management purposes to mitigate exposures to fluctuations in certain commodity prices and transmission congestion costs. The fair value of those financial instruments that are determined to be derivatives are recorded as assets or liabilities on the balance sheets. Certain
commodity purchase and sales contracts qualifyqualified for and have beenwere designated under the normal purchase and sale exception, and arewere accounted for on the accrual basis of accounting. Alliant Energy, IPL and WPL have elected to not net the fair value amounts of derivatives subject to a master netting arrangement by counterparty. Alliant Energy, IPL and WPL do not offset fair value amounts recognized for the right to reclaim cash collateral (receivable) or the obligation to return cash collateral (payable) against fair value amounts recognized for derivative instruments that are executed with the same counterparty under the same master netting arrangement. Refer to Note 2 for discussion of the recognition of regulatory assets and regulatory liabilities related to the unrealized losses and gains on IPL’s and WPL’s derivative instruments. Refer to Notes 14, 15, 16 and 16(f)17(f) for further discussion of derivatives and related credit risk.
NOTE 1(i) Asset Impairments -
Property, Plant and Equipment of Regulated Operations - Property, plant and equipment of regulated operations are reviewed for possible impairment whenever events or changes in circumstances indicate all or a portion of the carrying value of the assets may be disallowed for rate-making purposes. If IPL or WPL are disallowed recovery of any portion of, the carrying value of their regulated property, plant and equipment that is under construction, has been recently completed or is probable of abandonment, or conclude it is probable recovery will be disallowed, an impairment charge is recognized equal to the amount of the carrying value that was disallowed or is probable of being disallowed. If IPL or WPL are only allowed a partial return on, the carrying value of their regulated property, plant and equipment that is under construction, has been recently completed or is probable of abandonment, or conclude it is probable recovery or a full return will not be allowed,disallowed, then an impairment charge is recognized equal to the difference between the carrying value and the present value of the future revenues expected from their regulated property, plant and equipment.recognized.
Property, Plant and Equipment of Non-utility Operations - Property, plant and equipment of non-utility operations are reviewed for possible impairment whenever events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Impairment is indicated if the carrying value of an asset exceeds its undiscounted future cash flows. If an impairment is indicated, a charge is recognized equal to the amount the carrying value exceeds the asset’s fair value. Refer to Note 3 for discussion of Alliant Energy’s impairment analysis of the Franklin County wind farm assets and resulting asset valuation charges recorded by Alliant Energy in 2016.
Unconsolidated Equity Investments - If events or circumstances indicate the carrying value of investments accounted for under the equity method of accounting exceeds fair value and the decline in value is other than temporary, potential impairment is assessed. If an impairment is indicated, a charge is recognized equal to the amount the carrying value exceeds the investment’s fair value. Refer to
Note 6(a) for additional discussionTable of investments accounted for under the equity method of accounting.Contents
NOTE 1(j) Asset Retirement Obligations - The fair value of a legal obligation associated with the retirement of an asset is recorded as a liability when an asset is placed in service, when a legal obligation is subsequently identified or when sufficient information becomes available to determine a reasonable estimate of the fair value of future retirement costs. When an ARO is recorded as a liability, an equivalent amount is added to the asset cost. The fair value of AROs at inception is determined using discounted cash flows analyses. The liability is accreted to its present value and the capitalized cost is depreciated over the useful life of the related asset. Accretion and depreciation expenses related to AROs for IPL’s and WPL’s regulated operations are recorded to regulatory assets on the balance sheets. Revisions in estimated cash flows for IPL’s and WPL’s regulated operations are recorded as an increase or decrease to the ARO liability, with an offset to the asset cost, unless the asset is already retired and then the offset is recorded to regulatory assets or regulatory liabilities on the balance sheets. Upon regulatory approval to recover IPL’s AROs expenditures, its regulatory assets are amortized to depreciation and amortization expenses in Alliant Energy’s and IPL’s income statements over the same time period the ARO expenditures are recovered from IPL’s customers. WPL’s regulatory assets related to AROs are being recovered as a component of depreciation rates pursuant to PSCW and FERC orders. Accretion and depreciation expenses related to AROs for Alliant Energy’s non-utility operations are recorded to depreciation and amortization expenses in Alliant Energy’s income statements. Upon settlement of the ARO liability, an entity settles the obligation for its recorded amount or incurs a gain or loss. Any gains or losses related to AROs for IPL’s and WPL’s regulated operations are recorded to regulatory liabilities or regulatory assets on the balance sheets. Refer to Note 13 for additional discussion of AROs.
NOTE 1(k) Debt Issuance and Retirement Costs - Debt issuance costs and debt premiums or discounts are presented on the balance sheetsheets as a direct deduction fromadjustment to the carrying amount of the related debt liability, and are deferred and amortized over the expected life of each debt issue, considering maturity dates and, if applicable, redemption rights held by others. Alliant Energy’s non-utility businesses and Corporate Services record to interest expense in the period of retirement any unamortized debt issuance costs and debt premiums or discounts on debt retired early.
NOTE 1(l) AllowanceCurrent Expected Credit Losses Estimates - Current expected credit losses are estimated for Doubtful Accounts - Allowancestrade and other receivables and credit exposures on guarantees of the performance by third parties. The current expected credit losses for doubtful accountsshort-term trade receivables are recorded for estimatedbased on estimates of losses resulting from the inability of customers to make required payments. Allowances for doubtful accounts are estimatedThe methodology used to estimate losses is based on historical write-offs, customer arrearsregional economic conditions, significant events that could impact collectability, such as impacts related to COVID-19, significant weather related matters including the derecho windstorm and related regulatory actions, and forecasted changes to the accounts receivable aging portfolio and write-offs. The current expected credit losses related to guarantees of the performance by third parties are estimated using both quantitative and qualitative information, which utilizes potential outcomes in a range of possible estimated amounts.
In 2016, the Financial Accounting Standards Board issued an accounting standard requiring use of a current expected credit loss model rather than an incurred loss method, which is intended to result in more timely recognition of credit losses on trade receivables, certain other economic factors within IPL’sassets and WPL’s service territories. Referoff-balance sheet credit exposures. Alliant Energy, IPL and WPL adopted this standard on January 1, 2020 using a modified retrospective method of adoption, which required cumulative effect adjustments to retained earnings on January 1, 2020. IPL and WPL did not record a cumulative effect adjustment to retained earnings and Alliant Energy recorded a pre-tax $12 million (after-tax $9 million) cumulative effect adjustment to decrease retained earnings related to Alliant Energy’s guarantees in the partnership obligations of an affiliate of Whiting Petroleum (refer to Note 5(a)17(d) for detailsfurther discussion). This adjustment is included in “Adoption of allowancenew accounting standard” in Alliant Energy’s equity statement for doubtful accounts.2020.
NOTE 1(m) Variable Interest Entities - An entity is considered a VIE if its equity investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties, the entity is structured with disproportionate voting rights and substantially all of the entity’s activities are conducted on behalf of the investor with disproportionately fewer voting rights, or its equity investors lack any of the following characteristics: (1) power, through voting rights or similar rights, to direct the activities of the entity that most significantly impact the entity’s economic performance; (2) the obligation to absorb expected losses of the entity; or (3) the right to receive expected benefits of the entity. The primary beneficiary of a VIE is required to consolidate the VIE. The financial statements do not reflect any consolidatedconsolidation of VIEs.
NOTE 1(n) New Accounting StandardsLeases -
Revenue Recognition - In May 2014,The determination of whether an arrangement qualifies as a lease occurs at the Financial Accounting Standards Board issuedinception of the arrangement. Arrangements that qualify as leases are classified as either operating or finance. Operating and finance lease liabilities represent obligations to make payments arising from the lease. Operating and finance lease assets represent the right to use an accounting standard providing principles for recognizing revenueunderlying asset for the transferlease term and are recognized at the lease commencement date based on the present value of promised goodsthe lease payments over the lease term. Leases with initial terms less than 12 months are not recognized as leases. For operating leases, an incremental borrowing rate, as determined at the lease commencement date, is used to determine the present value of the lease payments. For finance leases, the rate implicit in the lease, if known, is used to determine the present value of the lease payments. If the rate implicit in the lease is not known, the incremental borrowing rate is used to determine the present value of the lease payments. Lease terms include options to extend or services to customers withterminate the consideration to whichlease when it is reasonably certain that the entity expects to be entitled in exchange for those goods or services. This standard also requires disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Alliant Energy, IPL and WPL adopted this standard on January 1, 2018 and used the modified retrospective method of adoption and thereoption will be no cumulative effect adjustments madeexercised. Operating lease expense is recognized on a straight-line basis over the expected lease term. Finance lease expense is comprised of depreciation and amortization, and interest expenses. Finance lease assets related to leased land for solar generation are amortized on a straight-line basis over the opening retained earnings balancelease term, and are accounted for as operating leases for rate-making purposes. All other finance lease assets are depreciated on January 1, 2018 upon adoption. The majority of Alliant Energy’s, IPL’s and WPL’s revenues are from retail electric and gas sales from tariff offerings that provide electricity or natural gas without a defined contractual term. For such arrangements, revenues from contracts with customers will be equivalent tostraight-line basis over the electricity or natural gas supplied and billed, or estimated to be billed, and there will be no significant shift in the timing or pattern of revenue recognition for such sales. Alliant Energy, IPL and WPL did not have a material change in revenue recognition as a resultshorter of the adoption of this standard, and the most significant impact to their financial statements is in the form of additional disclosures. The incremental disclosures in future filings will include a separate footnote disclosure, including disaggregation of revenue by location and customer class.
Leases - In February 2016, the Financial Accounting Standards Board issued an accounting standard requiring lease assets and lease liabilities, including operating leases, to be recognized on the balance sheet for all leases with terms longer than 12 months. The standard also requires disclosure of key information about leasing arrangements. Alliant Energy, IPL and WPL currently expect to adopt this standard on January 1, 2019 and are evaluating the impact of this standard on their financial condition and results of operations and expect an increase in assets and liabilities from recognizing operating leases on their balance sheets.
Presentation of Net Periodic Pension and Postretirement Benefit Costs - In March 2017, the Financial Accounting Standards Board issued an accounting standard amending the income statement presentationuseful life of the components of net periodic benefit costs for defined benefit pension and other postretirement plans. The standard requires entities to (1) disaggregateunderlying asset or the current service cost component from the other components of net periodic benefit costs and present it with other employee compensation costs in the income statement; and (2) include the other components in the income statement outside of operating income. This new presentation will shift the majority of the net periodic benefit costs from “Other operation and maintenance” expenses to “Interest expense and other” expenses in the income statements in future filings. In addition, only the service cost component of net periodic benefit costs is eligible for capitalization into property, plant and equipment, when applicable. IPL and WPL, as rate-regulated entities, will capitalize the other components of net periodic benefit costs into regulatory assets or regulatory liabilities. Alliant Energy, IPL and WPL adopted this standard on January 1, 2018 and used the retrospective method of adoption for the presentation requirements and the prospective method of adoption for the capitalization requirements.lease term.
Share-based Compensation Award Payments - In March 2016, the Financial Accounting Standards Board issued an accounting standard intended to simplify certain aspects of the accounting for share-based compensation award payments and the associated income taxes. This standard changes the accounting for excess tax benefits, whereby such benefits are recognized in the income statement instead of additional paid-in capital on the balance sheet. Alliant Energy adopted this standard on January 1, 2016, which resulted in a cumulative effect of a decrease to its deferred tax liabilities and an increase to its January 1, 2016 retained earnings balance of $3.1 million, which is included in “Other” in Alliant Energy’s common equity statement in 2016.
NOTE 2. REGULATORY MATTERS
Regulatory Assets - Alliant Energy, IPL and WPL assess whether IPL’s and WPL’s regulatory assets are probable of future recovery by considering factors such as applicable regulations, recent orders by the applicable regulatory agencies, historical treatment of similar costs by the applicable regulatory agencies and regulatory environment changes. Based on these assessments, Alliant Energy, IPL and WPL believe the regulatory assets recognized as of December 31, 2021 are probable of future recovery. However, no assurance can be made that IPL and WPL will recover all of these regulatory assets in future rates. If future recovery of a regulatory asset ceases to be probable, the regulatory asset will be charged to expense. At December 31, regulatory assets were comprised of the following items (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 |
| Tax-related | $934 | | | $890 | | | $884 | | | $843 | | | $50 | | | $47 | |
| Pension and OPEB costs | 462 | | | 580 | | | 228 | | | 291 | | | 234 | | | 289 | |
| AROs | 128 | | | 119 | | | 89 | | | 81 | | | 39 | | | 38 | |
| Assets retired early | 92 | | | 113 | | | 66 | | | 77 | | | 26 | | | 36 | |
| IPL’s DAEC PPA amendment | 90 | | | 110 | | | 90 | | | 110 | | | — | | | — | |
| WPL’s Western Wisconsin gas distribution expansion investments | 52 | | | 55 | | | — | | | — | | | 52 | | | 55 | |
| Commodity cost recovery | 42 | | | 4 | | | 2 | | | 1 | | | 40 | | | 3 | |
| Derivatives | 8 | | | 26 | | | 4 | | | 13 | | | 4 | | | 13 | |
| | | | | | | | | | | |
| Other | 132 | | | 113 | | | 80 | | | 67 | | | 52 | | | 46 | |
| $1,940 | | | $2,010 | | | $1,443 | | | $1,483 | | | $497 | | | $527 | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Tax-related |
| $778.2 |
| |
| $1,055.6 |
| |
| $750.5 |
| |
| $1,022.4 |
| |
| $27.7 |
| |
| $33.2 |
|
| Pension and OPEB costs | 548.0 |
| | 578.7 |
| | 274.4 |
| | 294.0 |
| | 273.6 |
| | 284.7 |
|
| AROs | 109.3 |
| | 105.9 |
| | 72.5 |
| | 64.3 |
| | 36.8 |
| | 41.6 |
|
| EGUs retired early | 63.8 |
| | 41.4 |
| | 31.6 |
| | — |
| | 32.2 |
| | 41.4 |
|
| Derivatives | 45.3 |
| | 30.7 |
| | 21.8 |
| | 10.0 |
| | 23.5 |
| | 20.7 |
|
| Emission allowances | 25.5 |
| | 26.2 |
| | 25.5 |
| | 26.2 |
| | — |
| | — |
|
| Other | 96.6 |
| | 76.6 |
| | 55.3 |
| | 41.9 |
| | 41.3 |
| | 34.7 |
|
| |
| $1,666.7 |
| |
| $1,915.1 |
| |
| $1,231.6 |
| |
| $1,458.8 |
| |
| $435.1 |
| |
| $456.3 |
|
A portion of the regulatory assets in the above table are not earning a return. These regulatory assets, but not the respective carrying costs of these regulatory assets, are expected to be recovered from customers in future rates. At December 31, 2017,2021, IPL and WPL had $56$75 million and $5$13 million, respectively, of regulatory assets representing past expenditures that were not earning a return. IPL’s regulatory assets that were not earning a return consisted primarily of retired analog electric meters, emission allowances debt redemption costs, and costs for clean air compliance and wind generation expansioncertain construction projects. WPL’s regulatory assets that were not earning a return consisted primarily of environmental-related costs, and amounts related to the wholesale portion of under-collected fuel-related costs, which is discussed in Note 1(g).and costs for future expansion projects. The other regulatory assets reported in the above table either earn a return or the cash has not yet been expended, in which case the assets are offset by liabilities that also do not incur a carrying cost.
Tax-related- IPL and WPL record regulatory assets for certain temporary differences (primarily related to utility property, plant and equipment at IPL) that result in a decrease in current rates charged to customers and an increase in future rates charged to customers based on the timing of income tax expense that is used to determine such rates. These temporary differences for IPL include the impacts of qualifying deductions for repairs expenditures, allocation of mixed service costs, and Iowa accelerated tax depreciation, which all contribute to lower current income tax expense during the first part of an asset’s useful life and higher current income tax expense during the latter part of an asset’s useful life. These regulatory assets will be recovered from customers in the future when these temporary differences reverse resulting in additional current income tax expense used to determine customers’ rates. Tax-related regulatory assets are classified as non-current. During 2017, Alliant Energy’s, IPL’s and WPL’s tax-related regulatory assets decreased primarily due to the impacts of Tax Reform, which is discussed in Note 11. As a result of the reduced tax rate from Tax Reform, the amount of taxes needed to be collected from customers in the future has decreased, which resulted in a corresponding decrease in the associated regulatory assets.
Pension and other postretirement benefits costs - The IUB, PSCW and the PSCWFERC have authorized IPL and WPL to record the retail portion of their respective previously unrecognized net actuarial gains and losses, and prior service costs and credits, as regulatory assets in lieu of AOCLaccumulated other comprehensive loss on the balance sheets, as these amounts are expected to be recovered in future rates. IPL and WPL also recognize the wholesale portion of their previously unrecognized net actuarial gains and losses, and prior service costs and credits, as regulatory assets on the balance sheets because these amounts are expected to be recovered in rates in future periods under the formula rate structure. These regulatory assets will be increased or decreased as the net actuarial gains or losses, and prior service costs or credits, are subsequently amortized and recognized as a component of net periodic benefit costs. Regulatory assets are also increased or decreased as a result of the annual defined benefit plan measurement process.
Pension and OPEB costs are included within the recoverable cost of service component of rates charged to IPL’s and WPL’s customers. The recoverable costs included in customers’ ratesretail and wholesale customers, which are based upon pension and OPEB costs determined in accordance with GAAP and are calculated using different methods forin accordance with IPL’s and WPL’s respective regulatory jurisdictions. In February 2018, the IUB authorized IPL to recover from its Iowa retail electric customers an allocated portion of annual costs equal to a five-year inflation-adjusted average of actual costs incurred for 2013 through 2016 and an estimate of costs for its forward-looking post-Test Year (2017). The PSCW has authorized WPL to recover from its retail electric and gas customers an estimated allocated portion of annual costs equal to the costs expected to be incurred during each test period. IPL and WPL are authorized to recover from their wholesale customers an allocated portion of actual pension costs incurred each year through FERC-approved formula rates. Refer to Note 12(a) for additional details regarding pension and OPEB costs.
AROs - Alliant Energy, IPL and WPL believe it is probable that anycertain differences between expenses accrued for legal AROs related to their utility operations and expenses recovered currently in rates will be recoverable in future rates, and are
deferring the differences as regulatory assets. IPL’s settlement reached in September 2017 and approved by the IUB in February 2018 did not include the recovery of certain ARO costs previously recorded as regulatory assets, and as a result, Alliant Energy and IPL recorded a write-down of regulatory assets in 2017 as discussed in “IPL’s Retail Electric Rate Review (2016 Test Year)” below. Refer to Note 13 for additional details of AROs.
Electric generating unitsAssets retired early - In June 2017, IPL and WPL have retired Sutherland Units 1various natural gas- and 3coal-fired EGUs, and reclassifiedIPL has retired certain analog electric meters. As a result, the remaining net book value of these EGUsassets was reclassified from property, plant and equipment to a regulatory asset on Alliant Energy’s and IPL’stheir respective balance sheets. IPL was earning a return onDetails regarding the remaining net book value of these EGUs, as well as recovering the remaining net book value of these EGUs from both its retail and wholesale customers. IPL’s settlement reached in September 2017 and approved by the IUB in February 2018 authorized IPL to recover the remaining net book value of these EGUs from IPL’s retail customers over a 10-year period; however, IPL is not allowed to earn a return on the remaining net book value of these EGUs from its retail customers. As a result, Alliant Energy and IPL recorded a write-down of regulatory assets in 2017 as discussed in “IPL’s Retail Electric Rate Review (2016 Test Year)” below. In September 2017, FERC approved continued recovery of the remaining net book value of these EGUsassets from IPL’s wholesaleand WPL’s customers overare as follows (dollars in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Entity | | Asset | | Retirement Date | | Regulatory Asset Balance as of Dec. 31, 2021 | | Recovery | | Regulatory Approval |
| IPL | | Sutherland Units 1 and 3 | | 2017 | | $19 | | Return of and return on remaining net book value through 2027 | | IUB and FERC |
| IPL | | M.L. Kapp Unit 2 | | 2018 | | 18 | | Return of and return on remaining net book value through 2029 | | IUB and FERC |
| IPL | | Analog electric meters | | 2019 | | 29 | | Return of remaining net book value through 2028 | | IUB and FERC |
| WPL | | Nelson Dewey Units 1 and 2 and Edgewater Unit 3 | | 2015 | | 6 | | Return of and return on remaining net book value through 2022 | | PSCW and FERC |
| WPL | | Edgewater Unit 4 | | 2018 | | 20 | | Return of and return on remaining net book value through 2028 | | PSCW and FERC |
IPL’s DAEC PPA Amendment - In September 2020, IPL made a 10-year period.
In 2015, WPL retired Nelson Dewey Units 1 and 2 and Edgewater Unit 3. WPL received approval frombuyout payment of $110 million in exchange for shortening the PSCW and FERC to reclassify the remaining net book valueterm of these EGUs from property, plant and equipment to a regulatory asset onits DAEC PPA by 5 years. The payment was included in “DAEC PPA amendment buyout payment” in Alliant Energy’s and WPL’s balance sheets.IPL’s cash flows used for operating activities in 2020. The remaining net book value is included in WPL’s rate base and WPL is earningbuyout payment, including a return on, the outstanding balance. WPL is currently recovering the remaining net book value of these EGUswill be recovered from both itsIPL’s retail and wholesale customers overfrom 2021 through the end of 2025, and is currently being amortized to “Electric production fuel and purchased power” in Alliant Energy’s and IPL’s income statements.
WPL’s Western Wisconsin gas distribution expansion investments - WPL made contributions in aid of construction to a 10-year period beginning January 1, 2013 pursuantthird party for investments as part of its Western Wisconsin gas distribution expansion project. Pursuant to authorization by the PSCW, Alliant Energy and FERC orders.WPL have recorded a regulatory asset for these costs, and are authorized by the PSCW to recover these amounts from WPL’s retail gas customers in base rates from 2021 through the end of 2040.
Commodity cost recovery - Refer to Note 1(g) for details of IPL’s and WPL’s commodity cost recovery mechanisms. The cost recovery mechanism for WPL’s retail electric customers is based on forecasts of certain fuel-related costs expected to be incurred during forward-looking test periods and fuel monitoring ranges determined by the PSCW during each retail electric rate proceeding or in a separate fuel cost plan approval proceeding. In 2021, WPL’s actual fuel-related costs fell outside these fuel monitoring ranges, resulting in a $37 million deferral as of December 31, 2021.
Derivatives - In accordance with IPL’s and WPL’s fuel and natural gas recovery mechanisms, prudently incurred costs from derivative instruments are recoverable from customers in the future after any losses are realized, and gains from derivative instruments are refundable to customers in the future after any gains are realized. Based on these recovery mechanisms, the changes in the fair value of derivative liabilities/assets resulted in comparable changes to regulatory assets/liabilities on the balance sheets. Refer to Note 15 for additional details of derivative assets and derivative liabilities.
Emission allowances - IPL entered into forward contracts in 2007 to purchase SO2 emission allowances with vintage years of 2014 through 2017 from various counterparties to meet expected future emission reduction standards. Alliant Energy and IPL have recorded a regulatory asset for amounts paid under the forward contracts. In February 2018, the IUB authorized IPL to recover the unamortized forward contract costs for SO2 emission allowances through the energy adjustment clause over a 10-year period.
Other - Alliant Energy, IPL and WPL assess whether IPL’s and WPL’s regulatory assets are probable of future recovery by considering factors such as applicable regulations, recent orders by the applicable regulatory agencies, historical treatment of similar costs by the applicable regulatory agencies and regulatory environment changes. Based on these assessments, Alliant Energy, IPL and WPL believe the regulatory assets recognized as of December 31, 2017 in the above table are probable of future recovery. However, no assurance can be made that IPL and WPL will recover all of these regulatory assets in future rates. If future recovery of a regulatory asset ceases to be probable, the regulatory asset will be charged to expense in the period the likelihood of future recovery is less than probable.
Regulatory Liabilities - At December 31, regulatory liabilities were comprised of the following items (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 |
| Tax-related | $585 | | $732 | | $312 | | $331 | | $273 | | $401 |
| Cost of removal obligations | 384 | | 367 | | 252 | | 238 | | 132 | | 129 |
| Derivatives | 166 | | 28 | | 77 | | 25 | | 89 | | 3 |
| Electric transmission cost recovery | 51 | | 68 | | 27 | | 39 | | 24 | | 29 |
| WPL’s West Riverside liquidated damages | 36 | | 38 | | — | | — | | 36 | | 38 |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Other | 49 | | 73 | | 23 | | 43 | | 26 | | 30 |
| $1,271 | | $1,306 | | $691 | | $676 | | $580 | | $630 |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Tax-related |
| $899.4 |
| |
| $7.7 |
| |
| $399.5 |
| |
| $1.9 |
| |
| $499.9 |
| |
| $5.8 |
|
| Cost of removal obligations | 410.0 |
| | 411.6 |
| | 274.5 |
| | 269.4 |
| | 135.5 |
| | 142.2 |
|
| Electric transmission cost recovery | 90.4 |
| | 72.0 |
| | 26.4 |
| | 35.7 |
| | 64.0 |
| | 36.3 |
|
| IPL’s tax benefit riders | 25.0 |
| | 83.5 |
| | 25.0 |
| | 83.5 |
| | — |
| | — |
|
| Commodity cost recovery | 21.0 |
| | 30.8 |
| | 14.6 |
| | 17.8 |
| | 6.4 |
| | 13.0 |
|
| Energy efficiency cost recovery | 19.9 |
| | 20.5 |
| | — |
| | — |
| | 19.9 |
| | 20.5 |
|
| Other | 31.5 |
| | 54.9 |
| | 15.4 |
| | 22.5 |
| | 16.1 |
| | 32.4 |
|
| |
| $1,497.2 |
| |
| $681.0 |
| |
| $755.4 |
| |
| $430.8 |
| |
| $741.8 |
| |
| $250.2 |
|
RegulatoryTax-related regulatory liabilities related to costreduce revenue requirement calculations utilized in IPL’s and WPL’s respective rate proceedings. Cost of removal obligations, to the extent expensed through depreciation rates, reduce rate base. Excluding the regulatory liabilities arising from Tax Reform, aA significant portion of the remaining regulatory liabilities areis not used to reduce rate base in theadjust revenue requirement calculations utilized in IPL’s and WPL’s respective rate proceedings.calculations.
Tax-related - During 2017, Alliant Energy’s, IPL’s and WPL’s tax-related regulatory liabilities increasedare primarily related to excess deferred tax benefits resulting from the remeasurement of accumulated deferred income taxes caused by Federal Tax Reform. The majority of these benefits related to accelerated depreciation are subject to tax normalization rules. These rules limit the rate at which these tax benefits are allowed to be passed on to customers. In 2021, Alliant Energy’s, IPL’s and WPL’s tax-related regulatory liabilities decreased primarily due to the impactsreturning a portion of Tax Reform, which is discussed in Note 11. Tax-related regulatory liabilities are classified as non-current.these excess deferred tax benefits back to customers.
Cost of removal obligations - Alliant Energy, IPL and WPL collect in rates future removal costs for many assets that do not have associated legalAROs or that have removal costs in addition to AROs. Alliant Energy, IPL and WPL record a regulatory liability for the estimated amounts they have collected in rates for these future removal costs and reduce the regulatory liability for amounts spent on removal activities. Cash payments related to cost of removal obligations are included in “Other” in cash flows used for investing activities.
Electric transmission cost recovery - A group of MISO cooperative and municipal utilities previously filed two complaints with FERC requesting a reduction to the base return on equity used by MISO transmission owners, including ITC and ATC, to determine electric transmission costs billed to utilities, including IPL and WPL. In 2016, FERC issued an order on the first complaint and established a base return on equity of 10.32%, excluding any incentive adders granted by FERC. The base return on equity of 10.32% was effective September 28, 2016, and was for the refund period from November 12, 2013 through February 11, 2015 (first complaint period). In 2017, Alliant Energy, IPL and WPL received the refunds for the first complaint period of $50 million, $39 million and $11 million, respectively, after final true-ups. IPL and WPL each initially recorded the retail portion of the refunds to a regulatory liability. Pursuant to IUB approval, IPL’s retail portion of the refund from ITC was refunded to its retail customers in 2017. WPL’s retail portion of the refund from ATC will remain in a regulatory liability until such refunds are approved to be returned to retail customers in a future rate proceeding. IPL’s and WPL’s wholesale customers received their share of the refunds through normal monthly billing practices in 2017. The second complaint covers the period from February 12, 2015 through May 11, 2016. A decision from FERC on the second complaint is currently expected in 2018. Refer to Note 1(g) for additional details of IPL’s and WPL’s electric transmission service cost recovery mechanisms.
IPL’s tax benefit riders - The In 2020, pursuant to an IUB has approved electric and gas tax benefit riders proposed byorder, IPL which utilize regulatory liabilitiesissued $42 million of credits to credit bills of IPL’s Iowaits retail electric and gas customers to help offset the impact of rate increases on such customers. Alliant Energy and IPL recognize an offsettingthrough its transmission cost rider for amounts previously collected in rates, which resulted in a reduction to income tax“Electric transmission service” expense for the after-tax amounts credited to such customers, resulting in no impact to their net income from the electric and gas tax benefit riders. The tax benefit riders regulatory liabilities are related to tax benefits from tax accounting method changes for repairs expenditures and cost of removal expenditures, and a rate-making accounting change for capitalized interest. In 2017, Alliant Energy’s and IPL’s “IPL’s tax benefit riders” regulatory liabilities increased (decreased) by ($59) million as follows (in millions):
|
| | | |
Electric tax benefit rider credits |
| ($65 | ) |
Gas tax benefit rider credits | (6 | ) |
Rate-making accounting change for capitalized interest | 17 |
|
Tax Reform adjustment (Refer to Note 11) | (5 | ) |
|
| ($59 | ) |
In 2017, Alliant Energy and IPL implemented a rate-making accounting change for capitalized interest. IPL currently anticipates crediting its related tax benefits from this rate-making accounting change to its Iowa retail electric and gas customers in the future, and as a result, Alliant Energy and IPL recorded an increase of $17 million to IPL’s tax benefit riders regulatory liabilities in 2017.
The remaining electric tax benefit rider regulatory liabilities are currently expected to be credited to IPL’s retail electric customers’ bills over a 12-month period after final rates are effective, which is currently expected in the first half of 2018. The remaining gas tax benefit rider regulatory liabilities are currently expected to be credited to IPL’s gas customers’ bills by December 2018, subject to final review by the IUB.
Electric tax benefit rider - Details for IPL’s electric tax benefit rider are as follows (in millions):
|
| | | | | | | | | | | |
| | 2017 | | 2016 | | 2015 |
| Credit to IPL’s Iowa retail electric customers’ bills with reduction to electric revenues (based on customers’ KWh usage) |
| $65 |
| |
| $64 |
| |
| $72 |
|
| Income tax benefit resulting from decreased taxable income caused by credits | 27 |
| | 27 |
| | 30 |
|
| Income tax benefit representing tax benefits realized from electric tax benefit rider | 38 |
| | 37 |
| | 42 |
|
The IUB authorized IPL to reduce the electric tax benefit rider billing credits on customers’ bills for 2013 through 2016 to recognize the revenue requirement impact of the changes in tax accounting methods related to tangible property and mixed service costs. The revenue requirement adjustment resulted in increases to electric revenues in Alliant Energy’s and IPL’s income statements and was recognized throughin 2020.
WPL’s West Riverside liquidated damages - Pursuant to terms included in the energy adjustment clause as a reductionrelated West Riverside construction procurement contracts, WPL reached agreement with the contractor on liquidated damages in 2020. A significant portion of the credits on IPL’s Iowa retail electric customers’ bills fromliquidated damages was settled by WPL offsetting amounts owed to the electric tax benefit rider as follows (in millions):
|
| | | | | | | |
| | 2016 | | 2015 |
| Revenue requirement adjustment |
| $14 |
| |
| $14 |
|
Gas tax benefit rider - Detailscontractor that were previously withheld for IPL’s gas tax benefit rider are as follows (in millions):
|
| | | | | | | | | | | |
| | 2017 | | 2016 | | 2015 |
| Credit to IPL’s Iowa retail gas customers’ bills with reduction to gas revenues (based on a fixed amount per day) |
| $6 |
| |
| $12 |
| |
| $12 |
|
| Income tax benefit resulting from decreased taxable income caused by credits | 3 |
| | 5 |
| | 5 |
|
| Income tax benefit representing tax benefits realized from gas tax benefit rider | 3 |
| | 7 |
| | 7 |
|
Commodity cost recovery - Referpayment, which were non-cash investing activities. In December 2020, the PSCW authorized WPL to Note 1(g) for additional details of IPL’s and WPL’s commodity cost recovery mechanisms.
Energy efficiency cost recovery - WPL and IPL collect revenues from their customers to offset certain expenditures they each incur for energy efficiency programs, including state mandated programs and Shared Savings programs. Differences between forecasted costs used to set rates and actual costs for these programs are deferredrecord the liquidated damages as a regulatory asset orliability, which the PSCW authorized to be returned to WPL’s retail customers in 2022 and 2023.
Derecho Windstorm - In August 2020, a derecho windstorm caused considerable damage to IPL’s electric distribution system in its service territory, and over 250,000 of its customers lost power. IPL completed its initial restoration and rebuilding efforts in August 2020 and permanent repairs to the system continue. As of December 31, 2021, approximately $140 million of costs from the windstorm were recorded substantially to “Property, plant and equipment, net” on Alliant Energy’s and IPL’s balance sheets. In December 2020, IPL received approval from the IUB for utilization of a regulatory liability.account to track certain incremental costs and benefits incurred resulting from the windstorm. These incremental costs and benefits were not addressed in the IUB’s order for IPL’s 2020 forward-looking Test Period electric subsequent proceeding, and are expected to be addressed in future regulatory proceedings. Tax benefits and the incremental operation and maintenance expenses resulting from the windstorm were deferred and recorded as a net regulatory liability of $8 million as of December 31, 2021, which is included in “Other” regulatory liabilities in the above table.
Utility Rate Reviews -
IPL’s Retail Electric Rate Review (2016(2020 Forward-looking Test Year)Period) - In April 2017,March 2019, IPL filed a request with the IUB to increase annual electric base rates for its Iowa retail electric customers. The request wascustomers based on a 20162020 forward-looking Test Period. The key drivers for IPL’s request included recovery of capital projects, including new wind generation. IPL concurrently filed for interim retail electric rates based on 2018 historical Test Yeardata as adjusted for certain known and measurable changes occurring up to 12 months afterin the commencementfirst quarter of the proceeding. The key drivers for the filing included recovery of capital projects, primarily power grid modernization and investments that advance cleaner energy, including Marshalltown.2019. An interim retail electric base rate increase of $102$90 million, or approximately 7%, on an annual basis, was implemented effective April 13, 2017. Tax benefit rider credits and MISO transmission owner return on equity refunds were used to reduce the effect of the interim rate increase on customer bills in 2017.1, 2019. In 2017, Alliant Energy and IPL recorded increases in electric base rates of $77 million in conjunction with the interim retail electric base rate increase.
In September 2017,October 2019, IPL reached a
partial, non-unanimous settlement agreement with
the Iowa Office of Consumer Advocate, the Iowa Business Energy Coalition and the Large Energy Groupcertain intervenor groups for an annual retail electric base rate increase of
$130 million, or approximately 9%.$127 million. In
February 2018,January 2020, the IUB issued an order approving the
settlement. Finalsettlement with final rates,
are currently expected to bewhich were effective
inFebruary 26, 2020. The agreement includes both the
first halfrecovery of
2018 once all motions for reconsideration have been addressed and
final tariffs have been approved by the IUB. The final rate increase includes continuation of the electric transmission cost rider; increased depreciation expense resulting from an updated depreciation study; recovery over a four-year period of ARO expenditures since the last retail electric rate filing in 2010; recovery over a 10-year period of the remaining net book value of Sutherland Units 1 and 3, unamortized forward contract costs for SO2 emission allowances through the energy adjustment clause and cancelled project costs approved in a prior EPB; and no double leverage applied to the weighted-average cost of capital. As a result of the partial settlement, in 2017, IPL recorded a write-down of regulatory assets of $9 million, including $4 million to “Other operation and maintenance” expenses primarily related to IPL being no longer probable of earning a return on
IPL’s early retired EGUs, and the
remainingrecovery of IPL’s retired analog electric meters. In addition, as discussed in Note 1(g), the net book valueimpact of Sutherland Units 1certain costs and 3benefits resulting from IPL’s 1,000 MW expansion of wind generation in 2019 and 2020 is being recovered from its retail electric customers whenthrough the renewable energy rider. The agreement also includes IPL providing retail electric billing credits, which began in the third quarter of 2020 through June 2021, and in aggregate include $27 million of excess deferred tax benefits and $8 million from a partial refund of interim rates implemented in 2019. In 2021, the IUB issued an order for IPL’s 2020 forward-looking Test Period electric subsequent proceeding, which compared actual revenues and costs to those initially forecasted by IPL, and authorized IPL to maintain its current retail electric rates.
IPL’s Retail Gas Rate Review (2020 Forward-looking Test Period) - In March 2019, IPL filed a request with the IUB to increase annual gas base rates for its Iowa retail gas customers based on a 2020 forward-looking Test Period. In October 2019, IPL reached a settlement agreement with intervenor groups for an annual retail gas base rate increase of $12 million. In December 2019, the IUB issued an order approving the settlement with final rates, are implemented,which were effective January 10, 2020. In 2021, the IUB issued an order for IPL’s 2020 forward-looking Test Period gas subsequent proceeding, which compared actual revenues and $5 millioncosts to “Depreciationthose initially forecasted by IPL, and amortization” expenses for certain AROs deemed no longer probable of recovery in futureauthorized IPL to maintain its current retail gas rates.
WPL’s Retail Electric and Gas Rate Review (2017/2018(2019/2020 Forward-looking Test Period) -In December 2016, WPL received2018, the PSCW issued an order from the PSCW authorizing WPL to implement increases in annualapproving WPL’s proposed settlement for its retail electric and gas rates of $9 million and $9 million, respectively, effective January 1, 2017 followed by a freeze of such rates throughrate review covering the end of 2018. The $9 million net annual retail electric rate increase reflects a $60 million increase in base rates, partially offset by a $51 million reduction in fuel-related costs, using an estimate for 2017 fuel-related costs. The key drivers for the electric and gas base rate increases are recovery of the costs for environmental controls projects at Edgewater and Columbia, and investments in electric and gas distribution systems, including expansion of natural gas pipeline infrastructure. The filing also included utilization of amounts that WPL previously over-recovered from its customers for energy efficiency cost recovery and electric transmission
cost recovery, as well as amounts deferred under the earnings sharing mechanism for the 2013/20142019/2020 Test Period, to reducewhich was based on a stipulated agreement between WPL and intervenor groups. Under the requested base rate increases. The order included provisions that requiresettlement, WPL to defer a portion of its earnings if its annual regulatory return on common equity exceeds certain levels in 2017 or 2018. In 2017, Alliant Energy and WPL recorded increases inretail electric and gas base rates did not change from then current levels through the end of $632020. In September 2020, pursuant to an August 2020 PSCW order, WPL refunded $12 million and $9 million, respectively,of 2019 fuel-related cost over-collections to its retail electric customers. In addition, WPL’s amortization of excess deferred taxes resulting from the remeasurement of accumulated deferred income taxes caused by Federal Tax Reform was used to offset increases in conjunction with the base rate increases authorized in the PSCW’s December 2016 order.WPL’s 2020 increased revenue requirements.
WPL’s Retail Electric and Gas Rate Review (2015/2016(2021 Forward-looking Test Period) - In July 2014, WPL receivedDecember 2020, the PSCW issued an order from the PSCW authorizing WPL to maintain its then current retail electric and gas base rates, at their then current levelsauthorized return on common equity, regulatory capital structure and earnings sharing mechanism through the end of 2016. The retail electric base rate review included a return of2021. WPL utilized anticipated fuel-related cost savings and return on costs for environmental controls projects, generation performance and reliability improvements, other ongoing capital expenditures and an increaseexcess deferred income tax benefits in electric transmission service expense. The additional2021 to offset the revenue requirement for these cost increasesimpacts of increasing electric and gas rate base, including the Kossuth wind farm, which was offset byplaced in service in October 2020, and the impact of changes in the amortization of regulatory liabilities associated with energy efficiency recoveries and increased sales volumes. The order also authorized WPL to implement a $5 million decrease in annual base rates for its retail gas customers effective January 1, 2015 followed by a freeze of such gas base rates through the end of 2016. The order included provisions that required WPL to defer a portionexpansion of its earnings if its annual regulatory return on common equity exceeded certain levelsgas distribution system in 2015 or 2016. As of December 31, 2017, Alliant Energy and WPL deferred $5 million of WPL’s 2016 earnings for these provisions,Western Wisconsin, which is includedwas placed in “Other”service in Alliant Energy’s and WPL’s regulatory liabilities tables above.November 2020.
IPL’s 2014 Retail Electric Rate Settlement Agreement - The IUB approved a settlement agreement in 2014 related to rates charged to IPL’s Iowa retail electric customers. The settlement agreement extended IPL’s Iowa retail electric base rates authorized in its 2009 Test Year rate review through 2016 and provided targeted retail electric customer billing credits of $105 million in aggregate. IPL recorded such billing credits as follows (in millions):
|
| | | | | | | | | | | |
| | 2016 | | 2015 | | 2014 |
| Billing credits to reduce retail electric customers’ bills |
| $9 |
| |
| $24 |
| |
| $72 |
|
WPL’s Retail Fuel-related Rate Filing (2016(2020 Forward-looking Test Year)Period) - Pursuant to a 2015 PSCW order, WPL’s 2016 fuel-related costs were subject to deferral if they were outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Retail fuel-related costs incurred by WPL in 2016 were lower than fuel-related costs used to determine rates for such period resulting in an over-collection of fuel-related costs. In August 2017, the PSCW authorized WPL to utilize $6 million of the over-collections as an offset to projected 2017 fuel-related cost under-collections. As of December 31, 2017, $3 million of remaining fuel-related costs for 2016 outside of the approved bandwidth are included in “Commodity cost recovery” in Alliant Energy’s and WPL’s regulatory liabilities table above, and these costs are expected to offset any rate changes for WPL’s 2018 fuel-related costs.
