UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
☒ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 20192022
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Name of Registrant, State of Incorporation, Address of Principal Executive Offices, Telephone Number, Commission File Number, IRS Employer Identification Number
ALLIANT ENERGY CORPORATIONCORPORATION
(a Wisconsin Corporation)
4902 N. Biltmore Lane
Madison, Wisconsin 53718
Telephone (608) 458-3311
Commission File Number - 1-9894
IRS Employer Identification Number - 39-1380265
INTERSTATE POWER & LIGHT COMPANYCOMPANY
(an Iowa corporation)
Alliant Energy Tower
Cedar Rapids, Iowa 52401
Telephone (319) 786-4411
Commission File Number - 1-4117
IRS Employer Identification Number - 42-0331370
WISCONSIN POWER & LIGHT COMPANYCOMPANY
(a Wisconsin corporation)
4902 N. Biltmore Lane
Madison, Wisconsin 53718
Telephone (608) 458-3311
Commission File Number - 0-337
IRS Employer Identification Number - 39-0714890
This combined Form 10-K is separately filed by Alliant Energy Corporation, Interstate Power and Light Company and Wisconsin Power and Light Company. Information contained in the Form 10-K relating to Interstate Power and Light Company and Wisconsin Power and Light Company is filed by each such registrant on its own behalf. Each of Interstate Power and Light Company and Wisconsin Power and Light Company makes no representation as to information relating to registrants other than itself.
Securities registered pursuant to Section 12(b) of the Act:
Alliant Energy Corporation, Common Stock, $0.01 Par Value, Trading Symbol LNT, Nasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrants areregistrant is a well-known seasoned issuers,issuer, as defined in Rule 405 of the Securities Act.
Alliant Energy Corporation - Yes ☒No ☐
Interstate Power and Light Company - Yes ☒No ☐
Wisconsin Power and Light Company - Yes ☒No ☐
Indicate by check mark if the registrants areregistrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Alliant Energy Corporation - Yes ☐No ☒
Interstate Power and Light Company - Yes ☐No ☒
Wisconsin Power and Light Company - Yes ☐No ☒
Indicate by check mark whether the registrantsregistrant (1) havehas filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports) and (2) havehas been subject to such filing requirements for the past 90 days.
Alliant Energy Corporation - Yes ☒No ☐
Interstate Power and Light Company - Yes ☒No ☐
Wisconsin Power and Light Company - Yes ☒No ☐
Indicate by check mark whether the registrants haveregistrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants wereregistrant was required to submit such files).
Alliant Energy Corporation - Yes ☒No ☐
Interstate Power and Light Company - Yes ☒No ☐
Wisconsin Power and Light Company - Yes ☒No ☐
Indicate by check mark whether the registrants areregistrant is a large accelerated filers,filer, accelerated filers,filer, non-accelerated filers,filer, smaller reporting companies,company, or emerging growth companies.company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Alliant Energy Corporation - Large Accelerated Filer ☒ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller Reporting Company ☐Emerging Growth Company ☐
Interstate Power and Light Company - Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☒ Smaller Reporting Company ☐Emerging Growth Company ☐
Wisconsin Power and Light Company - Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☒ Smaller Reporting Company ☐Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Alliant Energy Corporation ☐
Interstate Power and Light Company ☐
Wisconsin Power and Light Company ☐
Indicate by check mark whether the registrantsregistrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (§ 15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
Alliant Energy Corporation ☒
Interstate Power and Light Company ☐
Wisconsin Power and Light Company ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Alliant Energy Corporation ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b).
Alliant Energy Corporation ☐
Indicate by check mark whether the registrant is a shell companiescompany (as defined in Rule 12b-2 of the Exchange Act).
Alliant Energy Corporation - Yes ☐No ☒
Interstate Power and Light Company - Yes ☐No ☒
Wisconsin Power and Light Company - Yes ☐No ☒
The aggregate market value of the voting and non-voting common equity held by nonaffiliates as of June 30, 2019:2022:
Alliant Energy Corporation - $11.6$14.7 billion
Interstate Power and Light Company - $0$0
Wisconsin Power and Light Company - $0$0
Number of shares outstanding of each class of common stock as of January 31, 2020:2023:
Alliant Energy Corporation, Common Stock, $0.01 par value, 245,031,019251,137,522 shares outstanding
Interstate Power and Light Company, Common Stock, $2.50 par value, 13,370,788 shares outstanding (all outstanding shares are owned beneficially and of record by Alliant Energy Corporation)
Wisconsin Power and Light Company, Common Stock, $5 par value, 13,236,601 shares outstanding (all outstanding shares are owned beneficially and of record by Alliant Energy Corporation)
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement relating to Alliant Energy Corporation’s 20202023 Annual Meeting of Shareowners are, or will be upon filing with the Securities and Exchange Commission, incorporated by reference into Part III hereof.
TABLE OF CONTENTS
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DEFINITIONS
The following abbreviations or acronyms used in this report are defined below:
| Abbreviation or Acronym | Definition | Abbreviation or Acronym | Definition | ||||||||
| Alliant Energy’s Proxy Statement for the | |||||||||||
| AEF | Alliant Energy Finance, LLC | GAAP | U.S. generally accepted accounting principles | ||||||||
| AFUDC | Allowance for funds used during construction | GHG | Greenhouse gases | ||||||||
| Alliant Energy | Alliant Energy Corporation | IPL | Interstate Power and Light Company | ||||||||
| ARO | Asset retirement obligation | IRS | Internal Revenue Service | ||||||||
| ATC | American Transmission Company LLC | ITC | ITC Midwest LLC | ||||||||
| ATC Holdings | Interest in American Transmission Company LLC and ATC Holdco LLC | IUB | Iowa Utilities Board | ||||||||
| ATI | AE Transco Investments, LLC | KWh | Kilowatt-hour | ||||||||
| CA | Certificate of authority | Marshalltown | Marshalltown Generating Station | ||||||||
| CAA | Clean Air Act | MDA | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||||||||
| CCR | Coal combustion residuals | MGP | Manufactured gas plant | ||||||||
| CO2 | Carbon dioxide | MISO | Midcontinent Independent System Operator, Inc. | ||||||||
| Corporate Services | Alliant Energy Corporate Services, Inc. | MW | Megawatt | ||||||||
| Novel coronavirus | MWh | Megawatt-hour | |||||||||
| CPCN | Certificate of Public Convenience and Necessity | ||||||||||
| Combined Notes to Consolidated Financial Statements | |||||||||||
| Construction work in progress | OIP | Alliant Energy Omnibus Incentive Plan | |||||||||
| DAEC | Duane Arnold Energy Center | OPEB | Other postretirement benefits | ||||||||
| DCP | Alliant Energy Deferred Compensation Plan | ||||||||||
| Purchased power agreement | |||||||||||
| PSCW | Public Service Commission of Wisconsin | ||||||||||
| Receivables Agreement | Receivables Purchase and Sale Agreement | ||||||||||
| Electric generating unit | Riverside | Riverside Energy Center | |||||||||
| EPA | U.S. Environmental Protection Agency | ||||||||||
| EPS | Earnings per weighted average common share | ||||||||||
| Federal Tax Reform | Tax Cuts and Jobs Act | ||||||||||
| FERC | Federal Energy Regulatory Commission | ||||||||||
| Financial Statements | Consolidated Financial Statements | ||||||||||
| FTR | Financial transmission right | ||||||||||
| 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:
•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;
•inflation and higher interest rates;
•changes in the price of delivered natural gas, transmission, purchased electricity and coal, particularly during elevated market prices, and any resulting changes to counterparty credit risk, due to shifts in supply and demand caused by market conditions, regulations and MISO’s seasonal resource adequacy process;
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•IPL’s and WPL’s ability to obtain adequate and timely rate relief to allow for, among other things, the recovery of and/or the return on costs, including fuel costs, operating costs, transmission costs, capacity costs, deferred expenditures, deferred tax assets, tax expense, interest expense, capital expenditures, and remaining costs related to EGUs that may be permanently closed and certain other retired assets, decreases in sales volumes, earning their authorized rates of return, and the payments to their parent of expected levels of dividends;
•the ability to obtain regulatory approval for construction projects with acceptable conditions;
•the ability to complete construction of renewable generation and storage projects by planned in-service dates and within the cost targets set by regulators due to cost increases of and access to materials, equipment and commodities including due to tariffs, duties or other assessments, such as any additional tariffs resulting from U.S. Department of Commerce investigations into the sourcing of solar project materials and equipment from certain countries, labor issues or supply shortages, the ability to successfully resolve warranty issues or contract disputes, the ability to achieve the expected level of tax benefits based on tax guidelines and project costs, and the ability to efficiently utilize the renewable generation and storage project tax benefits for the benefit of customers;
•disruptions to ongoing operations and the supply of materials, services, equipment and commodities needed to construct solar generation, battery storage and electric and gas distribution projects, which may result from geopolitical issues, supplier manufacturing constraints, labor issues or transportation issues, and thus affect the ability to meet capacity requirements and result in increased capacity expense;
•federal and state regulatory or governmental actions, including the impact of legislation, and regulatory agency orders;
•the ability to utilize tax credits and net operating losses generated to date, and those that may be generated in the future, before they expire;expire, as well as the ability to transfer tax credits that may be generated in the future at adequate pricing;
•the directimpacts of changes in the tax code, including tax rates, minimum tax rates, and adjustments made to deferred tax assets and liabilities;
•employee workforce factors, including the ability to hire and retain employees with specialized skills, impacts from employee retirements, changes in key executives, ability to create desired corporate culture, collective bargaining agreements and negotiations, work stoppages or indirect effects resulting from terrorist incidents,restructurings;
•disruptions in the supply and delivery of natural gas, purchased electricity and coal;
•changes to the creditworthiness of, or performance of obligations by, counterparties with which Alliant Energy, IPL and WPL have contractual arrangements, including physical attacksparticipants in the energy markets and cyber attacks, or responses to such incidents;fuel suppliers and transporters;
•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;
•any material post-closing payments related to any past asset divestitures, including the sale of Whiting Petroleum, which could result from, among other things, indemnification agreements, warranties, parental guarantees or litigation;
•weather effects on results of utility operations;
•continued access to the capital markets on competitive terms and rates, and the actions of credit rating agencies;
•changes to MISO’s resource adequacy process establishing capacity planning reserve margin and capacity accreditation requirements that may impact how and when new generating facilities such as IPL’s and WPL’s additional solar generation may be accredited with energy capacity, and may require IPL and WPL to adjust their current resource plans, to add resources to meet the requirements of MISO’s new process, or procure capacity in the market whereby such costs might not be recovered in rates;
•the direct or indirect effects resulting from the ongoing COVID-19 pandemic and the spread of variant strains;
•issues associated with environmental remediation and environmental compliance, including compliance with all environmental and emissions permits, the CCR rule, future changes in environmental laws and regulations, including changes to CSAPR emissions allowances and federal, state or local regulations for CO2 emissions reductions from new and existing fossil-fueled EGUs, and litigation associated with environmental requirements;
•increased pressure from customers, investors and other stakeholders to more rapidly reduce CO2 emissions;
•the ability to defend against environmental claims brought by state and federal agencies, such as the EPA, state natural resources agencies or third parties, such as the Sierra Club, and the impact on operating expenses of defending and resolving such claims;
•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, including regulations promulgated by the Pipeline and Hazardous Materials Safety Administration;
•issues related to the availability and operations of EGUs, including start-up risks, breakdown or failure of equipment, availability of warranty coverage for equipment breakdowns or failures, performance below expected or contracted levels of output or efficiency, operator error, employee safety, transmission constraints, compliance with mandatory reliability standards and risks related to recovery of resulting incremental operating, fuel-related and capital costs through rates;
•impacts that excessive heat, excessive cold, storms or natural disasters may have on Alliant Energy’s, IPL’s and WPL’s operations and recovery of costs associated with restoration activities or on the operations of Alliant Energy’s investments;
•Alliant Energy’s ability to sustain its dividend payout ratio goal;
•changes to costs of providing benefits and related funding requirements of pension and OPEB plans due to the market value of the assets that fund the plans, economic conditions, financial market performance, interest rates, timing and form of benefits payments, life expectancies and demographics;
•material changes in employee-related benefit and compensation costs;costs, including settlement losses related to pension plans;
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•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 equity income from unconsolidated investments due to furtherfrom changes in valuations of the assets held, as well as 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 state depreciation, and recoverability of the associated regulatory assets from customers, when the differences reverse in future periods;
•current or future litigation, regulatory investigations, proceedings or inquiries;
•reputational damage from negative publicity, protests, fines, penalties and other negative consequences resulting in regulatory and/or legal actions;
•the effect of accounting standards issued periodically by standard-setting bodies;
•the ability to successfully complete tax audits and changes in tax accounting methods with no material impact on earnings and cash flows; and
Alliant Energy, IPL and WPL each assume no obligation, and disclaim any duty, to update the forward-looking statements in this report, except as required by law.
WEBSITE ACCESS TO REPORTS
Alliant Energy, IPL and WPL make their periodic and current reports, and amendments to those reports, available, free of charge, on Alliant Energy’s website at www.alliantenergy.com/investors on the same day as such material is electronically filed with, or furnished to, the SEC. Alliant Energy, IPL and WPL are not including the information contained on Alliant Energy’s website as a part of, or incorporating it by reference into, this report.
PART I
This report includes information relating to Alliant Energy, IPL and WPL (as well as AEF and Corporate Services). Where appropriate, information relating to a specific entity has been segregated and labeled as such. Unless otherwise noted, the information herein excludes discontinued operations for all periods presented. The terms “we,” “our” and “us” used in this report refer collectively to Alliant Energy, IPL and WPL.
ITEM 1. BUSINESS
A. GENERAL
Alliant Energy was incorporated in Wisconsin in 1981 and maintains its principal executive offices in Madison, Wisconsin. Alliant Energy operates as a regulated investor-owned public utility holding company.company, and its purpose-driven strategy is to serve its customers and build stronger communities. Alliant Energy’s primary focus is to provide regulated electric and natural gas service to approximately 970,000995,000 electric and approximately 420,000425,000 natural gas customers in the Midwest through its two public utility subsidiaries, IPL and WPL. The primary first tier wholly-owned subsidiaries of Alliant Energy are as follows:
1) IPL - was incorporated in 1925 in Iowa as Iowa Railway and Light Corporation. IPL is a public utility engaged principally in the generation and distribution of electricity and the distribution and transportation of natural gas to retail customers in select markets in Iowa. IPL provides utility services to incorporated communities as directed by the IUB and utilizes non-exclusive franchises, which cover the use of public right-of-ways for utility facilities in incorporated communities for a maximum term of 25 years. At December 31, 2019,2022, IPL supplied electric and natural gas service to approximately 490,000500,000 and 225,000 retail customers, respectively, in Iowa. IPL also sells electricity to wholesale customers in Minnesota, Illinois and Iowa. IPL is also engaged in the generation and distribution of steam for two customers in Cedar Rapids, Iowa. In 2019, 2018 and 2017, IPL had no single customer for which electric, gas, steam and/or other sales accounted for 10% or more of IPL’s consolidated revenues.
2) WPL - was incorporated in 1917 in Wisconsin as Eastern Wisconsin Electric Company. WPL is a public utility engaged principally in the generation and distribution of electricity and the distribution and transportation of natural gas to retail customers in select markets in Wisconsin. WPL operates in municipalities pursuant to permits of indefinite duration and state statutes authorizing utility operation in areas annexed by a municipality. At December 31, 2019,2022, WPL supplied electric and natural gas service to approximately 480,000495,000 and 195,000200,000 retail customers, respectively. WPL also sells electricity to wholesale customers in Wisconsin. In 2019, 2018 and 2017, WPL had no single customer for which electric, gas and/or other sales accounted for 10% or more of WPL’s consolidated revenues.
3) CORPORATE SERVICES - was incorporated in 1997 in Iowa. Corporate Services provides administrative services to Alliant Energy, IPL, WPL and AEF.
4) AEF - was created in 2016 in Wisconsin as a limited liability company. Alliant Energy’s non-utility holdings are organized under AEF, which manages a portfolio of wholly-owned subsidiaries and additional holdings, throughincluding the following distinct platforms:
ATI - currently holds all of Alliant Energy’s interest in ATC Holdings. ATC Holdings is comprised of a 16% ownership interest in ATC and a 20% ownership interest in ATC Holdco LLC. ATC is an independent, for-profit, transmission-only company. ATC Holdco LLC holds an interest in Duke-American Transmission Company, LLC, a joint venture between Duke Energy Corporation and ATC, that owns electric transmission infrastructure in North America.
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Corporate Venture Investments - includes various minority ownership interests in regional and national venture funds, including a global coalition of energy companies working together to help advance the transition towards a cleaner, more sustainable, and inclusive energy future, by identifying and researching innovative technologies and business models within the emerging energy economy.
Non-utility Wind Farm - includes a 50% cash equity ownership interest in a 225 MW non-utility wind farm located in Oklahoma.
Sheboygan Falls Energy Facility - is a 347 MW, simple-cycle, natural gas-fired EGU near Sheboygan Falls, Wisconsin, which is leased to WPL for an initial period of 20 years ending in 2025.
B. INFORMATION RELATING TO ALLIANT ENERGY ON A CONSOLIDATED BASIS
1) EMPLOYEESHUMAN CAPITAL MANAGEMENT - Alliant Energy’s core purpose is to serve customers and build stronger communities. We constantly strive to attract, retain and develop a diverse and qualified workforce of high-performing employees, and create and foster an environment of inclusion and belonging for all employees.
Employees - At December 31, 2019,2022, Alliant Energy, IPL and WPL had the following full- and part-time employees:
| Total | Number of | Percentage of Employees | |||||||||||||||
| Number of | Bargaining Unit | Covered by Collective | |||||||||||||||
| Employees | Employees | Bargaining Agreements | |||||||||||||||
| Alliant Energy | 3,129 | 1,692 | 54% | ||||||||||||||
| IPL | 1,080 | 755 | 70% | ||||||||||||||
| WPL | 1,001 | 825 | 82% | ||||||||||||||
| Total | Number of | Percentage of Employees | ||||
| Number of | Bargaining Unit | Covered by Collective | ||||
| Employees | Employees | Bargaining Agreements | ||||
| Alliant Energy | 3,597 | 1,948 | 54% | |||
| IPL | 1,418 | 885 | 62% | |||
| WPL | 1,153 | 952 | 83% | |||
The majority of IPL’s bargaining unit employees are covered by the International Brotherhood of Electrical Workers Local 204 (Cedar Rapids) collective bargaining agreement, which expires on August 31, 2020.2024. All of WPL’s bargaining unit employees are covered by the International Brotherhood of Electrical Workers Local 965 collective bargaining agreement, which expires on May 31, 2022.2026.
Safety - Safety is integral to our company’s culture. It is one of our Values - “Live safety. Everyone. Always. Our first priority is that nobody gets hurt.” Alliant Energy is committed to providing a safe environment for our employees, visitors, customers, contractors, vendors and the communities in which we live and work.
We focus on the proactive management of our safety performance. Our comprehensive behavioral safety-based program consists of leading indicators, lagging indicators and targeted focus programs. We utilize a formal safety management system to capture and track best practices, near misses, job site briefings, safety observations, safety conversations and any unsafe conditions. This system provides the insights needed to help drive a positive safety culture and help ensure compliance with safety rules, processes and procedures. We also use this system to broadly share lessons learned in support of shaping the mindsets and behaviors needed to help prevent similar events from occurring elsewhere. Collectively, this information is used to evaluate the safety performance of the executive and management teams related to their goals, and safety metrics are factored into short-term incentive awards.
We maintain executive and local safety leadership teams to establish our safety vision, strategy and priorities, and ensure education and recognition of employee actions that improve our safety culture. This leadership provides strong support for sustained growth of both employee and public safety programs and initiatives.
Public safety is equally important as we interact with our customers to provide energy to their homes and businesses. We offer awareness campaigns, natural gas and electric public safety presentations, and free online resources and training programs and guidance to assist local emergency responders.
Total Rewards - Our market-competitive Total Rewards programs are designed to meet the varied and evolving needs of our employees. Through a variety of health, welfare and compensation programs, we offer employees choice and control, while supporting their financial, physical, and mental well-being. Tools and resources are provided to employees to help maintain and improve their health. Short- and long-term incentive plans are designed with a mix of operational and financial metrics that align employees with strategic corporate and social goals.
In addition to competitive salaries and wages, our Total Rewards programs include:
•competitive short- and long-term incentive compensation;
•a 401(k) savings plan with an employer match;
•healthcare and insurance benefits, including medical, vision, dental, life, short-term disability, and long-term disability insurance;
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•health savings and flexible spending accounts;
•paid time off to use for vacation, personal time, sick time, holidays, bereavement, jury duty, military leave, parental leave, maternity leave, and adoption leave;
•adoption assistance;
•legal planning assistance;
•Employee Assistance program;
•tuition reimbursement;
•Vacation Donation program; and
•Volunteer Grants and Matching Gifts program.
Diversity, Equity and Inclusion (DE&I) - A diverse, equitable and inclusive workplace is crucial for the success and retention of our employees, to attract future talent and to execute our purpose-driven strategy to serve our customers and build stronger communities. It is one of our Values - “Care for others: Together we create a workplace where people feel like they belong and can use their unique backgrounds, talents and perspectives to their fullest potential.” Alliant Energy is driven by DE&I and believes the achievement of its strategic objectives can only be achieved with a focused and engaged workforce. Alliant Energy’s corporate officers group currently has approximately 40% gender diversity and 27% ethnic diversity.
Our efforts to create a diverse and inclusive workforce have focused on reducing bias, building diverse teams, and listening and acting on employee feedback, and include:
•learning opportunities for employees, such as inviting employees to participate in area diversity summits and supporting company-wide listening sessions, speakers and programs;
•capturing and acting upon employee feedback through employee sentiment surveys;
•Employee Resource Groups that foster a diverse and inclusive workplace that supports employee well-being while promoting professional development and enhancing community relationships; and
•a DE&I Leadership Team that partners with the Human Resources recruiting department and hiring managers to attract more diverse applicants that represent the diversity of the communities we serve.
Our DE&I initiatives also include a focus on building a diverse Board of Directors. We believe it is in our shareowners’ best interest to have a diverse Board representing a wide breadth of experiences and perspectives. Our Board currently has approximately 50% gender diversity and 20% ethnic diversity.
Our 2022 DE&I accomplishments include:
•received a perfect score on the Corporate Equality Index administered by the Human Rights Campaign Foundation to benchmark LGBTQ+ rights, policies and practices;
•selected for the 2022 Bloomberg Gender-Equality Index;
•held our third annual Day of Understanding, with 85% voluntary company-wide participation, where leaders facilitated conversations around creating a culture of inclusion and belonging, helping to ensure employees are seen, heard and valued; and
•all people-leaders completed training on reducing unconscious bias in the interview process.
Alliant Energy’s short- and long-term incentive compensation plans include diversity metrics to drive leadership accountability for efforts to advance a diverse and inclusive culture.
Talent Development and Workforce Readiness - We support employees in the growth of their careers through several training opportunities and development programs. These include tuition reimbursement, online, instructor-led and on-the-job learning formats, as well as leadership development and succession planning.
In addition, we have an apprenticeship program that combines supervised, structured on-the-job training with related instruction to produce highly skilled trade and technical workers. Our program builds lifetime skills and comprehensive knowledge in the high-demand technical trades necessary for our success. The program gives us the flexibility to tailor training to match our needs - training employees in our facilities, on our equipment, and consistent withoursafety standards and employee expectations. We instill company Values, methods and procedures from day one.
2) REGULATION - Alliant Energy, IPL and WPL are subject to regulation by various federal, state and local agencies. The following includes the primary regulations impacting Alliant Energy’s, IPL’s and WPL’s businesses.
FERC -
Public Utility Holding Company Act of 2005 - Alliant Energy is registered with FERC as a public utility holding company, pursuant to the Public Utility Holding Company Act of 2005, and is required to maintain certain records and to report certain transactions involving its public utilities, service company and other entities regulated by FERC. Corporate Services, IPL and WPL are subject to regulation by FERC under the Public Utility Holding Company Act of 2005 for various matters including, but not limited to, affiliate transactions, public utility mergers, acquisitions and dispositions, and books, records and accounting requirements.
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Energy Policy Act of 2005 - The Energy Policy Act of 2005 requires creation of an Electric Reliability Organization to provide oversight by FERC. FERC designated North American Electric Reliability Corporation as the overarching Electric Reliability Organization. Midwest Reliability Organization, which is a regional member of North American Electric Reliability Corporation, has direct responsibility for mandatory electric reliability standards for IPL and WPL.
