UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2017March 31, 2018
or
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☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
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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 | | |
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0-337 | | WISCONSIN POWER AND LIGHT COMPANY | | 39-0714890 |
| | (a Wisconsin corporation) | | |
| | 4902 N. Biltmore Lane | | |
| | Madison, Wisconsin 53718 | | |
| | Telephone (608) 458-3311 | | |
This combined Form 10-Q is separately filed by Alliant Energy Corporation, Interstate Power and Light Company and Wisconsin Power and Light Company. Information contained in the Form 10-Q 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.
Indicate by check mark whether the registrants (1) have 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) have been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrants have 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 were required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers, smaller reporting companies, or emerging growth companies. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| 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 | | | | | ☒ | | | | |
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. ☐
Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Number of shares outstanding of each class of common stock as of June 30, 2017March 31, 2018:
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Alliant Energy Corporation | Common stock, $0.01 par value, 231,062,417231,481,828 shares outstanding |
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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) |
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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) |
TABLE OF CONTENTS
DEFINITIONS
The following abbreviations or acronyms used in this Form 10-Q are defined below:
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Abbreviation or Acronym | Definition | Abbreviation or Acronym | Definition |
20162017 Form 10-K | Combined Annual Report on Form 10-K filed by Alliant Energy, IPL and WPL for the year ended Dec. 31, 20162017 | ITCIUB | ITC Midwest LLCIowa Utilities Board |
AEF | Alliant Energy Finance, LLC | IUB | Iowa Utilities Board |
AFUDC | Allowance for funds used during construction | Marshalltown | Marshalltown Generating Station |
Alliant Energy | Alliant Energy Corporation | MDA | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
ATCAFUDC | American Transmission CompanyAllowance for funds used during construction | MISO | Midcontinent Independent System Operator, Inc. |
ATIAlliant Energy | AE Transco Investments, LLCAlliant Energy Corporation | MW | Megawatt |
CDDATC | Cooling degree daysAmerican Transmission Company LLC | MWh | Megawatt-hour |
ATC Holdings | Interest in American Transmission Company LLC and ATC Holdco LLC | N/A | Not applicable |
Corporate Services | Alliant Energy Corporate Services, Inc. | N/A | Not applicable |
Dth | Dekatherm | Note(s) | Combined Notes to Condensed Consolidated Financial Statements |
Dth | Dekatherm | NOx | Nitrogen oxide |
EGU | Electric generating unit | NOxOPEB | Nitrogen oxideOther postretirement benefits |
EPA | U.S. Environmental Protection Agency | OPEB | Other postretirement benefits |
EPS | Earnings per weighted average common share | PSCW | Public Service Commission of Wisconsin |
FERC | Federal Energy Regulatory Commission | Riverside | Riverside Energy Center |
Financial Statements | Condensed Consolidated Financial Statements | RMTSCR | RMT, Inc.Selective catalytic reduction |
FTR | Financial transmission right | SCRTax Reform | Selective catalytic reductionTax Cuts and Jobs Act |
Fuel-related | Electric production fuel and purchased power | SO2U.S. | Sulfur dioxideUnited States of America |
GAAP | U.S. generally accepted accounting principles | U.S. | United States of America |
HDD | Heating degree days | Whiting Petroleum | Whiting Petroleum Corporation |
IPL | Interstate Power and Light Company | WPL | Wisconsin Power and Light Company |
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:
federal and state regulatory or governmental actions, including the impact of energy, tax (including potential tax reform), financial and health care legislation, and of regulatory agency orders;
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;
the ability to continue cost controlsfederal and operational efficiencies;
state regulatory or governmental actions, including the impact of IPL’s pending retail electric base rate review;
weather effects on results of utility operations;
the impact of the economy in IPL’senergy, tax, financial and WPL’s service territorieshealth care legislation, and the resulting impacts on sales volumes, margins and the ability to collect unpaid bills;regulatory agency orders;
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;
developments that adversely impact the ability to implementutilize tax credits and net operating losses generated to date, and those that may be generated in the strategic plan;future, before they expire;
the abilitydirect or indirect effects resulting from terrorist incidents, including physical attacks and cyber attacks, or responses to qualify for the full level of production tax credits on planned and potential new wind farms and 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;
employee workforce factors, including changes in key executives, ability to production tax credits for existing wind farms;hire and retain employees with specialized skills, ability to create desired corporate culture, collective bargaining agreements and negotiations, work stoppages or restructurings;
weather effects on results of utility operations;
issues related to the availability and operations of EGUs, including start-up risks, breakdown or failure of equipment, 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;
disruptions in the supply and delivery of natural gas, purchased electricity and coal;
changes in the price of delivered natural gas, purchased electricity and coal due to shifts in supply and demand caused by market conditions and regulations;
impacts on equity income from unconsolidated investments due to further potential changes to ATC LLC’s authorized return on equity;
issues associated with environmental remediation and environmental compliance, including compliance with the Consent Decree between WPL, the EPA and the Sierra Club, the Consent Decree between IPL, the EPA, the Sierra Club, the State of Iowa and Linn County in Iowa, the Coal Combustion Residuals Rule, the Clean Power Plan, future changes in environmental laws and regulations, including the EPA’s regulations for carbon dioxide emissions reductions from new and existing fossil-fueled EGUs, and litigation associated with environmental requirements;
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;
the impact of the economy in IPL’s and WPL’s service territories and the resulting impacts on sales volumes, margins and the ability to collect unpaid bills;
changes in the price of delivered natural gas, 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;
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 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;
issues related to the availability and operations of EGUs, including start-up risks, breakdown or failure of equipment, 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 storms or natural disasters in IPL’s and WPL’s service territories may have on their operations and recovery of costs associated with restoration activities;
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 breakdown or failure of equipment in the operation of gas distribution systems, such as leaks, explosions and mechanical problems, and compliance with gas transmission and distribution safety regulations, such as proposed rules issued by the Pipeline and Hazardous Materials Safety Administration;
impacts of IPL’s future tax benefits from Iowa rate-making practices, including deductions for repairs expenditures and allocation of mixed service costs, and recoverability of the associated regulatory assets from customers, when the differences reverse in future periods;
risks associated with non-regulated renewable 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;
continued accessAlliant 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 capital marketsmarket value of the assets that fund the plans, economic conditions, financial market performance, interest rates, life expectancies and demographics;
material changes in employee-related benefit and compensation costs;
risks associated with operation and ownership of non-utility 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 competitive termsequity income from unconsolidated investments due to further 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, allocation of mixed service costs and rates,state depreciation, and recoverability of the actionsassociated regulatory assets from customers, when the differences reverse in future periods;
the impacts of credit rating agencies;
inflationadjustments made to deferred tax assets and interest rates;liabilities from changes in the tax laws;
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;
Alliant Energy’s ability to sustain its dividend payout ratio goal;
employee workforce factors, including changes in key executives, collective bargaining agreements and negotiations, work stoppages or restructurings;
changes in technology that alter the channels through which electric customers buy or utilize electricity;
material changes in employee-related benefit and compensation costs;
the effect of accounting standards issued periodically by standard-setting bodies;
the impact of adjustments made to deferred tax assets and liabilities from state apportionment assumptions;
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 ability to successfully complete tax audits and changes in tax accounting methods with no material impact on earnings and cash flows; and
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• | factors listed in MDA and Risk Factors in Item 1A in the 20162017 Form 10-K. |
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.
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| | | For the Three Months | | For the Six Months | For the Three Months |
| Ended June 30, | | Ended June 30, | Ended March 31, |
| 2017 | | 2016 | | 2017 | | 2016 | 2018 | | 2017 |
| (in millions, except per share amounts) | (in millions, except per share amounts) |
Operating revenues: | | | | | | | | |
Revenues: | | | | |
Electric utility |
| $680.9 |
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| $675.9 |
| |
| $1,358.5 |
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| $1,344.8 |
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| $708.7 |
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| $677.6 |
|
Gas utility | 62.6 |
| | 57.0 |
| | 216.9 |
| | 209.2 |
| 185.6 |
| | 154.3 |
|
Other utility | 11.5 |
| | 12.4 |
| | 23.2 |
| | 25.6 |
| 13.2 |
| | 11.7 |
|
Non-regulated | 10.3 |
| | 9.3 |
| | 20.6 |
| | 18.8 |
| |
Total operating revenues | 765.3 |
| | 754.6 |
| | 1,619.2 |
| | 1,598.4 |
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Non-utility | | 8.8 |
| | 10.3 |
|
Total revenues | | 916.3 |
| | 853.9 |
|
Operating expenses: | | | | | | | | | | |
Electric production fuel and purchased power | 184.3 |
| | 199.5 |
| | 392.1 |
| | 400.4 |
| 203.2 |
| | 207.8 |
|
Electric transmission service | 117.6 |
| | 130.3 |
| | 242.3 |
| | 258.2 |
| 126.4 |
| | 124.7 |
|
Cost of gas sold | 28.3 |
| | 24.6 |
| | 120.5 |
| | 119.8 |
| 111.2 |
| | 92.2 |
|
Other operation and maintenance | 145.1 |
| | 144.5 |
| | 298.0 |
| | 289.6 |
| 162.4 |
| | 148.6 |
|
Depreciation and amortization | 115.0 |
| | 102.1 |
| | 222.0 |
| | 204.6 |
| 120.4 |
| | 107.0 |
|
Taxes other than income taxes | 25.7 |
| | 25.0 |
| | 52.1 |
| | 51.3 |
| 27.0 |
| | 26.4 |
|
Total operating expenses | 616.0 |
| | 626.0 |
| | 1,327.0 |
| | 1,323.9 |
| 750.6 |
| | 706.7 |
|
Operating income | 149.3 |
| | 128.6 |
| | 292.2 |
| | 274.5 |
| 165.7 |
| | 147.2 |
|
Interest expense and other: | | | | | | | | |
Other (income) and deductions: | | | | |
Interest expense | 52.8 |
| | 48.0 |
| | 105.1 |
| | 96.0 |
| 59.2 |
| | 52.3 |
|
Equity income from unconsolidated investments, net | (11.3 | ) | | (9.1 | ) | | (22.8 | ) | | (19.6 | ) | (21.3 | ) | | (11.5 | ) |
Allowance for funds used during construction | (10.1 | ) | | (15.3 | ) | | (27.1 | ) | | (28.5 | ) | (14.9 | ) | | (17.0 | ) |
Interest income and other | (0.1 | ) | | — |
| | (0.2 | ) | | (0.2 | ) | |
Total interest expense and other | 31.3 |
| | 23.6 |
| | 55.0 |
| | 47.7 |
| |
Other | | 2.4 |
| | 4.2 |
|
Total other (income) and deductions | | 25.4 |
| | 28.0 |
|
Income from continuing operations before income taxes | 118.0 |
| | 105.0 |
| | 237.2 |
| | 226.8 |
| 140.3 |
| | 119.2 |
|
Income taxes | 21.2 |
| | 18.1 |
| | 38.8 |
| | 39.7 |
| 16.8 |
| | 17.6 |
|
Income from continuing operations, net of tax | 96.8 |
| | 86.9 |
| | 198.4 |
| | 187.1 |
| 123.5 |
| | 101.6 |
|
Income (loss) from discontinued operations, net of tax | — |
| | (0.5 | ) | | 1.4 |
| | (1.6 | ) | |
Income from discontinued operations, net of tax | | — |
| | 1.4 |
|
Net income | 96.8 |
| | 86.4 |
| | 199.8 |
| | 185.5 |
| 123.5 |
| | 103.0 |
|
Preferred dividend requirements of Interstate Power and Light Company | 2.5 |
| | 2.5 |
| | 5.1 |
| | 5.1 |
| 2.6 |
| | 2.6 |
|
Net income attributable to Alliant Energy common shareowners |
| $94.3 |
| |
| $83.9 |
| |
| $194.7 |
| |
| $180.4 |
|
| $120.9 |
| |
| $100.4 |
|
Weighted average number of common shares outstanding (basic and diluted) | 229.0 |
| | 227.0 |
| | 228.3 |
| | 226.9 |
| 231.4 |
| | 227.6 |
|
Earnings per weighted average common share attributable to Alliant Energy common shareowners (basic and diluted) |
| $0.41 |
| |
| $0.37 |
| |
| $0.85 |
| |
| $0.80 |
| |
Earnings per weighted average common share attributable to Alliant Energy common shareowners (basic and diluted): | | | | |
Income from continuing operations, net of tax | |
| $0.52 |
| |
| $0.43 |
|
Income from discontinued operations, net of tax | | — |
| | 0.01 |
|
Net income | |
| $0.52 |
| |
| $0.44 |
|
Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | | |
Income from continuing operations, net of tax |
| $94.3 |
| |
| $84.4 |
| |
| $193.3 |
| |
| $182.0 |
|
| $120.9 |
| |
| $99.0 |
|
Income (loss) from discontinued operations, net of tax | — |
| | (0.5 | ) | | 1.4 |
| | (1.6 | ) | |
Income from discontinued operations, net of tax | | — |
| | 1.4 |
|
Net income |
| $94.3 |
| |
| $83.9 |
| |
| $194.7 |
| |
| $180.4 |
|
| $120.9 |
| |
| $100.4 |
|
Dividends declared per common share |
| $0.315 |
| |
| $0.29375 |
| |
| $0.63 |
| |
| $0.5875 |
|
| $0.335 |
| |
| $0.315 |
|
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| | | June 30, 2017 | | December 31, 2016 | March 31, 2018 | | December 31, 2017 |
| (in millions, except per share and share amounts) | (in millions, except per share and share amounts) |
ASSETS | | | | | | |
Current assets: | | | | | | |
Cash and cash equivalents |
| $7.3 |
| |
| $8.2 |
|
| $19.1 |
| |
| $27.9 |
|
Accounts receivable, less allowance for doubtful accounts | 424.9 |
| | 493.3 |
| 343.2 |
| | 482.8 |
|
Production fuel, at weighted average cost | 84.7 |
| | 98.1 |
| 76.7 |
| | 72.3 |
|
Gas stored underground, at weighted average cost | 22.2 |
| | 37.6 |
| 16.3 |
| | 44.5 |
|
Materials and supplies, at weighted average cost | 94.7 |
| | 86.6 |
| 109.8 |
| | 105.6 |
|
Regulatory assets | 68.5 |
| | 57.8 |
| 74.9 |
| | 84.3 |
|
Other | 112.4 |
| | 95.5 |
| 85.9 |
| | 87.7 |
|
Total current assets | 814.7 |
| | 877.1 |
| 725.9 |
| | 905.1 |
|
Property, plant and equipment, net | 10,608.1 |
| | 10,279.2 |
| 11,439.6 |
| | 11,234.5 |
|
Investments: | | | | | | |
ATC Investment | 335.2 |
| | 317.6 |
| |
ATC Holdings | | 275.5 |
| | 274.2 |
|
Other | 19.3 |
| | 20.0 |
| 139.2 |
| | 121.9 |
|
Total investments | 354.5 |
| | 337.6 |
| 414.7 |
| | 396.1 |
|
Other assets: | | | | | | |
Regulatory assets | 1,947.5 |
| | 1,857.3 |
| 1,589.2 |
| | 1,582.4 |
|
Deferred charges and other | 18.6 |
| | 22.6 |
| 72.4 |
| | 69.7 |
|
Total other assets | 1,966.1 |
| | 1,879.9 |
| 1,661.6 |
| | 1,652.1 |
|
Total assets |
| $13,743.4 |
| |
| $13,373.8 |
|
| $14,241.8 |
| |
| $14,187.8 |
|
| | LIABILITIES AND EQUITY | | | | | | |
Current liabilities: | | | | | | |
Current maturities of long-term debt |
| $5.2 |
| |
| $4.6 |
|
| $855.7 |
| |
| $855.7 |
|
Commercial paper | 368.6 |
| | 244.1 |
| 336.4 |
| | 320.2 |
|
Other short-term borrowings | | 95.0 |
| | 95.0 |
|
Accounts payable | 381.1 |
| | 445.3 |
| 363.1 |
| | 477.3 |
|
Regulatory liabilities | 187.6 |
| | 186.2 |
| 172.2 |
| | 140.0 |
|
Other | 265.7 |
| | 281.8 |
| 251.1 |
| | 260.8 |
|
Total current liabilities | 1,208.2 |
| | 1,162.0 |
| 2,073.5 |
| | 2,149.0 |
|
Long-term debt, net (excluding current portion) | 4,354.3 |
| | 4,315.6 |
| 4,056.8 |
| | 4,010.6 |
|
Other liabilities: | | | | | | |
Deferred tax liabilities | 2,681.3 |
| | 2,570.2 |
| 1,511.6 |
| | 1,478.4 |
|
Regulatory liabilities | 478.2 |
| | 494.8 |
| 1,365.7 |
| | 1,357.2 |
|
Pension and other benefit obligations | 482.7 |
| | 489.9 |
| 488.9 |
| | 504.0 |
|
Other | 288.3 |
| | 279.3 |
| 313.8 |
| | 306.4 |
|
Total other liabilities | 3,930.5 |
| | 3,834.2 |
| 3,680.0 |
| | 3,646.0 |
|
Commitments and contingencies (Note 12) |
|
| |
|
| |
Commitments and contingencies (Note 13) | |
|
| |
|
|
Equity: | | | | | | |
Alliant Energy Corporation common equity: | | | | | | |
Common stock - $0.01 par value - 480,000,000 shares authorized; 231,062,417 and 227,673,654 shares outstanding | 2.3 |
| | 2.3 |
| |
Common stock - $0.01 par value - 480,000,000 shares authorized; 231,481,828 and 231,348,646 shares outstanding | | 2.3 |
| | 2.3 |
|
Additional paid-in capital | 1,830.4 |
| | 1,693.1 |
| 1,851.4 |
| | 1,845.5 |
|
Retained earnings | 2,228.6 |
| | 2,177.0 |
| 2,389.4 |
| | 2,346.0 |
|
Accumulated other comprehensive loss | (0.4 | ) | | (0.4 | ) | (0.5 | ) | | (0.5 | ) |
Shares in deferred compensation trust - 450,173 and 441,695 shares at a weighted average cost of $23.25 and $22.71 per share | (10.5 | ) | | (10.0 | ) | |
Shares in deferred compensation trust - 458,639 and 463,365 shares at a weighted average cost of $24.17 and $23.91 per share | | (11.1 | ) | | (11.1 | ) |
Total Alliant Energy Corporation common equity | 4,050.4 |
| | 3,862.0 |
| 4,231.5 |
| | 4,182.2 |
|
Cumulative preferred stock of Interstate Power and Light Company | 200.0 |
| | 200.0 |
| 200.0 |
| | 200.0 |
|
Total equity | 4,250.4 |
| | 4,062.0 |
| 4,431.5 |
| | 4,382.2 |
|
Total liabilities and equity |
| $13,743.4 |
| |
| $13,373.8 |
|
| $14,241.8 |
| |
| $14,187.8 |
|
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| | | For the Six Months | For the Three Months |
| Ended June 30, | Ended March 31, |
| 2017 | | 2016 | 2018 | | 2017 |
| (in millions) | (in millions) |
Cash flows from operating activities: | | | | | | |
Net income |
| $199.8 |
| |
| $185.5 |
|
| $123.5 |
| |
| $103.0 |
|
Adjustments to reconcile net income to net cash flows from operating activities: | | | | | | |
Depreciation and amortization | 222.0 |
| | 204.6 |
| 120.4 |
| | 107.0 |
|
Deferred tax expense and tax credits | 49.7 |
| | 46.1 |
| 17.6 |
| | 22.7 |
|
Other | (10.5 | ) | | (28.8 | ) | (14.8 | ) | | (7.6 | ) |
Other changes in assets and liabilities: | | | | | | |
Accounts receivable | 47.7 |
| | (59.5 | ) | (147.6 | ) | | (143.2 | ) |
Sales of accounts receivable | 22.0 |
| | 133.0 |
| |
Gas stored underground | | 28.2 |
| | 25.4 |
|
Regulatory assets | (66.7 | ) | | 34.7 |
| (3.4 | ) | | (40.6 | ) |
Derivative assets | | 11.0 |
| | 28.1 |
|
Accounts payable | | (59.6 | ) | | (41.3 | ) |
Regulatory liabilities | (19.0 | ) | | (29.2 | ) | 34.2 |
| | 14.2 |
|
Deferred income taxes | 60.9 |
| | 46.2 |
| 14.9 |
| | 32.8 |
|
Derivative liabilities | 16.8 |
| | (27.5 | ) | |
Other | (20.7 | ) | | 4.9 |
| (35.1 | ) | | 18.5 |
|
Net cash flows from operating activities | 502.0 |
| | 510.0 |
| 89.3 |
| | 119.0 |
|
Cash flows used for investing activities: | | | | | | |
Construction and acquisition expenditures: | | | | | | |
Utility business | (579.3 | ) | | (491.0 | ) | (335.2 | ) | | (268.9 | ) |
Alliant Energy Corporate Services, Inc. and non-regulated businesses | (28.2 | ) | | (28.9 | ) | |
Other | | (20.3 | ) | | (22.6 | ) |
Cash receipts on sold receivables | | 284.3 |
| | 214.7 |
|
Other | (18.9 | ) | | 19.1 |
| (14.0 | ) | | (10.4 | ) |
Net cash flows used for investing activities | (626.4 | ) | | (500.8 | ) | (85.2 | ) | | (87.2 | ) |
Cash flows from (used for) financing activities: | | | | |
Cash flows used for financing activities: | | | | |
Common stock dividends | (143.1 | ) | | (133.2 | ) | (77.5 | ) | | (71.5 | ) |
Proceeds from issuance of common stock, net | 137.3 |
| | 13.8 |
| |
Net change in commercial paper | 164.5 |
| | 127.8 |
| 62.1 |
| | 58.7 |
|
Other | (35.2 | ) | | (16.9 | ) | 5.6 |
| | (17.1 | ) |
Net cash flows from (used for) financing activities | 123.5 |
| | (8.5 | ) | |
Net increase (decrease) in cash and cash equivalents | (0.9 | ) | | 0.7 |
| |
Cash and cash equivalents at beginning of period | 8.2 |
| | 5.8 |
| |
Cash and cash equivalents at end of period |
| $7.3 |
| |
| $6.5 |
| |
Net cash flows used for financing activities | | (9.8 | ) | | (29.9 | ) |
Net increase (decrease) in cash, cash equivalents and restricted cash | | (5.7 | ) | | 1.9 |
|
Cash, cash equivalents and restricted cash at beginning of period | | 33.9 |
| | 13.1 |
|
Cash, cash equivalents and restricted cash at end of period | |
| $28.2 |
| |
| $15.0 |
|
Supplemental cash flows information: | | | | | | |
Cash paid during the period for: | | | | | | |
Interest, net of capitalized interest |
| ($105.0 | ) | |
| ($95.8 | ) |
| ($54.2 | ) | |
| ($51.8 | ) |
Income taxes, net |
| ($11.4 | ) | |
| ($4.3 | ) |
| $— |
| |
| ($2.3 | ) |
Significant non-cash investing and financing activities: | | | | | | |
Accrued capital expenditures |
| $124.3 |
| |
| $122.1 |
|
| $144.9 |
| |
| $139.3 |
|
Beneficial interest obtained in exchange for securitized accounts receivable | |
| $120.9 |
| |
| $149.0 |
|
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
INTERSTATE POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| | | For the Three Months | | For the Six Months | For the Three Months |
| Ended June 30, | | Ended June 30, | Ended March 31, |
| 2017 | | 2016 | | 2017 | | 2016 | 2018 | | 2017 |
| (in millions) | (in millions) |
Operating revenues: | | | | | | | | |
Revenues: | | | | |
Electric utility |
| $372.4 |
| |
| $364.4 |
| |
| $728.6 |
| |
| $726.0 |
|
| $405.7 |
| |
| $356.2 |
|
Gas utility | 36.7 |
| | 34.5 |
| | 119.8 |
| | 118.7 |
| 108.1 |
| | 83.1 |
|
Steam and other | 11.1 |
| | 12.1 |
| | 22.3 |
| | 25.0 |
| 12.0 |
| | 11.2 |
|
Total operating revenues | 420.2 |
| | 411.0 |
| | 870.7 |
| | 869.7 |
| |
Total revenues | | 525.8 |
| | 450.5 |
|
Operating expenses: | | | | | | | | | | |
Electric production fuel and purchased power | 98.0 |
| | 100.4 |
| | 207.5 |
| | 199.8 |
| 114.6 |
| | 109.5 |
|
Electric transmission service | 75.1 |
| | 88.3 |
| | 156.8 |
| | 174.8 |
| 90.8 |
| | 81.7 |
|
Cost of gas sold | 16.9 |
| | 15.9 |
| | 64.7 |
| | 68.3 |
| 60.6 |
| | 47.8 |
|
Other operation and maintenance | 89.4 |
| | 93.0 |
| | 184.3 |
| | 185.0 |
| 105.5 |
| | 93.2 |
|
Depreciation and amortization | 61.2 |
| | 52.4 |
| | 114.8 |
| | 105.1 |
| 64.8 |
| | 53.6 |
|
Taxes other than income taxes | 13.3 |
| | 13.0 |
| | 26.7 |
| | 26.7 |
| 13.9 |
| | 13.4 |
|
Total operating expenses | 353.9 |
| | 363.0 |
| | 754.8 |
| | 759.7 |
| 450.2 |
| | 399.2 |
|
Operating income | 66.3 |
| | 48.0 |
| | 115.9 |
| | 110.0 |
| 75.6 |
| | 51.3 |
|
Interest expense and other: | | | | | | | | |
Other (income) and deductions: | | | | |
Interest expense | 27.9 |
| | 25.0 |
| | 55.6 |
| | 49.9 |
| 29.8 |
| | 27.7 |
|
Allowance for funds used during construction | (6.1 | ) | | (12.1 | ) | | (20.4 | ) | | (22.4 | ) | (7.4 | ) | | (14.3 | ) |
Interest income and other | (0.2 | ) | | (0.1 | ) | | (0.1 | ) | | (0.1 | ) | |
Total interest expense and other | 21.6 |
| | 12.8 |
| | 35.1 |
| | 27.4 |
| |
Other | | 0.8 |
| | 1.8 |
|
Total other (income) and deductions | | 23.2 |
| | 15.2 |
|
Income before income taxes | 44.7 |
| | 35.2 |
| | 80.8 |
| | 82.6 |
| 52.4 |
| | 36.1 |
|
Income tax expense (benefit) | (0.6 | ) | | 0.8 |
| | (4.3 | ) | | — |
| 3.1 |
| | (3.7 | ) |
Net income | 45.3 |
| | 34.4 |
| | 85.1 |
| | 82.6 |
| 49.3 |
| | 39.8 |
|
Preferred dividend requirements | 2.5 |
| | 2.5 |
| | 5.1 |
| | 5.1 |
| 2.6 |
| | 2.6 |
|
Earnings available for common stock |
| $42.8 |
| |
| $31.9 |
| |
| $80.0 |
| |
| $77.5 |
|
| $46.7 |
| |
| $37.2 |
|
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.