WPL’s Retail Fuel-related Rate Filing (2017 Test Year) - In March 2017, WPL filed an application with the PSCW for a mid-year fuel-related cost adjustment for 2017. Fuel-related costs for 2017 were expected to exceed the approved 2017 fuel-related cost plan by more than the 2% annual bandwidth. In August 2017, the PSCW authorized WPL to utilize $6 million of the 2016 fuel-related cost over-collections to offset a portion of the projected fuel-related cost under-collections for 2017. Retail fuel-related costs incurred by WPL in 2017 were higher than the projected fuel-related costs used to determine rates for such period resulting in an under-collection of fuel-related costs. As of December 31, 2017, after applying the 2016 over-recovery amounts, the remaining fuel-related costs for 2017 outside of the approved bandwidth were $5 million and are included in “Other” in Alliant Energy’s and WPL’s regulatory assets table above.
WPL’s Retail Fuel-related Rate Filing (2018 Test Year) - In December 2017,2019, WPL received an order from the PSCW authorizing an annual retail electric rate increasedecrease of $6$29 million, or approximately 1%2%, effective January 1, 2018.2020. The increasedecrease primarily reflectsreflected a change in expected fuel-related costs in 2018, which was offset by $3 million of over-collections from WPL’s 2016 fuel-related costs as discussed above.2020.
NOTE 3. PROPERTY, PLANT AND EQUIPMENT
At December 31, details of property, plant and equipment on the balance sheets were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 |
| Utility: | | | | | | | | | | | |
| Electric plant: | | | | | | | | | | | |
| Generation in service | $7,539 | | | $8,222 | | | $4,922 | | | $4,884 | | | $2,617 | | | $3,338 | |
| Distribution in service | 6,537 | | | 6,216 | | | 3,652 | | | 3,470 | | | 2,885 | | | 2,746 | |
| Other in service | 540 | | | 536 | | | 363 | | | 358 | | | 177 | | | 178 | |
| Anticipated to be retired early (a) | 2,094 | | | 1,269 | | | 487 | | | 459 | | | 1,607 | | | 810 | |
| Total electric plant | 16,710 | | | 16,243 | | | 9,424 | | | 9,171 | | | 7,286 | | | 7,072 | |
| Gas plant in service | 1,636 | | | 1,563 | | | 878 | | | 844 | | | 758 | | | 719 | |
| Other plant in service | 621 | | | 534 | | | 398 | | | 354 | | | 223 | | | 180 | |
| Accumulated depreciation | (5,263) | | | (4,868) | | | (2,897) | | | (2,671) | | | (2,366) | | | (2,197) | |
| Net plant | 13,704 | | | 13,472 | | | 7,803 | | | 7,698 | | | 5,901 | | | 5,774 | |
| Leased Sheboygan Falls Energy Facility, net (b) | — | | | — | | | — | | | — | | | 21 | | | 27 | |
| Leased land for solar generation, net | 11 | | | — | | | — | | | — | | | 11 | | | — | |
| Construction work in progress | 778 | | | 405 | | | 174 | | | 185 | | | 604 | | | 220 | |
| Other, net | 7 | | | 7 | | | 6 | | | 6 | | | 1 | | | 1 | |
| Total utility | 14,500 | | | 13,884 | | | 7,983 | | | 7,889 | | | 6,538 | | | 6,022 | |
| Non-utility and other: | | | | | | | | | | | |
| Non-utility Generation, net (c) | 75 | | | 79 | | | — | | | — | | | — | | | — | |
| Corporate Services and other, net (d) | 412 | | | 373 | | | — | | | — | | | — | | | — | |
| Total non-utility and other | 487 | | | 452 | | | — | | | — | | | — | | | — | |
| Total property, plant and equipment | $14,987 | | | $14,336 | | | $7,983 | | | $7,889 | | | $6,538 | | | $6,022 | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Utility: | | | | | | | | | | | |
| Electric plant: | | | | | | | | | | | |
| Generation in service |
| $6,655.3 |
| |
| $5,866.9 |
| |
| $3,715.9 |
| |
| $2,916.8 |
| |
| $2,939.4 |
| |
| $2,950.1 |
|
| Distribution in service | 5,123.5 |
| | 4,739.2 |
| | 2,820.9 |
| | 2,589.3 |
| | 2,302.6 |
| | 2,149.9 |
|
| Other in service | 425.1 |
| | 329.1 |
| | 282.3 |
| | 223.5 |
| | 142.8 |
| | 105.6 |
|
| Anticipated to be retired early (a)(b) | 93.0 |
| | 108.3 |
| | — |
| | 108.3 |
| | 93.0 |
| | — |
|
| Total electric plant | 12,296.9 |
| | 11,043.5 |
| | 6,819.1 |
| | 5,837.9 |
| | 5,477.8 |
| | 5,205.6 |
|
| Gas plant in service | 1,244.0 |
| | 1,107.6 |
| | 654.8 |
| | 556.7 |
| | 589.2 |
| | 550.9 |
|
| Other plant in service | 571.9 |
| | 549.3 |
| | 333.4 |
| | 313.0 |
| | 238.5 |
| | 236.3 |
|
| Accumulated depreciation | (4,283.1 | ) | | (4,135.7 | ) | | (2,311.0 | ) | | (2,258.3 | ) | | (1,972.1 | ) | | (1,877.4 | ) |
| Net plant | 9,829.7 |
| | 8,564.7 |
| | 5,496.3 |
| | 4,449.3 |
| | 4,333.4 |
| | 4,115.4 |
|
| Leased Sheboygan Falls Energy Facility, net (c) | — |
| | — |
| | — |
| | — |
| | 46.2 |
| | 52.4 |
|
| Construction work in progress | 962.2 |
| | 1,226.8 |
| | 424.4 |
| | 968.1 |
| | 537.8 |
| | 258.7 |
|
| Other, net | 6.0 |
| | 18.4 |
| | 5.5 |
| | 18.2 |
| | 0.5 |
| | 0.2 |
|
| Total utility | 10,797.9 |
| | 9,809.9 |
| | 5,926.2 |
| | 5,435.6 |
| | 4,917.9 |
| | 4,426.7 |
|
| Non-utility and other: | | | | | | | | | | | |
| Non-utility Generation, net (d) | 90.9 |
| | 135.0 |
| | — |
| | — |
| | — |
| | — |
|
| Corporate Services and other, net (e) | 345.7 |
| | 334.3 |
| | — |
| | — |
| | — |
| | — |
|
| Total non-utility and other | 436.6 |
| | 469.3 |
| | — |
| | — |
| | — |
| | — |
|
| Total property, plant and equipment |
| $11,234.5 |
| |
| $10,279.2 |
| |
| $5,926.2 |
| |
| $5,435.6 |
| |
| $4,917.9 |
| |
| $4,426.7 |
|
| |
(a) | In 2017, IPL retired Sutherland Unit 3 and reclassified the remaining net book value of this EGU from property, plant and equipment to a regulatory asset on Alliant Energy’s and IPL’s balance sheets. Refer to Note 2 for further discussion, including recovery of the remaining net book value of Sutherland Unit 3. |
| |
(b) | In 2017, WPL received approval from MISO to retire Edgewater Unit 4 and currently anticipates retiring this EGU by September 30, 2018. In 2016, the PSCW authorized WPL to recover the remaining net book value of Edgewater Unit 4 over a 10-year period beginning the later of the retirement date of the EGU or January 1, 2019. |
| |
(c) | Less accumulated amortization of $77.6 million and $71.4 million for WPL as of December 31, 2017 and 2016, respectively. The Sheboygan Falls Energy Facility is eliminated from WPL upon consolidation and is included in the “Non-utility Generation, net” line within Alliant Energy’s consolidated property, plant and equipment. |
| |
(d) | Less accumulated depreciation of $50.5 million and $46.5 million for Alliant Energy as of December 31, 2017 and 2016, respectively. Refer to “Franklin County Wind Farm” below for discussion of the April 2017 transfer of the Franklin County wind farm from AEF to IPL pursuant to a February 2017 FERC order.
|
| |
(e) | Less accumulated depreciation of $285.6 million and $272.0 million for Alliant Energy as of December 31, 2017 and 2016, respectively.
|
Utility -
Natural Gas-Fired Generation Projects -
IPL’s Marshalltown Generating Station - Construction(a)In 2020, IPL and WPL received approval from MISO to retire Lansing and Edgewater Unit 5, respectively, and currently anticipate retiring Lansing by the end of Marshalltown, a 706 MW natural gas-fired combined-cycle EGU, began in 20142022 and was completed in 2017, which resulted in a transferEdgewater Unit 5 by early 2023. In 2021, WPL received approval from MISO to retire Columbia Units 1 and 2, and currently anticipates retiring Columbia Unit 1 by the end of 2023 and Columbia Unit 2 by the capitalized project costs from “Construction work in progress” to “Electric plant - Generation in service” in the above table forend of 2024. Alliant Energy and IPL in 2017.concluded that Lansing, and Alliant Energy and WPL concluded that Edgewater Unit 5 and Columbia Units 1 and 2, met the criteria to be considered probable of abandonment as of December 31, 2021. IPL and WPL are currently allowed a full recovery of and a full return on its respective EGUs from both its retail and wholesale customers, and as a result, Alliant Energy, IPL and WPL concluded that no disallowance was required as of December 31, 2021. As of December 31, 20172021, net book values were $245 million for Lansing, $527 million for Edgewater Unit 5, and 2016, the capitalized project costs$460 million for the EGU consistedColumbia Units 1 and 2 in aggregate.
(b)Less accumulated amortization of capitalized expenditures of $645$100 million and CWIP of $612$95 million and AFUDC of $81 million and $68 million, respectively.
WPL’s West Riverside Energy Center -for WPL is currently constructing West Riverside, an approximate 730 MW natural gas-fired combined-cycle EGU. Construction began in 2016 and is currently expected to be completed by early 2020. Asas of December 31, 20172021 and 2016,2020, respectively. For Alliant Energy, the leased Sheboygan Falls Energy Facility is eliminated upon consolidation and WPL recorded capitalized expenditures for CWIPis included in the “Non-utility Generation, net” line within Alliant Energy’s consolidated property, plant and equipment.
(c)Less accumulated depreciation of $339$67 million and $81$63 million and AFUDC of $14 million and $2 million, respectively, for West Riverside in “Construction work in progress” in the above table for Alliant Energy and WPL. These capital expenditures do not yet reflect any potential impacts from the exercise of purchase options by certain WPL electric cooperatives for a partial ownership interest in West Riverside.
Wind Generation -
IPL’s Expansion of Wind Generation - IPL currently plans to add up to 1,000 MW of new wind projects to its existing generation portfolio. These wind projects are expected to be placed into service in 2019 and 2020. Asas of December 31, 20172021 and 2016, Alliant Energy and IPL recorded capitalized expenditures for CWIP2020, respectively.
(d)Less accumulated depreciation of $264$245 million and $102$210 million and AFUDC of $11 million and $1 million, respectively, for this expansion of wind generation in “Construction work in progress” in the above table for Alliant Energy as of December 31, 2021 and IPL.2020, respectively.
Franklin County Wind Farm - In 2016, based on an evaluation of the strategic options for the Franklin County wind farm, Alliant Energy concluded it was probable the Franklin County wind farm would be transferred to IPL. As a result, Alliant Energy performed an impairment analysis of such assets and recorded non-cash, pre-tax asset valuation charges of $86 million (after-tax charges of $51 million, or $0.23 per share) in 2016. Alliant Energy recorded such charges as a reduction to property, plant and equipment on its balance sheet and charges to “Asset valuation charges for Franklin County wind farm” in its income statement in 2016.
In April 2017, the Franklin County wind farm was transferred from AEF to IPL as approved by a February 2017 FERC order. IPL’s purchase price, including certain transaction-related costs, was $32 million. As of the closing date, the estimated fair values of the assets purchased and liabilities assumed by IPL were as follows (in millions):
|
| | | |
Electric plant in service |
| $40 |
|
Current assets | 2 |
|
Total assets acquired | 42 |
|
Other liabilities | 10 |
|
Net assets acquired |
| $32 |
|
WPL’s Proposed Acquisition of Forward Wind Energy Center - In October 2017, WPL entered into definitive agreements to acquire the assets of FWEC, which is a 129 MW wind farm located in Wisconsin. WPL currently expects to acquire 55 MW of FWEC for approximately $74 million. In November 2017, WPL filed for approval from the PSCW to acquire the assets of FWEC, and a decision from the PSCW is currently expected in the first half of 2018. In January 2018, FERC approved WPL’s request to acquire the assets of FWEC.
Sales of IPL’s Minnesota Electric and Natural Gas Distribution Assets - In 2015, IPL completed the sale of its Minnesota natural gas distribution assets (primarily related to property, plant and equipment) and received proceeds of $11 million and a promissory note of $2 million. In 2015, IPL completed the sale of its Minnesota electric distribution assets (primarily related to property, plant and equipment) to Southern Minnesota Energy Cooperative, a combined group of various neighboring electric cooperatives, and received proceeds of $129 million. The proceeds from the natural gas distribution assets were used for general corporate purposes and the proceeds from the electric distribution assets were used to reduce cash amounts received from IPL’s sales of accounts receivable program. The premium received over the book value of the property, plant and equipment sold was more than offset by a reduction in tax-related regulatory assets associated with the distribution assets. As a result, Alliant Energy and IPL recorded pre-tax charges of $11 million and $3 million for the Minnesota electric and natural gas distribution asset transactions, respectively, in “Other operation and maintenance” in their income statements in 2015.
The electric distribution asset sales agreement includes a wholesale power supply agreement between IPL and Southern Minnesota Energy Cooperative, which was approved by FERC in 2015 and became effective upon the sale of IPL’s Minnesota electric distribution assets. The wholesale power supply agreement contains a five-year termination notice, which may not be given until the fifth anniversary of the effective date of the agreement, resulting in a minimum term of 10 years. The agreement remains in effect indefinitely, unless notice to terminate is provided by either party. This wholesale power supply agreement includes standardized pricing mechanisms that are detailed in IPL’s current tariffs accepted by FERC through wholesale rate review proceedings. IPL’s current return on common equity authorized by FERC related to its wholesale electric rates is 10.97%. As a result of IPL’s requirement to supply electricity to Southern Minnesota Energy Cooperative under the wholesale power supply agreement, the sale of the electric distribution assets did not have a significant impact on IPL’s generation plans or operating results.
AFUDC - AFUDC represents costs to finance construction additions, including a return on equity component and cost of debt component as required by regulatory accounting. The concurrent credit for the amount of AFUDC capitalized is recorded as “Allowance for funds used during construction” in the income statements. The amount of AFUDC generated by equity and debt components was as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Equity | $18 | | $39 | | $66 | | $7 | | $17 | | $35 | | $11 | | $22 | | $31 |
| Debt | 7 | | 16 | | 27 | | 2 | | 7 | | 15 | | 5 | | 9 | | 12 |
| $25 | | $55 | | $93 | | $9 | | $24 | | $50 | | $16 | | $31 | | $43 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Equity |
| $33.6 |
| |
| $42.3 |
| |
| $24.4 |
| |
| $21.1 |
| |
| $35.2 |
| |
| $18.6 |
| |
| $12.5 |
| |
| $7.1 |
| |
| $5.8 |
|
| Debt | 16.1 |
| | 20.2 |
| | 12.5 |
| | 10.3 |
| | 16.8 |
| | 9.6 |
| | 5.8 |
| | 3.4 |
| | 2.9 |
|
| |
| $49.7 |
| |
| $62.5 |
| |
| $36.9 |
| |
| $31.4 |
| |
| $52.0 |
| |
| $28.2 |
| |
| $18.3 |
| |
| $10.5 |
| |
| $8.7 |
|
Non-utility and Other - The non-utility and other property, plant and equipment recorded on Alliant Energy’s balance sheets includesinclude the following:
Non-utility Generation - The Sheboygan Falls Energy Facility was placed intoin service in 2005 and is depreciated using the straight-line method over a 35-year period. As of December 31, 2017, Alliant Energy recorded $91 million on its balance sheet related to the Sheboygan Falls Energy Facility.
Corporate Services and Other - Property, plant and equipment related to Corporate Services includesinclude a customer billing and information system for IPL and WPL and other computer software, and the corporate headquarters building located in Madison, Wisconsin. The customer billing and information system is amortized using the straight-line method over a 12-year period. The majority of the remaining software is amortized over a 5-year period. Property,Other property, plant and equipment related to Transportation includesinclude
Travero assets (a short-line rail freight service in Iowa; a short-line railwayMississippi River barge, rail and truck freight terminal in Illinois; freight brokerage services; and a rail-served warehouse in Iowa, and a barge terminal on the Mississippi River. Thewhich began operations in 2021). All Corporate Services and Other property, plant and equipment isare depreciated using the straight-line method over periods ranging from 5 to 30 years.
NOTE 4. JOINTLY-OWNED ELECTRIC UTILITY PLANT
Under joint ownership agreements with other utilities, IPL and WPL have undivided ownership interests in jointly-owned coal-fired EGUs. Each of the respective owners is responsible for the financing of its portion of the construction costs. KWh generation and operating expenses are primarily divided between the joint owners on the same basis as ownership. IPL’s and WPL’s shares of expenses from jointly-owned coal-fired EGUs are included in the corresponding operating expenses (e.g., electric production fuel, other operation and maintenance, etc.) in theirthe income statements. Information relative to IPL’s and WPL’s ownership interest in these jointly-owned coal-fired EGUs at December 31, 20172021 was as follows (dollars in millions):
| | | | | | | | | | | | | | | | | | | | | | | |
| Ownership | | Electric | | Accumulated Provision | | Construction |
| Interest % | | Plant | | for Depreciation | | Work in Progress |
| IPL | | | | | | | |
| Ottumwa Unit 1 | 48.0% | | $599 | | $214 | | $11 |
| George Neal Unit 4 | 25.7% | | 193 | | 100 | | 2 |
| George Neal Unit 3 | 28.0% | | 173 | | 74 | | 3 |
| Louisa Unit 1 | 4.0% | | 40 | | 23 | | — |
| | | 1,005 | | 411 | | 16 |
| WPL | | | | | | | |
| Columbia Units 1-2 | 53.5% | | 802 | | 314 | | 6 |
| West Riverside Energy Center and Solar Garden | 91.0% | | 706 | | 33 | | 3 |
| Forward Wind Energy Center | 42.6% | | 118 | | 48 | | — |
| | | 1,626 | | 395 | | 9 |
| Alliant Energy | | | $2,631 | | $806 | | $25 |
|
| | | | | | | | | | | | | | |
| | Ownership | | Electric | | Accumulated Provision | | Construction |
| | Interest % | | Plant | | for Depreciation | | Work in Progress |
| IPL | | | | | | | |
| Ottumwa Unit 1 | 48.0 | % | |
| $501.8 |
| |
| $144.9 |
| |
| $37.3 |
|
| George Neal Unit 4 | 25.7 | % | | 187.2 |
| | 85.2 |
| | 0.8 |
|
| George Neal Unit 3 | 28.0 | % | | 150.6 |
| | 53.0 |
| | 2.5 |
|
| Louisa Unit 1 | 4.0 | % | | 37.8 |
| | 22.4 |
| | 1.4 |
|
| | | | 877.4 |
| | 305.5 |
| | 42.0 |
|
| WPL | | | | | | | |
| Columbia Units 1-2 | 50.1 | % | | 714.7 |
| | 216.8 |
| | 46.9 |
|
| Edgewater Unit 4 | 68.2 | % | | 99.9 |
| | 60.4 |
| | 0.1 |
|
| | | | 814.6 |
| | 277.2 |
| | 47.0 |
|
| Alliant Energy | | |
| $1,692.0 |
| |
| $582.7 |
| |
| $89.0 |
|
In 2016, WPL received an order from the PSCW approving amendments to the Columbia joint operating agreement, which allow the co-owners to forgo certain capital expenditures at Columbia (excluding capital expenditures related to the Columbia Unit 2 SCR currently being constructed), resulting in WPL incurring these additional capital expenditures in exchange for a proportional increase in its ownership share of Columbia. Based on the additional capital expenditures WPL currently expects to incur through June 1, 2020, WPL’s ownership interest in Columbia is expected to increase in the future. In June 2017, FERC approved these amendments to the Columbia joint operating agreement.
In October 2017, WPL received an order from the PSCW authorizing various electric cooperatives, which currently have wholesale power supply agreements with WPL, to acquire a partial ownership interest in West Riverside while the EGU is being constructed.
NOTE 5. RECEIVABLES
NOTE 5(a) Accounts Receivable - Details for accounts receivable included on the balance sheets as of December 31 were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 |
| Customer | $93 | | | $101 | | | $— | | | $— | | | $82 | | | $92 | |
| Unbilled utility revenues | 91 | | | 82 | | | — | | | — | | | 91 | | | 82 | |
| Deferred proceeds | 214 | | | 188 | | | 214 | | | 188 | | | — | | | — | |
| Other | 53 | | | 59 | | | 28 | | | 23 | | | 25 | | | 35 | |
| Allowance for expected credit losses | (11) | | | (18) | | | (1) | | | (1) | | | (10) | | | (17) | |
| $440 | | | $412 | | | $241 | | | $210 | | | $188 | | | $192 | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Customer |
| $103.3 |
| |
| $111.7 |
| |
| $— |
| |
| $— |
| |
| $97.7 |
| |
| $104.4 |
|
| Unbilled utility revenues | 85.1 |
| | 90.2 |
| | — |
| | — |
| | 85.1 |
| | 90.2 |
|
| Deferred proceeds | 222.1 |
| | 211.1 |
| | 222.1 |
| | 211.1 |
| | — |
| | — |
|
| Other | 84.3 |
| | 89.0 |
| | 44.1 |
| | 30.7 |
| | 40.1 |
| | 38.8 |
|
| Allowance for doubtful accounts | (12.0 | ) | | (8.7 | ) | | (1.3 | ) | | (1.1 | ) | | (10.7 | ) | | (7.1 | ) |
| |
| $482.8 |
| |
| $493.3 |
| |
| $264.9 |
| |
| $240.7 |
| |
| $212.2 |
| |
| $226.3 |
|
NOTE 5(b) Sales of Accounts Receivable - IPL maintains a Receivables Agreement whereby it may sell its customer accounts receivables, unbilled revenues and certain other accounts receivables to a third party through wholly-owned and consolidated special purpose entities. TheIn April 2021, IPL amended and extended through March 2023 the purchase commitment from the third party to which IPLit sells its receivables expires in March 2018. IPL currently expects to amend and extend the purchase commitment.receivables. IPL pays a monthly fee to the third party that varies based on interest rates, limits on cash proceeds and cash amounts received from the third party. Deferred proceeds represent IPL’s interest in the receivables sold to the third party. At IPL’s request, deferred proceeds are paid to IPL from collections of receivables, after paying any required expenses incurred by the third party and the collection agent. Corporate Services acts as collection agent for the third party and receives a fee for collection services. The Receivables Agreement can be terminated by the third party if arrears or write-offs exceed certain levels. The transfers of receivables meet the criteria for sale accounting established by the transfer of financial assets accounting rules. IPL was in compliance with allbelieves that the allowance for expected credit losses related covenants asto its sales of December 31, 2017.receivables is a reasonable approximation of credit risk of the customers that generated the receivables. Refer to Note 16 for discussion of the fair value of deferred proceeds.
Under the Receivables Agreement, IPL has the right to receive cash proceeds, up to a certain limit, from the third party in exchange for the receivables sold. Effective February 2017,April 2021, the limit on cash proceeds was changed to $125is $110 million. Cash proceeds are used by IPL to meet short-term financing needs, and cannot exceed the current limit or amount of receivables available for sale, whichever is less. As of December 31, 2017,2021, IPL had $91.7$109 million of available capacity under its sales of accounts receivable program.
The transfers of receivables meet the criteria for sale accounting established by the transfer of financial assets accounting rules. IPL believes that the allowance for doubtful accounts related to its sales of receivables is a reasonable approximation of credit risk of the customers that generated the receivables. In 2017, 2016 and 2015, IPL’s costs incurred related to the sales of accounts receivable program were not material. Refer to Note 14 for discussion of the fair value of deferred proceeds.
IPL’s maximum and average outstanding aggregate cash proceeds (based on daily outstanding balances) related to the sales of accounts receivable program were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Maximum | | Average |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Outstanding aggregate cash proceeds | $110 | | $96 | | $108 | | $46 | | $9 | | $36 |
|
| | | | | | | | | | | |
| | Maximum | | Average |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Outstanding aggregate cash proceeds | $112.0 | | $172.0 | | $137.0 | | $62.2 | | $73.2 | | $46.7 |
As of December 31, the attributes of IPL’s receivables sold under the Receivables Agreement were as follows (in millions):
| | | | | | | | | | | |
| 2021 | | 2020 |
| Customer accounts receivable | $125 | | $114 |
| Unbilled utility revenues | 104 | | 92 |
| | | |
| Receivables sold to third party | 229 | | 206 |
| Less: cash proceeds | 1 | | 1 |
| Deferred proceeds | 228 | | 205 |
| Less: allowance for expected credit losses | 14 | | 17 |
| Fair value of deferred proceeds | $214 | | $188 |
| Outstanding receivables past due | $22 | | $27 |
|
| | | |
| | 2017 | | 2016 |
| Customer accounts receivable | $133.8 | | $157.6 |
| Unbilled utility revenues | 112.7 | | 90.4 |
| Other receivables | 0.3 | | 0.1 |
| Receivables sold to third party | 246.8 | | 248.1 |
| Less: cash proceeds (a) | 12.0 | | 21.0 |
| Deferred proceeds | 234.8 | | 227.1 |
| Less: allowance for doubtful accounts | 12.7 | | 16.0 |
| Fair value of deferred proceeds | $222.1 | | $211.1 |
| Outstanding receivables past due | $44.7 | | $68.0 |
| |
(a) | Changes in cash proceeds are presented in “Sales of accounts receivable” in operating activities in Alliant Energy’s and IPL’s cash flows statements. |
Additional attributes of IPL’s receivables sold under the Receivables Agreement were as follows (in millions):
| | | | | | | | | | | | | | | | | |
| 2021 | | 2020 | | 2019 |
| Collections | $2,134 | | $2,025 | | $2,193 |
| Write-offs, net of recoveries | 9 | | 7 | | 19 |
|
| | | | | |
| | 2017 | | 2016 | | 2015 |
| Collections reinvested in receivables | $1,647.1 | | $1,818.1 | | $1,812.9 |
| Write-offs, net of recoveries | 17.7 | | 4.8 | | 8.8 |
In connection with the implementation of IPL’s new customer billing and information system in 2016, IPL postponed the write-off of customer bills for a portion of 2016, resulting in lower write-offs in 2016, higher write-offs in 2017 and higher outstanding receivables past due as of December 31, 2016.
NOTE 6. INVESTMENTS
NOTE 6(a) Unconsolidated Equity Investments - Unconsolidated Alliant Energy’s unconsolidated investments accounted for under the equity method of accounting are as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ownership Interest at | | Carrying Value at December 31, | | Equity (Income) / Loss |
| December 31, 2021 | | 2021 | | 2020 | | 2021 | | 2020 | | 2019 |
| ATC Holdings | 16%, 20% | | $338 | | $331 | | ($43) | | ($47) | | ($45) |
| Non-utility wind farm in Oklahoma | 50% | | 99 | | 103 | | (4) | | (8) | | (5) |
| Corporate venture investments | Various | | 52 | | 31 | | (13) | | (4) | | (1) |
| Other | Various | | 19 | | 11 | | (2) | | (2) | | (2) |
| | | $508 | | $476 | | ($62) | | ($61) | | ($53) |
| | | | | | | | | | | |
| | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | |
| | Ownership Interest at | | Carrying Value at December 31, | | Equity (Income) / Loss |
| | December 31, 2017 | | 2017 | | 2016 | | 2017 | | 2016 | | 2015 |
| Alliant Energy | | | | | | | | | | | |
| ATC Investment (a) | 16%-20% | |
| $274.2 |
| |
| $317.6 |
| |
| ($42.4 | ) | |
| ($39.1 | ) | |
| ($34.2 | ) |
| Wind Investment in Oklahoma | 50% | | 98.3 |
| | — |
| | (1.8 | ) | | — |
| | — |
|
| Other | Various | | 8.9 |
| | 8.4 |
| | (0.6 | ) | | (0.5 | ) | | 0.4 |
|
| | | |
| $381.4 |
| |
| $326.0 |
| |
| ($44.8 | ) | |
| ($39.6 | ) | |
| ($33.8 | ) |
| WPL | | | | | | | | | | | |
| ATC | —% | |
| $— |
| |
| $— |
| |
| $— |
| |
| ($39.1 | ) | |
| ($34.2 | ) |
| Wisconsin River Power Company | 50% | | 8.3 |
| | 7.7 |
| | (0.7 | ) | | (0.7 | ) | | (0.9 | ) |
| | | |
| $8.3 |
| |
| $7.7 |
| |
| ($0.7 | ) | |
| ($39.8 | ) | |
| ($35.1 | ) |
| |
(a) | As of December 31, 2017, Alliant Energy’s ATC Investment is comprised of a 16% ownership interest in ATC and a 20% ownership interest in ATC Holdco LLC, which are described below. In 2017, Alliant Energy’s investment in ATC decreased due to the impacts of Tax Reform. Refer to Note 11 for further discussion. Alliant Energy currently has the ability to exercise significant influence over ATC’s financial and operating policies through its participation on ATC’s Board of Directors. Refer to Note 18 for information regarding related party transactions with ATC. |
Summary aggregate financial information from the financial statements of these investmentsholdings is as follows (in millions): | | | | | | | | | | | | | | | | Alliant Energy | |
| | Alliant Energy | | WPL | | 2021 | | 2020 | | 2019 | |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 | |
| Operating revenues |
| $741 |
| |
| $658 |
| |
| $624 |
| |
| $8 |
| |
| $658 |
| |
| $624 |
| |
| Revenues | | Revenues | $802 | | | $801 | | | $783 | | |
| Operating income | 374 |
| | 331 |
| | 299 |
| | 4 |
| | 331 |
| | 299 |
| Operating income | 357 | | | 376 | | | 359 | | |
| Net income | 267 |
| | 232 |
| | 186 |
| | 2 |
| | 234 |
| | 202 |
| Net income | 358 | | | 343 | | | 340 | | |
| As of December 31: | | | | | | | | | | | | As of December 31: | | |
| Current assets | 104 |
| | 82 |
| | | | 7 |
| | 6 |
| | | Current assets | 112 | | | 121 | | | |
| Non-current assets | 5,041 |
| | 4,340 |
| | | | 20 |
| | 19 |
| | | Non-current assets | 7,036 | | | 6,388 | | | |
| Current liabilities | 770 |
| | 498 |
| | | | 2 |
| | 3 |
| | | Current liabilities | 455 | | | 317 | | | |
| Non-current liabilities | 2,038 |
| | 2,144 |
| | | | 8 |
| | 7 |
| | | Non-current liabilities | 3,110 | | | 2,997 | | | |
| Minority interest | 255 |
| | — |
| | | | — |
| | — |
| | | |
| Noncontrolling interest | | Noncontrolling interest | 247 | | | 192 | | | |
Investment in ATC and WPL’s Noncontrolling InterestHoldings - Prior to 2014, WPL owned 100% of WPL Transco, which held Alliant Energy’s investment in ATC. In 2014, WPL Transco’s operating agreement was amended to allow ATI, a wholly-owned subsidiary of AEF, to become a member of WPL Transco in addition to WPL. In 2014, ATI began funding capital contributions that WPL Transco made to ATC. WPL Transco’s equity income from ATC and ATC dividends received by WPL Transco were allocated between WPL and ATI based on their respective ownership interests at the time the equity income was generated and at the time of the dividend payments. Prior to the transfer of the investment in ATC to ATI discussed below, WPL consolidated WPL Transco, and ATI’s ownership in WPL Transco was recorded as a noncontrolling interest in total equity on WPL’s balance sheets.
On December 31, 2016, pursuant to a June 2016 PSCW order, WPL Transco was liquidated and WPL transferred its investment in ATC to ATI. As a result, WPL no longer records equity income from its prior investment in ATC. In conjunction with the transfer of the investment in ATC, a deferred intercompany tax gain recognized by WPL was assumed by ATI. The impact of WPL’s transfer of the ATC investment, including the assumption of such intercompany tax gain by
ATI, was recorded as a net reduction in total equity of $163.6 million on WPL’s balance sheet. WPL’s income statement includes all of the equity earnings from ATC through December 31, 2016, the date of transfer. There were no impacts of this transfer to Alliant Energy’s consolidated financial statements. As of December 31, 2016, ATI owns2021, Alliant Energy’s entireEnergy has a 16% ownership interest in ATC Investment.
Investmentand a 20% ownership interest in ATC Holdco LLC, - In 2011, collectively referred to as ATC Holdings. ATC is an independent, for-profit, transmission-only company. ATC Holdco LLC holds Duke-American Transmission Company, LLC, a joint venture between Duke Energy Corporation and ATC, announced the creation of DATC, a joint venture that is expected to acquire, build, own and operate newowns electric transmission infrastructure in North America. DATC continues to evaluate new projects and opportunities, and participates in a competitive bidding process on projects it considers to be viable. In October 2017, ATC transferred a portion of its interest in DATC to ATC Holdco LLC, and as a result, Alliant Energy contributed additional equity capital funding based on its ownership interest in ATC Holdco LLC. A portion of proceeds from the transfer was distributed to all ATC Holdco LLC’s owners based on their ATC ownership percentage.
Non-utility Wind InvestmentFarm in Oklahoma - In July 2017, a wholly-owned subsidiary of AEF acquired 50% of a cash equity ownership interest in a 225 MWThe non-utility wind farm located in Oklahoma which started commercial operations in December 2016. This wind farm has both cash and tax equity ownership. The wind farm provides electricity to a third-party under a long-term PPA. In 2017, Alliant Energy’s “Other investments” assets increased $98 million from this acquisition.PPA, and has both cash and tax equity ownership. Alliant Energy willdoes not maintain or operate the wind farm, and provided a parent guarantee of its subsidiary’s indemnification obligations under the operating agreement and PPA. Refer to Note 16(d)17(d) for discussion of the guarantee.
Corporate Venture Investments - Alliant Energy accounts for this non-utility investment underhas various minority ownership interests in regional and national venture funds, including a coalition with different energy companies across the equity method of accounting. In conjunction withU.S., working together to help identify and research innovative products, technologies and business models within the acquisition, in July 2017, AEF entered into a $95 million, 364-day variable-rate term loan credit agreement (with Alliant Energy as guarantor).emerging energy economy.
NOTE 6(b) Cash Surrender Value of Life Insurance Policies - Various life insurance policies cover certain current and former employees and directors. In 2016, certain of Alliant Energy’s and IPL’s company-owned life insurance policies were liquidated. The related proceeds of $31 million and $19 million were recorded in investing activities in Alliant Energy’s and IPL’s cash flows statements, respectively, in 2016. At December 31, the cash surrender value of these investments was as follows (in millions):
|
| | | | | | | |
| | Alliant Energy | | WPL |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Cash surrender value | $10.4 | | $10.6 | | $5.6 | | $5.8 |
NOTE 7. COMMON EQUITY
Common Share Activity - A summary of Alliant Energy’s common stock activity was as follows:
| | | | | | | | | | | | | | | | | |
| 2021 | | 2020 | | 2019 |
| Shares outstanding, January 1 | 249,868,415 | | | 245,022,800 | | | 236,063,279 | |
| Equity forward agreements | — | | | 4,275,127 | | | 8,358,973 | |
| | | | | |
| Shareowner Direct Plan | 492,565 | | | 472,283 | | | 501,808 | |
| Equity-based compensation plans | 113,549 | | | 98,205 | | | 101,478 | |
| Other | — | | | — | | | (2,738) | |
| Shares outstanding, December 31 | 250,474,529 | | | 249,868,415 | | | 245,022,800 | |
|
| | | | | | | | |
| | 2017 | | 2016 | | 2015 |
| Shares outstanding, January 1 | 227,673,654 |
| | 226,918,432 |
| | 221,871,360 |
|
| At-the-market offering programs | 3,074,931 |
| | — |
| | 4,373,234 |
|
| Shareowner Direct Plan issuances | 640,723 |
| | 732,814 |
| | 606,010 |
|
| 5,185 |
| | 22,408 |
| | 112,756 |
|
| Other | (45,847 | ) | | — |
| | (44,928 | ) |
| Shares outstanding, December 31 | 231,348,646 |
| | 227,673,654 |
| | 226,918,432 |
|
At December 31, 2017,2021, Alliant Energy had a total of 12.414 million shares available for issuance in the aggregate, pursuant to its Amended and Restated2020 OIP, Shareowner Direct Plan and 401(k) Savings Plan.
At-the-Market Offering ProgramsEquity Forward Agreements - In 2017 and 2015,2018, Alliant Energy filed prospectus supplementsentered into forward sale agreements with various counterparties in connection with a public offering of 8,358,973 shares of Alliant Energy common stock. In 2019, Alliant Energy settled $366 million under which it could sell up to $125 million and $150 millionthe forward sale agreements by delivering 8,358,973 shares of itsnewly issued Alliant Energy common stock respectively, through at-the-market offering programs. In 2017,at a weighted average forward sale price of $43.75 per share. Alliant Energy issued 3,074,931 shares of common stock through this program and received cash proceeds of $124 million,used the net of $1 million in commissions and fees. In 2015, Alliant Energy issued 4,373,234 shares of common stock through this program and received cash proceeds of $133 million, net of $2 million in commissions and fees. The proceeds from the issuances of common stock were usedsettlements for general corporate purposes. The 2015 at-the-market offering program expired in 2016, and
In 2019, Alliant Energy currently has no plans to issue any additionalentered into forward sale agreements with a counterparty in connection with a public offering of 4,275,127 shares of Alliant Energy common stock. In 2020, Alliant Energy settled $222 million under the forward sale agreements by delivering 4,275,127 shares of newly issued Alliant Energy common stock throughat a weighted average forward sale price of $51.98 per share. Alliant Energy used the 2017 at-the-market offering program.net proceeds from the settlements for general corporate purposes.
Shareowner Direct Plan - Alliant Energy satisfies its requirements under the Shareowner Direct Plan (dividend reinvestment and stock purchase plan) by acquiring Alliant Energy common stock through original issue, rather than on the open market.
Shareowner Rights Agreement - Alliant Energy previously established an amended and restated Shareowner Rights Agreement. The rights under this agreement were exercisable if a person or group acquired, or announced an intention to acquire, 15% or more of Alliant Energy’s outstanding common stock. In January 2018, Alliant Energy’s Board of Directors authorized the redemption of the rights, which were redeemed to shareowners as of the close of business on January 31, 2018.
Dividend Restrictions - Alliant Energy does not have any significant common stock dividend restrictions. IPL and WPL each have common stock dividend restrictions based on applicable regulatory limitations. IPL also has common stock dividend restrictions based on the terms of its outstanding preferred stock. As of December 31, 2017, IPL and WPL were in compliance with all such dividend restrictions.
IPL is restricted from paying common stock dividends to its parent company, Alliant Energy, if for any past or current dividend period, dividends on its preferred stock have not been paid, or declared and set apart for payment. IPL has paid all dividends on its preferred stock through 2017. Under the Federal Power Act, IPL may not pay dividends to its parent company in excess of the current amount of its retained earnings. As of December 31, 2017, IPL’s amount of retained earnings that were free of dividend restrictions was $679 million. If IPL’s actual 13-month average common equity ratio (calculated on a financial basis consistent with IPL’s rate reviews) falls below 42% of total capitalization, IPL is required to notify the IUB.
Pursuant to a December 2016 PSCW order, WPL has a regulatory limitation on distributions to its parent company. WPL is prohibited from paying annual common stock dividends to its parent company in excess of forecasted dividend levels of $140 million in 2018 if WPL’s actual 13-month average common equity ratio (calculated on a financial basis consistent with WPL’s rate reviews) would fall below 51.00% for 2018. As of December 31, 2017, WPL’s amount of retained earnings that were free of dividend restrictions was $140 million for 2018.
Restricted Net Assets of Subsidiaries - IPL and WPL do not have regulatory authority to lend or advance any amounts to their parent company. As of December 31, 2017, the amount of IPL’s and WPL’s net assets that were not available to be transferred to their parent company, Alliant Energy, in the form of loans, advances or cash dividends without the consent of IPL’s and WPL’s regulatory authorities was $1.8 billion and $1.7 billion, respectively.
Comprehensive Income - In 2017, 2016 and 2015, Alliant Energy’s other comprehensive income (loss) was ($0.1) million, $0 million and $0.2 million, respectively; therefore, its comprehensive income was substantially equal to its net income and its comprehensive income attributable to Alliant Energy common shareowners was substantially equal to its net income attributable to Alliant Energy common shareowners for such periods. In 2017, 2016 and 2015, IPL and WPL had no other comprehensive income; therefore their comprehensive income was equal to their net income and their comprehensive income available for common stock was equal to their earnings available for common stock for such periods.
NOTE 8. REDEEMABLE PREFERRED STOCK
IPL is authorized to issue up to 16,000,000 shares of cumulative preferred stock in aggregate. Information related to the carrying value of IPL’s cumulative preferred stock at December 31, 2020 was as follows:follows (dollars in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Series | | Liquidation Preference/Stated Value | | Shares Authorized | | Shares Outstanding | | | | Carrying Value |
| | | | | | | | | | |
| 5.1% | | $25 | | 8,000,000 | | 8,000,000 | | | | $200 |
|
| | | | | | | | | | | | | | |
| Series | | Liquidation Preference/Stated Value | | Shares Authorized | | Shares Outstanding | | 2017 | | 2016 |
| | | | | | | | | (in millions) |
| 5.1% | | $25 | | 8,000,000 | | 8,000,000 | |
| $200.0 |
| |
| $200.0 |
|
On or after March 15, 2018,In December 2021, IPL may, atredeemed all 8,000,000 outstanding shares of its option, redeem the 5.1% cumulative preferred stock for cash at a redemption price ofthe $25 per share par value for $200 million plus accrued and unpaid dividends up to the redemption date. In 2021, Alliant Energy and IPL recorded a $5 million non-cash charge related to this transaction in “Preferred dividend requirements” in their income statements.