Federal Power Act of 1935 - FERC also has jurisdiction, under the Federal Power Act of 1935, over certain electric utility facilities and operations, electric wholesale andsales, interstate electric transmission rates, dividend payments, issuance of IPL’s securities, and accounting practices of Corporate Services, IPL and WPL.
Electric Wholesale Rates - IPLFERC has authority over IPL's and WPL receiveWPL's wholesale electric market-based rate authority from FERC.rates. Market-based rate authorization allows for wholesale sales of electricity within FERC’s wholesale markets, including the MISO market, and in transactions directly with third parties, based on the market value of the transactions. IPL and WPL also have FERC-approved cost of service formula-based rates related to the provision of firm full- and partial-requirement wholesale electric sales, which allow for true-ups to actual costs, including fuel costs.
Electric Transmission Rates - FERC regulates the rates charged for electric transmission facilities used in interstate commerce. IPL and WPL do not own or operate FERC-regulated electric transmission facilities; however, both IPL and WPL pay for the use of the interstate electric transmission system based upon FERC-regulated rates. IPL and WPL rely primarily on the use of the ITC and ATC transmission systems, respectively.
Natural Gas Act - FERC regulates the transportation and sale for resale of natural gas in interstate commerce under the Natural Gas Act. Under the Natural Gas Act, FERC has authority over certain natural gas facilities and operations of IPL and WPL.
IUB - IPL is subject to regulation by the IUB for various matters including, but not limited to, retail utility rates and standards of service, accounting requirements, salesthe construction of EGUs, and the acquisition, sale or lease of assets with values that exceed 3% of IPL’s revenues,revenues. In 2021, legislation was enacted in Iowa prohibiting counties and approvalcities from regulating the sale of the locationnatural gas and constructionpropane, which supports IPL’s ability to provide gas utility service to a diversified base of EGUs.retail customers and industries.
Retail Utility Base Rates - IPL files periodic requests with the IUB for retail rate changes and may base those requests on either historical or forward-looking test periods. The IUB must decide on requests for retail rate changes within 10 months of the date of the application for which changes are filed. The historical test periods may be adjusted for certain known and measurable changes to capital investments, cost of capital and operating and maintenance expenses consistent with IUB rules and regulations. Interim retail ratesIn 2021, the IUB adopted rules that establish minimum filing requirements for historicalrate reviews using a forward-looking test periods can be placed in effect as soon as 10 daysperiod, and a related subsequent proceeding review after the rate application filing, subject to refund, and must be based on previously established regulatory principles. The IUB must decide on requests for retail rate changes within 10 monthsclose of the dateforward-looking test period. The rules provide that in the subsequent proceeding review, a utility’s actual costs and revenues will be presumed to be reasonably consistent with the forward-looking test period if the utility’s actual return on common equity falls within a standard of reasonableness of 50 basis points above to 50 basis points below the application for which changes are filed.authorized return on common equity. If the utility’s actual return on common equity is outside of this range, future rates could be adjusted. In addition, the rules require that IPL must receive an order from the IUB related to the subsequent proceeding review before it can file another rate review.
Energy Efficiency - In accordance with Iowa law, IPL is required to file an EEP every five years with the IUB. An EEP provides a utility’s plan and related budget to achieve specified levels of electric and gas energy savings. IUB approval demonstrates that IPL’s EEP is reasonably expected to achieve cost-effective delivery of the energy efficiency programs. Refer to Note 1(g) for discussion of the recovery of these costs from IPL’s retail electric and gas customers.
Electric Generating Units - IPL must obtain a certificate of public convenience, use and necessity (GCU Certificate) from the IUB in order to construct a new, or significantly alter (including fuel switching) an existing, EGU located in Iowa with 25 MW or more of nameplate generating capacity. IPL’s ownership and operation of EGUs (including those located outside the state of Iowa) to serve Iowa customers is subject to retail utility rate regulation by the IUB.
Gas Pipeline Projects - IPL must obtain a pipeline permit from the IUB related to the siting of utility gas pipelines in Iowa that will be operated at a pressure over 150 pounds per square inch and will transport gas to a distribution system or single, large volume customer.
Advance Rate-making Principles - Iowa law providesallows Iowa utilities withto request rate-making principles prior to making certain generation investments in Iowa. As a result, IPL may file for, and the IUB must render a decision on, rate-making principles for certain new EGUs located in Iowa, including any alternative energy production facility (such as a wind or solar facility)facility, as well as battery storage constructed in combination with these facilities), combined-cycle natural gas-fired EGU, and certain base-load EGUs with a nameplate generating capacity of 300 MW or more (such as nuclear or coal-firednuclear-fired generation). Stand-alone battery storage facilities will be considered for advance rate-making principles on a case-by-case basis. Advance rate-making principles are also available for the repowering of an alternative energy production facility or certain significant alterations of an existing EGU. Upon approval of rate-making principles by the IUB, IPL must either buildconstruct the EGU or repower the alternative energy production facility under the approved rate-making principles, or not at all. If rate-making principles are not
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approved by the IUB, IPL may construct the facility, subject to other applicable approvals (such as a GCU Certificate), subject to recovery in future rate reviews.
Electric Generating Unit Environmental Controls Projects - IPL is required to submit an updated emissions plan and budget biennially to the IUB setting out a multi-year plan and budget for managing regulated emissions from its coal-fired EGUs in a cost-effective manner. IPL must simultaneously submit this plan and budget to the Iowa Department of Natural Resources for a determination of whether the plan and budget meet state environmental requirements for regulated emissions. The reasonable and prudent costs associated with implementing the approved plan are expected to be included in IPL’s future retail electric rates.
PSCW - WPL is subject to regulation by the PSCW related to its operations in Wisconsin for various matters including, but not limited to, retail utility rates and standards of service, accounting requirements, issuance and use of proceeds of securities,
affiliate transactions, approval of the location and construction of EGUs and certain other additions and extensions to facilities. In addition, Alliant Energy is subject to regulation by the PSCW for the type and amount of Alliant Energy’s holdings in non-utility businesses and other affiliated interest activities, among other matters.
Retail Utility Base Rates - WPL files periodic requests with the PSCW for retail rate changes. These filingschanges, which are required to be based on forward-looking test periods. There is no statutory time limit for the PSCW to decide on retail base rate requests. However, the PSCW attempts to process retail base rate reviews in approximately 10 months and has the ability to approve interim retail rate relief, subject to refund, if necessary. Currently, WPL is required to defer a portion of its earnings if its annual regulatory return on common equity exceeds certain levels. Through 2023, any such deferral is required to be offset against the remaining net book value of Edgewater Unit 5, which is currently expected to be retired by June 1, 2025.
Public Benefits - WPL contributes 1.2% of its annual retail utility revenues to help fund Focus on Energy, Wisconsin’s state-wide energy efficiency and renewable energy resource program. In addition, WPL contributes to a program that provides assistance to income-eligible residents in Wisconsin. These contributions are recovered from customers through a monthly bill surcharge of up tothe lesser of 3% of customers’ utilities bills.bills or $750. Refer to Note 1(g) for discussion of the recovery of these costs from WPL’s retail electric and gas customers.
New Electric Generating Units - A CA application is required to be filed with the PSCW for construction approval of any new EGU (including battery storage) with a capacity of less than 100 MW and a project cost of $11.0$12.4 million or more. WPL must obtain a CPCN from the PSCW in order to construct a new EGU in Wisconsin with a capacity of 100 MW or more. In addition, WPL’s ownership and operation of EGUs (including those located outside the state of Wisconsin) to serve Wisconsin customers are subject to retail utility rate regulation by the PSCW.
Electric Generating Unit Upgrades and Electric Distribution Projects - A CA application is required to be filed with the PSCW for construction approval of any additions to EGUs, including environmental controls projects, as well as electric distribution projects, with estimated project costs of $11.0$12.4 million or more.
Gas Distribution Projects - A CA application is required to be filed with the PSCW for construction approval of gas projects with an estimated project cost of $2.5$5.9 million or more and at any time that WPL requests to extend gas service to a new portion of its service territory.
Advance Rate-making Principles - Wisconsin law provides Wisconsin utilities with the opportunity to request rate-making principles prior to the purchase or construction of any EGU utilized to serve Wisconsin customers. WPL is not obligated to file for or accept authorized rate-making principles under Wisconsin law. WPL can proceed with an approved project under traditional rate-making terms or accept authorized rate-making principles under Wisconsin law.
Department of Homeland Security Transportation Security Administration - Alliant Energy, IPL and WPL are subject to regulation for physical and cyber security of their natural gas pipeline systems, and are applying, and monitoring for changes to, these requirements to their pipeline systems.
Environmental - Alliant Energy, IPL and WPL are subject to regulation of environmental matters by federal, state and local authorities as a result of their current and past operations. Alliant Energy, IPL and WPL monitor these environmental matters and address them by installing controls that reduce emissions and by implementing operational modifications or other measures to address compliance obligations. There is currently significant regulatory uncertainty with respect to environmental rules and regulations discussed below. Given the dynamicevolving nature of environmental regulations and other related regulatory requirements, Alliant Energy, IPL and WPL havedevelop and periodically update their compliance plans to address these environmental obligations. Prudent expenditures incurred by IPL and WPL to comply with environmental requirements are eligible to be recovered in rates from their customers. The following are major environmental matters that could potentially have a significant impact on financial condition and results of operations.
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Air Quality -
Climate Change and Greenhouse GasesGas Regulations -There is continued debate regarding the public policy response that the U.S. should adopt to address climate change, involving both domestic actions and international efforts. In 2007, the Supreme Court provided direction on the EPA’s authority to regulate GHG and ruled that these emissions are covered by the CAA. In 2009, the EPA issued a ruling that found GHG emissions contribute to climate change, and therefore, threaten public health and welfare, which was the prerequisite for implementing carbonCO2 reduction standards under the CAA. While the EPA’s rules to regulate GHG issued under the authority of the CAA remain subject to further review, growing awareness ofemphasis on climate change and evolving energy technologies are driving efforts to decarbonize the environment through voluntary emissions reductions. The primary GHG directly emitted from Alliant Energy’s utility operations is CO2 from the combustion of fossil fuels at their largerits EGUs.
Clean Air Act Section 111(d) - In 2015, the EPA published final standardsissued the Clean Power Plan under Section 111(d) of the CAA referred to as the Clean Power Plan, to reduce CO2 emissions from existing fossil-fueled EGUs. In July 2019,EGUs through broad electricity system-wide measures. This was replaced by the EPA published the final Affordable Clean Energy rule which repealed the Clean Power Plan effective September 6, 2019. The Affordable Clean
Clean Air Act Section 111(b) - In 2015, the EPA published final standards under Section 111(b) of the CAA, which establish CO2 emissions limits for certain new fossil-fueled EGUs. Marshalltown and West Riverside are subject to the EPA’s Section 111(b) regulation and have been designed to achieve compliance with these standards. The EPA is reviewing the Section 111(b) standards, and has stated it intends to issue a proposed rule in 2023 and a final rule in 2024, although a timeline cannot be predicted with certainty. Litigation related to Section 111(b) is suspended while the EPA revises its Section 111(b), regulations, and Alliant Energy, IPL and WPL are currently unable to predict with certainty the impact of these standards.
Cross-State Air Pollution Rule - CSAPR is a regional sulfur dioxide and nitrogen oxides cap-and-trade program, where compliance with emission limits may be achieved by purchasing emission allowances and/or reducing emissions through changes in operations or the additions of environmental controls. CSAPR emission allowances may be banked for future year compliance. CSAPR establishes state-specific annual sulfur dioxide and nitrogen oxides emission caps and ozone season nitrogen oxides emission caps. In addition, if Section 111(b) is vacated,2022, the EPA’s abilityEPA proposed revisions to implement regulationsthe CSAPR state-specific ozone season nitrogen oxides emission caps and utility-specific emission allowances for CO2 emissions at existing fossil-fueled EGUs, such as the Affordable Clean Energycertain states, including Wisconsin, beginning in 2023. The proposed rule does not apply to Iowa; however, Iowa could be limited.included in the final rule, which is currently expected in 2023. Alliant Energy, IPL and WPL are currently unable to predict with certainty the future outcome or impact of these matters.
Water Quality -
Effluent Limitation Guidelines - In 2015, the EPA published final effluent limitation guidelines, which required changes to discharge limits for wastewater from certain IPL and WPL steam generating facilities.EGUs. In 2020, revised effluent limitation guidelines (2020 Reconsideration Rule) became effective, which incorporated flexibility to the 2015 rule, including a new subcategory for coal-fired EGUs that will be retired or converted to no longer burn coal before 2028. Compliance for existing steamsteam-electric generating facilities is determined by each facility’s wastewater discharge permit and will generally be required by December 31, 2023.2025. Projects required for compliance are facility-specific. Compliance for new steam generating facilities, such as West Riverside, is required immediately upon operation. Estimated capital expendituresIn 2021, the current Presidential Administration issued an Executive Order requiring the review and possible revision of environmental regulations issued during the prior Administration. As a result, the EPA expects to comply with theseundertake a supplemental rule-making to revise the guidelines for steam-electric generating facilities. As part of the rule-making process, the EPA is expected to determine whether more stringent limitations and standards are appropriate. The 2020 through 2023Reconsideration Rule will remain in effect while the EPA undertakes this new rule-making. Alliant Energy, IPL and WPL are included incurrently unable to predict with certainty the “Other Generation” line infuture outcome or impact of the construction and acquisition expenditures table in “Liquidity and Capital Resources” in MDA.anticipated supplemental rule-making.
Land and Solid Waste -
Coal Combustion Residuals Rule - The final CCR Rule, which became effective in 2015, regulates CCR as a non-hazardous waste, became effective in 2015.waste. IPL and WPL have coal-fired EGUs with coal ash ponds and active CCR landfills that are impacted by this rule. LitigationCompliance obligations associated with the CCR Rule may be subject to change due to future EPA CCR Rule updates, on-going litigation related to the CCR Rule, remains on-going and has resulted in various proposed rule updates.any actions taken to-date that may be challenged. Alliant Energy, IPL and WPL are currently unable to predict with certainty the impact of these updates.
Renewable Energy Standards - Iowa and Wisconsin have RES,renewable energy standards, which establish the minimum amount of energy IPL and WPL must supply from renewable resources. IPL primarily relies upon renewable energy generated from the wind projectsresources it owns and renewable energy acquired under PPAs to meet these requirements. WPL utilizes its current renewable portfolio, which primarily consists of wind, solar and hydro energy, both owned and acquired under PPAs, to meet these requirements. IPL and WPL currently exceed their respective RESrenewable energy standards requirements.
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3) STRATEGY - Refer to “Overview” in MDA for discussion of Alliant Energy’s strategy, which supports its mission to deliver energy solutions and exceptional service that its customers and communities count on - affordably, safely, reliably and sustainably.
C. INFORMATION RELATING TO UTILITY OPERATIONS
Alliant Energy’s utility business (IPL and WPL) has three segments: a) electric operations; b) gas operations; and c) other, which includes IPL’s steam operations and the unallocated portions of the utility business. IPL’s and WPL’s electric, gas and other revenues as a percentage of total revenues were as follows:
| IPL | WPL | |||||||
1) ELECTRIC UTILITY OPERATIONS
General - Electric utility operations represent the largest operating segment for Alliant Energy, IPL and WPL. Alliant Energy’s electric utility operations are located in the Midwest with IPL providing retail electric service in Iowa and WPL providing retail and wholesale electric service in Wisconsin. IPL also sells electricity to wholesale customers in Minnesota, Illinois and Iowa. Refer to the “Electric Operating Information” tables for additional details regarding electric utility operations.
Customers - IPL and WPL provide electric utility service to a diversified base of retail customers in several industries, with the largest concentrations in the farming, agriculture, industrial manufacturing, chemical (including ethanol), packaging and packagingfood industries. IPL and WPL also sell electricity to wholesale customers, which primarily consist of municipalities and rural electric cooperatives.
Seasonality - Electric sales are seasonal to some extent with the annual peak normally occurring in the summer months due to air conditioning requirements. Electric sales are also impacted to a certain extent in the winter months due to heating requirements.
Competition - Retail electric customers in Iowa and Wisconsin currently do not have the ability to choose their electric supplier, and IPL and WPL have obligations to serve all their retail electric customers. Although electric service in Iowa and Wisconsin is regulated, IPL and WPL still face competition from self-generation by large industrial customers, customer- and third party-owned generation (e.g. solar panels), alternative energy sources, and petitions to municipalize (Iowa) as well as service territory expansions by municipal utilities through annexations (Wisconsin). In addition, the wholesale power market is competitive and IPL and WPL compete against independent power producers, other utilities and MISO market purchases to serve wholesale customers for their electric energy and capacity needs. Alliant Energy’s strategy includes actions to retain current customers and attract new customers into IPL’s and WPL’s service territories in an effort to keep energy rates low for all of their customers. Refer to “Overview” in MDA for discussion of the strategy element focusing on growing customer demand.
Electric Supply - Alliant Energy, IPL and WPL have met, and expect to continue meeting, customer demand of electricity through a mix of electric supply, including owned EGUs, PPAs and additional purchases from wholesale energy markets. Alliant Energy expects its mix of electric supply to change in the next several years with WPL’s constructionits planned transition away from coal-fired EGUs by considering additional renewable energy such as solar generation, repowering of existing wind farms and distributed energy resources, including community solar and energy storage systems, natural gas resources, and the actual and potential sale of partial interests in West Riverside and planned solar generation, and IPL’s and WPL’s planned wind generation and the proposed retirement and/or fuel switching of various EGUs.to neighboring utilities. Long-term generation plans are intended to meet customer demand, reduce air emissions and water impacts, reduce reliance on wholesale market purchases and mitigate the impacts of future EGU retirements while maintaining compliance with long-term electric demand planning reserve margins, environmental requirements and RESrenewable energy standards established by regulators.regulators and other various requirements.
Electric Demand Planning Reserve Margin - IPL and WPL are required to maintain a planning reserve margin above their load at the time of the MISO-wide peak to ensure reliability of electric service to their customers. The required installed capacity reserve margin is 18.0% and the required unforced capacity reserve margin is 8.9% for the June 1, 2020 through May 31, 2021 MISO planning year. IPL and WPL currentlyutilize accredited capacity from EGUs they own, and have adequate capacityrights to through PPAs, to meet sucha substantial portion of their current MISO planning reserve margin requirements.requirements and periodically rely on short-term market capacity purchases to supplement the accredited capacity from such EGUs. Refer to “Customer Investments” in MDA for discussion of MISO’s new seasonal resource adequacy process establishing capacity planning reserve margin and capacity accreditation requirements effective with the June 1, 2023 through May 31, 2024 MISO Planning Year. The new seasonal capacity reserve margins are as follows:
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| June 2023 - August 2023 | September 2023 - November 2023 | December 2023 - February 2024 | March 2024 - May 2024 | ||||||||||||||||||||
| Required installed capacity reserve margin | 15.9% | 25.8% | 41.2% | 39.3% | |||||||||||||||||||
| Required unforced capacity reserve margin | 7.4% | 14.9% | 25.5% | 24.5% | |||||||||||||||||||
Generation Fuel Supply - IPL and WPL own a portfolio of EGUs located in Iowa, Wisconsin and Minnesota with a diversified fuel mix that includes natural gas, renewable resources and coal. Refer to “Properties” in Item 2 for details of IPL’s and WPL’s EGUs. The average cost of delivered fuel per million British Thermal Units used for electric generation was as follows:
| IPL | WPL | ||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||
| All fuels | $4.37 | $2.10 | $2.22 | $4.47 | $2.62 | $2.36 | |||||||||||||||||||||||||||||
| Natural gas (a) | 5.76 | 2.54 | 2.54 | 6.02 | 3.31 | 2.51 | |||||||||||||||||||||||||||||
| Coal | 2.31 | 1.81 | 1.84 | 2.43 | 2.07 | 2.19 | |||||||||||||||||||||||||||||
| IPL | WPL | ||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
| All fuels | $2.17 | $2.46 | $2.22 | $2.55 | $2.72 | $2.53 | |||||||||||||||||
| Natural gas (a) | 2.52 | 3.12 | 2.72 | 2.76 | 3.30 | 3.28 | |||||||||||||||||
| Coal | 1.81 | 1.97 | 2.00 | 2.35 | 2.45 | 2.38 | |||||||||||||||||
(a)The average cost of natural gas includes commodity and transportation costs, as well as realized gains and losses from swap and option contracts used to hedge the price of natural gas volumes expected to be used by IPL’s and WPL’s natural gas-fired EGUs.
Natural Gas - Alliant Energy, IPL and WPL own several natural gas-fired EGUs, and WPL also has exclusive rights to the output of AEF’s Sheboygan Falls Energy Facility under an affiliated lease agreement. These facilities help meet customer demand for electricity when natural gas prices are low enough to make natural gas-fired generation economical compared to other fuel sources. Alliant Energy manages the gas supply to these gas-fired EGUs and helps ensure an adequate supply is available at known prices through a combination of gas commodity, pipeline transportation and storage agreements held by IPL and WPL for numerous years. Alliant Energy, IPL and WPL believe they are reasonably insulated against gas price volatility for these EGUs given their use of forward contracts and hedging practices, as well as their regulatory cost-recovery mechanisms.
Coal - Coal is one of the fuel sources for owned EGUs. Coal contracts entered into with different entities help ensure that a specified supply of coal is available, and delivered, at known prices for IPL’s and WPL’s coal-fired EGUs. Alliant Energy, IPL and WPL believe their coal supply portfolio represents a reasonable balance between the risks of insufficient supplies and those associated with being unable to respond to future coal market changes. Remaining coal requirements are expected to be met from either future term contracts or purchases in the spot market. Currently, all of the coal utilized by IPL and WPL is from the Wyoming Powder River Basin.
Alliant Energy, IPL and WPL believe they are reasonably insulated against coal price volatility given their current coal procurement process, the specific coal market in their primary purchase region and regulatory cost-recovery mechanisms. The coal procurement process supports periodic purchases, staggering of contract terms, stair-stepped levels of supply going forward and supplier diversity. Similarly, given the term lengths of their transportation agreements and strategic alignment of agreement expirations for negotiation purposes, Alliant Energy, IPL and WPL believe they are reasonably insulated against future higher coal transportation rates from the major railroads.
Purchased Power - IPL and WPL periodically enter into PPAs and purchase electricity from wholesale energy markets to meet a portion of their customer demand for electricity. Refer to Note 17(b) for discussion of purchased power commitments.
Electric Transmission - IPL and WPL do not own electric transmission service assets and currently receive transmission services from ITC and ATC, respectively. ITC and ATC are independent, for-profit, transmission-only companies and are transmission-owning members of the MISO Regional Transmission Organization, Midwest Reliability Organization and Reliability First Corporation Regional Entities. The annual transmission service rates that ITC or ATC charges their customers are calculated each calendar year using a FERC-approved cost of service formula rate. As a result, ITC and ATC can implement new rates each calendar year without filing a request with FERC. However, new rates are subject to challenge by either FERC or customers. If the rates proposed by ITC or ATC are determined by FERC to be unjust or unreasonable, or another mechanism is determined by FERC to be just and reasonable, ITC’s or ATC’s rates would change accordingly. Refer to Note 1(g) for discussion of a transmission cost rider utilized by IPL for recovery of its electric transmission service expense, and discussion of WPL’s escrow for recovery of electric transmission service expense, which is recovered from its retail electric customers through changes in base rates determined during periodic rate proceedings. Refer to Note 17(h)17(g) for discussion of MISO transmission ownera court decision, which is currently expected to reduce the base return on equity complaints.authorized for MISO transmission owners, including ATC.
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MISO Markets - IPL and WPL are members of MISO, a FERC-approved Regional Transmission Organization, which is responsible for monitoring and ensuring equal access to the transmission system in their footprint. IPL and WPL participate in the wholesale energy and ancillary services markets operated by MISO, which are discussed in more detail below. As agent for IPL and WPL, Corporate Services enters into energy, capacity, ancillary services, and transmission sale and purchase transactions within MISO. Corporate Services assigns such sales and purchases between IPL and WPL based on statements received from MISO.
Wholesale Energy Market - IPL and WPL sell and purchase power in the day-ahead and real-time wholesale energy markets operated by MISO. MISO’s bid/offer-based markets compare the cost of IPL and WPL generation against other generators, which affects IPL and WPL generation operations, energy purchases and energy sales. MISO generally dispatches the lowest cost generators, while recognizing current system constraints, to reduce costs for purchasers in the wholesale energy market. In addition, MISO may dispatch generators that support reliability needs, but that would not have operated based on economic needs. In these cases, MISO’s settlement assures that these generators are made whole financially for their variable costs.
Ancillary Services Market - IPL and WPL also participate in MISO’s ancillary services market, which integrates the procurement and use of regulation and contingency reserves with the existing wholesale energy market to ensure reliability of electricity supply. MISO’s ancillary services market has had the overall impact of lowering ancillary services costs in the MISO footprint.