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
INTERSTATE POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| | | June 30, 2017 | | December 31, 2016 | March 31, 2018 | | December 31, 2017 |
| (in millions, except per share and share amounts) | (in millions, except per share and share amounts) |
ASSETS | | |
Current assets: | | | | | | |
Cash and cash equivalents |
| $4.0 |
| |
| $3.3 |
|
| $2.9 |
| |
| $3.6 |
|
Accounts receivable, less allowance for doubtful accounts | 194.7 |
| | 240.7 |
| 145.9 |
| | 264.9 |
|
Production fuel, at weighted average cost | 59.8 |
| | 70.3 |
| 55.0 |
| | 52.4 |
|
Gas stored underground, at weighted average cost | 8.2 |
| | 16.3 |
| 3.6 |
| | 20.3 |
|
Materials and supplies, at weighted average cost | 51.8 |
| | 46.5 |
| 61.6 |
| | 60.6 |
|
Regulatory assets | 24.4 |
| | 17.7 |
| 38.1 |
| | 41.9 |
|
Other | 36.9 |
| | 27.7 |
| 23.2 |
| | 32.3 |
|
Total current assets | 379.8 |
| | 422.5 |
| 330.3 |
| | 476.0 |
|
Property, plant and equipment, net | 5,586.5 |
| | 5,435.6 |
| 6,088.5 |
| | 5,926.2 |
|
Other assets: | | | | | | |
Regulatory assets | 1,532.2 |
| | 1,441.1 |
| 1,192.8 |
| | 1,189.7 |
|
Deferred charges and other | 8.6 |
| | 5.5 |
| 16.2 |
| | 14.1 |
|
Total other assets | 1,540.8 |
| | 1,446.6 |
| 1,209.0 |
| | 1,203.8 |
|
Total assets |
| $7,507.1 |
| |
| $7,304.7 |
|
| $7,627.8 |
| |
| $7,606.0 |
|
| | LIABILITIES AND EQUITY | | |
Current liabilities: | | | | | | |
Current maturities of long-term debt | |
| $350.0 |
| |
| $350.0 |
|
Accounts payable |
| $163.8 |
| |
| $186.3 |
| 183.2 |
| | 220.3 |
|
Accounts payable to associated companies | | 35.9 |
| | 50.1 |
|
Regulatory liabilities | 132.4 |
| | 149.6 |
| 102.4 |
| | 69.7 |
|
Other | 194.7 |
| | 185.9 |
| 127.4 |
| | 137.6 |
|
Total current liabilities | 490.9 |
| | 521.8 |
| 798.9 |
| | 827.7 |
|
Long-term debt, net | 2,194.5 |
| | 2,153.5 |
| |
Long-term debt, net (excluding current portion) | | 2,102.2 |
| | 2,056.0 |
|
Other liabilities: | | | | | | |
Deferred tax liabilities | 1,586.9 |
| | 1,511.8 |
| 926.5 |
| | 910.7 |
|
Regulatory liabilities | 283.3 |
| | 281.2 |
| 674.9 |
| | 685.7 |
|
Pension and other benefit obligations | 171.9 |
| | 173.2 |
| 171.6 |
| | 173.8 |
|
Other | 228.6 |
| | 214.2 |
| 239.2 |
| | 242.4 |
|
Total other liabilities | 2,270.7 |
| | 2,180.4 |
| 2,012.2 |
| | 2,012.6 |
|
Commitments and contingencies (Note 12) |
|
| |
|
| |
Commitments and contingencies (Note 13) | |
|
| |
|
|
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 |
| 33.4 |
| | 33.4 |
|
Additional paid-in capital | 1,697.8 |
| | 1,597.8 |
| 1,797.8 |
| | 1,797.8 |
|
Retained earnings | 619.8 |
| | 617.8 |
| 683.3 |
| | 678.5 |
|
Total Interstate Power and Light Company common equity | 2,351.0 |
| | 2,249.0 |
| 2,514.5 |
| | 2,509.7 |
|
Cumulative preferred stock | 200.0 |
| | 200.0 |
| 200.0 |
| | 200.0 |
|
Total equity | 2,551.0 |
| | 2,449.0 |
| 2,714.5 |
| | 2,709.7 |
|
Total liabilities and equity |
| $7,507.1 |
| |
| $7,304.7 |
|
| $7,627.8 |
| |
| $7,606.0 |
|
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
INTERSTATE POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| | | For the Six Months | For the Three Months |
| Ended June 30, | Ended March 31, |
| 2017 | | 2016 | 2018 | | 2017 |
| (in millions) | (in millions) |
Cash flows from operating activities: | | | | |
Cash flows used for operating activities: | | | | |
Net income |
| $85.1 |
| |
| $82.6 |
|
| $49.3 |
| |
| $39.8 |
|
Adjustments to reconcile net income to net cash flows from operating activities: | | | | |
Adjustments to reconcile net income to net cash flows used for operating activities: | | | | |
Depreciation and amortization | 114.8 |
| | 105.1 |
| 64.8 |
| | 53.6 |
|
Other | 8.7 |
| | 3.4 |
| — |
| | 3.1 |
|
Other changes in assets and liabilities: | | | | | | |
Accounts receivable | 27.2 |
| | (32.7 | ) | (166.7 | ) | | (147.0 | ) |
Sales of accounts receivable | 22.0 |
| | 133.0 |
| |
Regulatory assets | (47.5 | ) | | (2.8 | ) | (3.3 | ) | | (29.3 | ) |
Accounts payable | | (34.3 | ) | | (24.7 | ) |
Regulatory liabilities | (18.7 | ) | | (30.2 | ) | 21.7 |
| | 15.7 |
|
Accrued taxes | 12.2 |
| | (14.5 | ) | |
Deferred income taxes | 54.2 |
| | 44.0 |
| 11.2 |
| | 29.1 |
|
Other | 10.0 |
| | (16.1 | ) | (7.9 | ) | | 21.3 |
|
Net cash flows from operating activities | 268.0 |
| | 271.8 |
| |
Cash flows used for investing activities: | | | | |
Utility construction and acquisition expenditures | (290.2 | ) | | (298.4 | ) | |
Net cash flows used for operating activities | | (65.2 | ) | | (38.4 | ) |
Cash flows from investing activities: | | | | |
Construction and acquisition expenditures | | (218.2 | ) | | (127.6 | ) |
Cash receipts on sold receivables | | 284.3 |
| | 214.7 |
|
Other | (15.7 | ) | | 6.9 |
| (10.5 | ) | | (8.7 | ) |
Net cash flows used for investing activities | (305.9 | ) | | (291.5 | ) | |
Cash flows from financing activities: | | | | |
Net cash flows from investing activities | | 55.6 |
| | 78.4 |
|
Cash flows from (used for) financing activities: | | | | |
Common stock dividends | (78.0 | ) | | (76.1 | ) | (41.9 | ) | | (39.1 | ) |
Capital contributions from parent | 100.0 |
| | 40.0 |
| |
Net change in commercial paper | 40.0 |
| | 67.0 |
| 45.9 |
| | 9.2 |
|
Other | (23.4 | ) | | (13.3 | ) | 4.9 |
| | (9.3 | ) |
Net cash flows from financing activities | 38.6 |
| | 17.6 |
| |
Net increase (decrease) in cash and cash equivalents | 0.7 |
| | (2.1 | ) | |
Cash and cash equivalents at beginning of period | 3.3 |
| | 4.5 |
| |
Cash and cash equivalents at end of period |
| $4.0 |
| |
| $2.4 |
| |
Net cash flows from (used for) financing activities | | 8.9 |
| | (39.2 | ) |
Net increase (decrease) in cash, cash equivalents and restricted cash | | (0.7 | ) | | 0.8 |
|
Cash, cash equivalents and restricted cash at beginning of period | | 7.2 |
| | 4.2 |
|
Cash, cash equivalents and restricted cash at end of period | |
| $6.5 |
| |
| $5.0 |
|
Supplemental cash flows information: | | | | | | |
Cash (paid) refunded during the period for: | | | | |
Cash paid during the period for: | | | | |
Interest |
| ($55.7 | ) | |
| ($49.8 | ) |
| ($28.2 | ) | |
| ($28.4 | ) |
Income taxes, net |
| $11.9 |
| |
| ($12.9 | ) |
| $— |
| |
| ($2.6 | ) |
Significant non-cash investing and financing activities: | | | | | | |
Accrued capital expenditures |
| $43.2 |
| |
| $52.1 |
|
| $68.3 |
| |
| $44.2 |
|
Beneficial interest obtained in exchange for securitized accounts receivable | |
| $120.9 |
| |
| $149.0 |
|
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| | | For the Three Months | | For the Six Months | For the Three Months |
| Ended June 30, | | Ended June 30, | Ended March 31, |
| 2017 | | 2016 | | 2017 | | 2016 | 2018 | | 2017 |
| (in millions) | (in millions) |
Operating revenues: | | | | | | | | |
Revenues: | | | | |
Electric utility |
| $308.5 |
| |
| $311.5 |
| |
| $629.9 |
| |
| $618.8 |
|
| $303.0 |
| |
| $321.4 |
|
Gas utility | 25.9 |
| | 22.5 |
| | 97.1 |
| | 90.5 |
| 77.5 |
| | 71.2 |
|
Other | 0.4 |
| | 0.3 |
| | 0.9 |
| | 0.6 |
| 1.2 |
| | 0.5 |
|
Total operating revenues | 334.8 |
| | 334.3 |
| | 727.9 |
| | 709.9 |
| |
Total revenues | | 381.7 |
| | 393.1 |
|
Operating expenses: | | | | | | | | | | |
Electric production fuel and purchased power | 86.3 |
| | 99.1 |
| | 184.6 |
| | 200.6 |
| 88.6 |
| | 98.3 |
|
Electric transmission service | 42.5 |
| | 42.0 |
| | 85.5 |
| | 83.4 |
| 35.6 |
| | 43.0 |
|
Cost of gas sold | 11.4 |
| | 8.7 |
| | 55.8 |
| | 51.5 |
| 50.6 |
| | 44.4 |
|
Other operation and maintenance | 56.6 |
| | 50.9 |
| | 113.6 |
| | 103.0 |
| 56.3 |
| | 54.4 |
|
Depreciation and amortization | 52.8 |
| | 47.4 |
| | 105.2 |
| | 94.8 |
| 54.6 |
| | 52.4 |
|
Taxes other than income taxes | 11.5 |
| | 11.2 |
| | 23.5 |
| | 22.8 |
| 12.0 |
| | 12.0 |
|
Total operating expenses | 261.1 |
| | 259.3 |
| | 568.2 |
| | 556.1 |
| 297.7 |
| | 304.5 |
|
Operating income | 73.7 |
| | 75.0 |
| | 159.7 |
| | 153.8 |
| 84.0 |
| | 88.6 |
|
Interest expense and other: | | | | | | | | |
Other (income) and deductions: | | | | |
Interest expense | 23.1 |
| | 22.9 |
| | 46.0 |
| | 45.8 |
| 24.7 |
| | 22.9 |
|
Equity income from unconsolidated investments | (0.2 | ) | | (9.0 | ) | | (0.2 | ) | | (19.7 | ) | |
Allowance for funds used during construction | (4.0 | ) | | (3.2 | ) | | (6.7 | ) | | (6.1 | ) | (7.5 | ) | | (2.7 | ) |
Interest income and other | — |
| | (0.2 | ) | | (0.1 | ) | | (0.3 | ) | |
Total interest expense and other | 18.9 |
| | 10.5 |
| | 39.0 |
| | 19.7 |
| |
Other | | 1.1 |
| | 2.5 |
|
Total other (income) and deductions | | 18.3 |
| | 22.7 |
|
Income before income taxes | 54.8 |
| | 64.5 |
| | 120.7 |
| | 134.1 |
| 65.7 |
| | 65.9 |
|
Income taxes | 16.7 |
| | 20.8 |
| | 37.1 |
| | 43.4 |
| 11.7 |
| | 20.4 |
|
Net income | 38.1 |
| | 43.7 |
| | 83.6 |
| | 90.7 |
| |
Net income attributable to noncontrolling interest | — |
| | 0.5 |
| | — |
| | 1.0 |
| |
Earnings available for common stock |
| $38.1 |
| |
| $43.2 |
| |
| $83.6 |
| |
| $89.7 |
|
| $54.0 |
| |
| $45.5 |
|
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.
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| | | June 30, 2017 | | December 31, 2016 | March 31, 2018 | | December 31, 2017 |
| (in millions, except per share and share amounts) | (in millions, except per share and share amounts) |
ASSETS | | |
Current assets: | | | | | | |
Cash and cash equivalents |
| $2.8 |
| |
| $4.2 |
|
| $3.7 |
| |
| $23.1 |
|
Accounts receivable, less allowance for doubtful accounts | 193.1 |
| | 226.3 |
| 192.0 |
| | 212.2 |
|
Production fuel, at weighted average cost | 24.9 |
| | 27.8 |
| 21.7 |
| | 19.9 |
|
Gas stored underground, at weighted average cost | 14.0 |
| | 21.3 |
| 12.7 |
| | 24.2 |
|
Materials and supplies, at weighted average cost | 39.6 |
| | 36.3 |
| 44.9 |
| | 42.1 |
|
Regulatory assets | 44.1 |
| | 40.1 |
| 36.8 |
| | 42.4 |
|
Other | 63.8 |
| | 60.5 |
| 57.7 |
| | 54.7 |
|
Total current assets | 382.3 |
| | 416.5 |
| 369.5 |
| | 418.6 |
|
Property, plant and equipment, net | 4,635.0 |
| | 4,426.7 |
| 4,962.6 |
| | 4,917.9 |
|
Other assets: | | | | | | |
Regulatory assets | 415.3 |
| | 416.2 |
| 396.4 |
| | 392.7 |
|
Deferred charges and other | 23.5 |
| | 30.9 |
| 29.4 |
| | 27.3 |
|
Total other assets | 438.8 |
| | 447.1 |
| 425.8 |
| | 420.0 |
|
Total assets |
| $5,456.1 |
| |
| $5,290.3 |
|
| $5,757.9 |
| |
| $5,756.5 |
|
| | LIABILITIES AND EQUITY | | |
Current liabilities: | | | | | | |
Commercial paper |
| $212.5 |
| |
| $52.3 |
|
| $30.6 |
| |
| $25.0 |
|
Accounts payable | 150.7 |
| | 192.9 |
| 134.6 |
| | 201.7 |
|
Accounts payable to associated companies | | 28.1 |
| | 22.2 |
|
Regulatory liabilities | 55.2 |
| | 36.6 |
| 69.8 |
| | 70.3 |
|
Other | 112.6 |
| | 112.9 |
| 89.8 |
| | 77.0 |
|
Total current liabilities | 531.0 |
| | 394.7 |
| 352.9 |
| | 396.2 |
|
Long-term debt, net | 1,535.9 |
| | 1,535.2 |
| 1,833.7 |
| | 1,833.4 |
|
Other liabilities: | | | | | | |
Deferred tax liabilities | 1,000.0 |
| | 971.6 |
| 530.9 |
| | 522.4 |
|
Regulatory liabilities | 194.9 |
| | 213.6 |
| 690.8 |
| | 671.5 |
|
Capital lease obligations - Sheboygan Falls Energy Facility | 73.8 |
| | 77.2 |
| 65.8 |
| | 70.2 |
|
Pension and other benefit obligations | 205.3 |
| | 207.8 |
| 210.8 |
| | 213.7 |
|
Other | 163.8 |
| | 159.4 |
| 172.5 |
| | 167.6 |
|
Total other liabilities | 1,637.8 |
| | 1,629.6 |
| 1,670.8 |
| | 1,645.4 |
|
Commitments and contingencies (Note 12) |
| |
| |
Commitments and contingencies (Note 13) | |
| |
|
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 |
| 66.2 |
| | 66.2 |
|
Additional paid-in capital | 1,019.0 |
| | 1,019.0 |
| 1,109.0 |
| | 1,109.0 |
|
Retained earnings | 666.2 |
| | 645.6 |
| 725.3 |
| | 706.3 |
|
Total Wisconsin Power and Light Company common equity | 1,751.4 |
| | 1,730.8 |
| 1,900.5 |
| | 1,881.5 |
|
Total liabilities and equity |
| $5,456.1 |
| |
| $5,290.3 |
|
| $5,757.9 |
| |
| $5,756.5 |
|
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| | | For the Six Months | For the Three Months |
| Ended June 30, | Ended March 31, |
| 2017 | | 2016 | 2018 | | 2017 |
| (in millions) | (in millions) |
Cash flows from operating activities: | | | | | | |
Net income |
| $83.6 |
| |
| $90.7 |
|
| $54.0 |
| |
| $45.5 |
|
Adjustments to reconcile net income to net cash flows from operating activities: | | | | | | |
Depreciation and amortization | 105.2 |
| | 94.8 |
| 54.6 |
| | 52.4 |
|
Deferred tax expense and tax credits | 25.2 |
| | 42.0 |
| 6.7 |
| | 11.8 |
|
Other | 4.0 |
| | (15.7 | ) | (4.7 | ) | | 2.6 |
|
Other changes in assets and liabilities: | | | | | | |
Accounts receivable | 32.2 |
| | (5.2 | ) | 18.7 |
| | 13.3 |
|
Regulatory assets | (19.2 | ) | | 37.5 |
| |
Derivative liabilities | 8.8 |
| | (13.9 | ) | |
Accounts payable | | (23.0 | ) | | (25.5 | ) |
Other | (9.9 | ) | | 21.2 |
| 35.4 |
| | 45.5 |
|
Net cash flows from operating activities | 229.9 |
| | 251.4 |
| 141.7 |
| | 145.6 |
|
Cash flows used for investing activities: | | | | | | |
Utility construction and acquisition expenditures | (307.0 | ) | | (192.6 | ) | |
Construction and acquisition expenditures | | (117.0 | ) | | (141.3 | ) |
Other | (15.4 | ) | | (13.0 | ) | (11.7 | ) | | (8.0 | ) |
Net cash flows used for investing activities | (322.4 | ) | | (205.6 | ) | (128.7 | ) | | (149.3 | ) |
Cash flows from (used for) financing activities: | | | | | | |
Common stock dividends | (63.0 | ) | | (67.5 | ) | (35.0 | ) | | (31.5 | ) |
Net change in commercial paper | 160.2 |
| | 25.9 |
| 5.6 |
| | 38.9 |
|
Other | (6.1 | ) | | (1.5 | ) | (1.9 | ) | | (5.8 | ) |
Net cash flows from (used for) financing activities | 91.1 |
| | (43.1 | ) | (31.3 | ) | | 1.6 |
|
Net increase (decrease) in cash and cash equivalents | (1.4 | ) | | 2.7 |
| |
Cash and cash equivalents at beginning of period | 4.2 |
| | 0.4 |
| |
Cash and cash equivalents at end of period |
| $2.8 |
| |
| $3.1 |
| |
Net decrease in cash, cash equivalents and restricted cash | | (18.3 | ) | | (2.1 | ) |
Cash, cash equivalents and restricted cash at beginning of period | | 24.2 |
| | 6.9 |
|
Cash, cash equivalents and restricted cash at end of period | |
| $5.9 |
| |
| $4.8 |
|
Supplemental cash flows information: | | | | | | |
Cash (paid) refunded during the period for: | | | | |
Cash paid during the period for: | | | | |
Interest |
| ($45.9 | ) | |
| ($45.7 | ) |
| ($21.5 | ) | |
| ($21.9 | ) |
Income taxes, net |
| ($19.3 | ) | |
| $3.0 |
| |
Significant non-cash investing and financing activities: | | | | | | |
Accrued capital expenditures |
| $76.6 |
| |
| $62.7 |
|
| $73.9 |
| |
| $90.5 |
|
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
ALLIANT ENERGY CORPORATION
INTERSTATE POWER AND LIGHT COMPANY
WISCONSIN POWER AND LIGHT COMPANY
COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 1(a) General - The interim unaudited Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading. These Financial Statements should be read in conjunction with the financial statements and the notes thereto included in the latest combined Annual Report on Form 10-K.
In the opinion of management, all adjustments, which unless otherwise noted are normal and recurring in nature, necessary for a fair presentation of the results of operations, financial position and cash flows have been made. Results for the sixthree months ended June 30, 2017March 31, 2018 are not necessarily indicative of results that may be expected for the year ending December 31, 2017.2018. A change in management’s estimates or assumptions could have a material impact on financial condition and results of operations during the period in which such change occurred. Certain prior period amounts in the Financial Statements and Notes have been reclassified to conform to the current period presentation for comparative purposes.purposes, including modifications to the presentation of the components of net periodic benefit costs for defined benefit pension and other postretirement plans in the income statements as discussed in Note 1(d), restricted cash and cash receipts on sold receivables in the cash flows statements as discussed in Note 1(d), and segment reporting as discussed in Note 14.
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.
NOTE 1(b) Cash, Cash Equivalents and Restricted Cash - At March 31, 2018 and December 31, 2017, restricted cash primarily related to deposits with trustees and borrowing requirements in Sheboygan Power, LLC’s debt agreement. Refer to Note 1(d) for discussion of revisions to the cash flows statements to include immaterial restricted cash amounts.
NOTE 1(c) Revenue Recognition -
Utility - Revenues from Alliant Energy’s utility business are primarily from retail and wholesale electric and gas sales to customers. Utility revenues are recognized over time as services are rendered or commodities are delivered to customers, and 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 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 each customer’s last meter reading. The unbilled revenue is based on estimates of daily system demand volumes, 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. As of March 31, 2018, the related amounts accrued for IPL and WPL were not material.
IPL and WPL participate in bid/offer-based wholesale energy and ancillary services markets operated by MISO. 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 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 Transportation business and are recognized over 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 revenues.
Other - Alliant Energy, IPL and WPL 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 goods delivered or services performed.
NOTE 1(d) New Accounting Standards -
Revenue Recognition - In May 2014, the Financial Accounting Standards Board issued an accounting standard providing principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which 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 will adoptadopted this standard on January 1, 2018 and currently expect to useusing the modified retrospective method of adoption. If applicable, this method requires a cumulative-effect adjustmentadoption, which was applied to the opening retained earnings balance oncontracts with customers that were completed subsequent to January 1, 2018, as if the standard had always been in effect.2018. Alliant Energy, IPL and WPL doutilized a portfolio approach upon adoption, which involved evaluating portfolios of contracts with similar characteristics, where the effects of applying the standard were not currently anticipate a significant changeexpected to be materially different than evaluating on an individual contract basis. Upon adoption, there were no cumulative effect adjustments made to the January 1, 2018 retained earnings balances. In addition, prior period amounts have not been restated to reflect the adoption of this standard and continue to be reported under the accounting standards in revenue recognitioneffect for retail electric and gas sales, which represent the majority of Alliant Energy’s, IPL’s and WPL’s revenues.those periods. Alliant Energy, IPL and WPL continue to evaluate additional impactsdid not have a material change in revenue recognition, including the timing and pattern of revenue recognition, as a result of the adoption of this standard on their financial condition, resultsstandard. Refer to Notes 1(c) and 8 for further discussion of operations and disclosures.revenue recognition.
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 presentation of the components of net periodic benefit costs for defined benefit pension and other postretirement plans. The standard requires entities to (1) disaggregate 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. In addition, onlyOnly the service cost component of net periodic benefit costs is eligible for capitalization into property, plant and equipment, when applicable.equipment; however, IPL and WPL, as rate-regulated entities, currently expect to capitalize the other components of net periodic benefit costs into regulatory assets or regulatory liabilities. Alliant Energy, IPL and WPL will adoptadopted this standard on January 1, 2018. Upon2018 and used the retrospective method of adoption the standard must be applied retrospectively for the presentation requirements and prospectivelyprospective method of adoption for the capitalization requirements. Alliant Energy, IPL and WPL continueused the actual net periodic benefit costs adjusted for approximately 40% of net periodic benefit costs allocated to evaluate additional impactscapital projects for the retrospective method of adoption for the presentation requirements. The change in presentation resulted in a decrease in “Other operation and maintenance” expenses and an increase in “Other (income) and deductions” in the income statements of $4.3 million, $1.7 million and $2.6 million, respectively, for the three months ended March 31, 2017.
Cash Flows Statements - In August 2016, the Financial Accounting Standards Board issued an accounting standard providing specific guidance on several cash flow classification matters. The accounting standard requires classification of the consideration received for the beneficial interest obtained for transferring accounts receivable from IPL’s sales of accounts receivable program as an investing activity, instead of an operating activity. Alliant Energy, IPL and WPL adopted this standard on their financial conditionJanuary 1, 2018, which was applied retrospectively. For the three months ended March 31, 2017, Alliant Energy and resultsIPL reclassified $214.7 million of operations.the related cash received from IPL’s sales of accounts receivable program from operating activities to investing activities. The related impact on Alliant Energy’s and IPL’s cash flows statements for the year ended December 31, 2017 was $681.9 million.
In November 2016, the Financial Accounting Standards Board issued an accounting standard requiring restricted cash to be included within beginning-of-period and end-of-period cash and cash equivalents in the cash flows statements. Alliant Energy, IPL and WPL adopted this standard on January 1, 2018, which was applied retrospectively. Refer to Note 1(b) for further discussion of restricted cash.