The current articles of incorporation of IPL contain a provision that grants the holders of its cumulative preferred stock voting rights to elect two members of IPL’s Board of Directors if preferred dividends equal to six or more quarterly dividend requirements (whether or not consecutive) are in arrears. Such voting rights would not provide the holders of IPL’s preferred stock control of the decision on redemption of IPL’s preferred stock and could not force IPL to exercise its call option. Therefore, IPL’s cumulative preferred stock is presented in total equity on Alliant Energy’s and IPL’s balance sheets in a manner consistent with noncontrolling interests.
Refer to Note 14 for information on the fair value of cumulative preferred stock.
NOTE 9. DEBT
NOTE 9(a) Short-term Debt - Alliant Energy and its subsidiaries maintain committed bank lines of credit to provide short-term borrowing flexibility and back-stop liquidity for commercial paper outstanding. In August 2017, Alliant Energy, IPL and WPL entered intoAt December 31, 2021, the short-term borrowing capacity under a single new credit facility agreement, which expires in August 2022. At December 31, 2017, the short-term borrowing capacity under the credit facility agreement2026, totaled $1 billion ($400450 million for Alliant Energy at the parent company level, $250 million for IPL and $350$300 million for WPL). Subject to certain conditions, Alliant Energy (at the parent company level), IPL and WPL may each reallocate and change its sublimit up to $500 million, $400 million and $500 million, respectively, within the $1 billion total commitment. Information regarding Alliant Energy’s, IPL’s and WPL’s commercial paper, and Alliant Energy’s and WPL’s borrowings under the single credit facility, classified as short-term debt and back-stopped by the credit facility was as follows (dollars in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| December 31 | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 |
| Amount outstanding | $515 | | $389 | | $— | | $— | | $236 | | $257 |
| Weighted average interest rates | 0.2% | | 0.2% | | N/A | | N/A | | 0.2% | | 0.1% |
| Available credit facility capacity | $485 | | $611 | | $250 | | $250 | | $64 | | $43 |
|
| | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| December 31 | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Commercial paper outstanding | $320.2 | | $244.1 | | $— | | $— | | $25.0 | | $52.3 |
| Commercial paper weighted average interest rates | 2.0% | | 0.9% | | N/A | | N/A | | 1.5% | | 0.7% |
| Available credit facility capacity | $679.8 | | $755.9 | | $250.0 | | $300.0 | | $325.0 | | $347.7 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| For the year ended | 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 |
| Maximum amount outstanding (based on daily outstanding balances) | $648 | | $495 | | $19 | | $8 | | $320 | | $266 |
| Average amount outstanding (based on daily outstanding balances) | $459 | | $292 | | $— | | $— | | $172 | | $117 |
| Weighted average interest rates | 0.2% | | 0.7% | | 0.2% | | 0.5% | | 0.1% | | 0.7% |
|
| | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| For the year ended | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Maximum amount outstanding (based on daily outstanding balances) | $424.4 | | $251.8 | | $20.0 | | $3.1 | | $271.2 | | $118.3 |
| Average amount outstanding (based on daily outstanding balances) | $294.3 | | $179.0 | | $0.5 | | $— | | $118.2 | | $38.1 |
| Weighted average interest rates | 1.2% | | 0.6% | | 1.3% | | 0.7% | | 1.0% | | 0.4% |
In July 2017, AEF entered into a $95 million, 364-day variable-rate (2.2% at December 31, 2017) term loan credit agreement (with Alliant Energy as guarantor) related to the acquisition of a cash equity ownership interest in a non-utility wind farm located in Oklahoma, which includes substantially the same financial covenants that are included in the credit facility agreement. Refer to Note 6(a) for further discussion of the non-utility wind farm investment.
Financial Covenants - The single new credit facility agreement contains a financial covenant, which requires Alliant Energy, IPL and WPL to maintain certain debt-to-capital ratios in order to borrow under the credit facility. AEF’s term loan credit agreement contains a financial covenant, which requires Alliant Energy to maintain a certain debt-to-capital ratio in order to borrow under the term loan credit agreement. The required debt-to-capital ratios compared to the actual debt-to-capital ratios at December 31, 2017 were as follows:
|
| | | | | |
| | Alliant Energy | | IPL | | WPL |
| Requirement, not to exceed | 65% | | 65% | | 65% |
| Actual | 54% | | 47% | | 51% |
The debt component of the capital ratios includes long- and short-term debt (excluding non-recourse debt and hybrid securities to the extent the total carrying value of such hybrid securities does not exceed 15% of consolidated capital of the applicable borrower), capital lease obligations, certain letters of credit, guarantees of the foregoing and new synthetic leases. Unfunded vested benefits under qualified pension plans and sales of accounts receivable are not included in the debt-to-capital ratios. The equity component of the capital ratios excludes accumulated other comprehensive income (loss).
NOTE 9(b) Long-Term Debt - Long-term debt, net as of December 31 was as follows (dollars in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2021 | | 2020 |
| Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
| Senior Debentures (a): | | | | | | | | | | | |
| 3.25%, due 2024 | $500 | | | $500 | | | $— | | | $500 | | | $500 | | | $— | |
| 3.4%, due 2025 | 250 | | | 250 | | | — | | | 250 | | | 250 | | | — | |
| 5.5%, due 2025 | 50 | | | 50 | | | — | | | 50 | | | 50 | | | — | |
| 4.1%, due 2028 | 500 | | | 500 | | | — | | | 500 | | | 500 | | | — | |
| 3.6%, due 2029 | 300 | | | 300 | | | — | | | 300 | | | 300 | | | — | |
| 2.3%, due 2030 | 400 | | | 400 | | | — | | | 400 | | | 400 | | | — | |
| 6.45%, due 2033 | 100 | | | 100 | | | — | | | 100 | | | 100 | | | — | |
| 6.3%, due 2034 | 125 | | | 125 | | | — | | | 125 | | | 125 | | | — | |
| 6.25%, due 2039 | 300 | | | 300 | | | — | | | 300 | | | 300 | | | — | |
| 4.7%, due 2043 | 250 | | | 250 | | | — | | | 250 | | | 250 | | | — | |
| 3.7%, due 2046 | 300 | | | 300 | | | — | | | 300 | | | 300 | | | — | |
| 3.5%, due 2049 | 300 | | | 300 | | | — | | | 300 | | | 300 | | | — | |
| 3.1%, due 2051 (b) | 300 | | | 300 | | | — | | | — | | | — | | | — | |
| 3,675 | | | 3,675 | | | — | | | 3,375 | | | 3,375 | | | — | |
| Debentures (a): | | | | | | | | | | | |
| 2.25%, due 2022 | 250 | | | — | | | 250 | | | 250 | | | — | | | 250 | |
| 3.05%, due 2027 | 300 | | | — | | | 300 | | | 300 | | | — | | | 300 | |
| 3%, due 2029 | 350 | | | — | | | 350 | | | 350 | | | — | | | 350 | |
| 1.95%, due 2031 (c) | 300 | | | — | | | 300 | | | — | | | — | | | — | |
| 6.25%, due 2034 | 100 | | | — | | | 100 | | | 100 | | | — | | | 100 | |
| 6.375%, due 2037 | 300 | | | — | | | 300 | | | 300 | | | — | | | 300 | |
| 7.6%, due 2038 | 250 | | | — | | | 250 | | | 250 | | | — | | | 250 | |
| 4.1%, due 2044 | 250 | | | — | | | 250 | | | 250 | | | — | | | 250 | |
| 3.65%, due 2050 | 350 | | | — | | | 350 | | | 350 | | | — | | | 350 | |
| 2,450 | | | — | | | 2,450 | | | 2,150 | | | — | | | 2,150 | |
| Other: | | | | | | | | | | | |
| AEF term loan credit agreement through March 2022, 1% at December 31, 2021 (with Alliant Energy as guarantor) | 300 | | | — | | | — | | | 300 | | | — | | | — | |
| Corporate Services 3.45% senior notes, due 2022 (a) | 75 | | | — | | | — | | | 75 | | | — | | | — | |
| AEF 3.75% senior notes, due 2023 (with Alliant Energy as guarantor) (a) | 400 | | | — | | | — | | | 400 | | | — | | | — | |
| AEF 1.4% senior notes, due 2026 (with Alliant Energy as guarantor) (a) | 200 | | | — | | | — | | | 200 | | | — | | | — | |
| AEF 4.25% senior notes, due 2028 (with Alliant Energy as guarantor) (a) | 300 | | | — | | | — | | | 300 | | | — | | | — | |
| Sheboygan Power, LLC 5.06% senior secured notes, due 2022 to 2024 (secured by the Sheboygan Falls Energy Facility and related assets) (a) | 24 | | | — | | | — | | | 31 | | | — | | | — | |
| Other, 1% at December 31, 2021, due 2022 to 2025 | 1 | | | — | | | — | | | 2 | | | — | | | — | |
| 1,300 | | | — | | | — | | | 1,308 | | | — | | | — | |
| Subtotal | 7,425 | | | 3,675 | | | 2,450 | | | 6,833 | | | 3,375 | | | 2,150 | |
| Current maturities | (633) | | | — | | | (250) | | | (8) | | | — | | | — | |
| Unamortized debt issuance costs | (42) | | | (23) | | | (15) | | | (41) | | | (22) | | | (14) | |
| Unamortized debt (discount) and premium, net | (15) | | | (9) | | | (6) | | | (15) | | | (8) | | | (6) | |
| Long-term debt, net (d) | $6,735 | | | $3,643 | | | $2,179 | | | $6,769 | | | $3,345 | | | $2,130 | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | 2017 | | 2016 |
| | Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
| Senior Debentures (a): | | | | | | | | | | | |
| 5.875%, due 2018 |
| $100.0 |
| |
| $100.0 |
| |
| $— |
| |
| $100.0 |
| |
| $100.0 |
| |
| $— |
|
| 7.25%, due 2018 | 250.0 |
| | 250.0 |
| | — |
| | 250.0 |
| | 250.0 |
| | — |
|
| 3.65%, due 2020 | 200.0 |
| | 200.0 |
| | — |
| | 200.0 |
| | 200.0 |
| | — |
|
| 3.25%, due 2024 (b) | 500.0 |
| | 500.0 |
| | — |
| | 250.0 |
| | 250.0 |
| | — |
|
| 3.4%, due 2025 | 250.0 |
| | 250.0 |
| | — |
| | 250.0 |
| | 250.0 |
| | — |
|
| 5.5%, due 2025 | 50.0 |
| | 50.0 |
| | — |
| | 50.0 |
| | 50.0 |
| | — |
|
| 6.45%, due 2033 | 100.0 |
| | 100.0 |
| | — |
| | 100.0 |
| | 100.0 |
| | — |
|
| 6.3%, due 2034 | 125.0 |
| | 125.0 |
| | — |
| | 125.0 |
| | 125.0 |
| | — |
|
| 6.25%, due 2039 | 300.0 |
| | 300.0 |
| | — |
| | 300.0 |
| | 300.0 |
| | — |
|
| 4.7%, due 2043 | 250.0 |
| | 250.0 |
| | — |
| | 250.0 |
| | 250.0 |
| | — |
|
| 3.7%, due 2046 | 300.0 |
| | 300.0 |
| | — |
| | 300.0 |
| | 300.0 |
| | — |
|
| | 2,425.0 |
| | 2,425.0 |
| | — |
| | 2,175.0 |
| | 2,175.0 |
| | — |
|
| Debentures (a): | | | | | | | | | | | |
| 5%, due 2019 | 250.0 |
| | — |
| | 250.0 |
| | 250.0 |
| | — |
| | 250.0 |
|
| 4.6%, due 2020 | 150.0 |
| | — |
| | 150.0 |
| | 150.0 |
| | — |
| | 150.0 |
|
| 2.25%, due 2022 | 250.0 |
| | — |
| | 250.0 |
| | 250.0 |
| | — |
| | 250.0 |
|
| 3.05%, due 2027 (c) | 300.0 |
| | — |
| | 300.0 |
| | — |
| | — |
| | — |
|
| 6.25%, due 2034 | 100.0 |
| | — |
| | 100.0 |
| | 100.0 |
| | — |
| | 100.0 |
|
| 6.375%, due 2037 | 300.0 |
| | — |
| | 300.0 |
| | 300.0 |
| | — |
| | 300.0 |
|
| 7.6%, due 2038 | 250.0 |
| | — |
| | 250.0 |
| | 250.0 |
| | — |
| | 250.0 |
|
| 4.1%, due 2044 | 250.0 |
| | — |
| | 250.0 |
| | 250.0 |
| | — |
| | 250.0 |
|
| | 1,850.0 |
| | — |
| | 1,850.0 |
| | 1,550.0 |
| | — |
| | 1,550.0 |
|
| Other: | | | | | | | | | | | |
| AEF term loan credit agreement through 2018, 2% at December 31, 2017 (with Alliant Energy as guarantor) (d) | 500.0 |
| | — |
| | — |
| | 500.0 |
| | — |
| | — |
|
| Corporate Services 3.45% senior notes, due 2022 (a) | 75.0 |
| | — |
| | — |
| | 75.0 |
| | — |
| | — |
|
| Sheboygan Power, LLC 5.06% senior secured notes, due 2018 to 2024 (secured by the Sheboygan Falls Energy Facility and related assets) (a) | 49.6 |
| | — |
| | — |
| | 53.8 |
| | — |
| | — |
|
| Other, 1% at December 31, 2017, due 2018 to 2025 | 2.9 |
| | — |
| | — |
| | 3.3 |
| | — |
| | — |
|
| | 627.5 |
| | — |
| | — |
| | 632.1 |
| | — |
| | — |
|
| Subtotal | 4,902.5 |
| | 2,425.0 |
| | 1,850.0 |
| | 4,357.1 |
| | 2,175.0 |
| | 1,550.0 |
|
| Current maturities | (855.7 | ) | | (350.0 | ) | | — |
| | (4.6 | ) | | — |
| | — |
|
| Unamortized debt issuance costs | (25.4 | ) | | (14.3 | ) | | (10.5 | ) | | (23.4 | ) | | (13.7 | ) | | (9.1 | ) |
| Unamortized debt (discount) and premium, net | (10.8 | ) | | (4.7 | ) | | (6.1 | ) | | (13.5 | ) | | (7.8 | ) | | (5.7 | ) |
| Long-term debt, net (e) |
| $4,010.6 |
| |
| $2,056.0 |
| |
| $1,833.4 |
| |
| $4,315.6 |
| |
| $2,153.5 |
| |
| $1,535.2 |
|
| |
(a) | Contains optional redemption provisions which, if elected by the issuer at its sole discretion, could require material redemption premium payments by the issuer. The redemption premium payments under these optional redemption provisions are variable and dependent on applicable U.S. Treasury rates at the time of redemption. |
| |
(b) | In 2017, IPL issued $250 million of 3.25% senior debentures due 2024. The proceeds from the issuance were used by IPL to reduce commercial paper classified as long-term debt, reduce cash amounts received from its sales of accounts receivable program and for general corporate purposes. |
| |
(c) | In 2017, WPL issued $300 million of 3.05% debentures due 2027. The proceeds from the issuance were used by WPL to reduce commercial paper and for general corporate purposes. |
| |
(d) | Refer to Note 9(a) for discussion of a financial covenant contained in AEF’s term loan credit agreement. |
| |
(e) | There were no significant sinking fund requirements related to the outstanding long-term debt. |
(a)Contains optional redemption provisions which, if elected by the issuer at its sole discretion, could require material redemption premium payments by the issuer. The redemption premium payments under these optional redemption provisions are variable and dependent on applicable U.S. Treasury rates at the time of redemption.
Five-Year Schedule(b)In November 2021, IPL issued $300 million of Long-term Debt Maturities - At December 31, 2017,3.1% senior debentures due 2051. The net proceeds from the issuance were used by IPL to retire its cumulative preferred stock in 2021 and for general corporate purposes.
(c)In September 2021, WPL issued $300 million of 1.95% debentures due 2031. The debentures were issued as green bonds, and an amount in excess of the net proceeds was disbursed for the construction and development of WPL’s wind and solar EGUs.
(d)There were no significant sinking fund requirements related to the outstanding long-term debt maturities for 2018 through 2022 were as follows (in millions):debt.
|
| | | | | | | | | | | | | | | | | | | |
| | 2018 | | 2019 | | 2020 | | 2021 | | 2022 |
| IPL |
| $350 |
| |
| $— |
| |
| $200 |
| |
| $— |
| |
| $— |
|
| WPL | — |
| | 250 |
| | 150 |
| | — |
| | 250 |
|
| Corporate Services | — |
| | — |
| | — |
| | — |
| | 75 |
|
| AEF | 506 |
| | 6 |
| | 7 |
| | 8 |
| | 8 |
|
| Alliant Energy |
| $856 |
| |
| $256 |
| |
| $357 |
| |
| $8 |
| |
| $333 |
|
Five-Year Schedule of Long-term Debt Maturities - At December 31, 2021, long-term debt maturities for 2022 through 2026 were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2022 | | 2023 | | 2024 | | 2025 | | 2026 |
| IPL | $— | | $— | | $500 | | $300 | | $— |
| WPL | 250 | | — | | — | | — | | — |
| Corporate Services | 75 | | — | | — | | — | | — |
| AEF | 308 | | 408 | | 9 | | — | | 200 |
| | | | | | | | | |
| Alliant Energy | $633 | | $408 | | $509 | | $300 | | $200 |
Fair Value of Long-term Debt - Refer to Note 1416 for information on the fair value of long-term debt outstanding.
NOTE 10. LEASES
NOTE 10(a) Operating Leases - Various agreements have been entered into related to property, plant Alliant Energy’s, IPL’s and equipment rights that are accounted for as operating leases. In 2017, 2016 and 2015, rental expenses associated withWPL’s operating leases were not material. At December 31, 2017, future minimum operatingprimarily include leases of space on telecommunication towers and leases of property. Operating lease payments, excluding contingent rentals, weredetails are as follows (in(dollars in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| December 31, 2021 | | December 31, 2020 |
| Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
| Property, plant and equipment, net | $14 | | $9 | | $5 | | $15 | | $9 | | $6 |
| Other current liabilities | $2 | | $1 | | $1 | | $2 | | $1 | | $1 |
| Other liabilities | 12 | | 8 | | 4 | | 13 | | 8 | | 5 |
| Total operating lease liabilities | $14 | | $9 | | $5 | | $15 | | $9 | | $6 |
| Weighted average remaining lease term | 9 years | | 11 years | | 8 years | | 10 years | | 11 years | | 9 years |
| Weighted average discount rate | 4% | | 4% | | 4% | | 4% | | 4% | | 4% |
| | | | | | | | | | | |
| | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | Thereafter | | Total |
| Alliant Energy |
| $6 |
| |
| $5 |
| |
| $2 |
| |
| $2 |
| |
| $1 |
| |
| $13 |
| |
| $29 |
|
| IPL | 3 |
| | 2 |
| | 1 |
| | 1 |
| | 1 |
| | 13 |
| | 21 |
|
| WPL | 3 |
| | 3 |
| | 1 |
| | — |
| | — |
| | — |
| | 7 |
|
NOTE 10(b) CapitalFinance Leases -
WPL - In 2005, WPL entered into a 20-year agreement with AEF’s Non-utility Generation business to leaseis currently leasing the Sheboygan Falls Energy Facility with an option for twofrom AEF’s Non-utility Generation business through 2025, the initial lease renewal periods thereafter. The lease became effective in 2005 when the EGU began commercial operation.term. WPL is responsible for the operation of the EGU and has exclusive rights to its output, andoutput. This finance lease contains 2 lease renewal periods, which are not included in the PSCW approved this affiliatedfinance lease agreement in 2005. The capital lease asset is amortized usingobligation, as well as an option to purchase the straight-line method overfacility at the 20-yearend of the initial lease term. WPL’s retail and wholesale rates include recovery ofFor Alliant Energy, the leased Sheboygan Falls Energy Facility is eliminated upon consolidation and is therefore is not reflected in Alliant Energy’s amounts below.
Related to its investments in solar generation, WPL entered into land lease payments. agreements with unaffiliated parties that commenced in 2021. The Sheboygan Falls Energy Facility lease expenses were included in WPL’s income statements as follows (in millions):
|
| | | | | | | | | | | |
| | 2017 | | 2016 | | 2015 |
| Interest expense |
| $8.7 |
| |
| $9.3 |
| |
| $9.9 |
|
| Depreciation and amortization | 6.2 |
| | 6.2 |
| | 6.2 |
|
| |
| $14.9 |
| |
| $15.5 |
| |
| $16.1 |
|
At December 31, 2017, WPL’s estimated future minimum capital lease payments forleases have various terms with optional renewal periods that are assumed to be extended through the Sheboygan Falls Energy Facility were as follows (in millions):
|
| | | | | | | | | | | | | | | | | |
| | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | Thereafter | | Total | | Less: amount representing interest | | Present value of minimum capital lease payments |
| Sheboygan Falls Energy Facility | $15 | | $15 | | $15 | | $15 | | $15 | | $35 | | $110 | | $33 | | $77 |
NOTE 11. INCOME TAXES
Tax Reform -In December 2017, Tax Reform was enacted. Substantially allend of the provisions of Tax Reform are effective for taxable years beginning after December 31, 2017. The most significant provisions of Tax Reform that impact Alliant Energy, IPL and WPL were the reduction in the federal corporate tax rate from 35% to 21%, the repealestimated useful lives of the federal corporate alternative minimum tax (AMT),solar generating facilities. The leases do not contain purchase options and the elimination of bonus depreciation deductions on utility property placed in service after September 27, 2017 unless a binding contract existed as of that date.are fixed lease payments.
The enactment of Tax Reform in December 2017 had a material impact on Alliant Energy’s, IPL’s and WPL’s 2017 financial statements as the tax effects of the changes in tax laws must be recognized in the period in which the law is enacted. Alliant Energy, IPL and WPL have completed their assessment of the applicable provisions of Tax Reform, and the impacts to their 2017 balance sheets and income statementsFinance lease details are as follows (in(dollars in millions):
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | WPL |
| December 31, 2021 | | December 31, 2021 | | December 31, 2020 | | |
| Property, plant and equipment, net: | | | | | | | |
| Sheboygan Falls Energy Facility | n/a | | $21 | | $27 | | |
| Leased land for solar generation | $11 | | 11 | | — | | |
| $11 | | $32 | | $27 | | |
| Other current liabilities: | | | | | | | |
| Sheboygan Falls Energy Facility | n/a | | $10 | | $9 | | |
| Leased land for solar generation | $1 | | 1 | | — | | |
| 1 | | 11 | | 9 | | |
| Other liabilities: | | | | | | | |
| Sheboygan Falls Energy Facility | n/a | | 31 | | 42 | | |
| Leased land for solar generation | 11 | | 11 | | — | | |
| 11 | | 42 | | 42 | | |
| Total finance lease liabilities | $12 | | $53 | | $51 | | |
| Weighted average remaining lease term | 34 years | | 10 years | | 4 years | | |
| Weighted average discount rate | 3% | | 9% | | 11% | | |
| | | | | | | |
| 2021 | | 2021 | | 2020 | | 2019 |
| Depreciation and amortization expenses | $— | | $6 | | $6 | | $6 |
| Interest expense | — | | 5 | | 6 | | 7 |
| Total finance lease expense | $— | | $11 | | $12 | | $13 |
Expected Maturities - As of December 31, 2021, expected maturities of lease liabilities were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | Thereafter | | Total | | Less: amount representing interest | | Present value of minimum lease payments |
| Operating Leases: | | | | | | | | | | | | | | | | | |
| Alliant Energy | $2 | | | $2 | | | $2 | | | $2 | | | $2 | | | $7 | | $17 | | $3 | | $14 |
| IPL | 1 | | | 1 | | | 1 | | | 1 | | | 1 | | | 6 | | 11 | | 2 | | 9 |
| WPL | 1 | | | 1 | | | 1 | | | 1 | | | 1 | | | 1 | | 6 | | 1 | | 5 |
| Finance Leases: | | | | | | | | | | | | | | | | | |
| Alliant Energy | — | | | — | | | — | | | — | | | 1 | | | 19 | | 20 | | 8 | | 12 |
| WPL | 15 | | | 15 | | | 15 | | | 6 | | | 1 | | | 19 | | 71 | | 18 | | 53 |
NOTE 11. REVENUES
|
| | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| Balance Sheet | | | | | |
| Other current assets |
| $— |
| |
| $4.7 |
| |
| ($1.4 | ) |
| Investments: | | | | | |
| ATC Investment | (75.0 | ) | | — |
| | — |
|
| Other assets: | | | | | |
| Regulatory assets | (387.6 | ) | | (375.0 | ) | | (12.7 | ) |
| Deferred charges and other | 41.0 |
| | — |
| | — |
|
| Total Tax Reform impact on assets |
| ($421.6 | ) | |
| ($370.3 | ) | |
| ($14.1 | ) |
| Other liabilities: | | | | | |
| Deferred tax liabilities |
| ($1,331.9 | ) | |
| ($757.2 | ) | |
| ($523.8 | ) |
| Regulatory liabilities | 885.9 |
| | 390.7 |
| | 495.2 |
|
| Other | 6.3 |
| | — |
| | — |
|
| Total Tax Reform impact on liabilities |
| ($439.7 | ) | |
| ($366.5 | ) | |
| ($28.6 | ) |
| Income Statement | | | | | |
| Income tax expense (benefit) |
| ($18.1 | ) | |
| $3.8 |
| |
| ($14.5 | ) |
Deferred Tax Liabilities - Deferred tax assets and liabilities are measured at the enacted tax rate expected to be applied when temporary differences are to be realized or settled. Given the enactment of Tax Reform in December 2017,Revenues from Alliant Energy’s, IPL’s and WPL’s deferred tax assetsutility businesses are primarily from electric and liabilitiesgas sales provided to customers based on approved tariffs or specific contracts with customers. IPL’s and WPL’s primary performance obligations under such arrangements are to deliver electricity and gas, and their customers simultaneously receive and consume the electricity and gas. For such arrangements, revenues are recognized equivalent to the value of the electricity or gas supplied during each period, including amounts billed during each period and changes in amounts estimated to be billed at December 31, 2017 were re-measured based upon the new corporate tax rate. Alliant Energy’s utility operations inend of each period. IPL and WPL recordedapply the net changesright to invoice method to measure progress towards completing performance obligations to transfer electricity and gas to their customers.
IPL provides retail electric and gas service to customers in Iowa, and WPL provides retail and wholesale electric and retail gas service to customers in Wisconsin. IPL also sells electricity to wholesale customers in Minnesota, Illinois and Iowa, as well as steam from re-measuring deferred tax assets and liabilities as a changeits Prairie Creek Generating Station to high-pressure steam customers in regulatory liabilities or regulatory assets as described in further detail below. Alliant Energy’s, Iowa.
IPL’s and WPL’s non-utility operations recorded the net change in deferred tax assetsretail electric and liabilitiesgas revenues include sales to “Income tax expense (benefit)” in their respective income statement or as an increase to “Other liabilities” or decrease in “ATC Investment”residential, commercial and industrial customers. IPL’s and WPL’s retail electric and gas customer prices are based on Alliant Energy’s balance sheet.
Regulatory AssetsIPL’s and Regulatory Liabilities - Tax Reform requires regulated utilities to account for certain changes in deferred taxes related to accelerated depreciationWPL’s cost of service and net operating losses using a normalization method of accounting. This method of accounting requires regulated utilities to record the normalized changes in deferred tax liabilitiesare determined through general rate review proceedings and assets to a regulatory liability or regulatory asset. For other changes to regulatory assets and regulatory liabilities resulting from Tax Reform, IPL and WPL are awaiting decisions fromvarious tariff filings with the IUB PCSW and FERCPSCW, respectively. Such tariff-based services provide electricity or gas to determine the appropriate regulatory treatment. customers without a defined contractual term.
IPL and WPL have recorded the offsetwholesale electric market-based rate authority from FERC allowing them to the changesparticipate in utility deferred tax liabilitieswholesale energy markets (e.g. MISO) and assets in a regulatory liability or regulatory assettransact directly with third parties. This authority from FERC allows sales of electricity referred to be reflected in future customer billings. Future changes may occuras bulk power sales based on decisions received from the IUB, PSCWcurrent market values. FERC also allows IPL and FERC.
In January 2018, the IUB issued an order initiating investigation of the impacts of Tax Reform. The order requires IPL to track all calculated differences since January 1, 2018 resulting from Tax Reform, such that any over-collections can be refunded to its customers at a future date, if appropriate. In January 2018, the PSCW issued an order directing WPL to deferenter into power supply agreements with municipalities and to accrue carrying costs on the revenue requirement impacts resultingrural electric cooperatives with defined contractual terms, which include standard pricing mechanisms that are detailed in current tariffs accepted by FERC through wholesale rate review proceedings.
Revenues from Tax Reform since its inception.
ATC Investment - Tax Reform required a re-measurement of deferred tax assets and liabilities associated with Alliant Energy’s ATC Investment. These deferred tax assetsnon-utility business customers are primarily from its Travero business, which includes a short-line rail freight service in Iowa; a Mississippi River barge, rail and liabilities have been utilized to determine the amount of costs billed by ATC to its customers. Due to the regulated nature of ATCtruck freight terminal in Illinois; freight brokerage services; and FERC policy on income tax allowances, Alliant Energy expects the changesa rail-served warehouse in deferred taxes that have been collectedIowa, which began operations in ATC’s customers’ rates to be returned to such customers over the regulatory life of ATC’s assets. As a result, Alliant Energy has reduced the deferred tax liabilities associated with the ATC Investment and recorded the offset to “ATC Investment” on its balance sheet. Starting in 2018, the adjustment as a result of the change in deferred taxes will be amortized as a reduction in deferred tax expense over the remaining life of ATC’s assets.2021.
Deferred Charges and Other - Tax Reform repealed corporate federal AMT and allows unutilized AMT credits to be refunded over the next four tax years beginning with the U.S. federal tax return for calendar year 2018. As a result of these changes, Alliant Energy reclassified $41 million of unutilized AMT credits from a deferred tax asset into a long-term tax receivable in 2017 in anticipation of future refunds of such tax credits. The long-term tax receivable is included in “Deferred charges and other” on Alliant Energy’s balance sheet.
Income Tax Expense (Benefit) -The changes in deferred taxes for Alliant Energy’s, IPL’s and WPL’s non-utility operations were primarily recorded in the income statements. In addition, Alliant Energy recognized valuation allowances for certain tax credit carryforwards as a result of Tax Reform that are discussed in more detail below.
Disaggregation of revenues from contracts with customers, which correlates to revenues for each reportable segment, was as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Electric Utility: | | | | | | | | | | | | | | | | | |
| Retail - residential | $1,115 | | | $1,093 | | | $1,092 | | | $620 | | | $602 | | | $601 | | | $495 | | | $491 | | | $491 | |
| Retail - commercial | 763 | | | 718 | | | 770 | | | 508 | | | 474 | | | 510 | | | 255 | | | 244 | | | 260 | |
| Retail - industrial | 893 | | | 841 | | | 889 | | | 505 | | | 488 | | | 504 | | | 388 | | | 353 | | | 385 | |
| Wholesale | 187 | | | 168 | | | 177 | | | 57 | | | 57 | | | 64 | | | 130 | | | 111 | | | 113 | |
| Bulk power and other | 123 | | | 100 | | | 136 | | | 62 | | | 74 | | | 102 | | | 61 | | | 26 | | | 34 | |
| Total Electric Utility | 3,081 | | | 2,920 | | | 3,064 | | | 1,752 | | | 1,695 | | | 1,781 | | | 1,329 | | | 1,225 | | | 1,283 | |
| Gas Utility: | | | | | | | | | | | | | | | | | |
| Retail - residential | 257 | | | 214 | | | 259 | | | 146 | | | 116 | | | 149 | | | 111 | | | 98 | | | 110 | |
| Retail - commercial | 139 | | | 107 | | | 133 | | | 79 | | | 59 | | | 75 | | | 60 | | | 48 | | | 58 | |
| Retail - industrial | 17 | | | 12 | | | 16 | | | 12 | | | 8 | | | 12 | | | 5 | | | 4 | | | 4 | |
| Transportation/other | 43 | | | 40 | | | 47 | | | 28 | | | 25 | | | 28 | | | 15 | | | 15 | | | 19 | |
| Total Gas Utility | 456 | | | 373 | | | 455 | | | 265 | | | 208 | | | 264 | | | 191 | | | 165 | | | 191 | |
| Other Utility: | | | | | | | | | | | | | | | | | |
| Steam | 36 | | | 36 | | | 37 | | | 36 | | | 36 | | | 37 | | | — | | | — | | | — | |
| Other utility | 13 | | | 13 | | | 9 | | | 10 | | | 8 | | | 7 | | | 3 | | | 5 | | | 2 | |
| Total Other Utility | 49 | | | 49 | | | 46 | | | 46 | | | 44 | | | 44 | | | 3 | | | 5 | | | 2 | |
| Non-Utility and Other: | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Travero and other | 83 | | | 74 | | | 83 | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total Non-Utility and Other | 83 | | | 74 | | | 83 | | | — | | | — | | | — | | | — | | | — | | | — | |
| Total revenues | $3,669 | | | $3,416 | | | $3,648 | | | $2,063 | | | $1,947 | | | $2,089 | | | $1,523 | | | $1,395 | | | $1,476 | |
NOTE 12. INCOME TAXES
Income Tax Expense (Benefit) - The components of “Income tax expense (benefit)” in the income statements were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Current tax expense (benefit): | | | | | | | | | | | | | | | | | |
| Federal | $1 | | | $1 | | | ($7) | | | ($21) | | | $6 | | | ($11) | | | $22 | | | ($11) | | | $12 | |
| State | 3 | | | 8 | | | 24 | | | (1) | | | (1) | | | 24 | | | 6 | | | 7 | | | 13 | |
| IPL’s tax benefit riders | — | | | — | | | (4) | | | — | | | — | | | (4) | | | — | | | — | | | — | |
| Deferred tax expense (benefit): | | | | | | | | | | | | | | | | | |
| Federal | 9 | | | 22 | | | 70 | | | 73 | | | 30 | | | 26 | | | (75) | | | (9) | | | 31 | |
| State | 15 | | | 8 | | | 42 | | | — | | | (2) | | | 31 | | | 11 | | | 10 | | | 6 | |
| Production tax credits | (101) | | | (95) | | | (55) | | | (87) | | | (80) | | | (42) | | | (14) | | | (15) | | | (13) | |
| Investment tax credits | (1) | | | (1) | | | (1) | | | — | | | — | | | — | | | (1) | | | (1) | | | — | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| ($74) | | | ($57) | | | $69 | | | ($36) | | | ($47) | | | $24 | | | ($51) | | | ($19) | | | $49 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Current tax expense (benefit): | | | | | | | | | | | | | | | | | |
| Federal |
| ($41.0 | ) | |
| $1.8 |
| |
| $2.0 |
| |
| ($27.9 | ) | |
| ($12.8 | ) | |
| ($14.1 | ) | |
| $5.5 |
| |
| ($22.3 | ) | |
| $4.7 |
|
| State | 8.5 |
| | 17.2 |
| | 3.2 |
| | 1.6 |
| | 15.5 |
| | 11.5 |
| | 2.5 |
| | 1.1 |
| | 0.6 |
|
| IPL’s tax benefit riders | (40.4 | ) | | (44.2 | ) | | (49.0 | ) | | (40.4 | ) | | (44.2 | ) | | (49.0 | ) | | — |
| | — |
| | — |
|
| Deferred tax expense (benefit): | | | | | | | | | | | | | | | | | |
| Federal | 159.5 |
| | 112.8 |
| | 120.8 |
| | 72.5 |
| | 59.1 |
| | 40.7 |
| | 55.0 |
| | 112.3 |
| | 76.8 |
|
| State | 12.3 |
| | 4.9 |
| | 27.9 |
| | (2.2 | ) | | (9.0 | ) | | 3.3 |
| | 16.6 |
| | 20.8 |
| | 20.2 |
|
| Production tax credits | (31.1 | ) | | (31.8 | ) | | (33.1 | ) | | (14.1 | ) | | (14.0 | ) | | (14.5 | ) | | (17.0 | ) | | (17.8 | ) | | (18.6 | ) |
| Investment tax credits | (1.1 | ) | | (1.3 | ) | | (1.4 | ) | | (0.4 | ) | | (0.5 | ) | | (0.6 | ) | | (0.7 | ) | | (0.8 | ) | | (0.8 | ) |
| |
| $66.7 |
| |
| $59.4 |
| |
| $70.4 |
| |
| ($10.9 | ) | |
| ($5.9 | ) | |
| ($22.7 | ) | |
| $61.9 |
| |
| $93.3 |
| |
| $82.9 |
|
Income Tax Rates - The overall income tax rates shown in the following table were computed by dividing income tax expense (benefit) by income from continuing operations before income taxes.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Statutory federal income tax rate | 21 | % | | 21 | % | | 21 | % | | 21 | % | | 21 | % | | 21 | % | | 21 | % | | 21 | % | | 21 | % |
| State income taxes, net of federal benefits | 2 | | | 2 | | | 7 | | | (1) | | | (1) | | | 8 | | | 6 | | | 6 | | | 6 | |
Amortization of excess deferred taxes (Refer to Note 2) | (18) | | | (13) | | | (1) | | | (4) | | | (5) | | | — | | | (43) | | | (26) | | | (2) | |
| Production tax credits | (17) | | | (17) | | | (9) | | | (27) | | | (28) | | | (13) | | | (6) | | | (7) | | | (5) | |
| Effect of rate-making on property-related differences | (1) | | | (3) | | | (6) | | | (2) | | | (4) | | | (10) | | | (1) | | | (2) | | | (3) | |
| Adjustment for prior period taxes | 1 | | | 1 | | | 1 | | | 2 | | | 1 | | | 3 | | | — | | | — | | | — | |
| IPL’s tax benefit riders | — | | | — | | | (1) | | | — | | | — | | | (1) | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | | | |
| Other items, net | — | | | (1) | | | (1) | | | — | | | — | | | — | | | (1) | | | — | | | — | |
| Overall income tax rate | (12 | %) | | (10 | %) | | 11 | % | | (11 | %) | | (16 | %) | | 8 | % | | (24 | %) | | (8 | %) | | 17 | % |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Statutory federal income tax rate | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % |
| State income taxes, net of federal benefits | 5.5 |
| | 5.4 |
| | 5.2 |
| | 6.5 |
| | 6.4 |
| | 6.2 |
| | 5.1 |
| | 5.1 |
| | 5.1 |
|
| Effect of rate-making on property-related differences | (8.5 | ) | | (8.5 | ) | | (6.8 | ) | | (19.1 | ) | | (16.2 | ) | | (17.2 | ) | | (1.7 | ) | | (0.7 | ) | | (0.5 | ) |
| IPL’s tax benefit riders | (7.6 | ) | | (10.0 | ) | | (10.6 | ) | | (18.7 | ) | | (20.1 | ) | | (28.3 | ) | | — |
| | — |
| | — |
|
| Production tax credits | (6.1 | ) | | (7.2 | ) | | (7.2 | ) | | (6.7 | ) | | (6.3 | ) | | (8.3 | ) | | (7.1 | ) | | (6.2 | ) | | (7.1 | ) |
| Impact of Tax Reform | (3.4 | ) | | — |
| | — |
| | 1.7 |
| | — |
| | — |
| | (5.8 | ) | | — |
| | — |
|
| Other items, net | (2.4 | ) | | (1.3 | ) | | (0.3 | ) | | (3.7 | ) | | (1.5 | ) | | (0.5 | ) | | (0.6 | ) | | (0.6 | ) | | (0.7 | ) |
| Overall income tax rate | 12.5 | % | | 13.4 | % | | 15.3 | % | | (5.0 | %) | | (2.7 | %) | | (13.1 | %) | | 24.9 | % | | 32.6 | % | | 31.8 | % |
Deferred Tax Assets and Liabilities - The deferred tax assets and liabilities included on the balance sheets at December 31 arise from the following temporary differences (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 |
| Deferred tax liabilities: | | | | | | | | | | | |
| Property | $2,389 | | | $2,232 | | | $1,416 | | | $1,312 | | | $913 | | | $854 | |
| ATC Holdings | 123 | | | 116 | | | — | | | — | | | — | | | — | |
| Other | 111 | | | 101 | | | 76 | | | 83 | | | 50 | | | 41 | |
| Total deferred tax liabilities | 2,623 | | | 2,449 | | | 1,492 | | | 1,395 | | | 963 | | | 895 | |
| Deferred tax assets: | | | | | | | | | | | |
| Federal credit carryforwards | 560 | | | 454 | | | 345 | | | 258 | | | 192 | | | 175 | |
| Net operating losses carryforwards - federal | 39 | | | 77 | | | 36 | | | 71 | | | — | | | 1 | |
| Net operating losses carryforwards - state | 38 | | | 37 | | | 3 | | | 1 | | | — | | | — | |
| Other | 65 | | | 73 | | | 25 | | | 30 | | | 18 | | | 18 | |
| Subtotal deferred tax assets | 702 | | | 641 | | | 409 | | | 360 | | | 210 | | | 194 | |
| Valuation allowances | (6) | | | (6) | | | — | | | — | | | — | | | (1) | |
| Total deferred tax assets | 696 | | | 635 | | | 409 | | | 360 | | | 210 | | | 193 | |
| Total deferred tax liabilities, net | $1,927 | | | $1,814 | | | $1,083 | | | $1,035 | | | $753 | | | $702 | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Deferred tax liabilities: | | | | | | | | | | | |
| Property |
| $1,852.7 |
| |
| $2,919.0 |
| |
| $1,102.6 |
| |
| $1,677.0 |
| |
| $674.2 |
| |
| $1,124.5 |
|
| ATC Investment | 86.4 |
| | 153.1 |
| | — |
| | — |
| | — |
| | — |
|
| Other | 75.9 |
| | 95.1 |
| | 63.4 |
| | 71.4 |
| | 36.5 |
| | 58.8 |
|
| Total deferred tax liabilities | 2,015.0 |
| | 3,167.2 |
| | 1,166.0 |
| | 1,748.4 |
| | 710.7 |
| | 1,183.3 |
|
| Deferred tax assets: | | | | | | | | | | | |
| Federal credit carryforwards | 260.7 |
| | 268.4 |
| | 113.1 |
| | 95.9 |
| | 131.0 |
| | 112.9 |
|
| Net operating losses carryforwards - federal | 174.4 |
| | 173.3 |
| | 107.4 |
| | 69.6 |
| | 43.7 |
| | 75.4 |
|
| Regulatory liability - IPL’s tax benefit riders | 7.4 |
| | 34.7 |
| | 7.4 |
| | 34.7 |
| | — |
| | — |
|
| Net operating losses carryforwards - state | 41.3 |
| | 32.9 |
| | 0.9 |
| | 0.6 |
| | 0.2 |
| | 0.1 |
|
| Other | 61.8 |
| | 87.9 |
| | 27.1 |
| | 35.8 |
| | 14.7 |
| | 23.6 |
|
| Subtotal deferred tax assets | 545.6 |
| | 597.2 |
| | 255.9 |
| | 236.6 |
| | 189.6 |
| | 212.0 |
|
| Valuation allowance | (9.0 | ) | | (0.2 | ) | | (0.6 | ) | | — |
| | (1.3 | ) | | (0.3 | ) |
| Total deferred tax assets | 536.6 |
| | 597.0 |
| | 255.3 |
| | 236.6 |
| | 188.3 |
| | 211.7 |
|
| Total deferred tax liabilities, net |
| $1,478.4 |
| |
| $2,570.2 |
| |
| $910.7 |
| |
| $1,511.8 |
| |
| $522.4 |
| |
| $971.6 |
|
The decreases in deferred tax liabilities were primarily due to the reduction in the federal corporate tax rate from 35% to 21% as a result of Tax Reform, as discussed above.