Financial Transmission Rights and Auction Revenue Rights - In areas of constrained transmission capacity, energy costs could be higher due to congestion and its impact on locational marginal prices. FTRs provide a hedge for certain congestion costs that occur in the MISO energy market. MISO allocates auction revenue rights to IPL and WPL annually based on a fiscal year from June 1 through May 31 and historical use of the transmission system. The allocated auction revenue rights are used by IPL and WPL to acquire FTRs through the FTR auctions operated by MISO.
Resource Adequacy - MISO has resource adequacy requirements to help ensure adequate resources to meet forecasted peak load obligations plus a reserve margin. Only accredited capacity assigned to EGUs is available to meet these requirements. In order for an EGU to receive accredited capacity, it must meet MISO capacity accreditation requirements, which can include satisfying transmission requirements identified in its interconnection agreement prior to the MISO planning year. Refer to “Customer Investments” in MDA for discussion of MISO’s new seasonal resource adequacy process establishing capacity planning reserve margin and capacity accreditation requirements effective with the 2023/2024 MISO Planning Year.
| Electric Operating Information - Alliant Energy | 2019 | 2018 | 2017 | ||||||||
| Revenues (in millions): | |||||||||||
| Residential | $1,092.4 | $1,063.4 | $1,006.2 | ||||||||
| Commercial | 769.7 | 735.6 | 710.3 | ||||||||
| Industrial | 889.1 | 888.8 | 853.1 | ||||||||
| Retail subtotal | 2,751.2 | 2,687.8 | 2,569.6 | ||||||||
| Sales for resale | 250.2 | 259.2 | 268.8 | ||||||||
| Other | 62.2 | 53.3 | 56.3 | ||||||||
| Total | $3,063.6 | $3,000.3 | $2,894.7 | ||||||||
| Sales (000s MWh): | |||||||||||
| Residential | 7,207 | 7,367 | 6,904 | ||||||||
| Commercial | 6,466 | 6,487 | 6,422 | ||||||||
| Industrial | 11,448 | 11,830 | 11,769 | ||||||||
| Retail subtotal | 25,121 | 25,684 | 25,095 | ||||||||
| Sales for resale | 6,594 | 5,804 | 5,003 | ||||||||
| Other | 79 | 96 | 94 | ||||||||
| Total | 31,794 | 31,584 | 30,192 | ||||||||
| Customers (End of Period): | |||||||||||
| Retail | 968,485 | 962,654 | 959,295 | ||||||||
| Other | 2,816 | 2,860 | 2,826 | ||||||||
| Total | 971,301 | 965,514 | 962,121 | ||||||||
| Other Selected Electric Data: | |||||||||||
| Maximum summer peak hour demand (MW) | 5,626 | 5,459 | 5,375 | ||||||||
| Maximum winter peak hour demand (MW) | 4,395 | 4,556 | 4,504 | ||||||||
| Cooling degree days (a): | |||||||||||
| Cedar Rapids, Iowa (IPL) (normal - 790) | 805 | 1,032 | 747 | ||||||||
| Madison, Wisconsin (WPL) (normal - 679) | 657 | 799 | 578 | ||||||||
| Sources of electric energy (000s MWh): | |||||||||||
| Gas | 11,060 | 9,731 | 5,315 | ||||||||
| Purchased power: | |||||||||||
| Nuclear | 3,748 | 3,538 | 3,727 | ||||||||
| Wind (b) | 2,383 | 1,086 | 1,268 | ||||||||
| Other (b) | 3,264 | 4,076 | 6,242 | ||||||||
| Wind (b) | 2,896 | 1,603 | 1,591 | ||||||||
| Coal | 8,643 | 12,113 | 12,380 | ||||||||
| Other (b) | 239 | 240 | 239 | ||||||||
| Total | 32,233 | 32,387 | 30,762 | ||||||||
| Revenue per KWh sold to retail customers (cents) | 10.95 | 10.46 | 10.24 | ||||||||
| Electric Operating Information - Alliant Energy | 2022 | 2021 | 2020 | ||||||||||||||
| Revenues (in millions): | |||||||||||||||||
| Residential | $1,233 | $1,115 | $1,093 | ||||||||||||||
| Commercial | 821 | 763 | 718 | ||||||||||||||
| Industrial | 965 | 893 | 841 | ||||||||||||||
| Retail subtotal | 3,019 | 2,771 | 2,652 | ||||||||||||||
| Sales for resale: | |||||||||||||||||
| Wholesale | 233 | 187 | 168 | ||||||||||||||
| Bulk power and other | 111 | 56 | 36 | ||||||||||||||
| Other | 58 | 67 | 64 | ||||||||||||||
| Total | $3,421 | $3,081 | $2,920 | ||||||||||||||
| Sales (000s MWh): | |||||||||||||||||
| Residential | 7,479 | 7,353 | 7,294 | ||||||||||||||
| Commercial | 6,436 | 6,383 | 6,107 | ||||||||||||||
| Industrial | 11,494 | 11,696 | 11,134 | ||||||||||||||
| Retail subtotal | 25,409 | 25,432 | 24,535 | ||||||||||||||
| Sales for resale: | |||||||||||||||||
| Wholesale | 2,866 | 2,787 | 2,525 | ||||||||||||||
| Bulk power and other | 3,734 | 3,018 | 3,521 | ||||||||||||||
| Other | 62 | 71 | 71 | ||||||||||||||
| Total | 32,071 | 31,308 | 30,652 | ||||||||||||||
| Customers (End of Period): | |||||||||||||||||
| Retail | 989,369 | 981,570 | 974,144 | ||||||||||||||
| Other | 2,903 | 2,878 | 2,841 | ||||||||||||||
| Total | 992,272 | 984,448 | 976,985 | ||||||||||||||
| Other Selected Electric Data: | |||||||||||||||||
| Maximum summer peak hour demand (MW) | 5,629 | 5,486 | 5,496 | ||||||||||||||
| Maximum winter peak hour demand (MW) | 4,415 | 4,413 | 4,158 | ||||||||||||||
| Cooling degree days (a): | |||||||||||||||||
| Cedar Rapids, Iowa (IPL) (normal - 807) | 908 | 974 | 800 | ||||||||||||||
| Madison, Wisconsin (WPL) (normal - 695) | 787 | 845 | 736 | ||||||||||||||
| Sources of electric energy (000s MWh): | |||||||||||||||||
| Gas | 11,438 | 10,055 | 10,440 | ||||||||||||||
| Purchased power: | |||||||||||||||||
| Wind (b) | 4,422 | 3,529 | 3,683 | ||||||||||||||
| Nuclear | — | — | 2,347 | ||||||||||||||
| Other (b) | 2,803 | 2,642 | 2,521 | ||||||||||||||
| Wind (b) | 6,424 | 5,231 | 4,872 | ||||||||||||||
| Coal | 7,416 | 10,218 | 7,021 | ||||||||||||||
| Other (b) | 239 | 226 | 254 | ||||||||||||||
| Total | 32,742 | 31,901 | 31,138 | ||||||||||||||
| Revenue per KWh sold to retail customers (cents) | 11.88 | 10.90 | 10.81 | ||||||||||||||
(a)Cooling degree days are calculated using a simple average of the high and low temperatures each day compared to a 65 degree base. Normal degree days are calculated using a rolling 20-year average of historical cooling degree days. Refer to “Gas Operating Information” below for details of heating degree days.
(b)All or some of the renewable energy attributes associated with generation from these sources may be used in future years to comply with renewable energy standards or other regulatory requirements.
| Electric Operating Information | IPL | WPL | |||||||||||||||||||||
| 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
| Revenues (in millions): | |||||||||||||||||||||||
| Residential | $601.5 | $590.6 | $535.6 | $490.9 | $472.8 | $470.6 | |||||||||||||||||
| Commercial | 510.3 | 486.8 | 452.7 | 259.4 | 248.8 | 257.6 | |||||||||||||||||
| Industrial | 503.9 | 500.8 | 459.7 | 385.2 | 388.0 | 393.4 | |||||||||||||||||
| Retail subtotal | 1,615.7 | 1,578.2 | 1,448.0 | 1,135.5 | 1,109.6 | 1,121.6 | |||||||||||||||||
| Sales for resale | 128.0 | 117.3 | 114.6 | 122.2 | 141.9 | 154.2 | |||||||||||||||||
| Other | 37.5 | 35.6 | 36.3 | 24.7 | 17.7 | 20.0 | |||||||||||||||||
| Total | $1,781.2 | $1,731.1 | $1,598.9 | $1,282.4 | $1,269.2 | $1,295.8 | |||||||||||||||||
| Sales (000s MWh): | |||||||||||||||||||||||
| Residential | 3,613 | 3,752 | 3,508 | 3,594 | 3,615 | 3,396 | |||||||||||||||||
| Commercial | 4,109 | 4,169 | 4,115 | 2,357 | 2,318 | 2,307 | |||||||||||||||||
| Industrial | 6,420 | 6,749 | 6,733 | 5,028 | 5,081 | 5,036 | |||||||||||||||||
| Retail subtotal | 14,142 | 14,670 | 14,356 | 10,979 | 11,014 | 10,739 | |||||||||||||||||
| Sales for resale | 4,479 | 2,980 | 2,169 | 2,115 | 2,824 | 2,834 | |||||||||||||||||
| Other | 36 | 37 | 38 | 43 | 59 | 56 | |||||||||||||||||
| Total | 18,657 | 17,687 | 16,563 | 13,137 | 13,897 | 13,629 | |||||||||||||||||
| Customers (End of Period): | |||||||||||||||||||||||
| Retail | 492,830 | 489,831 | 489,717 | 475,655 | 472,823 | 469,578 | |||||||||||||||||
| Other | 855 | 900 | 878 | 1,961 | 1,960 | 1,948 | |||||||||||||||||
| Total | 493,685 | 490,731 | 490,595 | 477,616 | 474,783 | 471,526 | |||||||||||||||||
| Other Selected Electric Data: | |||||||||||||||||||||||
| Maximum summer peak hour demand (MW) | 2,944 | 2,929 | 2,968 | 2,682 | 2,647 | 2,476 | |||||||||||||||||
| Maximum winter peak hour demand (MW) | 2,377 | 2,553 | 2,421 | 2,031 | 2,011 | 2,100 | |||||||||||||||||
| Cooling degree days (a): | |||||||||||||||||||||||
| Cedar Rapids, Iowa (IPL) (normal - 790) | 805 | 1,032 | 747 | N/A | N/A | N/A | |||||||||||||||||
| Madison, Wisconsin (WPL) (normal - 679) | N/A | N/A | N/A | 657 | 799 | 578 | |||||||||||||||||
| Sources of electric energy (000s MWh): | |||||||||||||||||||||||
| Gas | 6,362 | 5,930 | 3,342 | 4,698 | 3,801 | 1,973 | |||||||||||||||||
| Purchased power: | |||||||||||||||||||||||
| Nuclear | 3,748 | 3,538 | 3,727 | N/A | N/A | N/A | |||||||||||||||||
| Wind (b) | 1,788 | 549 | 613 | 595 | 537 | 655 | |||||||||||||||||
| Other (b) | 326 | 1,472 | 2,456 | 2,938 | 2,604 | 3,786 | |||||||||||||||||
| Wind (b) | 2,067 | 890 | 851 | 829 | 713 | 740 | |||||||||||||||||
| Coal | 4,470 | 5,690 | 5,766 | 4,173 | 6,423 | 6,614 | |||||||||||||||||
| Other (b) | 11 | 40 | 22 | 228 | 200 | 217 | |||||||||||||||||
| Total | 18,772 | 18,109 | 16,777 | 13,461 | 14,278 | 13,985 | |||||||||||||||||
| Revenue per KWh sold to retail customers (cents) | 11.42 | 10.76 | 10.09 | 10.34 | 10.07 | 10.44 | |||||||||||||||||
| Electric Operating Information | IPL | WPL | |||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||
| Revenues (in millions): | |||||||||||||||||||||||||||||||||||
| Residential | $673 | $620 | $602 | $560 | $495 | $491 | |||||||||||||||||||||||||||||
| Commercial | 536 | 508 | 474 | 285 | 255 | 244 | |||||||||||||||||||||||||||||
| Industrial | 538 | 505 | 488 | 427 | 388 | 353 | |||||||||||||||||||||||||||||
| Retail subtotal | 1,747 | 1,633 | 1,564 | 1,272 | 1,138 | 1,088 | |||||||||||||||||||||||||||||
| Sales for resale: | |||||||||||||||||||||||||||||||||||
| Wholesale | 64 | 57 | 57 | 169 | 130 | 111 | |||||||||||||||||||||||||||||
| Bulk power and other | 13 | 17 | 31 | 98 | 39 | 5 | |||||||||||||||||||||||||||||
| Other | 35 | 45 | 43 | 23 | 22 | 21 | |||||||||||||||||||||||||||||
| Total | $1,859 | $1,752 | $1,695 | $1,562 | $1,329 | $1,225 | |||||||||||||||||||||||||||||
| Sales (000s MWh): | |||||||||||||||||||||||||||||||||||
| Residential | 3,793 | 3,680 | 3,623 | 3,686 | 3,673 | 3,671 | |||||||||||||||||||||||||||||
| Commercial | 4,049 | 4,022 | 3,835 | 2,387 | 2,361 | 2,272 | |||||||||||||||||||||||||||||
| Industrial | 6,428 | 6,581 | 6,372 | 5,066 | 5,115 | 4,762 | |||||||||||||||||||||||||||||
| Retail subtotal | 14,270 | 14,283 | 13,830 | 11,139 | 11,149 | 10,705 | |||||||||||||||||||||||||||||
| Sales for resale: | |||||||||||||||||||||||||||||||||||
| Wholesale | 771 | 738 | 723 | 2,095 | 2,049 | 1,802 | |||||||||||||||||||||||||||||
| Bulk power and other | 1,401 | 1,069 | 2,762 | 2,333 | 1,949 | 759 | |||||||||||||||||||||||||||||
| Other | 33 | 35 | 34 | 29 | 36 | 37 | |||||||||||||||||||||||||||||
| Total | 16,475 | 16,125 | 17,349 | 15,596 | 15,183 | 13,303 | |||||||||||||||||||||||||||||
| Customers (End of Period): | |||||||||||||||||||||||||||||||||||
| Retail | 498,515 | 496,435 | 494,258 | 490,854 | 485,135 | 479,886 | |||||||||||||||||||||||||||||
| Other | 867 | 858 | 856 | 2,036 | 2,020 | 1,985 | |||||||||||||||||||||||||||||
| Total | 499,382 | 497,293 | 495,114 | 492,890 | 487,155 | 481,871 | |||||||||||||||||||||||||||||
| Other Selected Electric Data: | |||||||||||||||||||||||||||||||||||
| Maximum summer peak hour demand (MW) | 2,895 | 2,892 | 2,951 | 2,800 | 2,680 | 2,609 | |||||||||||||||||||||||||||||
| Maximum winter peak hour demand (MW) | 2,449 | 2,433 | 2,311 | 2,046 | 2,028 | 1,873 | |||||||||||||||||||||||||||||
| Cooling degree days (a): | |||||||||||||||||||||||||||||||||||
| Cedar Rapids, Iowa (IPL) (normal - 807) | 908 | 974 | 800 | N/A | N/A | N/A | |||||||||||||||||||||||||||||
| Madison, Wisconsin (WPL) (normal - 695) | N/A | N/A | N/A | 787 | 845 | 736 | |||||||||||||||||||||||||||||
| Sources of electric energy (000s MWh): | |||||||||||||||||||||||||||||||||||
| Gas | 4,625 | 4,011 | 5,296 | 6,813 | 6,044 | 5,144 | |||||||||||||||||||||||||||||
| Purchased power: | |||||||||||||||||||||||||||||||||||
| Wind (b) | 2,985 | 2,285 | 2,359 | 1,437 | 1,244 | 1,324 | |||||||||||||||||||||||||||||
| Nuclear | — | — | 2,347 | N/A | N/A | N/A | |||||||||||||||||||||||||||||
| Other (b) | 835 | 1,166 | 391 | 1,968 | 1,476 | 2,130 | |||||||||||||||||||||||||||||
| Wind (b) | 4,991 | 4,088 | 3,843 | 1,433 | 1,143 | 1,029 | |||||||||||||||||||||||||||||
| Coal | 3,305 | 4,756 | 3,185 | 4,111 | 5,462 | 3,836 | |||||||||||||||||||||||||||||
| Other (b) | 13 | 12 | 12 | 226 | 214 | 242 | |||||||||||||||||||||||||||||
| Total | 16,754 | 16,318 | 17,433 | 15,988 | 15,583 | 13,705 | |||||||||||||||||||||||||||||
| Revenue per KWh sold to retail customers (cents) | 12.24 | 11.43 | 11.31 | 11.42 | 10.21 | 10.16 | |||||||||||||||||||||||||||||
(a)Cooling degree days are calculated using a simple average of the high and low temperatures each day compared to a 65 degree base. Normal degree days are calculated using a rolling 20-year average of historical cooling degree days. Refer to “Gas Operating Information” below for details of heating degree days.
(b)All or some of the renewable energy attributes associated with generation from these sources may be used in future years to comply with renewable energy standards or other regulatory requirements.
2) GAS UTILITY OPERATIONS
General - Gas utility operations represent the second largest operating segment for Alliant Energy, IPL and WPL. Alliant Energy’s gas utility operations are located in the Midwest with IPL providing gas service in Iowa and WPL providing gas service in Wisconsin. Refer to the “Gas Operating Information” tables for additional details regarding gas utility operations. Refer to Note 1(g) for information relating to utility natural gas cost recovery mechanisms and Note 17(b) for discussion of natural gas commitments.
Customers - IPL and WPL provide gas utility service to a diversified base of retail customers and industries, including research, education, hospitality, manufacturing and chemicals (including ethanol). In addition, IPL and WPL provide transportation service to commercial and industrial customers by moving customer-owned gas through Alliant Energy’s distribution systems to the customers’ meters.
Seasonality - Gas sales follow a seasonal pattern with an annual base-load of gas and a large heating peak occurring during the winter season. Natural gas obtained from producers, marketers and brokers, as well as gas in storage, is utilized to meet the peak heating season requirements. Storage contracts generally allow IPL and WPL to purchase gas in the summer and inject it into underground storage fields, and remove it from storage fields in the winter to deliver to customers.
Competition - Gas customers in Iowa and Wisconsin currently do not have the ability to choose their gas distributor, and IPL and WPL have obligations to serve all their gas customers. While the gas utility distribution function is expected to remain a regulated function, sales of the natural gas commodity and related services are subject to competition from third-parties who provide alternative fuel sources (e.g. propane). However, when natural gas service is available for a given area, customers in such area have generally selected natural gas over propane as a more cost competitive solution for their fuel needs. Refer to “Customer Investments” in MDA for discussion of plans to expand gas distribution systems.
Gas Supply - IPL and WPL maintain purchase agreements with numerous suppliers of natural gas from various gas producing regions of the U.S. and Canada. In providing gas commodity service to retail customers, Corporate Services administers a diversified portfolio of transportation and storage contracts on behalf of IPL and WPL. The tariffs for IPL’s and WPL’s retail gas customers provide for subsequent adjustments to their rates for the cost of gas sold to these customers. As a result, natural gas prices do not have a material impact on IPL’s or WPL’s gas margins.
Gas Demand Planning Reserve Margin - IPL and WPL are required to maintain adequate pipeline capacity to ensure they meet their customers’ maximum daily system demand requirements. IPL and WPL currently have planning reserve margins of 2% and 3%6%, respectively, above their forecasted maximum daily system demand requirements from November 20192022 through March 2020.2023.
| Gas Operating Information - Alliant Energy | 2022 | 2021 | 2020 | ||||||||||||||
| Revenues (in millions): | |||||||||||||||||
| Residential | $371 | $257 | $214 | ||||||||||||||
| Commercial | 197 | 139 | 107 | ||||||||||||||
| Industrial | 20 | 17 | 12 | ||||||||||||||
| Retail subtotal | 588 | 413 | 333 | ||||||||||||||
| Transportation/other | 54 | 43 | 40 | ||||||||||||||
| Total | $642 | $456 | $373 | ||||||||||||||
| Sales (000s Dths): | |||||||||||||||||
| Residential | 31,109 | 26,795 | 27,809 | ||||||||||||||
| Commercial | 21,097 | 18,516 | 17,996 | ||||||||||||||
| Industrial | 2,815 | 2,868 | 3,003 | ||||||||||||||
| Retail subtotal | 55,021 | 48,179 | 48,808 | ||||||||||||||
| Transportation/other | 104,812 | 99,179 | 102,790 | ||||||||||||||
| Total | 159,833 | 147,358 | 151,598 | ||||||||||||||
| Retail Customers (End of Period) | 426,153 | 422,864 | 419,994 | ||||||||||||||
| Other Selected Gas Data: | |||||||||||||||||
| Heating degree days (a): | |||||||||||||||||
| Cedar Rapids, Iowa (IPL) (normal - 6,697) | 7,222 | 6,539 | 6,625 | ||||||||||||||
| Madison, Wisconsin (WPL) (normal - 6,976) | 7,210 | 6,620 | 6,789 | ||||||||||||||
| Revenue per Dth sold to retail customers | $10.69 | $8.57 | $6.82 | ||||||||||||||
| Purchased gas costs per Dth sold to retail customers | $6.97 | $5.29 | $3.67 | ||||||||||||||
| Gas Operating Information - Alliant Energy | 2019 | 2018 | 2017 | ||||||||
| Revenues (in millions): | |||||||||||
| Residential | $259.4 | $254.4 | $224.7 | ||||||||
| Commercial | 133.0 | 133.0 | 123.2 | ||||||||
| Industrial | 16.0 | 14.9 | 16.7 | ||||||||
| Retail subtotal | 408.4 | 402.3 | 364.6 | ||||||||
| Transportation/other | 46.8 | 44.3 | 36.3 | ||||||||
| Total | $455.2 | $446.6 | $400.9 | ||||||||
| Sales (000s Dths): | |||||||||||
| Residential | 30,791 | 29,356 | 26,127 | ||||||||
| Commercial | 21,611 | 21,003 | 19,501 | ||||||||
| Industrial | 3,448 | 3,030 | 3,622 | ||||||||
| Retail subtotal | 55,850 | 53,389 | 49,250 | ||||||||
| Transportation/other | 97,135 | 90,357 | 76,916 | ||||||||
| Total | 152,985 | 143,746 | 126,166 | ||||||||
| Retail Customers at End of Period | 417,322 | 415,174 | 413,054 | ||||||||
| Other Selected Gas Data: | |||||||||||
| Heating degree days (a): | |||||||||||
| Cedar Rapids, Iowa (IPL) (normal - 6,609) | 7,262 | 6,868 | 6,076 | ||||||||
| Madison, Wisconsin (WPL) (normal - 6,892) | 7,397 | 7,303 | 6,569 | ||||||||
| Revenue per Dth sold to retail customers | $7.31 | $7.54 | $7.40 | ||||||||
| Purchased gas costs per Dth sold to retail customers | $3.89 | $4.27 | $4.23 | ||||||||
| Gas Operating Information | IPL | WPL | |||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||
| Revenues (in millions): | |||||||||||||||||||||||||||||||||||
| Residential | $202 | $146 | $116 | $169 | $111 | $98 | |||||||||||||||||||||||||||||
| Commercial | 101 | 79 | 59 | 96 | 60 | 48 | |||||||||||||||||||||||||||||
| Industrial | 14 | 12 | 8 | 6 | 5 | 4 | |||||||||||||||||||||||||||||
| Retail subtotal | 317 | 237 | 183 | 271 | 176 | 150 | |||||||||||||||||||||||||||||
| Transportation/other | 34 | 28 | 25 | 20 | 15 | 15 | |||||||||||||||||||||||||||||
| Total | $351 | $265 | $208 | $291 | $191 | $165 | |||||||||||||||||||||||||||||
| Sales (000s Dths): | |||||||||||||||||||||||||||||||||||
| Residential | 16,250 | 13,873 | 14,521 | 14,859 | 12,922 | 13,288 | |||||||||||||||||||||||||||||
| Commercial | 10,257 | 9,065 | 8,925 | 10,840 | 9,451 | 9,071 | |||||||||||||||||||||||||||||
| Industrial | 1,985 | 1,943 | 2,062 | 830 | 925 | 941 | |||||||||||||||||||||||||||||
| Retail subtotal | 28,492 | 24,881 | 25,508 | 26,529 | 23,298 | 23,300 | |||||||||||||||||||||||||||||
| Transportation/other | 43,264 | 40,738 | 39,543 | 61,548 | 58,441 | 63,247 | |||||||||||||||||||||||||||||
| Total | 71,756 | 65,619 | 65,051 | 88,077 | 81,739 | 86,547 | |||||||||||||||||||||||||||||
| Retail Customers (End of Period) | 226,284 | 225,517 | 224,927 | 199,869 | 197,347 | 195,067 | |||||||||||||||||||||||||||||
| Other Selected Gas Data: | |||||||||||||||||||||||||||||||||||
| Maximum daily winter peak demand (Dth) | 259,474 | 269,335 | 253,439 | 201,980 | 221,256 | 189,439 | |||||||||||||||||||||||||||||
| Heating degree days (a): | |||||||||||||||||||||||||||||||||||
| Cedar Rapids, Iowa (IPL) (normal - 6,697) | 7,222 | 6,539 | 6,625 | N/A | N/A | N/A | |||||||||||||||||||||||||||||
| Madison, Wisconsin (WPL) (normal - 6,976) | N/A | N/A | N/A | 7,210 | 6,620 | 6,789 | |||||||||||||||||||||||||||||
| Revenue per Dth sold to retail customers | $11.13 | $9.53 | $7.17 | $10.22 | $7.55 | $6.44 | |||||||||||||||||||||||||||||
| Purchased gas cost per Dth sold to retail customers | $7.17 | $5.96 | $3.87 | $6.77 | $4.58 | $3.45 | |||||||||||||||||||||||||||||
(a)Heating degree days are calculated using a simple average of the high and low temperatures each day compared to a 65 degree base. Normal degree days are calculated using a rolling 20-year average of historical heating degree days.