NOTE 2. REGULATORY MATTERS
Regulatory Assets and Regulatory Liabilities -
Regulatory assets were comprised of the following items (in millions):
| | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
| June 30, 2017 | | December 31, 2016 | | June 30, 2017 | | December 31, 2016 | | June 30, 2017 | | December 31, 2016 | March 31, 2018 | | December 31, 2017 | | March 31, 2018 | | December 31, 2017 | | March 31, 2018 | | December 31, 2017 |
Tax-related |
| $1,100.7 |
| |
| $1,055.6 |
| |
| $1,063.3 |
| |
| $1,022.4 |
| |
| $37.4 |
| |
| $33.2 |
|
| $795.1 |
| |
| $778.2 |
| |
| $762.8 |
| |
| $750.5 |
| |
| $32.3 |
| |
| $27.7 |
|
Pension and OPEB costs | 558.3 |
| | 578.7 |
| | 284.2 |
| | 294.0 |
| | 274.1 |
| | 284.7 |
| 538.6 |
| | 548.0 |
| | 270.0 |
| | 274.4 |
| | 268.6 |
| | 273.6 |
|
Asset retirement obligations | 108.7 |
| | 105.9 |
| | 72.5 |
| | 64.3 |
| | 36.2 |
| | 41.6 |
| 104.3 |
| | 109.3 |
| | 67.9 |
| | 72.5 |
| | 36.4 |
| | 36.8 |
|
EGUs retired early | 78.2 |
| | 41.4 |
| | 40.3 |
| | — |
| | 37.9 |
| | 41.4 |
| 60.1 |
| | 63.8 |
| | 30.4 |
| | 31.6 |
| | 29.7 |
| | 32.2 |
|
Derivatives | 47.9 |
| | 30.7 |
| | 18.1 |
| | 10.0 |
| | 29.8 |
| | 20.7 |
| 47.6 |
| | 45.3 |
| | 25.5 |
| | 21.8 |
| | 22.1 |
| | 23.5 |
|
Emission allowances | 25.9 |
| | 26.2 |
| | 25.9 |
| | 26.2 |
| | — |
| | — |
| 25.4 |
| | 25.5 |
| | 25.4 |
| | 25.5 |
| | — |
| | — |
|
Other | 96.3 |
| | 76.6 |
| | 52.3 |
| | 41.9 |
| | 44.0 |
| | 34.7 |
| 93.0 |
| | 96.6 |
| | 48.9 |
| | 55.3 |
| | 44.1 |
| | 41.3 |
|
|
| $2,016.0 |
| |
| $1,915.1 |
| |
| $1,556.6 |
| |
| $1,458.8 |
| |
| $459.4 |
| |
| $456.3 |
|
| $1,664.1 |
| |
| $1,666.7 |
| |
| $1,230.9 |
| |
| $1,231.6 |
| |
| $433.2 |
| |
| $435.1 |
|
Regulatory liabilities were comprised of the following items (in millions):
| | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
| June 30, 2017 | | December 31, 2016 | | June 30, 2017 | | December 31, 2016 | | June 30, 2017 | | December 31, 2016 | March 31, 2018 | | December 31, 2017 | | March 31, 2018 | | December 31, 2017 | | March 31, 2018 | | December 31, 2017 |
Tax-related | |
| $901.3 |
| |
| $899.4 |
| |
| $399.5 |
| |
| $399.5 |
| |
| $501.8 |
| |
| $499.9 |
|
Cost of removal obligations |
| $415.3 |
| |
| $411.6 |
| |
| $273.0 |
| |
| $269.4 |
| |
| $142.3 |
| |
| $142.2 |
| 415.6 |
| | 410.0 |
| | 274.7 |
| | 274.5 |
| | 140.9 |
| | 135.5 |
|
Electric transmission cost recovery | 118.5 |
| | 72.0 |
| | 61.7 |
| | 35.7 |
| | 56.8 |
| | 36.3 |
| 95.3 |
| | 90.4 |
| | 33.5 |
| | 26.4 |
| | 61.8 |
| | 64.0 |
|
Commodity cost recovery | | 31.2 |
| | 21.0 |
| | 24.2 |
| | 14.6 |
| | 7.0 |
| | 6.4 |
|
IPL’s tax benefit riders | 47.2 |
| | 83.5 |
| | 47.2 |
| | 83.5 |
| | — |
| | — |
| 25.0 |
| | 25.0 |
| | 25.0 |
| | 25.0 |
| | — |
| | — |
|
Commodity cost recovery | 27.5 |
| | 30.8 |
| | 15.9 |
| | 17.8 |
| | 11.6 |
| | 13.0 |
| |
Energy efficiency cost recovery | 19.6 |
| | 20.5 |
| | — |
| | — |
| | 19.6 |
| | 20.5 |
| |
Derivatives | 11.4 |
| | 31.5 |
| | 7.1 |
| | 12.1 |
| | 4.3 |
| | 19.4 |
| |
Other | 26.3 |
| | 31.1 |
| | 10.8 |
| | 12.3 |
| | 15.5 |
| | 18.8 |
| 69.5 |
| | 51.4 |
| | 20.4 |
| | 15.4 |
| | 49.1 |
| | 36.0 |
|
|
| $665.8 |
| |
| $681.0 |
| |
| $415.7 |
| |
| $430.8 |
| |
| $250.1 |
| |
| $250.2 |
|
| $1,537.9 |
| |
| $1,497.2 |
| |
| $777.3 |
| |
| $755.4 |
| |
| $760.6 |
| |
| $741.8 |
|
Tax-related - Alliant Energy’s and IPL’s tax-related regulatory assets are generally 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. Deferred tax amounts for such property-related differences at IPL are recorded to regulatory assets, along with the necessary revenue requirement tax gross-ups. During the sixthree months ended June 30, 2017,March 31, 2018, Alliant Energy’s and IPL’s tax-related regulatory assets increased primarily due to property-related differences for qualifying repair expenditures.
Electric generating units retired earlyOther - In June 2017, IPL retired Sutherland Units 1 and 3 and reclassifiedJanuary 2018, the remaining net book value of these EGUs from property, plant and equipment to a regulatory asset on Alliant Energy’s and IPL’s balance sheets. IPL is currently earning a return on 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 has requested continued recovery of the remaining net book value of these EGUs from both its retail and wholesale customers over a 10-year period from the IUB and FERC, with decisions currently expected in 2018 and 2017, respectively.
Derivatives - Refer to Note 11 for discussion of derivative assets and derivative liabilities.
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 LLC to determine electric transmission costs billed to utilities, including IPL and WPL. In September 2016, FERC issued an order onrequiring 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 first complaintPSCW issued an order directing WPL and establishedother investor-owned utilities in Wisconsin to defer the revenue requirement impacts resulting from Tax Reform since its inception. As a base return on equityresult 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 the first halfthese orders, as of 2017,March 31, 2018, Alliant Energy, IPL and WPL received the refunds for the first complaint period of $50deferred $19 million, $39$8 million and $11 million, respectively, after final true-ups. IPL and WPL each recorded the retail portion of the refundsrelated to a regulatory liability. Pursuant to IUB approval, IPL’s retail portion of the refund from ITCTax Reform, which is currently being refunded to its retail customersincluded in 2017, beginning May 2017. WPL’s retail portion of the refund from ATC LLC 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“Other” in the first quarter of 2017.
IPL’s tax benefit riders - IPL’s tax benefit riders utilize regulatory liabilities to credit bills of IPL’s Iowa retail electric and gas customers to help offset the impact of rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs expenditures and cost of removal expenditures. For the six months ended June 30, table above.2017, Alliant Energy’s and IPL’s “IPL’s tax benefit riders” regulatory liabilities decreased by $36 million as follows (in millions):
|
| | | |
Electric tax benefit rider credits |
| $33 |
|
Gas tax benefit rider credits | 3 |
|
|
| $36 |
|
Utility Rate Reviews -
IPL’s Retail ElectricGas Rate Review (2016(2017 Test Year) - In April 2017,May 2018, IPL filed a request with the IUB to increase annual electricgas base rates for its Iowa retail electricgas customers by $176$20 million, or approximately 12%8%. The request was based on a 20162017 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.partially offset by the benefits of Tax Reform. An interim retail electric basegas rate increase of $102$11 million, or approximately 7%5%, on an annual basis, waswill be implemented effective April 13, 2017, withoutMay 14, 2018. The interim rate increase does not require regulatory review, andapproval; however, it will be subject to refund pending determination of final rates. Tax benefit rider credits and MISO transmission owner return on equity refunds are expected to reduce the effect of the rate increase on customer bills in 2017 and 2018. IPL currently expects to implementa decision from the IUB in 2019 with final rates effective by the firstsecond quarter of 2018.2019. The IUB must issue a decision on requests for retail rate changes within 10 months of the date of the application for which changes are filed. For both
IPL’s Retail Electric Rate Review (2016 Test Year) - In April 2017, IPL filed a request with the three and six months ended June 30, 2017, Alliant Energy and IPL recorded increases inIUB to increase annual electric margins of $20 million in conjunction with thebase rates for its Iowa retail electric customers. An interim retail electric base rate increase.
WPL’s Retail Electric and Gas Rate Review (2017/2018 Test Period) - In December 2016, WPL received an order from the PSCW authorizing WPL to implement an increase in annual retail electric rates of $9$102 million, or approximately 1%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 for an annual electric base rate increase in annual retail gas base rates of $9$130 million, or approximately 13%9%. The $9 million net annual retail electric rate increase reflects a $60 million increase in baseIn February 2018, the IUB issued an order approving the settlement. Final rates partially offset by a $51 million reduction in fuel-related costs, using an estimate for 2017 fuel-related costs. These increases were effective JanuaryMay 1, 2017 and extend through the end of 2018. For the three and six months ended June 30, 2017, Alliant Energy and WPL recorded increases in electric margins of $16 million and $38 million, and increases in gas margins of $2 million and $4 million, respectively, in conjunction with the base rate increases authorized in the PSCW’s December 2016 order.
WPL’s Retail Fuel-related Rate Filing (2018 Test Year) - In July 2017, WPL filed a request with the PSCW to increase annual rates for WPL’s retail electric customers by $6 million, or approximately 1%, in 2018. The increase primarily reflects a change in expected fuel-related costs in 2018. Any rate changes granted from this request are expected to be effective January 1, 2018.
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 are currently expected to exceed the approved 2017 fuel-related cost plan by more than the 2% annual bandwidth and result in a deferral of under-collected fuel-related costs of $12 million for 2017. WPL’s application proposes to offset any deferral of projected under-collection of fuel-related costs from 2017 against the balance owed to customers for over-collected fuel-related costs for 2016 discussed below, and any remaining net balance at the end of 2017 would then be returned to, or collected from, customers in a future rate proceeding. Under WPL’s proposal, customer rates would not change during 2017 for the mid-year fuel-related cost adjustment. As of June 30, 2017, fuel-related costs for 2017 outside of the approved bandwidth were $8 million and are included in “Other” in Alliant Energy’s and WPL’s regulatory assets table above.
WPL’s Retail Fuel-related Rate Filing (2016 Test Year) - Pursuant to a 2015 PSCW order, WPL’s 2016 fuel-related costs were subject to deferral since 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. As of June 30, 2017, fuel-related costs for 2016 outside of the approved bandwidth were $9 million and are included in “Commodity cost recovery” in Alliant Energy’s and WPL’s regulatory liabilities table above.
March 31, 2018, Alliant Energy and IPL recorded increases in electric base rates of $23 million in conjunction with the interim retail electric base rate increase.
NOTE 3. PROPERTY, PLANT AND EQUIPMENT
Utility -
Natural Gas-Fired Generation ProjectsProject -
IPL’s Marshalltown Generating Station - IPL’s construction of Marshalltown, an approximate 660 MW natural gas-fired combined-cycle EGU, was completed and the EGU was placed into service in April 2017. As of June 30, 2017, Alliant Energy and IPL recorded total project costs of $640 million and AFUDC of $81 million for Marshalltown in “Property, plant and equipment, net” on their balance sheets.
WPL’s West Riverside Energy Center - 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. As of June 30, 2017,March 31, 2018, Alliant Energy and WPL recorded capitalized expenditures for construction work in progress of $185$347 million and AFUDC of $5$20 million for West Riverside in “Property, plant and equipment, net” on their balance sheets. These capital expenditures do not yet reflect any potential impacts from the intent to exercise purchase options by certainWPL’s portion of West Riverside. Certain WPL electric cooperatives foracquired approximately 60 MW of West Riverside in January 2018, and will fund their share of capital expenditures during construction. As part of the electric cooperatives’ acquisitions, 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 partial ownership interest in West Riverside.five-year notice requirement.
Wind Generation -
Franklin CountyIPL’s Expansion of Wind Farm TransferGeneration - IPL currently plans to add up to 1,000 MW of new wind generation to its existing generation portfolio. These wind projects are expected to be placed into service in 2019 and 2020. As of March 31, 2018, Alliant Energy and IPL recorded capitalized expenditures for construction work in progress of $385 million and AFUDC of $16 million for this expansion of wind generation in “Property, plant and equipment, net” on their balance sheets.
WPL’s Acquisition of Forward Wind Energy Center (FWEC) - In April 2017,January 2018 and March 2018, WPL received approval from FERC and the Franklin CountyPSCW, respectively, to acquire the assets of FWEC, which is a 129 MW 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 $32located in Wisconsin. In April 2018, WPL acquired 55 MW of FWEC for approximately $74 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 |
|
The final amount to be recovered for IPL’s electric rate-making purposes will be determined by the IUB as part of IPL’s Iowa retail electric base rate review for the 2016 Test Year, which was filed in April 2017.
Retirement of IPL’s Sutherland Units 1 and 3 - In June 2017, IPL retired Sutherland Units 1 and 3 and reclassified the remaining net book value of these EGUs 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.
NOTE 4. RECEIVABLES
Sales of Accounts Receivable - IPL maintains a Receivables Purchase and Sale Agreement (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. In March 2018, IPL amended and extended through March 2021 the purchase commitment from the third party to which it sells its receivables. Effective April 2018, the limit on cash proceeds will fluctuate between $90 million and $110 million. The transfers of receivables meet the criteria for sale accounting established by the transfer of financial assets accounting rules. As of June 30, 2017March 31, 2018, IPL had $36.9 million ofno available capacity under its sales of accounts receivable program. For the three and six months ended June 30,March 31, 2018 and 2017, and 2016, IPL’s costs incurred related to the sales of accounts receivable program were not material.
IPL’s maximum and average outstanding cash proceeds (based on daily outstanding balances) related to the sales of accounts receivable program for the three and six months ended June 30March 31 were as follows (in millions):
| | | Three Months | | Six Months | | | | | |
| 2017 | | 2016 | | 2017 | | 2016 | 2018 | | 2017 |
Maximum outstanding aggregate cash proceeds |
| $97.0 |
| |
| $150.0 |
| |
| $97.0 |
| |
| $150.0 |
|
| $116.0 |
| |
| $79.0 |
|
Average outstanding aggregate cash proceeds | 71.1 |
| | 122.7 |
| | 54.8 |
| | 80.9 |
| 61.1 |
| | 38.4 |
|
The attributes of IPL’s receivables sold under the Receivables Agreement were as follows (in millions):
|
| | | | | | | |
| March 31, 2018 | | December 31, 2017 |
Customer accounts receivable |
| $156.1 |
| |
| $133.8 |
|
Unbilled utility revenues | 93.2 |
| | 112.7 |
|
Other receivables | 0.3 |
| | 0.3 |
|
Receivables sold to third party | 249.6 |
| | 246.8 |
|
Less: cash proceeds | 116.0 |
| | 12.0 |
|
Deferred proceeds | 133.6 |
| | 234.8 |
|
Less: allowance for doubtful accounts | 12.7 |
| | 12.7 |
|
Fair value of deferred proceeds |
| $120.9 |
| |
| $222.1 |
|
The attributes of IPL’s receivables sold under the Receivables Agreement were as follows (in millions):
|
| | | | | | | |
| June 30, 2017 | | December 31, 2016 |
Customer accounts receivable |
| $135.2 |
| |
| $157.6 |
|
Unbilled utility revenues | 93.4 |
| | 90.4 |
|
Other receivables | 0.4 |
| | 0.1 |
|
Receivables sold to third party | 229.0 |
| | 248.1 |
|
Less: cash proceeds (a) | 43.0 |
| | 21.0 |
|
Deferred proceeds | 186.0 |
| | 227.1 |
|
Less: allowance for doubtful accounts | 16.0 |
| | 16.0 |
|
Fair value of deferred proceeds |
| $170.0 |
| |
| $211.1 |
|
| |
(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. |
As of June 30, 2017,March 31, 2018, outstanding receivables past due under the Receivables Agreement were $53.1$50.7 million. Additional attributes of IPL’s receivables sold under the Receivables Agreement for the three and six months ended June 30March 31 were as follows (in millions):
|
| | | | | | | | | | | | | | | |
| Three Months | | Six Months |
| 2017 | | 2016 | | 2017 | | 2016 |
Collections reinvested in receivables |
| $434.1 |
| |
| $422.2 |
| |
| $935.3 |
| |
| $862.4 |
|
Write-off losses (recoveries), net | 2.3 |
| | (0.7 | ) | | 6.9 |
| | (0.3 | ) |
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 for the three and six months ended June 30, 2016. |
| | | | | | | |
| 2018 | | 2017 |
Collections |
| $517.0 |
| |
| $501.2 |
|
Write-offs, net of recoveries | 6.1 |
| | 4.6 |
|
NOTE 5. INVESTMENTS
NOTE 5(a) Unconsolidated Equity Investments -Equity Alliant Energy’s equity (income) loss from unconsolidated investments accounted for under the equity method of accounting for the three and six months ended June 30March 31 was as follows (in millions):
| | | Alliant Energy | | WPL | 2018 | | 2017 |
| Three Months | | Six Months | | Three Months | | Six Months | |
| 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | |
ATC Investment |
| ($11.1 | ) | |
| ($8.8 | ) | |
| ($22.6 | ) | |
| ($19.5 | ) | |
| $— |
| |
| ($8.8 | ) | |
| $— |
| |
| ($19.5 | ) | |
ATC Holdings | |
| ($8.7 | ) | |
| ($11.5 | ) |
Non-utility wind farm in Oklahoma | | (12.1 | ) | | — |
|
Other | (0.2 | ) | | (0.3 | ) | | (0.2 | ) | | (0.1 | ) | | (0.2 | ) | | (0.2 | ) | | (0.2 | ) | | (0.2 | ) | (0.5 | ) | | — |
|
|
| ($11.3 | ) | |
| ($9.1 | ) | |
| ($22.8 | ) | |
| ($19.6 | ) | |
| ($0.2 | ) | |
| ($9.0 | ) | |
| ($0.2 | ) | |
| ($19.7 | ) |
| ($21.3 | ) | |
| ($11.5 | ) |
ATC InvestmentNon-utility Wind Farm in Oklahoma - On December 31, 2016, pursuant toAlliant Energy’s interest in a June 2016 PSCW order, WPL Transco, LLC was liquidated and WPL transferred its investmentnon-utility wind farm in ATC LLC to ATI.Oklahoma commenced in July 2017. As a result, WPLthere was no longer recordscorresponding equity income from its prior investmentrecognized in ATC LLC. There were nothe first quarter of 2017. The equity income recognized in the first quarter of 2018 was primarily related to the impacts of this transferTax Reform. The liquidation method utilized to recognize Alliant Energy’s share of the wind farm’s earnings includes utilizing the federal income tax rate in effect as of the end of the measurement period. The lower federal income tax rate effective as of January 1, 2018 resulted in an acceleration of earnings attributable to Alliant Energy’s consolidated financial statements. As of December 31, 2016, ATI owns Alliant Energy’s entire investmentinterest in ATC.the Oklahoma wind farm. This increase in earnings is expected to reverse over time.
Non-regulated 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-regulated wind farm located in Oklahoma, which started commercial operations in December 2016. The wind farm provides electricity to a third-party under a long-term purchased power agreement. The expected increase in assets from this acquisition is approximately $98 million, subject to working capital adjustments. Alliant Energy will not maintain or operate the wind farm, and provided a parent guarantee of its subsidiary’s indemnification obligations under the operating agreement and purchased power agreement. Alliant Energy will account for this non-regulated investment under the equity method of accounting. In conjunction with the acquisition, in July 2017, AEF entered into a $95 million, 364-day variable-rate term loan credit agreement (with Alliant Energy as guarantor).
NOTE 5(b) Cash Surrender Value of Life Insurance Policies - During the six months ended June 30, 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.
NOTE 6. COMMON EQUITY
Common Share Activity - A summary of Alliant Energy’s common stock activity was as follows:
|
| | |
Shares outstanding, January 1, 20172018 | 227,673,654 |
|
At-the-market offering program | 3,074,931231,348,646 |
|
Shareowner Direct Plan issuances | 354,494166,527 |
|
| 5,1855,078 |
|
Other | (45,84738,423 | ) |
Shares outstanding, June 30, 2017March 31, 2018 | 231,062,417231,481,828 |
|
At-the-Market Offering Program - In May 2017, Alliant Energy filed a prospectus supplement under which it may sell up to $125 million of its common stock through an at-the-market offering program. As of June 30, 2017, Alliant Energy issued 3,074,931 shares of common stock through this 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. Alliant Energy currently has no plans to issue any additional common stock through this at-the-market offering program.
Dividend Restrictions - As of June 30, 2017March 31, 2018, IPL’s amount of retained earnings that were free of dividend restrictions was $620683 million. As of June 30, 2017March 31, 2018, WPL’s amount of retained earnings that were free of dividend restrictions was $63105 million for the remainder of 20172018.
Restricted Net Assets of Subsidiaries - As of June 30, 2017March 31, 2018, 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 $1.71.8 billion and $1.71.8 billion, respectively.
Comprehensive Income - For the three and six months ended June 30, 2017March 31, 2018 and 20162017, Alliant Energy had no other comprehensive income; therefore, its comprehensive income was equal to its net income and its comprehensive income attributable to Alliant Energy common shareowners was equal to its net income attributable to Alliant Energy common shareowners for such periods. For the three and six months ended June 30,March 31, 2018 and 2017, and 2016, 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 7. DEBT
Note 7(a) Short-term Debt - Information regarding commercial paper classified as short-term debt was as follows (dollars in millions):
| | June 30, 2017 | Alliant Energy | | IPL | | WPL | |
March 31, 2018 | | Alliant Energy | | IPL | | WPL |
Commercial paper outstanding | $368.6 | | $— | | $212.5 | $336.4 | | $— | | $30.6 |
Commercial paper weighted average interest rates | 1.3% | | N/A | | 1.1% | 2.3% | | N/A | | 1.8% |
Available credit facility capacity (a) | $591.4 | | $260.0 | | $187.5 | $617.7 | | $204.1 | | $319.4 |
| | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
Three Months Ended June 30 | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | |
Three Months Ended March 31 | | 2018 | | 2017 | | 2018 | | 2017 | | 2018 | | 2017 |
Maximum amount outstanding (based on daily outstanding balances) | $397.6 | | $229.9 | | $14.6 | | $1.7 | | $212.5 | | $62.9 | $336.4 | | $325.5 | | $3.0 | | $9.2 | | $36.7 | | $113.6 |
Average amount outstanding (based on daily outstanding balances) | $307.8 | | $213.0 | | $1.0 | | $— | | $134.9 | | $37.4 | $310.1 | | $276.5 | | $— | | $0.1 | | $11.5 | | $79.1 |
Weighted average interest rates | 1.1% | | 0.6% | | 1.2% | | 0.6% | | 1.0% | | 0.4% | 1.9% | | 0.9% | | 1.8% | | 1.1% | | 1.6% | | 0.7% |
Six Months Ended June 30 | | |
Maximum amount outstanding (based on daily outstanding balances) | $397.6 | | $242.6 | | $14.6 | | $1.7 | | $212.5 | | $62.9 | |
Average amount outstanding (based on daily outstanding balances) | $292.3 | | $206.0 | | $0.6 | | $— | | $107.2 | | $31.6 | |
Weighted average interest rates | 1.0% | | 0.6% | | 1.2% | | 0.6% | | 0.9% | | 0.4% | |
| |
(a) | Alliant Energy’s and IPL’s available credit facility capacities reflect outstanding commercial paper classified as both short- and long-term debt at June 30, 2017.March 31, 2018. |
NOTE 7(b) Long-term Debt - As of March 31, 2018, $45.9 million of commercial paper was recorded in “Long-term debt, net” on Alliant Energy’s and IPL’s balance sheets due to the existence of a long-term credit facility that back-stops this commercial paper balance, along with Alliant Energy’s and IPL’s intent and ability to refinance these balances on a long-term basis. As of March 31, 2018, this commercial paper balance had a 2.3% interest rate.
In July 2017,April 2018, AEF entered into a $95$300 million 364-day variable-rate (2.3% at April 30, 2018) term loan credit agreement (with Alliant Energy as guarantor) and used the proceeds from borrowings under this agreement for general corporate purposes. AEF’s term loan credit agreement expires in April 2020 and includes substantially the same financial covenants that are included in Alliant Energy’s credit facility agreement.
NOTE 8. REVENUES
Revenues from Alliant Energy’s, IPL’s and WPL’s utility businesses are primarily from retail and wholesale electric and gas 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 the end of each period. IPL and WPL apply the right 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 its Prairie Creek Generating Station to high-pressure steam customers in Iowa.
IPL’s and WPL’s retail electric and gas revenues include sales to residential, commercial and industrial customers. IPL’s and WPL’s retail electric and gas customer prices are based on IPL’s and WPL’s cost of service and are determined through general rate review proceedings and various tariff filings with the IUB and PSCW, respectively. Such tariff-based services provide electricity or gas to customers without a defined contractual term.
IPL and WPL have wholesale electric market-based rate authority from FERC allowing them to participate in wholesale energy markets (e.g. MISO) and transact directly with third parties. This authority from FERC allows sales of electricity referred to as bulk power sales based on current market values. FERC also allows IPL and WPL to enter into power supply agreements with municipalities and rural 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 Alliant Energy’s non-utility business customers are primarily from its Transportation business, which 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.
As of March 31, 2018, revenue expected to be recognized in any future year related to
remaining performance obligations is not material, as the
majority of revenues are recognized as services are rendered or commodities are delivered, and are from contracts with durations of less than one year. Alliant Energy, IPL and WPL do not have any material contract assets or contract liabilities, or contract acquisition
of a non-regulated wind farm located in Oklahoma. Refer to Note 5(a) for further discussion.fulfillment costs.