Property - The decrease in property-related deferred tax liabilities from Tax Reform was partially offset by bonus depreciation deductions from property placed in service in 2017, including IPL’s Marshalltown Generating Station. Alliant Energy currently estimates its total bonus depreciation deductions to be claimed on its U.S. federal income tax return for calendar year 2017 will be approximately $670 million ($500 million for IPL and $140 million for WPL).
Carryforwards - The decrease in Alliant Energy’s federal credit carryforwards was due to the reclassification of AMT credits to a long-term tax receivable as a result of Tax Reform, partially offset by production tax credits generated in 2017. The increase in Alliant Energy’s and IPL’s federal net operating losses carryforwards was primarily due to bonus depreciation deductions for property placed in service in 2017, including IPL’s Marshalltown Generating Station, largely offset by the impacts of Tax Reform.
At December 31, 2017,2021, carryforwards and expiration dates were estimated as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | |
| Range of Expiration Dates | | Alliant Energy | | IPL | | WPL |
| Federal net operating losses | 2037 | | $186 | | $172 | | $1 |
| State net operating losses | 2022-2041 | | 619 | | 28 | | 2 |
| Federal tax credits | 2022-2041 | | 560 | | 345 | | 192 |
|
| | | | | | | | | | | | | |
| | Range of Expiration Dates | | Alliant Energy | | IPL | | WPL |
| Federal net operating losses | 2030-2037 | |
| $852 |
| |
| $537 |
| |
| $208 |
|
| State net operating losses | 2018-2037 | | 700 |
| | 13 |
| | 2 |
|
| Federal tax credits | 2022-2037 | | 267 |
| | 119 |
| | 131 |
|
Valuation Allowances - Due to the anticipated future reductions in revenues from utility customers due to Tax Reform, Alliant Energy currently expects a reduction in its future consolidated taxable income, which will extend the period to which prior unutilizedfederal net operating losses carryforwards will not be utilized. Taxablefully utilized until 2023. Because taxable income must be reduced by federal net operating losses carryforwards prior to utilizing federal tax credit carryforwards.carryforwards, Alliant Energy expects to utilize its net operating losses carryforwards by 2024 and therefore, currently does not expect to utilize 2002 and 2003 vintage federal credit carryforwards prior to their expiration in 2022, and 2023, respectively. This has resultedresulting in valuation allowance charges recorded to “Income tax expense (benefit)” on the income statementsallowances as noted in the table above.of December 31, 2021.
Uncertain Tax Positions - At December 31, 2017, 20162021, 2020 and 2015,2019, there were no uncertain tax positions or penalties accrued related to uncertain tax positions, and interest accrued and tax positions favorably impacting future effective tax rates for continuing operations were not material.positions. As of December 31, 2017,2021, no material changes to unrecognized tax benefits are expected during the next 12 months.
Open tax years - Tax years that remain subject to the statute of limitations in the major jurisdictions for each of Alliant Energy, IPL and WPL are as follows:
| | | | | | | | | | | |
| Consolidated federal income tax returns (a) | 2018 | - | 2020 |
| Consolidated Iowa income tax returns (b) | 2018 | - | 2020 |
| Wisconsin combined tax returns (c) | 2017 | - | 2020 |
|
| | | |
| Consolidated federal income tax returns (a) | 2014 | - | 2016 |
| Consolidated Iowa income tax returns (b) | 2014 | - | 2016 |
| Wisconsin combined tax returns (c) | 2013 | - | 2016 |
| | | | | | | | |
(a) | These federal tax returns are effectively settled as a result of participation in the IRS Compliance Assurance Program, which allows Alliant Energy and the IRS to work together to resolve issues related to Alliant Energy’s current tax year before filing its federal income tax return. The statute of limitations for these federal tax returns expires three years from each filing date. |
| 76 | |
(b) | The statute of limitations for these Iowa tax returns expires three years from each filing date. |
| |
(c) | The statute of limitations for these Wisconsin combined tax returns expires four years from each filing date. |
(a)The 2018 and 2019 federal tax returns are effectively settled as a result of participation in the IRS Compliance Assurance Program, which allows Alliant Energy and the IRS to work together to resolve issues related to Alliant Energy’s current tax year before filing its federal income tax return. The statute of limitations for these federal tax returns expires three years from each filing date. (b)The statute of limitations for these Iowa tax returns expires three years from each filing date.
(c)The statute of limitations for these Wisconsin combined tax returns expires four years from each filing date.
Iowa Tax Reform - In 2018, Iowa tax reform was enacted, resulting in a reduction in the Iowa income tax rate from 12% to 9.8%, effective January 1, 2021, and the elimination of the deduction for federal income taxes, effective January 1, 2022, for taxes related to 2020 and prior.
NOTE 12.13. BENEFIT PLANS
NOTE 12(a)13(a) Pension and Other Postretirement Benefits Plans - Retirement benefits are provided to substantially all employees through various qualified and non-qualified non-contributory defined benefit pension plans (currently closed to new hires), and/or through defined contribution plans (including 401(k) savings plans). Benefits of the non-contributory defined benefit pension plans are based on the plan participant’s years of service, age and compensation. Benefits of the defined contribution plans are based on the plan participant’s years of service, age, compensation and contributions. Certain defined benefit postretirement health care and life benefits are provided to eligible retirees. In general, the retiree health care plans consist of fixed benefit subsidy structures and the retiree life insurance plans are non-contributory.
IPL and WPL account for their participation in Alliant Energy and Corporate Services sponsored plans as multiple-employer plans. In IPL’sFor IPL and WPL’s tablesWPL, amounts below the defined benefit pension plan amounts represent those respectivethe amounts for their bargaining unit employeesplan participants covered under the qualified plans that they sponsor, as well as amounts directly assigned to them related to their current and former non-bargaining employees who arecertain participants in the Alliant Energy and Corporate Services sponsored qualified and non-qualified defined benefit pension plans. In IPL’s and WPL’s tables below, the OPEB plan amounts represent respective amounts for their employees, as well as amounts directly assigned to them related to their current and former non-bargaining employees who are participants in the Corporate Services sponsored OPEB plan.
Assumptions - The assumptions for defined benefit pension and OPEB plans at the measurement date of December 31 were as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Defined Benefit Pension Plans | | OPEB Plans |
| Alliant Energy | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Discount rate for benefit obligations | 2.91% | | 2.57% | | 3.48% | | 2.81% | | 2.31% | | 3.40% |
| Discount rate for net periodic cost | 2.57% | | 3.48% | | 4.34% | | 2.31% | | 3.40% | | 4.24% |
| Expected rate of return on plan assets | 7.10% | | 7.10% | | 7.60% | | 4.80% | | 4.50% | | 5.44% |
| Interest crediting rate for Alliant Energy Cash Balance Pension Plan | 4.18% | | 4.76% | | 5.52% | | N/A | | N/A | | N/A |
| Rate of compensation increase | 3.30% | - | 4.50% | | 3.65% | - | 4.50% | | 3.65% | - | 4.50% | | N/A | | N/A | | N/A |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | Qualified Defined Benefit Pension Plan | | OPEB Plans |
| | Defined Benefit Pension Plans | | OPEB Plans | |
| Alliant Energy | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 | |
| IPL | | IPL | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Discount rate for benefit obligations | 3.66% | | 4.19% | | 4.47% | | 3.53% | | 3.98% | | 4.30% | Discount rate for benefit obligations | 2.94% | | 2.61% | | 3.51% | | 2.80% | | 2.28% | | 3.39% |
| Discount rate for net periodic cost | 4.19% | | 4.47% | | 4.18% | | 3.98% | | 4.30% | | 3.97% | Discount rate for net periodic cost | 2.61% | | 3.51% | | 4.35% | | 2.28% | | 3.39% | | 4.23% |
| Expected rate of return on plan assets | 7.60% | | 7.60% | | 7.60% | | 5.80% | | 6.30% | | 6.20% | Expected rate of return on plan assets | 7.10% | | 7.10% | | 7.60% | | 5.10% | | 4.50% | | 5.60% |
| Rate of compensation increase | 3.65 | % | - | 4.50% | | 3.65 | % | - | 4.50% | | 3.65 | % | - | 4.50% | | N/A | | N/A | | N/A | Rate of compensation increase | 3.30% | | 3.65% | | 3.65% | | N/A | | N/A | | N/A |
| Medical cost trend on covered charges: | | | | | | | |
| Initial trend rate (end of year) | N/A | | N/A | | N/A | | 6.75% | | 7.00% | | 7.25% | |
| Ultimate trend rate | N/A | | N/A | | N/A | | 5.00% | | 5.00% | | 5.00% | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Qualified Defined Benefit Pension Plan | | OPEB Plans |
| WPL | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Discount rate for benefit obligations | 2.94% | | 2.64% | | 3.50% | | 2.79% | | 2.27% | | 3.39% |
| Discount rate for net periodic cost | 2.64% | | 3.50% | | 4.35% | | 2.27% | | 3.39% | | 4.23% |
| Expected rate of return on plan assets | 7.10% | | 7.10% | | 7.60% | | 4.02% | | 3.28% | | 3.81% |
| Rate of compensation increase | 3.30% | | 3.65% | | 3.65% | | N/A | | N/A | | N/A |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
|
| | | | | | | | | | | |
| | Qualified Defined Benefit Pension Plan | | OPEB Plans |
| IPL | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Discount rate for benefit obligations | 3.68% | | 4.22% | | 4.50% | | 3.51% | | 3.95% | | 4.28% |
| Discount rate for net periodic cost | 4.22% | | 4.50% | | 4.20% | | 3.95% | | 4.28% | | 3.94% |
| Expected rate of return on plan assets | 7.60% | | 7.60% | | 7.60% | | 6.20% | | 6.60% | | 6.60% |
| Rate of compensation increase | 3.65% | | 3.65% | | 3.65% | | N/A | | N/A | | N/A |
| Medical cost trend on covered charges: | | | | | | | | | | | |
| Initial trend rate (end of year) | N/A | | N/A | | N/A | | 6.75% | | 7.00% | | 7.25% |
| Ultimate trend rate | N/A | | N/A | | N/A | | 5.00% | | 5.00% | | 5.00% |
|
| | | | | | | | | | | |
| | Qualified Defined Benefit Pension Plan | | OPEB Plans |
| WPL | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Discount rate for benefit obligations | 3.69% | | 4.23% | | 4.51% | | 3.51% | | 3.96% | | 4.28% |
| Discount rate for net periodic cost | 4.23% | | 4.51% | | 4.20% | | 3.96% | | 4.28% | | 3.96% |
| Expected rate of return on plan assets | 7.60% | | 7.60% | | 7.60% | | 3.50% | | 4.70% | | 4.60% |
| Rate of compensation increase | 3.65% | | 3.65% | | 3.65% | | N/A | | N/A | | N/A |
| Medical cost trend on covered charges: | | | | | | | | | | | |
| Initial trend rate (end of year) | N/A | | N/A | | N/A | | 6.75% | | 7.00% | | 7.25% |
| Ultimate trend rate | N/A | | N/A | | N/A | | 5.00% | | 5.00% | | 5.00% |
Expected rate of return on plan assets - The expected rate of return on plan assets is based on projected asset class returns using target allocations. A forward-looking building blocks approach is used, and historical returns, survey information and capital market information are analyzed to support the expected rate of return on plan assets assumption. Refer to “Investment Strategy for Plan Assets” below for additional information related to investment strategy and mix of assets for the pension and OPEB plans.
Life Expectancy - The life expectancy assumption is used in determining the benefit obligation and net periodic benefit cost for defined benefit pension and OPEB plans. This assumption was updated to utilizeutilizes base mortality tables that were released in 20142019 by the Society of Actuaries and updatedmortality projection tables that were released in 2015 and 2016.2020 by the Society of Actuaries.
Net Periodic Benefit Costs (Credits) - The components of net periodic benefit costs (credits) for sponsored defined benefit pension and OPEB plans are included in the tables below (in millions). NetThe service cost component of net periodic benefit costs are primarilyis included in “Other operation and maintenance” expenses in the income statements and all other components of net periodic benefit costs are included in “Other (income) and deductions” in the income statements.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | Defined Benefit Pension Plans | | OPEB Plans |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Service cost | $11 | | | $11 | | | $10 | | | $4 | | | $3 | | | $3 | |
| Interest cost | 34 | | | 43 | | | 50 | | | 5 | | | 7 | | | 9 | |
| Expected return on plan assets (a) | (69) | | | (70) | | | (60) | | | (5) | | | (5) | | | (5) | |
| Amortization of prior service credit (b) | — | | | — | | | (1) | | | — | | | — | | | — | |
| Amortization of actuarial loss (c) | 39 | | | 34 | | | 36 | | | 5 | | | 3 | | | 3 | |
| Settlement losses (d) | — | | | 12 | | | — | | | — | | | — | | | — | |
| $15 | | | $30 | | | $35 | | | $9 | | | $8 | | | $10 | |
| | | Alliant Energy | Defined Benefit Pension Plans | | OPEB Plans | |
| 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 | |
| IPL | | IPL | Defined Benefit Pension Plans | | OPEB Plans |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Service cost |
| $12.5 |
| |
| $12.6 |
| |
| $15.9 |
| |
| $5.0 |
| |
| $5.3 |
| |
| $5.5 |
| Service cost | $7 | | | $7 | | | $6 | | | $1 | | | $1 | | | $1 | |
| Interest cost | 51.0 |
| | 53.0 |
| | 53.6 |
| | 8.6 |
| | 9.4 |
| | 9.1 |
| Interest cost | 16 | | | 20 | | | 23 | | | 2 | | | 3 | | | 3 | |
| Expected return on plan assets (a) | (65.5 | ) | | (65.5 | ) | | (75.0 | ) | | (6.1 | ) | | (6.1 | ) | | (8.4 | ) | Expected return on plan assets (a) | (32) | | | (33) | | | (28) | | | (3) | | | (4) | | | (4) | |
| Amortization of prior service credit (b) | (0.4 | ) | | (0.3 | ) | | (0.2 | ) | | (0.2 | ) | | (4.1 | ) | | (11.3 | ) | |
| | Amortization of actuarial loss (c) | 37.6 |
| | 37.4 |
| | 35.4 |
| | 3.8 |
| | 4.7 |
| | 4.8 |
| Amortization of actuarial loss (c) | 17 | | | 15 | | | 15 | | | 2 | | | 1 | | | 2 | |
| Additional benefit costs | — |
| | — |
| | 0.5 |
| | — |
| | — |
| | — |
| |
| Settlement losses (d) | 0.9 |
| | — |
| | — |
| | — |
| | — |
| | — |
| Settlement losses (d) | — | | | 7 | | | — | | | — | | | — | | | — | |
| |
| $36.1 |
| |
| $37.2 |
| |
| $30.2 |
| |
| $11.1 |
| |
| $9.2 |
| |
| ($0.3 | ) | | $8 | | | $16 | | | $16 | | | $2 | | | $1 | | | $2 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| WPL | Defined Benefit Pension Plans | | OPEB Plans |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Service cost | $4 | | | $4 | | | $3 | | | $1 | | | $2 | | | $1 | |
| Interest cost | 15 | | | 19 | | | 21 | | | 2 | | | 3 | | | 3 | |
| Expected return on plan assets (a) | (31) | | | (31) | | | (26) | | | — | | | (1) | | | (1) | |
| Amortization of prior service credit (b) | — | | | — | | | — | | | — | | | (1) | | | — | |
| Amortization of actuarial loss (c) | 19 | | | 16 | | | 18 | | | 2 | | | 2 | | | 2 | |
| $7 | | | $8 | | | $16 | | | $5 | | | $5 | | | $5 | |
(a)The expected return on plan assets is based on the expected rate of return on plan assets and the fair value approach to the market-related value of plan assets.
(b)Unrecognized prior service credits for the OPEB plans are amortized over the average future service period to full eligibility of the participants of each plan.
(c)Unrecognized net actuarial gains or losses in excess of 10% of the greater of the plans’ benefit obligations or assets are amortized over the average future service lives of plan participants, except for the Alliant Energy Cash Balance Pension Plan where gains or losses outside the 10% threshold are amortized over the time period the participants are expected to receive benefits.
(d)Settlement losses related to payments made to retired executives of Alliant Energy and lump sum payments related to IPL’s qualified defined benefit pension plan.
|
| | | | | | | | | | | | | | | | | | | | | | | |
| IPL | Defined Benefit Pension Plans | | OPEB Plans |
| 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Service cost |
| $7.3 |
| |
| $7.5 |
| |
| $8.8 |
| |
| $2.1 |
| |
| $2.3 |
| |
| $2.4 |
|
| Interest cost | 23.5 |
| | 24.5 |
| | 25.0 |
| | 3.5 |
| | 3.8 |
| | 3.8 |
|
| Expected return on plan assets (a) | (30.8 | ) | | (30.9 | ) | | (35.8 | ) | | (4.3 | ) | | (4.3 | ) | | (5.7 | ) |
| Amortization of prior service credit (b) | (0.2 | ) | | (0.2 | ) | | (0.1 | ) | | — |
| | (2.6 | ) | | (6.1 | ) |
| Amortization of actuarial loss (c) | 16.1 |
| | 16.5 |
| | 15.3 |
| | 2.0 |
| | 2.6 |
| | 2.3 |
|
| |
| $15.9 |
| |
| $17.4 |
| |
| $13.2 |
| |
| $3.3 |
| |
| $1.8 |
| |
| ($3.3 | ) |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| WPL | Defined Benefit Pension Plans | | OPEB Plans |
| 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Service cost |
| $4.9 |
| |
| $4.9 |
| |
| $5.8 |
| |
| $1.9 |
| |
| $2.0 |
| |
| $2.1 |
|
| Interest cost | 21.8 |
| | 22.3 |
| | 22.6 |
| | 3.4 |
| | 3.8 |
| | 3.7 |
|
| Expected return on plan assets (a) | (28.5 | ) | | (28.3 | ) | | (32.4 | ) | | (0.8 | ) | | (0.8 | ) | | (1.5 | ) |
| Amortization of prior service cost (credit) (b) | 0.1 |
| | 0.2 |
| | 0.2 |
| | (0.2 | ) | | (0.9 | ) | | (3.5 | ) |
| Amortization of actuarial loss (c) | 18.5 |
| | 17.6 |
| | 16.8 |
| | 1.6 |
| | 1.8 |
| | 2.2 |
|
| Additional benefit costs | — |
| | — |
| | 0.5 |
| | — |
| | — |
| | — |
|
| |
| $16.8 |
| |
| $16.7 |
| |
| $13.5 |
| |
| $5.9 |
| |
| $5.9 |
| |
| $3.0 |
|
| |
(a) | The expected return on plan assets is based on the expected rate of return on plan assets and the fair value approach to the market-related value of plan assets. |
| |
(b) | Unrecognized prior service costs (credits) for the OPEB plans are amortized over the average future service period to full eligibility of the participants of each plan. |
| |
(c) | Unrecognized net actuarial gains or losses in excess of 10% of the greater of the plans’ benefit obligations or assets are amortized over the average future service lives of plan participants, except for the Alliant Energy Cash Balance Pension Plan where gains or losses outside the 10% threshold are amortized over the time period the participants are expected to receive benefits. |
| |
(d) | Settlement losses related to payments made to retired executives of Alliant Energy. |
The estimated amortization from “Regulatory assets” and “Regulatory liabilities” on the balance sheets and AOCL on Alliant Energy’s balance sheet into net periodic benefit cost in 2018 is as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | Defined Benefit | | | | Defined Benefit | | | | Defined Benefit | | |
| | Pension Plans | | OPEB Plans | | Pension Plans | | OPEB Plans | | Pension Plans | | OPEB Plans |
| Actuarial loss |
| $35.2 |
| |
| $3.4 |
| |
| $15.0 |
| |
| $1.2 |
| |
| $17.2 |
| |
| $2.0 |
|
| Prior service credit | (0.7 | ) | | (0.2 | ) | | (0.2 | ) | | — |
| | (0.2 | ) | | (0.2 | ) |
| |
| $34.5 |
| |
| $3.2 |
| |
| $14.8 |
| |
| $1.2 |
| |
| $17.0 |
| |
| $1.8 |
|
Benefit Plan Assets and Obligations - A reconciliation of the funded status of qualified and non-qualified defined benefit pension and OPEB plans to the amounts recognized on the balance sheets at December 31 was as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | |
| Defined Benefit Pension Plans | | OPEB Plans |
| Alliant Energy | 2021 | | 2020 | | 2021 | | 2020 |
| Change in benefit obligation: | | | | | | | |
| Net benefit obligation at January 1 | $1,351 | | | $1,280 | | | $227 | | | $214 | |
| Service cost | 11 | | | 11 | | | 4 | | | 3 | |
| Interest cost | 34 | | | 43 | | | 5 | | | 7 | |
| Plan participants’ contributions | — | | | — | | | 5 | | | 4 | |
| | | | | | | |
| | | | | | | |
| Actuarial (gain) loss | (46) | | | 132 | | | (12) | | | 18 | |
| | | | | | | |
| Gross benefits paid | (99) | | | (115) | | | (19) | | | (19) | |
| | | | | | | |
| Net benefit obligation at December 31 | 1,251 | | | 1,351 | | | 210 | | | 227 | |
| Change in plan assets: | | | | | | | |
| Fair value of plan assets at January 1 | 984 | | | 931 | | | 108 | | | 105 | |
| Actual return on plan assets | 87 | | | 108 | | | 4 | | | 11 | |
| Employer contributions | 39 | | | 60 | | | 8 | | | 7 | |
| Plan participants’ contributions | — | | | — | | | 5 | | | 4 | |
| Gross benefits paid | (99) | | | (115) | | | (19) | | | (19) | |
| Fair value of plan assets at December 31 | 1,011 | | | 984 | | | 106 | | | 108 | |
| Under funded status at December 31 | ($240) | | | ($367) | | | ($104) | | | ($119) | |
|
| | | | | | | | | | | | | | | |
| | Defined Benefit Pension Plans | | OPEB Plans |
| Alliant Energy | 2017 | | 2016 | | 2017 | | 2016 |
| Change in benefit obligation: | | | | | | | |
| Net benefit obligation at January 1 |
| $1,244.3 |
| |
| $1,206.3 |
| |
| $220.1 |
| |
| $221.4 |
|
| Service cost | 12.5 |
| | 12.6 |
| | 5.0 |
| | 5.3 |
|
| Interest cost | 51.0 |
| | 53.0 |
| | 8.6 |
| | 9.4 |
|
| Plan participants’ contributions | — |
| | — |
| | 2.9 |
| | 2.4 |
|
| Actuarial (gain) loss | 83.6 |
| | 48.3 |
| | 5.4 |
| | (0.3 | ) |
| Gross benefits paid | (88.3 | ) | | (75.9 | ) | | (19.7 | ) | | (18.1 | ) |
| Net benefit obligation at December 31 | 1,303.1 |
| | 1,244.3 |
| | 222.3 |
| | 220.1 |
|
| Change in plan assets: | | | | | | | |
| Fair value of plan assets at January 1 | 895.7 |
| | 895.0 |
| | 105.8 |
| | 106.9 |
|
| Actual return on plan assets | 136.7 |
| | 74.3 |
| | 12.9 |
| | 8.2 |
|
| Employer contributions | 6.6 |
| | 2.3 |
| | 9.2 |
| | 6.4 |
|
| Plan participants’ contributions | — |
| | — |
| | 2.9 |
| | 2.4 |
|
| Gross benefits paid | (88.3 | ) | | (75.9 | ) | | (19.7 | ) | | (18.1 | ) |
| Fair value of plan assets at December 31 | 950.7 |
| | 895.7 |
| | 111.1 |
| | 105.8 |
|
| Under funded status at December 31 |
| ($352.4 | ) | |
| ($348.6 | ) | |
| ($111.2 | ) | |
| ($114.3 | ) |
| | | | | | | | | | | | | | | | | | | | | | | |
| Defined Benefit Pension Plans | | OPEB Plans |
| Alliant Energy | 2021 | | 2020 | | 2021 | | 2020 |
| Amounts recognized on the balance sheets consist of: | | | | | | | |
| Non-current assets | $— | | | $— | | | $13 | | | $8 | |
| Current liabilities | (2) | | | (2) | | | (8) | | | (8) | |
| Pension and other benefit obligations | (238) | | | (365) | | | (109) | | | (119) | |
| Net amounts recognized at December 31 | ($240) | | | ($367) | | | ($104) | | | ($119) | |
| Amounts recognized in Regulatory Assets consist of: | | | | | | | |
| Net actuarial loss | $429 | | | $533 | | | $38 | | | $54 | |
| Prior service credit | (4) | | | (5) | | | (1) | | | (1) | |
| $425 | | | $528 | | | $37 | | | $53 | |
|
| | | | | | | | | | | | | | | |
| | Defined Benefit Pension Plans | | OPEB Plans |
| Alliant Energy | 2017 | | 2016 | | 2017 | | 2016 |
| Amounts recognized on the balance sheets consist of: | | | | | | | |
| Non-current assets |
| $— |
| |
| $— |
| |
| $8.8 |
| |
| $3.2 |
|
| Current liabilities | (2.2 | ) | | (6.5 | ) | | (9.1 | ) | | (8.6 | ) |
| Pension and other benefit obligations | (350.2 | ) | | (342.1 | ) | | (110.9 | ) | | (108.9 | ) |
| Net amounts recognized at December 31 |
| ($352.4 | ) | |
| ($348.6 | ) | |
| ($111.2 | ) | |
| ($114.3 | ) |
| | | | | | | |
| Net actuarial loss |
| $509.1 |
| |
| $535.1 |
| |
| $47.4 |
| |
| $52.6 |
|
| Prior service credit | (6.5 | ) | | (6.9 | ) | | (1.3 | ) | | (1.5 | ) |
| |
| $502.6 |
| |
| $528.2 |
| |
| $46.1 |
| |
| $51.1 |
|
| | | | Defined Benefit Pension Plans | | OPEB Plans | | Defined Benefit Pension Plans | | OPEB Plans |
| IPL | 2017 | | 2016 | | 2017 | | 2016 | IPL | 2021 | | 2020 | | 2021 | | 2020 |
| Change in benefit obligation: | | | | | | | | Change in benefit obligation: | | | | | | | |
| Net benefit obligation at January 1 |
| $570.4 |
| |
| $556.1 |
| |
| $90.1 |
| |
| $91.3 |
| Net benefit obligation at January 1 | $615 | | | $581 | | | $91 | | | $86 | |
| Service cost | 7.3 |
| | 7.5 |
| | 2.1 |
| | 2.3 |
| Service cost | 7 | | | 7 | | | 1 | | | 1 | |
| Interest cost | 23.5 |
| | 24.5 |
| | 3.5 |
| | 3.8 |
| Interest cost | 16 | | | 20 | | | 2 | | | 3 | |
| Plan participants’ contributions | — |
| | — |
| | 1.0 |
| | 0.9 |
| Plan participants’ contributions | — | | | — | | | 2 | | | 1 | |
| | Actuarial (gain) loss | 34.9 |
| | 19.1 |
| | (0.1 | ) | | (0.7 | ) | Actuarial (gain) loss | (23) | | | 60 | | | (4) | | | 8 | |
| | Gross benefits paid | (43.2 | ) | | (36.8 | ) | | (7.2 | ) | | (7.5 | ) | Gross benefits paid | (48) | | | (53) | | | (8) | | | (8) | |
| | Net benefit obligation at December 31 | 592.9 |
| | 570.4 |
| | 89.4 |
| | 90.1 |
| Net benefit obligation at December 31 | 567 | | | 615 | | | 84 | | | 91 | |
| Change in plan assets: | | | | | | | | Change in plan assets: | | | | | | | |
| Fair value of plan assets at January 1 | 422.0 |
| | 422.7 |
| | 68.2 |
| | 69.2 |
| Fair value of plan assets at January 1 | 453 | | | 436 | | | 74 | | | 72 | |
| Actual return on plan assets | 64.3 |
| | 35.3 |
| | 8.9 |
| | 5.3 |
| Actual return on plan assets | 40 | | | 51 | | | 4 | | | 7 | |
| Employer contributions | 0.6 |
| | 0.8 |
| | 2.0 |
| | 0.3 |
| Employer contributions | 17 | | | 19 | | | 2 | | | 2 | |
| Plan participants’ contributions | — |
| | — |
| | 1.0 |
| | 0.9 |
| Plan participants’ contributions | — | | | — | | | 2 | | | 1 | |
| Gross benefits paid | (43.2 | ) | | (36.8 | ) | | (7.2 | ) | | (7.5 | ) | Gross benefits paid | (48) | | | (53) | | | (8) | | | (8) | |
| Fair value of plan assets at December 31 | 443.7 |
| | 422.0 |
| | 72.9 |
| | 68.2 |
| Fair value of plan assets at December 31 | 462 | | | 453 | | | 74 | | | 74 | |
| Under funded status at December 31 |
| ($149.2 | ) | |
| ($148.4 | ) | |
| ($16.5 | ) | |
| ($21.9 | ) | Under funded status at December 31 | ($105) | | | ($162) | | | ($10) | | | ($17) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Defined Benefit Pension Plans | | OPEB Plans |
| IPL | 2021 | | 2020 | | 2021 | | 2020 |
| Amounts recognized on the balance sheets consist of: | | | | | | | |
| Non-current assets | $— | | | $— | | | $10 | | | $4 | |
| Current liabilities | — | | | (1) | | | (2) | | | (2) | |
| Pension and other benefit obligations | (105) | | | (161) | | | (18) | | | (19) | |
| Net amounts recognized at December 31 | ($105) | | | ($162) | | | ($10) | | | ($17) | |
| Amounts recognized in Regulatory Assets consist of: | | | | | | | |
| Net actuarial loss | $180 | | | $228 | | | $13 | | | $20 | |
| Prior service credit | (1) | | | (1) | | | — | | | — | |
| $179 | | | $227 | | | $13 | | | $20 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Defined Benefit Pension Plans | | OPEB Plans |
| WPL | 2021 | | 2020 | | 2021 | | 2020 |
| Change in benefit obligation: | | | | | | | |
| Net benefit obligation at January 1 | $588 | | | $550 | | | $89 | | | $85 | |
| Service cost | 4 | | | 4 | | | 1 | | | 2 | |
| Interest cost | 15 | | | 19 | | | 2 | | | 3 | |
| Plan participants’ contributions | — | | | — | | | 2 | | | 2 | |
| | | | | | | |
| | | | | | | |
| Actuarial (gain) loss | (18) | | | 55 | | | (5) | | | 5 | |
| | | | | | | |
| Gross benefits paid | (43) | | | (40) | | | (8) | | | (8) | |
| | | | | | | |
| Net benefit obligation at December 31 | 546 | | | 588 | | | 81 | | | 89 | |
| Change in plan assets: | | | | | | | |
| Fair value of plan assets at January 1 | 436 | | | 406 | | | 18 | | | 17 | |
| Actual return on plan assets | 39 | | | 48 | | | — | | | 2 | |
| Employer contributions | 18 | | | 22 | | | 5 | | | 5 | |
| Plan participants’ contributions | — | | | — | | | 2 | | | 2 | |
| Gross benefits paid | (43) | | | (40) | | | (8) | | | (8) | |
| Fair value of plan assets at December 31 | 450 | | | 436 | | | 17 | | | 18 | |
| Under funded status at December 31 | ($96) | | | ($152) | | | ($64) | | | ($71) | |
| | | | | | | | | | | | Defined Benefit Pension Plans | | OPEB Plans |
| | Defined Benefit Pension Plans | | OPEB Plans | |
| IPL | 2017 | | 2016 | | 2017 | | 2016 | |
| WPL | | WPL | 2021 | | 2020 | | 2021 | | 2020 |
| Amounts recognized on the balance sheets consist of: | | | | | | | | Amounts recognized on the balance sheets consist of: | | | | | | | |
| Non-current assets |
| $— |
| |
| $— |
| |
| $5.9 |
| |
| $0.4 |
| Non-current assets | $— | | | $— | | | $3 | | | $3 | |
| Current liabilities | (0.5 | ) | | (0.7 | ) | | (2.0 | ) | | (1.9 | ) | Current liabilities | — | | | — | | | (6) | | | (6) | |
| Pension and other benefit obligations | (148.7 | ) | | (147.7 | ) | | (20.4 | ) | | (20.4 | ) | Pension and other benefit obligations | (96) | | | (152) | | | (61) | | | (68) | |
| Net amounts recognized at December 31 |
| ($149.2 | ) | |
| ($148.4 | ) | |
| ($16.5 | ) | |
| ($21.9 | ) | Net amounts recognized at December 31 | ($96) | | | ($152) | | | ($64) | | | ($71) | |
Amounts recognized in Regulatory Assets consist of (refer to Note 2 for details): | | | | | | | | |
| Amounts recognized in Regulatory Assets consist of: | | Amounts recognized in Regulatory Assets consist of: | | | | | | | |
| Net actuarial loss |
| $218.9 |
| |
| $233.6 |
| |
| $18.7 |
| |
| $25.4 |
| Net actuarial loss | $188 | | | $233 | | | $18 | | | $25 | |
| Prior service credit | (2.1 | ) | | (2.3 | ) | | — |
| | — |
| Prior service credit | (1) | | | (1) | | | (1) | | | (1) | |
| |
| $216.8 |
| |
| $231.3 |
| |
| $18.7 |
| |
| $25.4 |
| | $187 | | | $232 | | | $17 | | | $24 | |
|
| | | | | | | | | | | | | | | |
| | Defined Benefit Pension Plans | | OPEB Plans |
| WPL | 2017 | | 2016 | | 2017 | | 2016 |
| Change in benefit obligation: | | | | | | | |
| Net benefit obligation at January 1 |
| $529.2 |
| |
| $505.9 |
| |
| $88.9 |
| |
| $89.7 |
|
| Service cost | 4.9 |
| | 4.9 |
| | 1.9 |
| | 2.0 |
|
| Interest cost | 21.8 |
| | 22.3 |
| | 3.4 |
| | 3.8 |
|
| Plan participants’ contributions | — |
| | — |
| | 1.4 |
| | 1.2 |
|
| Actuarial loss | 38.3 |
| | 25.7 |
| | 4.1 |
| | 0.5 |
|
| Gross benefits paid | (34.4 | ) | | (29.6 | ) | | (9.3 | ) | | (8.3 | ) |
| Net benefit obligation at December 31 | 559.8 |
| | 529.2 |
| | 90.4 |
| | 88.9 |
|
| Change in plan assets: | | | | | | | |
| Fair value of plan assets at January 1 | 389.7 |
| | 386.8 |
| | 18.6 |
| | 18.7 |
|
| Actual return on plan assets | 59.6 |
| | 32.4 |
| | 1.2 |
| | 1.2 |
|
| Employer contributions | 0.1 |
| | 0.1 |
| | 6.8 |
| | 5.8 |
|
| Plan participants’ contributions | — |
| | — |
| | 1.4 |
| | 1.2 |
|
| Gross benefits paid | (34.4 | ) | | (29.6 | ) | | (9.3 | ) | | (8.3 | ) |
| Fair value of plan assets at December 31 | 415.0 |
| | 389.7 |
| | 18.7 |
| | 18.6 |
|
| Under funded status at December 31 |
| ($144.8 | ) | |
| ($139.5 | ) | |
| ($71.7 | ) | |
| ($70.3 | ) |
|
| | | | | | | | | | | | | | | |
| | Defined Benefit Pension Plans | | OPEB Plans |
| WPL | 2017 | | 2016 | | 2017 | | 2016 |
| Amounts recognized on the balance sheets consist of: | | | | | | | |
| Non-current assets |
| $— |
| |
| $— |
| |
| $2.9 |
| |
| $2.7 |
|
| Current liabilities | (0.1 | ) | | (0.1 | ) | | (6.8 | ) | | (6.4 | ) |
| Pension and other benefit obligations | (144.7 | ) | | (139.4 | ) | | (67.8 | ) | | (66.6 | ) |
| Net amounts recognized at December 31 |
| ($144.8 | ) | |
| ($139.5 | ) | |
| ($71.7 | ) | |
| ($70.3 | ) |
Amounts recognized in Regulatory Assets consist of (refer to Note 2 for details): | | | | | | | |
| Net actuarial loss |
| $224.7 |
| |
| $236.1 |
| |
| $23.6 |
| |
| $21.5 |
|
| Prior service credit | (1.5 | ) | | (1.4 | ) | | (1.3 | ) | | (1.5 | ) |
| |
| $223.2 |
| |
| $234.7 |
| |
| $22.3 |
| |
| $20.0 |
|
IncludedActuarial gains related to benefit obligations in 2021 for defined benefit pension and OPEB plans were primarily due to increases in the following tables are accumulateddiscount rates. Actuarial losses related to benefit obligations in 2020 for defined benefit pension and OPEB plans were primarily due to decreases in the discount rates, partially offset by the impact of updated mortality projection tables.