| Gas Operating Information | IPL | WPL | |||||||||||||||||||||
| 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
| Revenues (in millions): | |||||||||||||||||||||||
| Residential | $149.3 | $152.3 | $123.2 | $110.1 | $102.1 | $101.5 | |||||||||||||||||
| Commercial | 74.9 | 75.9 | 67.9 | 58.1 | 57.1 | 55.3 | |||||||||||||||||
| Industrial | 11.7 | 10.2 | 11.1 | 4.3 | 4.7 | 5.6 | |||||||||||||||||
| Retail subtotal | 235.9 | 238.4 | 202.2 | 172.5 | 163.9 | 162.4 | |||||||||||||||||
| Transportation/other | 28.3 | 27.8 | 23.8 | 18.5 | 16.5 | 12.5 | |||||||||||||||||
| Total | $264.2 | $266.2 | $226.0 | $191.0 | $180.4 | $174.9 | |||||||||||||||||
| Sales (000s Dths): | |||||||||||||||||||||||
| Residential | 16,078 | 15,925 | 13,856 | 14,713 | 13,431 | 12,271 | |||||||||||||||||
| Commercial | 10,906 | 10,707 | 10,303 | 10,705 | 10,296 | 9,198 | |||||||||||||||||
| Industrial | 2,514 | 2,019 | 2,421 | 934 | 1,011 | 1,201 | |||||||||||||||||
| Retail subtotal | 29,498 | 28,651 | 26,580 | 26,352 | 24,738 | 22,670 | |||||||||||||||||
| Transportation/other | 38,323 | 37,899 | 39,365 | 58,812 | 52,458 | 37,551 | |||||||||||||||||
| Total | 67,821 | 66,550 | 65,945 | 85,164 | 77,196 | 60,221 | |||||||||||||||||
| Retail Customers at End of Period | 224,613 | 224,413 | 224,041 | 192,709 | 190,761 | 189,013 | |||||||||||||||||
| Other Selected Gas Data: | |||||||||||||||||||||||
| Maximum daily winter peak demand (Dth) | 303,508 | 264,787 | 237,203 | 229,022 | 220,784 | 201,947 | |||||||||||||||||
| Heating degree days (a): | |||||||||||||||||||||||
| Cedar Rapids, Iowa (IPL) (normal - 6,609) | 7,262 | 6,868 | 6,076 | N/A | N/A | N/A | |||||||||||||||||
| Madison, Wisconsin (WPL) (normal - 6,892) | N/A | N/A | N/A | 7,397 | 7,303 | 6,569 | |||||||||||||||||
| Revenue per Dth sold to retail customers | $8.00 | $8.32 | $7.61 | $6.55 | $6.63 | $7.16 | |||||||||||||||||
| Purchased gas cost per Dth sold to retail customers | $4.06 | $4.51 | $4.34 | $3.70 | $3.99 | $4.11 | |||||||||||||||||
3) OTHER UTILITY OPERATIONS - STEAM - IPL’s Prairie Creek facility is the primary source of steam for IPL’s two high-pressure steam customers in Iowa. These customers are each under contract through 2025 for taking minimum quantities of annual steam usage, with certain conditions.
ITEM 1A. RISK FACTORS
You should carefully consider each of the risks described below relating to Alliant Energy, IPL and WPL, together with all of the other information contained in this combined report, before making an investment decision with respect to our securities. If any of the following risks develop into actual events, our business, financial condition or results of operations could be materially and adversely affected, and you may lose all or part of your investment.
Risks Related to Business Operations
A cyber attack may disrupt our operations or lead to a loss or misuse of confidential and proprietary information or potential liability - We operate in an industry that requires the continuous use and operation of sophisticated information technology systems and network infrastructure. We face threats from use of malicious code (such as malware, viruses and ransomware), employee theft or misuse, advanced persistent threats, vulnerabilities such as the log4j vulnerability, fraud attempts, and phishing attacks. More of our workforce is working remotely, which increases the number of devices connected to the internet that impact our operations and increases our cyber security risk. Incidents of ransomware attacks have been increasing in frequency and magnitude, including the ransomware attack that resulted in the operator of the Colonial Pipeline paying millions of dollars in ransom to hackers as a result of a cyber attack disabling the pipeline for several days in 2021. Cyber attacks targeting electronic control systems used at our generating facilities and for electric and gas distribution systems could result in a full or partial disruption of our electric and/or gas operations. We have relied on a global supply chain for certain components of our operating and technology systems, which may increase our exposure to cyber attacks. Any disruption of these operations could result in a loss of service to customers and a significant decrease in revenues, as well as significant expense to repair system damage and remedy security breaches. Due to the evolving nature of cyber attacks and cyber security, our current safeguards to protect our operating systems and information technology assets may not always be effective. We rely on third parties for software to protect against cyber attacks and we are at risk if such third parties are targets of cyber attacks. If the technology systems were to fail or be breached by a cyber attack or a computer virus, and not be recovered in a timely fashion, we may be unable to fulfill critical business functions and confidential data could be compromised, adversely impacting our financial condition and results of operation.
In addition, we may collect and retain sensitive information, including personal information about our customers, shareowners and employees. In some cases, we outsource administration of certain functions to vendors that could be targets of cyber
| 15 | ||||||||
attacks. For example, we outsource administration of our employee health insurance to Anthem, which was the target of a cyber attack in 2014. Any theft, loss and/or fraudulent use of customer, shareowner, employee or proprietary data as a result of a cyber attack could subject us to significant litigation, liability and costs, as well as adversely impact our reputation with customers and regulators, among others.
Demand for energy may decrease - Our results of operations are affected by the demand for energy in our service territories. Energy demand may decrease due to many things, including proliferation of customer and third party-owned generation, technological advances that reduce the costs of renewable energy and storage solutions for our customers, government policies, such as the Inflation Reduction Act of 2022, which incentivize customer and third party-owned generation, loss of service territory or franchises, energy efficiency measures, technological advances that improve energy efficiency, third-party disrupters, loss of wholesale customers, the adverse impact of tariffs on our customers, and economic conditions. The loss of sales due to lower demand for energy may increase our rates for remaining customers, as our rates must cover our fixed costs. Increased customer rates may cause decreased demand for energy as customers move to customer and third party-owned generation and implement energy efficiency measures to reduce costs. The loss of customers, the inability to replace those customers with new customers, and the decrease in demand for energy could negatively impact our financial condition and results of operations.
Our strategy includes large construction projects, which are subject to risks - Our strategy includes constructing renewable generating facilities and large-scale additions and upgrades to our electric and gas distribution systems. These construction projects are subject to various risks. These risks include: the inability to obtain necessary regulatory approvals and permits in a timely manner; adverse interpretation or enforcement of permit conditions; changes in applicable laws or regulations; changes in costs of materials, equipment, commodities, fuel or labor including due to inflation, tariffs, labor issues, or supply shortages; delays caused by construction accidents or injuries; shortages in materials, equipment, or qualified labor; changes to the scope or timing of the projects; general contractors, subcontractors, or equipment not performing as required under their contracts; the inability to agree to contract terms or disputes in contract terms; the inability to successfully resolve warranty claims; poor initial cost estimates; work stoppages; adverse weather conditions; government actions; legal action; unforeseen engineering or technology issues; limited access to capital or other financing arrangements; and other adverse economic conditions. We may not be able to recover all costs for the projects in rates and face increased risk of potential impairment of our project investment if a construction project is not completed or is delayed, or final costs exceed expectations or the costs approved by our regulators. We may not be able to meet capacity requirements to comply with electric demand planning reserve margins if a construction project is not completed or is delayed. Inability to recover costs, or inability to complete projects in a timely manner, could adversely impact our financial condition and results of operations.
Supply chain disruptions could negatively impact our operations and implementation of our strategy - Our operations and strategy depend on the global supply chain to procure the equipment, materials and other resources necessary to provide services in a safe and reliable manner and construct new utility infrastructure. The global supply chain has experienced, and is expected to continue to experience, disruptions due to a multitude of factors, such as geopolitical issues, supplier manufacturing constraints, labor issues, transportation issues, resource availability, long lead times, tariffs, tighter credit markets, inflation, the COVID-19 pandemic and weather. These disruptions have impacted, and are expected to continue to impact, our ability to receive critical materials, supplies and services in a timely and economic manner. This could have an adverse impact by increasing costs and delaying the construction, maintenance or repair of items that are needed to support normal operations or are necessary to our construction projects to implement our strategy. Inability to recover higher costs, or inability to complete projects in a timely manner, could adversely impact our financial condition and results of operations.
Our utility business is seasonal and may be adversely affected by the impacts of weather - Electric and gas utility businesses are seasonal businesses. Demand for electricity is greater in the summer months associated with higher air conditioning needs and winter months associated with higher heating needs. Demand for natural gas depends significantly upon temperature patterns in winter months due to heavy use in residential and commercial heating. As a result, our overall operating results in the future may fluctuate substantially on a seasonal basis. In addition, we have historically generated less revenues and income when temperatures are warmer in the winter and/or cooler in the summer. Thus, mild winters and/or summers could have an adverse impact on our financial condition and results of operations.
We face risks associated with operating electric and natural gas infrastructure - The operation of electric generation and distribution infrastructure involves many risks, including start-up risks, breakdown or failure of equipment, fires developing from our power lines, transformers or substations, dam failure at one of our hydroelectric facilities, the dependence on a specific fuel source, including the supply and transportation of fuel, the risk of performance below expected or contracted levels of output or efficiency, public and employee safety, operator error and ruptured oil and chemical tanks. The operation of our natural gas distribution and transportation infrastructure also involves many risks, such as leaks, explosions, mechanical problems, members of the public and contractors coming into contact with our infrastructure, and employee and public safety. In addition, the North American electric transmission grid is highly interconnected and, in extraordinary circumstances, disruptions at particular points within the grid could cause an extensive power outage in our service territories. Increased utilization of customer- and third party-owned generation technologies could also disrupt the reliability and balance of the electricity grid. Further, the electric transmission system in our utilities’ service territories can experience constraints, limiting the ability to transmit electricity within our service territories. The transmission constraints could result in an inability to deliver
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electricity from generating facilities, particularly wind generating facilities, to the national grid, or to access lower cost sources of electricity.
These risks could cause significant harm to employees, customers and the public, including loss of human life, significant damage to property, adverse impacts on the environment and impairment of our operations, all of which could result in substantial financial losses to us. We are also responsible for compliance with new and changing regulatory standards involving safety, reliability and environmental compliance, including regulations under the Pipeline and Hazardous Materials Safety Administration, the Occupational Health and Safety Administration, the North American Electric Reliability Corporation and Transportation Security Administration. Failure to meet these regulatory standards could result in substantial fines. Lastly, we have obligations to provide electric and natural gas service to customers under regulatory requirements and contractual commitments. Failure to meet our service obligations could adversely impact our financial condition and results of operations.
Storms or other natural disasters may impact our operations in unpredictable ways - Storms and other natural disasters, including events such as floods, tornadoes, windstorms like the 2020 derecho in Iowa, blizzards, ice storms, extreme hot temperatures, extreme cold temperatures, fires, solar flares or pandemics may adversely impact our ability to generate, purchase or distribute electric energy and gas or obtain fuel or other critical supplies. In addition, we could incur large costs to repair damage to our generating facilities and electric and gas infrastructure, or costs related to environmental remediation, due to storms or other natural disasters. The restoration costs may not be fully covered by insurance policies and may not be fully recovered in rates, or recovery in rates may be delayed. Storms and natural disasters may impact our customers and the resulting reduced demand for energy could cause lower sales and revenues, which may not be replaced or recovered in rates, or rate recovery may be delayed. Any of these items could adversely impact our financial condition and results of operations.
Threats of terrorism and catastrophic events that could result from terrorism may impact our operations in unpredictable ways - We are subject to direct and indirect effects of terrorist threats and activities. Generation, transmission and distribution facilities, in general, have been identified as potential targets of physical or cyber attacks. Physical attacks on transmission and distribution facilities that appeared to be terrorist-style attacks have occurred. Our gas distribution system could also be the target of terrorist threats and activities. The risks posed by such attacks could include, among other things, the inability to generate, purchase or distribute electric energy or obtain fuel sources, the increased cost of security and insurance, the disruption of, volatility in, or other effects on capital markets, and a decline in the economy and/or energy usage within our service territories, all of which could adversely impact our financial condition and results of operations. In addition, the cost of repairing damage to our facilities and infrastructure caused by acts of terrorism, and the loss of revenue if such events prevent us from providing utility service to our customers, could adversely impact our financial condition and results of operations.
We may not be able to fully recover costs related to commodity prices - We have natural gas and coal supply and transportation contracts in place for some of the natural gas and coal we require to generate electricity. We also have transportation and supply agreements in place to facilitate delivery of natural gas to our customers. Our counterparties to these contracts may not fulfill their obligations to provide natural gas or coal to us due to financial or operational problems caused by natural disasters, severe weather, economic conditions, labor shortages, employee strikes, transportation issues, pandemics, physical attacks or cyber attacks. If we were unable to obtain enough natural gas or coal for our electric generating facilities under our existing contracts, or to obtain electricity under existing or future purchased power agreements, we could be required to purchase natural gas or coal at higher prices, forced to purchase electricity from higher-cost generating resources in the Midcontinent Independent System Operator, Inc. (MISO) energy market and/or required to purchase replacement capacity to comply with electric demand planning reserve margins. We may be obligated to pay for coal deliveries under our contracts even if our coal-fired generating facilities do not operate enough to fully utilize the amounts of coal covered by the contracts. If, for natural gas delivery to our customers, we were unable to obtain our natural gas supply requirements under existing or future natural gas supply and transportation contracts, we could be required to purchase natural gas at higher prices from other sources. Natural gas market prices have been volatile in the past and could be volatile in the future due to additional future regulations, increased demand including due to increased liquified natural gas demand from foreign countries, limited global suppliers of natural gas, periods of extremely cold temperatures or disruption in supply caused by major storms or pipeline explosions. We may not be able to pass on all of the changes in costs to our customers, especially at WPL where we do not have an automatic retail electric fuel cost adjustment clause to timely recover such costs and where electric fuel cost recovery may be limited if WPL earns in excess of its authorized return on common equity. Increases in prices and costs due to disruptions that are not recovered in rates fully, in a timely manner, may adversely impact our financial condition and results of operations.
Energy industry changes could have a negative effect on our businesses - We operate in a highly regulated business environment. The advent of new and unregulated markets has the potential to significantly impact our financial condition and results of operations. Further, competitors may not be subject to the same operating, regulatory and financial requirements that we are, potentially causing a substantial competitive disadvantage for us. Changes in public policy, such as new tax incentives that we cannot take advantage of or efforts to deregulate the utility industry, could provide an advantage to competitors. Changes in technology could also alter the channels through which electric customers produce, store, buy or utilize power, which could reduce the revenues or increase the expenses of our utility companies. Increased competition in our primary retail electric service territories may have an adverse impact on our financial condition and results of operations.
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We face risks related to non-utility operations - We rely on our non-utility operations for a portion of our earnings. If our non-utility holdings do not perform at expected levels, we could experience an adverse impact on our financial condition and results of operations.
Risks Related to Laws and Regulations
Our utility business is significantly impacted by government legislation, regulation and oversight - Our utility financial condition is influenced by how regulatory authorities, including the IUB, the PSCW and FERC, establish the rates we can charge our customers, our authorized rates of return and common equity levels, and the costs that may be recovered from customers. Our ability to timely obtain rate adjustments to earn authorized rates of return depends upon timely regulatory action under applicable statutes and regulations, and cannot be guaranteed. In future rate reviews, IPL and WPL may not receive an adequate amount of rate relief to recover all costs and earn their authorized rates of return, rates may be reduced, rate refunds may be required, rate adjustments may not be approved on a timely basis, costs may not be otherwise recovered through rates, future rates may be temporarily frozen, certain rate base items may not receive a full weighted average cost of capital, and authorized rates of return on capital may be reduced. As a result, we may experience adverse impacts on our financial condition and results of operations.
In addition, our operations are subject to extensive regulation primarily by the IUB, the PSCW and FERC. We are also subject to oversight and monitoring by organizations such as the North American Electric Reliability Corporation, the Midwest Reliability Organization, the Pipeline and Hazardous Materials Safety Administration, MISO and the Midcontinent Independent System Operator, Inc. (MISO).Transportation Security Administration. The impacts on our operations include: our ability to site and construct new generating facilities, such as renewable energy projects, and recover associated costs, including our ability to continue to use a renewable energy rider in Iowa; our ability to decommission generating facilities and recover related costs and the remaining carrying value of these facilities;facilities and related assets; changes to MISO’s resource adequacy process establishing seasonal capacity planning reserve margin and capacity accreditation requirements that may impact how and when new generating facilities such as IPL’s and WPL’s additional solar generation may be accredited with energy capacity, and may require IPL and WPL to adjust their current resource plans, to add resources to meet the requirements of MISO’s new process, or procure capacity in the market whereby such costs might not be recovered in rates; the impact of the lack of availability of existing and new generating facilities has on our accredited capacity for such facilities pursuant to MISO’s new seasonal resource adequacy process; the rates paid to transmission operators and how those costs are recovered from customers, including our ability to continue to use a transmission rider in Iowa; our ability to site, construct and recover costs for new natural gas pipelines; our ability to recover costs to
upgrade our electric and gas distribution systems; the amount of certain sources of energy we must use, such as renewable sources; our ability to purchase generating facilities and recover the costs associated therewith; our ability to sell utility assets and any conditions placed upon the sale of such assets; our ability to enter into purchased power agreements and recover the costs associated therewith; resource adequacy requirements, energy capacity standards, and when new facilities such as WPL’s West Riverside Energy Center, and IPL’s and WPL’s planned additional wind and solar generation may be fully accredited with energy capacity; the allocation of expenditures by transmission companies on transmission network upgrades and our ability to recover costs associated therewith; reliability; safety; the issuance of securities;securities and ability to use other financing arrangements for our renewable energy projects; accounting matters; and transactions between affiliates. These regulatory authorities and organizations are also empowered to impose financial penalties and other sanctions, including requirements to implement new compliance programs. Failure to obtain approvals for any of these matters in a timely manner, or receipt of approvals with uneconomical conditions, may cause us not to pursue the construction of such projects or to record an impairment of our assets and may have a material adverse impact on our financial condition and results of operations. Our regulators or legislatures could change regulations or laws to permit third parties to provide renewable energy directly to our customers without being treated as a utility, potentially causing a competitive disadvantage for us. Changes to these regulations could materially increase our costs or cause us to reconsider our strategy, which could have a material adverse impact on our financial condition and results of operations.
Provisions of the Wisconsin Utility Holding Company Act may limit our ability to invest in or grow our non-utility activities and may deter potential purchasers who might be willing to pay a premium for our stock.
Changes to certain tax elections, tax regulations and future taxable income could negatively impact our financial condition and results of operations - We have significantly reduced our federal and state income tax obligations through tax planning strategies and the extensionutilization of bonus depreciation deductions for certain expenditures for property. These tax planning strategies and extensions of bonus depreciation deductions have generated large taxable losses and tax credits that have resulted in significant federal and state net operating losses and tax credit carryforwards. We plan to utilize substantially all of these net operating losses and tax credit carryforwards in the future to reduce our income tax obligations. If we cannot generate enough taxable income in the future to utilize all of the net operating losses and tax credit carryforwards before they expire due to lower than expected financial performance or changes to tax regulations, we may incur material charges to earnings. The Inflation Reduction Act of 2022 allows for the sale or transfer of renewable tax credits to other taxpayers. We plan to sell a substantial amount of our eligible renewable tax credits in future years. This is a new market that will require regulations and guidance from taxing authorities. It is unclear what terms and pricing the sale of renewable tax credits will require. If we are unable to sell renewable tax credits at reasonable terms, that could materially impact our tax credit carryforward position. In addition, our tax liability is determined by our taxable income multiplied by the current tax rates in effect. If the IRS does not agree with the tax positions resulting from our tax planning strategies or our position on the qualification of production tax credits from wind generating facilities and investment tax credits from solar generating facilities,rates are increased, we may experience adverse impacts to our financial condition and results of operations may be adversely impacted.operations.
Our utility business currently operates wind and solar generating facilities, which generate production tax credits for us to use to reduce our federal tax obligations. The amount of production tax credits we earn is dependent on the date the qualifying generating facilities are placed in-service,in service, the level of electricity output generated by our qualifying generating facilities and
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sold to an unrelated buyer, and the applicable tax credit rate. If there is a disagreement on the in-service date, the amount of production tax credits that we can generate may be significantly reduced. A variety of operating and economic parameters, including transmission constraints, the imbalance of supply and demand of wind energy resulting in unfavorable pricing for wind or solar energy, adverse weather conditions and breakdown or failure of equipment, could significantly reduce the production tax credits generated by our wind farmsor solar facilities resulting in a material adverse impact on our financial condition and results of operations.
Our strategic plan includes developing solar generatingstorage facilities, which are expected to generate investment tax credits. Investment tax credits are dependent on the date the qualifying generating facilities begin and end construction and the costs of the qualifying generating facilities. If there is a disagreement on the dates construction began and ended or the qualifying costs, the amount of investment tax credits that we earnawarded may be significantly reduced, possibly adversely impacting our financial condition and results of operations.
The Inflation Reduction Act of 2022 introduced new labor requirements that are required to qualify for the full value of renewable tax credits. Failure to meet these requirements on future renewable projects could result in a significant reduction in the amount of renewable tax credits, which could adversely impact our financial condition and results of operations.
Our utility businesses are subject to numerous environmental laws and regulations - Our utilities are subject to numerous federal, regional, state and local environmental laws, regulations, court orders, and international treaties. These laws, regulations and court orders generally concern emissions into the air, discharges into water, use of water, wetlands preservation, remediation of contamination, waste disposal and containment, disposal of coal combustion residuals, hazardous waste disposal, threatened and endangered species, and noise regulation, among others. Failure to comply with such laws, regulations and court orders, or to obtain or comply with any necessary environmental permits pursuant to such laws and regulations, could result in injunctions, fines or other sanctions. Environmental laws and regulations affecting power generation and electric and gas distribution are complex and subject to continued uncertainty.uncertainty and could be changed by the current Presidential Administration. These laws and regulations have imposed, and proposed laws and regulations could impose in the future, additional costs on our utility operations. We have incurred, and will continue to incur, capital and other expenditures to comply with these and other environmental laws and regulations. Changes in or new development of environmental restrictions may force us to incur significant expenses or expenses that may exceed our estimates. There can be no assurance that we would be able to recover all or any increased environmental costs from our customers. Failure to comply with the laws, regulations and court orders, changes in the laws and regulations and failure to recover costs of compliance may adversely impact our financial condition and results of operations.