NOTE 7(b) Long-term Debt - AsDisaggregation of June 30, 2017, $40.0 million of commercial paperrevenues from contracts with customers, which correlates to revenues for each reportable segment, was recorded in “Long-term debt, net” on Alliant Energy’s and IPL’s balance sheets due to the existence of long-term credit facilities that back-stop this commercial paper balance, along with Alliant Energy’s and IPL’s intent and ability to refinance these balances on a long-term basis. As of June 30, 2017, this commercial paper balance had a 1.4% interest rate.as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Three Months Ended March 31 | 2018 | | 2017 | | 2018 | | 2017 | | 2018 | | 2017 |
Electric Utility: | | | | | | | | | | | |
Retail - residential |
| $259.4 |
| |
| $241.2 |
| |
| $142.2 |
| |
| $123.3 |
| |
| $117.2 |
| |
| $117.9 |
|
Retail - commercial | 174.0 |
| | 165.7 |
| | 111.6 |
| | 99.5 |
| | 62.4 |
| | 66.2 |
|
Retail - industrial | 201.9 |
| | 195.0 |
| | 114.8 |
| | 103.9 |
| | 87.1 |
| | 91.1 |
|
Wholesale | 53.8 |
| | 63.4 |
| | 24.3 |
| | 21.3 |
| | 29.5 |
| | 42.1 |
|
Bulk power and other | 19.6 |
| | 12.3 |
| | 12.8 |
| | 8.2 |
| | 6.8 |
| | 4.1 |
|
Total Electric Utility | 708.7 |
| | 677.6 |
| | 405.7 |
| | 356.2 |
| | 303.0 |
| | 321.4 |
|
Gas Utility: | | | | | | | | | | | |
Retail - residential | 110.6 |
| | 89.9 |
| | 65.5 |
| | 47.9 |
| | 45.1 |
| | 42.0 |
|
Retail - commercial | 57.0 |
| | 49.8 |
| | 31.6 |
| | 25.8 |
| | 25.4 |
| | 24.0 |
|
Retail - industrial | 5.8 |
| | 4.8 |
| | 2.7 |
| | 2.8 |
| | 3.1 |
| | 2.0 |
|
Transportation/other | 12.2 |
| | 9.8 |
| | 8.3 |
| | 6.6 |
| | 3.9 |
| | 3.2 |
|
Total Gas Utility | 185.6 |
| | 154.3 |
| | 108.1 |
| | 83.1 |
| | 77.5 |
| | 71.2 |
|
Other Utility: | | | | | | | | | | | |
Steam | 9.4 |
| | 8.6 |
| | 9.4 |
| | 8.6 |
| | — |
| | — |
|
Other utility | 3.8 |
| | 3.1 |
| | 2.6 |
| | 2.6 |
| | 1.2 |
| | 0.5 |
|
Total Other Utility | 13.2 |
| | 11.7 |
| | 12.0 |
| | 11.2 |
| | 1.2 |
| | 0.5 |
|
Non-Utility and Other: | | | | | | | | | | | |
Transportation and other | 8.8 |
| | 10.3 |
| | — |
| | — |
| | — |
| | — |
|
Total Non-Utility and Other | 8.8 |
| | 10.3 |
| | — |
| | — |
| | — |
| | — |
|
Total revenues |
| $916.3 |
| |
| $853.9 |
| |
| $525.8 |
| |
| $450.5 |
| |
| $381.7 |
| |
| $393.1 |
|
NOTE 8.9. INCOME TAXES
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 |
Three Months Ended June 30 | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
Statutory federal income tax rate | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % |
Effect of rate-making on property-related differences | (9.0 | ) | | (4.9 | ) | | (18.0 | ) | | (8.8 | ) | | (1.9 | ) | | (1.0 | ) |
IPL’s tax benefit riders | (7.8 | ) | | (7.9 | ) | | (18.6 | ) | | (16.6 | ) | | — |
| | — |
|
Production tax credits | (5.9 | ) | | (5.7 | ) | | (6.2 | ) | | (5.3 | ) | | (7.1 | ) | | (6.3 | ) |
Other items, net | 5.7 |
| | 0.7 |
| | 6.5 |
| | (2.0 | ) | | 4.5 |
| | 4.5 |
|
Overall income tax rate | 18.0 | % | | 17.2 | % | | (1.3 | %) | | 2.3 | % | | 30.5 | % | | 32.2 | % |
| | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
Six Months Ended June 30 | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | |
Three Months Ended March 31 | | 2018 | | 2017 | | 2018 | | 2017 | | 2018 | | 2017 |
Statutory federal income tax rate | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | 21.0 | % | | 35.0 | % | | 21.0 | % | | 35.0 | % | | 21.0 | % | | 35.0 | % |
State income taxes, net of federal benefits | | 7.5 |
| | 5.4 |
| | 8.5 |
| | 6.3 |
| | 6.2 |
| | 5.1 |
|
Effect of rate-making on property-related differences | (8.0 | ) | | (5.9 | ) | | (18.0 | ) | | (12.5 | ) | | (1.8 | ) | | (0.9 | ) | (7.4 | ) | | (7.5 | ) | | (13.5 | ) | | (17.9 | ) | | (2.4 | ) | | (1.7 | ) |
Production tax credits | | (5.5 | ) | | (5.9 | ) | | (5.4 | ) | | (6.6 | ) | | (6.7 | ) | | (7.0 | ) |
IPL’s tax benefit riders | (7.8 | ) | | (8.4 | ) | | (19.0 | ) | | (19.0 | ) | | — |
| | — |
| (2.2 | ) | | (7.8 | ) | | (4.7 | ) | | (19.4 | ) | | — |
| | — |
|
Production tax credits | (5.9 | ) | | (6.0 | ) | | (6.4 | ) | | (6.1 | ) | | (7.0 | ) | | (6.4 | ) | |
Other items, net | 3.1 |
| | 2.8 |
| | 3.1 |
| | 2.6 |
| | 4.5 |
| | 4.7 |
| (1.4 | ) | | (4.4 | ) | | — |
| | (7.6 | ) | | (0.3 | ) | | (0.4 | ) |
Overall income tax rate | 16.4 | % | | 17.5 | % | | (5.3 | %) | | — | % | | 30.7 | % | | 32.4 | % | 12.0 | % | | 14.8 | % | | 5.9 | % | | (10.2 | %) | | 17.8 | % | | 31.0 | % |
Deferred Tax Assets and Liabilities - For the sixthree months ended June 30, 2017,March 31, 2018, Alliant Energy’s, IPL’s and WPL’s deferred tax liabilities increased $111.1$33.2 million, $75.1$15.8 million and $28.4$8.5 million, respectively. These increases were primarily due to property-related differences recordedand the utilization of federal net operating losses during the sixthree months ended June 30, 2017. Alliant Energy’s and IPL’sMarch 31, 2018. These increases were partially offset by the generation ofan increase in federal net operating lossescredit carryforwards recorded during the sixthree months ended June 30, 2017, which are primarily due to the accelerated tax depreciation associated with Marshalltown.March 31, 2018.
Carryforwards - At June 30, 2017,March 31, 2018, carryforwards and expiration dates were estimated as follows (in millions):
| | | Range of Expiration Dates | | Alliant Energy | | IPL | | WPL | Range of Expiration Dates | | Alliant Energy | | IPL | | WPL |
Federal net operating losses | 2030-2037 | |
| $736 |
| |
| $412 |
| |
| $217 |
| 2030-2037 | |
| $774 |
| |
| $497 |
| |
| $176 |
|
State net operating losses | 2018-2037 | | 707 |
| | 14 |
| | 2 |
| 2018-2038 | | 707 |
| | 13 |
| | 2 |
|
Federal tax credits | 2022-2037 | | 292 |
| | 108 |
| | 123 |
| 2022-2038 | | 277 |
| | 123 |
| | 136 |
|
NOTE 9.10. BENEFIT PLANS
NOTE 9(a)10(a) Pension and Other Postretirement Benefits Plans -
Net Periodic Benefit Costs - The components of net periodic benefit costs for sponsored defined benefit pension and OPEB plans for the three and six months ended June 30March 31 are included in the tables below (in millions). The service cost component of net periodic benefit costs is 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. In IPL’s and WPL’s tables below, the defined benefit pension plan amounts represent those respective amounts for their bargaining unit employees 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 are 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 plansplan 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.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Defined Benefit Pension Plans | | OPEB Plans |
| Three Months | | Six Months | | Three Months | | Six Months |
Alliant Energy | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
Service cost |
| $3.1 |
| |
| $3.1 |
| |
| $6.2 |
| |
| $6.3 |
| |
| $1.3 |
| |
| $1.3 |
| |
| $2.5 |
| |
| $2.6 |
|
Interest cost | 12.8 |
| | 13.2 |
| | 25.6 |
| | 26.5 |
| | 2.1 |
| | 2.4 |
| | 4.3 |
| | 4.7 |
|
Expected return on plan assets | (16.4 | ) | | (16.4 | ) | | (32.8 | ) | | (32.8 | ) | | (1.6 | ) | | (1.5 | ) | | (3.1 | ) | | (3.0 | ) |
Amortization of prior service credit | (0.1 | ) | | — |
| | (0.2 | ) | | (0.1 | ) | | — |
| | (1.1 | ) | | (0.1 | ) | | (2.1 | ) |
Amortization of actuarial loss | 9.4 |
| | 9.4 |
| | 18.8 |
| | 18.7 |
| | 0.9 |
| | 1.2 |
| | 1.9 |
| | 2.4 |
|
|
| $8.8 |
| |
| $9.3 |
| |
| $17.6 |
| |
| $18.6 |
| |
| $2.7 |
| |
| $2.3 |
| |
| $5.5 |
| |
| $4.6 |
|
|
| | | | | | | | | | | | | | | |
| Defined Benefit Pension Plans | | OPEB Plans |
Alliant Energy | 2018 | | 2017 | | 2018 | | 2017 |
Service cost |
| $3.0 |
| |
| $3.1 |
| |
| $1.1 |
| |
| $1.2 |
|
Interest cost | 11.7 |
| | 12.8 |
| | 1.9 |
| | 2.2 |
|
Expected return on plan assets | (17.4 | ) | | (16.4 | ) | | (1.5 | ) | | (1.5 | ) |
Amortization of prior service credit | (0.2 | ) | | (0.1 | ) | | — |
| | (0.1 | ) |
Amortization of actuarial loss | 8.8 |
| | 9.4 |
| | 0.8 |
| | 1.0 |
|
|
| $5.9 |
| |
| $8.8 |
| |
| $2.3 |
| |
| $2.8 |
|
| | | Defined Benefit Pension Plans | | OPEB Plans | | | | | | | | | |
| Three Months | | Six Months | | Three Months | | Six Months | Defined Benefit Pension Plans | | OPEB Plans |
IPL | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | 2018 | | 2017 | | 2018 | | 2017 |
Service cost |
| $1.9 |
| |
| $1.9 |
| |
| $3.7 |
| |
| $3.8 |
| |
| $0.6 |
| |
| $0.6 |
| |
| $1.1 |
| |
| $1.2 |
|
| $1.8 |
| |
| $1.8 |
| |
| $0.4 |
| |
| $0.5 |
|
Interest cost | 5.8 |
| | 6.2 |
| | 11.7 |
| | 12.3 |
| | 0.9 |
| | 0.9 |
| | 1.8 |
| | 1.9 |
| 5.3 |
| | 5.9 |
| | 0.8 |
| | 0.9 |
|
Expected return on plan assets | (7.7 | ) | | (7.8 | ) | | (15.4 | ) | | (15.5 | ) | | (1.1 | ) | | (1.2 | ) | | (2.2 | ) | | (2.2 | ) | (8.1 | ) | | (7.7 | ) | | (1.1 | ) | | (1.1 | ) |
Amortization of prior service credit | (0.1 | ) | | (0.1 | ) | | (0.1 | ) | | (0.1 | ) | | — |
| | (0.6 | ) | | — |
| | (1.3 | ) | |
Amortization of actuarial loss | 4.1 |
| | 4.1 |
| | 8.1 |
| | 8.2 |
| | 0.5 |
| | 0.7 |
| | 1.0 |
| | 1.3 |
| 3.7 |
| | 4.0 |
| | 0.3 |
| | 0.5 |
|
|
| $4.0 |
| |
| $4.3 |
| |
| $8.0 |
| |
| $8.7 |
| |
| $0.9 |
| |
| $0.4 |
| |
| $1.7 |
| |
| $0.9 |
|
| $2.7 |
| |
| $4.0 |
| |
| $0.4 |
| |
| $0.8 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Defined Benefit Pension Plans | | OPEB Plans |
| Three Months | | Six Months | | Three Months | | Six Months |
WPL | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
Service cost |
| $1.2 |
| |
| $1.2 |
| |
| $2.4 |
| |
| $2.4 |
| |
| $0.4 |
| |
| $0.5 |
| |
| $0.9 |
| |
| $1.0 |
|
Interest cost | 5.4 |
| | 5.6 |
| | 10.9 |
| | 11.2 |
| | 0.8 |
| | 1.0 |
| | 1.7 |
| | 1.9 |
|
Expected return on plan assets | (7.1 | ) | | (7.1 | ) | | (14.2 | ) | | (14.2 | ) | | (0.2 | ) | | (0.2 | ) | | (0.4 | ) | | (0.4 | ) |
Amortization of prior service cost (credit) | — |
| | — |
| | — |
| | 0.1 |
| | — |
| | (0.2 | ) | | (0.1 | ) | | (0.4 | ) |
Amortization of actuarial loss | 4.7 |
| | 4.4 |
| | 9.3 |
| | 8.8 |
| | 0.4 |
| | 0.4 |
| | 0.8 |
| | 0.9 |
|
|
| $4.2 |
| |
| $4.1 |
| |
| $8.4 |
| |
| $8.3 |
| |
| $1.4 |
| |
| $1.5 |
| |
| $2.9 |
| |
| $3.0 |
|
401(k) Savings Plan - A significant number of employees participate in a defined contribution retirement plan (401(k) savings plan). For the three and six months ended June 30, costs related to the 401(k) savings plan, 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 |
| Three Months | | Six Months | | Three Months | | Six Months | | Three Months | | Six Months |
| 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
401(k) costs |
| $6.0 |
| |
| $5.7 |
| |
| $12.5 |
| |
| $11.9 |
| |
| $3.1 |
| |
| $2.9 |
| |
| $6.5 |
| |
| $6.0 |
| |
| $2.6 |
| |
| $2.6 |
| |
| $5.5 |
| |
| $5.4 |
|
|
| | | | | | | | | | | | | | | |
| Defined Benefit Pension Plans | | OPEB Plans |
WPL | 2018 | | 2017 | | 2018 | | 2017 |
Service cost |
| $1.1 |
| |
| $1.2 |
| |
| $0.4 |
| |
| $0.5 |
|
Interest cost | 5.0 |
| | 5.5 |
| | 0.8 |
| | 0.9 |
|
Expected return on plan assets | (7.6 | ) | | (7.1 | ) | | (0.2 | ) | | (0.2 | ) |
Amortization of prior service credit | — |
| | — |
| | — |
| | (0.1 | ) |
Amortization of actuarial loss | 4.3 |
| | 4.6 |
| | 0.5 |
| | 0.4 |
|
|
| $2.8 |
| |
| $4.2 |
| |
| $1.5 |
| |
| $1.5 |
|
NOTE 9(b)10(b) Equity-based Compensation Plans - A summary of compensation expense, including amounts allocated to IPL and WPL, and the related income tax benefits recognized for share-based compensation awards for the three and six months ended June 30March 31 was as follows (in millions):
| | | Alliant Energy | | IPL | | WPL | | | | | | | | | | | | | |
| Three Months | | Six Months | | Three Months | | Six Months | | Three Months | | Six Months | Alliant Energy | | IPL | | WPL |
| 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | 2018 | | 2017 | | 2018 | | 2017 | | 2018 | | 2017 |
Compensation expense |
| $1.6 |
| |
| $7.1 |
| |
| $4.8 |
| |
| $12.4 |
| |
| $0.9 |
| |
| $3.7 |
| |
| $2.6 |
| |
| $6.5 |
| |
| $0.6 |
| |
| $3.1 |
| |
| $2.0 |
| |
| $5.4 |
|
| $3.3 |
| |
| $3.2 |
| |
| $1.8 |
| |
| $1.7 |
| |
| $1.3 |
| |
| $1.4 |
|
Income tax benefits | 0.6 |
| | 2.9 |
| | 1.9 |
| | 5.1 |
| | 0.4 |
| | 1.6 |
| | 1.1 |
| | 2.7 |
| | 0.3 |
| | 1.3 |
| | 0.8 |
| | 2.2 |
| 0.9 |
| | 1.3 |
| | 0.5 |
| | 0.7 |
| | 0.4 |
| | 0.5 |
|
As of June 30, 2017,March 31, 2018, Alliant Energy’s, IPL’s and WPL’s total unrecognized compensation cost related to share-based compensation awards was $10.5$14.6 million, $5.7$8.1 million and $4.4$5.9 million, respectively, which is expected to be recognized over a weighted average period of between one and two years.
Performance Shares and Performance Units - A summary of the performance shares and performance units activity for the six months ended June 30, 2017, with amounts representing the target number of awards, was as follows:
|
| | | | | |
| Performance | | Performance |
| Shares | | Units |
Nonvested awards, January 1 | 257,599 |
| | 93,320 |
|
Granted | 65,350 |
| | 21,558 |
|
Vested | (99,438 | ) | | (37,395 | ) |
Forfeited | — |
| | (988 | ) |
Nonvested awards, June 30 | 223,511 |
| | 76,495 |
|
Performance Shares and Performance Units - A summary of the performance shares and performance units activity for the three months ended March 31, 2018, with amounts representing the target number of awards, was as follows:
|
| | | | | |
| Performance Shares | | Performance Units |
Nonvested awards, January 1 | 223,511 |
| | 71,737 |
|
Granted | 74,163 |
| | 19,840 |
|
Vested | (90,806 | ) | | (31,910 | ) |
Nonvested awards, March 31 | 206,868 |
| | 59,667 |
|
Vested Awards - During the sixthree months ended June 30, 2017,March 31, 2018, certain performance shares and performance units that were granted in 20142015 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 | | Performance | | | | | |
| Shares | | Units | Performance Shares | | Performance Units |
Performance awards vested | 99,438 |
| | 37,395 |
| 90,806 |
| | 31,910 |
|
Percentage of target number of performance awards | 147.5 | % | | 147.5 | % | 137.5 | % | | 137.5 | % |
Aggregate payout value (in millions) |
| $5.6 |
| |
| $1.5 |
|
| $5.3 |
| |
| $1.4 |
|
Payout - cash (in millions) |
| $5.1 |
| |
| $1.5 |
|
| $4.9 |
| |
| $1.4 |
|
Payout - common stock shares issued | 5,185 |
| | N/A | 5,078 |
| | N/A |
|
Fair Value of Awards - InformationAt March 29, 2018, Alliant Energy’s common stock closing price was $40.86. Additional information related to fair values of nonvested performance shares and performance units at June 30, 2017March 31, 2018, by year of grant, was as follows:
| | | Performance Shares | | Performance Units | Performance Shares | | Performance Units |
| 2017 Grant | | 2016 Grant | | 2015 Grant | | 2017 Grant | | 2016 Grant | | 2015 Grant | 2018 Grant | | 2017 Grant | | 2016 Grant | | 2018 Grant | | 2017 Grant | | 2016 Grant |
Nonvested awards at target | 65,350 |
| | 67,355 |
| | 90,806 |
| | 20,570 |
| | 22,657 |
| | 33,268 |
| 74,163 |
| | 65,350 |
| | 67,355 |
| | 19,840 |
| | 18,600 |
| | 21,227 |
|
Alliant Energy common stock closing price on June 30, 2017 |
| $40.17 |
| |
| $40.17 |
| |
| $40.17 |
| |
| $40.17 |
| |
| $40.17 |
| | 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 | 100 | % | | 143 | % | | 113 | % | | 100 | % | | 143 | % | | 113 | % | 100 | % | | 115 | % | | 160 | % | | 100 | % | | 115 | % | | 160 | % |
Fair values of each nonvested award |
| $40.17 |
| |
| $57.44 |
| |
| $45.39 |
| |
| $40.17 |
| |
| $57.44 |
| |
| $36.78 |
|
| $40.86 |
| |
| $46.99 |
| |
| $65.38 |
| |
| $40.86 |
| |
| $46.99 |
| |
| $65.38 |
|
Performance Restricted Stock Units - A summary of the performance restricted stock units activity for the sixthree months ended June 30, 2017,March 31, 2018, with amounts representing the target number of units, was as follows:
| | | Units | | Weighted Average Grant Date Fair Value | Units | | Weighted Average Grant Date Fair Value |
Nonvested units, January 1 | 67,355 |
| |
| $33.96 |
| 132,705 |
| |
| $36.50 |
|
Granted | 65,350 |
| | 39.12 |
| 74,163 |
| | 38.60 |
|
Nonvested units, June 30 | 132,705 |
| | 36.50 |
| |
Nonvested units, March 31 | | 206,868 |
| | 37.25 |
|
Restricted Stock Units - A summary of the restricted stock units activity for the sixthree months ended June 30, 2017,March 31, 2018, was as follows:
|
| | |
Nonvested units, January 1 | 57,736113,749 |
|
Granted | 56,01363,568 |
|
Nonvested units, June 30March 31 | 113,749177,317 |
|
NOTE 10.11. FAIR VALUE MEASUREMENTS
Valuation Hierarchy - At each reporting date, Level 1 items included IPL’s 5.1% cumulative preferred stock, Level 2 items included certain non-exchange traded commodity contracts and substantially all of the long-term debt instruments, and Level 3 items included FTRs, certain non-exchange traded commodity contracts and IPL’s deferred proceeds.