Accumulated benefit obligations, aggregate amounts applicable to defined benefit pension and OPEB plans with accumulated benefit obligations in excess of plan assets, as well as defined benefit pension plans with projected benefit obligations in excess of plan assets as of the December 31 measurement date are as follows (in millions):
| | | | Defined Benefit Pension Plans | | OPEB Plans | | Defined Benefit Pension Plans | | OPEB Plans |
| Alliant Energy | 2017 | | 2016 | | 2017 | | 2016 | Alliant Energy | 2021 | | 2020 | | 2021 | | 2020 |
| Accumulated benefit obligations |
| $1,269.0 |
| |
| $1,201.5 |
| |
| $222.3 |
| |
| $220.1 |
| Accumulated benefit obligations | $1,214 | | | $1,305 | | | $210 | | | $227 | |
| Plans with accumulated benefit obligations in excess of plan assets: | | | | | | | | Plans with accumulated benefit obligations in excess of plan assets: | |
| Accumulated benefit obligations | 1,269.0 |
| | 1,201.5 |
| | 222.3 |
| | 220.1 |
| Accumulated benefit obligations | 1,214 | | | 1,305 | | | 210 | | | 227 | |
| Fair value of plan assets | 950.7 |
| | 895.7 |
| | 111.1 |
| | 105.8 |
| Fair value of plan assets | 1,011 | | | 984 | | | 106 | | | 108 | |
| Plans with projected benefit obligations in excess of plan assets: | | | | | | | | Plans with projected benefit obligations in excess of plan assets: | |
| Projected benefit obligations | 1,303.1 |
| | 1,244.3 |
| | N/A |
| | N/A |
| Projected benefit obligations | 1,251 | | | 1,351 | | | N/A | | N/A |
| Fair value of plan assets | 950.7 |
| | 895.7 |
| | N/A |
| | N/A |
| Fair value of plan assets | 1,011 | | | 984 | | | N/A | | N/A |
| | | | | | | | | | | | | | | | | | | | | | | |
| Defined Benefit Pension Plans | | OPEB Plans |
| IPL | 2021 | | 2020 | | 2021 | | 2020 |
| Accumulated benefit obligations | $546 | | | $589 | | | $84 | | | $91 | |
| Plans with accumulated benefit obligations in excess of plan assets: | | | | | | | |
| Accumulated benefit obligations | 546 | | | 589 | | | 84 | | | 91 | |
| Fair value of plan assets | 462 | | | 453 | | | 74 | | | 74 | |
| Plans with projected benefit obligations in excess of plan assets: | | | | | | | |
| Projected benefit obligations | 567 | | | 615 | | | N/A | | N/A |
| Fair value of plan assets | 462 | | | 453 | | | N/A | | N/A |
| | | | | | | | | | | | | | | | | | | | | | | |
| Defined Benefit Pension Plans | | OPEB Plans |
| WPL | 2021 | | 2020 | | 2021 | | 2020 |
| Accumulated benefit obligations | $532 | | | $573 | | | $81 | | | $89 | |
| Plans with accumulated benefit obligations in excess of plan assets: | | | | | | | |
| Accumulated benefit obligations | 532 | | | 573 | | | 81 | | | 89 | |
| Fair value of plan assets | 450 | | | 436 | | | 17 | | | 18 | |
| Plans with projected benefit obligations in excess of plan assets: | | | | | | | |
| Projected benefit obligations | 546 | | | 588 | | | N/A | | N/A |
| Fair value of plan assets | 450 | | | 436 | | | N/A | | N/A |
|
| | | | | | | | | | | | | | | |
| | Defined Benefit Pension Plans | | OPEB Plans |
| IPL | 2017 | | 2016 | | 2017 | | 2016 |
| Accumulated benefit obligations |
| $573.1 |
| |
| $546.7 |
| |
| $89.4 |
| |
| $90.1 |
|
| Plans with accumulated benefit obligations in excess of plan assets: | | | | | | | |
| Accumulated benefit obligations | 573.1 |
| | 546.7 |
| | 89.4 |
| | 90.1 |
|
| Fair value of plan assets | 443.7 |
| | 422.0 |
| | 72.9 |
| | 68.2 |
|
| Plans with projected benefit obligations in excess of plan assets: | | | | | | | |
| Projected benefit obligations | 592.9 |
| | 570.4 |
| | N/A |
| | N/A |
|
| Fair value of plan assets | 443.7 |
| | 422.0 |
| | N/A |
| | N/A |
|
|
| | | | | | | | | | | | | | | |
| | Defined Benefit Pension Plans | | OPEB Plans |
| WPL | 2017 | | 2016 | | 2017 | | 2016 |
| Accumulated benefit obligations |
| $548.1 |
| |
| $513.2 |
| |
| $90.4 |
| |
| $88.9 |
|
| Plans with accumulated benefit obligations in excess of plan assets: | | | | | | | |
| Accumulated benefit obligations | 548.1 |
| | 513.2 |
| | 90.4 |
| | 88.9 |
|
| Fair value of plan assets | 415.0 |
| | 389.7 |
| | 18.7 |
| | 18.6 |
|
| Plans with projected benefit obligations in excess of plan assets: | | | | | | | |
| Projected benefit obligations | 559.8 |
| | 529.2 |
| | N/A |
| | N/A |
|
| Fair value of plan assets | 415.0 |
| | 389.7 |
| | N/A |
| | N/A |
|
In addition to the amounts recognized in regulatory assets in the above tables for IPL and WPL, regulatory assets were recognized for amounts associated with Corporate Services employees participating in other Alliant Energy sponsored benefit plans that were allocated to IPL and WPL at December 31 as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | |
| IPL | | WPL |
| 2021 | | 2020 | | 2021 | | 2020 |
| Regulatory assets | $35 | | $44 | | $30 | | $34 |
| | | | | | | |
|
| | | | | | | | | | | | | | | |
| | IPL | | WPL |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Regulatory assets |
| $38.9 |
| |
| $37.3 |
| |
| $28.1 |
| |
| $30.0 |
|
Estimated Future Employer Contributions and Benefit Payments - Estimated funding for the qualified and non-qualified defined benefit pension and OPEB plans for 20182022 is as follows (in millions):
| | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| Defined benefit pension plans (a) | $2 | | $— | | $— |
| OPEB plans | 8 | | 2 | | 6 |
|
| | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| Defined benefit pension plans (a) |
| $6.3 |
| |
| $4.4 |
| |
| $0.3 |
|
| OPEB plans | 9.0 |
| | 2.0 |
| | 6.8 |
|
(a)Alliant Energy sponsors several non-qualified defined benefit pension plans that cover certain current and former key employees of IPL and WPL. Alliant Energy allocates pension costs to IPL and WPL for these plans. In addition, IPL and WPL amounts reflect funding for their non-bargaining employees who are participants in the Alliant Energy and Corporate Services sponsored qualified and non-qualified defined benefit pension plans.
| |
(a) | Alliant Energy sponsors several non-qualified defined benefit pension plans that cover certain current and former key employees of IPL and WPL. Alliant Energy allocates pension costs to IPL and WPL for these plans. In addition, IPL and WPL amounts reflect funding for their non-bargaining employees who are participants in the Alliant Energy and Corporate Services sponsored qualified and non-qualified defined benefit pension plans. |
Expected benefit payments for the qualified and non-qualified defined benefit plans, which reflect expected future service, as appropriate, are as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | 2027 - 2031 |
| Defined benefit pension benefits | $85 | | | $83 | | | $82 | | | $82 | | | $83 | | | $387 |
| OPEB | 18 | | | 17 | | | 17 | | | 17 | | | 16 | | | 71 |
| $103 | | | $100 | | | $99 | | | $99 | | | $99 | | | $458 |
| | | Alliant Energy | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | 2023 - 2027 | |
| IPL | | IPL | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | 2027 - 2031 |
| Defined benefit pension benefits |
| $72.2 |
| |
| $73.9 |
| |
| $76.4 |
| |
| $77.1 |
| |
| $92.9 |
| |
| $398.2 |
| Defined benefit pension benefits | $41 | | | $40 | | | $39 | | | $39 | | | $38 | | | $174 |
| OPEB | 18.2 |
| | 18.4 |
| | 17.7 |
| | 17.5 |
| | 17.2 |
| | 80.1 |
| OPEB | 7 | | | 7 | | | 7 | | | 7 | | | 7 | | | 28 |
| |
| $90.4 |
| |
| $92.3 |
| |
| $94.1 |
| |
| $94.6 |
| |
| $110.1 |
| |
| $478.3 |
| | $48 | | | $47 | | | $46 | | | $46 | | | $45 | | | $202 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| WPL | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | 2027 - 2031 |
| Defined benefit pension benefits | $37 | | | $36 | | | $35 | | | $35 | | | $34 | | | $163 |
| OPEB | 7 | | | 7 | | | 7 | | | 7 | | | 6 | | | 27 |
| $44 | | | $43 | | | $42 | | | $42 | | | $40 | | | $190 |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| IPL | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | 2023 - 2027 |
| Defined benefit pension benefits |
| $33.9 |
| |
| $33.8 |
| |
| $36.5 |
| |
| $36.6 |
| |
| $37.6 |
| |
| $188.4 |
|
| OPEB | 7.1 |
| | 7.1 |
| | 7.2 |
| | 7.1 |
| | 7.0 |
| | 32.6 |
|
| |
| $41.0 |
| |
| $40.9 |
| |
| $43.7 |
| |
| $43.7 |
| |
| $44.6 |
| |
| $221.0 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| WPL | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | 2023 - 2027 |
| Defined benefit pension benefits |
| $31.4 |
| |
| $32.0 |
| |
| $32.4 |
| |
| $32.4 |
| |
| $32.7 |
| |
| $167.8 |
|
| OPEB | 8.3 |
| | 8.3 |
| | 7.5 |
| | 7.3 |
| | 7.0 |
| | 31.8 |
|
| |
| $39.7 |
| |
| $40.3 |
| |
| $39.9 |
| |
| $39.7 |
| |
| $39.7 |
| |
| $199.6 |
|
Investment Strategy for Plan Assets - Investment strategies for defined benefit pension and OPEB plan assets combine preservation of principal and prudent risk-taking to protect the integrity of plan assets, in order to meet the obligations to plan participants while minimizing benefit costs over the long term. Investment risk of plan assets is mitigated through diversification, including broad U.S. equity,and international equity, and fixed income exposure, and global asset and risk parity strategies. Global asset and risk parity strategies may include investments in global equity, global debt commodities and currencies.
Defined Benefit Pension Plan Assets - The asset mix of defined benefit pension plans is governed by allocation targets. Historical performance results and future expectations suggest that equity securities will provide higher total investment returns than fixed income securities over a long-term investment horizon. Consistent with the goals of meeting obligations to plan participants and minimizing benefit costs over the long-term, the defined benefit pension plans have a long-term investment posture more heavily weighted toward equity holdings. The asset allocation is monitored regularly, and appropriate steps are taken as needed to rebalance the assets within the prescribed ranges. An overlay management service is also used to help maintain target allocations and meet liquidity needs. The overlay manager is authorized to use derivative financial instruments to facilitate this service. For separately managed accounts, prohibited investments include, but mayare not be limited to, direct ownership of real estate, margin trading, oil and gas limited partnerships, and securities of the managers’ firms or affiliate firms.
firms, and Alliant Energy securities. At December 31, 2017,2021, the current target ranges and actual allocations for the defined benefit pension plan assets were as follows:
| | | | | | | | | | | | | | | | | |
| Target Range | | Actual |
| Allocation | | Allocation |
| Cash and equivalents | 0% | - | 5% | | 3% |
| Equity securities - U.S. | 14% | - | 54% | | 34% |
| Equity securities - international | 11% | - | 31% | | 21% |
| Global asset securities | 5% | - | 15% | | 9% |
| | | | | |
| Fixed income securities | 25% | - | 45% | | 33% |
|
| | | | | | |
| | Target Range | | Actual |
| | Allocation | | Allocation |
| Cash and equivalents | 0 | % | - | 5% | | 3% |
| Equity securities - U.S. | 11 | % | - | 41% | | 24% |
| Equity securities - international | 14 | % | - | 34% | | 23% |
| Global asset securities | 5 | % | - | 15% | | 10% |
| Risk parity securities | 5 | % | - | 15% | | 10% |
| Fixed income securities | 20 | % | - | 40% | | 30% |
Other Postretirement Benefits Plan Assets - OPEB plan assets are comprised of specific assets within certain defined benefit pension plans (401(h) assets) as well as assets held in VEBA trusts. The investment strategy of the Corporate Services 401(h) assets mirrors those of the defined benefit pension plans, which are discussed above. For VEBA trusts with assets greater than $5 million and the WPL 401(h) assets, the mix among asset classes is governed by allocation targets. The asset allocation is monitored regularly, and appropriate steps are taken as needed to rebalance the assets within the prescribed ranges. Mutual funds are used to achieve the desired diversification. At December 31, 2017,2021, the current target ranges and actual allocations for VEBA trusts with assets greater than $5 million and the WPL 401(h) assets were as follows:
| | | | | | | | | | | | | | | | | |
| Target Range | | Actual |
| Allocation | | Allocation |
| Cash and equivalents | 0% | - | 5% | | 1% |
| Equity securities - U.S. | 0% | - | 55% | | 35% |
| | | | | |
| | | | | |
| Fixed income securities | 40% | - | 100% | | 64% |
|
| | | | | | |
| | Target Range | | Actual |
| | Allocation | | Allocation |
| Cash and equivalents | 0 | % | - | 5% | | 1% |
| Equity securities - U.S. | 0 | % | - | 50% | | 26% |
| Equity securities - international | 0 | % | - | 34% | | 10% |
| Fixed income securities | 20 | % | - | 100% | | 63% |
Fair Value Measurements - Fair value measurement accounting establishes three levels of fair value hierarchy that prioritize the inputs to valuation techniques used to measure fair value. Refer to Note 1416 for discussion of levels within the fair value hierarchy. Level 1 items include investments in securities held in registered investment companies treasury bills and directly held equity securities, which are valued at the closing price reported in the active market in which the securities are traded. Level 2 items include fixed income securities consisting of corporate and government bonds, and agency obligations, which are valued at the closing price reported in the active market for similar assets in which the individual securities are traded or based on yields currently available on comparable securities of issuers with similar credit ratings. Certain investments that are measured at fair value using the net asset value practical expedient have not been classified in the fair value hierarchy. These fair value amounts are included in the tables below to reconcile the fair value hierarchy to the respective total plan assets.
At December 31, the fair values of qualified and non-qualified defined benefit pension plan assets were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2021 | | 2020 |
| Fair | | Level | | Level | | Level | | Fair | | Level | | Level | | Level |
| Alliant Energy | Value | | 1 | | 2 | | 3 | | Value | | 1 | | 2 | | 3 |
| Cash and equivalents | $35 | | | $— | | | $35 | | | $— | | | $46 | | | $— | | | $46 | | | $— | |
| Equity securities - U.S. | 256 | | | 256 | | | — | | | — | | | 182 | | | 182 | | | — | | | — | |
| Equity securities - international | — | | | — | | | — | | | — | | | 151 | | | 151 | | | — | | | — | |
| Global asset securities | 52 | | | 52 | | | — | | | — | | | 45 | | | 45 | | | — | | | — | |
| Fixed income securities | 191 | | | 47 | | | 144 | | | — | | | 134 | | | 56 | | | 78 | | | — | |
| Total assets in fair value hierarchy | 534 | | | $355 | | | $179 | | | $— | | | 558 | | | $434 | | | $124 | | | $— | |
| Assets measured at net asset value | 477 | | | | | | | | | 426 | | | | | | | |
| Accrued investment income | 1 | | | | | | | | | 1 | | | | | | | |
| Due to brokers, net (pending trades with brokers) | (1) | | | | | | | | | (1) | | | | | | | |
| Total pension plan assets | $1,011 | | | | | | | | | $984 | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2017 | | 2016 |
| | Fair | | Level | | Level | | Level | | Fair | | Level | | Level | | Level |
| Alliant Energy | Value | | 1 | | 2 | | 3 | | Value | | 1 | | 2 | | 3 |
| Cash and equivalents |
| $28.2 |
| |
| $4.5 |
| |
| $23.7 |
| |
| $— |
| |
| $30.4 |
| |
| $5.0 |
| |
| $25.4 |
| |
| $— |
|
| Equity securities - U.S. | 158.3 |
| | 158.3 |
| | — |
| | — |
| | 183.6 |
| | 183.6 |
| | — |
| | — |
|
| Equity securities - international | 137.5 |
| | 137.5 |
| | — |
| | — |
| | 97.4 |
| | 97.4 |
| | — |
| | — |
|
| Global asset securities | 49.4 |
| | 49.4 |
| | — |
| | — |
| | 53.0 |
| | 53.0 |
| | — |
| | — |
|
| Fixed income securities | 135.9 |
| | 55.8 |
| | 80.1 |
| | — |
| | 125.4 |
| | 53.6 |
| | 71.8 |
| | — |
|
| Total assets in fair value hierarchy | 509.3 |
| |
| $405.5 |
| |
| $103.8 |
| |
| $— |
| | 489.8 |
| |
| $392.6 |
| |
| $97.2 |
| |
| $— |
|
| Assets measured at net asset value | 441.1 |
| | | | | | | | 405.9 |
| | | | | | |
| Accrued investment income | 1.0 |
| | | | | | | | 1.1 |
| | | | | | |
| Due to brokers, net (pending trades with brokers) | (0.7 | ) | | | | | | | | (1.1 | ) | | | | | | |
| Total pension plan assets |
| $950.7 |
| | | | | | | |
| $895.7 |
| | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2017 | | 2016 |
| | Fair | | Level | | Level | | Level | | Fair | | Level | | Level | | Level |
| IPL | Value | | 1 | | 2 | | 3 | | Value | | 1 | | 2 | | 3 |
| Cash and equivalents |
| $13.2 |
| |
| $2.2 |
| |
| $11.0 |
| |
| $— |
| |
| $14.4 |
| |
| $2.4 |
| |
| $12.0 |
| |
| $— |
|
| Equity securities - U.S. | 73.9 |
| | 73.9 |
| | — |
| | — |
| | 86.5 |
| | 86.5 |
| | — |
| | — |
|
| Equity securities - international | 64.2 |
| | 64.2 |
| | — |
| | — |
| | 45.9 |
| | 45.9 |
| | — |
| | — |
|
| Global asset securities | 23.0 |
| | 23.0 |
| | — |
| | — |
| | 24.9 |
| | 24.9 |
| | — |
| | — |
|
| Fixed income securities | 63.4 |
| | 26.0 |
| | 37.4 |
| | — |
| | 59.1 |
| | 25.3 |
| | 33.8 |
| | — |
|
| Total assets in fair value hierarchy | 237.7 |
| |
| $189.3 |
| |
| $48.4 |
| |
| $— |
| | 230.8 |
| |
| $185.0 |
| |
| $45.8 |
| |
| $— |
|
| Assets measured at net asset value | 205.8 |
| | | | | | | | 191.2 |
| | | | | | |
| Accrued investment income | 0.5 |
| | | | | | | | 0.5 |
| | | | | | |
| Due to brokers, net (pending trades with brokers) | (0.3 | ) | | | | | | | | (0.5 | ) | | | | | | |
| Total pension plan assets |
| $443.7 |
| | | | | | | |
| $422.0 |
| | | | | | |
| | | | | | | | | | | | | | | | | | | | 2021 | | 2020 |
| | 2017 | | 2016 | | Fair | | Level | | Level | | Level | | Fair | | Level | | Level | | Level |
| | Fair | | Level | | Level | | Level | | Fair | | Level | | Level | | Level | |
| WPL | Value | | 1 | | 2 | | 3 | | Value | | 1 | | 2 | | 3 | |
| IPL | | IPL | Value | | 1 | | 2 | | 3 | | Value | | 1 | | 2 | | 3 |
| Cash and equivalents |
| $12.3 |
| |
| $2.0 |
| |
| $10.3 |
| |
| $— |
| |
| $13.3 |
| |
| $2.2 |
| |
| $11.1 |
| |
| $— |
| Cash and equivalents | $16 | | | $— | | | $16 | | | $— | | | $21 | | | $— | | | $21 | | | $— | |
| Equity securities - U.S. | 69.1 |
| | 69.1 |
| | — |
| | — |
| | 79.9 |
| | 79.9 |
| | — |
| | — |
| Equity securities - U.S. | 117 | | | 117 | | | — | | | — | | | 84 | | | 84 | | | — | | | — | |
| Equity securities - international | 60.0 |
| | 60.0 |
| | — |
| | — |
| | 42.4 |
| | 42.4 |
| | — |
| | — |
| Equity securities - international | — | | | — | | | — | | | — | | | 69 | | | 69 | | | — | | | — | |
| Global asset securities | 21.6 |
| | 21.6 |
| | — |
| | — |
| | 23.0 |
| | 23.0 |
| | — |
| | — |
| Global asset securities | 24 | | | 24 | | | — | | | — | | | 21 | | | 21 | | | — | | | — | |
| Fixed income securities | 59.3 |
| | 24.3 |
| | 35.0 |
| | — |
| | 54.5 |
| | 23.3 |
| | 31.2 |
| | — |
| Fixed income securities | 87 | | | 21 | | | 66 | | | — | | | 62 | | | 26 | | | 36 | | | — | |
| Total assets in fair value hierarchy | 222.3 |
| |
| $177.0 |
| |
| $45.3 |
| |
| $— |
| | 213.1 |
| |
| $170.8 |
| |
| $42.3 |
| |
| $— |
| Total assets in fair value hierarchy | 244 | | | $162 | | | $82 | | | $— | | | 257 | | | $200 | | | $57 | | | $— | |
| Assets measured at net asset value | 192.5 |
| | | | | | | | 176.6 |
| | | | | | | Assets measured at net asset value | 218 | | | | | | | | | 196 | | | | | | | |
| Accrued investment income | 0.5 |
| | | | | | | | 0.5 |
| | | | | | | |
| Due to brokers, net (pending trades with brokers) | (0.3 | ) | | | | | | | | (0.5 | ) | | | | | | | |
| | Total pension plan assets |
| $415.0 |
| | | | | | | |
| $389.7 |
| | | | | | | Total pension plan assets | $462 | | | $453 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2021 | | 2020 |
| Fair | | Level | | Level | | Level | | Fair | | Level | | Level | | Level |
| WPL | Value | | 1 | | 2 | | 3 | | Value | | 1 | | 2 | | 3 |
| Cash and equivalents | $16 | | | $— | | | $16 | | | $— | | | $20 | | | $— | | | $20 | | | $— | |
| Equity securities - U.S. | 114 | | | 114 | | | — | | | — | | | 81 | | | 81 | | | — | | | — | |
| Equity securities - international | — | | | — | | | — | | | — | | | 67 | | | 67 | | | — | | | — | |
| Global asset securities | 23 | | | 23 | | | — | | | — | | | 20 | | | 20 | | | — | | | — | |
| Fixed income securities | 85 | | | 21 | | | 64 | | | — | | | 59 | | | 25 | | | 34 | | | — | |
| Total assets in fair value hierarchy | 238 | | | $158 | | | $80 | | | $— | | | 247 | | | $193 | | | $54 | | | $— | |
| Assets measured at net asset value | 212 | | | | | | | | | 189 | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Total pension plan assets | $450 | | | | | | | | | $436 | | | | | | | |
At December 31, the fair values of OPEB plan assets were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2021 | | 2020 |
| Fair | | Level | | Level | | Level | | Fair | | Level | | Level | | Level |
| Alliant Energy | Value | | 1 | | 2 | | 3 | | Value | | 1 | | 2 | | 3 |
| Cash and equivalents | $5 | | | $— | | | $5 | | | $— | | | $2 | | | $— | | | $2 | | | $— | |
| Equity securities - U.S. | 11 | | | 11 | | | — | | | — | | | 4 | | | 4 | | | — | | | — | |
| Equity securities - international | — | | | — | | | — | | | — | | | 3 | | | 3 | | | — | | | — | |
| Global asset securities | 1 | | | 1 | | | — | | | — | | | — | | | — | | | — | | | — | |
| Fixed income securities | 60 | | | 58 | | | 2 | | | — | | | 72 | | | 71 | | | 1 | | | — | |
| Total assets in fair value hierarchy | 77 | | | $70 | | | $7 | | | $— | | | 81 | | | $78 | | | $3 | | | $— | |
| Assets measured at net asset value | 29 | | | | | | | | | 27 | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Total OPEB plan assets | $106 | | | | | | | | | $108 | | | | | | | |
| | | | | | | | | | | | | | | | | | | | 2021 | | 2020 |
| | 2017 | | 2016 | | Fair | | Level | | Level | | Level | | Fair | | Level | | Level | | Level |
| | Fair | | Level | | Level | | Level | | Fair | | Level | | Level | | Level | |
| Alliant Energy | Value | | 1 | | 2 | | 3 | | Value | | 1 | | 2 | | 3 | |
| IPL | | IPL | Value | | 1 | | 2 | | 3 | | Value | | 1 | | 2 | | 3 |
| Cash and equivalents |
| $1.2 |
| |
| $0.7 |
| |
| $0.5 |
| |
| $— |
| |
| $3.5 |
| |
| $2.0 |
| |
| $1.5 |
| |
| $— |
| Cash and equivalents | $1 | | | $— | | | $1 | | | $— | | | $1 | | | $— | | | $1 | | | $— | |
| Equity securities - U.S. | 27.9 |
| | 27.9 |
| | — |
| | — |
| | 22.5 |
| | 22.5 |
| | — |
| | — |
| Equity securities - U.S. | 8 | | | 8 | | | — | | | — | | | — | | | — | | | — | | | — | |
| Equity securities - international | 11.4 |
| | 11.4 |
| | — |
| | — |
| | 13.5 |
| | 13.5 |
| | — |
| | — |
| |
| Global asset securities | 0.4 |
| | 0.4 |
| | — |
| | — |
| | 16.5 |
| | 16.5 |
| | — |
| | — |
| |
| | Fixed income securities | 66.6 |
| | 66.0 |
| | 0.6 |
| | — |
| | 46.8 |
| | 46.2 |
| | 0.6 |
| | — |
| Fixed income securities | 42 | | | 42 | | | — | | | — | | | 51 | | | 51 | | | — | | | — | |
| Total assets in fair value hierarchy | 107.5 |
| |
| $106.4 |
| |
| $1.1 |
| |
| $— |
| | 102.8 |
| |
| $100.7 |
| |
| $2.1 |
| |
| $— |
| Total assets in fair value hierarchy | 51 | | | $50 | | | $1 | | | $— | | | 52 | | | $51 | | | $1 | | | $— | |
| Assets measured at net asset value | 3.6 |
| | | | | | | | 3.0 |
| | | | | | | Assets measured at net asset value | 23 | | | | | | | | | 22 | | | | | | | |
| | Total OPEB plan assets |
| $111.1 |
| | | | | | | |
| $105.8 |
| | | | | | | Total OPEB plan assets | $74 | | | $74 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2021 | | 2020 |
| Fair | | Level | | Level | | Level | | Fair | | Level | | Level | | Level |
| WPL | Value | | 1 | | 2 | | 3 | | Value | | 1 | | 2 | | 3 |
| Cash and equivalents | $1 | | | $— | | | $1 | | | $— | | | $— | | | $— | | | $— | | | $— | |
| Equity securities - U.S. | 1 | | | 1 | | | — | | | — | | | — | | | — | | | — | | | — | |
| | | | | | | | | | | | | | | |
| Fixed income securities | 15 | | | 15 | | | — | | | — | | | 18 | | | 18 | | | — | | | — | |
| Total OPEB plan assets | $17 | | | $16 | | | $1 | | | $— | | | $18 | | | $18 | | | $— | | | $— | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2017 | | 2016 |
| | Fair | | Level | | Level | | Level | | Fair | | Level | | Level | | Level |
| IPL | Value | | 1 | | 2 | | 3 | | Value | | 1 | | 2 | | 3 |
| Cash and equivalents |
| $0.3 |
| |
| $0.3 |
| |
| $— |
| |
| $— |
| |
| $0.8 |
| |
| $0.8 |
| |
| $— |
| |
| $— |
|
| Equity securities - U.S. | 22.3 |
| | 22.3 |
| | — |
| | — |
| | 17.0 |
| | 17.0 |
| | — |
| | — |
|
| Equity securities - international | 7.5 |
| | 7.5 |
| | — |
| | — |
| | 11.0 |
| | 11.0 |
| | — |
| | — |
|
| Global asset securities | — |
| | — |
| | — |
| | — |
| | 7.0 |
| | 7.0 |
| | — |
| | — |
|
| Fixed income securities | 42.8 |
| | 42.8 |
| | — |
| | — |
| | 32.4 |
| | 32.4 |
| | — |
| | — |
|
| Total OPEB plan assets |
| $72.9 |
| |
| $72.9 |
| |
| $— |
| |
| $— |
| |
| $68.2 |
| |
| $68.2 |
| |
| $— |
| |
| $— |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2017 | | 2016 |
| | Fair | | Level | | Level | | Level | | Fair | | Level | | Level | | Level |
| WPL | Value | | 1 | | 2 | | 3 | | Value | | 1 | | 2 | | 3 |
| Cash and equivalents |
| $0.6 |
| |
| $0.3 |
| |
| $0.3 |
| |
| $— |
| |
| $2.0 |
| |
| $0.7 |
| |
| $1.3 |
| |
| $— |
|
| Global asset securities | — |
| | — |
| | — |
| | — |
| | 5.5 |
| | 5.5 |
| | — |
| | — |
|
| Fixed income securities | 18.1 |
| | 18.1 |
| | — |
| | — |
| | 11.1 |
| | 11.1 |
| | — |
| | — |
|
| Total OPEB plan assets |
| $18.7 |
| |
| $18.4 |
| |
| $0.3 |
| |
| $— |
| |
| $18.6 |
| |
| $17.3 |
| |
| $1.3 |
| |
| $— |
|
For the various defined benefit pension and OPEB plans, Alliant Energy common stock represented less than 1% of assets directly held in the plans at December 31, 20172021 and 2016.2020.
401(k) Savings Plans - A significant number of employees participate in defined contribution retirement plans (401(k) savings plans). Alliant Energy common stock directly held by participants represented 11.5%9% and 12.6%9% of total assets in the 401(k) savings plans at December 31, 20172021 and 2016,2020, respectively. Costs related to the 401(k) savings plans, which are partially based on the participants’ contributions and include allocated costs associated with Corporate Services employees for IPL and WPL, were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| 401(k) costs | $26 | | | $25 | | | $25 | | | $13 | | | $13 | | | $13 | | | $12 | | | $12 | | | $12 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | | 2016 | | 2015 | | 2017 |
| | 2016 |
| | 2015 |
| | 2017 | | 2016 | | 2015 |
| 401(k) costs |
| $24.8 |
| |
| $23.6 |
| |
| $24.9 |
| |
| $12.8 |
| |
| $12.0 |
| |
| $12.7 |
| |
| $11.1 |
| |
| $10.7 |
| |
| $11.2 |
|
NOTE 12(b)13(b) Equity-based Compensation Plans -In 2015,2020, Alliant Energy’s shareowners approved the Amended and Restated2020 OIP, which permits the grant of shares of Alliant Energy common stock, restricted stock, restricted stock units, performance shares, performance units, and other stock-based or cash-based awards to key employees. The 2020 OIP replaced the Amended and Restated 2010 OIP, which permitted similar grants. At December 31, 2017,2021, performance shares performance-contingent restricted stock and restricted stock units (performance- and time-vesting) were outstanding under the 2020 OIP and the Amended and Restated 2010 OIP, and 7.19 million shares of Alliant Energy’sEnergy common stock remained available for grants under the Amended and Restated2020 OIP. Alliant Energy satisfies share payouts related to equity awards under the Amended and Restated OIP through the issuance of new shares of its common stock. Alliant Energy also has the DLIP, which permits the grant ofgranted cash-based long-term awards, including performance units, restricted cash awards and restricted units, to certain key employees.employees, under the DLIP. At December 31, 2017, performance units, performance-contingent cash2021, no awards and restricted units (performance- and time-vesting) were outstanding under the DLIP. There is no limit to the number of grants that can be made under the DLIP and Alliant Energy satisfies all payouts under the DLIP through cash payments. Nonvested awards generally do not have non-forfeitable rights to dividends or dividend equivalents when dividends are paid to common shareowners.
A summary of compensation expense, including amounts allocated to IPL and WPL, and the related income tax benefits recognized for share-based compensation awards was as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Compensation expense | $14 | | | $16 | | | $26 | | | $8 | | | $9 | | | $15 | | | $6 | | | $6 | | | $10 | |
| Income tax benefits | 4 | | | 4 | | | 7 | | | 2 | | | 2 | | | 4 | | | 2 | | | 2 | | | 3 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Compensation expense |
| $15.1 |
| |
| $18.0 |
| |
| $10.7 |
| |
| $8.3 |
| |
| $9.5 |
| |
| $5.7 |
| |
| $6.4 |
| |
| $7.9 |
| |
| $4.7 |
|
| Income tax benefits | 6.2 |
| | 7.4 |
| | 4.4 |
| | 3.4 |
| | 4.0 |
| | 2.4 |
| | 2.6 |
| | 3.2 |
| | 1.9 |
|
As of December 31, 2017,2021, Alliant Energy’s, IPL’s and WPL’s total unrecognized compensation cost related to share-based compensation awards was $5.6$5 million, $3.1$3 million and $2.2$2 million, respectively, which is expected to be recognized over a weighted average period of between one year and two years. Share-based compensation expense is recognized on a straight-line basis over the requisite service periods and is primarily recorded in “Other operation and maintenance” in the income statements. As of December 31, 2021, 653,956 shares were included in the calculation of diluted EPS related to the nonvested equity awards.
Performance Shares and Performance Units- Equity Awards - Payouts of 2021, 2020 and 2019 performance shares under the Amended and Restated OIP and performance units under the DLIP to key employees are contingent upon achievement over three-year periodsa three-year period of specified performance criteria, which currently include metrics ofis total shareowner return relative to an investor-owned utility peer group. Performance shares cangranted in 2021, 2020 and 2019 are to be paid out in shares of Alliant Energy’sEnergy common stock cash or a combination of cash and stock. Performance units must be paid out in cash. Alliant Energy assumes it will make future payouts of its performance shares and performance units in cash; therefore, performance shares and performance units are accounted for as liabilityequity awards. A summaryThe fair value of theeach of these performance shares and performance units activity, with amounts representing the target number of awards, was as follows:
|
| | | | | | | | | | | | | | | | | |
| | Performance Shares | | Performance Units |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Nonvested awards, January 1 | 257,599 |
| | 288,430 |
| | 288,848 |
| | 93,320 |
| | 116,412 |
| | 127,330 |
|
| Granted | 65,350 |
| | 68,585 |
| | 90,806 |
| | 21,558 |
| | 23,918 |
| | 35,674 |
|
| Vested | (99,438 | ) | | (98,186 | ) | | (91,224 | ) | | (37,395 | ) | | (42,760 | ) | | (45,690 | ) |
| Forfeited | — |
| | (1,230 | ) | | — |
| | (5,746 | ) | | (4,250 | ) | | (902 | ) |
| Nonvested awards, December 31 | 223,511 |
| | 257,599 |
| | 288,430 |
| | 71,737 |
| | 93,320 |
| | 116,412 |
|
Granted Awards - Each performance share’s value is based on the closing market price of one share of Alliant Energy’s common stock at the endfair value of the performance period. For performance units granted in 2017 and 2016, the value is based on the closing market price of one share of Alliant Energy’s common stock at the end of the performance period. For performance units granted in 2015, the value is based on the closing market price of one share of Alliant Energy’sunderlying common stock on the grant date and the probability of satisfying the award.market condition contained in the agreement during a three-year performance period. The actual payout fornumber of these performance shares and performance unitsthat will be paid out upon vesting is dependent upon actual performance and may range from zero to 200% of the target number of awards.shares. If minimum performance targets are not met during the performance period, these performance shares are forfeited. Compensation expense is recorded ratably over the performance period based on the fair value of the awards at the grant date. A summary of the 2021, 2020 and 2019 performance shares activity, with amounts representing the target number of awards, was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2021 | | 2020 | | 2019 |
| Performance Shares - Equity | | Weighted Average Grant Date Fair Value | | Performance Shares - Equity | | Weighted Average Grant Date Fair Value | | Performance Shares - Equity | | Weighted Average Grant Date Fair Value |
| Nonvested awards, January 1 | 129,156 | | | $54.63 | | 74,193 | | | $47.44 | | — | | | $— |
| Granted | 73,112 | | | 46.19 | | 56,204 | | | 64.04 | | 91,816 | | | 47.23 |
| | | | | | | | | | | |
| Forfeited | (5,839) | | | 51.07 | | (1,241) | | | 50.94 | | (17,623) | | | 46.35 |
| Nonvested awards, December 31 | 196,429 | | | 51.59 | | 129,156 | | | 54.63 | | 74,193 | | | 47.44 |
Performance Shares and Performance Units - Liability Awards - Payouts of performance shares granted prior to 2019 under the Amended and Restated 2010 OIP and performance units granted prior to 2019 under the DLIP to key employees were contingent upon achievement over three-year periods of specified performance criteria, which was total shareowner return relative to an investor-owned utility peer group. Performance shares granted prior to 2019 were able to be paid out in shares of Alliant Energy common stock, cash or a combination of cash and stock. Performance units granted prior to 2019 were paid out in cash. Alliant Energy assumed it would make future payouts of its performance shares granted prior to 2019 and performance units in cash; therefore, these performance shares and performance units were accounted for as liability awards. The fair value of each performance share and performance unit accounted for as a liability award was based on the closing market price of 1 share of Alliant Energy common stock at the end of the performance period. The actual payout for performance shares and performance units iswas dependent upon actual performance and may range from zero to 200% of the
target number of awards. Compensation expense for these performance shares and performance units was recorded ratably over the performance period based on the fair value of the awards at each reporting period. A summary of these performance shares and performance units activity, with amounts representing the target number of awards, was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Shares (granted prior to 2019) | | Performance Units (granted prior to 2019) |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Nonvested awards, January 1 | 68,307 | | | 131,872 | | | 203,188 | | | 16,801 | | | 34,574 | | | 57,761 | |
| | | | | | | | | | | |
| Vested | (68,307) | | | (63,565) | | | (66,322) | | | (16,801) | | | (16,661) | | | (20,131) | |
| Forfeited | — | | | — | | | (4,994) | | | — | | | (1,112) | | | (3,056) | |
| Nonvested awards, December 31 | — | | | 68,307 | | | 131,872 | | | — | | | 16,801 | | | 34,574 | |
Vested Awards - Certain performance shares and performance units vested, resulting in payouts (a combination of cash and common stock for the performance shares and cash only for the performance units) as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Performance Shares (granted prior to 2019) | | Performance Units (granted prior to 2019) |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| 2018 Grant | | 2017 Grant | | 2016 Grant | | 2018 Grant | | 2017 Grant | | 2016 Grant |
| Performance awards vested | 68,307 | | 63,565 | | 66,322 | | 16,801 | | 16,661 | | 20,131 |
| Percentage of target number of performance awards | 172.5% | | 155.0% | | 142.5% | | 172.5% | | 155.0% | | 142.5% |
| Aggregate payout value (in millions) | $7 | | $6 | | $4 | | $2 | | $2 | | $1 |
| Payout - cash (in millions) | $5 | | $5 | | $4 | | $2 | | $2 | | $1 |
| Payout - common stock shares issued | 13,644 | | 9,543 | | 6,447 | | N/A | | N/A | | N/A |
|
| | | | | | | | | | | |
| | Performance Shares | | Performance Units |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| | 2014 Grant | | 2013 Grant | | 2012 Grant | | 2014 Grant | | 2013 Grant | | 2012 Grant |
| Performance awards vested | 99,438 | | 98,186 | | 91,224 | | 37,395 | | 42,760 | | 45,690 |
| Percentage of target number of performance awards | 147.5% | | 165.0% | | 167.5% | | 147.5% | | 165.0% | | 167.5% |
| Aggregate payout value (in millions) | $5.6 | | $5.1 | | $5.1 | | $1.5 | | $1.7 | | $1.6 |
| Payout - cash (in millions) | $5.1 | | $2.9 | | $3.2 | | $1.5 | | $1.7 | | $1.6 |
| Payout - common stock shares issued | 5,185 | | 22,408 | | 21,950 | | N/A | | N/A | | N/A |
Fair Value of Awards - Information related to fair values of nonvested performance shares and performance units at December 31, 2017, by year of grant, were as follows:
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Performance Shares | | Performance Units |
| | 2017 Grant | | 2016 Grant | | 2015 Grant | | 2017 Grant | | 2016 Grant | | 2015 Grant |
| Nonvested awards at target | 65,350 |
| | 67,355 |
| | 90,806 |
| | 18,600 |
| | 21,227 |
| | 31,910 |
|
| Alliant Energy common stock closing price on December 29, 2017 |
| $42.61 |
| |
| $42.61 |
| |
| $42.61 |
| |
| $42.61 |
| |
| $42.61 |
| | N/A |
| Alliant Energy common stock closing price on grant date | N/A | | N/A | | N/A | | N/A | | N/A | |
| $32.55 |
|
| Estimated payout percentage based on performance criteria | 105 | % | | 150 | % | | 138 | % | | 105 | % | | 150 | % | | 138 | % |
| Fair values of each nonvested award |
| $44.74 |
| |
| $63.92 |
| |
| $58.80 |
| |
| $44.74 |
| |
| $63.92 |
| |
| $44.92 |
|
Performance Restricted Stock Units - Equity Awards - Payouts of 2021, 2020 and Performance Restricted Units - Alliant Energy granted new types of share-based compensation awards to key employees beginning in 2016 referred to as performance2019 restricted stock units under the Amended and Restated OIP, and performance restricted units and key employee performance restricted units under the DLIP. Payouts of these units are based on the expiration of a three-year time-vesting period. Restricted stock units granted in 2021, 2020 and 2019 are to be paid out in shares of Alliant Energy common stock and are accounted for as equity awards. The fair value of each of these restricted stock units is based on the closing market price of 1 share of Alliant Energy common stock on the grant date of the award. Compensation expense is recorded ratably over the performance period based on the fair value of the awards on the grant date. A summary of the 2021, 2020 and 2019 restricted stock units activity was as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2021 | | 2020 | | 2019 |
| Restricted Stock Units - Equity | | Weighted Average Grant Date Fair Value | | Restricted Stock Units - Equity | | Weighted Average Grant Date Fair Value | | Restricted Stock Units - Equity | | Weighted Average Grant Date Fair Value |
| Nonvested units, January 1 | 146,549 | | | $51.54 | | 89,281 | | | $46.04 | | — | | | $— |
| Granted | 80,152 | | | 48.65 | | 61,056 | | | 59.42 | | 105,348 | | | 45.98 |
| | | | | | | | | | | |
| Forfeited | (8,882) | | | 49.84 | | (3,788) | | | 49.01 | | (16,067) | | | 45.63 |
| Nonvested units, December 31 | 217,819 | | | 50.54 | | 146,549 | | | 51.54 | | 89,281 | | | 46.04 |
Restricted Stock Units - Liability Awards - Payouts of restricted stock units granted prior to 2019 were based on the expiration of a three-year time-vesting period and were able to be paid out in shares of Alliant Energy common stock, cash or a combination of cash and stock. Alliant Energy assumed it would make future payouts of its restricted stock units granted prior to 2019 in cash; therefore, restricted stock units granted prior to 2019 were accounted for as liability awards. The fair value of each restricted stock unit granted prior to 2019 was based on the closing market price of 1 share of Alliant Energy common stock at the end of the time-vesting period. Compensation expense was recorded ratably over the performance period based on the fair value of the awards at each reporting period. A summary of the restricted stock units granted prior to 2019 activity was as follows:
| | | | | | | | | | | | | | | | | |
| 2021 | | 2020 | | 2019 |
| Nonvested units, January 1 | 58,550 | | | 113,033 | | | 174,163 | |
| | | | | |
| Vested | (58,550) | | | (54,483) | | | (56,849) | |
| Forfeited | — | | | — | | | (4,281) | |
| Nonvested units, December 31 | — | | | 58,550 | | | 113,033 | |
Performance Restricted Stock Units - Equity Awards - Payouts of performance restricted stock units are based upon achievement of certain performance targets (currentlyduring a three-year performance period, which currently includes specified growth of consolidated net income from continuing operations) during a three-year performance period.operations. The actual number of units that will be paid out upon vesting is dependent upon actual performance and may range from zero to 200% of the target number of units. If minimum performance targets are not met during the performance period, these units are forfeited. As of December 31, 2017, the amount of nonvested performance restricted units and key employee performance restricted units was not material.