Actions related to global climate change and reducing greenhouse gasesgas (GHG) emissions could negatively impact us - Regulators, customers and investors continue to raise concerns about climate change and GHG emissions. National regulatory action is in flux and international regulatory actions continue to evolve. We are focused on executing a long-term strategy to deliver safe, reliable and affordable energy with lower carbon dioxide (CO2) emissions independent of changing policies and political landscape. However, it is unclear how these climate change concerns will ultimately impact us. We could incur costs or other obligations to comply with future GHG regulations, and could become the target of legal claims or challenges, because generating electricity using fossil fuels emits CO2 and other GHG.GHGs. Further, investors may determine that we are too reliant on fossil fuels, reducing demand for our stock, which may cause our stock price to decrease, or not buy our debt securities, which may cause our cost of debtcapital to increase. We could face additional pressures from customers, investors or other stakeholders to more rapidly reduce CO2 emissions on a voluntary-basis, including faster adoption of lower CO2 emitting technologies and management of excess renewable energy credits. The timing and pace to fully achieve decarbonization is also contingent on the future development of technologies to reliably store and manage electricity, as well as electrification of other economic sectors. The EPA’s approach and timing for implementing rules to regulate CO2 emissions at fossil-fuel fired electric generating units remains undecided and subject to litigation.litigation and could change in the current Presidential Administration. Various legislative and regulatory proposals to address climate change at the national, state and local levels continue to be introduced. Potential future requirements to reduce CO2, methane and other GHGs from the energy and manufacturing sectors could affect our operations in various ways. Regulation or legislation mandating CO2 emissions reductions or other clean energy standards affecting utility companies could materially increase costs, causing some electric generating units to be uneconomical to operate or maintain. We are vulnerable to potential risks associated with transition to a lower-carbon economy that may extend to our supply chain and natural gas operations. Regulation of oil and gas production could affect our upstream supply of natural gas for electricity generation and to provide directly to our residential and business customers from our local distribution company. This could result in rapid increased demand for alternative non-fossil energy sources and economy-wide electrification. Changes to regional and local climate trends such as the frequency, seasonality, and severity of weather conditions could directly and indirectly impact our company. Acute and chronic physical risks could disrupt our operations or affect our property. Furthermore, it could affect the timing of peak demand and overall energy consumption of our customers. We cannot provide any assurance regarding the potential impacts of climate change policy or related policies and regulations to reduce GHG regulationsemissions on our operations and these could have a material adverse impact on our financial condition and results of operations.
Risks Related to Business OperationsEconomic, Financial and Labor Market Conditions
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in the continuous usefuture in order to successfully implement our strategy. We have seen an increase in retirements due to our aging workforce and operationthe recent impact of sophisticated information technology systems and network infrastructure. We face threats from use of malicious code (such as malware, viruses and ransomware), employee theft or misuse, advanced persistent threats, and phishing attacks. Cyber attacks targeting electronic control systems used atrising interest rates on pension plan benefits. The labor market for our generating facilities and for electric and gas distribution systems could result in a full or partial disruption of our electric and/or gas operations. Any disruption of these operations could result in a loss of service to customers and a significant decrease in revenues, as well as significant expense to repair system damage and remedy security breaches. Due toemployees is very competitive, increasing the evolving nature of cyber attacks and cyber security, our current safeguards to protect our operating systems and information technology assets may not always be effective. If the technology systems were to fail or be breached by a cyber attack or a computer virus, and not be recovered in a timely fashion,likelihood that we may lose critical employees or have difficulty hiring qualified employees for critical roles. Critical employees are being hired at a higher cost. It may be unabledifficult to fulfillhire and retain such a skilled workforce due to labor market conditions, such as low unemployment rates in our service territories, the length of time employees need to acquire the skills, and general competition for talent. The competitive employment market also increases the amounts we pay our employees in critical business functions and confidential datapositions. We are also subject to collective bargaining agreements covering approximately 1,700 employees. Any work stoppage experienced in connection with negotiations of collective bargaining agreements could be compromised, adversely impactingaffect our financial condition and results of operation.
We are subject to limitations on our ability to pay dividends - Alliant Energy is a holding company with no significant operations of its own. The primary sources of funds for Alliant Energy to pay dividends to its shareowners are dividends and distributions from its subsidiaries, primarily its utility subsidiaries. Our subsidiaries are separate and distinct legal entities and have no obligation to pay any amounts to Alliant Energy, whether by dividends, distributions, loans or other payments. The ability of our subsidiaries to pay dividends or make distributions to Alliant Energy and, accordingly, our ability to pay dividends on Alliant Energy common stock will depend on regulatory limitations, earnings, cash flows, capital requirements and general financial condition of our subsidiaries. Our utilities have dividend payment restrictions based on the terms of any outstanding preferred stock and regulatory limitations applicable to them. If we do not receive adequate dividends and distributions from our subsidiaries, then we may not be able to make, or may have to reduce, dividend payments on Alliant Energy common stock.
We may incur material post-closing adjustments related to past asset and business divestitures - We have sold certain non-utility subsidiaries such as Whiting Petroleum Corporation (Whiting Petroleum), as well as regulated assets such as our Minnesota electric and natural gas distribution assets.. We may continue to incur liabilities relating to our previous ownership of, or the transactions pursuant to which we disposed of, these subsidiaries and assets. Any potential liability depends on a number of factors outside of our control, including the financial condition of Whiting Petroleum, certain of its partners, and/or itstheir assignees. Any required payments on retained liabilities, guarantees or indemnification obligations with respect to Whiting Petroleum the sales of our Minnesota electric and natural gas distribution assets, or other past and future asset or business divestitures could adversely impact our financial condition and results of operations.
We are dependent on the capital markets and could be negatively impacted by disruptions in the capital markets - Successful implementation of our strategy is dependent upon our ability to access the capital markets. We have forecasted capital expenditures of approximately $5$8 billion over the next four years. Disruption, uncertainty or volatility in the capital markets could increase our cost of capital or limit our ability to raise funds needed to operate our businesses. Disruptions could be caused by Federal Reserve policies and actions, currency concerns, inflation, economic downturn or uncertainty, monetary policies, a negative view of the utility industry or our company, failures of financial institutions, U.S. debt management concerns, U.S. debt limit and budget debates, including government shutdowns, European and worldwide sovereign debt concerns, other global or geopolitical events, or other factors. Increases in interest rates will cause the cost of capital to increase and may cause the price of our equity securities to decline. Any disruptions in capital markets could adversely impact our ability to implement our strategy.
We rely on our strong credit ratings to access the credit markets. If our credit ratings are downgraded for any reason, such as worsening credit metric impacts, negative changes to our regulatory environment, or general negative outlook for the utility industry, we could pay higher interest rates in future financings, the pool of potential lenders could be reduced, borrowing costs under existing credit facilities could increase, our access to the commercial paper market could be limited, or we could be required to provide additional credit assurance, including cash collateral, to contract counterparties. If our access to capital were to become significantly constrained or costs of capital increased significantly due to lowered credit ratings, prevailing industry conditions, regulatory constraints, volatility of the capital markets, inflation or other factors, our financial condition and results of operations could be adversely affected.
Our pension and other postretirement benefits plans are subject to investment and interest rate risk that could negatively impact our financial condition - We have pension and other postretirement benefits plans that provide benefits to many of our employees and retirees. Costs of providing benefits and related funding requirements of these plans are subject to changes in the liabilities of the plans and market value of the assets that fund the plans. The funded status of the plans and the related costs reflected in our financial statements are affected by various factors, which are subject to an inherent degree of uncertainty, including economic conditions, financial market performance, interest rates, life expectancies and demographics. Recessions and volatility in the domestic and international financial markets have negatively affected the asset values of our pension plans at various times in the past. Poor investment returns or lower interest rates may necessitate
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accelerated funding of the plans to meet minimum federal government requirements, which could have an adverse impact on our financial condition and results of operations.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Alliant Energy - As a holding company, Alliant Energy doesn’t directly own any significant properties other than the stock of its subsidiaries. The principal properties of those subsidiaries are as follows:
IPL and WPL
Electric - At December 31, 2019,2022, IPL’s and WPL’s EGUsfacilities by primary fuel type were as follows:
| IPL | Nameplate | Generating | ||||||
| In-service | Capacity | Capacity | ||||||
| Name of EGU and Location | Dates | in MW | in MW (a) | |||||
| Marshalltown Generating Station (Units 1-3); Marshalltown, IA | 2017 | 706 | 624 | |||||
| Emery Generating Station (Units 1-3); Mason City, IA | 2004 | 603 | 538 | |||||
| Marshalltown Combustion Turbines (Units 1-3); Marshalltown, IA | 1978 | 189 | 134 | |||||
| Prairie Creek Generating Station (Unit 4); Cedar Rapids, IA | 1967 | 149 | 105 | |||||
| Burlington Combustion Turbines (Units 1-4); Burlington, IA | 1994-1996 | 79 | 38 | |||||
| Total Gas | 1,726 | 1,439 | ||||||
| Ottumwa Generating Station (Unit 1); Ottumwa, IA (b) | 1981 | 348 | 320 | |||||
| Lansing Generating Station (Unit 4); Lansing, IA | 1977 | 275 | 210 | |||||
| Burlington Generating Station (Unit 1); Burlington, IA | 1968 | 212 | 179 | |||||
| George Neal Generating Station (Unit 4); Sioux City, IA (c) | 1979 | 179 | 156 | |||||
| George Neal Generating Station (Unit 3); Sioux City, IA (d) | 1975 | 164 | 137 | |||||
| Prairie Creek Generating Station (Units 1 and 3); Cedar Rapids, IA | 1958-1997 | 65 | 28 | |||||
| Louisa Generating Station (Unit 1); Louisa, IA (e) | 1983 | 32 | 29 | |||||
| Total Coal | 1,275 | 1,059 | ||||||
| Lime Creek Combustion Turbines (Units 1-2); Mason City, IA | 1991 | 90 | 67 | |||||
| Total Oil | 90 | 67 | ||||||
| Upland Prairie (121 Units); Clay and Dickinson Cos., IA | 2019 | 303 | 47 | |||||
| Whispering Willow - East (121 Units); Franklin Co., IA | 2009 | 200 | 32 | |||||
| English Farms (69 Units); Poweshiek Co., IA | 2019 | 172 | 26 | |||||
| Franklin County (60 Units); Franklin Co., IA | 2012 | 99 | 16 | |||||
| Total Wind | 774 | 121 | ||||||
| Dubuque Solar Garden; Dubuque, IA | 2017 | 5 | 2 | |||||
| Total Solar | 5 | 2 | ||||||
| Total capacity | 3,870 | 2,688 | ||||||
| WPL | Nameplate | Generating | ||||||
| In-service | Capacity | Capacity | ||||||
| Name of EGU and Location | Dates | in MW | in MW (a) | |||||
| Riverside Energy Center (Units 1-3); Beloit, WI | 2004 | 675 | 544 | |||||
| Neenah Energy Facility (Units 1-2); Neenah, WI | 2000 | 371 | 293 | |||||
| South Fond du Lac Combustion Turbines (2 Units); Fond du Lac, WI (f) | 1994 | 191 | 150 | |||||
| Rock River Combustion Turbines (Units 3-6); Beloit, WI | 1967-1972 | 169 | 81 | |||||
| Sheepskin Combustion Turbine (Unit 1); Edgerton, WI | 1971 | 42 | 28 | |||||
| Total Gas | 1,448 | 1,096 | ||||||
| Columbia Energy Center (Units 1-2); Portage, WI (g) | 1975-1978 | 593 | 561 | |||||
| Edgewater Generating Station (Unit 5); Sheboygan, WI | 1985 | 414 | 404 | |||||
| Total Coal | 1,007 | 965 | ||||||
| Bent Tree (122 Units); Freeborn Co., MN | 2010-2011 | 201 | 31 | |||||
| Cedar Ridge (41 Units); Fond du Lac Co., WI | 2008 | 68 | 10 | |||||
| Forward Wind Energy Center (37 Units); Dodge and Fond du Lac Cos., WI (h) | 2008 | 59 | 9 | |||||
| Total Wind | 328 | 50 | ||||||
| Prairie du Sac Hydro Plant (8 Units); Prairie due Sac, WI | 1914-1940 | 33 | 12 | |||||
| Kilbourn Hydro Plant (4 Units); Wisconsin Dells, WI | 1926-1939 | 10 | 6 | |||||
| Total Hydro | 43 | 18 | ||||||
| Total capacity | 2,826 | 2,129 | ||||||
| IPL | Generating | |||||||||||||||||||||||||||||||
| In-service | Capacity | |||||||||||||||||||||||||||||||
| Name of Facility and Location | Dates | in MW (a) | ||||||||||||||||||||||||||||||
| Marshalltown Generating Station (Units 1-3); Marshalltown, IA | 2017 | 528 | ||||||||||||||||||||||||||||||
| Emery Generating Station (Units 1-3); Mason City, IA | 2004 | 514 | ||||||||||||||||||||||||||||||
| Burlington Generating Station (Unit 1); Burlington, IA | 1968 | 162 | ||||||||||||||||||||||||||||||
| Marshalltown Combustion Turbines (Units 1-3); Marshalltown, IA | 1978 | 141 | ||||||||||||||||||||||||||||||
| Prairie Creek Generating Station (Unit 4); Cedar Rapids, IA | 1967 | 99 | ||||||||||||||||||||||||||||||
| Burlington Combustion Turbines (Units 1-4); Burlington, IA | 1994-1996 | 32 | ||||||||||||||||||||||||||||||
| Total Gas | 1,476 | |||||||||||||||||||||||||||||||
| Upland Prairie (121 Units); Clay and Dickinson Cos., IA | 2019 | 299 | ||||||||||||||||||||||||||||||
| Whispering Willow - North (81 Units); Franklin Co., IA | 2020 | 201 | ||||||||||||||||||||||||||||||
| Whispering Willow - East (121 Units); Franklin Co., IA | 2009 | 200 | ||||||||||||||||||||||||||||||
| Golden Plains (82 Units); Winnebago and Kossuth Cos., IA | 2020 | 200 | ||||||||||||||||||||||||||||||
| English Farms (69 Units); Poweshiek Co., IA | 2019 | 172 | ||||||||||||||||||||||||||||||
| Richland (53 Units); Sac Co., IA | 2020 | 131 | ||||||||||||||||||||||||||||||
| Franklin County (60 Units); Franklin Co., IA | 2012 | 99 | ||||||||||||||||||||||||||||||
| Total Wind | 1,302 | |||||||||||||||||||||||||||||||
| Ottumwa Generating Station (Unit 1); Ottumwa, IA (b) | 1981 | 309 | ||||||||||||||||||||||||||||||
| Lansing Generating Station (Unit 4); Lansing, IA | 1977 | 146 | ||||||||||||||||||||||||||||||
| George Neal Generating Station (Unit 4); Sioux City, IA (c) | 1979 | 158 | ||||||||||||||||||||||||||||||
| George Neal Generating Station (Unit 3); Sioux City, IA (d) | 1975 | 137 | ||||||||||||||||||||||||||||||
| Prairie Creek Generating Station (Units 1 and 3); Cedar Rapids, IA | 1958-1997 | 31 | ||||||||||||||||||||||||||||||
| Louisa Generating Station (Unit 1); Louisa, IA (e) | 1983 | 29 | ||||||||||||||||||||||||||||||
| Total Coal | 810 | |||||||||||||||||||||||||||||||
| Lime Creek Combustion Turbines (Units 1-2); Mason City, IA | 1991 | 63 | ||||||||||||||||||||||||||||||
| Total Oil | 63 | |||||||||||||||||||||||||||||||
| Dubuque Solar Facility; Dubuque, IA | 2017 | 5 | ||||||||||||||||||||||||||||||
| Marshalltown Solar Facility; Marshalltown, IA | 2020 | 3 | ||||||||||||||||||||||||||||||
| Total Solar | 8 | |||||||||||||||||||||||||||||||
| Battery Storage; Decorah, Wellman and Marshalltown, IA | 2019-2021 | 4 | ||||||||||||||||||||||||||||||
| Total Battery Storage | 4 | |||||||||||||||||||||||||||||||
| Total capacity | 3,663 | |||||||||||||||||||||||||||||||
| WPL | Generating | |||||||||||||||||||||||||||||||
| In-service | Capacity | |||||||||||||||||||||||||||||||
| Name of Facility and Location | Dates | in MW (a) | ||||||||||||||||||||||||||||||
| Riverside Energy Center (Units 1-3); Beloit, WI | 2004 | 438 | ||||||||||||||||||||||||||||||
| West Riverside Energy Center (Units 1-3); Beloit, WI (f) | 2020 | 436 | ||||||||||||||||||||||||||||||
| Neenah Energy Facility (Units 1-2); Neenah, WI | 2000 | 289 | ||||||||||||||||||||||||||||||
| South Fond du Lac Combustion Turbines (2 Units); Fond du Lac, WI (g) | 1994 | 162 | ||||||||||||||||||||||||||||||
| Total Gas | 1,325 | |||||||||||||||||||||||||||||||
| Bent Tree (122 Units); Freeborn Co., MN | 2010-2011 | 201 | ||||||||||||||||||||||||||||||
| Kossuth (56 Units); Kossuth Co., IA | 2020 | 152 | ||||||||||||||||||||||||||||||
| Cedar Ridge (41 Units); Fond du Lac Co., WI | 2008 | 68 | ||||||||||||||||||||||||||||||
| Forward Wind Energy Center (37 Units); Dodge and Fond du Lac Cos., WI (h) | 2008 | 59 | ||||||||||||||||||||||||||||||
| Total Wind | 480 | |||||||||||||||||||||||||||||||
| Columbia Energy Center (Units 1-2); Portage, WI (i) | 1975-1978 | 584 | ||||||||||||||||||||||||||||||
| Edgewater Generating Station (Unit 5); Sheboygan, WI | 1985 | 356 | ||||||||||||||||||||||||||||||
| Total Coal | 940 | |||||||||||||||||||||||||||||||
| Wood County Solar Facility, Wood Co., WI | 2022 | 150 | ||||||||||||||||||||||||||||||
| Bear Creek Solar Facility, Richland Co., WI | 2022 | 50 | ||||||||||||||||||||||||||||||
| North Rock Solar Facility, Rock Co., WI | 2022 | 50 | ||||||||||||||||||||||||||||||
| West Riverside Solar Facility, Beloit, WI (j) | 2021 | 4 | ||||||||||||||||||||||||||||||
| Customer- and Community-hosted Solar; various locations in WI | 2021-2022 | 4 | ||||||||||||||||||||||||||||||
| Total Solar | 258 | |||||||||||||||||||||||||||||||
| Prairie du Sac Hydro Plant (8 Units); Prairie due Sac, WI | 1914-1940 | 13 | ||||||||||||||||||||||||||||||
| Kilbourn Hydro Plant (4 Units); Wisconsin Dells, WI | 1926-1939 | 6 | ||||||||||||||||||||||||||||||
| Total Hydro | 19 | |||||||||||||||||||||||||||||||
| Battery Storage; Portage, WI | 2022 | 5 | ||||||||||||||||||||||||||||||
| Total Battery Storage | 5 | |||||||||||||||||||||||||||||||
| Total capacity | 3,027 | |||||||||||||||||||||||||||||||
(a)Based on the accredited generating capacity included in MISO’s resource adequacy process for the planning period from June 2022 through May 2023, except for wind facilities, solar facilities and battery storage, which are based on nameplate capacity.
(b)Represents IPL’s 48% ownership interest, which is operated by IPL.
(c)Represents IPL’s 25.695% ownership interest, which is operated by MidAmerican Energy Company.
(d)Represents IPL’s 28% ownership interest, which is operated by MidAmerican Energy Company.
(e)Represents IPL’s 4% ownership interest, which is operated by MidAmerican Energy Company.
(f)Represents WPL’s 91% ownership interest, which is operated by WPL.
(g)Represents Units 2 and 3, which WPL owns. WPL also operates, but does not own, South Fond du Lac Combustion Turbines Units 1 and 4.
(h)Represents WPL’s 42.64% ownership interest, which is operated by Invenergy Services, LLC.
(i)Represents WPL’s 53.5% ownership interest, which is operated by WPL.
(j)Represents WPL’s 91% ownership interest, which is operated by WPL.
IPL and WPL own overhead electric distribution line, underground electric distribution cable and substation distribution transformers, substantially all of which are located in Iowa for IPL and Wisconsin for WPL.
Gas - IPL’s and WPL’s gas properties consist primarily of mains and services, meters, regulating and gate stations and other related transmission and distribution equipment. IPL’s and WPL’s gas distribution facilities include gas mains located in Iowa and Wisconsin, respectively.
Other - IPL’s other property includes steam service assets. Refer to Note 10 for information regarding WPL’s lease of the Sheboygan Falls Energy Facility from AEF’s Non-utility Generation business.
Corporate Services - Corporate Services’ property included in “Property, plant and equipment, net” on Alliant Energy’s balance sheet at December 31, 20192022 consisted primarily of a customer billing and information system for IPL and WPL and other computer software, and the corporate headquarters building located in Madison, Wisconsin.
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AEF - AEF’s principal properties included in “Property, plant and equipment, net” on Alliant Energy’s balance sheet at December 31, 20192022 were as follows:
Non-utility Generation - Includes the Sheboygan Falls Energy Facility, a 347 MW, simple-cycle, natural gas-fired facility near Sheboygan Falls, Wisconsin that was placed in service in 2005 and is leased to WPL. The Sheboygan Falls Energy Facility was accredited with 293291 MW of generating capacity for MISO’s resource adequacy process for the planning period from June 20192022 through May 2020.2023.
ITEM 3. LEGAL PROCEEDINGS
None. SEC regulations require Alliant Energy, IPL and WPL to disclose information about certain proceedings arising under federal, state or local environmental provisions when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that Alliant Energy, IPL and WPL reasonably believe will exceed a specified threshold. Pursuant to the SEC regulations, Alliant Energy, IPL and WPL use a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required. Applying this threshold, there are no environmental matters to disclose for this period. Refer to Note 17(c) for discussion of legal and administrative proceedings before various courts and agencies with respect to matters arising in the ordinary course of business.
ITEM 4. MINE SAFETY DISCLOSURES
None.
INFORMATION ABOUT EXECUTIVE OFFICERS
The executive officers of Alliant Energy, IPL and WPL for which information must be included are the same; however, different positions may be held at the various registrants. None of the executive officers for Alliant Energy, IPL or WPL listed below are related to any member of the Board of Directors or nominee for director or any other executive officer. All of the executive officers have no definite terms of office and serve at the pleasure of the Board of Directors. The executive officers of Alliant Energy, IPL and WPL announced as of the date of this filing are as follows:
| Name | Age as of Filing Date | Registrant | Positions | |||||||||||||||||
| John O. Larsen | Alliant Energy | Mr. Larsen has served as a director since February 2019, and as | ||||||||||||||||||
| IPL | Mr. Larsen has served as CEO since January 2019, as a director since February 2019, and as | |||||||||||||||||||
| WPL | Mr. Larsen has served as CEO since January 2019, as a director since February 2019, and as | |||||||||||||||||||
| Lisa M. Barton | 57 | Alliant Energy | Ms. Barton was selected to become President and COO effective February 27, 2023. She previously served as Executive VP and COO of American Electric Power Company, Inc. (AEP) from January 2021 to November 2022, Executive VP - Utilities of AEP from January 2020 to December 2020, and as Executive VP - Transmission of AEP from 2011 to 2019. | |||||||||||||||||
| IPL and WPL | Ms. Barton was selected to become CEO effective February 27, 2023. | |||||||||||||||||||
| Robert J. Durian | Alliant Energy, IPL and WPL | Mr. Durian has served as Executive VP and Chief Financial Officer (CFO) since February 2020. He previously served as Senior VP and CFO since February 2019; and as Senior VP, CFO and Treasurer from January 2018 to February | ||||||||||||||||||
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| Name | Age as of Filing Date | Registrant | Positions | |||||||||||||||||
| David A. de Leon | Alliant Energy and IPL | Mr. de Leon has served as Senior VP since January 2019. He previously served as VP since April | ||||||||||||||||||
| WPL | Mr. de Leon has served as President since January 2019. He previously served as VP since April | |||||||||||||||||||
| Terry L. Kouba | Alliant Energy and WPL | Mr. Kouba has served as Senior VP since January 2019. He previously served as VP since February 2014. | ||||||||||||||||||
| IPL | Mr. Kouba has served as President since January 2019. He previously served as VP since February 2014. | |||||||||||||||||||
| Alliant Energy, IPL and WPL | Mr. Luhrs has served as Senior VP since April 2022. He previously was with Duke Energy, Inc. as VP - Integrated Grid Strategy and Solutions from 2021 to 2022, VP - Market Strategy and Solutions from 2019 to 2021, and as VP - Retail Programs from 2013 to 2018. | |||||||||||||||||||
| Benjamin M. Bilitz | 48 | Alliant Energy, IPL and WPL | Mr. Bilitz has served as | |||||||||||||||||
PART II
ITEM 5. MARKET FOR REGISTRANTS’ COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
Common Stock Data - Alliant Energy’s common stock trades on the Nasdaq Global Select Market under the symbol “LNT,” and the closing sales price at December 31, 20192022 was $54.72.$55.21.