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 related estimated fair values of other financial instruments were as follows (in millions):
| | Alliant Energy | June 30, 2017 | | December 31, 2016 | March 31, 2018 | | December 31, 2017 |
| | | Fair Value | | | | Fair Value | | | Fair Value | | | | Fair Value |
| Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | | Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | |
| Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total | Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total |
Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivatives |
| $37.9 |
| |
| $— |
| |
| $1.1 |
| |
| $36.8 |
| |
| $37.9 |
| |
| $41.4 |
| |
| $— |
| |
| $4.6 |
| |
| $36.8 |
| |
| $41.4 |
|
| $14.1 |
| |
| $— |
| |
| $4.1 |
| |
| $10.0 |
| |
| $14.1 |
| |
| $25.1 |
| |
| $— |
| |
| $4.1 |
| |
| $21.0 |
| |
| $25.1 |
|
Deferred proceeds | 170.0 |
| | — |
| | — |
| | 170.0 |
| | 170.0 |
| | 211.1 |
| | — |
| | — |
| | 211.1 |
| | 211.1 |
| 120.9 |
| | — |
| | — |
| | 120.9 |
| | 120.9 |
| | 222.1 |
| | — |
| | — |
| | 222.1 |
| | 222.1 |
|
Liabilities and equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivatives | 45.4 |
| | — |
| | 17.8 |
| | 27.6 |
| | 45.4 |
| | 28.6 |
| | — |
| | 0.5 |
| | 28.1 |
| | 28.6 |
| 46.7 |
| | — |
| | 7.3 |
| | 39.4 |
| | 46.7 |
| | 41.7 |
| | — |
| | 8.5 |
| | 33.2 |
| | 41.7 |
|
Long-term debt (including current maturities) | 4,359.5 |
| | — |
| | 4,878.8 |
| | 2.9 |
| | 4,881.7 |
| | 4,320.2 |
| | — |
| | 4,795.7 |
| | 3.3 |
| | 4,799.0 |
| |
Long-term debt (incl. current maturities) | | 4,912.5 |
| | — |
| | 5,366.6 |
| | 2.5 |
| | 5,369.1 |
| | 4,866.3 |
| | — |
| | 5,444.6 |
| | 2.9 |
| | 5,447.5 |
|
Cumulative preferred stock of IPL | 200.0 |
| | 206.2 |
| | — |
| | — |
| | 206.2 |
| | 200.0 |
| | 194.8 |
| | — |
| | — |
| | 194.8 |
| 200.0 |
| | 198.4 |
| | — |
| | — |
| | 198.4 |
| | 200.0 |
| | 203.8 |
| | — |
| | — |
| | 203.8 |
|
| | IPL | June 30, 2017 | | December 31, 2016 | March 31, 2018 | | December 31, 2017 |
| | | Fair Value | | | | Fair Value | | | Fair Value | | | | Fair Value |
| Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | | Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | |
| Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total | Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total |
Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivatives |
| $29.3 |
| |
| $— |
| |
| $1.0 |
| |
| $28.3 |
| |
| $29.3 |
| |
| $20.8 |
| |
| $— |
| |
| $2.8 |
| |
| $18.0 |
| |
| $20.8 |
|
| $7.9 |
| |
| $— |
| |
| $1.7 |
| |
| $6.2 |
| |
| $7.9 |
| |
| $17.1 |
| |
| $— |
| |
| $2.0 |
| |
| $15.1 |
| |
| $17.1 |
|
Deferred proceeds | 170.0 |
| | — |
| | — |
| | 170.0 |
| | 170.0 |
| | 211.1 |
| | — |
| | — |
| | 211.1 |
| | 211.1 |
| 120.9 |
| | — |
| | — |
| | 120.9 |
| | 120.9 |
| | 222.1 |
| | — |
| | — |
| | 222.1 |
| | 222.1 |
|
Liabilities and equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivatives | 16.3 |
| | — |
| | 5.1 |
| | 11.2 |
| | 16.3 |
| | 8.3 |
| | — |
| | 0.4 |
| | 7.9 |
| | 8.3 |
| 24.7 |
| | — |
| | 3.1 |
| | 21.6 |
| | 24.7 |
| | 19.4 |
| | — |
| | 2.9 |
| | 16.5 |
| | 19.4 |
|
Long-term debt | 2,194.5 |
| | — |
| | 2,421.3 |
| | — |
| | 2,421.3 |
| | 2,153.5 |
| | — |
| | 2,352.3 |
| | — |
| | 2,352.3 |
| |
Long-term debt (incl. current maturities) | | 2,452.2 |
| | — |
| | 2,635.7 |
| | — |
| | 2,635.7 |
| | 2,406.0 |
| | — |
| | 2,665.7 |
| | — |
| | 2,665.7 |
|
Cumulative preferred stock | 200.0 |
| | 206.2 |
| | — |
| | — |
| | 206.2 |
| | 200.0 |
| | 194.8 |
| | — |
| | — |
| | 194.8 |
| 200.0 |
| | 198.4 |
| | — |
| | — |
| | 198.4 |
| | 200.0 |
| | 203.8 |
| | — |
| | — |
| | 203.8 |
|
| | WPL | June 30, 2017 | | December 31, 2016 | March 31, 2018 | | December 31, 2017 |
| | | Fair Value | | | | Fair Value | | | Fair Value | | | | Fair Value |
| Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | | Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | |
| Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total | Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total |
Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivatives |
| $8.6 |
| |
| $— |
| |
| $0.1 |
| |
| $8.5 |
| |
| $8.6 |
| |
| $20.6 |
| |
| $— |
| |
| $1.8 |
| |
| $18.8 |
| |
| $20.6 |
|
| $6.2 |
| |
| $— |
| |
| $2.4 |
| |
| $3.8 |
| |
| $6.2 |
| |
| $8.0 |
| |
| $— |
| |
| $2.1 |
| |
| $5.9 |
| |
| $8.0 |
|
Liabilities: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivatives | 29.1 |
| | — |
| | 12.7 |
| | 16.4 |
| | 29.1 |
| | 20.3 |
| | — |
| | 0.1 |
| | 20.2 |
| | 20.3 |
| 22.0 |
| | — |
| | 4.2 |
| | 17.8 |
| | 22.0 |
| | 22.3 |
| | — |
| | 5.6 |
| | 16.7 |
| | 22.3 |
|
Long-term debt | 1,535.9 |
| | — |
| | 1,823.6 |
| | — |
| | 1,823.6 |
| | 1,535.2 |
| | — |
| | 1,807.4 |
| | — |
| | 1,807.4 |
| 1,833.7 |
| | — |
| | 2,102.7 |
| | — |
| | 2,102.7 |
| | 1,833.4 |
| | — |
| | 2,147.9 |
| | — |
| | 2,147.9 |
|
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 |
Three Months Ended June 30 | 2017 | | 2016 | | 2017 | | 2016 |
Beginning balance, April 1 |
| ($32.9 | ) | |
| ($65.9 | ) | |
| $149.0 |
| |
| $154.2 |
|
Total net gains included in changes in net assets (realized/unrealized) | 8.1 |
| | 44.6 |
| | — |
| | — |
|
Transfers out of Level 3 | 12.2 |
| | 0.4 |
| | — |
| | — |
|
Purchases | 28.3 |
| | 22.0 |
| | — |
| | — |
|
Sales | — |
| | (0.1 | ) | | — |
| | — |
|
Settlements (a) | (6.5 | ) | | (0.4 | ) | | 21.0 |
| | (79.8 | ) |
Ending balance, June 30 |
| $9.2 |
| |
| $0.6 |
| |
| $170.0 |
| |
| $74.4 |
|
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 June 30 |
| $8.3 |
| |
| $44.8 |
| |
| $— |
| |
| $— |
|
|
| | | | | | | | | | | | | | | |
Alliant Energy | Commodity Contract Derivative | | |
| Assets and (Liabilities), net | | Deferred Proceeds |
Three Months Ended March 31 | 2018 | | 2017 | | 2018 | | 2017 |
Beginning balance, January 1 |
| ($12.2 | ) | |
| $8.7 |
| |
| $222.1 |
| |
| $211.1 |
|
Total net losses included in changes in net assets (realized/unrealized) | (9.8 | ) | | (35.2 | ) | | — |
| | — |
|
Sales | — |
| | (0.1 | ) | | — |
| | — |
|
Settlements (a) | (7.4 | ) | | (6.3 | ) | | (101.2 | ) | | (62.1 | ) |
Ending balance, March 31 |
| ($29.4 | ) | |
| ($32.9 | ) | |
| $120.9 |
| |
| $149.0 |
|
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at March 31 |
| ($9.4 | ) | |
| ($33.7 | ) | |
| $— |
| |
| $— |
|
|
| | | | | | | | | | | | | | | |
Alliant Energy | Commodity Contract Derivative | | |
| Assets and (Liabilities), net | | Deferred Proceeds |
Six Months Ended June 30 | 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) | (27.0 | ) | | 13.1 |
| | — |
| | — |
|
Transfers into Level 3 | — |
| | 0.9 |
| | — |
| | — |
|
Transfers out of Level 3 | 12.2 |
| | 0.4 |
| | — |
| | — |
|
Purchases | 28.3 |
| | 22.0 |
| | — |
| | — |
|
Sales | (0.2 | ) | | (0.7 | ) | | — |
| | — |
|
Settlements (a) | (12.8 | ) | | (2.4 | ) | | (41.1 | ) | | (97.6 | ) |
Ending balance, June 30 |
| $9.2 |
| |
| $0.6 |
| |
| $170.0 |
| |
| $74.4 |
|
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 June 30 |
| ($25.4 | ) | |
| $14.8 |
| |
| $— |
| |
| $— |
|
|
| | | | | | | | | | | | | | | |
IPL | Commodity Contract Derivative | | |
| Assets and (Liabilities), net | | Deferred Proceeds |
Three Months Ended March 31 | 2018 | | 2017 | | 2018 | | 2017 |
Beginning balance, January 1 |
| ($1.4 | ) | |
| $10.1 |
| |
| $222.1 |
| |
| $211.1 |
|
Total net losses included in changes in net assets (realized/unrealized) | (7.6 | ) | | (12.7 | ) | | — |
| | — |
|
Sales | — |
| | (0.1 | ) | | — |
| | — |
|
Settlements (a) | (6.4 | ) | | (5.6 | ) | | (101.2 | ) | | (62.1 | ) |
Ending balance, March 31 |
| ($15.4 | ) | |
| ($8.3 | ) | |
| $120.9 |
| |
| $149.0 |
|
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at March 31 |
| ($7.3 | ) | |
| ($11.4 | ) | |
| $— |
| |
| $— |
|
|
| | | | | | | | | | | | | | | |
IPL | Commodity Contract Derivative | | |
| Assets and (Liabilities), net | | Deferred Proceeds |
Three Months Ended June 30 | 2017 | | 2016 | | 2017 | | 2016 |
Beginning balance, April 1 |
| ($8.3 | ) | |
| ($13.1 | ) | |
| $149.0 |
| |
| $154.2 |
|
Total net gains included in changes in net assets (realized/unrealized) | 2.9 |
| | 12.9 |
| | — |
| | — |
|
Transfers out of Level 3 | 3.4 |
| | (0.1 | ) | | — |
| | — |
|
Purchases | 24.6 |
| | 20.6 |
| | — |
| | — |
|
Sales | — |
| | (0.1 | ) | | — |
| | — |
|
Settlements (a) | (5.5 | ) | | (1.9 | ) | | 21.0 |
| | (79.8 | ) |
Ending balance, June 30 |
| $17.1 |
| |
| $18.3 |
| |
| $170.0 |
| |
| $74.4 |
|
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 June 30 |
| $2.9 |
| |
| $12.8 |
| |
| $— |
| |
| $— |
|
|
| | | | | | | | | | | | | | | |
IPL | Commodity Contract Derivative | | |
| Assets and (Liabilities), net | | Deferred Proceeds |
Six Months Ended June 30 | 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) | (9.5 | ) | | 5.2 |
| | — |
| | — |
|
Transfers into Level 3 | — |
| | 0.5 |
| | — |
| | — |
|
Transfers out of Level 3 | 3.1 |
| | (0.1 | ) | | — |
| | — |
|
Purchases | 24.6 |
| | 20.6 |
| | — |
| | — |
|
Sales | (0.1 | ) | | (0.7 | ) | | — |
| | — |
|
Settlements (a) | (11.1 | ) | | (5.3 | ) | | (41.1 | ) | | (97.6 | ) |
Ending balance, June 30 |
| $17.1 |
| |
| $18.3 |
| |
| $170.0 |
| |
| $74.4 |
|
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 June 30 |
| ($8.2 | ) | |
| $6.2 |
| |
| $— |
| |
| $— |
|
|
| | | | | | | |
WPL | Commodity Contract Derivative |
| Assets and (Liabilities), net |
Three Months Ended June 30 | 2017 | | 2016 |
Beginning balance, April 1 |
| ($24.6 | ) | |
| ($52.8 | ) |
Total net gains included in changes in net assets (realized/unrealized) | 5.2 |
| | 31.7 |
|
Transfers out of Level 3 | 8.8 |
| | 0.5 |
|
Purchases | 3.7 |
| | 1.4 |
|
Settlements | (1.0 | ) | | 1.5 |
|
Ending balance, June 30 |
| ($7.9 | ) | |
| ($17.7 | ) |
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 June 30 |
| $5.4 |
| |
| $32.0 |
|
|
| | | | | | | |
WPL | Commodity Contract Derivative |
| Assets and (Liabilities), net |
Six Months Ended June 30 | 2017 | | 2016 |
Beginning balance, January 1 |
| ($1.4 | ) | |
| ($30.8 | ) |
Total net gains (losses) included in changes in net assets (realized/unrealized) | (17.5 | ) | | 7.9 |
|
Transfers into Level 3 | — |
| | 0.4 |
|
Transfers out of Level 3 | 9.1 |
| | 0.5 |
|
Purchases | 3.7 |
| | 1.4 |
|
Sales | (0.1 | ) | | — |
|
Settlements | (1.7 | ) | | 2.9 |
|
Ending balance, June 30 |
| ($7.9 | ) | |
| ($17.7 | ) |
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 June 30 |
| ($17.2 | ) | |
| $8.6 |
|
|
| | | | | | | |
WPL | Commodity Contract Derivative |
| Assets and (Liabilities), net |
Three Months Ended March 31 | 2018 | | 2017 |
Beginning balance, January 1 |
| ($10.8 | ) | |
| ($1.4 | ) |
Total net losses included in changes in net assets (realized/unrealized) | (2.2 | ) | | (22.5 | ) |
Settlements | (1.0 | ) | | (0.7 | ) |
Ending balance, March 31 |
| ($14.0 | ) | |
| ($24.6 | ) |
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at March 31 |
| ($2.1 | ) | |
| ($22.3 | ) |
| |
(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 coaldiesel fuel commodity contracts categorized as Level 3 was recognized as net derivative assets (liabilities) as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| Excluding FTRs | | FTRs | | Excluding FTRs | | FTRs | | Excluding FTRs | | FTRs |
June 30, 2017 |
| ($19.8 | ) | |
| $29.0 |
| |
| ($8.0 | ) | |
| $25.1 |
| |
| ($11.8 | ) | |
| $3.9 |
|
December 31, 2016 | (2.3 | ) | | 11.0 |
| | 0.1 |
| | 10.0 |
| | (2.4 | ) | | 1.0 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| Excluding FTRs | | FTRs | | Excluding FTRs | | FTRs | | Excluding FTRs | | FTRs |
March 31, 2018 |
| ($34.6 | ) | |
| $5.2 |
| |
| ($20.0 | ) | |
| $4.6 |
| |
| ($14.6 | ) | |
| $0.6 |
|
December 31, 2017 | (23.5 | ) | | 11.3 |
| | (11.5 | ) | | 10.1 |
| | (12.0 | ) | | 1.2 |
|
NOTE 11.12. DERIVATIVE INSTRUMENTS
Commodity Derivatives -
Notional Amounts - As of June 30, 2017,March 31, 2018, gross notional amounts and settlement/delivery years related to outstanding swap contracts, option contracts, physical forward contracts FTRs, coal contracts and diesel fuel contractsFTRs that were accounted for as commodity derivative instruments were as follows (units in thousands):
| | | Electricity | | FTRs | | Natural Gas | | Coal | | Diesel Fuel | Electricity | | FTRs | | Natural Gas | | Coal | | Diesel Fuel |
| MWhs | | Years | | MWhs | | Years | | Dths | | Years | | Tons | | Years | | Gallons | | Years | MWhs | | Years | | MWhs | | Years | | Dths | | Years | | Tons | | Years | | Gallons | | Years |
Alliant Energy | 1,976 |
| | 2017-2018 | | 20,106 |
| | 2017-2018 | | 157,939 |
| | 2017-2026 | | 6,060 |
| | 2017-2019 | | 8,064 |
| | 2017-2019 | 990 |
| | 2018 | | 3,370 |
| | 2018 | | 156,074 |
| | 2018-2026 | | 7,144 |
| | 2018-2020 | | 5,670 |
| | 2018-2019 |
IPL | — |
| | — | | 12,495 |
| | 2017-2018 | | 68,421 |
| | 2017-2026 | | 2,163 |
| | 2017-2019 | | — |
| | — | — |
| | — | | 2,252 |
| | 2018 | | 65,541 |
| | 2018-2026 | | 2,975 |
| | 2018-2020 | | — |
| | — |
WPL | 1,976 |
| | 2017-2018 | | 7,611 |
| | 2017-2018 | | 89,518 |
| | 2017-2026 | | 3,897 |
| | 2017-2018 | | 8,064 |
| | 2017-2019 | 990 |
| | 2018 | | 1,118 |
| | 2018 | | 90,533 |
| | 2018-2026 | | 4,169 |
| | 2018-2020 | | 5,670 |
| | 2018-2019 |
Financial Statement Presentation - Derivative instruments are recorded at fair value each reporting date on the balance sheets as assets or liabilities. 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 | Alliant Energy | | IPL | | WPL |
Commodity contracts | June 30, 2017 | | December 31, 2016 | | June 30, 2017 | | December 31, 2016 | | June 30, 2017 | | December 31, 2016 | |
| | March 31, 2018 | | December 31, 2017 | | March 31, 2018 | | December 31, 2017 | | March 31, 2018 | | December 31, 2017 |
Current derivative assets |
| $35.9 |
| |
| $29.4 |
| |
| $28.7 |
| |
| $19.1 |
| |
| $7.2 |
| |
| $10.3 |
|
| $10.8 |
| |
| $21.1 |
| |
| $7.0 |
| |
| $15.8 |
| |
| $3.8 |
| |
| $5.3 |
|
Non-current derivative assets | 2.0 |
| | 12.0 |
| | 0.6 |
| | 1.7 |
| | 1.4 |
| | 10.3 |
| 3.3 |
| | 4.0 |
| | 0.9 |
| | 1.3 |
| | 2.4 |
| | 2.7 |
|
Current derivative liabilities | 17.8 |
| | 13.3 |
| | 4.1 |
| | 2.7 |
| | 13.7 |
| | 10.6 |
| 15.9 |
| | 18.7 |
| | 4.8 |
| | 5.0 |
| | 11.1 |
| | 13.7 |
|
Non-current derivative liabilities | 27.6 |
| | 15.3 |
| | 12.2 |
| | 5.6 |
| | 15.4 |
| | 9.7 |
| 30.8 |
| | 23.0 |
| | 19.9 |
| | 14.4 |
| | 10.9 |
| | 8.6 |
|
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 June 30, 2017March 31, 2018 and December 31, 2016,2017, 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 June 30, 2017March 31, 2018 and December 31, 2016.2017. 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 12.13. COMMITMENTS AND CONTINGENCIES
NOTE 12(a)13(a) Capital Purchase Obligations - Various contractual obligations contain minimum future commitments related to capital expenditures for certain construction projects. IPL’s projects include the expansion of wind generation and installation of an SCR system at Ottumwa Unit 1 to reduce NOx emissions at the EGU. WPL’s projects include West Riverside and the installation of an SCR system at Columbia Unit 2 to reduce NOx emissions at the EGU.Riverside. At June 30, 2017,March 31, 2018, Alliant Energy’s, IPL’s and WPL’s minimum future commitments related to certain contractual obligations for these projects were $53$95 million, $4$12 million and $49$83 million, respectively.
NOTE 12(b) Operating Expense13(b) Other Purchase Obligations - Various commodity supply, transportation and storage contracts help meet obligations to provide electricity and natural gas to utility customers. In addition, there are various operating expense purchase obligations associated with other goods and services. At June 30, 2017,March 31, 2018, minimum future commitments related to these operating expense purchase obligations were as follows (in millions):
| | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
Purchased power (a) |
| $1,326 |
| |
| $1,231 |
| |
| $95 |
|
| $1,175 |
| |
| $1,127 |
| |
| $48 |
|
Natural gas | 774 |
| | 402 |
| | 372 |
| 892 |
| | 362 |
| | 530 |
|
Coal (b) | 140 |
| | 66 |
| | 74 |
| 165 |
| | 88 |
| | 77 |
|
Other (c) | 30 |
| | 28 |
| | 2 |
| 46 |
| | 26 |
| | 6 |
|
|
| $2,270 |
| |
| $1,727 |
| |
| $543 |
|
| $2,278 |
| |
| $1,603 |
| |
| $661 |
|
| |
(a) | Includes payments required by purchased power agreements 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 June 30, 2017March 31, 2018 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 June 30, 2017March 31, 2018. |
NOTE 12(c)13(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 Cedar Rapids and Iowa City Railway Company (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 June 30, 2017.
NOTE 12(d) Guarantees and Indemnifications -
RMT - In 2013, Alliant Energy sold RMT. RMT provided renewable energy services, including construction and high voltage connection services for wind and solar projects. As part of the sale, Alliant Energy indemnified the buyer for any claims, including claims of warranty under the project obligations that were commenced or are based on actions that occurred prior to the sale, except for liabilities already accounted for through adjustments to the purchase price. Alliant Energy also guaranteed RMT’s performance obligations related to certain of RMT’s projects that were commenced prior to Alliant Energy’s sale of RMT. In the first quarter of 2017, all warranty periods and performance guarantees expired and all outstanding warranty claims were resolved.March 31, 2018.
NOTE 13(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, 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 general partnership agreements in the oil and gas industry, including with respect to 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 June 30, 2017March 31, 2018, the present value of the abandonment obligations is estimated at $32$34 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 June 30, 2017.March 31, 2018.
Non-utility Wind Farm 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 purchased power agreement. Alliant Energy provided a parent guarantee of its subsidiary’s indemnification obligations under the related operating agreement and purchased power agreement. Alliant Energy’s obligations under the operating agreement were $98 million as of March 31, 2018 and will reduce annually until expiring in July 2047. Alliant Energy’s obligations under the purchased power agreement 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 March 31, 2018.
IPL’s Minnesota Electric Distribution Assets - IPL provided indemnifications associated with the July 2015 sale of its Minnesota electric distribution 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 of June 30, 2017.March 31, 2018. The general terms of the indemnifications provided by IPL included a maximum limit of $17 million and expire in October 2020.
NOTE 12(e)13(e) Environmental Matters -
Manufactured Gas Plant (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.
Environmental liabilities related to the MGP sites are recorded based upon periodic studies. Such amounts are based on the best current estimate of the remaining amount to be incurred for investigation, remediation and monitoring costs for those sites where the investigation process has been or is substantially completed, and the minimum of the estimated cost range for those sites where the investigation is in its earlier stages. There are inherent uncertainties associated with the estimated remaining costs for MGP projects primarily due to unknown site conditions and potential changes in regulatory agency requirements. It is possible that future cost estimates will be greater than current estimates as the investigation process proceeds and as additional facts become known. Costs of future expenditures for environmental remediation obligations are not discounted. At June 30, 2017March 31, 2018, 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 June 30, 2017,March 31, 2018, such amounts for WPL were not material.
| | | Alliant Energy | | IPL | Alliant Energy | | IPL |
Range of estimated future costs |
| $12 |
| - | $31 | |
| $10 |
| - | $27 |
| $11 |
| - | $30 | |
| $9 |
| - | $25 |
Current and non-current environmental liabilities | 17 | | 14 | 16 | | 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 Clean Air Act (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,sulfur dioxide (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. WPL is in the process of completing approximately $7 million in environmental mitigation projects. 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.
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;2019, and fuel switching or retiring Prairie Creek Unit 4 by June 1, 2018, 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, Dubuque, Lansing, M.L. Kapp, Ottumwa and Prairie Creek and Sutherland. IPL is in the process of completing approximately $6 million in environmental mitigation projects.Creek. Alliant Energy and IPL currently expect to recover material costs incurred by IPL related to compliance with the environmental control systems and environmental mitigation projectsterms 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: Cross-State Air Pollution Rule, Effluent Limitation Guidelines, Coal Combustion Residuals Rule, and various legislation and EPA regulations to monitor and regulate the emission of greenhouse gases, including carbon emissions from new (CAA Section 111(b)) and existing (CAA Section 111(d)) fossil-fueled EGUs.
NOTE 13.14. SEGMENTS OF BUSINESS
In the fourth quarter of 2017, Alliant Energy and WPL modified the segment reporting related to ATC Holdings, consistent with information used by their chief operating decision maker to evaluate performance and allocate resources. As of December 31, 2017, ATC Holdings are no longer included in Alliant Energy’s utility electric operations reportable segment or WPL’s electric operations reportable segment. As a result, all prior period amounts impacted by this change were reclassified to conform to the new presentation. Alliant Energy’s related amounts were reclassified from “Electric Utility” to “ATC Holdings, Non-Utility, Parent and Other” in the table below. There was no resulting change to WPL’s segment reporting for the three months ended March 31, 2017.
Alliant Energy - Certain financial information relating to Alliant Energy’s business segments is as follows. Intersegment revenues were not material to Alliant Energy’s operations.
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Utility (a) | | Non-Regulated, | | Alliant Energy |
| Electric | | Gas | | Other | | Total | | Parent and Other | | Consolidated |
| (in millions) |
Three Months Ended June 30, 2017 | | | | | | | | | | | |
Operating revenues |
| $680.9 |
| |
| $62.6 |
| |
| $11.5 |
| |
| $755.0 |
| |
| $10.3 |
| |
| $765.3 |
|
Operating income | 135.6 |
| | 3.9 |
| | 0.5 |
| | 140.0 |
| | 9.3 |
| | 149.3 |
|
Net income attributable to Alliant Energy common shareowners | | | | | | | 87.6 |
| | 6.7 |
| | 94.3 |
|
Three Months Ended June 30, 2016 | | | | | | | | | | | |
Operating revenues |
| $675.9 |
| |
| $57.0 |
| |
| $12.4 |
| |
| $745.3 |
| |
| $9.3 |
| |
| $754.6 |
|
Operating income | 119.3 |
| | 1.9 |
| | 1.8 |
| | 123.0 |
| | 5.6 |
| | 128.6 |
|
Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | | | |
Income from continuing operations, net of tax | | | | | | | 75.1 |
| | 9.3 |
| | 84.4 |
|
Loss from discontinued operations, net of tax | | | | | | | — |
| | (0.5 | ) | | (0.5 | ) |
Net income | | | | | | | 75.1 |
| | 8.8 |
| | 83.9 |
|
| | | Utility (a) | | Non-Regulated, | | Alliant Energy | | | | | | | | | ATC Holdings, | | |
| Electric | | Gas | | Other | | Total | | Parent and Other | | Consolidated | Utility | | Non-Utility, | | Alliant Energy |
| (in millions) | Electric | | Gas | | Other | | Total | | Parent and Other | | Consolidated |
Six Months Ended June 30, 2017 | | | | | | | | | | | | |
Operating revenues |
| $1,358.5 |
| |
| $216.9 |
| |
| $23.2 |
| |
| $1,598.6 |
| |
| $20.6 |
| |
| $1,619.2 |
| |
| | (in millions) |
Three Months Ended March 31, 2018 | | | | | | | | | | | | |
Revenues | |
| $708.7 |
| |
| $185.6 |
| |
| $13.2 |
| |
| $907.5 |
| |
| $8.8 |
| |
| $916.3 |
|
Operating income | | 126.7 |
| | 31.5 |
| | 1.4 |
| | 159.6 |
| | 6.1 |
| | 165.7 |
|
Net income attributable to Alliant Energy common shareowners | | | | | | | | 100.7 |
| | 20.2 |
| | 120.9 |
|
Three Months Ended March 31, 2017 | | | | | | | | | | | | |
Revenues | |
| $677.6 |
| |
| $154.3 |
| |
| $11.7 |
| |
| $843.6 |
| |
| $10.3 |
| |
| $853.9 |
|
Operating income | 242.8 |
| | 31.9 |
| | 0.9 |
| | 275.6 |
| | 16.6 |
| | 292.2 |
| 110.9 |
| | 28.6 |
| | 0.4 |
| | 139.9 |
| | 7.3 |
| | 147.2 |
|
Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | | | | | | | | | | | | | | |
Income from continuing operations, net of tax | | | | | | | 177.2 |
| | 16.1 |
| | 193.3 |
| | | | | | | 82.7 |
| | 16.3 |
| | 99.0 |
|
Income from discontinued operations, net of tax | | | | | | | — |
| | 1.4 |
| | 1.4 |
| | | | | | | — |
| | 1.4 |
| | 1.4 |
|
Net income | | | | | | | 177.2 |
| | 17.5 |
| | 194.7 |
| | | | | | | 82.7 |
| | 17.7 |
| | 100.4 |
|
Six Months Ended June 30, 2016 | | | | | | | | | | | | |
Operating revenues |
| $1,344.8 |
| |
| $209.2 |
| |
| $25.6 |
| |
| $1,579.6 |
| |
| $18.8 |
| |
| $1,598.4 |
| |
Operating income | 229.1 |
| | 30.7 |
| | 4.0 |
| | 263.8 |
| | 10.7 |
| | 274.5 |
| |
Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | | | | |
Income from continuing operations, net of tax | | | | | | | 167.2 |
| | 14.8 |
| | 182.0 |
| |
Loss from discontinued operations, net of tax | | | | | | | — |
| | (1.6 | ) | | (1.6 | ) | |
Net income | | | | | | | 167.2 |
| | 13.2 |
| | 180.4 |
| |
| |
(a) | Alliant Energy’s utility business segments include: a) utility electric operations, which include Alliant Energy’s entire investment in ATC; b) utility gas operations; and c) utility other, which includes steam operations and the unallocated portions of the utility business. |
IPL - Certain financial information relating to IPL’s business segments is as follows. Intersegment revenues were not material to IPL’s operations.
| | | Electric | | Gas | | Other | | Total | Electric | | Gas | | Other | | Total |
| (in millions) | (in millions) |
Three Months Ended June 30, 2017 | | | | | | | | |
Operating revenues |
| $372.4 |
| |
| $36.7 |
| |
| $11.1 |
| |
| $420.2 |
| |
Three Months Ended March 31, 2018 | | | | | | | | |
Revenues | |
| $405.7 |
| |
| $108.1 |
| |
| $12.0 |
| |
| $525.8 |
|
Operating income | 62.4 |
| | 2.4 |
| | 1.5 |
| | 66.3 |
| 57.5 |
| | 16.9 |
| | 1.2 |
| | 75.6 |
|
Earnings available for common stock | | | | | | | 42.8 |
| | | | | | | 46.7 |
|
Three Months Ended June 30, 2016 | | | | | | | | |
Operating revenues |
| $364.4 |
| |
| $34.5 |
| |
| $12.1 |
| |
| $411.0 |
| |
Three Months Ended March 31, 2017 | | | | | | | | |
Revenues | |
| $356.2 |
| |
| $83.1 |
| |
| $11.2 |
| |
| $450.5 |
|
Operating income | 44.5 |
| | 0.9 |
| | 2.6 |
| | 48.0 |
| 35.3 |
| | 14.6 |
| | 1.4 |
| | 51.3 |
|
Earnings available for common stock | | | | | | | 31.9 |
| | | | | | | 37.2 |
|
Six Months Ended June 30, 2017 | | | | | | | | |
Operating revenues |
| $728.6 |
| |
| $119.8 |
| |
| $22.3 |
| |
| $870.7 |
| |
Operating income | 96.2 |
| | 16.8 |
| | 2.9 |
| | 115.9 |
| |
Earnings available for common stock | | | | | | | 80.0 |
| |
Six Months Ended June 30, 2016 | | | | | | | | |
Operating revenues |
| $726.0 |
| |
| $118.7 |
| |
| $25.0 |
| |
| $869.7 |
| |
Operating income | 87.9 |
| | 16.7 |
| | 5.4 |
| | 110.0 |
| |
Earnings available for common stock | | | | | | | 77.5 |
| |
WPL - Certain financial information relating to WPL’s business segments is as follows. Intersegment revenues were not material to WPL’s operations.
| | | Electric | | Gas | | Other | | Total | Electric | | Gas | | Other | | Total |
| (in millions) | (in millions) |
Three Months Ended June 30, 2017 | | | | | | | | |
Operating revenues |
| $308.5 |
| |
| $25.9 |
| |
| $0.4 |
| |
| $334.8 |
| |
Three Months Ended March 31, 2018 | | | | | | | | |
Revenues | |
| $303.0 |
| |
| $77.5 |
| |
| $1.2 |
| |
| $381.7 |
|
Operating income | | 69.2 |
| | 14.6 |
| | 0.2 |
| | 84.0 |
|
Earnings available for common stock | | | | | | | | 54.0 |
|
Three Months Ended March 31, 2017 | | | | | | | | |
Revenues | |
| $321.4 |
| |
| $71.2 |
| |
| $0.5 |
| |
| $393.1 |
|
Operating income (loss) | 73.2 |
| | 1.5 |
| | (1.0 | ) | | 73.7 |
| 75.6 |
| | 14.0 |
| | (1.0 | ) | | 88.6 |
|
Earnings available for common stock | | | | | | | 38.1 |
| | | | | | | 45.5 |
|
Three Months Ended June 30, 2016 | | | | | | | | |
Operating revenues |
| $311.5 |
| |
| $22.5 |
| |
| $0.3 |
| |
| $334.3 |
| |
Operating income (loss) | 74.8 |
| | 1.0 |
| | (0.8 | ) | | 75.0 |
| |
Earnings available for common stock | | | | | | | 43.2 |
| |
Six Months Ended June 30, 2017 | | | | | | | | |
Operating revenues |
| $629.9 |
| |
| $97.1 |
| |
| $0.9 |
| |
| $727.9 |
| |
Operating income (loss) | 146.6 |
| | 15.1 |
| | (2.0 | ) | | 159.7 |
| |
Earnings available for common stock | | | | | | | 83.6 |
| |
Six Months Ended June 30, 2016 | | | | | | | | |
Operating revenues |
| $618.8 |
| |
| $90.5 |
| |
| $0.6 |
| |
| $709.9 |
| |
Operating income (loss) | 141.2 |
| | 14.0 |
| | (1.4 | ) | | 153.8 |
| |
Earnings available for common stock | | | | | | | 89.7 |
| |
NOTE 14.15. 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 for the three and six months ended June 30March 31 were as follows (in millions):
| | | IPL | | WPL | | | | | | | | | |
| Three Months | | Six Months | | Three Months | | Six Months | IPL | | WPL |
| 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | 2018 | | 2017 | | 2018 | | 2017 |
Corporate Services billings |
| $43 |
| |
| $45 |
| |
| $82 |
| |
| $83 |
| |
| $32 |
| |
| $37 |
| |
| $63 |
| |
| $70 |
|
| $41 |
| |
| $39 |
| |
| $33 |
| |
| $31 |
|
Sales credited | 5 |
| | 2 |
| | 7 |
| | 3 |
| | 2 |
| | 2 |
| | 2 |
| | 3 |
| 5 |
| | 2 |
| | 1 |
| | — |
|
Purchases billed | 96 |
| | 102 |
| | 162 |
| | 198 |
| | 33 |
| | 23 |
| | 67 |
| | 42 |
| 93 |
| | 66 |
| | 17 |
| | 34 |
|
Net intercompany payables to Corporate Services were as follows (in millions):
|
| | | | | | | |
| IPL | | WPL |
| June 30, 2017 | | December 31, 2016 | | June 30, 2017 | | December 31, 2016 |
Net payables to Corporate Services | $102 | | $104 | | $69 | | $72 |
|
| | | | | | | |
| IPL | | WPL |
| March 31, 2018 | | December 31, 2017 | | March 31, 2018 | | December 31, 2017 |
Net payables to Corporate Services | $96 | | $114 | | $64 | | $61 |
ATC LLC - Pursuant to various agreements, WPL receives a range of transmission services from ATC LLC.ATC. WPL provides operation, maintenance, and construction services to ATC LLC.ATC. WPL and ATC LLC also bill each other for use of shared facilities owned by each party. The related amounts billed between the parties for the three and six months ended June 30March 31 were as follows (in millions):
|
| | | | | | | | | | | | | | | |
| Three Months | | Six Months |
| 2017 | | 2016 | | 2017 | | 2016 |
ATC LLC billings to WPL |
| $27 |
| |
| $27 |
| |
| $53 |
| |
| $54 |
|
WPL billings to ATC LLC | 3 |
| | 3 |
| | 6 |
| | 6 |
|
|
| | | | | | | |
| 2018 | | 2017 |
ATC billings to WPL |
| $27 |
| |
| $26 |
|
WPL billings to ATC | 2 |
| | 3 |
|
WPL owed ATC LLC net amounts of $8$7 million as of June 30, 2017March 31, 2018 and $89 million as of December 31, 20162017.