Performance Restricted Stock Units - Performance restricted stock units generally mustare to be paid out in shares and are accounted for as equity awards. EachThe fair value of each performance restricted stock unit’s valueunit is based on the closing market price of one1 share of Alliant Energy’sEnergy common stock on the grant date of the award. Compensation expense is recorded ratably over the performance period based on a probability assessment of payouts for the awards at each reporting period. A summary of the performance restricted stock units activity, with amounts representing the target number of units, was as follows:
|
| | | | | | | | | | | | | |
| | 2017 | | 2016 |
| | Units | | Weighted Average Grant Date Fair Value | | Units | | Weighted Average Grant Date Fair Value |
| Nonvested units, January 1 | 67,355 |
| |
| $33.96 |
| | — |
| |
| $— |
|
| Granted | 65,350 |
| | 39.12 |
| | 68,585 |
| | 33.96 |
|
| Forfeited | — |
| | — |
| | (1,230 | ) | | 33.90 |
|
| Nonvested units, December 31 | 132,705 |
| | 36.50 |
| | 67,355 |
| | 33.96 |
|
Restricted Stock Units and Restricted Units - Alliant Energy granted new types | | | | | | | 2021 | | 2020 | | 2019 |
| | 2017 | | 2016 | | Units | | Weighted Average
Grant Date Fair Value | | Units | | Weighted Average
Grant Date Fair Value | | Units | | Weighted Average
Grant Date Fair Value |
| Nonvested units, January 1 | 57,736 |
| | — |
| Nonvested units, January 1 | 197,463 | | | $47.31 | | 206,065 | | | $41.50 | | 203,188 | | | $37.23 |
| Granted | 56,013 |
| | 58,790 |
| Granted | 73,112 | | | 48.66 | | 56,204 | | | 59.37 | | 91,816 | | | 46.10 |
| Vested | | Vested | (68,307) | | | 38.60 | | (63,565) | | | 39.12 | | (66,322) | | | 33.93 |
| Forfeited | — |
| | (1,054 | ) | Forfeited | (5,839) | | | 50.46 | | (1,241) | | | 49.25 | | (22,617) | | | 44.00 |
| Nonvested units, December 31 | 113,749 |
| | 57,736 |
| Nonvested units, December 31 | 196,429 | | | 50.74 | | 197,463 | | | 47.31 | | 206,065 | | | 41.50 |
Performance-Contingent Restricted Stock and Performance-Contingent Cash Awards - As of December 31, 2017, the amount of nonvested performance-contingent restricted stock and performance-contingent cash awards was not material.
NOTE 12(c)13(c) Deferred Compensation Plan - Alliant Energy maintains a DCP under which key employees may defer up to 100% of base salary and short-term cash incentive compensation and directors may elect to defer all or part of their retainer and committee fees. Key employees who have made the maximum allowed contribution to the Alliant Energy 401(k) Savings Plan may receive an additional credit to the DCP. Key employees and directors may elect to have their deferrals credited to a company stock account, an interest account, equity accounts or mutual fund accounts based on certain benchmark funds.
Company Stock Account - The DCP does not permit diversification of deferrals credited to the company stock account and all distributions from participants’ company stock accounts are made in the form of shares of Alliant Energy common stock. The deferred compensation obligations for participants’ company stock accounts are recorded in “Additional paid-in capital” and the shares of Alliant Energy common stock held in a rabbi trust to satisfy this obligation are recorded in “Shares in deferred compensation trust” on Alliant Energy’s balance sheets. At December 31, the carrying value of the deferred compensation obligation for the company stock account and the shares in the deferred compensation trust based on the historical value of the shares of Alliant Energy common stock contributed to the rabbi trust, and the fair market value of the shares held in the rabbi trust, were as follows (in millions):
| | | | | | | | | | | |
| 2021 | | 2020 |
| Carrying value | $12 | | | $11 | |
| Fair market value | 24 | | | 20 | |
|
| | | | | | | |
| | 2017 | | 2016 |
| Carrying value |
| $11.1 |
| |
| $10.0 |
|
| Fair market value | 19.7 |
| | 16.7 |
|
Interest, Equity and Mutual Fund Accounts - Distributions from participants’ interest, equity and mutual fund accounts are in the form of cash payments. The deferred compensation obligations for participants’ interest, equity and mutual fund accounts are recorded in “Pension and other benefit obligations” on the balance sheets. At December 31, 20172021 and 2016,2020, the carrying value of Alliant Energy’s deferred compensation obligations for participants’ interest, equity and mutual fund accounts, which approximates fair market value, was $21.8$22 million and $19.4$22 million, respectively.
NOTE 13.14. ASSET RETIREMENT OBLIGATIONS
Recognized AROs relate to legal obligations for the removal, closure or dismantlement of several assets including, but not limited to, wind farms, ash ponds, wind farms, active ash landfills, solar generation andcoal yards, above ground storage tanks.tanks and solar generation. Recognized AROs also include legal obligations for the management and final disposition of asbestos and polychlorinated biphenyls and lead-based paint.biphenyls. AROs are recorded in “Other current liabilities” and “Other liabilities” on the balance sheets. Refer to Note 2 for information regarding regulatory assets related to AROs. A reconciliation of the changes in AROs associated with long-lived assets is as follows (in millions): | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 |
| Balance, January 1 | $251 | | | $196 | | | $177 | | | $134 | | | $74 | | | $62 | |
| Revisions in estimated cash flows | 50 | | | 13 | | | 44 | | | 9 | | | 6 | | | 4 | |
| Liabilities settled | (17) | | | (13) | | | (13) | | | (9) | | | (4) | | | (4) | |
| Liabilities incurred | 3 | | | 48 | | | — | | | 38 | | | 3 | | | 10 | |
| Accretion expense | 7 | | | 7 | | | 5 | | | 5 | | | 2 | | | 2 | |
| Balance, December 31 | $294 | | | $251 | | | $213 | | | $177 | | | $81 | | | $74 | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Balance, January 1 |
| $195.7 |
| |
| $214.0 |
| |
| $124.7 |
| |
| $132.9 |
| |
| $61.4 |
| |
| $71.9 |
|
| Revisions in estimated cash flows | 4.3 |
| | (13.3 | ) | | 7.0 |
| | (5.8 | ) | | (2.7 | ) | | (7.5 | ) |
| Liabilities settled | (23.5 | ) | | (14.0 | ) | | (13.1 | ) | | (6.8 | ) | | (10.4 | ) | | (7.2 | ) |
| Liabilities incurred | 2.0 |
| | 2.6 |
| | 11.7 |
| | 0.7 |
| | — |
| | 1.9 |
|
| Accretion expense | 6.0 |
| | 6.4 |
| | 3.8 |
| | 3.7 |
| | 2.1 |
| | 2.3 |
|
| Balance, December 31 |
| $184.5 |
| |
| $195.7 |
| |
| $134.1 |
| |
| $124.7 |
| |
| $50.4 |
| |
| $61.4 |
|
In addition, certain AROs related to EGU assets have not been recognized. Due to an indeterminate remediation date, the fair values of the AROs for these assets cannot be currently estimated. A liability for these AROs will be recorded when fair value is determinable. Removal costs of these EGUs are being recovered in rates and are recorded in regulatory liabilities.
NOTE 14. FAIR VALUE MEASUREMENTS
Valuation Hierarchy - Fair value measurement accounting establishes three levels of fair value hierarchy that prioritize the inputs to valuation techniques used to measure fair value. Level 1 pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 pricing inputs are quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active as of the reporting date. Level 3 pricing inputs are unobservable inputs for assets or liabilities for which little or no market data exist and require significant management judgment or estimation.
The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. The lowest level input that is significant to a fair value measurement in its entirety determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.
Valuation Techniques -
Derivative assets and derivative liabilities - Derivative instruments are used for risk management purposes to mitigate exposures to fluctuations in certain commodity prices, transmission congestion costs and rail transportation costs. Risk policies are maintained that govern the use of such derivative instruments. Derivative instruments were not designated as hedging instruments and included the following:
|
| |
Risk management purpose | Type of instrument |
Mitigate pricing volatility for: | |
Electricity purchased to supply customers | Electric physical forward contracts (WPL) |
Fuel used to supply natural gas-fired EGUs | Natural gas swap, options and physical forward contracts (IPL and WPL) |
Natural gas supplied to retail customers | Natural gas options and physical forward contracts (IPL and WPL) |
| Natural gas swap contracts (IPL) |
Fuel used at coal-fired EGUs | Coal physical forward contracts (IPL and WPL) |
Optimize the value of natural gas pipeline capacity | Natural gas physical forward contracts (IPL and WPL) |
| Natural gas swap contracts (IPL) |
Manage transmission congestion costs | FTRs (IPL and WPL) |
Manage rail transportation costs | Diesel fuel swap contracts (WPL) |
Swap, option and physical forward commodity contracts were non-exchange-based derivative instruments and were valued using indicative price quotations from a pricing vendor that provides daily exchange forward price settlements, from broker or dealer quotations, from market publications or from on-line exchanges. The indicative price quotations reflected the average of the bid-ask mid-point prices and were obtained from sources believed to provide the most liquid market for the commodity. A portion of these indicative price quotations were corroborated using quoted prices for similar assets or
liabilities in active markets and categorized derivative instruments based on such indicative price quotations as Level 2. Commodity contracts that were valued using indicative price quotations based on significant assumptions such as seasonal or monthly shaping and indicative price quotations that could not be readily corroborated were categorized as Level 3. Swap, option and physical forward commodity contracts were predominately at liquid trading points. FTRs were valued using auction prices and were categorized as Level 3. Refer to Note 15 for additional details of derivative assets and derivative liabilities.
Deferred proceeds (sales of receivables) - The fair value of IPL’s deferred proceeds related to its sales of accounts receivable program was calculated each reporting date using the cost approach valuation technique. The fair value represents the carrying amount of receivables sold less the allowance for doubtful accounts associated with the receivables sold and cash amounts received from the receivables sold due to the short-term nature of the collection period. These inputs were considered unobservable and deferred proceeds were categorized as Level 3. Deferred proceeds represent IPL’s maximum exposure to loss related to the receivables sold. Refer to Note 5(b) for additional information regarding deferred proceeds.
Long-term debt (including current maturities) - The fair value of long-term debt instruments was based on quoted market prices for similar liabilities at each reporting date or on a discounted cash flow methodology, which utilizes assumptions of current market pricing curves at each reporting date, and was substantially classified as Level 2. Refer to Note 9(b) for additional information regarding long-term debt.
Cumulative preferred stock - The fair value of IPL’s 5.1% cumulative preferred stock was based on its closing market price quoted by the New York Stock Exchange at each reporting date, and was classified as Level 1. Refer to Note 8 for additional information regarding cumulative preferred stock.
Fair Value of Financial Instruments - The carrying amounts of current assets and current liabilities approximate fair value because of the short maturity of such financial instruments. Carrying amounts and the related estimated fair values of other financial instruments at December 31 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | 2017 | | 2016 |
| | | | Fair Value | | | | Fair Value |
| | Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | |
| | Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total |
| Assets: | | | | | | | | | | | | | | | | | | | |
| Derivatives |
| $25.1 |
| |
| $— |
| |
| $4.1 |
| |
| $21.0 |
| |
| $25.1 |
| |
| $41.4 |
| |
| $— |
| |
| $4.6 |
| |
| $36.8 |
| |
| $41.4 |
|
| Deferred proceeds | 222.1 |
| | — |
| | — |
| | 222.1 |
| | 222.1 |
| | 211.1 |
| | — |
| | — |
| | 211.1 |
| | 211.1 |
|
| Liabilities and equity: | | | | | | | | | | | | | | | | | | | |
| Derivatives | 41.7 |
| | — |
| | 8.5 |
| | 33.2 |
| | 41.7 |
| | 28.6 |
| | — |
| | 0.5 |
| | 28.1 |
| | 28.6 |
|
| Long-term debt (incl. current maturities) | 4,866.3 |
| | — |
| | 5,444.6 |
| | 2.9 |
| | 5,447.5 |
| | 4,320.2 |
| | — |
| | 4,795.7 |
| | 3.3 |
| | 4,799.0 |
|
| Cumulative preferred stock of IPL | 200.0 |
| | 203.8 |
| | — |
| | — |
| | 203.8 |
| | 200.0 |
| | 194.8 |
| | — |
| | — |
| | 194.8 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IPL | 2017 | | 2016 |
| | | | Fair Value | | | | Fair Value |
| | Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | |
| | Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total |
| Assets: | | | | | | | | | | | | | | | | | | | |
| Derivatives |
| $17.1 |
| |
| $— |
| |
| $2.0 |
| |
| $15.1 |
| |
| $17.1 |
| |
| $20.8 |
| |
| $— |
| |
| $2.8 |
| |
| $18.0 |
| |
| $20.8 |
|
| Deferred proceeds | 222.1 |
| | — |
| | — |
| | 222.1 |
| | 222.1 |
| | 211.1 |
| | — |
| | — |
| | 211.1 |
| | 211.1 |
|
| Liabilities and equity: | | | | | | | | | | | | | | | | | | | |
| Derivatives | 19.4 |
| | — |
| | 2.9 |
| | 16.5 |
| | 19.4 |
| | 8.3 |
| | — |
| | 0.4 |
| | 7.9 |
| | 8.3 |
|
| Long-term debt (incl. current maturities) | 2,406.0 |
| | — |
| | 2,665.7 |
| | — |
| | 2,665.7 |
| | 2,153.5 |
| | — |
| | 2,352.3 |
| | — |
| | 2,352.3 |
|
| Cumulative preferred stock | 200.0 |
| | 203.8 |
| | — |
| | — |
| | 203.8 |
| | 200.0 |
| | 194.8 |
| | — |
| | — |
| | 194.8 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| WPL | 2017 | | 2016 |
| | | | Fair Value | | | | Fair Value |
| | Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | |
| | Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total |
| Assets: | | | | | | | | | | | | | | | | | | | |
| Derivatives |
| $8.0 |
| |
| $— |
| |
| $2.1 |
| |
| $5.9 |
| |
| $8.0 |
| |
| $20.6 |
| |
| $— |
| |
| $1.8 |
| |
| $18.8 |
| |
| $20.6 |
|
| Liabilities and equity: | | | | | | | | | | | | | | | | | | | |
| Derivatives | 22.3 |
| | — |
| | 5.6 |
| | 16.7 |
| | 22.3 |
| | 20.3 |
| | — |
| | 0.1 |
| | 20.2 |
| | 20.3 |
|
| Long-term debt | 1,833.4 |
| | — |
| | 2,147.9 |
| | — |
| | 2,147.9 |
| | 1,535.2 |
| | — |
| | 1,807.4 |
| | — |
| | 1,807.4 |
|
Information for fair value measurements using significant unobservable inputs (Level 3 inputs) was as follows (in millions):
|
| | | | | | | | | | | | | | | |
| Alliant Energy | Commodity Contract Derivative | | |
| | Assets and (Liabilities), net | | Deferred Proceeds |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Beginning balance, January 1 |
| $8.7 |
| |
| ($32.7 | ) | |
| $211.1 |
| |
| $172.0 |
|
| Total net gains (losses) included in changes in net assets (realized/unrealized) | (32.9 | ) | | 30.7 |
| | — |
| | — |
|
| Transfers into Level 3 | — |
| | 0.9 |
| | — |
| | — |
|
| Transfers out of Level 3 | 12.2 |
| | 1.2 |
| | — |
| | — |
|
| Purchases | 28.3 |
| | 22.0 |
| | — |
| | — |
|
| Sales | (0.3 | ) | | (1.0 | ) | | — |
| | — |
|
| Settlements (a) | (28.2 | ) | | (12.4 | ) | | 11.0 |
| | 39.1 |
|
| Ending balance, December 31 |
| ($12.2 | ) | |
| $8.7 |
| |
| $222.1 |
| |
| $211.1 |
|
| The amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at December 31 |
| ($31.0 | ) | |
| $32.7 |
| |
| $— |
| |
| $— |
|
|
| | | | | | | | | | | | | | | |
| IPL | Commodity Contract Derivative | | |
| | Assets and (Liabilities), net | | Deferred Proceeds |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Beginning balance, January 1 |
| $10.1 |
| |
| ($1.9 | ) | |
| $211.1 |
| |
| $172.0 |
|
| Total net gains (losses) included in changes in net assets (realized/unrealized) | (14.8 | ) | | 7.3 |
| | — |
| | — |
|
| Transfers into Level 3 | — |
| | 0.5 |
| | — |
| | — |
|
| Transfers out of Level 3 | 3.1 |
| | 0.2 |
| | — |
| | — |
|
| Purchases | 24.6 |
| | 20.6 |
| | — |
| | — |
|
| Sales | (0.2 | ) | | (1.0 | ) | | — |
| | — |
|
| Settlements (a) | (24.2 | ) | | (15.6 | ) | | 11.0 |
| | 39.1 |
|
| Ending balance, December 31 |
| ($1.4 | ) | |
| $10.1 |
| |
| $222.1 |
| |
| $211.1 |
|
| The amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at December 31 |
| ($13.5 | ) | |
| $8.5 |
| |
| $— |
| |
| $— |
|
|
| | | | | | | |
| WPL | Commodity Contract Derivative |
| | Assets and (Liabilities), net |
| | 2017 | | 2016 |
| Beginning balance, January 1 |
| ($1.4 | ) | |
| ($30.8 | ) |
| Total net gains (losses) included in changes in net assets (realized/unrealized) | (18.1 | ) | | 23.4 |
|
| Transfers into Level 3 | — |
| | 0.4 |
|
| Transfers out of Level 3 | 9.1 |
| | 1.0 |
|
| Purchases | 3.7 |
| | 1.4 |
|
| Sales | (0.1 | ) | | — |
|
| Settlements | (4.0 | ) | | 3.2 |
|
| Ending balance, December 31 |
| ($10.8 | ) | |
| ($1.4 | ) |
| The amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at December 31 |
| ($17.5 | ) | |
| $24.2 |
|
| |
(a) | Settlements related to deferred proceeds are due to the change in the carrying amount of receivables sold less the allowance for doubtful accounts associated with the receivables sold and cash amounts received from the receivables sold. |
Commodity Contracts - The fair value of electric, natural gas, coal and diesel fuel commodity contracts categorized as Level 3 was recognized as net derivative assets (liabilities) at December 31 as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | Excluding FTRs | | FTRs | | Excluding FTRs | | FTRs | | Excluding FTRs | | FTRs |
| 2017 |
| ($23.5 | ) | |
| $11.3 |
| |
| ($11.5 | ) | |
| $10.1 |
| |
| ($12.0 | ) | |
| $1.2 |
|
| 2016 | (2.3 | ) | | 11.0 |
| | 0.1 |
| | 10.0 |
| | (2.4 | ) | | 1.0 |
|
NOTE 15. DERIVATIVE INSTRUMENTS
Commodity Derivatives -
Purpose - Derivative instruments are used for risk management purposes to mitigate exposures to fluctuations in certain commodity prices, transmission congestion costs and rail transportation costs. Refer to Note 14 for detailed discussionRisk policies are maintained that govern the use of such derivative instruments. Derivative instruments were not designated as hedging instruments and included the following:
| | | | | |
| Risk management purpose | Type of instrument |
| Mitigate pricing volatility for: | |
| Fuel used to supply natural gas-fired EGUs | Natural gas swap, options and physical forward contracts (IPL and WPL) |
| Natural gas supplied to retail customers | Natural gas swap, options and physical forward contracts (IPL and WPL) |
| Fuel used at coal-fired EGUs | Coal physical forward contracts (IPL and WPL) |
| Optimize the value of natural gas pipeline capacity | Natural gas physical forward contracts (IPL and WPL) |
| Natural gas swap contracts (IPL) |
| Manage transmission congestion costs | FTRs (IPL and WPL) |
| Manage rail transportation costs | Diesel fuel swap contracts (WPL) |
Notional Amounts - As of December 31, 2017,2021, gross notional amounts and settlement/delivery years related to outstanding swap contracts, option contracts, physical forward contracts and FTRs that were accounted for as commodity derivative instruments were as follows (units in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | FTRs | | Natural Gas | | Coal | | Diesel Fuel |
| | | | | MWhs | | Years | | Dths | | Years | | Tons | | Years | | Gallons | | Years |
| Alliant Energy | | | | | 9,135 | | | 2022 | | 191,670 | | | 2022-2030 | | 3,193 | | | 2022-2023 | | 3,024 | | | 2022 |
| IPL | | | | | 2,647 | | | 2022 | | 100,560 | | | 2022-2030 | | 1,270 | | | 2022-2023 | | — | | | — |
| WPL | | | | | 6,488 | | | 2022 | | 91,110 | | | 2022-2030 | | 1,923 | | | 2022-2023 | | 3,024 | | | 2022 |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Electricity | | FTRs | | Natural Gas | | Coal | | Diesel Fuel |
| | MWhs | | Years | | MWhs | | Years | | Dths | | Years | | Tons | | Years | | Gallons | | Years |
| Alliant Energy | 1,314 |
| | 2018 | | 8,970 |
| | 2018 | | 170,463 |
| | 2018-2026 | | 8,177 |
| | 2018-2020 | | 6,552 |
| | 2018-2019 |
| IPL | — |
| | — | | 5,886 |
| | 2018 | | 72,662 |
| | 2018-2026 | | 3,339 |
| | 2018-2020 | | — |
| | — |
| WPL | 1,314 |
| | 2018 | | 3,084 |
| | 2018 | | 97,801 |
| | 2018-2026 | | 4,838 |
| | 2018-2020 | | 6,552 |
| | 2018-2019 |
Financial Statement Presentation - Derivative instruments are recorded at fair value each reporting date on the balance sheet as assets or liabilities. At December 31, the fair values of current derivative assets are included in “Other current assets,” non-current derivative assets are included in “Deferred charges and other,” current derivative liabilities are included in “Other current liabilities” and non-current derivative liabilities are included in “Other liabilities” on the balance sheets as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2021 | | 2020 | | 2021 | | 2020 | | 2021 | | 2020 |
| Current derivative assets | $113 | | $24 | | $48 | | $20 | | $65 | | $4 |
| Non-current derivative assets | 63 | | 10 | | 36 | | 9 | | 27 | | 1 |
| Current derivative liabilities | 8 | | 9 | | 4 | | 3 | | 4 | | 6 |
| Non-current derivative liabilities | 1 | | 16 | | — | | 9 | | 1 | | 7 |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Current derivative assets |
| $21.1 |
| |
| $29.4 |
| |
| $15.8 |
| |
| $19.1 |
| |
| $5.3 |
| |
| $10.3 |
|
| Non-current derivative assets | 4.0 |
| | 12.0 |
| | 1.3 |
| | 1.7 |
| | 2.7 |
| | 10.3 |
|
| Current derivative liabilities | 18.7 |
| | 13.3 |
| | 5.0 |
| | 2.7 |
| | 13.7 |
| | 10.6 |
|
| Non-current derivative liabilities | 23.0 |
| | 15.3 |
| | 14.4 |
| | 5.6 |
| | 8.6 |
| | 9.7 |
|
In 2021, Alliant Energy’s, IPL’s and WPL’s derivative assets increased and derivative liabilities decreased primarily as a result of higher natural gas prices. Based on IPL’s and WPL’s natural gas cost recovery mechanisms, this resulted in corresponding decreases in derivative regulatory assets and increases in derivative regulatory liabilities on the balance sheets.
Credit Risk-related Contingent Features - Various agreements contain credit risk-related contingent features, including requirements to maintain certain credit ratings and/or limitations on liability positions under the agreements based on credit ratings. Certain of these agreements with credit risk-related contingency features are accounted for as derivative instruments. In the event of a material change in creditworthiness or if liability positions exceed certain contractual limits, credit support may need to be provided in the form of letters of credit or cash collateral up to the amount of exposure under the contracts, or the contracts may need to be unwound and underlying liability positions paid. At December 31, 20172021 and 2016,2020, the aggregate fair value of all derivative instruments with credit risk-related contingent features in a net liability position was not materially different than amounts that would be required to be posted as credit support to counterparties by Alliant Energy, IPL or WPL if the most restrictive credit risk-related contingent features for derivative agreements in a net liability position were triggered.
Balance Sheet Offsetting - The fair value amounts of derivative instruments subject to a master netting arrangement are not netted by counterparty on the balance sheets. However, if the fair value amounts of derivative instruments by counterparty were netted, amounts would not be materially different from gross amounts of derivative assets and derivative liabilities at December 31, 20172021 and 2016.2020. Fair value amounts recognized for the right to reclaim cash collateral (receivable) or the obligation to return cash collateral (payable) are not offset against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement.
NOTE 16. FAIR VALUE MEASUREMENTS
Valuation Hierarchy - Fair value measurement accounting establishes three levels of fair value hierarchy that prioritize the inputs to valuation techniques used to measure fair value. Level 1 pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the reporting date. Level 2 pricing inputs are quoted prices for similar assets or liabilities in active markets or quoted prices for identical or similar assets or liabilities in markets that are not active as of the reporting date. Level 3 pricing inputs are unobservable inputs for assets or liabilities for which little or no market data exist and require significant management judgment or estimation.
The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. The lowest level input that is significant to a fair value measurement in its entirety determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.
NOTE 16. COMMITMENTS AND CONTINGENCIES
NOTE 16(a) Capital Purchase ObligationsDerivative assets and derivative liabilities - Various contractual obligations contain minimum future commitmentsSwap, option and physical forward commodity contracts were non-exchange-based derivative instruments and were valued using indicative price quotations from a pricing vendor that provides daily exchange forward price settlements, from broker or dealer quotations, from market publications or from on-line exchanges. The indicative price quotations reflected the average of the bid-ask mid-point prices and were obtained from sources believed to provide the most liquid market for the commodity. A portion of these indicative price quotations were corroborated using quoted prices for similar assets or liabilities in active markets and categorized derivative instruments based on such indicative price quotations as Level 2. Commodity contracts that were valued using indicative price quotations based on significant assumptions such as seasonal or monthly shaping and indicative price quotations that could not be readily corroborated were categorized as Level 3. Swap, option and physical forward commodity contracts were predominately at liquid trading points. FTRs were valued using auction prices and were categorized as Level 3. Refer to Note 15 for additional details of derivative assets and derivative liabilities.
Deferred proceeds (sales of receivables) - The fair value of IPL’s deferred proceeds related to capital expendituresits sales of accounts receivable program was calculated each reporting date using the cost approach valuation technique. The fair value represents the carrying amount of receivables sold less the allowance for certain construction projects.expected credit losses associated with the receivables sold and cash amounts received from the receivables sold due to the short-term nature of the collection period. These inputs were considered unobservable and deferred proceeds were categorized as Level 3. Deferred proceeds represent IPL’s projects include the expansion of wind generation and installation of an SCR system at Ottumwa Unit 1maximum exposure to reduce NOx emissions at the EGU. WPL’s projects include West Riverside. At December 31, 2017, Alliant Energy’s, IPL’s and WPL’s minimum future commitmentsloss related to certain contractual obligationsthe receivables sold. Refer to Note 5(b) for these projects were $82 million, $15 millionadditional information regarding deferred proceeds.
Long-term debt (including current maturities) - The fair value of long-term debt instruments was based on a discounted cash flow methodology using observable data from comparably traded securities with similar credit profiles, and $67 million, respectively.was substantially classified as Level 2. Refer to Note 9(b) for additional information regarding long-term debt.
NOTE 16(b) Other Purchase ObligationsFair Value of Financial Instruments - Various commodity supply, transportationThe carrying amounts of current assets and storage contracts help meet obligations to provide electricitycurrent liabilities approximate fair value because of the short maturity of such financial instruments. Carrying amounts and natural gas to utility customers. In addition, there are various purchase obligations associated withthe related estimated fair values of other goods and services. At financial instruments at December 31 2017, minimum future commitments related to these purchase obligations were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | 2021 | | 2020 |
| | | Fair Value | | | | Fair Value |
| Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | |
| Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total |
| Assets: | | | | | | | | | | | | | | | | | | | |
| Money market fund investments | $32 | | | $32 | | | $— | | | $— | | | $32 | | | $44 | | | $44 | | | $— | | | $— | | | $44 | |
| Derivatives | 176 | | | — | | | 146 | | | 30 | | | 176 | | | 34 | | | — | | | 5 | | | 29 | | | 34 | |
| Deferred proceeds | 214 | | | — | | | — | | | 214 | | | 214 | | | 188 | | | — | | | — | | | 188 | | | 188 | |
| Liabilities and equity: | | | | | | | | | | | | | | | | | | | |
| Derivatives | 9 | | | — | | | 8 | | | 1 | | | 9 | | | 25 | | | — | | | 25 | | | — | | | 25 | |
| Long-term debt (incl. current maturities) | 7,368 | | | — | | | 8,329 | | | 1 | | | 8,330 | | | 6,777 | | | — | | | 8,107 | | | 2 | | | 8,109 | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | Thereafter | | Total |
| Purchased power (a) |
| $188 |
| |
| $159 |
| |
| $135 |
| |
| $149 |
| |
| $140 |
| |
| $461 |
| |
| $1,232 |
|
| Natural gas | 229 |
| | 140 |
| | 130 |
| | 110 |
| | 84 |
| | 253 |
| | 946 |
|
| Coal (b) | 107 |
| | 59 |
| | 21 |
| | 5 |
| | — |
| | — |
| | 192 |
|
| Other (c) | 21 |
| | 6 |
| | 6 |
| | 3 |
| | 2 |
| | 2 |
| | 40 |
|
| |
| $545 |
| |
| $364 |
| |
| $292 |
| |
| $267 |
| |
| $226 |
| |
| $716 |
| |
| $2,410 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IPL | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | Thereafter | | Total |
| Purchased power (a) |
| $130 |
| |
| $144 |
| |
| $135 |
| |
| $149 |
| |
| $140 |
| |
| $461 |
| |
| $1,159 |
|
| Natural gas | 126 |
| | 58 |
| | 44 |
| | 32 |
| | 22 |
| | 102 |
| | 384 |
|
| Coal (b) | 51 |
| | 31 |
| | 11 |
| | 5 |
| | — |
| | — |
| | 98 |
|
| Other (c) | 15 |
| | 3 |
| | 3 |
| | 3 |
| | 2 |
| | 2 |
| | 28 |
|
| |
| $322 |
| |
| $236 |
| |
| $193 |
| |
| $189 |
| |
| $164 |
| |
| $565 |
| |
| $1,669 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| WPL | 2018 | | 2019 | | 2020 | | 2021 | | 2022 | | Thereafter | | Total |
| Purchased power (a) |
| $58 |
| |
| $15 |
| |
| $— |
| |
| $— |
| |
| $— |
| |
| $— |
| |
| $73 |
|
| Natural gas | 103 |
| | 82 |
| | 86 |
| | 78 |
| | 62 |
| | 151 |
| | 562 |
|
| Coal (b) | 56 |
| | 28 |
| | 10 |
| | — |
| | — |
| | — |
| | 94 |
|
| Other (c) | 5 |
| | 1 |
| | — |
| | — |
| | — |
| | — |
| | 6 |
|
| |
| $222 |
| |
| $126 |
| |
| $96 |
| |
| $78 |
| |
| $62 |
| |
| $151 |
| |
| $735 |
|
| |
(a) | Includes payments required by PPAs for capacity rights and minimum quantities of MWhs required to be purchased. |
| |
(b) | Corporate Services entered into system-wide coal contracts on behalf of IPL and WPL that include minimum future commitments. These commitments were assigned to IPL and WPL based on information available as of December 31, 2017 regarding expected future usage, which is subject to change. |
| |
(c) | Includes individual commitments incurred during the normal course of business that exceeded $1 million at December 31, 2017. |
Certain contracts are considered leases and are therefore not included here, but are included in Note 10.
NOTE 16(c) Legal Proceedings -
Flood Damage Claims - In 2013, several plaintiffs purporting to represent a class of residential and commercial property owners filed a complaint against CRANDIC, Alliant Energy and various other defendants in the Iowa District Court for Linn County. Plaintiffs assert claims of negligence and strict liability based on their allegations that CRANDIC (along with other defendants) caused or exacerbated flooding of the Cedar River in June 2008. In February 2016, the Iowa District Court for Linn County ruled in favor of Alliant Energy and CRANDIC and dismissed all claims against them, resulting in no loss. In August 2016, the Iowa District Court for Linn County dismissed all claims against the remaining defendants. In September 2016, plaintiffs filed a notice of appeal with the Supreme Court of Iowa. Alliant Energy does not currently believe any material losses for this complaint are both probable and reasonably estimated, and therefore has not recognized any material loss contingency amounts as of December 31, 2017.
Other - Alliant Energy, IPL and WPL are involved in other legal and administrative proceedings before various courts and agencies with respect to matters arising in the ordinary course of business. Although unable to predict the outcome of these matters, Alliant Energy, IPL and WPL believe that appropriate reserves have been established and final disposition of these actions will not have a material effect on their financial condition or results of operations.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IPL | 2021 | | 2020 |
| | | Fair Value | | | | Fair Value |
| Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | |
| Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total |
| Assets: | | | | | | | | | | | | | | | | | | | |
| Money market fund investments | $32 | | | $32 | | | $— | | | $— | | | $32 | | | $44 | | | $44 | | | $— | | | $— | | | $44 | |
| Derivatives | 84 | | | — | | | 65 | | | 19 | | | 84 | | | 29 | | | — | | | 3 | | | 26 | | | 29 | |
| Deferred proceeds | 214 | | | — | | | — | | | 214 | | | 214 | | | 188 | | | — | | | — | | | 188 | | | 188 | |
| Liabilities and equity: | | | | | | | | | | | | | | | | | | | |
| Derivatives | 4 | | | — | | | 3 | | | 1 | | | 4 | | | 12 | | | — | | | 12 | | | — | | | 12 | |
| Long-term debt | 3,643 | | | — | | | 4,124 | | | — | | | 4,124 | | | 3,345 | | | — | | | 4,021 | | | — | | | 4,021 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| WPL | 2021 | | 2020 |
| | | Fair Value | | | | Fair Value |
| Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | |
| Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total |
| Assets: | | | | | | | | | | | | | | | | | | | |
| Derivatives | $92 | | | $— | | | $81 | | | $11 | | | $92 | | | $5 | | | $— | | | $2 | | | $3 | | | $5 | |
| Liabilities and equity: | | | | | | | | | | | | | | | | | | | |
| Derivatives | 5 | | | — | | | 5 | | | — | | | 5 | | | 13 | | | — | | | 13 | | | — | | | 13 | |
| Long-term debt (incl. current maturities) | 2,429 | | | — | | | 2,862 | | | — | | | 2,862 | | | 2,130 | | | — | | | 2,690 | | | — | | | 2,690 | |
NOTE 16(d) Guarantees and Indemnifications -
Whiting Petroleum - In 2004, Alliant Energy sold its remaining interest in Whiting Petroleum. Whiting Petroleum is an independent oil and gas company. Alliant Energy Resources, LLC,Information for fair value measurements using significant unobservable inputs (Level 3 inputs) was as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | Commodity Contract Derivative | | |
| Assets and (Liabilities), net | | Deferred Proceeds |
| 2021 | | 2020 | | 2021 | | 2020 |
| Beginning balance, January 1 | $29 | | | $21 | | | $188 | | | $188 | |
| Total net gains included in changes in net assets (realized/unrealized) | 6 | | | 11 | | | — | | | — | |
| | | | | | | |
| | | | | | | |
| Purchases | 21 | | | 14 | | | — | | | — | |
| Sales | (1) | | | (1) | | | — | | | — | |
| Settlements (a) | (26) | | | (16) | | | 26 | | | — | |
| Ending balance, December 31 | $29 | | | $29 | | | $214 | | | $188 | |
| The amount of total net gains for the period included in changes in net assets attributable to the change in unrealized gains relating to assets and liabilities held at December 31 | $6 | | | $11 | | | $— | | | $— | |
| | | | | | | | | | | | | | | | | | | | | | | |
| IPL | Commodity Contract Derivative | | |
| Assets and (Liabilities), net | | Deferred Proceeds |
| 2021 | | 2020 | | 2021 | | 2020 |
| Beginning balance, January 1 | $26 | | | $18 | | | $188 | | | $188 | |
| Total net gains (losses) included in changes in net assets (realized/unrealized) | (3) | | | 10 | | | — | | | — | |
| | | | | | | |
| | | | | | | |
| Purchases | 16 | | | 11 | | | — | | | — | |
| Sales | (1) | | | (1) | | | — | | | — | |
| Settlements (a) | (20) | | | (12) | | | 26 | | | — | |
| Ending balance, December 31 | $18 | | | $26 | | | $214 | | | $188 | |
| The amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at December 31 | ($3) | | | $10 | | | $— | | | $— | |
| | | | | | | | | | | |
| WPL | Commodity Contract Derivative |
| Assets and (Liabilities), net |
| 2021 | | 2020 |
| Beginning balance, January 1 | $3 | | | $3 | |
| Total net gains included in changes in net assets (realized/unrealized) | 9 | | | 1 | |
| | | |
| | | |
| Purchases | 5 | | | 3 | |
| | | |
| Settlements | (6) | | | (4) | |
| Ending balance, December 31 | $11 | | | $3 | |
| The amount of total net gains for the period included in changes in net assets attributable to the change in unrealized gains relating to assets and liabilities held at December 31 | $9 | | | $1 | |
(a)Settlements related to deferred proceeds are due to the successor to a predecessor entity that owned Whiting Petroleum, and a wholly-owned subsidiary of AEF, continues to guarantee the partnership obligations of an affiliate of Whiting Petroleum under general partnership agreementschange in the oil and gas industry, including with respect tocarrying amount of receivables sold less the future abandonment of certain platforms off the coast of California and related onshore plant and equipment owned by the partnerships. The guarantees do not include a maximum limit. As of December 31, 2017, the present value of the abandonment obligations is estimated at $33 million. Alliant Energy is not aware of any material liabilities related to these guarantees of which it is probable that Alliant Energy Resources, LLC will be obligated to pay and therefore has not recognized any material liabilities related to this guarantee as of December 31, 2017.
Non-utility Wind Investment in Oklahoma - In July 2017, a wholly-owned subsidiary of AEF acquired a cash equity ownership interest in a non-utility wind farm located in Oklahoma. The wind farm provides electricity to a third-party under a long-term PPA. Alliant Energy provided a parent guarantee of its subsidiary’s indemnification obligations under the related operating agreement and PPA. Alliant Energy’s obligations under the operating agreement were $98 million as of December 31, 2017 and will reduce annually until expiring in July 2047. Alliant Energy’s obligations under the PPA are subject to a maximum limit of $17 million and expire in December 2031, subject to potential extension. Alliant Energy is not aware of any material liabilities related to this guarantee that it is probable that it will be obligated to pay and therefore has not recognized any material liabilities related to this guarantee as of December 31, 2017. Refer to Note 6(a)allowance for further discussion of the non-utility wind investment.
IPL’s Minnesota Electric Distribution Assets - IPL provided indemnificationsexpected credit losses associated with the July 2015 salereceivables sold and cash amounts received from the receivables sold.
Commodity Contracts - The fair value of its Minnesota electric distributionFTR and natural gas commodity contracts categorized as Level 3 was recognized as net derivative assets for losses resulting from potential breach of IPL’s representations, warranties and obligations under the sale agreement. Alliant Energy and IPL believe the likelihood of having to make any material cash payments under these indemnifications is remote. IPL has not recorded any material liabilities related to these indemnifications as ofat December 31 2017. The general terms of the indemnifications provided by IPL included a maximum limit of $17 million and expire in October 2020. Refer to Note 3 for further discussion of the sale of IPL’s Minnesota electric distribution assets.
NOTE 16(e) Environmental Matters - Alliant Energy, IPL and WPL are subject to environmental regulations as a result of their current and past operations. These regulations are designed to protect public health and the environment and have resulted in compliance, remediation, containment and monitoring obligations, which are recorded as current and non-current environmental liabilities. Substantially all of the environmental liabilities recorded on the balance sheets relate to MGP sites.
MGP Sites - IPL and WPL have current or previous ownership interests in various sites that are previously associated with the production of gas for which IPL and WPL have, or may have in the future, liability for investigation, remediation and monitoring costs. IPL and WPL are working pursuant to the requirements of various federal and state agencies to investigate, mitigate, prevent and remediate, where necessary, the environmental impacts to property, including natural resources, at and around these former MGP sites in order to protect public health and the environment. At December 31, 2017, estimated future costs expected to be incurred for the investigation, remediation and monitoring of the MGP sites, as well as environmental liabilities recorded on the balance sheets for these sites, which are not discounted, were as follows (in millions). At December 31, 2017, such amounts for WPL were not material.:
|
| | | | | | | | | | | |
| | Alliant Energy | | IPL |
| Range of estimated future costs |
| $11 |
| - | $30 | |
| $9 |
| - | $27 |
| Current and non-current environmental liabilities | 15 | | 13 |
WPL Consent Decree - In 2013, the U.S. District Court for the Western District of Wisconsin approved a Consent Decree that WPL, along with the other owners of Edgewater and Columbia, entered into with the EPA and the Sierra Club, thereby resolving claims against WPL. Such claims included allegations that the owners of Edgewater, Nelson Dewey and Columbia violated the Prevention of Significant Deterioration program requirements, Title V Operating Permit requirements of the CAA and the Wisconsin State Implementation Plan designed to implement the CAA.
WPL has completed various requirements under the Consent Decree. WPL’s remaining requirements include installing an SCR system at Columbia Unit 2 and fuel switching or retiring Edgewater Unit 4 by December 31, 2018. The Consent Decree also establishes SO2, NOx and particulate matter emission rate limits for Columbia Units 1 and 2, and Edgewater Units 4 and 5. In addition, the Consent Decree includes annual plant-wide SO2 and NOx emission caps for Columbia and Edgewater. Alliant Energy and WPL currently expect to recover material costs incurred by WPL related to compliance with the terms of the Consent Decree from WPL’s electric customers.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| Excluding FTRs | | FTRs | | Excluding FTRs | | FTRs | | Excluding FTRs | | FTRs |
| 2021 | $9 | | | $20 | | | $8 | | | $10 | | | $1 | | | $10 | |
| 2020 | 18 | | | 11 | | | 17 | | | 9 | | | 1 | | | 2 | |
IPL Consent Decree - In 2015, the U.S. District Court for the Northern District of Iowa approved a Consent Decree that IPL entered into with the EPA, the Sierra Club, the State of Iowa and Linn County in Iowa, thereby resolving potential CAA issues associated with emissions from IPL’s coal-fired generating facilities in Iowa. IPL has completed various requirements under the Consent Decree. IPL’s remaining requirements include installing an SCR system or equivalent NOx reduction system at Ottumwa by December 31, 2019, and fuel switching or retiring Burlington by December 31, 2021 and Prairie Creek Units 1 and 3 by December 31, 2025.