Shareowners - At December 31, 2019,2022, there were 24,03421,556 holders of record of Alliant Energy’s common stock, including holders through Alliant Energy’s Shareowner Direct Plan. Alliant Energy is the sole common shareowner of all 13,370,788 and 13,236,601 shares of IPL and WPL common stock, respectively, currently outstanding. As a result, there is no established public trading market for the common stock of either IPL or WPL.
Dividends - In November 2019,2022, Alliant Energy announced an increase in its targeted 20202023 annual common stock dividend to $1.52$1.81 per share, which is equivalent to a quarterly rate of $0.38$0.4525 per share, beginning with the February 20202023 dividend payment. The timing and amount of future dividends is subject to an approved dividend declaration from Alliant Energy’s Board of Directors, and is dependent upon earnings expectations, capital requirements, and general financial business conditions, among other factors.
Common Stock Repurchases - A summary of Alliant Energy common stock repurchases for the quarter ended December 31, 20192022 was as follows:
| Total Number | Average Price | Total Number of Shares | Maximum Number (or Approximate | |||||||||||||||||||||||
| of Shares | Paid Per | Purchased as Part of | Dollar Value) of Shares That May | |||||||||||||||||||||||
| Period | Purchased (a) | Share | Publicly Announced Plan | Yet Be Purchased Under the Plan (a) | ||||||||||||||||||||||
| October 1 to October 31 | 5,101 | $50.28 | — | N/A | ||||||||||||||||||||||
| November 1 to November 30 | 3,224 | 53.66 | — | N/A | ||||||||||||||||||||||
| December 1 to December 31 | 43 | 55.30 | — | N/A | ||||||||||||||||||||||
| 8,368 | 51.61 | — | ||||||||||||||||||||||||
| Total Number | Average Price | Total Number of Shares | Maximum Number (or Approximate | ||||||||
| of Shares | Paid Per | Purchased as Part of | Dollar Value) of Shares That May | ||||||||
| Period | Purchased (a) | Share | Publicly Announced Plan | Yet Be Purchased Under the Plan (a) | |||||||
| October 1 to October 31 | 1,794 | $53.08 | — | N/A | |||||||
| November 1 to November 30 | 2,847 | 52.89 | — | N/A | |||||||
| December 1 to December 31 | 162 | 53.62 | — | N/A | |||||||
| 4,803 | 52.99 | — | |||||||||
ITEM 6. SELECTED FINANCIAL DATA[RESERVED]
| Alliant Energy | 2019 (a) | 2018 (a) | 2017 | 2016 | 2015 | ||||||||||||||
| (dollars in millions, except per share data) | |||||||||||||||||||
| Income Statement Data: | |||||||||||||||||||
| Revenues | $3,647.7 | $3,534.5 | $3,382.2 | $3,320.0 | $3,253.6 | ||||||||||||||
| Amounts attributable to Alliant Energy common shareowners: | |||||||||||||||||||
| Income from continuing operations, net of tax | 557.2 | 512.1 | 455.9 | 373.8 | 380.7 | ||||||||||||||
| Income (loss) from discontinued operations, net of tax | — | — | 1.4 | (2.3 | ) | (2.5 | ) | ||||||||||||
| Net income | 557.2 | 512.1 | 457.3 | 371.5 | 378.2 | ||||||||||||||
| Common Stock Data: | |||||||||||||||||||
| Earnings per weighted average common share attributable to Alliant Energy common shareowners (basic): | |||||||||||||||||||
| Income from continuing operations, net of tax | $2.34 | $2.19 | $1.99 | $1.65 | $1.69 | ||||||||||||||
| Loss from discontinued operations, net of tax | $— | $— | $— | ($0.01 | ) | ($0.01 | ) | ||||||||||||
| Net income | $2.34 | $2.19 | $1.99 | $1.64 | $1.68 | ||||||||||||||
| Earnings per weighted average common share attributable to Alliant Energy common shareowners (diluted): | |||||||||||||||||||
| Income from continuing operations, net of tax | $2.33 | $2.19 | $1.99 | $1.65 | $1.69 | ||||||||||||||
| Loss from discontinued operations, net of tax | $— | $— | $— | ($0.01 | ) | ($0.01 | ) | ||||||||||||
| Net income | $2.33 | $2.19 | $1.99 | $1.64 | $1.68 | ||||||||||||||
| Common shares outstanding at year-end (000s) | 245,023 | 236,063 | 231,349 | 227,674 | 226,918 | ||||||||||||||
| Dividends declared per common share | $1.42 | $1.34 | $1.26 | $1.175 | $1.10 | ||||||||||||||
| Market value per share at year-end | $54.72 | $42.25 | $42.61 | $37.89 | $31.225 | ||||||||||||||
| Book value per share at year-end | $21.24 | $19.43 | $18.08 | $16.96 | $16.41 | ||||||||||||||
| Market capitalization at year-end | $13,407.7 | $9,973.7 | $9,857.8 | $8,626.6 | $7,085.5 | ||||||||||||||
| Other Selected Financial Data: | |||||||||||||||||||
| Cash flows from operating activities (b) | $660.4 | $527.7 | $521.6 | $392.8 | $871.2 | ||||||||||||||
| Construction and acquisition expenditures | $1,640.1 | $1,633.9 | $1,466.9 | $1,196.8 | $1,034.3 | ||||||||||||||
| Total assets at year-end | $16,700.7 | $15,426.0 | $14,187.8 | $13,373.8 | $12,495.2 | ||||||||||||||
| Long-term obligations, net | $6,190.8 | $5,506.1 | $4,870.6 | $4,325.1 | $3,837.0 | ||||||||||||||
| IPL | |||||||||||||||||||
| Revenues | $2,089.6 | $2,042.3 | $1,870.3 | $1,820.4 | $1,774.5 | ||||||||||||||
| Net income available for common stock | 284.1 | 264.0 | 216.8 | 215.6 | 186.0 | ||||||||||||||
| Cash dividends declared on common stock | 168.0 | 168.0 | 156.1 | 151.9 | 140.0 | ||||||||||||||
| Cash flows from (used for) operating activities (b) | 172.9 | (5.0 | ) | (21.8 | ) | (104.9 | ) | 385.0 | |||||||||||
| Total assets | 9,277.5 | 8,411.4 | 7,606.0 | 7,304.7 | 6,709.1 | ||||||||||||||
| Long-term obligations, net | 3,147.7 | 2,552.8 | 2,406.6 | 2,154.0 | 1,857.4 | ||||||||||||||
| WPL | |||||||||||||||||||
| Revenues | $1,475.7 | $1,452.6 | $1,472.8 | $1,459.1 | $1,435.1 | ||||||||||||||
| Net income available for common stock | 233.0 | 208.1 | 186.6 | 190.4 | 176.3 | ||||||||||||||
| Cash dividends declared on common stock | 143.9 | 140.1 | 125.9 | 135.0 | 126.9 | ||||||||||||||
| Cash flows from operating activities | 423.2 | 457.0 | 465.7 | 521.4 | 449.8 | ||||||||||||||
| Total assets | 6,506.5 | 6,152.5 | 5,756.5 | 5,290.3 | 5,270.4 | ||||||||||||||
| Long-term obligations, net | 1,992.9 | 1,905.4 | 1,914.3 | 1,623.2 | 1,624.2 | ||||||||||||||
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This MDA includes information relating to Alliant Energy, IPL and WPL, as well as AEF and Corporate Services. Where appropriate, information relating to a specific entity has been segregated and labeled as such. The following discussion and analysis should be read in conjunction with the Financial Statements and Notes included in this report. Unless otherwise noted, all “per share” references in MDA refer to earnings per diluted share. In addition, this MDA includes certain financial information for 20192022 compared to 2018.2021. Refer to MDA in the combined 20182021 Form 10-K for details on certain financial information for 20182021 compared to 2017.2020.
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OVERVIEW
Mission, Purpose and Strategy
Alliant Energy’s mission is to deliver affordable energy solutions and exceptional service that its customers and communities count on - affordably, safely, efficientlyreliably, and responsibly. Thesustainably. This mission aligns with Alliant Energy’s purpose - to serve customers and build stronger communities - which guides it through the ever-changing dynamics of the economy and the energy industry. Alliant Energy takes its responsibility as a corporate citizen seriously and remains a careful steward of the environment and supports the communities in its service territories. Alliant Energy’s mission and purpose is supported by a strategy focused on meeting the evolving expectations of customers while providing an attractive return for investors.investors, and pursuing emerging technologies and safe, sustainable methods of energy production. This strategy includes the following key elements:
Providing affordable energy solutions to customers - Alliant Energy’s strategy focuses on affordable energy solutions that support retention and growth of its existing customers and attract new customers to its service territories.
Key Highlights -
•Alliant Energy’s Clean Energy Blueprint, also known as its cleaner energy strategy, continues to add clean energy resources in Iowa and Wisconsin, which directly reinvests in the communities Alliant Energy serves through the addition of skilled jobs, economic development and increased tax revenue. The execution of Alliant Energy’s strategy is expected to result in cost benefits for its utility customers by continuing to add renewable energy projects that generate fuel cost benefits and renewable tax credits that are provided to its electric customers. Alliant Energy, IPL and WPL currently expect to utilize various provisions of the Inflation Reduction Act of 2022 to enhance the tax benefits expected from their announced solar and battery storage projects, including transferring certain future tax credits from such projects to other corporate taxpayers.
•In 2022, Alliant Energy’s wind generation was the highest in its history, which resulted in renewable tax credits and fuel cost savings for its customers.
•Reductions in Iowa corporate income tax rates resulting from tax reform enacted in March 2022 are expected to provide cost benefits to IPL’s customers in the future.
•IPL maintaining flat base rates for its retail electric and gas customers in 2021 and 2022.
•IPL’s renewable energy rider became effective February 26, 2020, which allows for annual adjustments to electric rates charged to IPL’s retail electric customers for actual renewable energy costs incurred to fund IPL’s 1,000 MW of wind EGUs placed in service in 2019 and 2020, - and related tax benefits, including production tax credits, that are provided to its electric customers.
•Significant fuel cost reductions achieved in 20192021 and further reductions in fuel cost expected in 20202022 as a result of expansionshortening the term of renewable generationIPL’s DAEC PPA by 5 years.
•Issuance of new long-term debt at historically low interest rates for IPL ($300 million of 3.1% senior debentures due 2051) and operating highly efficient, lowWPL ($300 million of 1.95% green bonds due 2031) in 2021, and WPL ($600 million of 3.95% green bonds due 2032) in 2022.
•Redemption of IPL’s 5.1% cumulative preferred stock in 2021.
•Levelized cost natural gas facilities.recovery mechanism for the remaining net book value of Edgewater Unit 5, which helps reduce customer costs in 2022 and 2023.
Making customer-focused investments - Alliant Energy’s strategic priorities include making significant customer-focused investments toward cleaner energy and resilient and sustainable customer solutions. Alliant Energy’s strategy drives a capital allocation process focused on: 1) transitioning its generation portfolio to meet the growing interest of customers for cleanerreliable and sustainable sources of energy, 2) upgrading its electric and gas distribution systems to strengthen safety and resiliency, as well as enable distributed energy solutions in its service territories, and 3) enhancing its customers’ and employees’ experience with evolving technology and greater flexibility.
•Plans to construct and/or acquire additional renewable, battery and natural gas resources to meet the requirements of MISO’s new wind projects: Upland Prairie (303seasonal resource adequacy process establishing capacity planning reserve margin and capacity accreditation requirements effective with the 2023/2024 MISO Planning Year.
•WPL’s completion of new solar generation in Wisconsin in 2022, including 150 MW in March 2019), English Farms (172Wood County, 50 MW in March 2019)Richland County, and Whispering Willow North (20150 MW in January 2020).Rock County.
Growing customer demand - Alliant Energy’s strategy supports expanding electric and gas usage in its service territories by promoting electrification initiatives and economic development in the communities it serves.
Key Highlights in2019 -
•Alliant Energy continues to partner with certifyingits commercial and industrial customers to help develop renewable solutions to enhance their sustainability initiatives, including planned solar facilities in Iowa and Wisconsin.
•Alliant Energy has various development-ready sites throughout Iowa and Wisconsin, including finalizing certification of the 1,300-acre Big Cedar Industrial Center Mega-site in Cedar Rapids, Iowa, and the 730-acre Prairie View Industrial Center Super Park a 730-acrein Ames, Iowa, which are rail-served ready-to-build manufacturing and industrial site in Ames, Iowa, which issites in close proximity to the regional airport and interstate freeways and accessesaccess IPL’s electric services. The Big Cedar Industrial Center Mega-site also accesses Travero’s rail-served warehouse in Iowa. In addition, the Beaver Dam Commerce Park was certified, which is a 520-acre ready-to-build manufacturing and industrial site in Beaver Dam, Wisconsin, with access to commercial and freight airports, interstate freeways and WPL’s electric services.
RESULTS OF OPERATIONS
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 meaningful basis for evaluating and managing utility operations since electric production fuel, purchased power and electric transmission service expenses and cost of gas sold are generally passed through to customers, and therefore, result in changes to electric and gas revenues that are comparable to changes in such expenses. The presentation of utility electric and gas margins herein is intended to provide supplemental information for investors regarding operating performance. These utility electric and gas margins may not be comparable to how other entities define utility electric and gas margin. Furthermore, these measures are not intended to replace operating income as determined in accordance with GAAP as an indicator of operating performance.
Additionally, the table below includes EPS for Utilities and Corporate Services, ATC Holdings, and Non-utility and Parent, which are non-GAAP financial measures. Alliant Energy believes these non-GAAP financial measures are useful to investors because they facilitate an understanding of segment performance and trends, and provide additional information about Alliant Energy’s operations on a basis consistent with the measures that management uses to manage its operations and evaluate its performance.
Financial Results Overview - Alliant Energy’s net income and EPS attributable to Alliant Energy common shareowners were as follows (dollars in millions, except per share amounts):
| 2022 | 2021 | ||||||||||||||||||||||
| Income (Loss) | EPS | Income (Loss) | EPS | ||||||||||||||||||||
| Utilities and Corporate Services | $690 | $2.74 | $632 | $2.52 | |||||||||||||||||||
| ATC Holdings | 29 | 0.12 | 31 | 0.12 | |||||||||||||||||||
| Non-utility and Parent | (33) | (0.13) | (4) | (0.01) | |||||||||||||||||||
| Alliant Energy Consolidated | $686 | $2.73 | $659 | $2.63 | |||||||||||||||||||
| 2019 | 2018 | ||||||||||||||
| Income (Loss) | EPS | Income (Loss) | EPS | ||||||||||||
| Utilities and Corporate Services | $529.5 | $2.22 | $485.7 | $2.08 | |||||||||||
| ATC Holdings | 33.6 | 0.14 | 28.4 | 0.12 | |||||||||||
| Non-utility and Parent | (5.9 | ) | (0.03 | ) | (2.0 | ) | (0.01 | ) | |||||||
| Alliant Energy Consolidated | $557.2 | $2.33 | $512.1 | $2.19 | |||||||||||
Alliant Energy’s Utilities and Corporate Services net income increased $44by $58 million in 20192022 compared to 2018.2021. The increase was primarily due to higher earnings resultingrevenue requirements and AFUDC from IPL’sWPL capital investments and WPL’s increasing rate base. This item washigher electric and gas margins, including the impacts of temperatures. These items were partially offset by higher depreciation expense.
Alliant Energy’s Non-utility and Parent net income decreased by $29 million in 2022 compared to 2021, primarily due to higher financing expense and higher interest expense.the impact of the Iowa state income tax rate change.
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 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Operating income | $928 | $795 | $453 | $460 | $452 | $308 | |||||||||||||||||||||||||||||||||||||||||||||||
| Electric utility revenues | $3,421 | $3,081 | $1,859 | $1,752 | $1,562 | $1,329 | |||||||||||||||||||||||||||||||||||||||||||||||
| Electric production fuel and purchased power expenses | (830) | (642) | (383) | (295) | (447) | (347) | |||||||||||||||||||||||||||||||||||||||||||||||
| Electric transmission service expense | (573) | (537) | (407) | (367) | (166) | (170) | |||||||||||||||||||||||||||||||||||||||||||||||
| Utility Electric Margin (non-GAAP) | 2,018 | 1,902 | 1,069 | 1,090 | 949 | 812 | |||||||||||||||||||||||||||||||||||||||||||||||
| Gas utility revenues | 642 | 456 | 351 | 265 | 291 | 191 | |||||||||||||||||||||||||||||||||||||||||||||||
| Cost of gas sold | (389) | (258) | (206) | (149) | (183) | (109) | |||||||||||||||||||||||||||||||||||||||||||||||
| Utility Gas Margin (non-GAAP) | 253 | 198 | 145 | 116 | 108 | 82 | |||||||||||||||||||||||||||||||||||||||||||||||
| Other utility revenues | 49 | 49 | 46 | 46 | 3 | 3 | |||||||||||||||||||||||||||||||||||||||||||||||
| Non-utility revenues | 93 | 83 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Other operation and maintenance expenses | (704) | (676) | (369) | (362) | (278) | (268) | |||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization expenses | (671) | (657) | (381) | (375) | (283) | (276) | |||||||||||||||||||||||||||||||||||||||||||||||
| Taxes other than income tax expense | (110) | (104) | (57) | (55) | (47) | (45) | |||||||||||||||||||||||||||||||||||||||||||||||
| Operating income | $928 | $795 | $453 | $460 | $452 | $308 | |||||||||||||||||||||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
| Operating income | $777.7 | $694.4 | $402.8 | $350.8 | $347.2 | $312.9 | |||||||||||||||||
| Electric utility revenues | $3,063.6 | $3,000.3 | $1,781.2 | $1,731.1 | $1,282.4 | $1,269.2 | |||||||||||||||||
| Electric production fuel and purchased power expenses | (776.7 | ) | (855.0 | ) | (434.5 | ) | (469.0 | ) | (342.2 | ) | (386.0 | ) | |||||||||||
| Electric transmission service expense | (481.4 | ) | (495.7 | ) | (340.2 | ) | (352.9 | ) | (141.2 | ) | (142.8 | ) | |||||||||||
| Utility Electric Margin (non-GAAP) | 1,805.5 | 1,649.6 | 1,006.5 | 909.2 | 799.0 | 740.4 | |||||||||||||||||
| Gas utility revenues | 455.2 | 446.6 | 264.2 | 266.2 | 191.0 | 180.4 | |||||||||||||||||
| Cost of gas sold | (221.7 | ) | (232.3 | ) | (119.9 | ) | (129.6 | ) | (101.8 | ) | (102.7 | ) | |||||||||||
| Utility Gas Margin (non-GAAP) | 233.5 | 214.3 | 144.3 | 136.6 | 89.2 | 77.7 | |||||||||||||||||
| Other utility revenues | 46.5 | 48.0 | 44.2 | 45.0 | 2.3 | 3.0 | |||||||||||||||||
| Non-utility revenues | 82.4 | 39.6 | — | — | — | — | |||||||||||||||||
| Other operation and maintenance expenses | (712.2 | ) | (645.8 | ) | (404.6 | ) | (402.6 | ) | (260.9 | ) | (241.6 | ) | |||||||||||
| Depreciation and amortization expenses | (567.2 | ) | (506.9 | ) | (326.7 | ) | (283.5 | ) | (235.6 | ) | (219.4 | ) | |||||||||||
| Taxes other than income tax expense | (110.8 | ) | (104.4 | ) | (60.9 | ) | (53.9 | ) | (46.8 | ) | (47.2 | ) | |||||||||||
| Operating income | $777.7 | $694.4 | $402.8 | $350.8 | $347.2 | $312.9 | |||||||||||||||||
Operating Income Variances - Variances between periods in operating income for 20192022 compared to 20182021 were as follows (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||
| Total higher (lower) utility electric margin variance (Refer to details below) | $116 | ($21) | $137 | ||||||||||||||
| Total higher utility gas margin variance (Refer to details below) | 55 | 29 | 26 | ||||||||||||||
| Total higher other operation and maintenance expenses variance (Refer to details below) | (28) | (7) | (10) | ||||||||||||||
| Total higher depreciation and amortization expense | (14) | (6) | (7) | ||||||||||||||
| Other | 4 | (2) | (2) | ||||||||||||||
| $133 | ($7) | $144 | |||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||
| Total higher utility electric margin variance (Refer to details below) | $156 | $97 | $59 | ||||||||
| Total higher utility gas margin variance (Refer to details below) | 19 | 8 | 12 | ||||||||
| Higher non-utility revenues due to AEF’s new acquisitions | 42 | — | — | ||||||||
| Total higher other operation and maintenance expenses variance (Refer to details below) | (66 | ) | (2 | ) | (19 | ) | |||||
| Higher depreciation and amortization expense, primarily due to additional plant in service in 2018 and 2019, and new IPL depreciation rates effective May 2018. | (60 | ) | (43 | ) | (16 | ) | |||||
| Other | (8 | ) | (8 | ) | (2 | ) | |||||
| $83 | $52 | $34 | |||||||||
Electric and Gas Revenues and Sales Summary - Electric and gas revenues (in millions), and MWh and Dth sales (in thousands), were as follows:
| Electric | Gas | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenues | MWhs Sold | Revenues | Dths Sold | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alliant Energy | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retail | $3,019 | $2,771 | 25,409 | 25,432 | $588 | $413 | 55,021 | 48,179 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Sales for resale: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wholesale | 233 | 187 | 2,866 | 2,787 | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Bulk power and other | 111 | 56 | 3,734 | 3,018 | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Transportation/Other | 58 | 67 | 62 | 71 | 54 | 43 | 104,812 | 99,179 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| $3,421 | $3,081 | 32,071 | 31,308 | $642 | $456 | 159,833 | 147,358 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| IPL | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retail | $1,747 | $1,633 | 14,270 | 14,283 | $317 | $237 | 28,492 | 24,881 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Sales for resale: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wholesale | 64 | 57 | 771 | 738 | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Bulk power and other | 13 | 17 | 1,401 | 1,069 | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Transportation/Other | 35 | 45 | 33 | 35 | 34 | 28 | 43,264 | 40,738 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| $1,859 | $1,752 | 16,475 | 16,125 | $351 | $265 | 71,756 | 65,619 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| WPL | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retail | $1,272 | $1,138 | 11,139 | 11,149 | $271 | $176 | 26,529 | 23,298 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Sales for resale: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wholesale | 169 | 130 | 2,095 | 2,049 | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Bulk power and other | 98 | 39 | 2,333 | 1,949 | N/A | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Transportation/Other | 23 | 22 | 29 | 36 | 20 | 15 | 61,548 | 58,441 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| $1,562 | $1,329 | 15,596 | 15,183 | $291 | $191 | 88,077 | 81,739 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Electric | Gas | ||||||||||||||||||||||||||
| Revenues | MWhs Sold | Revenues | Dths Sold | ||||||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
| Alliant Energy | |||||||||||||||||||||||||||
| Retail | $2,751.2 | $2,687.8 | 25,121 | 25,684 | $408.4 | $402.3 | 55,850 | 53,389 | |||||||||||||||||||
| Sales for resale | 250.2 | 259.2 | 6,594 | 5,804 | N/A | N/A | N/A | N/A | |||||||||||||||||||
| Transportation/Other | 62.2 | 53.3 | 79 | 96 | 46.8 | 44.3 | 97,135 | 90,357 | |||||||||||||||||||
| $3,063.6 | $3,000.3 | 31,794 | 31,584 | $455.2 | $446.6 | 152,985 | 143,746 | ||||||||||||||||||||
| IPL | |||||||||||||||||||||||||||
| Retail | $1,615.7 | $1,578.2 | 14,142 | 14,670 | $235.9 | $238.4 | 29,498 | 28,651 | |||||||||||||||||||
| Sales for resale | 128.0 | 117.3 | 4,479 | 2,980 | N/A | N/A | N/A | N/A | |||||||||||||||||||
| Transportation/Other | 37.5 | 35.6 | 36 | 37 | 28.3 | 27.8 | 38,323 | 37,899 | |||||||||||||||||||
| $1,781.2 | $1,731.1 | 18,657 | 17,687 | $264.2 | $266.2 | 67,821 | 66,550 | ||||||||||||||||||||
| WPL | |||||||||||||||||||||||||||
| Retail | $1,135.5 | $1,109.6 | 10,979 | 11,014 | $172.5 | $163.9 | 26,352 | 24,738 | |||||||||||||||||||
| Sales for resale | 122.2 | 141.9 | 2,115 | 2,824 | N/A | N/A | N/A | N/A | |||||||||||||||||||
| Transportation/Other | 24.7 | 17.7 | 43 | 59 | 18.5 | 16.5 | 58,812 | 52,458 | |||||||||||||||||||
| $1,282.4 | $1,269.2 | 13,137 | 13,897 | $191.0 | $180.4 | 85,164 | 77,196 | ||||||||||||||||||||
Sales Trends and Temperatures - Alliant Energy’s retail electric sales volumes decreased 2%were unchanged in 20192022 compared to 2021 primarily due to the impact of lowerincreases in sales volumes to residential and commercial customers caused by changes in temperatures, offset by decreases in sales volumes to industrial customers caused by maintenance outages and labor-related disruptions at certain large customers. Alliant Energy’s retail gas sales volumes increased 14% in 2022 compared to 2021, primarily due to cooler summerchanges in temperatures during 2019 compared to 2018 and lower demand from IPL’s industrial customers due to customer operations and general economic conditions.increases in the number of retail gas customers.