Refer to
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.
ITEM 2. 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 the Notes included in this report, as well as the financial statements, notes and MDA included in the 20162017 Form 10-K. Unless otherwise noted, all “per share” references in MDA refer to earnings per diluted share.
EXECUTIVE OVERVIEW
Description of Business
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-regulatednon-utility businesses, including Alliant Energy’s Transportation business and certain non-utility generation holdings, and holds all of Alliant Energy’s investment in ATC.ATC Holdings. Corporate Services provides administrative services to Alliant Energy and its subsidiaries. An illustration of Alliant Energy’s primary businesses is shown below.
|
| | | | | |
| | Alliant Energy | | |
| | | | | |
| | | | |
Utilities ATC Investment and Corporate Services | | Non-regulatedATC Holdings, Non-utility and Parent |
- Retail electric and gas services in IA (IPL) | | - TransportationATC Holdings (AEF) |
- Retail electric and gas services in WI (WPL) | | - Non-regulated wind investment (AEF) |
- ATC Investment (ATI) | | - Sheboygan Falls Energy FacilityTransportation (AEF) |
- Wholesale electric service in MN, IL & IA (IPL) | | - Parent CompanyNon-utility wind farm (AEF) |
- Wholesale electric service in WI (WPL) | | - Sheboygan Falls Energy Facility (AEF) |
- Corporate Services | | - Parent Company |
Financial Results - Alliant Energy’s net income and EPSearnings per weighted average common share (EPS) attributable to Alliant Energy common shareowners for the secondfirst quarter were as follows (dollars in millions, except per share amounts):
| | | 2017 | | 2016 | 2018 | | 2017 |
| Income | | EPS | | Income (Loss) | | EPS | Income | | EPS | | Income | | EPS |
Continuing operations: | | | | | | | | | | | | | | |
Utilities, ATC Investment and Corporate Services |
| $90.9 |
| |
| $0.40 |
| |
| $78.6 |
| |
| $0.35 |
| |
Non-regulated and Parent | 3.4 |
| | 0.01 |
| | 5.8 |
| | 0.02 |
| |
Utilities and Corporate Services | |
| $104.4 |
| |
| $0.45 |
| |
| $85.9 |
| |
| $0.38 |
|
ATC Holdings | | 6.3 |
| | 0.03 |
| | 6.9 |
| | 0.03 |
|
Non-utility and Parent | | 10.2 |
| | 0.04 |
| | 6.2 |
| | 0.02 |
|
Income from continuing operations | 94.3 |
| | 0.41 |
| | 84.4 |
| | 0.37 |
| 120.9 |
| | 0.52 |
| | 99.0 |
| | 0.43 |
|
Loss from discontinued operations | — |
| | — |
| | (0.5 | ) | | — |
| |
Income from discontinued operations | | — |
| | — |
| | 1.4 |
| | 0.01 |
|
Net income |
| $94.3 |
| |
| $0.41 |
| |
| $83.9 |
| |
| $0.37 |
|
| $120.9 |
| |
| $0.52 |
| |
| $100.4 |
| |
| $0.44 |
|
The table above includes EPS from continuing operations for utilities ATC Investment and Corporate Services, ATC Holdings, and non-regulatednon-utility and parent, which are non-GAAP financial measures. Alliant Energy believes EPS from continuing operations for utilities, ATC Investment and Corporate Services, and non-regulated and parentthese 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.
IncomeAlliant Energy’s, IPL’s and WPL’s income from continuing operations inincreased by $22 million, $10 million and $9 million, respectively, for the second quarter of 2017 comparedthree-month period. Alliant Energy’s increase was primarily due to the second quarter of 2016 included higher revenuesmargins resulting from IPL’s interim retail electric base rate increase implemented in April 2017, and WPL’shigher retail electric and gas base rate increases implementedsales due to colder temperatures in Januarythe first quarter of 2018 compared to the same period in 2017. These items were partially offset by higher depreciation expense and higher energy efficiency cost recovery amortization at WPL.expense.
Refer to “Results of Operations” for additional details regarding the various factors impacting earnings during the secondfirst quarters of 20172018 and 2016.2017.
20172018 Overview - Alliant Energy, IPL and WPL continue to focus on achieving their financial objectives and executing their strategic plan. Key developments since the filing of the 20162017 Form 10-K include the following:
Marshalltown Generating Station - IPL’s construction of Marshalltown, an approximate 660 MW natural gas-fired combined-cycle EGU, was completed in April 2017. Final capital expenditures are currently estimated to be approximately $645 million 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 - In addition to IPL’s 500 MW expansion of wind generation approved by the IUB in October 2016 and transfer of the 99 MW Franklin County wind farm toApril 2018, IPL in 2017, IPL and WPL are currently exploring options to own and operate up to 500 MW and 200 MW, respectively, of additional new wind generation. Current estimated capital expenditures assume 200 MW of wind generation for each of IPL and WPL. The amount and timing of these wind projects will largely depend on regulatory approvals and the acquisition of wind sites. In August 2017, IPL filed an application withreceived approval from the IUB for advance rate-making principles for up tothe second 500 MW of the additionalnew wind generation. In April 2018, WPL acquired 55 MW of FWEC, which is a 129 MW wind farm located in Wisconsin. Refer to “Strategic Overview” for further discussion. |
| |
• | Non-regulated Wind Investment in OklahomaIPL’s Tax Reform Benefits - In July 2017, a wholly-owned subsidiary of AEF acquired a 50% cash equity ownership interest in a 225 MW non-regulated wind farm located in Oklahoma. Refer to Note 5(a) for further discussion.In April 2018, the IUB issued an order approving the return of approximately $35 million of estimated annual tax benefits for 2018 to IPL’s retail electric customers utilizing the tax benefit rider effective May 1, 2018, subject to true-up. The IUB order also approved the return of approximately $3 million of estimated annual tax benefits for 2018 to IPL’s retail gas customers utilizing interim rates to be implemented May 14, 2018 for IPL’s 2017 Test Year gas rate review, subject to further review by the IUB. Lastly, the IUB order determined the excess deferred taxes resulting from the remeasurement of accumulated deferred income taxes caused by Tax Reform (approximately $370 million revenue requirement) will be addressed in IPL’s next retail electric and gas rate reviews. WPL’s Tax Reform Benefits - In April 2018, WPL received a decision from the PSCW directing WPL to return annual tax benefits for 2018 to WPL’s retail electric and gas customers, which WPL currently estimates to be approximately $43 million. The estimated tax benefits related to the first half of 2018 will be provided as a one-time credit on WPL’s retail electric and gas customers’ July 2018 bills. Thereafter, WPL currently expects to provide a monthly refund equal to one-twelfth of the estimated annual tax benefits for 2018 to its retail electric and gas customers through the end of 2018. The PSCW decision also determined the excess deferred taxes resulting from the remeasurement of accumulated deferred income taxes caused by Tax Reform (approximately $460 million revenue requirement) will be addressed in WPL’s next retail electric and gas rate review. |
IPL’s Retail ElectricGas Rate Review (2016(2017 Test Year) - In April 2017,May 2018, IPL filed a request with the IUB to increase annual electricgas base rates for its Iowa retail electricgas customers by $176$20 million, or approximately 12%8%. The request was based on a 20162017 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.partially offset by the benefits of Tax Reform. An interim retail electric basegas rate increase of $102$11 million, or approximately 7%5%, on an annual basis, waswill be implemented effective April 13, 2017.May 14, 2018. IPL currently expects to implementa decision from the IUB in 2019 with final rates effective by the firstsecond quarter of 2018.2019.
RESULTS OF OPERATIONS
WPL’s Retail Fuel-related Rate Filing (2018 Test Year)Overview - In July“Executive Overview” provides an overview of Alliant Energy’s, IPL’s and WPL’s earnings for the three months ended March 31, 2018 and 2017. Additional earnings details for the three months ended March 31, 2018 and 2017 WPL filedare 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 revenues less electric production fuel, purchased power and electric transmission service expenses. Utility gas margins are defined as gas 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 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 requestmeaningful 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 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 the PSCW to increase annual rates for WPL’s retail electric customers by $6 million, or approximately 1%, in 2018. The increase primarily reflects a change in expected fuel-related costs in 2018. Any rate changes granted from this request are expected to be effective January 1, 2018.GAAP as an indicator of operating performance.
For the three months ended March 31, 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 |
Three Months | 2018 | | 2017 | | 2018 | | 2017 | | 2018 | | 2017 |
Operating income |
| $165.7 |
| |
| $147.2 |
| |
| $75.6 |
| |
| $51.3 |
| |
| $84.0 |
| |
| $88.6 |
|
| | | | | | | | | | | |
Electric utility revenues |
| $708.7 |
| |
| $677.6 |
| |
| $405.7 |
| |
| $356.2 |
| |
| $303.0 |
| |
| $321.4 |
|
Electric production fuel and purchased power expenses | (203.2 | ) | | (207.8 | ) | | (114.6 | ) | | (109.5 | ) | | (88.6 | ) | | (98.3 | ) |
Electric transmission service expense | (126.4 | ) | | (124.7 | ) | | (90.8 | ) | | (81.7 | ) | | (35.6 | ) | | (43.0 | ) |
Utility Electric Margin (non-GAAP) | 379.1 |
| | 345.1 |
| | 200.3 |
| | 165.0 |
| | 178.8 |
| | 180.1 |
|
| | | | | | | | | | | |
Gas utility revenues | 185.6 |
| | 154.3 |
| | 108.1 |
| | 83.1 |
| | 77.5 |
| | 71.2 |
|
Cost of gas sold | (111.2 | ) | | (92.2 | ) | | (60.6 | ) | | (47.8 | ) | | (50.6 | ) | | (44.4 | ) |
Utility Gas Margin (non-GAAP) | 74.4 |
| | 62.1 |
| | 47.5 |
| | 35.3 |
| | 26.9 |
| | 26.8 |
|
| | | | | | | | | | | |
Other utility revenues | 13.2 |
| | 11.7 |
| | 12.0 |
| | 11.2 |
| | 1.2 |
| | 0.5 |
|
Non-utility revenues | 8.8 |
| | 10.3 |
| | — |
| | — |
| | — |
| | — |
|
Other operation and maintenance expenses | (162.4 | ) | | (148.6 | ) | | (105.5 | ) | | (93.2 | ) | | (56.3 | ) | | (54.4 | ) |
Depreciation and amortization expenses | (120.4 | ) | | (107.0 | ) | | (64.8 | ) | | (53.6 | ) | | (54.6 | ) | | (52.4 | ) |
Taxes other than income tax expense | (27.0 | ) | | (26.4 | ) | | (13.9 | ) | | (13.4 | ) | | (12.0 | ) | | (12.0 | ) |
Operating income |
| $165.7 |
| |
| $147.2 |
| |
| $75.6 |
| |
| $51.3 |
| |
| $84.0 |
| |
| $88.6 |
|
MISO Transmission Owner Return on Equity ComplaintsOperating Income Variances - A group of MISO cooperative and municipal utilities previously filed two complaints with FERC requesting a reductionVariances between periods in operating income for the three months ended March 31, 2018 compared to the base return on equity used by MISO transmission owners, including ITCsame period in 2017 were as follows (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Total higher (lower) utility electric margin variance (refer to details below) |
| $34 |
| |
| $35 |
| |
| ($1 | ) |
Total higher utility gas margin variance (refer to details below) | 12 |
| | 12 |
| | — |
|
Total higher other operation and maintenance expenses variance (refer to details below) | (14 | ) | | (12 | ) | | (2 | ) |
Total higher depreciation and amortization expense, primarily due to additional plant in service in 2017, including impacts from the Marshalltown Generating Station | (13 | ) | | (11 | ) | | (2 | ) |
|
| $19 |
| |
| $24 |
| |
| ($5 | ) |
Electric and ATC LLC to determine electric transmission costs billed to utilities, including IPLGas Revenues and WPL. In September 2016, FERC issued an order onSales Summary - Electric and gas revenues (in millions), and MWh and Dth sales (in thousands), for the first complaint and established a base return on equitythree months ended March 31 were as follows:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Alliant Energy | Electric | | Gas |
| Revenues | | MWhs Sold | | Revenues | | Dths Sold |
| 2018 | | 2017 | | 2018 | | 2017 | | 2018 | | 2017 | | 2018 | | 2017 |
Retail |
| $635.3 |
| |
| $601.9 |
| | 6,336 |
| | 6,193 |
| |
| $173.4 |
| |
| $144.5 |
| | 23,848 |
| | 20,560 |
|
Sales for resale | 60.6 |
| | 64.4 |
| | 1,121 |
| | 1,051 |
| | — |
| | — |
| | — |
| | — |
|
Transportation/Other | 12.8 |
| | 11.3 |
| | 26 |
| | 26 |
| | 12.2 |
| | 9.8 |
| | 24,061 |
| | 19,108 |
|
|
| $708.7 |
| |
| $677.6 |
| | 7,483 |
| | 7,270 |
| |
| $185.6 |
| |
| $154.3 |
| | 47,909 |
| | 39,668 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
IPL | Electric | | Gas |
| Revenues | | MWhs Sold | | Revenues | | Dths Sold |
| 2018 | | 2017 | | 2018 | | 2017 | | 2018 | | 2017 | | 2018 | | 2017 |
Retail |
| $368.6 |
| |
| $326.7 |
| | 3,669 |
| | 3,553 |
| |
| $99.8 |
| |
| $76.5 |
| | 12,692 |
| | 10,792 |
|
Sales for resale | 29.7 |
| | 22.3 |
| | 527 |
| | 350 |
| | — |
| | — |
| | — |
| | — |
|
Transportation/Other | 7.4 |
| | 7.2 |
| | 9 |
| | 10 |
| | 8.3 |
| | 6.6 |
| | 11,223 |
| | 10,740 |
|
|
| $405.7 |
| |
| $356.2 |
| | 4,205 |
| | 3,913 |
| |
| $108.1 |
| |
| $83.1 |
| | 23,915 |
| | 21,532 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
WPL | Electric | | Gas |
| Revenues | | MWhs Sold | | Revenues | | Dths Sold |
| 2018 | | 2017 | | 2018 | | 2017 | | 2018 | | 2017 | | 2018 | | 2017 |
Retail |
| $266.7 |
| |
| $275.2 |
| | 2,667 |
| | 2,640 |
| |
| $73.6 |
| |
| $68.0 |
| | 11,156 |
| | 9,768 |
|
Sales for resale | 30.9 |
| | 42.1 |
| | 594 |
| | 701 |
| | — |
| | — |
| | — |
| | — |
|
Transportation/Other | 5.4 |
| | 4.1 |
| | 17 |
| | 16 |
| | 3.9 |
| | 3.2 |
| | 12,838 |
| | 8,368 |
|
|
| $303.0 |
| |
| $321.4 |
| | 3,278 |
| | 3,357 |
| |
| $77.5 |
| |
| $71.2 |
| | 23,994 |
| | 18,136 |
|
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 the first half of 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 is currently being refunded to its retail customers in 2017, beginning May 2017. WPL’s retail portion of the refund from ATC LLC will remain in a regulatory liability until such refunds are approved to be returned to retail customers in a future rate proceeding.
At-the-Market Offering Program - In the second quarter of 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.
RESULTS OF OPERATIONS
Overview - Second Quarter ResultsTemperatures -
Alliant Energy - “Executive Overview” provides an overview of Alliant Energy’s second quarter 2017 and 2016 earnings and the various components of its business.
IPL - Earnings available for common stock increased $11 million primarily due to the impact of IPL’s interim retail electric base rate increase implemented on April 13, 2017, partially offset by higher depreciation expense.
WPL - Earnings available for common stock decreased $5 million primarily due to reduced equity income resulting from the transfer of WPL’s investment in ATC LLC to ATI on December 31, 2016, higher energy efficiency cost recovery amortizations during the second quarter of 2017 compared to the second quarter of 2016, and higher depreciation expense. These items were largely offset by the impact of WPL’s retail electric and gas base rate increases implemented January 1, 2017.
Additional details of Alliant Energy’s, IPL’s and WPL’s second quarter 2017 and 2016 earnings are discussed below.
Utility Electric Margins - Electric margins are defined as electric operating revenues less electric production fuel, purchased power and electric transmission service expenses. Management believes that electric margins provide a meaningful basis for evaluating utility operations since electric production fuel, purchased power and electric transmission service expenses are generally passed through to customers, and therefore, result in changes to electric operating revenues that are comparable to changes in such expenses. These electric margins may not be comparable to how other entities define utility margin.
Second Quarter 2017 vs. Second Quarter 2016 Summary - Electric margins and MWh sales for the three months ended June 30 were as follows:
|
| | | | | | | | | | | | | | | | | | | |
Alliant Energy | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $229.3 |
| |
| $225.1 |
| | 2 | % | | 1,537 |
| | 1,586 |
| | (3 | %) |
Commercial | 165.7 |
| | 168.1 |
| | (1 | %) | | 1,506 |
| | 1,537 |
| | (2 | %) |
Industrial | 192.3 |
| | 193.4 |
| | (1 | %) | | 2,626 |
| | 2,654 |
| | (1 | %) |
Industrial - co-generation | 15.5 |
| | 15.3 |
| | 1 | % | | 267 |
| | 224 |
| | 19 | % |
Retail subtotal | 602.8 |
| | 601.9 |
| | — | % | | 5,936 |
| | 6,001 |
| | (1 | %) |
Sales for resale: | | | | | | | | | | | |
Wholesale | 59.4 |
| | 61.7 |
| | (4 | %) | | 906 |
| | 925 |
| | (2 | %) |
Bulk power and other | 5.4 |
| | 2.4 |
| | 125 | % | | 217 |
| | 97 |
| | 124 | % |
Other | 13.3 |
| | 9.9 |
| | 34 | % | | 24 |
| | 26 |
| | (8 | %) |
Total revenues/sales | 680.9 |
| | 675.9 |
| | 1 | % | | 7,083 |
| | 7,049 |
| | — | % |
Electric production fuel expense | 80.0 |
| | 87.7 |
| | (9 | %) | | | | | | |
Purchased power expense | 104.3 |
| | 111.8 |
| | (7 | %) | | | | | | |
Electric transmission service expense | 117.6 |
| | 130.3 |
| | (10 | %) | | | | | | |
Electric margins (a) |
| $379.0 |
| |
| $346.1 |
| | 10 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
IPL | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $122.4 |
| |
| $118.7 |
| | 3 | % | | 781 |
| | 795 |
| | (2 | %) |
Commercial | 103.6 |
| | 104.7 |
| | (1 | %) | | 967 |
| | 979 |
| | (1 | %) |
Industrial | 94.0 |
| | 96.8 |
| | (3 | %) | | 1,409 |
| | 1,457 |
| | (3 | %) |
Industrial - co-generation | 15.5 |
| | 15.3 |
| | 1 | % | | 267 |
| | 224 |
| | 19 | % |
Retail subtotal | 335.5 |
| | 335.5 |
| | — | % | | 3,424 |
| | 3,455 |
| | (1 | %) |
Sales for resale: | | | | | | | | | | | |
Wholesale | 23.3 |
| | 21.4 |
| | 9 | % | | 315 |
| | 306 |
| | 3 | % |
Bulk power and other | 4.3 |
| | 0.8 |
| | 438 | % | | 170 |
| | 13 |
| | 1,208 | % |
Other | 9.3 |
| | 6.7 |
| | 39 | % | | 11 |
| | 11 |
| | — | % |
Total revenues/sales | 372.4 |
| | 364.4 |
| | 2 | % | | 3,920 |
| | 3,785 |
| | 4 | % |
Electric production fuel expense | 37.6 |
| | 30.7 |
| | 22 | % | | | | | | |
Purchased power expense | 60.4 |
| | 69.7 |
| | (13 | %) | | | | | | |
Electric transmission service expense | 75.1 |
| | 88.3 |
| | (15 | %) | | | | | | |
Electric margins (a) |
| $199.3 |
| |
| $175.7 |
| | 13 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
WPL | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $106.9 |
| |
| $106.4 |
| | — | % | | 756 |
| | 791 |
| | (4 | %) |
Commercial | 62.1 |
| | 63.4 |
| | (2 | %) | | 539 |
| | 558 |
| | (3 | %) |
Industrial | 98.3 |
| | 96.6 |
| | 2 | % | | 1,217 |
| | 1,197 |
| | 2 | % |
Retail subtotal | 267.3 |
| | 266.4 |
| | — | % | | 2,512 |
| | 2,546 |
| | (1 | %) |
Sales for resale: | | | | | | | | | | | |
Wholesale | 36.1 |
| | 40.3 |
| | (10 | %) | | 591 |
| | 619 |
| | (5 | %) |
Bulk power and other | 1.1 |
| | 1.6 |
| | (31 | %) | | 47 |
| | 84 |
| | (44 | %) |
Other | 4.0 |
| | 3.2 |
| | 25 | % | | 13 |
| | 15 |
| | (13 | %) |
Total revenues/sales | 308.5 |
| | 311.5 |
| | (1 | %) | | 3,163 |
| | 3,264 |
| | (3 | %) |
Electric production fuel expense | 42.4 |
| | 57.0 |
| | (26 | %) | | | | | | |
Purchased power expense | 43.9 |
| | 42.1 |
| | 4 | % | | | | | | |
Electric transmission service expense | 42.5 |
| | 42.0 |
| | 1 | % | | | | | | |
Electric margins |
| $179.7 |
| |
| $170.4 |
| | 5 | % | | | | | | |
| |
(a) | Includes $16 million and $15 million of electric tax benefit rider credits on IPL’s Iowa retail electric customers’ bills for the second quarters of 2017 and 2016, respectively. The electric tax benefit rider results in reductions in electric revenues that are offset by reductions in income tax expense for the years ended December 31, 2017 and 2016.