The Consent Decree also establishes SO2, NOx and particulate matter emission rate limits with varying averaging times for Burlington, Lansing, M.L. Kapp, Ottumwa and Prairie Creek. In addition, the Consent Decree includes calendar-year SO2 and NOx emission caps for Prairie Creek, and calendar-year SO2 and NOx emission caps in aggregate for Burlington, Lansing, M.L. Kapp, Ottumwa and Prairie Creek. Alliant Energy and IPL currently expect to recover material costs incurred by IPL related to compliance with the terms of the Consent Decree from IPL’s electric customers.
Other Environmental Contingencies - In addition to the environmental liabilities discussed above, various environmental rules are monitored that may have a significant impact on future operations. Several of these environmental rules are subject to legal challenges, reconsideration and/or other uncertainties. Given uncertainties regarding the outcome, timing and compliance plans for these environmental matters, the complete financial impact of each of these rules is not able to be determined; however future capital investments and/or modifications to EGUs to comply with certain of these rules could be significant. Specific current, proposed or potential environmental matters include, among others: CSAPR, Effluent Limitation Guidelines, CCR Rule, and various legislation and EPA regulations to monitor and regulate the emission of GHG, including carbon emissions from new (CAA Section 111(b)) and existing (CAA Section 111(d)) fossil-fueled EGUs.
NOTE 16(f) Credit Risk - IPL provides retail electric and gas services in Iowa and wholesale electric service in Minnesota, Illinois and Iowa. WPL provides retail electric and gas services and wholesale electric service in Wisconsin. The geographic concentration of IPL’s and WPL’s customers did not contribute significantly to overall credit risk exposure. In addition, as a result of a diverse customer base, IPL and WPL did not have any significant credit risk concentration for receivables arising from the sale of electricity or gas services.
Alliant Energy, IPL and WPL are subject to credit risk related to the ability of counterparties to meet their contractual payment obligations or the potential non-performance of counterparties to deliver contracted commodities and other goods or services at the contracted price. Credit policies are maintained to mitigate credit risk. These credit policies include evaluation of the financial condition of certain counterparties, use of credit risk-related contingent provisions in certain agreements that require credit support from counterparties not meeting specific criteria, diversification of counterparties to reduce concentrations of credit risk and the use of standardized agreements that facilitate the netting of cash flows associated with certain counterparties. Based on these credit policies and counterparty diversification, as well as utility cost recovery mechanisms, it is unlikely that counterparty non-performance would have a material effect on financial condition or results of operations. However, there is no assurance that these items will protect against all losses from counterparty non-performance.
Refer to Notes 5(a) and 15 for details of allowances for doubtful accounts and credit risk-related contingent features, respectively.
NOTE 17. SEGMENTS OF BUSINESSCOMMITMENTS AND CONTINGENCIES
NOTE 17(a) Capital Purchase Commitments - Various contractual obligations contain minimum future commitments related to capital expenditures for certain construction projects, including WPL’s expansion of solar generation. At December 31, 2021, Alliant Energy’s and WPL’s minimum future commitments in 2022 for these projects were $178 million and $177 million, respectively.
NOTE 17(b) Other Purchase Commitments - Various commodity supply, transportation and storage contracts help meet obligations to provide electricity and natural gas to utility customers. In addition, there are various purchase commitments associated with other goods and services. At December 31, 2021, the fourth quarterrelated minimum future commitments were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | Thereafter | | Total |
| | | | | | | | | | | | | |
| Natural gas | $307 | | $196 | | $144 | | $102 | | $88 | | $175 | | $1,012 |
| Coal | 63 | | 46 | | 25 | | 3 | | — | | — | | 137 |
| Other (a) | 82 | | 14 | | 8 | | 5 | | 2 | | 25 | | 136 |
| $452 | | $256 | | $177 | | $110 | | $90 | | $200 | | $1,285 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IPL | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | Thereafter | | Total |
| | | | | | | | | | | | | |
| Natural gas | $148 | | $108 | | $84 | | $52 | | $42 | | $65 | | $499 |
| Coal | 32 | | 27 | | 17 | | 3 | | — | | — | | 79 |
| Other (a) | 34 | | 4 | | 2 | | 2 | | 2 | | 23 | | 67 |
| $214 | | $139 | | $103 | | $57 | | $44 | | $88 | | $645 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| WPL | 2022 | | 2023 | | 2024 | | 2025 | | 2026 | | Thereafter | | Total |
| | | | | | | | | | | | | |
| Natural gas | $159 | | $88 | | $60 | | $50 | | $46 | | $110 | | $513 |
| Coal | 31 | | 19 | | 8 | | — | | — | | — | | 58 |
| Other (a) | 33 | | 1 | | 1 | | 1 | | 1 | | — | | 37 |
| $223 | | $108 | | $69 | | $51 | | $47 | | $110 | | $608 |
(a)Includes individual commitments incurred during the normal course of 2017,business that exceeded $1 million at December 31, 2021.
NOTE 17(c) Legal Proceedings - Alliant Energy, IPL and WPL modifiedare involved in legal and administrative proceedings before various courts and agencies with respect to matters arising in the segment reporting relatedordinary course of business. Although unable to predict the outcome of these matters, Alliant Energy, IPL and WPL believe that appropriate reserves have been established and final disposition of these actions will not have a material effect on their ATC Investment, consistentfinancial condition or results of operations.
NOTE 17(d) Guarantees and Indemnifications -
Whiting Petroleum - Whiting Petroleum is an independent oil and gas company. In 2004, Alliant Energy sold its remaining interest in Whiting Petroleum. Alliant Energy Resources, LLC, as the successor to a predecessor entity that owned Whiting Petroleum, and a wholly-owned subsidiary of AEF, continues to guarantee the partnership obligations of an affiliate of Whiting Petroleum under multiple general partnership agreements in the oil and gas industry. The guarantees do not include a maximum limit. Based on information made available to Alliant Energy by Whiting Petroleum, the Whiting Petroleum affiliate holds an approximate 6% share in the partnerships, and currently known obligations include costs associated with information usedthe future abandonment of certain facilities owned by their chief operating decision makerthe partnerships. The general partnerships were formed under California law, and Alliant Energy Resources, LLC may need to evaluate performance and allocate resources. perform under the guarantees if the affiliate of Whiting Petroleum is unable to meet its partnership obligations.
As of December 31, 2017,2021, the ATC Investment is no longer included incurrently known partnership obligations for the abandonment obligations are estimated at $60 million, which represents Alliant Energy’s utility electric operations reportable segment or WPL’s electric operations reportable segment. Ascurrently estimated maximum exposure under the guarantees. Alliant Energy estimates its expected loss to be a result, all prior period amounts impacted by this change were reclassifiedportion of the $60 million of known partnership abandonment obligations of the Whiting Petroleum affiliate and the other partners. Alliant Energy is not aware of any material liabilities related to conformthese guarantees that it is probable that it will be obligated to pay; however, as of both December 31, 2021 and 2020, a liability of $5 million is recorded in “Other liabilities” on Alliant Energy’s balance sheets for expected credit losses related to the new presentation.contingent obligations that are in the scope of these guarantees.
Non-utility Wind Farm in Oklahoma - In 2017, a wholly-owned subsidiary of AEF acquired a cash equity ownership interest in a non-utility wind farm located in Oklahoma. The wind farm provides electricity to a third-party under a long-term PPA. Alliant Energy provided a parent guarantee of its subsidiary’s indemnification obligations under the related operating agreement and PPA. Alliant Energy’s obligations under the operating agreement were $67 million as of December 31, 2021 and will reduce annually until expiring in July 2047. Alliant Energy’s obligations under the PPA are subject to a maximum limit of $17 million and expire in December 2031, subject to potential extension. Alliant Energy is not aware of any material liabilities related amounts were reclassified from “Electric Utility” to “ATC Investment, Non-Utility, Parentthis guarantee that it is probable that it will be obligated to pay and Other.” WPL’stherefore has not recognized any material liabilities related amounts were reclassified from “Electric” to “Other.”
this guarantee as of December 31, 2021 and 2020.
NOTE 17(e) Environmental Matters - Alliant Energy, - Alliant Energy’s principal businesses as of December 31, 2017 are:
Utility - includes the operations of IPL and WPL are subject to environmental regulations as a result of their current and past operations. These regulations are designed to protect public health and the environment and have resulted in compliance, remediation, containment and monitoring obligations, which primarily serveare recorded as current and non-current environmental liabilities. Substantially all of the environmental liabilities recorded on the balance sheets relate to MGP sites.
Manufactured Gas Plant Sites - IPL and WPL have current or previous ownership interests in various sites that are previously associated with the production of gas for which IPL and WPL have, or may have in the future, liability for investigation, remediation and monitoring costs. IPL and WPL are working pursuant to the requirements of various federal and state agencies to investigate, mitigate, prevent and remediate, where necessary, the environmental impacts to property, including natural resources, at and around these former MGP sites in order to protect public health and the environment. At December 31, 2021, estimated future costs expected to be incurred for the investigation, remediation and monitoring of the MGP sites, as well as environmental liabilities recorded on the balance sheets for these sites, which are not discounted, were as follows (in millions). At December 31, 2021, such amounts for WPL were not material.
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL |
| Range of estimated future costs | $8 | | - | $24 | | $6 | | - | $18 |
| Current and non-current environmental liabilities | 11 | | 8 |
IPL Consent Decree - In 2015, the U.S. District Court for the Northern District of Iowa approved a Consent Decree that IPL entered into with the EPA, the Sierra Club, the State of Iowa and Linn County in Iowa, thereby resolving potential CAA issues associated with emissions from IPL’s coal-fired generating facilities in Iowa. IPL has completed various requirements under the Consent Decree. IPL’s remaining requirements include fuel switching or retiring Prairie Creek Units 1 and 3 by December 31, 2025. Alliant Energy and IPL currently expect to recover material costs incurred by IPL related to compliance with the terms of the Consent Decree from IPL’s electric customers.
Other Environmental Contingencies - In addition to the environmental liabilities discussed above, various environmental rules are monitored that may have a significant impact on future operations. Several of these environmental rules are subject to legal challenges, reconsideration and/or other uncertainties. Given uncertainties regarding the outcome, timing and compliance plans for these environmental matters, the complete financial impact of each of these rules is not able to be determined; however future capital investments and/or modifications to EGUs and electric and gas distribution systems to comply with certain of these rules could be significant. Specific current, proposed or potential environmental matters include, among others: Effluent Limitation Guidelines, CCR Rule, and various legislation and EPA regulations to monitor and regulate the emission of GHG, including the CAA.
NOTE 17(f) Credit Risk - IPL provides retail customerselectric and gas services in Iowa and Wisconsin. The utility business has three reportable segments: a) utilitywholesale electric operations; b) utility gas operations;service in Minnesota, Illinois and c) utility other, which includes steam operations and the unallocated portions of the utility business. Various line items in the following tables are not allocated to theIowa. WPL provides retail electric and gas segmentsservices and wholesale electric service in Wisconsin. The geographic concentration of IPL’s and WPL’s customers did not contribute significantly to overall credit risk exposure. In addition, as a result of a diverse customer base, IPL and WPL did not have any significant credit risk concentration for management reporting purposes, and therefore, are included only in “Total Utility.”receivables arising from the sale of electricity or gas services.
| |
• | ATC Investment, Non-utility, Parent and Other - includes the operations of AEF and its subsidiaries, Corporate Services, the Alliant Energy parent company, and any Alliant Energy parent company consolidating adjustments. AEF is comprised of Alliant Energy’s ATC Investment, Transportation, a non-utility wind investment, the Sheboygan Falls Energy Facility and other non-utility investments, which are described in Note 1(a). |
Alliant Energy’s administrative support servicesEnergy, IPL and WPL are directly chargedsubject to credit risk related to the applicable segment where practicable. Inability of counterparties to meet their contractual payment obligations or the potential non-performance of counterparties to deliver contracted commodities and other goods or services at the contracted price. Credit policies are maintained to mitigate credit risk. These credit policies include evaluation of the financial condition of certain counterparties, use of credit risk-related contingent provisions in certain agreements that require credit support from counterparties not meeting specific criteria, diversification of counterparties to reduce concentrations of credit risk and the use of standardized agreements that facilitate the netting of cash flows associated with certain counterparties. Based on these credit policies and counterparty diversification, as well as utility cost recovery mechanisms, it is unlikely that counterparty non-performance would have a material effect on financial condition or results of operations. However, there is no assurance that these items will protect against all other cases, administrative support services are allocatedlosses from counterparty non-performance.
Refer to the applicable segment based on services agreements. Intersegment revenues were not material to Alliant Energy’s operationsNotes 5(a) and there was no single customer whose revenues were 10% or more15 for details of allowances for expected credit losses and credit risk-related contingent features, respectively.
NOTE 17(g) Collective Bargaining Agreements - At December 31, 2021, employees covered by collective bargaining agreements represented 54%, 69% and 83% of total employees of Alliant Energy’s consolidated revenues. AllEnergy, IPL and WPL, respectively. In May 2022, WPL’s collective bargaining agreement with International Brotherhood of Electrical Workers Local 965 expires, representing 26% and 83% of total employees of Alliant Energy’s operationsEnergy and assets are located in the U.S.WPL, respectively.
Certain financial information relating to Alliant Energy’s business segments, which represent the services provided to its customers, was as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | ATC Investment, | | |
| | Utility | | Non-utility, | | Alliant Energy |
| 2017 | Electric | | Gas | | Other | | Total | | Parent and Other | | Consolidated |
| Operating revenues |
| $2,894.7 |
| |
| $400.9 |
| |
| $47.5 |
| |
| $3,343.1 |
| |
| $39.1 |
| |
| $3,382.2 |
|
| Depreciation and amortization | 412.0 |
| | 38.2 |
| | 7.7 |
| | 457.9 |
| | 3.9 |
| | 461.8 |
|
| Operating income (loss) | 586.5 |
| | 45.3 |
| | (11.7 | ) | | 620.1 |
| | 33.3 |
| | 653.4 |
|
| Interest expense | | | | | | | 206.2 |
| | 9.4 |
| | 215.6 |
|
| Equity income from unconsolidated investments, net | (0.7 | ) | | — |
| | — |
| | (0.7 | ) | | (44.1 | ) | | (44.8 | ) |
| Income taxes | | | | | | | 51.0 |
| | 15.7 |
| | 66.7 |
|
| Net income attributable to Alliant Energy common shareowners | | | | | | | 403.4 |
| | 53.9 |
| | 457.3 |
|
| Total assets | 11,396.2 |
| | 1,199.8 |
| | 766.5 |
| | 13,362.5 |
| | 825.3 |
| | 14,187.8 |
|
| Investments in equity method subsidiaries | 8.3 |
| | — |
| | — |
| | 8.3 |
| | 373.1 |
| | 381.4 |
|
| Construction and acquisition expenditures | 1,154.9 |
| | 125.2 |
| | 1.7 |
| | 1,281.8 |
| | 185.1 |
| | 1,466.9 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | ATC Investment, | | |
| | Utility | | Non-utility, | | Alliant Energy |
| 2016 | Electric | | Gas | | Other | | Total | | Parent and Other | | Consolidated |
| Operating revenues |
| $2,875.5 |
| |
| $355.4 |
| |
| $48.6 |
| |
| $3,279.5 |
| |
| $40.5 |
| |
| $3,320.0 |
|
| Depreciation and amortization | 367.0 |
| | 34.2 |
| | 2.1 |
| | 403.3 |
| | 8.3 |
| | 411.6 |
|
| Operating income (loss) | 571.9 |
| | 30.7 |
| | (4.8 | ) | | 597.8 |
| | (60.8 | ) | | 537.0 |
|
| Interest expense | | | | | | | 194.6 |
| | 1.6 |
| | 196.2 |
|
| Equity income from unconsolidated investments, net | (0.7 | ) | | — |
| | — |
| | (0.7 | ) | | (38.9 | ) | | (39.6 | ) |
| Income tax expense (benefit) | | | | | | | 71.4 |
| | (12.0 | ) | | 59.4 |
|
| Net income (loss) attributable to Alliant Energy common shareowners | | | | | | | 385.2 |
| | (13.7 | ) | | 371.5 |
|
| Total assets | 10,722.9 |
| | 1,091.1 |
| | 781.0 |
| | 12,595.0 |
| | 778.8 |
| | 13,373.8 |
|
| Investments in equity method subsidiaries | 7.7 |
| | — |
| | — |
| | 7.7 |
| | 318.3 |
| | 326.0 |
|
| Construction and acquisition expenditures | 994.0 |
| | 137.1 |
| | 0.1 |
| | 1,131.2 |
| | 65.6 |
| | 1,196.8 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | ATC Investment, | | |
| | Utility | | Non-utility, | | Alliant Energy |
| 2015 | Electric | | Gas | | Other | | Total | | Parent and Other | | Consolidated |
| Operating revenues |
| $2,770.5 |
| |
| $381.2 |
| |
| $57.9 |
| |
| $3,209.6 |
| |
| $44.0 |
| |
| $3,253.6 |
|
| Depreciation and amortization | 358.6 |
| | 31.1 |
| | 1.8 |
| | 391.5 |
| | 9.8 |
| | 401.3 |
|
| Operating income | 514.1 |
| | 34.6 |
| | 1.9 |
| | 550.6 |
| | 26.4 |
| | 577.0 |
|
| Interest expense | | | | | | | 189.2 |
| | (2.1 | ) | | 187.1 |
|
| Equity income from unconsolidated investments, net | (0.9 | ) | | — |
| | — |
| | (0.9 | ) | | (32.9 | ) | | (33.8 | ) |
| Income taxes | | | | | | | 46.2 |
| | 24.2 |
| | 70.4 |
|
| Net income attributable to Alliant Energy common shareowners | | | | | | | 343.4 |
| | 34.8 |
| | 378.2 |
|
| Total assets | 9,918.0 |
| | 939.3 |
| | 828.9 |
| | 11,686.2 |
| | 809.0 |
| | 12,495.2 |
|
| Investments in equity method subsidiaries | 8.7 |
| | — |
| | — |
| | 8.7 |
| | 294.2 |
| | 302.9 |
|
| Construction and acquisition expenditures | 852.5 |
| | 106.4 |
| | 1.4 |
| | 960.3 |
| | 74.0 |
| | 1,034.3 |
|
IPL - IPL is a utility primarily serving retail customers in Iowa and includes three reportable segments: a) electric operations; b) gas operations; and c) other, which includes steam operations and the unallocated portions of the utility business. Various line items in the following tables are not allocated to the electric and gas segments for management reporting purposes, and therefore, are included only in “Total.” Intersegment revenues were not material to IPL’s operations and there was no single customer whose revenues were 10% or more of IPL’s consolidated revenues. All of IPL’s operations and assets are located in the U.S. Certain financial information relating to IPL’s business segments, which represent the services provided to its customers, was as follows (in millions):
|
| | | | | | | | | | | | | | | |
| 2017 | Electric | | Gas | | Other | | Total |
| Operating revenues |
| $1,598.9 |
| |
| $226.0 |
| |
| $45.4 |
| |
| $1,870.3 |
|
| Depreciation and amortization | 215.1 |
| | 22.2 |
| | 7.7 |
| | 245.0 |
|
| Operating income (loss) | 281.1 |
| | 20.8 |
| | (5.0 | ) | | 296.9 |
|
| Interest expense | | | | | | | 112.4 |
|
| Income tax benefit | | | | | | | (10.9 | ) |
| Earnings available for common stock | | | | | | | 216.8 |
|
| Total assets | 6,524.4 |
| | 727.9 |
| | 353.7 |
| | 7,606.0 |
|
| Construction and acquisition expenditures | 594.1 |
| | 80.7 |
| | 1.2 |
| | 676.0 |
|
|
| | | | | | | | | | | | | | | |
| 2016 | Electric | | Gas | | Other | | Total |
| Operating revenues |
| $1,569.7 |
| |
| $204.0 |
| |
| $46.7 |
| |
| $1,820.4 |
|
| Depreciation and amortization | 189.4 |
| | 19.3 |
| | 2.1 |
| | 210.8 |
|
| Operating income | 252.0 |
| | 15.5 |
| | 3.3 |
| | 270.8 |
|
| Interest expense | | | | | | | 103.2 |
|
| Income tax benefit | | | | | | | (5.9 | ) |
| Earnings available for common stock | | | | | | | 215.6 |
|
| Total assets | 6,278.2 |
| | 653.3 |
| | 373.2 |
| | 7,304.7 |
|
| Construction and acquisition expenditures | 598.1 |
| | 91.5 |
| | 0.1 |
| | 689.7 |
|
|
| | | | | | | | | | | | | | | |
| 2015 | Electric | | Gas | | Other | | Total |
| Operating revenues |
| $1,503.8 |
| |
| $217.3 |
| |
| $53.4 |
| |
| $1,774.5 |
|
| Depreciation and amortization | 187.9 |
| | 17.5 |
| | 1.8 |
| | 207.2 |
|
| Operating income | 218.8 |
| | 17.7 |
| | 5.4 |
| | 241.9 |
|
| Interest expense | | | | | | | 96.8 |
|
| Income tax benefit | | | | | | | (22.7 | ) |
| Earnings available for common stock | | | | | | | 186.0 |
|
| Total assets | 5,754.1 |
| | 548.2 |
| | 406.8 |
| | 6,709.1 |
|
| Construction and acquisition expenditures | 561.2 |
| | 56.7 |
| | 1.4 |
| | 619.3 |
|
WPL - WPL is a utility serving customers in Wisconsin and includes three reportable segments: a) electric operations; b) gas operations; and c) other, which includes WPL’s investment in ATC in 2015 and 2016, and the unallocated portions of the utility business. Refer to Note 6(a) for discussion of WPL’s transfer of its investment in ATC to ATI as of December 31, 2016. Various line items in the following tables are not allocated to the electric and gas segments for management reporting purposes, and therefore, are included only in “Total.” Intersegment revenues were not material to WPL’s operations and there was no single customer whose revenues were 10% or more of WPL’s consolidated revenues. All of WPL’s operations and assets are located in the U.S. Certain financial information relating to WPL’s business segments, which represent the services provided to its customers, was as follows (in millions): |
| | | | | | | | | | | | | | | |
| 2017 | Electric | | Gas | | Other | | Total |
| Operating revenues |
| $1,295.8 |
| |
| $174.9 |
| |
| $2.1 |
| |
| $1,472.8 |
|
| Depreciation and amortization | 196.9 |
| | 16.0 |
| | — |
| | 212.9 |
|
| Operating income (loss) | 305.4 |
| | 24.5 |
| | (6.7 | ) | | 323.2 |
|
| Interest expense | | | | | | | 93.8 |
|
| Equity income from unconsolidated investments | (0.7 | ) | | — |
| | — |
| | (0.7 | ) |
| Income taxes | | | | | | | 61.9 |
|
| Earnings available for common stock | | | | | | | 186.6 |
|
| Total assets | 4,871.8 |
| | 471.9 |
| | 412.8 |
| | 5,756.5 |
|
| Investments in equity method subsidiaries | 8.3 |
| | — |
| | — |
| | 8.3 |
|
| Construction and acquisition expenditures | 592.4 |
| | 44.5 |
| | 0.5 |
| | 637.4 |
|
|
| | | | | | | | | | | | | | | |
| 2016 | Electric | | Gas | | Other | | Total |
| Operating revenues |
| $1,305.8 |
| |
| $151.4 |
| |
| $1.9 |
| |
| $1,459.1 |
|
| Depreciation and amortization | 177.6 |
| | 14.9 |
| | — |
| | 192.5 |
|
| Operating income (loss) | 319.9 |
| | 15.2 |
| | (8.1 | ) | | 327.0 |
|
| Interest expense | | | | | | | 91.4 |
|
| Equity income from unconsolidated investments | (0.7 | ) | | — |
| | (39.1 | ) | | (39.8 | ) |
| Income taxes | | | | | | | 93.3 |
|
| Earnings available for common stock | | | | | | | 190.4 |
|
| Total assets | 4,444.7 |
| | 437.8 |
| | 407.8 |
| | 5,290.3 |
|
| Investments in equity method subsidiaries | 7.7 |
| | — |
| | — |
| | 7.7 |
|
| Construction and acquisition expenditures | 395.9 |
| | 45.6 |
| | 11.5 |
| | 453.0 |
|
|
| | | | | | | | | | | | | | | |
| 2015 | Electric | | Gas | | Other | | Total |
| Operating revenues |
| $1,266.7 |
| |
| $163.9 |
| |
| $4.5 |
| |
| $1,435.1 |
|
| Depreciation and amortization | 170.7 |
| | 13.6 |
| | — |
| | 184.3 |
|
| Operating income (loss) | 295.3 |
| | 16.9 |
| | (3.5 | ) | | 308.7 |
|
| Interest expense | | | | | | | 92.4 |
|
| Equity income from unconsolidated investments | (0.9 | ) | | — |
| | (34.2 | ) | | (35.1 | ) |
| Income taxes | | | | | | | 82.9 |
|
| Earnings available for common stock | | | | | | | 176.3 |
|
| Total assets | 4,163.9 |
| | 391.1 |
| | 715.4 |
| | 5,270.4 |
|
| Investments in equity method subsidiaries | 8.7 |
| | — |
| | 293.3 |
| | 302.0 |
|
| Construction and acquisition expenditures | 291.3 |
| | 49.7 |
| | 3.3 |
| | 344.3 |
|
NOTE 18. RELATED PARTIES
Service Agreements - Pursuant to service agreements, IPL and WPL receive various administrative and general services from an affiliate, Corporate Services. These services are billed to IPL and WPL at cost based on expenses incurred by Corporate Services for the benefit of IPL and WPL, respectively. These costs consisted primarily of employee compensation and benefits, fees associated with various professional services, depreciation and amortization of property, plant and equipment, and a return on net assets. Corporate Services also acts as agent on behalf of IPL and WPL pursuant to the service agreements. As agent, Corporate Services enters into energy, capacity, ancillary services, and transmission sale and purchase transactions within MISO. Corporate Services assigns such sales and purchases among IPL and WPL based on statements received from MISO. The amounts billed for services provided, sales credited and purchases were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | IPL | | WPL |
| | 2017 | | 2016 | | 2015 | | 2017 | | 2016 | | 2015 |
| Corporate Services billings |
| $177 |
| |
| $161 |
| |
| $150 |
| |
| $135 |
| |
| $133 |
| |
| $121 |
|
| Sales credited | 23 |
| | 8 | | 10 | | 13 |
| | 7 | | 24 |
| Purchases billed | 364 |
| | 433 | | 366 | | 115 |
| | 102 | | 66 |
As of December 31, net intercompany payables to Corporate Services were as follows (in millions):
|
| | | | | | | |
| | 2017 | | 2016 |
| IPL |
| $114 |
| |
| $104 |
|
| WPL | 61 |
| | 72 |
|
ATC - Pursuant to various agreements, WPL receives a range of transmission services from ATC. WPL provides operation, maintenance, and construction services to ATC. WPL and ATC also bill each other for use of shared facilities owned by each party. The related amounts billed between the parties were as follows (in millions):
|
| | | | | | | | | | | |
| | 2017 | | 2016 | | 2015 |
| ATC billings to WPL |
| $105 |
| |
| $110 |
| |
| $101 |
|
| WPL billings to ATC | 10 |
| | 13 |
| | 13 |
|
As of December 31, 2017 and 2016, WPL owed ATC net amounts of $9 million and $8 million, respectively.
Refer to Note 6(a) for discussion of WPL’s transfer of its investment in ATC to ATI on December 31, 2016.
WPL’s Sheboygan Falls Energy Facility Lease - Refer to Note 10(b) for discussion of WPL’s Sheboygan Falls Energy Facility lease.
Franklin County Wind Farm - Refer to Note 3 for discussion of the transfer of the Franklin County wind farm from AEF to IPL in April 2017.
NOTE 19. SELECTED CONSOLIDATED QUARTERLY FINANCIAL DATA (UNAUDITED)
Alliant Energy - All “per share” references refer to earnings per diluted share. Summation of the individual quarters may not equal annual totals due to rounding.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2017 | | 2016 |
| | March 31 | | June 30 | | Sep. 30 | | Dec. 31 | | March 31 | | June 30 | | Sep. 30 | | Dec. 31 |
| | (in millions, except per share data) |
| Operating revenues |
| $853.9 |
| |
| $765.3 |
| |
| $906.9 |
| |
| $856.1 |
| |
| $843.8 |
| |
| $754.6 |
| |
| $924.6 |
| |
| $797.0 |
|
| Operating income | 142.9 |
| | 149.3 |
| | 231.5 |
| | 129.7 |
| | 145.9 |
| | 128.6 |
| | 162.6 |
| | 99.9 |
|
| Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | | | | | | | |
| Income from continuing operations, net of tax | 99.0 |
| | 94.3 |
| | 168.8 |
| | 93.8 |
| | 97.6 |
| | 84.4 |
| | 128.8 |
| | 63.0 |
|
| Income (loss) from discontinued operations, net of tax | 1.4 |
| | — |
| | — |
| | — |
| | (1.1 | ) | | (0.5 | ) | | (0.4 | ) | | (0.3 | ) |
| Net income | 100.4 |
| | 94.3 |
| | 168.8 |
| | 93.8 |
| | 96.5 |
| | 83.9 |
| | 128.4 |
| | 62.7 |
|
| Earnings per weighted average common share attributable to Alliant Energy common shareowners: | | | | | | | | | | | | | | | |
| Income from continuing operations, net of tax | 0.43 |
| | 0.41 |
| | 0.73 |
| | 0.41 |
| | 0.43 |
| | 0.37 |
| | 0.57 |
| | 0.28 |
|
| Income from discontinued operations, net of tax | 0.01 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| Net income | 0.44 |
| | 0.41 |
| | 0.73 |
| | 0.41 |
| | 0.43 |
| | 0.37 |
| | 0.57 |
| | 0.28 |
|
IPL - Earnings per share data is not disclosed for IPL given Alliant Energy is the sole shareowner of all shares of IPL’s common stock outstanding during the periods presented.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2017 | | 2016 |
| | March 31 | | June 30 | | Sep. 30 | | Dec. 31 | | March 31 | | June 30 | | Sep. 30 | | Dec. 31 |
| | (in millions) |
| Operating revenues |
| $450.5 |
| |
| $420.2 |
| |
| $527.4 |
| |
| $472.2 |
| |
| $458.7 |
| |
| $411.0 |
| |
| $516.2 |
| |
| $434.5 |
|
| Operating income | 49.6 |
| | 66.3 |
| | 131.8 |
| | 49.2 |
| | 62.0 |
| | 48.0 |
| | 125.9 |
| | 34.9 |
|
| Net income | 39.8 |
| | 45.3 |
| | 123.0 |
| | 18.9 |
| | 48.2 |
| | 34.4 |
| | 116.7 |
| | 26.5 |
|
| Earnings available for common stock | 37.2 |
| | 42.8 |
| | 120.4 |
| | 16.4 |
| | 45.6 |
| | 31.9 |
| | 114.1 |
| | 24.0 |
|
WPL - Earnings per share data is not disclosed for WPL given Alliant Energy is the sole shareowner of all shares of WPL’s common stock outstanding during the periods presented.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | 2017 | | 2016 |
| | March 31 | | June 30 | | Sep. 30 | | Dec. 31 | | March 31 | | June 30 | | Sep. 30 | | Dec. 31 |
| | (in millions) |
| Operating revenues |
| $393.1 |
| |
| $334.8 |
| |
| $370.2 |
| |
| $374.7 |
| |
| $375.6 |
| |
| $334.3 |
| |
| $397.0 |
| |
| $352.2 |
|
| Operating income | 86.0 |
| | 73.7 |
| | 90.7 |
| | 72.8 |
| | 78.8 |
| | 75.0 |
| | 115.0 |
| | 58.2 |
|
| Net income | 45.5 |
| | 38.1 |
| | 49.8 |
| | 53.2 |
| | 47.0 |
| | 43.7 |
| | 69.6 |
| | 32.5 |
|
| Earnings available for common stock | 45.5 |
| | 38.1 |
| | 49.8 |
| | 53.2 |
| | 46.5 |
| | 43.2 |
| | 69.0 |
| | 31.7 |
|
NOTE 18. SEGMENTS OF BUSINESS
Alliant Energy - Alliant Energy’s principal businesses as of December 31, 2021 are:
•Utility - includes the operations of IPL and WPL, which primarily serve retail customers in Iowa and Wisconsin. The utility business has 3 reportable segments: a) utility electric operations; b) utility gas operations; and c) utility other, which includes steam operations and the unallocated portions of the utility business. Various line items in the following tables are not allocated to the electric and gas segments for management reporting purposes, and therefore, are included only in “Total Utility.”
•ATC Holdings, Non-utility, Parent and Other - includes the operations of AEF and its subsidiaries, Corporate Services, the Alliant Energy parent company, and any Alliant Energy parent company consolidating adjustments. AEF is comprised of Alliant Energy’s interest in ATC Holdings, Travero, a non-utility wind farm, corporate venture investments, the Sheboygan Falls Energy Facility and other non-utility holdings.
Alliant Energy’s administrative support services are directly charged to the applicable segment where practicable. In all other cases, administrative support services are allocated to the applicable segment based on services agreements. Intersegment revenues were not material to Alliant Energy’s operations and there was no single customer whose revenues were 10% or more of Alliant Energy’s consolidated revenues. All of Alliant Energy’s operations and assets are located in the U.S. Certain financial information relating to Alliant Energy’s business segments, which represent the services provided to its customers, was as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | ATC Holdings, | | |
| Utility | | Non-utility, | | Alliant Energy |
| 2021 | Electric | | Gas | | Other | | Total | | Parent and Other | | Consolidated |
| Revenues | $3,081 | | | $456 | | | $49 | | | $3,586 | | | $83 | | $3,669 |
| Depreciation and amortization | 591 | | | 54 | | | 6 | | | 651 | | | 6 | | 657 |
| Operating income (loss) | 716 | | | 63 | | | (11) | | | 768 | | | 27 | | 795 |
| Interest expense | | | | | | | 244 | | | 33 | | 277 |
| Equity income from unconsolidated investments, net | (2) | | | — | | | — | | | (2) | | | (60) | | (62) |
| Income tax expense (benefit) | | | | | | | (87) | | | 13 | | (74) |
| Net income attributable to Alliant Energy common shareowners | | | | | | | 618 | | | 41 | | 659 |
| Total assets | 14,924 | | | 1,487 | | | 1,103 | | | 17,514 | | | 1,039 | | 18,553 |
| Investments in equity method subsidiaries | 17 | | | — | | | — | | | 17 | | | 491 | | 508 |
| Construction and acquisition expenditures | 980 | | | 90 | | | — | | | 1,070 | | | 99 | | 1,169 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | ATC Holdings, | | |
| Utility | | Non-utility, | | Alliant Energy |
| 2020 | Electric | | Gas | | Other | | Total | | Parent and Other | | Consolidated |
| Revenues | $2,920 | | | $373 | | | $49 | | | $3,342 | | | $74 | | $3,416 |
| Depreciation and amortization | 556 | | | 49 | | | 5 | | | 610 | | | 5 | | 615 |
| Operating income (loss) | 643 | | | 74 | | | (1) | | | 716 | | | 24 | | 740 |
| Interest expense | | | | | | | 243 | | | 32 | | 275 |
| Equity income from unconsolidated investments, net | (2) | | | — | | | — | | | (2) | | | (59) | | (61) |
| Income tax expense (benefit) | | | | | | | (66) | | | 9 | | (57) |
| Net income attributable to Alliant Energy common shareowners | | | | | | | 573 | | | 41 | | 614 |
| Total assets | 14,358 | | | 1,413 | | | 990 | | | 16,761 | | | 949 | | 17,710 |
| Investments in equity method subsidiaries | 11 | | | — | | | — | | | 11 | | | 465 | | 476 |
| Construction and acquisition expenditures | 1,109 | | | 182 | | | 2 | | | 1,293 | | | 73 | | 1,366 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | ATC Holdings, | | |
| Utility | | Non-utility, | | Alliant Energy |
| 2019 | Electric | | Gas | | Other | | Total | | Parent and Other | | Consolidated |
| Revenues | $3,064 | | | $455 | | | $46 | | | $3,565 | | | $83 | | $3,648 |
| Depreciation and amortization | 513 | | | 47 | | | 3 | | | 563 | | | 4 | | 567 |
| Operating income | 679 | | | 70 | | | 1 | | | 750 | | | 28 | | 778 |
| Interest expense | | | | | | | 229 | | | 44 | | 273 |
| Equity income from unconsolidated investments, net | (1) | | | — | | | — | | | (1) | | | (52) | | (53) |
| Income tax expense (benefit) | | | | | | | 73 | | | (4) | | 69 |
| Net income attributable to Alliant Energy common shareowners | | | | | | | 517 | | | 40 | | 557 |
| Total assets | 13,659 | | | 1,269 | | | 856 | | | 15,784 | | | 917 | | 16,701 |
| Investments in equity method subsidiaries | 9 | | | — | | | — | | | 9 | | | 449 | | 458 |
| Construction and acquisition expenditures | 1,439 | | | 100 | | | — | | | 1,539 | | | 101 | | 1,640 |
IPL - IPL is a utility primarily serving retail customers in Iowa and includes 3 reportable segments: a) electric operations; b) gas operations; and c) other, which includes steam operations and the unallocated portions of the utility business. Various line items in the following tables are not allocated to the electric and gas segments for management reporting purposes, and therefore, are included only in “Total.” Intersegment revenues were not material to IPL’s operations and there was no single customer whose revenues were 10% or more of IPL’s consolidated revenues. All of IPL’s operations and assets are located in the U.S. Certain financial information relating to IPL’s business segments, which represent the services provided to its customers, was as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | |
| 2021 | Electric | | Gas | | Other | | Total |
| Revenues | $1,752 | | $265 | | $46 | | $2,063 | |
| Depreciation and amortization | 338 | | 31 | | 6 | | 375 | |
| Operating income (loss) | 420 | | 43 | | (3) | | 460 | |
| Interest expense | | | | | | | 139 | |
| Income tax benefit | | | | | | | (36) | |
| Net income available for common stock | | | | | | | 350 | |
| Total assets | 8,602 | | 819 | | 575 | | 9,996 | |
| Construction and acquisition expenditures | 342 | | 42 | | — | | 384 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| 2020 | Electric | | Gas | | Other | | Total |
| Revenues | $1,695 | | $208 | | $44 | | $1,947 | |
| Depreciation and amortization | 321 | | 30 | | 5 | | 356 | |
| Operating income | 358 | | 50 | | 2 | | 410 | |
| Interest expense | | | | | | | 139 | |
| Income tax benefit | | | | | | | (47) | |
| Net income available for common stock | | | | | | | 324 | |
| Total assets | 8,518 | | 766 | | 565 | | 9,849 | |
| Construction and acquisition expenditures | 626 | | 59 | | 2 | | 687 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| 2019 | Electric | | Gas | | Other | | Total |
| Revenues | $1,781 | | $264 | | $44 | | $2,089 | |
| Depreciation and amortization | 295 | | 29 | | 3 | | 327 | |
| Operating income | 360 | | 39 | | 4 | | 403 | |
| Interest expense | | | | | | | 127 | |
| Income taxes | | | | | | | 24 | |
| Net income available for common stock | | | | | | | 284 | |
| Total assets | 8,075 | | 734 | | 468 | | 9,277 | |
| Construction and acquisition expenditures | 964 | | 56 | | — | | 1,020 | |
WPL - WPL is a utility serving customers in Wisconsin and includes 3 reportable segments: a) electric operations; b) gas operations; and c) other, which includes the unallocated portions of the utility business. Various line items in the following tables are not allocated to the electric and gas segments for management reporting purposes, and therefore, are included only in “Total.” Intersegment revenues were not material to WPL’s operations and there was no single customer whose revenues were 10% or more of WPL’s consolidated revenues. All of WPL’s operations and assets are located in the U.S. Certain financial information relating to WPL’s business segments, which represent the services provided to its customers, was as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | |
| 2021 | Electric | | Gas | | Other | | Total |
| Revenues | $1,329 | | | $191 | | | $3 | | | $1,523 | |
| Depreciation and amortization | 253 | | | 23 | | | — | | | 276 | |
| Operating income (loss) | 296 | | | 20 | | | (8) | | | 308 | |
| Interest expense | | | | | | | 105 | |
| | | | | | | |
| Income tax benefit | | | | | | | (51) | |
| Net income | | | | | | | 268 | |
| Total assets | 6,322 | | | 668 | | | 528 | | | 7,518 | |
| | | | | | | |
| Construction and acquisition expenditures | 638 | | | 48 | | | — | | | 686 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| 2020 | Electric | | Gas | | Other | | Total |
| Revenues | $1,225 | | | $165 | | | $5 | | | $1,395 | |
| Depreciation and amortization | 235 | | | 19 | | | — | | | 254 | |
| Operating income (loss) | 285 | | | 24 | | | (3) | | | 306 | |
| Interest expense | | | | | | | 104 | |
| | | | | | | |
| Income tax benefit | | | | | | | (19) | |
| Net income | | | | | | | 249 | |
| Total assets | 5,840 | | | 647 | | | 425 | | | 6,912 | |
| | | | | | | |
| Construction and acquisition expenditures | 483 | | | 123 | | | — | | | 606 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| 2019 | Electric | | Gas | | Other | | Total |
| Revenues | $1,283 | | | $191 | | | $2 | | | $1,476 | |
| Depreciation and amortization | 218 | | | 18 | | | — | | | 236 | |
| Operating income (loss) | 319 | | | 31 | | | (3) | | | 347 | |
| Interest expense | | | | | | | 102 | |
| | | | | | | |
| Income taxes | | | | | | | 49 | |
| Net income | | | | | | | 233 | |
| Total assets | 5,584 | | | 535 | | | 388 | | | 6,507 | |
| | | | | | | |
| Construction and acquisition expenditures | 475 | | | 44 | | | — | | | 519 | |
NOTE 19. RELATED PARTIES
Service Agreements - Pursuant to service agreements, IPL and WPL receive various administrative and general services from an affiliate, Corporate Services. These services are billed to IPL and WPL at cost based on expenses incurred by Corporate Services for the benefit of IPL and WPL, respectively. These costs consisted primarily of employee compensation and benefits, fees associated with various professional services, depreciation and amortization of property, plant and equipment, and a return on net assets. Corporate Services also acts as agent on behalf of IPL and WPL pursuant to the service agreements. As agent, Corporate Services enters into energy, capacity, ancillary services, and transmission sale and purchase transactions within MISO. Corporate Services assigns such sales and purchases among IPL and WPL based on statements received from MISO. The amounts billed for services provided, sales credited and purchases were as follows (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IPL | | WPL |
| 2021 | | 2020 | | 2019 | | 2021 | | 2020 | | 2019 |
| Corporate Services billings | $180 | | $176 | | $185 | | $154 | | $142 | | $142 |
| Sales credited | 22 | | 35 | | 68 | | 23 | | 3 | | 7 |
| Purchases billed | 441 | | 329 | | 331 | | 116 | | 108 | | 120 |
As of December 31, net intercompany payables to Corporate Services were as follows (in millions):
| | | | | | | | | | | |
| 2021 | | 2020 |
| IPL | $110 | | $110 |
| WPL | 83 | | 73 |
ATC - Pursuant to various agreements, WPL receives a range of transmission services from ATC. WPL provides operation, maintenance, and construction services to ATC. WPL and ATC also bill each other for use of shared facilities owned by each party. The related amounts billed between the parties were as follows (in millions):
| | | | | | | | | | | | | | | | | |
| 2021 | | 2020 | | 2019 |
| ATC billings to WPL | $122 | | $108 | | $109 |
| WPL billings to ATC | 18 | | 10 | | 13 |
As of December 31, 2021 and 2020, WPL owed ATC net amounts of $10 million and $9 million, respectively.
