Mail Stop 3561
November 18, 2005
Mr. William D. Harvey
Chairman and Chief Executive Officer
Alliant Energy Corporation
4902 N. Biltmore Lane
Madison, Wisconsin 53718
RE: Alliant Energy Corporation
Form 10-K for Fiscal Year Ended December, 2005
Form 10-Q for Fiscal Quarter Ended September 30, 2005
Filed March 4, 2005 and November 8, 2005
File No. 1-9894
Dear Mr. Harvey:
We have reviewed your filings and have the following
comments. We have limited our review to only your financial
statements and related disclosures and do not intend to expand our
review to other portions of your documents. Where indicated, we
think you should revise your disclosures in response to these
comments. If you disagree, we will consider your explanation as
to
why our comment is inapplicable or a revision is unnecessary.
Please
be as detailed as necessary in your explanation. In some of our
comments, we may ask you to provide us with information so we may
better understand your disclosure. After reviewing this
information,
we may raise additional comments.
Please understand that the purpose of our review process
is
to assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your
filings.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 10-K for Fiscal Year Ended December 31, 2004
Notes to Consolidated Financial Statements, page 62
Note 1(c) Regulatory Assets and Liabilities, page 63
1. You disclose regulatory assets not earning a return. We
presume
such assets are included in rates but with no return. If
otherwise,
please supplementally explain. If so, please disclose the
weighted
average remaining life of regulatory assets not earning a return.
You
may also want to clarify whether regulatory assets not requiring
the
outlay of cash are included in your numerical disclosure of non-
earning regulatory assets. Finally, tell us whether regulatory
liabilities, that provide a source of interest free funds, reduce
rate base. If so, we believe you should clarify such in future
filings since such information is useful in analyzing the rate
environment of the entity.
2. Please explain to us the nature of the ARO regulatory asset.
Given the existence of the "cost of removal obligation" regulatory
liability, tell us why you have a regulatory asset associated with
your legal obligation and a liability for non-legal removal
obligations. In short, how did you associate the portion of
amounts
collected for legal and non-legal removal with the associated
legal
and non-legal obligation. In this regard, show us your
computation
of the legal liability for IPL, WPL and WPC and the entries you
made
to adopt SFAS no. 143 and record the regulatory liability
associated
with asset closure. Show us how you determined the amount you
were
collecting in rates associated with each plant or type of plant.
We
presume there was no income statement impact of the adoption of
Statement no. 143 for IPL and WPL but WPC was the sole reason for
Alliant`s 2001 cumulative effect charge. If otherwise, please
explain. Please be detailed in your explanation reconciling
financial statement balances and related disclosures when
practicable.
Note 3. Leases, page 68
3. Please provide us with your analysis you performed in applying
FIN46R in fiscal year 2004 with respect to your various synthetic
leases and tell us in detail why they did not meet the
consolidation
requirements of FIN46(R). Please ensure we understand whether you
believe the synthetic leases are scoped out of FIN46R, and if so,
why, and if not, how you considered the guarantees and/or other
forms
of subordinated financial support you provide to theses entities
in
your FIN46R analysis.
4. We note that you are unable to obtain information in order to
assess whether the counterparties on the Riverside plant tolling
and
RockGen plant purchased-power agreements are variable interest
entities and the identity of the primary beneficiary. Please tell
us
whether you have any ownership interest either directly or
indirectly, in either plant. If so, advise how the counterparties
are able to keep such information away from your preview. If you
are
non-stakeholder in either plant with only an interest to convert
or
purchase power, please advise how long you expect to utilize the
information exception in FIN46R and whether any attempt to modify
the
contract to allow you information to determine possible
consolidation
has occurred. We may have further comment.
Note 8, Debt (b) Long-Term Debt, page 77
5. All significant features of each issue of your long term debt
should be disclosed. This includes call prices and dates, sinking
fund requirements or any significant covenant that could affect
your
liquidity in the event such covenant was violated. Please tell us
such terms and note for future filings.
6. We have reviewed your responses to a staff comment letter in a
memorandum dated June 5, 2003 relating to your Exchangeable Senior
Notes due 2030. Please help us understand why the effective
interest
rate was high relative to Resource` credit status at the issuance
date and the maturity and standing of the Notes. We note that the
embedded derivative was valued based on Black Scholes. Please
advise
why Black Scholes would be the most accurate model to estimate
fair
value of the derivative. In this regard, tell us how your bankers
determined the pricing of the Notes and whether any other pricing
models were used to determine the fair value of the imbedded call
option. If so, tell us how such results compared to those
produced
subsequently by Black Scholes. Tell us the effective interest
rate
relating to the amount of interest income reported to the holders
of
the Notes for income tax purposes. Lastly, tell us how, and the
related amounts, of the fluctuations in the fair value of the
derivative liability were recognized in the income statement from
adoption of SFAS no. 133 to the present.
7. With regard to the preceding comment, please explain to us in
detail the current standing of the IRS position involving the
capitalization of interest on such notes. Please ensure we
understand the tax consequences of such capitalization. Our
limited
understanding is that if the IRS`s position is sustained, you will
have a capital loss upon retirement as opposed to a current
interest
deduction. If this is correct then, at a minimum, quantification
of
your potential increased cash tax-related costs in your liquidity
section should be presented to the extent material to your tax
payments.
Item 15. Exhibits, Financial Statement Schedules, page 131
8. Please consider including in your future filings, the
computation
of the ratio of earnings to fixed charges and preferred dividend
requirements. Although technically required in a registration
statement, the staff believes such information may be useful to an
existing debt or preferred shareholder. Refer to Items 601(b)(12)
and 503(d) of Regulation S-K.
As appropriate, please respond to these comments within 10
business days or tell us when you will provide us with a response.
Please understand that we may have additional comments after
reviewing your responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings to be certain that the
filings includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filing;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filing; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement has access to all information you provide to the staff
of
the Division of Corporation Finance in our review of your filing
or
in response to our comments on your filing.
If you have any questions regarding these comments,
please
direct them to Anthony Watson, Staff Accountant, at (202) 551-3318
or, in his absence, to me at (202) 551-3849.
Sincerely,
Jim Allegretto
Senior Assistant Chief
Accountant
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Mr. William D. Harvey
Alliant Energy Corporation
November 18, 2005
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