|
Six Months Ended June 30, 2017 vs. Six Months Ended June 30, 2016Summary - Electric margins and MWh sales for the six months ended June 30 were as follows:
|
| | | | | | | | | | | | | | | | | | | |
Alliant Energy | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $470.5 |
| |
| $466.4 |
| | 1 | % | | 3,301 |
| | 3,427 |
| | (4 | %) |
Commercial | 331.4 |
| | 330.2 |
| | — | % | | 3,091 |
| | 3,133 |
| | (1 | %) |
Industrial | 370.0 |
| | 368.5 |
| | — | % | | 5,257 |
| | 5,158 |
| | 2 | % |
Industrial - co-generation | 32.8 |
| | 32.8 |
| | — | % | | 480 |
| | 486 |
| | (1 | %) |
Retail subtotal | 1,204.7 |
| | 1,197.9 |
| | 1 | % | | 12,129 |
| | 12,204 |
| | (1 | %) |
Sales for resale: | | | | | | | | | | | |
Wholesale | 122.8 |
| | 123.7 |
| | (1 | %) | | 1,909 |
| | 1,905 |
| | — | % |
Bulk power and other | 6.4 |
| | 3.7 |
| | 73 | % | | 265 |
| | 196 |
| | 35 | % |
Other | 24.6 |
| | 19.5 |
| | 26 | % | | 50 |
| | 51 |
| | (2 | %) |
Total revenues/sales | 1,358.5 |
| | 1,344.8 |
| | 1 | % | | 14,353 |
| | 14,356 |
| | — | % |
Electric production fuel expense | 164.3 |
| | 186.7 |
| | (12 | %) | | | | | | |
Purchased power expense | 227.8 |
| | 213.7 |
| | 7 | % | | | | | | |
Electric transmission service expense | 242.3 |
| | 258.2 |
| | (6 | %) | | | | | | |
Electric margins (a) |
| $724.1 |
| |
| $686.2 |
| | 6 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
IPL | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $245.7 |
| |
| $248.5 |
| | (1 | %) | | 1,696 |
| | 1,765 |
| | (4 | %) |
Commercial | 203.1 |
| | 203.0 |
| | — | % | | 1,960 |
| | 1,984 |
| | (1 | %) |
Industrial | 180.6 |
| | 182.8 |
| | (1 | %) | | 2,841 |
| | 2,811 |
| | 1 | % |
Industrial - co-generation | 32.8 |
| | 32.8 |
| | — | % | | 480 |
| | 486 |
| | (1 | %) |
Retail subtotal | 662.2 |
| | 667.1 |
| | (1 | %) | | 6,977 |
| | 7,046 |
| | (1 | %) |
Sales for resale: | | | | | | | | | | | |
Wholesale | 44.6 |
| | 44.6 |
| | — | % | | 649 |
| | 646 |
| | — | % |
Bulk power and other | 5.3 |
| | 1.4 |
| | 279 | % | | 186 |
| | 21 |
| | 786 | % |
Other | 16.5 |
| | 12.9 |
| | 28 | % | | 21 |
| | 20 |
| | 5 | % |
Total revenues/sales | 728.6 |
| | 726.0 |
| | — | % | | 7,833 |
| | 7,733 |
| | 1 | % |
Electric production fuel expense | 70.0 |
| | 65.9 |
| | 6 | % | | | | | | |
Purchased power expense | 137.5 |
| | 133.9 |
| | 3 | % | | | | | | |
Electric transmission service expense | 156.8 |
| | 174.8 |
| | (10 | %) | | | | | | |
Electric margins (a) |
| $364.3 |
| |
| $351.4 |
| | 4 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
WPL | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $224.8 |
| |
| $217.9 |
| | 3 | % | | 1,605 |
| | 1,662 |
| | (3 | %) |
Commercial | 128.3 |
| | 127.2 |
| | 1 | % | | 1,131 |
| | 1,149 |
| | (2 | %) |
Industrial | 189.4 |
| | 185.7 |
| | 2 | % | | 2,416 |
| | 2,347 |
| | 3 | % |
Retail subtotal | 542.5 |
| | 530.8 |
| | 2 | % | | 5,152 |
| | 5,158 |
| | — | % |
Sales for resale: | | | | | | | | | | | |
Wholesale | 78.2 |
| | 79.1 |
| | (1 | %) | | 1,260 |
| | 1,259 |
| | — | % |
Bulk power and other | 1.1 |
| | 2.3 |
| | (52 | %) | | 79 |
| | 175 |
| | (55 | %) |
Other | 8.1 |
| | 6.6 |
| | 23 | % | | 29 |
| | 31 |
| | (6 | %) |
Total revenues/sales | 629.9 |
| | 618.8 |
| | 2 | % | | 6,520 |
| | 6,623 |
| | (2 | %) |
Electric production fuel expense | 94.3 |
| | 120.8 |
| | (22 | %) | | | | | | |
Purchased power expense | 90.3 |
| | 79.8 |
| | 13 | % | | | | | | |
Electric transmission service expense | 85.5 |
| | 83.4 |
| | 3 | % | | | | | | |
Electric margins |
| $359.8 |
| |
| $334.8 |
| | 7 | % | | | | | | |
| |
(a) | Includes $33 million and $30 million of electric tax benefit rider credits on IPL’s Iowa retail electric customers’ bills for the six months ended June 30, 2017 and 2016, respectively. The electric tax benefit rider results in reductions in electric revenues that are offset by reductions in income tax expense for the years ended December 31, 2017 and 2016. |
Variances - Variances between periods in electric margins for the three and six months ended June 30, 2017 compared to the same periods in 2016 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months | | Six Months |
| Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
Higher margins at WPL from the impact of its 2017/2018 Test Period retail electric base rate increase (a) |
| $16 |
| |
| $— |
| |
| $16 |
| |
| $38 |
| |
| $— |
| |
| $38 |
|
Higher margins at IPL from the impact of its 2016 Test Year interim retail electric base rate increase (b) | 20 |
| | 20 |
| | — |
| | 20 |
| | 20 |
| | — |
|
Retail electric customer billing credits at IPL in 2016 | 2 |
| | 2 |
| | — |
| | 4 |
| | 4 |
| | — |
|
Changes in electric fuel-related costs, net of recoveries at WPL (Refer to “Electric Production Fuel and Purchased Power (Fuel-related) Expenses” below for details) | (1 | ) | | — |
| | (1 | ) | | (9 | ) | | — |
| | (9 | ) |
Estimated changes in sales caused by temperatures (Refer to “Temperatures” below for details) | (5 | ) | | (3 | ) | | (2 | ) | | (8 | ) | | (4 | ) | | (4 | ) |
Revenue requirement adjustment in 2016 related to certain tax benefits from tax accounting method changes at IPL | (4 | ) | | (4 | ) | | — |
| | (7 | ) | | (7 | ) | | — |
|
Lower retail electric sales due to one additional day in 2016 for leap year | — |
| | — |
| | — |
| | (4 | ) | | (2 | ) | | (2 | ) |
Lower revenues at IPL due to higher electric tax benefit rider credits on customers’ bills (Refer to Note 2 for details) | (1 | ) | | (1 | ) | | — |
| | (3 | ) | | (3 | ) | | — |
|
Other | 6 |
| | 10 |
| | (4 | ) | | 7 |
| | 5 |
| | 2 |
|
|
| $33 |
| |
| $24 |
| |
| $9 |
| |
| $38 |
| |
| $13 |
| |
| $25 |
|
| |
(a) | In December 2016,WPL received an order from the PSCW authorizing WPL to implement an increase in annual retail electric rates of $9 million, or approximately 1%. 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 increase was effective January 1, 2017 and extends through the end of 2018. WPL no longer has winter rates that are lower than summer rates. Thus, the quarter-over-quarter variances resulting from the retail electric base rate increase will be larger during the winter quarters, compared to the summer quarters.
|
| |
(b) | In April 2017, IPL filed a request with the IUB to increase annual electric base rates for its Iowa retail electric customers by $176 million, or approximately 12%. An interim retail electric base rate increase of $102 million, or approximately 7%, on an annual basis, was implemented effective April 13, 2017. |
Temperatures - HDD and CDDHeating degree days (HDD) 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 HDD and CDD. HDD and CDD in Alliant Energy’s service territories for the three and six months ended June 30 were as follows:
|
| | | | | | | | | | | | | | | | | |
| Three Months | | Six Months |
| Actual | | | | Actual | | |
| 2017 | | 2016 | | Normal | | 2017 | | 2016 | | Normal |
HDD: | | | | | | | | | | | |
Cedar Rapids, Iowa (IPL) | 624 |
| | 651 |
| | 693 |
| | 3,543 |
| | 3,720 |
| | 4,144 |
|
Madison, Wisconsin (WPL) | 757 |
| | 828 |
| | 826 |
| | 3,887 |
| | 4,086 |
| | 4,365 |
|
CDD: | | | | | | | | | | | |
Cedar Rapids, Iowa (IPL) | 244 |
| | 297 |
| | 215 |
| | 244 |
| | 297 |
| | 217 |
|
Madison, Wisconsin (WPL) | 172 |
| | 201 |
| | 175 |
| | 172 |
| | 201 |
| | 177 |
|
HDD. The following table summarizes the approximate quarterly temperature statistics and resulting impacts on IPL’s and WPL’s electric and gas sales.
|
| | | | | |
| 2017 | | 2016 | | Resulting Impact in 2017 Compared to 2016 |
First quarter (HDD) | 13% warmer than normal | | 10% warmer than normal | | Decrease in IPL’s and WPL’s electric and gas sales due to lower demand by customers for heating |
Second quarter (CDD) | 2% cooler - 13% warmer than normal | | 10% - 35% warmer than normal | | Decrease in IPL’s and WPL’s electric sales due to lower demand by customers for air cooling |
|
| | | | | |
| 2018 | | 2017 | | Resulting Impact in 2018 Compared to 2017 |
First quarter (HDD) | 2% colder than normal | | 13% warmer than normal | | Increase in IPL’s and WPL’s electric and gas sales due to higher demand by customers for heating |
Estimated increases (decreases) to electric margins from the impacts of temperatures for the three and six months ended June 30 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months | | Six Months |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
IPL |
| $1 |
| |
| $4 |
| |
| ($3 | ) | |
| ($4 | ) | |
| $— |
| |
| ($4 | ) |
WPL | (1 | ) | | 1 |
| | (2 | ) | | (5 | ) | | (1 | ) | | (4 | ) |
Total Alliant Energy |
| $— |
| |
| $5 |
| |
| ($5 | ) | |
| ($9 | ) | |
| ($1 | ) | |
| ($8 | ) |
Sales Trends - Alliant Energy’s retail sales volumes decreased 1% for both the three and six months ended June 30, 2017 compared to the same periods in 2016. The decreases were primarily due to the impact of lower residential and commercial sales due to temperatures during the three and six months ended June 30, 2017 compared to the same periods in 2016 and an extra day of retail sales during 2016 due to the leap year, partially offset by increases in WPL’s industrial sales from higher production and customer expansions.
Alliant Energy’s wholesale sales volumes decreased 2% and remained unchanged for the three and six months ended June 30, 2017 compared to the same periods in 2016, respectively. The three-month decrease was primarily due to the expiration of a wholesale power supply agreement with one of WPL’s partial-requirement wholesale customers on May 31, 2017.
Alliant Energy’s bulk power and other sales volumes 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 bulk power and other sales revenues were largely offset by changes in fuel-related costs, and therefore, did not have a significant impact on electric margins.
Electric Production Fuel and Purchased Power (Fuel-related) Expenses - Alliant Energy’s electric production fuel expense decreased $8 million and $22 million for the three and six months ended June 30, 2017 compared to the same periods in 2016, respectively. The decreases were primarily due to lower dispatch of WPL’s natural gas-fired EGUs during the three and six months ended June 30, 2017 partially due to higher natural gas prices and an outage at Riverside in 2017. The decrease was also due to changes in the under-/over-collection of fuel-related expenses that were outside the approved bandwidth at WPL. These items were partially offset by higher dispatch of IPL’s and WPL’s coal-fired EGUs during the three and six months ended June 30, 2017.
Alliant Energy’s purchased power expense decreased $8 million and increased $14 million for the three and six months ended June 30, 2017 compared to the same periods in 2016, respectively. The three-month decrease was primarily due to decreased volumes purchased resulting from higher dispatch of IPL’s and WPL’s coal-fired EGUs, partially offset by higher prices for electricity purchased by IPL and WPL from MISO wholesale energy markets. The six-month increase was primarily due to higher prices for electricity purchased by IPL and WPL from MISO wholesale energy markets.
Due to IPL’s cost recovery mechanism for retail fuel-related expenses, these changes in fuel-related expenses resulted in comparable changes in electric revenues, and therefore did not have a significant impact on Alliant Energy’s and IPL’s electric margins.
WPL’s cost recovery mechanism for retail fuel-related expenses supports deferrals of amounts that fall outside an approved bandwidth of plus or minus 2% of forecasted fuel-related expenses determined by the PSCW each year. The difference between revenue collected and actual fuel-related expenses incurred within the bandwidth increases or decreases Alliant Energy’s and WPL’s electric margins. WPL estimates the decrease to electric margins from amounts within the bandwidth was approximately $6 million for the six months ended June 30, 2017. WPL estimates the increases to electric margins from amounts within the bandwidth were approximately $1 million and $3 million for the three and six months ended June 30, 2016, respectively.
Electric Transmission Service Expense - Alliant Energy’s electric transmission service expense decreased $13 million and $16 million for the three and six months ended June 30, 2017 compared to the same periods in 2016, respectively, primarily due to lower electric transmission service amounts billed by ITC, ATC LLC and MISO. These items were partially offset by changes at IPL in the under-/over-collection of electric transmission service expense through the transmission cost rider and changes in WPL’s costs deferred pursuant to escrow treatment for the difference between actual electric transmission service costs and those costs used to determine rates. Refer to Note 2 for discussion of refunds received in 2017 from ITC and ATC LLC resulting from MISO transmission owner return on equity complaints.
Utility Gas Margins - Gas margins are defined as gas operating revenues less cost of gas sold. Management believes that gas margins provide a meaningful basis for evaluating utility operations since cost of gas sold is generally passed through to customers, and therefore, results in changes to gas operating revenues that are comparable to changes in cost of gas sold. These gas margins may not be comparable to how other entities define utility margin.
Second Quarter 2017 vs. Second Quarter 2016 Summary - Gas margins and Dth sales for the three months ended June 30 were as follows:
|
| | | | | | | | | | | | | | | | | | | |
Alliant Energy | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $33.7 |
| |
| $29.8 |
| | 13 | % | | 3,300 |
| | 3,804 |
| | (13 | %) |
Commercial | 18.7 |
| | 16.6 |
| | 13 | % | | 2,807 |
| | 3,138 |
| | (11 | %) |
Industrial | 2.6 |
| | 2.6 |
| | — | % | | 560 |
| | 681 |
| | (18 | %) |
Retail subtotal | 55.0 |
| | 49.0 |
| | 12 | % | | 6,667 |
| | 7,623 |
| | (13 | %) |
Transportation/other | 7.6 |
| | 8.0 |
| | (5 | %) | | 15,954 |
| | 19,078 |
| | (16 | %) |
Total revenues/sales | 62.6 |
| | 57.0 |
| | 10 | % | | 22,621 |
| | 26,701 |
| | (15 | %) |
Cost of gas sold | 28.3 |
| | 24.6 |
| | 15 | % | | | | | | |
Gas margins (a) |
| $34.3 |
| |
| $32.4 |
| | 6 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
IPL | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $18.8 |
| |
| $17.4 |
| | 8 | % | | 1,743 |
| | 2,062 |
| | (15 | %) |
Commercial | 10.8 |
| | 10.0 |
| | 8 | % | | 1,451 |
| | 1,699 |
| | (15 | %) |
Industrial | 1.8 |
| | 2.1 |
| | (14 | %) | | 373 |
| | 507 |
| | (26 | %) |
Retail subtotal | 31.4 |
| | 29.5 |
| | 6 | % | | 3,567 |
| | 4,268 |
| | (16 | %) |
Transportation/other | 5.3 |
| | 5.0 |
| | 6 | % | | 8,978 |
| | 8,865 |
| | 1 | % |
Total revenues/sales | 36.7 |
| | 34.5 |
| | 6 | % | | 12,545 |
| | 13,133 |
| | (4 | %) |
Cost of gas sold | 16.9 |
| | 15.9 |
| | 6 | % | | | | | | |
Gas margins (a) |
| $19.8 |
| |
| $18.6 |
| | 6 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
WPL | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $14.9 |
| |
| $12.4 |
| | 20 | % | | 1,557 |
| | 1,742 |
| | (11 | %) |
Commercial | 7.9 |
| | 6.6 |
| | 20 | % | | 1,356 |
| | 1,439 |
| | (6 | %) |
Industrial | 0.8 |
| | 0.5 |
| | 60 | % | | 187 |
| | 174 |
| | 7 | % |
Retail subtotal | 23.6 |
| | 19.5 |
| | 21 | % | | 3,100 |
| | 3,355 |
| | (8 | %) |
Transportation/other | 2.3 |
| | 3.0 |
| | (23 | %) | | 6,976 |
| | 10,213 |
| | (32 | %) |
Total revenues/sales | 25.9 |
| | 22.5 |
| | 15 | % | | 10,076 |
| | 13,568 |
| | (26 | %) |
Cost of gas sold | 11.4 |
| | 8.7 |
| | 31 | % | | | | | | |
Gas margins |
| $14.5 |
| |
| $13.8 |
| | 5 | % | | | | | | |
| |
(a) | Includes $1 million and $3 million of gas tax benefit rider credits on IPL’s Iowa retail gas customers’ bills for the second quarters of 2017 and 2016, respectively. The gas tax benefit rider results in reductions in gas revenues that are offset by reductions in income tax expense for the years ended December 31, 2017 and 2016.
|
Six Months Ended June 30, 2017 vs. Six Months Ended June 30, 2016 - Gas margins and Dth sales for the six months ended June 30 were as follows:
|
| | | | | | | | | | | | | | | | | | | |
Alliant Energy | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $123.6 |
| |
| $117.9 |
| | 5 | % | | 15,044 |
| | 15,920 |
| | (6 | %) |
Commercial | 68.5 |
| | 66.5 |
| | 3 | % | | 10,651 |
| | 11,222 |
| | (5 | %) |
Industrial | 7.4 |
| | 7.6 |
| | (3 | %) | | 1,532 |
| | 1,652 |
| | (7 | %) |
Retail subtotal | 199.5 |
| | 192.0 |
| | 4 | % | | 27,227 |
| | 28,794 |
| | (5 | %) |
Transportation/other | 17.4 |
| | 17.2 |
| | 1 | % | | 35,062 |
| | 41,313 |
| | (15 | %) |
Total revenues/sales | 216.9 |
| | 209.2 |
| | 4 | % | | 62,289 |
| | 70,107 |
| | (11 | %) |
Cost of gas sold | 120.5 |
| | 119.8 |
| | 1 | % | | | | | | |
Gas margins (a) |
| $96.4 |
| |
| $89.4 |
| | 8 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
IPL | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $66.7 |
| |
| $66.2 |
| | 1 | % | | 7,977 |
| | 8,678 |
| | (8 | %) |
Commercial | 36.6 |
| | 37.1 |
| | (1 | %) | | 5,409 |
| | 5,874 |
| | (8 | %) |
Industrial | 4.6 |
| | 5.0 |
| | (8 | %) | | 973 |
| | 1,059 |
| | (8 | %) |
Retail subtotal | 107.9 |
| | 108.3 |
| | — | % | | 14,359 |
| | 15,611 |
| | (8 | %) |
Transportation/other | 11.9 |
| | 10.4 |
| | 14 | % | | 19,718 |
| | 18,283 |
| | 8 | % |
Total revenues/sales | 119.8 |
| | 118.7 |
| | 1 | % | | 34,077 |
| | 33,894 |
| | 1 | % |
Cost of gas sold | 64.7 |
| | 68.3 |
| | (5 | %) | | | | | | |
Gas margins (a) |
| $55.1 |
| |
| $50.4 |
| | 9 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
WPL | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $56.9 |
| |
| $51.7 |
| | 10 | % | | 7,067 |
| | 7,242 |
| | (2 | %) |
Commercial | 31.9 |
| | 29.4 |
| | 9 | % | | 5,242 |
| | 5,348 |
| | (2 | %) |
Industrial | 2.8 |
| | 2.6 |
| | 8 | % | | 559 |
| | 593 |
| | (6 | %) |
Retail subtotal | 91.6 |
| | 83.7 |
| | 9 | % | | 12,868 |
| | 13,183 |
| | (2 | %) |
Transportation/other | 5.5 |
| | 6.8 |
| | (19 | %) | | 15,344 |
| | 23,030 |
| | (33 | %) |
Total revenues/sales | 97.1 |
| | 90.5 |
| | 7 | % | | 28,212 |
| | 36,213 |
| | (22 | %) |
Cost of gas sold | 55.8 |
| | 51.5 |
| | 8 | % | | | | | | |
Gas margins |
| $41.3 |
| |
| $39.0 |
| | 6 | % | | | | | | |
| |
(a) | Includes $3 million and $6 million of gas tax benefit rider credits on IPL’s Iowa retail gas customers’ bills for the six months ended June 30, 2017 and 2016, respectively. The gas tax benefit rider results in reductions in gas revenues that are offset by reductions in income tax expense for the years ended December 31, 2017 and 2016. |
Variances - Variances between periods in gas margins for the three and six months ended June 30, 2017 compared to the same periods in 2016 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months | | Six Months |
| Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
Higher margins at WPL from the impact of its 2017/2018 Test Period retail gas base rate increase (a) |
| $2 |
| |
| $— |
| |
| $2 |
| |
| $4 |
| |
| $— |
| |
| $4 |
|
Higher revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (b) | 1 |
| | 1 |
| | — |
| | 3 |
| | 3 |
| | — |
|
Higher revenues at IPL due to lower gas tax benefit rider credits on customer’s bills (Refer to Note 2 for details) | 2 |
| | 2 |
| | — |
| | 3 |
| | 3 |
| | — |
|
Estimated changes in sales caused by temperatures (Refer to “Temperatures” below for details) | — |
| | — |
| | — |
| | (2 | ) | | (1 | ) | | (1 | ) |
Other | (3 | ) | | (2 | ) | | (1 | ) | | (1 | ) | | — |
| | (1 | ) |
|
| $2 |
| |
| $1 |
| |
| $1 |
| |
| $7 |
| |
| $5 |
| |
| $2 |
|
| |
(a) | In December 2016,WPL received an order from the PSCW authorizing WPL to implement an increase in annual retail gas base rates of $9 million, or approximately 13%. The increase is effective January 1, 2017 and extends through the end of 2018.
|
| |
(b) | Changes in gas energy efficiency revenues were mostly offset by changes in energy efficiency expense included in other operation and maintenance expenses. |
Temperatures - Estimated decreases to gas margins from the impacts of temperatures for the three and six months ended March 31 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Electric Margins | | Gas Margins |
| 2018 | | 2017 | | Change | | 2018 | | 2017 | | Change |
IPL |
| $— |
| |
| ($5 | ) | |
| $5 |
| |
| $— |
| |
| ($3 | ) | |
| $3 |
|
WPL | 1 |
| | (4 | ) | | 5 |
| | 1 |
| | (2 | ) | | 3 |
|
Total Alliant Energy |
| $1 |
| |
| ($9 | ) | |
| $10 |
| |
| $1 |
| |
| ($5 | ) | |
| $6 |
|
June 30Utility Electric Margin Variances were- The following items contributed to increased (decreased) utility electric margins for the three months ended March 31, 2018 compared to the same period in 2017 as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months | | Six Months |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
IPL |
| $— |
| |
| $— |
| |
| $— |
| |
| ($3 | ) | |
| ($2 | ) | |
| ($1 | ) |
WPL | — |
| | — |
| | — |
| | (2 | ) | | (1 | ) | | (1 | ) |
Total Alliant Energy |
| $— |
| |
| $— |
| |
| $— |
| |
| ($5 | ) | |
| ($3 | ) | |
| ($2 | ) |
Refer to “Utility Electric Margins” for HDD data details.
Other Operation and Maintenance Expenses - Variances between periods in other operation and maintenance expenses for the three and six months ended June 30, 2017 compared to the same periods in 2016 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months | | Six Months |
| Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
Higher energy efficiency cost recovery amortizations at WPL (a) |
| $6 |
| |
| $— |
| |
| $6 |
| |
| $13 |
| |
| $— |
| |
| $13 |
|
Higher bad debt expense | 1 |
| | — |
| | 1 |
| | 8 |
| | 4 |
| | 4 |
|
Lower equity-based performance compensation expense | (6 | ) | | (3 | ) | | (3 | ) | | (8 | ) | | (4 | ) | | (3 | ) |
Other | — |
| | (1 | ) | | 2 |
| | (5 | ) | | (1 | ) | | (3 | ) |
|
| $1 |
| |
| ($4 | ) | |
| $6 |
| |
| $8 |
| |
| ($1 | ) | |
| $11 |
|
|
| | | | | | | | | | | |
| 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) |
| $23 |
| |
| $23 |
| |
| $— |
|
Higher revenues at IPL due to electric tax benefit rider credits on customers’ bills in 2017 | 17 |
| | 17 |
| | — |
|
Estimated changes in sales volumes caused by temperatures (Refer to “Temperatures” above for details) | 10 |
| | 5 |
| | 5 |
|
Changes in electric fuel-related costs, net of recoveries at WPL (a) | 6 |
| | — |
| | 6 |
|
Lower transmission cost recovery amortization at WPL (b) | 6 |
| | — |
| | 6 |
|
Decrease in revenues due to deferral of higher taxes collected to be returned to customers (deferral is offset by lower tax expense from the effects of Tax Reform) (Refer to Note 2 for details) | (17 | ) | | (7 | ) | | (10 | ) |
Lower wholesale margins at WPL primarily due to the expiration of a wholesale power supply agreement on May 31, 2017 | (7 | ) | | — |
| | (7 | ) |
Other | (4 | ) | | (3 | ) | | (1 | ) |
|
| $34 |
| |
| $35 |
| |
| ($1 | ) |
| |
(a) | WPL estimates the 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 for the three months ended March 31, 2017. The impact to electric margins from amounts within the bandwidth was not material for the three months ended March 31, 2018. |
| |
(b) | The December 2016 PSCW order for WPL’s 2017/2018 Test Period electric and gas base rate review authorized changes in energy efficiencyelectric transmission cost recovery amortizations for 2017 and 2018. |
Depreciation and Amortization ExpensesElectric Sales Trends - Variances between periods in depreciation and amortization expensesAlliant Energy’s retail electric sales volumes increased 2% for the three and six months ended June 30, 2017March 31, 2018 compared to the same periodsperiod in 2016 were2017. The increase was primarily due to the impact of higher residential and commercial sales due to colder temperatures during the three months ended March 31, 2018 compared to the same period in 2017.
Utility Gas Margin Variances - The following items contributed to increased (decreased) utility gas margins for the three months ended March 31, 2018 compared to the same period in 2017 as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months | | Six Months |
| Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
Higher depreciation expense at WPL due to updated depreciation rates effective January 2017 approved by the PSCW and FERC |
| $3 |
| |
| $— |
| |
| $3 |
| |
| $6 |
| |
| $— |
| |
| $6 |
|
Higher depreciation expense for IPL’s Marshalltown facility placed in service in April 2017 | 5 |
| | 5 |
| | — |
| | 5 |
| | 5 |
| | — |
|
Higher depreciation expense for WPL’s Edgewater Unit 5 scrubber and baghouse placed in service in 2016 | 1 |
| | — |
| | 1 |
| | 3 |
| | — |
| | 3 |
|
Other | 4 |
| | 4 |
| | 1 |
| | 3 |
| | 5 |
| | 1 |
|
|
| $13 |
| |
| $9 |
| |
| $5 |
| |
| $17 |
| |
| $10 |
| |
| $10 |
|
|
| | | | | | | | | | | |
| 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 included in other operation and maintenance expenses) |
| $7 |
| |
| $7 |
| |
| $— |
|
Estimated changes in sales volumes caused by temperatures (Refer to “Temperatures” above for details) | 6 |
| | 3 |
| | 3 |
|
Other | (1 | ) | | 2 |
| | (3 | ) |
|
| $12 |
| |
| $12 |
| |
| $— |
|
Interest ExpenseOther Operation and Maintenance Expenses - Alliant Energy’sThe following items contributed to (increased) decreased other operation and IPL’s interest expense increased $9 million and $6 millionmaintenance expenses for the sixthree months ended June 30, 2017March 31, 2018 compared to the same period in 2016, respectively, primarily due to higher interest expense from the issuance of IPL’s $300 million, 3.7% senior debentures in September 2016.
Equity Income from Unconsolidated Investments, Net - WPL’s equity income from unconsolidated investments decreased $9 million and $20 million for the three and six-month periods, respectively, due to the transfer of WPL’s investment in ATC LLC to ATI on December 31, 2016.