In 2020, WPL received $46 million from ATC related to construction deposits WPL previously provided ATC for transmission network upgrades for West Riverside, which is substantially recorded in “Other” in Alliant Energy’s and WPL’s cash flows from investing activities.
WPL’s Sheboygan Falls Energy Facility Lease - Refer to Note 10 for discussion of WPL’s Sheboygan Falls Energy Facility lease.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Alliant Energy’s, IPL’s and WPL’s management evaluated, with the participation of each of Alliant Energy’s, IPL’s and WPL’s Chief Executive Officer, Chief Financial Officer and Disclosure Committee, the effectiveness of the design and operation of Alliant Energy’s, IPL’s and WPL’s disclosure controls and procedures as of the end of the quarter ended December 31, 20172021 pursuant to the requirements of the Securities Exchange Act of 1934, as amended. Based on their evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that Alliant Energy’s, IPL’s and WPL’s disclosure controls and procedures were effective as of the end of the quarter ended December 31, 2017.2021.
There was no change in Alliant Energy’s, IPL’s and WPL’s internal control over financial reporting that occurred during the quarter ended December 31, 20172021 that has materially affected, or is reasonably likely to materially affect, Alliant Energy’s, IPL’s and WPL’s internal control over financial reporting.
Management’s Annual Report on Internal Control over Financial Reporting - The management of Alliant Energy, IPL and WPL are responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Alliant Energy’s, IPL’s and WPL’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.
Because of the inherent limitations of internal control over financial reporting, misstatements may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Alliant Energy’s, IPL’s and WPL’s management assessed the effectiveness of their respective internal control over financial reporting as of December 31, 20172021 using the criteria set forth in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on these assessments, Alliant Energy’s, IPL’s and WPL’s management concluded that, as of December 31, 2017,2021, their respective internal control over financial reporting was effective.
Deloitte & Touche LLP, Alliant Energy’s independent registered public accounting firm, has audited Alliant Energy’s internal control over financial reporting. That report is included herein. This report does not include an attestation report of IPL’s and WPL’s independent registered public accounting firm regarding its assessment of IPL’s and WPL’s internal control over financial reporting.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareowners and the Board of Directors and Shareowners of Alliant Energy CorporationCorporation:
Opinion on Internal Control over Financial Reporting
We have audited the internal control over financial reporting of Alliant Energy Corporation and subsidiaries (the “Company”) as of December 31, 2017,2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by COSO.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States (U.S.))States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2017,2021, of the Company and our report dated February 23, 2018,18, 2022, expressed an unqualified opinion on those financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
February 23, 201818, 2022
ITEM 9B. OTHER INFORMATION
None.
ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The directors of Alliant Energy, IPL and WPL are the same, and therefore, the information required by Item 10 relating to directors and nominees for election of directors is the same for all registrants. The information required by Item 10 relating to directors and nominees for election of directors at the 20182022 Annual Meeting of Shareowners, the timely filing of reports under Section 16 of the Securities Exchange Act of 1934, audit committees and audit committee financial experts, and Alliant Energy’s, IPL’s and WPL’s Code of Conduct is incorporated herein by reference to the relevant information in the 20182022 Alliant Energy Proxy Statement, which will be filed with the SEC within 120 days after the end of Alliant Energy’s, IPL’s and WPL’s fiscal years. The code of ethics, also referred to as the Code of Conduct, of Alliant Energy, IPL and WPL are the same. Information regarding executive officers of Alliant Energy, IPL and WPL may be found in Part I of this report under the caption “Information About Executive Officers of the Registrants.”
ITEM 11. EXECUTIVE COMPENSATION
The directors and executive officers of Alliant Energy, IPL and WPL for which compensation information must be included are the same. Therefore, the information required by Item 11 for each of Alliant Energy, IPL and WPL is incorporated herein by reference to the relevant information in the 20182022 Alliant Energy Proxy Statement, which will be filed with the SEC within 120 days after the end of Alliant Energy’s, IPL’s and WPL’s fiscal years.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
ALLIANT ENERGY
Information regarding Alliant Energy’s equity compensation plans as of December 31, 20172021 was as follows:
| | | | | | | | | | | | | | | | | | | | |
| | (A) | | | | (C) |
| | Number of securities to be | | (B) | | Number of securities remaining available |
| | issued upon exercise of | | Weighted-average exercise | | for future issuance under equity |
| | outstanding options, | | price of outstanding options, | | compensation plans (excluding |
| Plan Category | | warrants and rights | | warrants and rights | | securities reflected in column (A)) |
| Equity compensation plans approved by shareowners | | 365,362 (a) | | $47.85 | | 8,626,914 (b) |
| Equity compensation plans not approved by shareowners (c) | | N/A | | N/A | | N/A (d) |
| | 365,362 | | $47.85 | | 8,626,914 |
|
| | | | | | |
| | | (A) | | | | (C) |
| | | Number of securities to be | | (B) | | Number of securities remaining available |
| | | issued upon exercise of | | Weighted-average exercise | | for future issuance under equity |
| | | outstanding options, | | price of outstanding options, | | compensation plans (excluding |
| Plan Category | | warrants and rights | | warrants and rights | | securities reflected in column (A)) |
| Equity compensation plans approved by shareowners | | 769,881 (a) | | $35.86 | | 7,098,777 (b) |
| Equity compensation plans not approved by shareowners (c) | | N/A | | N/A | | N/A (d) |
| | | 769,881 | | $35.86 | | 7,098,777 |
| |
(a) | Represents performance shares, performance restricted stock units and restricted stock units granted under the OIP. Performance shares may be paid out in shares of Alliant Energy’s common stock, cash, or a combination of cash and stock and performance restricted stock units are paid out in shares of Alliant Energy’s common stock. The performance share and performance restricted stock unit awards are adjusted by a performance multiplier, which ranges from zero to 200%, based on the performance criteria. The performance share and performance restricted stock unit awards included in column (A) of the table reflect an assumed payout in the form of Alliant Energy’s common stock at the maximum performance multiplier of 200% for the 2017 and 2016 grants and at the estimated payout percentage of 138% for the 2015 performance share grants. Also included are restricted stock units granted under the OIP, which may be paid out in shares of Alliant Energy’s common stock, cash, or a combination of cash and stock at the expiration of a three-year time-vesting period. |
| |
(b) | All of the available shares under the Amended and Restated OIP may be issued as awards in the form of shares of Alliant Energy’s common stock, restricted stock, restricted stock units, performance shares, performance units and other stock-based or cash-based awards. As of December 31, 2017, there were performance shares, restricted stock awards, performance restricted stock units and restricted stock units outstanding under the Amended and Restated OIP. Excludes 90,806 shares of nonvested performance-contingent restricted stock previously issued and outstanding under the Amended and Restated OIP at December 31, 2017.
|
| |
(c) | As of December 31, 2017, there were 463,365 shares of Alliant Energy’s common stock held under the DCP, which is described in Note 12(c). |
(a)Represents performance shares, performance restricted stock units and restricted stock units granted under the 2020 OIP. Performance restricted stock units and performance shares are paid out in shares of Alliant Energy’s common stock. The performance share and performance restricted stock unit awards are adjusted by a performance multiplier, which ranges from zero to 200%, based on the performance criteria. The performance share and performance restricted stock unit awards included in column (A) of the table reflect an assumed payout in the form of Alliant Energy’s common stock at the maximum performance multiplier of 200%. Also included are restricted stock units granted under the 2020 OIP, which are paid out in shares of Alliant Energy’s common stock at the expiration of a three-year time-vesting period.
(b)All of the available shares under the 2020 OIP may be issued as awards in the form of shares of Alliant Energy’s common stock, restricted stock, restricted stock units, performance shares, performance units and other stock-based or cash-based awards. As of December 31, 2021, there were performance shares and restricted stock units (performance- and time-vesting) outstanding under the 2020 OIP.
| |
(d) | There is no limit on the number of shares of Alliant Energy’s common stock that may be held under the DCP. |
(d)There is no limit on the number of shares of Alliant Energy’s common stock that may be held under the DCP.
The remainder of the information required by Item 12 for Alliant Energy, and the information required by Item 12 for each of IPL and WPL, is incorporated herein by reference to the relevant information in the 20182022 Alliant Energy Proxy Statement, which will be filed with the SEC within 120 days after the end of Alliant Energy’s, fiscal year.
IPL AND WPL
None of IPL’s directors or executive officers own any shares of preferred stock in IPL. The remainder of the information required by Item 12 is incorporated herein by reference to the relevant information in the 2018 Alliant Energy Proxy Statement, which will be filed with the SEC within 120 days after the end of IPL’s and WPL’s fiscal years.year.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
The information required by Item 13 for each of Alliant Energy, IPL and WPL is incorporated herein by reference to the relevant information in the 20182022 Alliant Energy Proxy Statement, which will be filed with the SEC within 120 days after the end of Alliant Energy’s, IPL’s and WPL’s fiscal years.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ALLIANT ENERGY
The information required by Item 14 is incorporated herein by reference to the relevant information in the 20182022 Alliant Energy Proxy Statement, which will be filed with the SEC within 120 days after the end of Alliant Energy’s fiscal year.
IPL AND WPL
Each of IPL’s and WPL’s Audit Committee of the Board of Directors has adopted a policy that requires advance approval of all audit, audit-related, tax and other permitted services performed by the independent registered public accounting firm. The policy provides for pre-approval by the Audit Committee of specifically defined audit and non-audit services after the Audit Committee is provided with the appropriate level of details regarding the specific services to be provided. The policy does not permit delegation of the Audit Committee’s authority to management. In the event the need for specific services arises between Audit Committee meetings, the Audit Committee has delegated to the Chairperson of the Audit Committee authority to approve permitted services provided that the Chairperson reports any decisions to the Audit Committee at its next scheduled meeting. The principal accounting fees billed to Alliant Energy by its independent registered public accounting firm, all of which were approved in advance by the Audit Committee, directly related and allocated to IPL and WPL were as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IPL | | WPL |
| 2021 | | 2020 | | 2021 | | 2020 |
| Fees | | % of Total | | Fees | | % of Total | | Fees | | % of Total | | Fees | | % of Total |
| Audit fees | $1,367 | | 96% | | $1,331 | | 96% | | $1,005 | | 90% | | $947 | | 89% |
| Audit-related fees | 49 | | 4% | | 51 | | 4% | | 85 | | 8% | | 39 | | 4% |
| Tax fees | 3 | | —% | | 4 | | —% | | 18 | | 2% | | 78 | | 7% |
| All other fees | 4 | | —% | | 3 | | —% | | 3 | | —% | | 2 | | —% |
| $1,423 | | 100% | | $1,389 | | 100% | | $1,111 | | 100% | | $1,066 | | 100% |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | IPL | | WPL |
| | 2017 | | 2016 | | 2017 | | 2016 |
| | Fees | | % of Total | | Fees | | % of Total | | Fees | | % of Total | | Fees | | % of Total |
| Audit fees |
| $1,083 |
| | 90 | % | |
| $1,035 |
| | 93 | % | |
| $1,070 |
| | 93 | % | |
| $1,008 |
| | 95 | % |
| Audit-related fees | 67 |
| | 5 | % | | 64 |
| | 6 | % | | 42 |
| | 4 | % | | 41 |
| | 4 | % |
| Tax fees | 9 |
| | 1 | % | | — |
| | — | % | | 2 |
| | — | % | | — |
| | — | % |
| All other fees | 44 |
| | 4 | % | | 8 |
| | 1 | % | | 36 |
| | 3 | % | | 7 |
| | 1 | % |
| |
| $1,203 |
| | 100 | % | |
| $1,107 |
| | 100 | % | |
| $1,150 |
| | 100 | % | |
| $1,056 |
| | 100 | % |
IPL’s and WPL’s audit fees for 20172021 and 20162020 consisted of the respective fees billed for the audits of the financial statements of IPL and its subsidiarysubsidiaries and WPL and its subsidiary, for reviews of financial statements included in Form 10-Q filings, and for services normally provided in connection with statutory and regulatory filings, such as financing transactions. IPL’s and WPL’s audit fees also included their respective portion of fees for the 20172021 and 20162020 audits of Alliant Energy’s financial statements and effectiveness of internal controls over financial reporting. IPL’s and WPL’s audit-related fees for 20172021 and 20162020 consisted of the fees billed for services rendered related to employee benefits plan audits and other attest services. IPL’s and WPL’s tax fees for 20172021 and 2020 consisted of the fees billed for professional services rendered for tax compliance, tax advice and tax planning, including all services performed by the tax professional staff of affiliates of the independent registered public accounting firm, except those rendered in connection with the audit. IPL and WPL did not have any tax fees for 2016. All other fees for 20172021 and 20162020 for IPL and WPL consisted of license fees for accounting research software products and seminars, and, with respect to 2017, consultation services.virtual seminars. The Audit Committee does not consider the provision of non-audit services by the independent registered public accounting firm described above to be incompatible with maintaining independence of the independent registered public accounting firm.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
| |
(1) | Consolidated Financial Statements - Refer to Item 8 Financial Statements and Supplementary Data. |
(1)Consolidated Financial Statements - Refer to Item 8 Financial Statements and Supplementary Data for Alliant Energy’s, IPL’s and WPL’s financial statements and Reports of Independent Registered Public Accounting Firm (Public Company Accounting Oversight Board ID No. 34). | |
(2) | Financial Statement Schedules -
|
(2)Financial Statement Schedules -
SCHEDULE I - CONDENSED PARENT COMPANY FINANCIAL STATEMENTS
| | | | | | | | | | | | | | | | | |
| ALLIANT ENERGY CORPORATION (Parent Company Only) | Year Ended December 31, |
| CONDENSED STATEMENTS OF INCOME | 2021 | | 2020 | | 2019 |
| (in millions) |
| | | | | |
| Operating expenses | $5 | | | $7 | | | $2 | |
| Operating loss | (5) | | | (7) | | | (2) | |
| Other (income) and deductions: | | | | | |
| Equity earnings from consolidated subsidiaries | (664) | | | (625) | | | (562) | |
| Interest expense | 1 | | | 2 | | | 9 | |
| Other | 1 | | | 4 | | | 7 | |
| Total other (income) and deductions | (662) | | | (619) | | | (546) | |
| Income before income taxes | 657 | | | 612 | | | 544 | |
| Income tax benefit | (5) | | | (4) | | | (15) | |
| Net income | $662 | | | $616 | | | $559 | |
ALLIANT ENERGY CORPORATION (Parent Company Only)
CONDENSED STATEMENTS OF INCOME
|
| | | | | | | | | | | |
| | Year Ended December 31, |
| | 2017 | | 2016 | | 2015 |
| | (in millions) |
| Operating revenues |
| $— |
| |
| $1 |
| |
| $2 |
|
| Operating expenses | 2 |
| | 3 |
| | 3 |
|
| Operating loss | (2 | ) | | (2 | ) | | (1 | ) |
| Interest expense and other: | | | | | |
| Equity earnings from consolidated subsidiaries | (457 | ) | | (374 | ) | | (379 | ) |
| Interest expense | 3 |
| | 3 |
| | 3 |
|
| Interest income | — |
| | (2 | ) | | (3 | ) |
| Total interest expense and other | (454 | ) | | (373 | ) | | (379 | ) |
| Income before income taxes | 452 |
| | 371 |
| | 378 |
|
| Income tax benefit | (6 | ) | | (1 | ) | | (1 | ) |
| Net income |
| $458 |
| |
| $372 |
| |
| $379 |
|
TheRefer to accompanying Notes to Condensed Financial Statements are an integral part of these statements.Statements.
| | | | | | | | | | | |
| ALLIANT ENERGY CORPORATION (Parent Company Only) | December 31, |
| CONDENSED BALANCE SHEETS | 2021 | | 2020 |
| (in millions) |
| ASSETS | | | |
| Current assets: | | | |
| Notes receivable from affiliated companies | $16 | | | $32 | |
| Other | 5 | | | 5 | |
| Total current assets | 21 | | | 37 | |
| Investments: | | | |
| Investments in consolidated subsidiaries | 7,061 | | | 6,664 | |
| Other | 2 | | | 2 | |
| Total investments | 7,063 | | | 6,666 | |
| Other assets | 96 | | | 88 | |
| Total assets | $7,180 | | | $6,791 | |
| | | | | | | | | | | |
| LIABILITIES AND EQUITY | | | |
| Current liabilities: | | | |
| Commercial paper | $279 | | | $132 | |
| Notes payable to affiliated companies | 900 | | | 937 | |
| Other | 4 | | | 29 | |
| Total current liabilities | 1,183 | | | 1,098 | |
| | | |
| Other liabilities | 2 | | | 2 | |
| Common equity: | | | |
| Common stock and additional paid-in capital | 2,752 | | | 2,706 | |
| Retained earnings | 3,255 | | | 2,996 | |
| | | |
| Shares in deferred compensation trust | (12) | | | (11) | |
| Total common equity | 5,995 | | | 5,691 | |
| Total liabilities and equity | $7,180 | | | $6,791 | |
Refer to accompanying Notes to Condensed Financial Statements.
| | | | | | | | | | | | | | | | | |
| ALLIANT ENERGY CORPORATION (Parent Company Only) | Year Ended December 31, |
| CONDENSED STATEMENTS OF CASH FLOWS | 2021 | | 2020 | | 2019 |
| (in millions) |
| Net cash flows from operating activities | $494 | | | $396 | | | $305 | |
| Cash flows used for investing activities: | | | | | |
| Capital contributions to consolidated subsidiaries | (295) | | | (429) | | | (250) | |
| | | | | |
| Net change in notes receivable from and payable to affiliates | (21) | | | 201 | | | 8 | |
| Dividends from consolidated subsidiaries in excess of equity earnings | 50 | | | — | | | — | |
| | | | | |
| Net cash flows used for investing activities | (266) | | | (228) | | | (242) | |
| Cash flows used for financing activities: | | | | | |
| Common stock dividends | (403) | | | (377) | | | (338) | |
| Proceeds from issuance of common stock, net | 28 | | | 247 | | | 390 | |
| | | | | |
| Net change in commercial paper | 147 | | | (37) | | | (116) | |
| Other | — | | | (1) | | | 1 | |
| Net cash flows used for financing activities | (228) | | | (168) | | | (63) | |
| Net increase (decrease) in cash, cash equivalents and restricted cash | — | | | — | | | — | |
| Cash, cash equivalents and restricted cash at beginning of period | — | | | — | | | — | |
| Cash, cash equivalents and restricted cash at end of period | $— | | | $— | | | $— | |
| Supplemental cash flows information: | | | | | |
| Cash (paid) refunded during the period for: | | | | | |
| Interest | ($1) | | | ($2) | | | ($9) | |
| Income taxes, net | 4 | | | 10 | | | 14 | |
ALLIANT ENERGY CORPORATION (Parent Company Only)
CONDENSED BALANCE SHEETS
|
| | | | | | | |
| | December 31, |
| | 2017 | | 2016 |
| | (in millions) |
| ASSETS | | | |
| Current assets: | | | |
| Notes receivable from affiliated companies |
| $50 |
| |
| $74 |
|
| Other | 7 |
| | 5 |
|
| Total current assets | 57 |
| | 79 |
|
| Investments: | | | |
| Investments in consolidated subsidiaries | 4,676 |
| | 4,211 |
|
| Other | 2 |
| | 2 |
|
| Total investments | 4,678 |
| | 4,213 |
|
| Other assets | 78 |
| | 64 |
|
| Total assets |
| $4,813 |
| |
| $4,356 |
|
|
| | | | | | | |
| LIABILITIES AND EQUITY | | | |
| Current liabilities: | | | |
| Commercial paper |
| $295 |
| |
| $192 |
|
| Notes payable to affiliated companies | 305 |
| | 275 |
|
| Other | 12 |
| | 12 |
|
| Total current liabilities | 612 |
| | 479 |
|
| Other liabilities | 20 |
| | 18 |
|
| Common equity: | | | |
| Common stock and additional paid-in capital | 1,848 |
| | 1,695 |
|
| Retained earnings | 2,344 |
| | 2,174 |
|
| Shares in deferred compensation trust | (11 | ) | | (10 | ) |
| Total common equity | 4,181 |
| | 3,859 |
|
| Total liabilities and equity |
| $4,813 |
| |
| $4,356 |
|
TheRefer to accompanying Notes to Condensed Financial Statements are an integral part of these statements.Statements.
ALLIANT ENERGY CORPORATION (Parent Company Only)
CONDENSED STATEMENTS OF CASH FLOWS
|
| | | | | | | | | | | |
| Year Ended December 31, |
| 2017 |
| 2016 |
| 2015 |
| (in millions) |
| Net cash flows from operating activities |
| $273 |
|
|
| $254 |
|
|
| $262 |
|
| Cash flows from (used for) investing activities: |
|
|
|
|
|
|
|
|
| Capital contributions to consolidated subsidiaries | (290 | ) |
| (250 | ) |
| (165 | ) |
| Capital repayments from consolidated subsidiaries | — |
|
| 130 |
|
| — |
|
| Net change in notes receivable from and payable to affiliates | 54 |
| | 294 |
| | 2 |
|
| Other | — |
|
| 10 |
|
| — |
|
| Net cash flows from (used for) investing activities | (236 | ) |
| 184 |
|
| (163 | ) |
| Cash flows used for financing activities: |
|
|
|
|
|
|
|
|
| Common stock dividends | (288 | ) |
| (267 | ) |
| (247 | ) |
| Proceeds from issuance of common stock, net | 150 |
| | 27 |
| | 151 |
|
| Payments to retire long-term debt | — |
| | (250 | ) | | — |
|
| Net change in commercial paper | 103 |
|
| 52 |
|
| (1 | ) |
| Other | (2 | ) |
| — |
|
| (2 | ) |
| Net cash flows used for financing activities | (37 | ) |
| (438 | ) |
| (99 | ) |
| Net increase (decrease) in cash and cash equivalents | — |
|
| — |
|
| — |
|
| Cash and cash equivalents at beginning of period | — |
|
| — |
|
| — |
|
| Cash and cash equivalents at end of period |
| $— |
|
|
| $— |
|
|
| $— |
|
| Supplemental cash flows information: |
|
|
|
|
|
|
|
|
| Cash paid during the period for: |
|
|
|
|
|
|
|
|
| Interest, net of capitalized interest |
| ($3 | ) |
|
| ($3 | ) |
|
| ($3 | ) |
| Income taxes, net | — |
|
| (37 | ) |
| (9 | ) |
The accompanying Notes to Condensed Financial Statements are an integral part of these statements.
ALLIANT ENERGY CORPORATION
(Parent Company Only)
NOTES TO CONDENSED FINANCIAL STATEMENTS
Pursuant to rules and regulations of the SEC, the Condensed Financial Statements of Alliant Energy Corporation (Parent Company Only) do not reflect all of the information and notes normally included with financial statements prepared in accordance with GAAP. Therefore, these Condensed Financial Statements should be read in conjunction with the Financial Statements and related Notes included in the combined 20172021 Form 10-K, Part II, Item 8, which is incorporated herein by reference.
In the Condensed Financial Statements of Alliant Energy Corporation (Parent Company Only), investments in subsidiaries are accounted for using the equity method.
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
|
| | | | | | | | | | | | | | | | | | | | | | |
| | | | Additions | | |
| Balance, | Charged to | Charged to Other | | Balance, |
| Description | January 1 | Expense | Accounts (a) | Deductions (b) | December 31 |
| (in millions) |
Valuation and Qualifying Accounts Which are Deducted in the Balance Sheet Fromfrom the Assets to Which They Apply:
|
| | | | | | | | | | | | | | | | | | |
| | Accumulated Provision for Uncollectible Accounts: | | | | |
| | | Alliant Energy (c) | | | | | |
| | | | Year ended December 31, 2017 |
| $8.7 |
|
| $15.1 |
|
| $5.4 |
|
| $17.2 |
|
| $12.0 |
|
| | | | Year ended December 31, 2016 | 4.8 |
| 17.4 |
| 8.8 |
| 22.3 |
| 8.7 |
|
| | | | Year ended December 31, 2015 | 5.1 |
| 8.1 |
| 3.0 |
| 11.4 |
| 4.8 |
|
| | | IPL (c) | | | | |
| | | | Year ended December 31, 2017 |
| $1.1 |
|
| $14.9 |
|
| $— |
|
| $14.7 |
|
| $1.3 |
|
| | | | Year ended December 31, 2016 | 0.6 |
| 17.2 |
| — |
| 16.7 |
| 1.1 |
|
| | | | Year ended December 31, 2015 | 0.4 |
| 8.1 |
| — |
| 7.9 |
| 0.6 |
|
| | | WPL | | | | |
| | | | Year ended December 31, 2017 |
| $7.1 |
|
| $0.2 |
|
| $5.4 |
|
| $2.0 |
|
| $10.7 |
|
| | | | Year ended December 31, 2016 | 3.7 |
| 0.1 |
| 8.8 |
| 5.5 |
| 7.1 |
|
| | | | Year ended December 31, 2015 | 4.2 |
| — |
| 3.0 |
| 3.5 |
| 3.7 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Accumulated Provision for Uncollectible Accounts: | | | | |
| | Alliant Energy (c) | | | | | |
| | | Year ended December 31, 2021 | $18 | $12 | $— | $19 | $11 |
| | | Year ended December 31, 2020 | 7 | 25 | 9 | 23 | 18 |
| | | Year ended December 31, 2019 | 10 | 17 | 2 | 22 | 7 |
| | IPL (c) | | | | |
| | | Year ended December 31, 2021 | $1 | $6 | $— | $6 | $1 |
| | | Year ended December 31, 2020 | 1 | 18 | — | 18 | 1 |
| | | Year ended December 31, 2019 | 3 | 16 | — | 18 | 1 |
| | WPL | | | | |
| | | Year ended December 31, 2021 | $17 | $6 | $— | $13 | $10 |
| | | Year ended December 31, 2020 | 6 | 7 | 9 | 5 | 17 |
| | | Year ended December 31, 2019 | 7 | 1 | 2 | 4 | 6 |
Note: The above provisions relate to various customer, notes and other receivable balances included in various line items on the respective balance sheets.
Other Reserves:
|
| | | | | | | | | | | | | | | | | | |
| | Accumulated Provision for Other Reserves (d): |
| | | Alliant Energy | | | | |
| | | | Year ended December 31, 2017 |
| $25.1 |
|
| $3.3 |
|
| $5.1 |
|
| $10.5 |
|
| $23.0 |
|
| | | | Year ended December 31, 2016 | 27.1 |
| 6.1 |
| — |
| 8.1 |
| 25.1 |
|
| | | | Year ended December 31, 2015 | 32.6 |
| 6.5 |
| — |
| 12.0 |
| 27.1 |
|
| | | IPL | | | | |
| | | | Year ended December 31, 2017 |
| $8.7 |
|
| $0.3 |
|
| $— |
|
| $1.4 |
|
| $7.6 |
|
| | | | Year ended December 31, 2016 | 9.4 |
| 1.0 |
| — |
| 1.7 |
| 8.7 |
|
| | | | Year ended December 31, 2015 | 10.6 |
| 2.1 |
| — |
| 3.3 |
| 9.4 |
|
| | | WPL | | | | |
| | | | Year ended December 31, 2017 |
| $8.1 |
|
| $0.1 |
|
| $— |
|
| $1.8 |
|
| $6.4 |
|
| | | | Year ended December 31, 2016 | 11.4 |
| 1.8 |
| — |
| 5.1 |
| 8.1 |
|
| | | | Year ended December 31, 2015 | 16.3 |
| 0.7 |
| — |
| 5.6 |
| 11.4 |
|
| | | | | | | | |
(a) | Accumulated provision for uncollectible accounts: In accordance with its regulatory treatment, certain amounts provided by WPL are recorded in regulatory assets. WPL expenses these amounts when an uncollectible account is written-off.100 | |
(a)Accumulated provision for other reserves:uncollectible accounts: In 2017, Alliant Energyaccordance with its regulatory treatment, certain amounts provided by WPL are recorded in regulatory assets.
(b)Deductions are of the nature for which the reserves were created. In the case of the accumulated provision for uncollectible accounts, deductions from this reserve are reduced by recoveries of amounts previously written off.
(c)Refer to deferred tax liabilities related to the impacts of Tax Reform, which is discussed in Note 115(b). | |
(b) | Deductions are of the nature for which the reserves were created. In the case of the accumulated provision for uncollectible accounts, deductions from this reserve are reduced by recoveries of amounts previously written off. |
| |
(c) | Refer to Note 5(b) for discussion of IPL’s sales of accounts receivable program. |
| |
(d) | Other reserves are largely related to injury and damage claims arising in the ordinary course of business, and the impacts of Tax Reform. |
for discussion of IPL’s sales of accounts receivable program.
NOTE: All other schedules are omitted because they are not applicable or not required, or because that required information is shown either in the financial statements or in the notes thereto.
(3) Exhibits Required by SEC Regulation S-K - Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the registrants agree to furnish to the SEC, upon request, any instrument defining the rights of holders of unregistered long-term debt not filed as an exhibit to this combined Form 10-K. No such instrument authorizes securities in excess of 10% of the total assets of Alliant Energy, IPL or WPL, as the case may be. The following exhibits for Alliant Energy, IPL and WPL are filed herewith or incorporated herein by reference.
| |
(3) | Exhibits Required by SEC Regulation S-K - Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the registrants agree to furnish to the SEC, upon request, any instrument defining the rights of holders of unregistered long-term debt not filed as an exhibit to this combined Form 10-K. No such instrument authorizes securities in excess of 10% of the total assets of Alliant Energy, IPL or WPL, as the case may be. The following exhibits for Alliant Energy, IPL and WPL are filed herewith or incorporated herein by reference.
|
| Description |
| | |
Exhibit Number | | Description |
1.1 | 3.1 | |
3.1 | | |
| 3.1a | | |
| 3.2 | | |
| 3.3 | | |
| 3.4 | | |
| 3.5 | | |
| 3.6 | |
3.6 | 4.1 | |
4.1 | | Five-Year Master Credit Agreement, dated as of August 16, 2017,effective December 17, 2021, among Alliant Energy, IPL, WPL, Wells Fargo Bank, National Association (N.A.) and the lender parties set forth therein (incorporated by reference to Exhibit 4.1 to Alliant Energy’s Form 8-K, filed AugustDecember 21, 20172021 (File No. 1-9894)) |
| 4.2 | | |
| 4.3 | | Indenture, dated as of June 12, 2018, among AEF, Alliant Energy, as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 4.1 to Alliant Energy’s Form 8-K, filed June 12, 2018 (File No. 1-9894)) |
| 4.4 | |
| 4.5 | |
4.4 | 4.5a | First Supplemental Indenture, dated September 16, 2021, among WPL, Wells Fargo Bank, N.A., as Original Trustee, and U.S. Bank N.A., as Series Trustee (incorporated by reference to Exhibit 4.1 to WPL's Form 8-K, filed September 16, 2021 (File No. 0-337)) |
| 4.6 | |
4.5 | 4.7 | |
4.6 | 4.8 | |
4.7 | 4.9 | |
4.8 | | |
4.9 | | |
| 4.10 | | |
| 4.11 | | |
| 4.12 | | |
| 4.13 | |
| 4.14 | |
4.13 | 4.15 | |
4.14 | | |
4.15 | 4.16 | |
| | | | | |
| Exhibit Number | Description |
| 4.16a | |
4.16 | 4.17 | |
|
| | |
Exhibit Number | | Description |
4.17 | | |
| 4.18 | | |
| 4.19 | | |
4.20 | | |
4.21 | 4.20 | |
4.21a | 4.20a | |
4.22 | 4.21 | |
4.23 | 4.22 | |
4.24 | 4.23 | |
10.1 | 4.24 | |
| 4.25 | |
| 4.26 | |
| 4.27 | |
| 4.28 | |
| 10.1 | Term Loan Credit Agreement, dated as of October 7, 2016,March 3, 2020, among AEF, Alliant Energy, JPMorgan Chase Bank,KeyBank N.A. and the lender parties set forth therein (incorporated by reference to Exhibit 10.1 to Alliant Energy’s Form 8-K, filed October 7, 2016March 5, 2020 (File No. 1-9894)) |
| 10.2# | | |
10.2a# | | |
10.2b# | | |
10.2c# | | |
10.3# | | |
10.3a# | 10.2a# | |
| 10.2b# | |
10.3b# | 10.2c# | |
10.3c# | 10.2d# | |
10.4# | 10.3 | |
| 10.3a# | |
10.4a# | 10.3b# | |
10.4b# | 10.3c# | |
10.5# | | |
10.5a# | | |
10.5b# | 10.3d# | |
| 10.3e# | |
10.5c# | 10.3f# | |
10.6# | 10.3g# | |
| 10.4# | |
|
| | |
Exhibit Number | | Description |
10.6a# | 10.4a# | |
10.7# | 10.5# | |
10.8# | 10.6# | |
10.8a# | 10.6a# | |
10.8b# | 10.6b# | |
10.9# | 10.7# | |
| | | | | |
| Exhibit Number | Description |
| 10.7a# | |
10.10# | 10.8# | |
10.11# | 10.9# | |
10.11a# | 10.9a# | |
10.11b# | 10.9b# | |
10.12# | 10.10# | |
10.13# | 10.11# | |
10.13a# | 10.12# | |
10.14# | 10.13# | |
10.15# | | |
10.15a# | | |
10.16# | | |
10.17# | 10.14# | |
12.1 | 21.1 | |
12.2 | | |
12.3 | | |
21.1 | | |
| 23.1 | | |
| 23.2 | | |
| 23.3 | | |
| 31.1 | | |
| 31.2 | | |
| 31.3 | | |
| 31.4 | | |
| 31.5 | | |
| 31.6 | | |
| 32.1 | | |
|
| | |
Exhibit Number | | Description |
| 32.2 | | |
| 32.3 | | |
| 101.INS | | Extensible Business Reporting Language (XBRL)Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
| 101.SCH | | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.LAB | | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 101.DEF | | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
# A management contract or compensatory plan or arrangement.
ITEM 16. FORM 10-K SUMMARY
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned, thereunto duly authorized on the 23rd18th day of February 2018.
|
| | | | | | | | | | | | | |
| ALLIANT ENERGY | | INTERSTATE POWER | | WISCONSIN POWER |
| CORPORATION | | AND LIGHT COMPANY | | AND LIGHT COMPANY |
By: /s/ Patricia L. Kampling /s/ John O. Larsen | | By: /s/ Patricia L. Kampling /s/ John O. Larsen | | By: /s/ Patricia L. Kampling /s/ John O. Larsen |
Patricia L. KamplingJohn O. Larsen | | Patricia L. KamplingJohn O. Larsen | | Patricia L. KamplingJohn O. Larsen |
ChairmanChair, President and Chief Executive Officer | | ChairmanChair and Chief Executive Officer | | ChairmanChair and Chief Executive Officer |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrants and in the capacities indicated on the 23rd18th day of February 2018.
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| ALLIANT ENERGY | | INTERSTATE POWER | | WISCONSIN POWER |
| CORPORATION | | AND LIGHT COMPANY | | AND LIGHT COMPANY |
| /s/ John O. Larsen | | /s/ John O. Larsen | | /s/ John O. Larsen |
| John O. Larsen | | John O. Larsen | | John O. Larsen |
| Chair, President, Chief Executive Officer and Director (Principal Executive Officer) | | Chair, Chief Executive Officer and Director (Principal Executive Officer) | | Chair, Chief Executive Officer and Director (Principal Executive Officer) |
| | | | |
ALLIANT ENERGY | | INTERSTATE POWER | | WISCONSIN POWER |
CORPORATION | | AND LIGHT COMPANY | | AND LIGHT COMPANY |
By: /s/ Patricia L. Kampling
| | By: /s/ Patricia L. Kampling
| | By: /s/ Patricia L. Kampling
|
Patricia L. Kampling | | Patricia L. Kampling | | Patricia L. Kampling |
Chairman, Chief Executive Officer and Director (Principal Executive Officer) | | Chairman, Chief Executive Officer and Director (Principal Executive Officer) | | Chairman, Chief Executive Officer and Director (Principal Executive Officer) |
| | | | |
| /s/ Robert J. Durian | | /s/ Robert J. Durian | | /s/ Robert J. Durian |
| Robert J. Durian | | Robert J. Durian | | Robert J. Durian |
SeniorExecutive Vice President and Chief Financial Officer and Treasurer (Principal Financial Officer) | | SeniorExecutive Vice President and Chief Financial Officer and Treasurer (Principal Financial Officer) | | SeniorExecutive Vice President and Chief Financial Officer and Treasurer (Principal Financial Officer) |
| | | | |
| /s/ Benjamin M. Bilitz | | /s/ Benjamin M. Bilitz | | /s/ Benjamin M. Bilitz |
| Benjamin M. Bilitz | | Benjamin M. Bilitz | | Benjamin M. Bilitz |
| Chief Accounting Officer and Controller (Principal Accounting Officer) | | Chief Accounting Officer and Controller (Principal Accounting Officer) | | Chief Accounting Officer and Controller (Principal Accounting Officer) |
| | | | |
| /s/ Patrick E. Allen | | /s/ Patrick E. Allen | | /s/ Patrick E. Allen |
| Patrick E. Allen, Director | | Patrick E. Allen, Director | | Patrick E. Allen, Director |
| | | | |
| /s/ N. Joy Falotico | | /s/ N. Joy Falotico | | /s/ N. Joy Falotico |
| N. Joy Falotico, Director | | N. Joy Falotico, Director | | N. Joy Falotico, Director |
| | | | |
/s/ Michael L. BennettD. Garcia | | /s/ Michael L. BennettD. Garcia | | /s/ Michael L. BennettD. Garcia |
Michael L. Bennett,D. Garcia, Director | | Michael L. Bennett,D. Garcia, Director | | Michael L. Bennett,D. Garcia, Director |
| | | | |
/s/ Deborah B. Dunie | | /s/ Deborah B. Dunie | | /s/ Deborah B. Dunie |
Deborah B. Dunie, Director | | Deborah B. Dunie, Director | | Deborah B. Dunie, Director |
| | | | |
/s/ Darryl B. Hazel | | /s/ Darryl B. Hazel | | /s/ Darryl B. Hazel |
Darryl B. Hazel, Director | | Darryl B. Hazel, Director | | Darryl B. Hazel, Director |
| | | | |
| /s/ Singleton B. McAllister | | /s/ Singleton B. McAllister | | /s/ Singleton B. McAllister |
| Singleton B. McAllister, Director | | Singleton B. McAllister, Director | | Singleton B. McAllister, Director |
| | | | |
| /s/ Roger K. Newport | | /s/ Roger K. Newport | | /s/ Roger K. Newport |
| Roger K. Newport, Director | | Roger K. Newport, Director | | Roger K. Newport, Director |
| | | | |
| /s/ Thomas F. O’Toole | | /s/ Thomas F. O’Toole | | /s/ Thomas F. O’Toole |
| Thomas F. O’Toole, Director | | Thomas F. O’Toole, Director | | Thomas F. O’Toole, Director |
| | | | |
| /s/ Dean C. Oestreich | | /s/ Dean C. Oestreich | | /s/ Dean C. Oestreich |
| Dean C. Oestreich, Director | | Dean C. Oestreich, Director | | Dean C. Oestreich, Director |
| | | | |
| /s/ Carol P. Sanders | | /s/ Carol P. Sanders | | /s/ Carol P. Sanders |
| Carol P. Sanders, Director | | Carol P. Sanders, Director | | Carol P. Sanders, Director |
| | | | |
| /s/ Susan D. Whiting | | /s/ Susan D. Whiting | | /s/ Susan D. Whiting |
| Susan D. Whiting, Director | | Susan D. Whiting, Director | | Susan D. Whiting, Director |