Estimated increases (decreases) to electric and gas margins from the impacts of temperatures were as follows (in millions):
| Electric Margins | Gas Margins | ||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||
| IPL | $16 | $12 | $5 | ($1) | |||||||||||||||||||||||||||||||||||||||||||
| WPL | 10 | 7 | 2 | (2) | |||||||||||||||||||||||||||||||||||||||||||
| Total Alliant Energy | $26 | $19 | $7 | ($3) | |||||||||||||||||||||||||||||||||||||||||||
| Electric Margins | Gas Margins | ||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||
| IPL | $10 | $20 | $5 | $1 | |||||||||||
| WPL | 4 | 12 | 3 | 2 | |||||||||||
| Total Alliant Energy | $14 | $32 | $8 | $3 | |||||||||||
Electric Sales for Resale - Electric sales for resale volume changes were largely due to changes in sales in the wholesale energy markets operated by MISO. These changes are impacted by several factors, including the availability and dispatch of Alliant Energy’s EGUs and electricity demand within these wholesale energy markets. Changes in sales for resale revenues were largely offset by changes in fuel-related costs, and therefore, did not have a significant impact on electric margins.
Gas Transportation/Other - Gas transportation/other sales volume changes were largely due to changes in the gas volumes supplied to Alliant Energy’s natural gas-fired EGUs caused by the availability and dispatch of such EGUs. Changes in these transportation/other revenues did not have a significant impact on gas margins.
Utility Electric Margin Variances - The following items contributed to increased (decreased) utility electric margins for 20192022 compared to 20182021 (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||
| Higher revenue requirements at WPL due to increasing rate base (a) | $121 | $— | $121 | ||||||||||||||
| Higher revenues at IPL due to changes in credits on customers’ bills related to excess deferred income tax benefits amortization through the tax benefit rider (offset by changes in income taxes) | 11 | 11 | — | ||||||||||||||
| Estimated changes in sales volumes caused by temperatures | 7 | 4 | 3 | ||||||||||||||
| Lower revenues at IPL related to changes in the renewable energy rider (mostly offset by changes in income taxes caused by higher production tax credits) | (37) | (37) | — | ||||||||||||||
| Other (includes higher wholesale margins at WPL) | 14 | 1 | 13 | ||||||||||||||
| $116 | ($21) | $137 | |||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||
| Impact of IPL’s retail electric interim and final base rate increases effective April 2019 and May 2018, respectively (a) | $102 | $102 | $— | ||||||||
| Higher margins at WPL from earning on increasing rate base for rates effective January 2019 | 58 | — | 58 | ||||||||
| Higher revenues at WPL due to changes in the amounts recorded in 2019 and 2018 for WPL’s earnings sharing mechanism (2018 reflected higher sharing of WPL’s earnings than in 2019) | 15 | — | 15 | ||||||||
| Higher revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (offset by changes in energy efficiency expense) | 10 | 10 | — | ||||||||
| Higher revenues at IPL due to changes in electric tax benefit rider credits on customers’ bills (offset by changes in income tax expense) | 9 | 9 | — | ||||||||
| Estimated changes in sales volumes caused by temperatures | (18 | ) | (10 | ) | (8 | ) | |||||
| Other (partially due to lower industrial sales at IPL) | (20 | ) | (14 | ) | (6 | ) | |||||
| $156 | $97 | $59 | |||||||||
(a)In December 2021, the PSCW issued an order authorizing annual base rate increases of $114 million and $15 million for WPL’s retail electric and gas customers, respectively, covering the 2022/2023 forward-looking Test Period, which was based on a stipulated agreement between WPL and certain stakeholders. The key drivers for the annual base rate increases include higher retail fuel-related costs in 2022, lower excess deferred income tax benefits in 2022 and 2023 compared to 2021, and revenue requirement impacts of increasing electric and gas rate base, including investments in solar generation. Retail electric rate changes were effective on January 1, 2022 and extend through the end of 2023. Retail gas rate changes were effective on January 1, 2022 and extended through the end of 2022. The higher fuel expense costs are recognized in electric margin and the lower amount of excess deferred income tax benefits is recognized as an increase in income tax expense.
Utility Gas Margin Variances - The following items contributed to increased (decreased) utility gas margins for 20192022 compared to 20182021 (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||
| Higher revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (mostly offset by changes in energy efficiency expense) | $17 | $17 | $— | ||||||||||||||
| Higher revenue requirements at WPL due to increasing rate base (refer to (a) above) | 17 | — | 17 | ||||||||||||||
| Estimated changes in sales volumes caused by temperatures | 10 | 6 | 4 | ||||||||||||||
| Other (includes higher sales in 2022) | 11 | 6 | 5 | ||||||||||||||
| $55 | $29 | $26 | |||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||
| Impact of IPL’s retail gas final base rate increase effective January 2019 | $9 | $9 | $— | ||||||||
| Higher margins at WPL from earning on increasing rate base for rates effective January 2019 | 9 | — | 9 | ||||||||
| Estimated changes in sales volumes caused by temperatures | 5 | 4 | 1 | ||||||||
| Lower revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (offset by changes in energy efficiency expense) | (7 | ) | (7 | ) | — | ||||||
| Other | 3 | 2 | 2 | ||||||||
| $19 | $8 | $12 | |||||||||
Other Operation and Maintenance Expenses Variances - The following items contributed to (increased) decreased other operation and maintenance expenses for 20192022 compared to 20182021 (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||
| Higher energy efficiency expense at IPL (mostly offset by higher revenues) | ($15) | ($15) | $— | ||||||||||||||
| Non-utility Travero (mostly offset by higher revenues) | (9) | — | — | ||||||||||||||
| Other | (4) | 8 | (10) | ||||||||||||||
| ($28) | ($7) | ($10) | |||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||
| Higher operation expense at AEF due to new acquisitions | ($39 | ) | $— | $— | |||||||
| Higher energy efficiency cost recovery amortizations at WPL pursuant to authorization from PSCW rate order effective January 2019 | (15 | ) | — | (15 | ) | ||||||
| Higher performance compensation expense | (9 | ) | (5 | ) | (4 | ) | |||||
| Higher energy efficiency expense at IPL (offset by higher electric revenues and lower gas revenues) | (2 | ) | (2 | ) | — | ||||||
| Other | (1 | ) | 5 | — | |||||||
| ($66 | ) | ($2 | ) | ($19 | ) | ||||||
Other Income and Deductions Variances - The following items contributed to (increased) decreased other income and deductions for 20192022 compared to 20182021 (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||
| Higher interest expense primarily due to financings completed in 2022 and 2021, and higher interest rates | ($48) | ($9) | ($16) | ||||||||||||||
| (11) | — | — | |||||||||||||||
| Higher AFUDC primarily due to changes in CWIP balances related to WPL’s solar generation | 35 | 2 | 33 | ||||||||||||||
| (1) | (5) | 3 | |||||||||||||||
| ($25) | ($12) | $20 | |||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||
| Higher interest expense primarily due to higher average outstanding long-term debt balances | ($26 | ) | ($8 | ) | ($4 | ) | |||||
Lower equity income due to decreased earnings from non-utility wind farm resulting from an acceleration of earnings in 2018 due to Federal Tax Reform (Refer to Note 6 for more details) | (10 | ) | — | — | |||||||
Higher equity income due to increased earnings from ATC resulting from return on equity reserve adjustments recorded in 2019 related to the FERC decision regarding MISO transmission owners’ authorized return on equity (Refer to Note 17(h) for more details) | 6 | — | — | ||||||||
| Higher AFUDC primarily due to changes in CWIP balances related to IPL’s new wind generation and WPL’s West Riverside Energy Center | 17 | 7 | 10 | ||||||||
| Other | (4 | ) | (4 | ) | (2 | ) | |||||
| ($17 | ) | ($5 | ) | $4 | |||||||
Income Taxes - Refer to Note 12 for details of effective income tax rates.rates, including the impact of Iowa tax reform in 2022.
Preferred Dividend Requirements of IPL - Refer to Note 8 for details of the redemption of IPL’s 5.1% cumulative preferred stock in 2021, including a $5 million non-cash charge recorded in 2021 related to this transaction.
Other Future Considerations - In addition to items discussed in this report, the following key items could impact Alliant Energy’s, IPL’s and WPL’s future financial condition or results of operations:
•Financing Plans -Alliant Energy currently expects to issue up to $250 million of common stock in 2023 through the distribution agreement for the sale from time to time of up to $225 million of common stock that was executed in December 2022, and its Shareowner Direct Plan. Alliant Energy and its subsidiaries currently expect to issue up to $1.2 billion of long-term debt in 2023. AEF has $400 million of long-term debt maturing in 2023. |
•Common Stock Dividends - Alliant Energy announced a 6% increase in its targeted 2023 annual common stock dividend to $1.81 per share, which is equivalent to a quarterly rate of $0.4525 per share, beginning with the February 2023 dividend payment. The timing and amount of future dividends is subject to an approved dividend declaration from Alliant Energy’s Board of Directors, and is dependent upon earnings expectations, capital requirements, and general financial business conditions, among other factors.
•Interest Expense - Alliant Energy, IPL and WPL currently expect an increase in interest expense in 2023 compared to 2022 due to financings completed in 2022 and planned in 2023 as discussed above, as well as expected higher interest rates.
CUSTOMER INVESTMENTS
Alliant Energy’s, IPL’s and WPL’s strategic priorities include making significant customer-focused investments toward cleaner energy and resilient and sustainable customer solutions. These priorities include:
Clean Energy Blueprint
Alliant Energy has developed a Clean Energy Blueprint, or its cleaner energy strategy, as a guide to meet customer demand for affordable, safe, reliable and sustainable energy in Iowa and Wisconsin. This strategy includes the planned development and acquisition of additional renewable energy, including approximately 1,100 MW of solar generation at WPL with in-service dates in 2022-2024, approximately 275 MW of battery storage at WPL with in-service dates in 2024 and 2025, approximately 400 MW of solar generation at IPL with in-service dates in 2023 and 2024 and approximately 75 MW of battery storage at IPL with in-service dates in 2024. In order to support reliable and sustainable energy and meet the MISO’s new seasonal resource adequacy requirements, Alliant Energy, IPL and WPL continue to evaluate additional opportunities for renewable generation, distributed energy resources and natural gas resources, as well as repower existing wind farms. Estimated capital expenditures for these planned projects for 2023 through 2026 are included in the “Renewables and battery storage” line in the construction and acquisition table in “Liquidity and Capital Resources.” These estimates include current expectations for higher costs for various projects, as supply constraints and commodity inflation continue to be prevalent in the solar market. In
| 29 | ||||||||
addition, Alliant Energy completed the construction and acquisition of approximately 1,200 MW of wind generation in aggregate (approximately 1,000 MW at IPL and approximately 200 MW at WPL) from 2018 through 2020.
WPL’s Solar Generation and Distributed Energy Resources - In June 2021, WPL received an order from the PSCW for its first CA authorizing WPL to acquire, own, and operate 675 MW of new solar generation in the following Wisconsin counties: Grant (200 MW), Sheboygan (150 MW), Wood (150 MW), Jefferson (75 MW), Richland (50 MW) and Rock (50 MW). In June 2022, WPL received an order from the PSCW for its second CA authorizing WPL to acquire, construct, own, and operate up to 414 MW of new solar generation in the following Wisconsin counties: Dodge (150 MW), Waushara (99 MW), Rock (65 MW), Grant (50 MW) and Green (50 MW). The Wood, Richland and Rock County projects were placed in service in 2022, and the remaining projects in the first and second CAs are expected to be placed in service in 2023 and 2024. The 1,089 MW of new solar generation is expected to replace energy and capacity being eliminated with the planned retirements of the coal-fired Edgewater Generating Station (414 MW) by June 1, 2025, and Columbia Units 1 and 2 (595 MW in aggregate) by June 1, 2026, which are the last coal-fired EGUs at WPL. The retirement of these coal-fired EGUs supports Alliant Energy’s strategy, which is focused on meeting its customers’ energy needs in an affordable, safe, reliable and sustainable manner.
In September 2022, WPL filed a request with the PSCW for approval to construct, own and operate 175 MW of battery storage, with 100 MW and 75 MW at the Grant County and Wood County solar projects, respectively, with in-service dates in 2024. In January 2023, WPL filed a request with the PSCW for approval to construct, own and operate approximately 99 MW of battery storage at the Edgewater Generating Station, with an in-service date in 2025.
IPL’s Solar Generation and Distributed Energy Resources - In November 2021, IPL filed for advance rate-making principles with the IUB for up to 400 MW of solar generation with in-service dates in 2023 and 2024 and 75 MW of battery storage in 2024. The advance rate-making principles filing included requests for a fixed cost cap, including AFUDC and transmission upgrade costs among other costs, and a return on common equity of 11.40%, and proposed that a portion of the construction be financed by tax equity partners. In September 2022, IPL provided the IUB with a summary of the Inflation Reduction Act of 2022, as well as an economic analysis indicating full ownership for these planned solar and battery storage projects is currently expected to result in more cost benefits for its customers compared to previous plans to utilize tax equity financing.
In November 2022, the IUB denied these advance rate-making principles filings and IPL requested reconsideration of the IUB’s decision. In December 2022, the IUB issued an order granting reconsideration of 200 MW of solar generation, and denied reconsideration of the other 200 MW of solar generation and 75 MW of battery storage. In January 2023, IPL filed additional information with the IUB related to the 400 MW of solar generation and 75 MW of battery storage, including a revised fixed cost cap of $1,845/kilowatt, based on updated materials, labor and shipping costs. In addition, IPL filed a request for judicial review in January 2023 regarding the denial of advance rate-making principles for the other 200 MW of solar generation and 75 MW of battery storage. In February 2023, the IUB issued an order stating that it will not issue a decision on the advance rate-making principles for the 200 MW of solar that was granted reconsideration until it receives clarity regarding its authority to issue the advance rate-making principles while the judicial review is also pending. IPL believes these solar generation and battery storage projects are in the best interests of its customers, and if advance rate-making principles are not approved by the IUB or approval by the IUB is expected to be delayed, IPL may decide to proceed with constructing the solar generation and battery storage subject to other applicable approvals (such as a GCU Certificate), and seek recovery in future rate reviews.
The 400 MW of new solar generation and 75 MW of battery storage would help replace a portion of the energy and capacity expected to be eliminated with the planned retirement of the coal-fired Lansing Generating Station (275 MW) in the first half of 2023 and the reduction of energy and capacity resulting from the December 2021 fuel switch of the Burlington Generating Station (212 MW) from coal to natural gas. In addition, IPL’s plans include additional renewables and distributed energy resources, including community solar and energy storage systems, to add energy and capacity.
New MISO Seasonal Resource Adequacy Process - In August 2022, FERC approved MISO’s proposal to change its resource adequacy process establishing capacity planning reserve margin and capacity accreditation requirements effective with the 2023/2024 MISO Planning Year, to help ensure the reliability of electricity in the MISO region. The process will change from the current Summer-based annual construct to four distinct seasons to help ensure the continued reliability of the electric transmission grid throughout each year. FERC’s approval also establishes planning reserve margin requirements for all market participants on a seasonal basis and determines a seasonal accredited capacity value for certain classes of generating resources, including higher accredited capacity for wind generation during the Spring, Fall and Winter seasons and higher accredited capacity for solar generation during the Summer season. Alliant Energy, IPL and WPL are currently unable to predict with certainty the future outcome or impact of these matters, but plan to construct and/or acquire additional renewable, battery and natural gas resources to meet the requirements of the new seasonal resource adequacy process and have reflected the estimated capital expenditures for these projects in the “Renewables and battery storage” and “Other” Generation lines in the construction and acquisition table in “Liquidity and Capital Resources.”
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WPL’s West Riverside Natural Gas-fired Generating Station - In 2020, WPL completed the construction of West Riverside, a 723 MW natural gas-fired combined-cycle EGU in Beloit, Wisconsin. WPL entered into agreements with neighboring utilities and electric cooperatives that provide each of them options to purchase a partial ownership interest in West Riverside. The purchase price for such options is based on the ownership interest acquired and the net book value of West Riverside on the date of the purchase. The timing and ownership amount of the options are as follows:
| Counterparty | Option Amount and Timing | |||||||
| Wisconsin Public Service Corporation (WPSC) | 100 MW were exercised January 2022 and are pending PSCW approval; additionally, up to 100 MW may be exercised prior to May 16, 2024 subject to PSCW approval (a) | |||||||
| Madison Gas and Electric Company (MGE) | 25 MW were exercised January 2022 and approved by the PSCW in December 2022; additionally, up to 25 MW may be exercised prior to May 16, 2025 subject to PSCW approval | |||||||
| Electric cooperatives | Approximately 60 MW were acquired January 2018 | |||||||
(a)Upon WPSC’s exercise of its options, WPL may exercise reciprocal options, subject to approval by the PSCW, to purchase up to 200 MW of any natural-gas combined-cycle EGU that either WPSC or its affiliated utility, Wisconsin Electric Power Company, places in service prior to May 2030.
Plant Retirements and Fuel Switching - The current strategy includes the retirement, or fuel switch from coal to natural gas, of various EGUs in the next several years. IPL currently expects to retire the coal-fired Lansing Generating Station (275 MW) in the first half of 2023, and fuel switch or retire Prairie Creek Units 1 and 3 (65 MW in aggregate) by December 31, 2025. WPL currently expects to retire the coal-fired Edgewater Generating Station (414 MW) by June 1, 2025, and Columbia Units 1 and 2 (595 MW in aggregate) by June 1, 2026. Alliant Energy, IPL and WPL are working with MISO, state regulatory commissions and other regulatory agencies, as required, to determine the timing of these actions, which are subject to change depending on operational, regulatory, market and other factors. Refer to Note 3 for additional details on these EGUs.
Environmental Stewardship
- Alliant Energy’s environmental stewardship is focused on meeting its customers’ energy needs in an economical, efficientaffordably, safely, reliably and sustainable manner.sustainably. Alliant Energy proactively considers future environmental compliance requirements and proposed regulations in its planning, decision-making, construction and ongoing operations activities. Alliant Energy is focused on executing a long-term strategy to deliver reliable and affordable energy with lower emissions independent of changing policies and political landscape. To achieve these long-term goals, Alliant Energy will transition away from coal-fired EGUs and incorporate moreby incorporating renewable energy, distributed energy resources, energy efficiency, demand response, highly-efficient natural gas-fired EGUs and other emerging technologies such as energy storage. Alliant Energy’s voluntary environmental-related goals and achievements include the following:
Future updates to 1,000 MW of new wind generation. IPL currently has on-going, new wind generation development utilizing the following sites:
Other Customer-focused Investments
Electric and Gas Distribution Systems - Customer-focused investments include replacing, modernizing and upgrading infrastructure in the electric and gas distribution systems. Electric system investments will focus on areas such as improving reliability and resiliency with more underground electric distribution and enabling distributed energy solutions with higher capacity lines. Gas system investments will focus on pipeline replacement to ensure safety and pipeline expansion to support reliability and economic development. Estimated capital expenditures for expected and current electric and gas distribution infrastructure projects for 20202023 through 20232026 are included in the “Electric and gas distribution systems” lines in the construction and acquisition expenditures table in “Liquidity and Capital Resources.”
Fiber Optic Telecommunication Network - Alliant Energy is currently installing fiber optic routes between its facilities to enhance its communications network to improve resiliency and reliability of, and enable and strengthen, the integrated grid network focused on less densely populated rural areas among financially disadvantaged customers and communities.
Gas Pipeline Expansion - IPL and WPL currently expect to make investments to extend various gas distribution systems to provide natural gas to unserved or underserved areas in their service territories. In September 2019, WPL filed a CA application with the PSCW for approval to expand its gas distribution systems in Western Wisconsin in 2020. Estimated capital expenditures for this project for 2020 are included in the “Gas distribution systems” line in the construction and acquisition expenditures table in “Liquidity and Capital Resources.”
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Gas Pipeline Safety -In October 2019, the The Pipeline and Hazardous Materials Safety Administration published avarious final rulerules from 2019 through 2022 that updatesupdated safety requirements for gas transmission pipelines. Procedures must bepipelines, and updated procedures were implemented to address these rules. Plans to address certain requirements for specific pipelines were developed by July 2021, and implemented, with identified remediation efforts mustto be completed by July 2035. In anticipation of these rule changes, Alliant Energy, IPL and WPL have been proactively replacing certain of IPL’s transmission pipelines, and making modifications to certain of WPL’s transmission pipelines, and are evaluatingupdating practices for assessment and operation of these pipelines. Alliant Energy, IPL, and WPL also continue to evaluate the impact of thisthese final rulerules and resulting remediation plans on their financial condition and results of operations.
Non-utility business - Alliant Energy continues to explore growth of its Travero businesses and other limited scope opportunities for growth outside of, but relatedcomplementary to, Alliant Energy’s core utility business. This non-utility strategy continues to evolve through exploration of modest strategic opportunities that are accretive to earnings and cash flows within and outside of Alliant Energy’s service territories. In January and March 2019, AEF purchased two freight management companies. These non-utility acquisitions enhance Alliant Energy’s Transportation value to customers by adding customized supply chain solution capabilities to their portfolio of service offerings. Refer to Note 3 for details.flows.
RATE MATTERS
Rate Reviews
Retail Base Rate Filings - Base rate changes reflect both returns on additions to infrastructure and recovery of changes in costs incurred or expected to be incurred.incurred to provide electric and gas service to retail customers. Given that a portion of the rate changes will offset changes in costs, revenues from rate changes should not be expected to result in an equal change in net income for either IPL or WPL.
WPL’s Retail Electric and Gas Rate Review (2019/2020Reviews (2022/2023 Forward-looking Test Period) - In 2017, WPL filed retail electric and gas rate review requests withDecember 2021, the PSCW covering the 2019/2020 forward-looking Test Period. In December 2018, WPL receivedissued an order from the PSCW approving WPL’s proposed settlementauthorizing annual base rate increases of $114 million and $15 million for its retail electric and gas rate reviews, effective January 1, 2019. Under the settlement, WPL’s retail electric and gas customers, respectively, covering the 2022/2023 forward-looking Test Period, which was based on a stipulated agreement between WPL and certain stakeholders. The key drivers for the annual base rates will not change from current levelsrate increases include higher retail fuel-related costs in 2022, lower excess deferred income tax benefits in 2022 and 2023 and revenue requirement impacts of increasing electric and gas rate base, including investments in solar generation. In addition, the PSCW authorized WPL to receive a recovery of and a return on the remaining net book value of Edgewater Unit 5 through 2023. Retail electric rate changes were effective on January 1, 2022 and extend through the end of 2020. Retail electric revenue requirements resulting from increasing investments in rate base (including West Riverside) are offset by lower fuel-related costs and Federal Tax Reform refunds.2023. Retail gas revenue requirements resultingrate changes were effective from increasing investmentsJanuary 1, 2022 through the end of 2022.
In December 2022, the PSCW issued an order authorizing an additional annual base rate increase of $9 million for WPL’s retail gas customers, covering the 2023 forward-looking Test Period, which reflects changes in weighted average cost of capital, updated depreciation rates and modifications to certain regulatory asset and regulatory liability amortizations. These retail gas rate base are offset by Federal Tax Reform refunds. changes were effective on January 1, 2023 and extend through the end of 2023.
WPL’s settlement extends, with certain modifications, an earnings sharing mechanism through 2020.2023. Under the earnings sharing mechanism, WPL will defer a portion of its earnings if its annual regulatory return on common equity exceeds 10.25% during the 2019/20202022/2023 Test Period. WPL must defer 50% of its excess earnings between 10.25% and 10.75%, and 100% of any excess earnings above 10.75%.
WPL’s Retail Fuel-related Rate Filing (2021 Forward-looking Test Period) - In August 2022, the PSCW regarding this rate filingauthorized WPL to collect $37 million in 2023 from its retail electric customers, plus interest, for an under-collection of fuel-related costs incurred by the end of 2020.WPL in 2021 that were higher than fuel-related costs used to determine rates for such period.
WPL’s Retail Fuel-related Rate Filing (2023 Forward-looking Test Period) - In December 2022, the PSCW authorized WPL to collect $47 million in higher rates in 2023 from its retail electric customers to reflect an increase in expected fuel-related costs for 2023 compared to WPL’s approved 2022 fuel-related costs.