AFUDC - Variances between periods in AFUDC for the three and six months ended June 30, 2017 compared to the same periods in 2016 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Three Months | | Six Months |
| Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
Marshalltown (IPL) |
| ($10 | ) | |
| ($10 | ) | |
| $— |
| |
| ($8 | ) | |
| ($8 | ) | |
| $— |
|
Edgewater Unit 5 scrubber and baghouse (WPL) | (2 | ) | | — |
| | (2 | ) | | (4 | ) | | — |
| | (4 | ) |
Wind projects (IPL) | 2 |
| | 2 |
| | — |
| | 4 |
| | 4 |
| | — |
|
West Riverside (WPL) | 2 |
| | — |
| | 2 |
| | 3 |
| | — |
| | 3 |
|
Other | 3 |
| | 2 |
| | 1 |
| | 4 |
| | 2 |
| | 2 |
|
|
| ($5 | ) | |
| ($6 | ) | |
| $1 |
| |
| ($1 | ) | |
| ($2 | ) | |
| $1 |
|
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Higher energy efficiency expense at IPL (primarily offset by gas revenues) |
| ($6 | ) | |
| ($6 | ) | |
| $— |
|
Higher generation operation and maintenance expenses, primarily due to the Marshalltown Generating Station and timing of expenditures | (5 | ) | | (3 | ) | | (2 | ) |
Other | (3 | ) | | (3 | ) | | — |
|
|
| ($14 | ) | |
| ($12 | ) | |
| ($2 | ) |
Other Income and Deductions Variances - The following items contributed to (increased) decreased other income and deductions for the three months ended March 31, 2018 compared to the same period in 2017 as follows (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Higher interest expense primarily due to higher average outstanding long-term debt balances |
| ($7 | ) | |
| ($2 | ) | |
| ($2 | ) |
Higher (lower) AFUDC primarily due to increased (decreased) construction work in progress balances | (2 | ) | | (7 | ) | | 5 |
|
Higher equity income primarily related to increased earnings from the non-utility wind farm in Oklahoma (Refer to Note 5 for details) | 10 |
| | — |
| | — |
|
Other | 2 |
| | 1 |
| | 1 |
|
|
| $3 |
| |
| ($8 | ) | |
| $4 |
|
Income Taxes - Refer to Note 89 for details of effective income tax rates from continuing operations.
STRATEGIC OVERVIEW
The strategic overview summary included in the 20162017 Form 10-K has not changed materially, except as described below.
Generation Plans -
Natural Gas-FiredWind Generation -
IPL’s ConstructionExpansion of MarshalltownWind Generation - In April 2018, IPL received approval from the IUB for advance rate-making principles for up to 500 MW of new wind generation, which is in addition to the 500 MW of new generation approved by the IUB in October 2016. The April 2018 IUB decision approved IPL’s requested advance rate-making principles, except for the return on common equity for the calculation of AFUDC during the construction period. IPL requested a return that was the greater of 10.0% or whatever percentage the IUB finds reasonable during IPL’s most recent retail electric rate proceeding, and the IUB approved a return of 9.6%.
WPL’s Expansion of Wind Generation - Refer to Note 3 for discussion of IPL’s constructionWPL’s April 2018 acquisition of Marshalltown, which was completed in April 2017. Final capital expenditures are currently estimated to be approximately $645 million to construct55 MW of the EGU and a pipeline to supply natural gas to the EGU, excluding transmission network upgrades and AFUDC.Forward Wind Energy Center.
WindCoal-Fired Generation -
Plant RetirementThe strategic plan includes - Refer to “Critical Accounting Policies and Estimates” for discussion of the planned and potential expansionexpected retirement of wind generation as follows:IPL’s M.L. Kapp Unit 2 by June 1, 2018. |
| | |
Wind Generation (a) | | Regulatory Application Filing Status |
IPL - up to 500 MW | | Approved by the IUB in October 2016 |
IPL - up to 500 MW (b) | | Filed with the IUB in August 2017 |
WPL - up to 200 MW (b) | | Plan to file with the PSCW in 2017 |
RATE MATTERS
The rate matters summary included in the 2017 Form 10-K has not changed materially, except as described below.
| |
(a) | IPL and WPL believe their respective planned and potential expansion of wind generation qualifies for the full level of production tax credits as a result of progress payments in 2016 for wind turbines. |
| |
(b) | Current estimated capital expenditures assume 200 MW of wind generation for each of IPL and WPL. The amount and timing of these wind projects will largely depend on regulatory approvals and the acquisition of wind sites. |
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. The advance rate-making principles requested by IPL in the August 2017 application were as follows:
Up to 500 MW of additional wind generation that qualifies for the full level of production tax credits, regardless of the location in Iowa, with a cost cap of $1,780/kilowatt, including AFUDC and transmission costs. Any costs incurred in excess of this $1,780/kilowatt 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 during a future rate review.
A return on common equity for the calculation of AFUDC during the construction period that is the greater of 10.0% or the percentage the IUB finds reasonable during IPL’s retail electric rate review for the 2016 Test Year.
The application of double leverage is deferred until IPL’s next retail electric base rate review or other future proceeding.
Amortization over a 10-year period of IPL’s prudently incurred and unreimbursed costs, effective with IPL’s next retail electric base rate review, if IPL cancels the construction of the wind generation.
IPL currently anticipates placing this proposed additional wind generation in service by 2020.
Franklin County Wind FarmRetail Base Rate Filings - Refer to Note 3 for discussion of the transfer of the Franklin County wind farm assets from AEF to IPL in April 2017.
Coal-Fired Generation -
IPL’s Environmental Controls Projects - In May 2017, the IUB approved IPL’s most recent emissions plan and budget, which includes the SCR currently under construction at Ottumwa Unit 1.
Plant Retirements and Fuel Switching - In June 2017, IPL retired Sutherland Units 1 and 3 and Dubuque Units 3 and 4, and fuel switched Marshalltown Combustion Turbine Units 1-3 from oil to natural gas. Refer to Note 2 for further discussion of the Sutherland Units 1 and 3 retirement.
Non-regulated Operations - The strategic plan for Alliant Energy’s non-regulated operations involves maintaining a modest portfolio of businesses that are accretive to earnings and cash flows. The non-regulated strategic plan continues to evolve through exploration of renewable investment opportunities within and outside of Alliant Energy’s service territories.
Non-regulated 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-regulated wind farm located in Oklahoma. Refer to Note 5(a) for further discussion.
RATE MATTERS
The rate matters summary included in the 2016 Form 10-K has not changed materially, except as described below.
IPL’s Retail ElectricGas Rate Review (2016(2017 Test Year) - In April 2017,May 2018, IPL filed a request with the IUB to increase annual electricgas base rates for its Iowa retail electricgas customers by $176$20 million, or approximately 12%8%. The request was based on a 20162017 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.partially offset by the benefits of Tax Reform. An interim retail electric basegas rate increase of $102$11 million, or approximately 7%5%, on an annual basis, waswill be implemented effective April 13, 2017.May 14, 2018. The interim base rate increase does not require a regulatory review,approval; however, it will be subject to refund pending determination of final rates. Tax benefit rider credits and MISO transmission owner return on equity refunds are expected to reduce the effect of the
rate increase on customer bills in 2017 and 2018. Intervenor testimony was filed in August 2017 addressing the revenue requirement and rate design. IPL currently expects to implementa decision from the IUB in 2019 with final rates effective by the firstsecond quarter of 2018.2019. The IUB must issue a decision on requests for retail rate changes within 10 months of the date of the application for which changes are filed.
The requested interim and final rate increases were calculated based on the following (Return on Common Equity (ROE)):following:
|
| | | |
| Interim Rates | | Final Rates |
Regulatory capital structure: | | | |
Common equity | 49.1% | | 49.1% |
Long-term debt | 46.3% | | 46.7% |
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% for interim rates and 10.3% for final rates) (a) | 7.4% | | 7.7% |
Retail electric rate base (b) | $3.8 billion | | $4.1 billion |
|
| | | |
| Interim Rates | | Final Rates |
Regulatory capital structure: | | | |
Common equity (CE) | 49.6% | | 53.0% |
Long-term debt (LD) | 46.5% | | 43.2% |
Preferred equity | 3.9% | | 3.8% |
After-tax weighted-average cost of capital (WACC) | 7.4% | | 7.5% |
Return on common equity (ROE) | 9.8% | | 9.8% |
Retail gas rate base (a) | $460 million | | $509 million |
| |
(a) | Other ROE for interim rates reflects the application of double leverage. Prior to application of double leverage, Other ROE for interim rates was 10.0%. |
| |
(b) | The retail electricgas 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.May 2018. The proposed retail electricgas rate base for final rates also includes deferred tax assets for production tax credits for Whispering Willow-East and post-test year capital additions expected to be placed in service by September 30, 2017.2018. |
In addition to capital investments, the final proposed rate increase includes increased depreciation expense resulting from an updated depreciation study, recovery of asset retirement obligation expenditures since the last retail electric rate filing in 2010, recovery of the remaining net book value of Sutherland Units 1 and 3, which were retired in June 2017, recovery of forward contract costs for SO2 emission allowances, continuation of the electric transmission cost rider, and no double leverage applied to the weighted average cost of capital for final rates.
WPL’sIPL’s Retail Fuel-relatedElectric Rate FilingsReview (2016 Test Year) - Refer to Note 2 for discussion of WPL’sIPL’s final annual retail fuel-relatedelectric rate filingsincrease for the 2016 2017 and 2018 Test Years.Year, which was effective May 1, 2018.
ENVIRONMENTAL MATTERSTax Reform - In January 2018, the IUB issued an order requiring IPL and other investor-owned utilities in Iowa to track all calculated differences since January 1, 2018 resulting from Tax Reform. In April 2018, the IUB issued an order on IPL’s electric and gas Tax Reform proposals. The IUB order approved the return of approximately $35 million of estimated annual tax benefits for 2018 to IPL’s retail electric customers utilizing the tax benefit rider effective May 1, 2018. These benefits are subject to true-up. The IUB order also approved the return of approximately $3 million of estimated annual tax benefits for 2018 to IPL’s retail gas customers utilizing interim rates to be implemented May 14, 2018 for IPL’s 2017 Test Year gas rate review. These benefits are subject to further review by the IUB. Lastly, the IUB order determined the excess deferred taxes resulting from the remeasurement of accumulated deferred income taxes caused by Tax Reform (approximately $370 million revenue requirement) will be addressed in IPL’s next retail electric and gas rate reviews.
In January 2018, the PSCW issued an order directing WPL and other investor-owned utilities in Wisconsin to defer the revenue requirement impacts since January 1, 2018 resulting from Tax Reform. In April 2018, WPL received a decision from the PSCW directing WPL to return annual tax benefits for 2018 to WPL’s retail electric and gas customers, which WPL currently estimates to be approximately $43 million. The environmental matters summary includedestimated tax benefits related to the first half of 2018 will be provided as a one-time credit on WPL’s retail electric and gas customers’ July 2018 bills. Thereafter, WPL currently expects to provide a monthly refund equal to one-twelfth of the estimated annual tax benefits for 2018 to its retail electric and gas customers through the end of 2018. These billing credits are subject to true-up. The PSCW decision also determined the excess deferred taxes resulting from the remeasurement of accumulated deferred income taxes caused by Tax Reform (approximately $460 million revenue requirement) will be addressed in the 2016 Form 10-K has not changed materially.WPL’s next retail electric and gas rate review.
LEGISLATIVE MATTERSIn March 2018, FERC issued an order granting a waiver request filed in February 2018 by a group of MISO transmission owners, including ITC Midwest LLC and ATC, allowing transmission rates to be updated to reflect the impacts resulting from Tax Reform. As a result, beginning in March 2018, amounts billed by ITC Midwest LLC and ATC decreased due to the impacts from Tax Reform. IPL and WPL currently expect lower electric transmission service expense of approximately $35 million and $10 million, respectively, in 2018 due to Tax Reform. IPL began providing the benefits of the lower transmission service expenses to its electric customers utilizing the transmission cost recovery mechanism effective May 1, 2018. WPL will defer the benefits of the lower transmission service expenses from Tax Reform until a future electric rate review. Based on IPL’s and WPL’s electric transmission cost recovery mechanisms, they currently do not expect that any changes to electric transmission service costs billed by ITC Midwest LLC and ATC, respectively, will have a material impact on their financial condition and results of operations.
The legislative matters summary included in the 2016 Form 10-K has not changed materially.
LIQUIDITY AND CAPITAL RESOURCES
The liquidity and capital resources matters summary included in the 20162017 Form 10-K has not changed materially, except as described below.
Liquidity Position - At June 30, 2017,March 31, 2018, Alliant Energy had $7$19 million of cash and cash equivalents, $591$618 million ($14395 million at the parent company, $260$204 million at IPL and $188$319 million at WPL) of available capacity under the revolving credit facilitiesfacility and $37 million ofno available capacity at IPL under its sales of accounts receivable program.
Capital Structure - Capital structures at June 30, 2017March 31, 2018 were as follows (Long-term Debt (including current maturities) (LD); Short-term Debt (SD); Common Equity (CE); IPL’s Preferred Stock (PS)):
Tax Reform - Refer to “Rate Matters” for discussion of expected refunds in 2018 to IPL’s and WPL’s retail electric and gas customers related to tax benefits resulting from Tax Reform.
Cash Flows - Selected information from the cash flows statements was as follows (in millions):
| | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
| 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | 2018 | | 2017 | | 2018 | | 2017 | | 2018 | | 2017 |
Cash and cash equivalents, January 1 |
| $8.2 |
| |
| $5.8 |
| |
| $3.3 |
| |
| $4.5 |
| |
| $4.2 |
| |
| $0.4 |
| |
Cash, cash equivalents and restricted cash, January 1 | |
| $33.9 |
| |
| $13.1 |
| |
| $7.2 |
| |
| $4.2 |
| |
| $24.2 |
| |
| $6.9 |
|
Cash flows from (used for): | | | | | | | | | | | | | | | | | | | | | | |
Operating activities | 502.0 |
| | 510.0 |
| | 268.0 |
| | 271.8 |
| | 229.9 |
| | 251.4 |
| 89.3 |
| | 119.0 |
| | (65.2 | ) | | (38.4 | ) | | 141.7 |
| | 145.6 |
|
Investing activities | (626.4 | ) | | (500.8 | ) | | (305.9 | ) | | (291.5 | ) | | (322.4 | ) | | (205.6 | ) | (85.2 | ) | | (87.2 | ) | | 55.6 |
| | 78.4 |
| | (128.7 | ) | | (149.3 | ) |
Financing activities | 123.5 |
| | (8.5 | ) | | 38.6 |
| | 17.6 |
| | 91.1 |
| | (43.1 | ) | (9.8 | ) | | (29.9 | ) | | 8.9 |
| | (39.2 | ) | | (31.3 | ) | | 1.6 |
|
Net increase (decrease) | (0.9 | ) | | 0.7 |
| | 0.7 |
| | (2.1 | ) | | (1.4 | ) | | 2.7 |
| (5.7 | ) | | 1.9 |
| | (0.7 | ) | | 0.8 |
| | (18.3 | ) | | (2.1 | ) |
Cash and cash equivalents, June 30 |
| $7.3 |
| |
| $6.5 |
| |
| $4.0 |
| |
| $2.4 |
| |
| $2.8 |
| |
| $3.1 |
| |
Cash, cash equivalents and restricted cash, March 31 | |
| $28.2 |
| |
| $15.0 |
| |
| $6.5 |
| |
| $5.0 |
| |
| $5.9 |
| |
| $4.8 |
|
Operating Activities -
Six Months Ended June 30, 2017 vs. Six Months Ended June 30, 2016 - The following items contributed to increased (decreased) operating activity cash flows for the sixthree months ended June 30, 2017March 31, 2018 compared to the same period in 20162017 (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Changes in the level of cash proceeds from IPL’s sales of accounts receivable |
| ($111 | ) | |
| ($111 | ) | |
| $— |
|
Timing of WPL’s fuel-related cost recoveries from customers | (36 | ) | | — |
| | (36 | ) |
Changes in income taxes paid/refunded | (7 | ) | | 25 |
| | (22 | ) |
Refunds received from ITC and ATC LLC in 2017 (Refer to Note 2 for details) | 50 |
| | 39 |
| | 11 |
|
Higher collections at WPL due to new retail electric and gas base rates in 2017 | 42 |
| | — |
| | 42 |
|
Higher collections at IPL due to interim retail electric base rate increase effective April 13, 2017 | 20 |
| | 20 |
| | — |
|
Changes in levels of production fuel | 19 |
| | 23 |
| | (4 | ) |
Other (primarily due to other changes in working capital) | 15 |
| | — |
| | (13 | ) |
|
| ($8 | ) | |
| ($4 | ) | |
| ($22 | ) |
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Refunds received from ITC Midwest LLC and ATC in 2017 |
| ($51 | ) | |
| ($40 | ) | |
| ($11 | ) |
Higher collections at IPL due to interim retail electric base rate increase effective April 13, 2017 | 23 |
| | 23 |
| | — |
|
Other (primarily due to other changes in working capital) | (2 | ) | | (10 | ) | | 7 |
|
|
| ($30 | ) | |
| ($27 | ) | |
| ($4 | ) |
Investing Activities -
Six Months Ended June 30, 2017 vs. Six Months Ended June 30, 2016 - The following items contributed to increased (decreased) investing activity cash flows for the sixthree months ended June 30, 2017March 31, 2018 compared to the same period in 20162017 (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Lower (higher) utility construction expenditures (largely due to higher expenditures for WPL’s West Riverside facility and IPL’s and WPL’s electric and gas distribution systems, partially offset by lower expenditures for IPL’s Marshalltown facility and WPL’s scrubber and baghouse at Edgewater Unit 5) |
| ($88 | ) | |
| $8 |
| |
| ($114 | ) |
Proceeds from the liquidation of company-owned life insurance policies in 2016 | (31 | ) | | (19 | ) | | — |
|
Other | (7 | ) | | (3 | ) | | (3 | ) |
|
| ($126 | ) | |
| ($14 | ) | |
| ($117 | ) |
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Lower (higher) utility construction expenditures (a) |
| ($66 | ) | |
| ($91 | ) | |
| $24 |
|
Changes in the amount of cash receipts on sold receivables | 70 |
| | 70 |
| | — |
|
Other | (2 | ) | | (2 | ) | | (3 | ) |
|
| $2 |
| |
| ($23 | ) | |
| $21 |
|
| |
(a) | Largely due to higher expenditures for IPL’s expansion of wind generation and IPL’s advanced metering infrastructure, partially offset by lower expenditures for IPL’s Marshalltown Generating Station and WPL’s electric and gas distribution systems. |
Construction and Acquisition Expenditures - Alliant Energy’s, IPL’s and WPL’s anticipated construction and acquisition expenditures included in the 2016 Form 10-K have not changed materially, except for Alliant Energy’s acquisition of a 50% cash equity ownership interest in a 225 MW non-regulated wind farm located in Oklahoma as discussed in Note 5(a). In
addition, the amount and timing of IPL’s and WPL’s planned and potential expansion of wind generation will largely depend on regulatory approvals and the acquisition of wind sites.
Financing Activities -
Six Months Ended June 30, 2017 vs. Six Months Ended June 30, 2016 - The following items contributed to increased (decreased) financing activity cash flows for the sixthree months ended June 30, 2017March 31, 2018 compared to the same period in 20162017 (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Higher net proceeds from common stock issuances |
| $124 |
| |
| $— |
| |
| $— |
|
Net changes in the amount of commercial paper outstanding | 37 |
| | (27 | ) | | 134 |
|
Higher capital contributions from IPL’s parent company, Alliant Energy | — |
| | 60 |
| | — |
|
Other (includes higher dividend payments in 2017) | (29 | ) | | (12 | ) | | — |
|
|
| $132 |
| |
| $21 |
| |
| $134 |
|
FERC Financing Authorization - Pursuant to a 2015 FERC authorization, IPL’s current remaining authority for short-term debt securities outstanding at any one time (including borrowings from its parent) is $260 million as of June 30, 2017. |
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Changes in outstanding checks that have not yet cleared the bank |
| $23 |
| |
| $15 |
| |
| $4 |
|
Net changes in the amount of commercial paper outstanding | 3 |
| | 37 |
| | (33 | ) |
Other (includes higher dividend payments in 2018) | (6 | ) | | (4 | ) | | (4 | ) |
|
| $20 |
| |
| $48 |
| |
| ($33 | ) |
Common Stock Issuances - Refer to Note 6 for discussion of common stock issuances by Alliant Energy during the sixthree months ended June 30, 2017.
Short-term Debt - In July 2017, AEF entered into a $95 million, 364-day variable-rate term loan credit agreement (with Alliant Energy as guarantor) related to the acquisition of a non-regulated wind farm located in Oklahoma. Refer to Note 5(a) for further discussion.March 31, 2018.
Long-term Debt - Refer to Note 7(b) for discussion of $40$45.9 million of commercial paper outstanding at June 30, 2017March 31, 2018 classified as long-term debt at Alliant Energy and IPL.IPL, as well as a $300 million variable-rate term loan credit agreement AEF entered into in April 2018 (with Alliant Energy as guarantor).
Off-Balance Sheet Arrangements - A summary of Alliant Energy’s off-balance sheet arrangements is included in the 20162017 Form 10-K and has not changed materially from the items reported in the 20162017 Form 10-K, except as described below. Refer to Note 4 for information regarding IPL’s sales of accounts receivable program. Refer to Note 12(d) for information regarding various guarantees and indemnifications related to Alliant Energy’s and IPL’s prior divestiture activities.
Certain Financial Commitments -
Contractual Obligations - A summary of Alliant Energy’s, IPL’s and WPL’s contractual obligations is included in the 20162017 Form 10-K and has not changed materially from the items reported in the 20162017 Form 10-K, except for the items described in Notes 7(b), 12(a)13(a) and 12(b)13(b).
OTHER MATTERS
Market Risk Sensitive Instruments and Positions - The market risks summary included in the 2016 Form 10-K has not changed materially.
Commodity Price - Refer to Note 2 for discussion of WPL’s retail fuel-related rate filings for the 2016, 2017 and 2018 Test Years.
New Accounting Standards - Refer to Note 1(b)1(d) for discussion of new accounting standards impacting Alliant Energy, IPL and WPL.
Critical Accounting Policies and Estimates - The summary of critical accounting policies and estimates included in the 20162017 Form 10-K has not changed materially, except as described below.
Contingencies - In the first quarter of 2017, all warranty periods and performance guarantees expired, and all outstanding warranty claims were resolved, related to Alliant Energy’s past divestiture of RMT. Refer to Note 12(d) for further discussion.
Long-Lived Assets -
Regulated Operations -
Generating Units Subject to Early Retirement- Refer to Note 2 for discussion of IPL’s June 2017 retirement of Sutherland Unit 3.
Non-regulated Operations -
Franklin County Wind Farm - ReferIPL currently expects to Note 3 for discussionretire M.L. Kapp Unit 2 by June 1, 2018, which had a net book value of $30 million as of March 31, 2018. Alliant Energy and IPL concluded that M.L. Kapp Unit 2 met the transfercriteria to be considered probable of the Franklin County wind farm assetsabandonment as of March 31, 2018. IPL is currently allowed a full recovery of and a full return on this EGU from AEF toboth its retail and wholesale customers, and as a result, Alliant Energy and IPL in April 2017.concluded that no impairment was required as of March 31, 2018.
Other Future Considerations - The summary of other future considerations included in the 2016 Form 10-K has not changed materially, except as described below, and as discussed earlier in MDA and the Notes in Item 1.
MISO Transmission Owner Return on Equity Complaints - Refer to Note 2 for discussion of refunds that Alliant Energy, IPL and WPL received in the first half of 2017 related to a complaint previously filed by a group of MISO cooperative and municipal utilities requesting a reduction to the base return on equity used by MISO transmission owners, including ITC and ATC LLC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 4. 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 defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of June 30, 2017March 31, 2018 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 quarter ended June 30, 2017.March 31, 2018.
There was no change in Alliant Energy’s, IPL’s and WPL’s internal control over financial reporting that occurred during the quarter ended June 30, 2017March 31, 2018 that has materially affected, or is reasonably likely to materially affect, Alliant Energy’s, IPL’s or WPL’s internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1A. RISK FACTORS
The risk factors described in Item 1A in the 20162017 Form 10-K have not changed materially.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
A summary of Alliant Energy common stock repurchases for the quarter ended June 30, 2017March 31, 2018 was as follows:
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| | | | | | | | | | | |
| | 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) |
April 1 through April 30 | | 2,335 |
| |
| $39.65 |
| | — | | N/A |
May 1 through May 31 | | 3,871 |
| | 39.79 |
| | — | | N/A |
June 1 through June 30 | | 525 |
| | 41.37 |
| | — | | N/A |
| | 6,731 |
| | 39.87 |
| | — | | |
|
| | | | | | | | | | | |
| | 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) |
January 1 through January 31 | | 3,840 |
| |
| $39.84 |
| | — | | N/A |
February 1 through February 28 | | 42,509 |
| | 38.65 |
| | — | | N/A |
March 1 through March 31 | | 1,175 |
| | 38.77 |
| | — | | N/A |
| | 47,524 |
| | 38.74 |
| | — | | |
| |
(a) | AllIncludes 3,840, 4,086 and 1,175 shares wereof Alliant Energy common stock for January 1 through January 31, February 1 through February 28 and March 1 through March 31, respectively, purchased on the open market and held in a rabbi trust under the Alliant Energy Deferred Compensation Plan. There is no limit on the number of shares of Alliant Energy common stock that may be held under the Deferred Compensation Plan, which currently does not have an expiration date. Also includes 38,423 shares of Alliant Energy common stock for February 1 through February 28 transferred from employees to Alliant Energy to satisfy tax withholding requirements in connection with the vesting of certain restricted stock under equity-based compensation plans. |
Refer to Note 6 for discussion of IPL’s and WPL’s dividend restrictions and limitations on distributions to their parent company, Alliant Energy.
ITEM 6. EXHIBITS
The following Exhibits for Alliant Energy, IPL and WPL are listed in the Exhibit Index, which isfiled herewith or incorporated herein by reference. |
| | |
Exhibit Number | | Description |
3.1 | | |
10.1 | | |
12.1 | | |
12.2 | | |
12.3 | | |
31.1 | | |
31.2 | | |
31.3 | | |
31.4 | | |
31.5 | | |
31.6 | | |
32.1 | | |
32.2 | | |
32.3 | | |
101.INS | | XBRL Instance Document |
101.SCH | | XBRL Taxonomy Extension Schema Document |
101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB | | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Alliant Energy Corporation, Interstate Power and Light Company and Wisconsin Power and Light Company have each duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on the 4th3rd day of August 2017.May 2018.
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| |
ALLIANT ENERGY CORPORATION | |
Registrant | |
| |
By: /s/ Benjamin M. Bilitz | Chief Accounting Officer and Controller |
Benjamin M. Bilitz | (Principal Accounting Officer and Authorized Signatory) |
|
| |
INTERSTATE POWER AND LIGHT COMPANY | |
Registrant | |
| |
By: /s/ Benjamin M. Bilitz | Chief Accounting Officer and Controller |
Benjamin M. Bilitz | (Principal Accounting Officer and Authorized Signatory) |
|
| |
WISCONSIN POWER AND LIGHT COMPANY | |
Registrant | |
| |
By: /s/ Benjamin M. Bilitz | Chief Accounting Officer and Controller |
Benjamin M. Bilitz | (Principal Accounting Officer and Authorized Signatory) |
ALLIANT ENERGY CORPORATION
INTERSTATE POWER AND LIGHT COMPANY
WISCONSIN POWER AND LIGHT COMPANY
EXHIBIT INDEX
The following Exhibits are filed herewith or incorporated herein by reference.
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| | |
Exhibit Number | | Description |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
101.INS | | XBRL Instance Document |
101.SCH | | XBRL Taxonomy Extension Schema Document |
101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB | | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document |