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Rate Review Details - Details related to IPL’s and WPL’s key jurisdictions were as follows:
| Average | Authorized Return | Common Equity | |||||||||||||||||||||||||||
| Regulatory | Rate Base | on Common | Component of Regulatory | Effective | |||||||||||||||||||||||||
| Body | (in millions) | Equity (a) | Capital Structure | Date | |||||||||||||||||||||||||
| IPL Retail Electric (2020 Test Period) | |||||||||||||||||||||||||||||
| Marshalltown (b) | IUB | $559 | 11.00% | 51.0% | 2/26/2020 | ||||||||||||||||||||||||
| Emery (b) | IUB | 165 | 12.23% | 51.0% | 2/26/2020 | ||||||||||||||||||||||||
| Whispering Willow - East (b) | IUB | 163 | 11.70% | 51.0% | 2/26/2020 | ||||||||||||||||||||||||
| Renewable energy rider (c) | IUB | 1,577 | 10.10% | 51.0% | 4/15/2022 | ||||||||||||||||||||||||
| Other (b) | IUB | 3,767 | 9.50% | 51.0% | 2/26/2020 | ||||||||||||||||||||||||
| IPL Retail Gas (2020 Test Period) (b) | IUB | 557 | 9.60% | 51.0% | 1/10/2020 | ||||||||||||||||||||||||
| IPL Wholesale Electric | FERC | 162 | 10.97% | 51.0% | 1/1/2022 | ||||||||||||||||||||||||
| WPL Retail Electric and Gas | |||||||||||||||||||||||||||||
| Electric (2023 Test Period) (d) | PSCW | 4,573 | 10.00% | 54.1% | 1/1/2023 | ||||||||||||||||||||||||
| Gas (2023 Test Period) (d) | PSCW | 471 | 10.00% | 54.1% | 1/1/2023 | ||||||||||||||||||||||||
| WPL Wholesale Electric | FERC | 424 | 10.90% | 55.0% | 1/1/2022 | ||||||||||||||||||||||||
(a)Authorized returns on common equity may not be indicative of actual returns earned or projections of future returns.
(b)Average rate base amounts reflect IPL’s allocated retail share of rate base and do not include CWIP, and were calculated using a forecasted 13-month average for the test period.
(c)Average rate base amounts recovered through IPL’s renewable energy rider mechanism include construction costs incurred to fund IPL’s 1,000 MW of wind generation facilities placed in service in 2019 and 2020 (11.00% return on common equity), production tax credit carryforwards for the 1,000 MW of wind generation facilities (5.00% return on common equity) and certain transmission facilities classified as intangible assets (9.50% return on common equity), and were calculated using a 13-month average.
(d)Average rate base amounts reflect WPL’s allocated retail share of rate base and do not include CWIP or a cash working capital allowance, and were calculated using a forecasted 13-month average for the test period. The PSCW provides a return on selected CWIP and a cash working capital allowance by adjusting the percentage return on rate base.
Planned Rate Reviews - WPL currently expects to file a retail electric and gas rate review with the PSCW in the second quarter of 2023 for the 2024/2025 forward-looking Test Period. The key drivers for the anticipated filing include revenue requirement impacts of increasing electric and gas rate base, including investments in solar generation and battery storage. Any rate changes granted from this pending request are expected to be effective on January 1, 2024, with a decision from the PSCW expected by the end of 2023.
IPL currently expects to file a retail electric and gas rate review with the IUB by the first half of 2024. The key drivers for the anticipated filing include revenue requirement impacts of increasing electric and gas rate base, including investments in solar generation and battery storage.
LEGISLATIVE MATTERS
| Average | Authorized Return | Common Equity | |||||||||
| Regulatory | Rate Base | on Common | Component of Regulatory | Effective | |||||||
| Body | (in millions) | Equity (a) | Capital Structure | Date | |||||||
| IPL Retail Electric (2020 Test Period) | |||||||||||
| Marshalltown (b) | IUB | $559 | 11.00% | 51.0% | (c) | ||||||
| Emery (b) | IUB | 165 | 12.23% | 51.0% | (c) | ||||||
| Whispering Willow - East (b) | IUB | 163 | 11.70% | 51.0% | (c) | ||||||
| Renewable energy rider (b)(d) | IUB | 1,335 | 10.65% | 51.0% | (c) | ||||||
| Other (b) | IUB | 3,767 | 9.50% | 51.0% | (c) | ||||||
| IPL Retail Gas (2020 Test Period) (b) | IUB | 557 | 9.60% | 51.0% | 1/10/2020 | ||||||
| IPL Wholesale Electric | FERC | 119 | 10.97% | 50.4% | 1/1/2019 | ||||||
| WPL Retail Electric and Gas | |||||||||||
| Electric (2020 Test Period) (e) | PSCW | 3,955 | 10.00% | 52.5% | 1/1/2020 | ||||||
| Gas (2020 Test Period) (e) | PSCW | 387 | 10.00% | 52.5% | 1/1/2020 | ||||||
| WPL Wholesale Electric | FERC | 239 | 10.90% | 55.0% | 1/1/2019 | ||||||
In August 2022, the Inflation Reduction Act of 2022 was enacted. The most significant provisions of the new legislation for Alliant Energy, IPL and WPL relate to a 10-year extension of tax credits for clean energy projects, a new production tax credit eligible for solar projects, a new stand-alone investment tax credit for battery storage projects and the right to transfer future renewable credits to other corporate taxpayers. The new legislation also includes a requirement for corporations with income over $1 billion to pay a 15% minimum tax; however, Alliant Energy is currently below this income level. Alliant Energy, IPL and WPL currently expect to utilize various provisions of the new legislation to enhance the tax benefits expected from their announced solar and battery storage projects, including transferring the future tax credits from such projects to other corporate taxpayers and opting to retain full ownership of such projects instead of financing a portion of the projects with tax equity partners. Compared to previous plans to utilize tax equity financing, the impact of these changes is expected to result in more cost benefits for IPL's and WPL's customers, higher rate base amounts, additional financing needs expected to be satisfied with additional long-term debt and common stock issuances, and improvements in long-term cash flows over the life of the solar and battery storage projects.
In November 2021, the Infrastructure Investment and Jobs Act (IIJA Act) was enacted. The most significant provisions of the IIJA Act for Alliant Energy relate to a variety of infrastructure-related priorities, including transportation, environmental, energy and broadband infrastructure. In addition, the IIJA Act is intended to accelerate research, development, demonstration and deployment of carbon-free technologies, including hydrogen and carbon capture and storage.
In March 2021, the American Rescue Plan Act of 2021 (Act) was enacted. The most significant provision of the Act for Alliant Energy is reduced minimum pension plan funding requirements, which Alliant Energy adopted in August 2021. The Act also
In December 2019, WPL received an order fromMarch 2020, the PSCW authorizing an annual retail electric rate decrease of $29 million, or approximately 2%, effective January 1, 2020.Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted. The decrease primarily reflects a change in expected fuel-related costs in 2020. Fuel-related costs are subject to deferral if they are outside an annual bandwidth of plus or minus 2%most significant provision of the approved annual forecasted fuel-related costs.
LIQUIDITY AND CAPITAL RESOURCES
Overview - Alliant Energy, IPL and WPL expect to maintain adequate liquidity to operate their businesses and implement their strategy as a result of operating cash flows generated by their utility business, and available capacity under a single revolving credit facility and IPL’s sales of accounts receivable program, supplemented by periodic issuances of long-term debt and Alliant Energy equity securities. As summarized below, Alliant Energy, IPL and WPL believe they have the ability to generate and obtain adequate amounts of cash to meet their requirements and plans for cash in the next 12 months and beyond.
Liquidity Position - At December 31, 2019,2022, Alliant Energy had $16$20 million of cash and cash equivalents, $663$358 million ($281148 million at the parent company, $250$100 million at IPL and $132$110 million at WPL) of available capacity under the single revolving credit facility and $83$30 million of available capacity at IPL under its sales of accounts receivable program.
Capital Structure - Alliant Energy, IPL and WPL plan to maintain debt-to-total capitalization ratios that are consistent with investment-grade credit ratings. IPL and WPL expect to maintain capital structures consistent with theirthe authorized levels. Alliant Energy expects to maintain consolidated debt at approximately 55% of total capital and consolidated preferred stock at less than 5% of total capital. These targets may be adjusted depending on subsequent developments and the impact on their respective weighted-average cost of capital and investment-grade credit ratings.levels approved by regulators. Capital structures as of December 31, 20192022 were as follows (Common Equity (CE); IPL’s Preferred Stock (PS); Long-term Debt (including current maturities) (LD); Short-term Debt (SD)):
Alliant Energy, IPL and WPL intend to manage their capital structures and liquidity positions in such a way that facilitates their ability to raise funds reliably and on reasonable terms and conditions, while maintaining capital structures consistent with those approved by regulators. In addition to capital structures, other important factors used to determine the characteristics of future financings include financial coverage ratios, capital spending plans, regulatory orders and rate-making considerations, levels of debt imputed by rating agencies, market conditions, the impact of tax initiatives and legislation, and any potential proceeds from asset sales. The PSCW factors certain imputed debt adjustments, including certain lease obligations, in establishing a regulatory capital structure as part of WPL’s retail rate reviews. The IUB does not make any explicit adjustments for imputed debt in establishing capital ratios used in determining customer rates, although such adjustments are considered by IPL in recommending an appropriate capital structure. Debt imputations by rating agencies include, among others, pension and OPEB obligations and the sales of accounts receivable program.
Credit and Capital Markets - Alliant Energy, IPL and WPL maintain a single revolving credit facility to provide backstop liquidity to their commercial paper programs, and ensure a committed source of liquidity in the event the commercial paper market becomes disrupted. In addition, IPL maintains a sales of accounts receivable program as an alternative financing source.source; however, if customer arrears were to exceed certain levels, IPL’s access to the program may be restricted.
Primary Sources and Uses of Cash - Alliant Energy’s most significant source of cash is from electric and gas sales to IPL’s and WPL’s customers. Cash from these sales reimburses IPL and WPL for prudently-incurred expenses to provide service to their utility customers and generally provides IPL and WPL a return of and a return on the assets used to provide such services. Capital needed to retire debt and fund capital expenditures related to large strategic projects is expected to be met primarily through external financings.
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Cash Flows - Selected information from the cash flows statements was as follows (in millions):
| Alliant Energy | IPL | WPL | ||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Cash, cash equivalents and restricted cash, January 1 | $40 | $56 | $34 | $50 | $2 | $3 | ||||||||||||||||||||||||||||||||||||||
| Cash flows from (used for): | ||||||||||||||||||||||||||||||||||||||||||||
| Operating activities | 486 | 582 | 83 | 153 | 299 | 371 | ||||||||||||||||||||||||||||||||||||||
| Investing activities | (933) | (728) | 215 | 91 | (1,033) | (716) | ||||||||||||||||||||||||||||||||||||||
| Financing activities | 431 | 130 | (317) | (260) | 737 | 344 | ||||||||||||||||||||||||||||||||||||||
| Net increase (decrease) | (16) | (16) | (19) | (16) | 3 | (1) | ||||||||||||||||||||||||||||||||||||||
| Cash, cash equivalents and restricted cash, December 31 | $24 | $40 | $15 | $34 | $5 | $2 | ||||||||||||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
| Cash, cash equivalents and restricted cash, January 1 | $25.5 | $33.9 | $12.4 | $7.2 | $9.2 | $24.2 | |||||||||||||||||
| Cash flows from (used for): | |||||||||||||||||||||||
| Operating activities | 660.4 | 527.7 | 172.9 | (5.0 | ) | 423.2 | 457.0 | ||||||||||||||||
| Investing activities | (1,287.3 | ) | (1,066.8 | ) | (667.0 | ) | (429.4 | ) | (557.2 | ) | (607.5 | ) | |||||||||||
| Financing activities | 619.1 | 530.7 | 491.0 | 439.6 | 129.2 | 135.5 | |||||||||||||||||
| Net increase (decrease) | (7.8 | ) | (8.4 | ) | (3.1 | ) | 5.2 | (4.8 | ) | (15.0 | ) | ||||||||||||
| Cash, cash equivalents and restricted cash, December 31 | $17.7 | $25.5 | $9.3 | $12.4 | $4.4 | $9.2 | |||||||||||||||||
Operating Activities - The following items contributed to increased (decreased) operating activity cash flows for 20192022 compared to 20182021 (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||
| Timing of WPL’s fuel-related cost recoveries from retail electric customers | ($80) | $— | ($80) | ||||||||||||||
| Changes in the sales of accounts receivable at IPL | (41) | (41) | — | ||||||||||||||
| Changes in interest payments | (39) | (10) | (10) | ||||||||||||||
| Changes in levels of production fuel | (19) | (16) | (3) | ||||||||||||||
| Changes in levels of gas stored underground | (15) | — | (15) | ||||||||||||||
| Lower (higher) contributions to qualified defined benefit pension plans | (13) | (33) | 18 | ||||||||||||||
| Changes in income taxes paid/refunded | (3) | (11) | (18) | ||||||||||||||
| Higher collections from WPL’s retail electric and gas base rate increases | 121 | — | 121 | ||||||||||||||
| Changes in cash collateral and deposit balances at Corporate Services | 38 | — | — | ||||||||||||||
| Increased collections from IPL’s and WPL’s retail customers caused by temperature impacts on electric and gas sales | 17 | 10 | 7 | ||||||||||||||
| Timing of intercompany payments and receipts | — | 7 | (26) | ||||||||||||||
| Other (primarily due to other changes in working capital) | (62) | 24 | (66) | ||||||||||||||
| ($96) | ($70) | ($72) | |||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||
| Higher collections from IPL’s retail electric and gas base rate increases | $111 | $111 | $— | ||||||||
| Changes in amounts refunded to customers related to Federal Tax Reform | 54 | 15 | 39 | ||||||||
| Changes in income taxes paid/refunded | 26 | 31 | (43 | ) | |||||||
| Contributions to qualified defined benefit pension plans in 2019 | (32 | ) | (16 | ) | (16 | ) | |||||
| Changes in levels of production fuel | (27 | ) | (10 | ) | (17 | ) | |||||
| Changes in interest payments | (20 | ) | (1 | ) | (4 | ) | |||||
| Decreased collections from IPL’s and WPL’s retail customers caused by temperature impacts on electric and gas sales | (13 | ) | (6 | ) | (7 | ) | |||||
| Timing of intercompany payments and receipts | — | 37 | 4 | ||||||||
| Other (primarily due to other changes in working capital) | 34 | 17 | 10 | ||||||||
| $133 | $178 | ($34 | ) | ||||||||
Income Tax Payments and Refunds - Income tax (payments) refunds including refunds of alternative minimum tax credits, were as follows (in millions):
| 2022 | 2021 | ||||||||||||||||
| IPL | $36 | $47 | |||||||||||||||
| WPL | (56) | (38) | |||||||||||||||
| Other subsidiaries | 14 | (12) | |||||||||||||||
| Alliant Energy | ($6) | ($3) | |||||||||||||||
| 2019 | 2018 | ||||||
| IPL | $7 | ($24 | ) | ||||
| WPL | (29 | ) | 14 | ||||
| Other subsidiaries | 43 | 5 | |||||
| Alliant Energy | $21 | ($5 | ) | ||||
Alliant Energy, IPL and WPL currently do not expect to make any significant federal income tax payments through 2024over the next few years based on their current federal net operating loss and credit carryforward positions. While no significant federal income tax payments through 2024 are expected to occur,positions; however, some tax payments and refunds may occur for state taxes and between consolidated group members (including IPL and WPL) under the tax sharing agreement between Alliant Energy and its subsidiaries. Refer to Note 12 for discussion of the carryforward positions.
As discussed in “Legislative Matters,” the Inflation Reduction Act of 2022 provides the right to transfer future renewable tax credits to other corporate taxpayers, which is expected to result in future cash flows from operating activities for Alliant Energy, IPL and WPL beginning as early as 2023.
Pension Plan Contributions - Alliant Energy, IPL and WPL currently expect to make $60$12 million, $19$1 million and $22$10 million of pension plan contributions in 2020,2023, respectively, based on the funded status and assumed return on assets for each plan as of the December 31, 20192022 measurement date. Refer to Note 13(a) for discussion of pension plan contributions in 2022 and the current funded levels of pension plans.
Investing Activities - The following items contributed to increased (decreased) investing activity cash flows for 20192022 compared to 20182021 (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||
| (Higher) lower utility construction and acquisition expenditures (a) | ($322) | $12 | ($334) | ||||||||||||||
| Changes in the amount of cash receipts on sold receivables | 96 | 96 | — | ||||||||||||||
| Other | 21 | 16 | 17 | ||||||||||||||
| ($205) | $124 | ($317) | |||||||||||||||
(a)Largely due to higher expenditures for WPL’s solar generation.
| Alliant Energy | IPL | WPL | |||||||||
| Changes in the amount of cash receipts on sold receivables | ($192 | ) | ($192 | ) | $— | ||||||
| Expenditures for new acquisitions at AEF in 2019 | (13 | ) | — | — | |||||||
| Lower (higher) utility construction and acquisition expenditures (a) | 30 | (29 | ) | 59 | |||||||
| Other | (46 | ) | (17 | ) | (9 | ) | |||||
| ($221 | ) | ($238 | ) | $50 | |||||||
Construction and Acquisition Expenditures - Construction and acquisition expenditures and financing plans are reviewed, approved and updated as part of the financialstrategic planning process. Changes may result from a number of reasons, including regulatory requirements, changing legislation, not obtaining favorable and acceptable regulatory approval on certain projects, improvements in technology and improvements to ensure resiliency and reliability of the electric and gas distribution systems. Alliant Energy, IPL and WPL have not yet entered into contractual commitments relating to the majority of their anticipated future construction and acquisition expenditures. As a result, they have some discretion with regard to the level and timing of these expenditures. The table below summarizes anticipated construction and acquisition expenditures (in millions)., which are focused on the transition to cleaner energy and strengthening the resiliency and reliability of IPL’s and WPL’s electric grid. Cost estimates represent Alliant Energy’s, IPL’s and WPL’s portion of construction expenditures and exclude AFUDC and capitalized interest, if applicable. Such amounts do not include IPL’s expected $110 million buyout payment in September 2020 related to the DAEC PPA. Such estimates reflect reductions to Alliant Energy’s and WPL’s capital expenditures resulting from purchase options by certain electric cooperatives for a partial ownership interest in West Riverside; however, such estimates do not reflect any potential proceeds if neighboring utilities exercise options for a partial ownership in West Riverside. Refer to “Customer Investments” for further discussion of certain key projects impacting construction and acquisition plans related to the utility business.
| Alliant Energy | IPL | WPL | ||||||||||||||||||||||||||||||||||||||||||
| 2023 | 2024 | 2025 | 2026 | 2023 | 2024 | 2025 | 2026 | 2023 | 2024 | 2025 | 2026 | |||||||||||||||||||||||||||||||||
| Generation: | ||||||||||||||||||||||||||||||||||||||||||||
| Renewables and battery storage | $900 | $1,205 | $725 | $1,060 | $325 | $625 | $260 | $670 | $575 | $580 | $465 | $390 | ||||||||||||||||||||||||||||||||
| Other | 100 | 315 | 490 | 335 | 55 | 55 | 70 | 100 | 45 | 260 | 420 | 235 | ||||||||||||||||||||||||||||||||
| Distribution: | ||||||||||||||||||||||||||||||||||||||||||||
| Electric systems | 550 | 595 | 545 | 535 | 320 | 360 | 300 | 280 | 230 | 235 | 245 | 255 | ||||||||||||||||||||||||||||||||
| Gas systems | 80 | 85 | 85 | 85 | 35 | 40 | 40 | 40 | 45 | 45 | 45 | 45 | ||||||||||||||||||||||||||||||||
| Other | 220 | 210 | 175 | 180 | 45 | 40 | 45 | 45 | 35 | 30 | 30 | 30 | ||||||||||||||||||||||||||||||||
| $1,850 | $2,410 | $2,020 | $2,195 | $780 | $1,120 | $715 | $1,135 | $930 | $1,150 | $1,205 | $955 | |||||||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | ||||||||||||||||||||||||||||||||||||
| 2020 | 2021 | 2022 | 2023 | 2020 | 2021 | 2022 | 2023 | 2020 | 2021 | 2022 | 2023 | |||||||||||||||||||||||||||
| Generation: | ||||||||||||||||||||||||||||||||||||||
| Renewable projects | $260 | $110 | $275 | $390 | $135 | $— | $— | $— | $125 | $110 | $275 | $390 | ||||||||||||||||||||||||||
| Other | 205 | 140 | 170 | 90 | 90 | 85 | 125 | 50 | 115 | 55 | 45 | 40 | ||||||||||||||||||||||||||
| Distribution: | ||||||||||||||||||||||||||||||||||||||
| Electric systems | 570 | 535 | 525 | 540 | 320 | 285 | 270 | 310 | 250 | 250 | 255 | 230 | ||||||||||||||||||||||||||
| Gas systems | 185 | 80 | 130 | 105 | 50 | 45 | 95 | 65 | 135 | 35 | 35 | 40 | ||||||||||||||||||||||||||
| Other | 205 | 180 | 235 | 245 | 30 | 10 | 10 | 15 | 15 | 10 | 20 | 15 | ||||||||||||||||||||||||||
| $1,425 | $1,045 | $1,335 | $1,370 | $625 | $425 | $500 | $440 | $640 | $460 | $630 | $715 | |||||||||||||||||||||||||||
West Riverside Options - WPL entered into agreements with neighboring utilities that provide them options to purchase a partial ownership interest in West Riverside. Upon exercise of such options, WPL will receive proceeds from the sale. Refer to “Customer Investments” for additional information, including timing for the actual and potential exercise of options.
Financing Activities - The following items contributed to increased (decreased) financing activity cash flows for 20192022 compared to 20182021 (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||
| Higher (lower) net proceeds from issuance of long-term debt | $738 | ($300) | $288 | ||||||||||||||
| Payments to redeem cumulative preferred stock of IPL in 2021 | 200 | 200 | — | ||||||||||||||
| Net changes in the amount of commercial paper outstanding | 1 | — | 75 | ||||||||||||||
| Higher payments to retire long-term debt | (625) | — | (250) | ||||||||||||||
| (Higher) lower common stock dividends | (25) | 79 | (8) | ||||||||||||||
| Higher (lower) capital contributions from IPL’s and WPL’s parent company, Alliant Energy | — | (50) | 285 | ||||||||||||||
| Other | 12 | 14 | 3 | ||||||||||||||
| $301 | ($57) | $393 | |||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||
| Lower (higher) payments to retire long-term debt | $599 | $350 | ($250 | ) | |||||||
| Higher net proceeds from common stock issuances | 194 | — | — | ||||||||
| Higher (lower) net proceeds from issuance of long-term debt | (550 | ) | 100 | 350 | |||||||
| Net changes in the amount of commercial paper and other short-term borrowings outstanding | (130 | ) | (101 | ) | (18 | ) | |||||
| Lower capital contributions from IPL’s and WPL’s parent company, Alliant Energy | — | (300 | ) | (75 | ) | ||||||
| Other | (25 | ) | 2 | (13 | ) | ||||||
| $88 | $51 | ($6 | ) | ||||||||
FERC and Public Utility Holding Company Act Financing Authorizations - Under the Public Utility Holding Company Act of 2005, FERC has authority over the issuance of utility securities, except to the extent that a public utility’s primary state regulatory commission has retained jurisdiction over such matters. FERC currently has authority over the issuance of securities by IPL. FERC does not have authority over the issuance of securities by Alliant Energy, WPL, AEF or Corporate Services. In 2019,2021, IPL received authorization from FERC to issue securities in 20202022 and 20212023 as follows (in millions):
| Long-term debt securities issuances in aggregate | |||||||||||
| Short-term debt securities outstanding at any time (including borrowings from its parent) | 400 | ||||||||||
| Preferred stock issuances in aggregate | 300 | ||||||||||
State Regulatory Financing Authorizations - In 2017, WPL received authorization from the PSCW to have up to $400 million of short-term borrowings and/or letters of credit outstanding at any time through the earlier of the expiration date of WPL’s credit facility agreement (including extensions) or December 2024. In October 2019,February 2023, WPL received authorization from the PSCW to issue up to $350 million$1.2 billion of long-term debt securities in aggregate in 2020.through December 2025.
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Shelf Registrations - Alliant Energy, IPL and WPL have current shelf registration statements on file with the SEC for availability to issue unspecified amounts of securities through December 2020.2023. Alliant Energy’s shelf registration statement may be used to issue common stock, debt and other securities. IPL’s and WPL’s shelf registration statements may be used to issue preferred stock and debt securities.
Common Stock Dividends - Payment of common stock dividends is subject to dividend declaration by Alliant Energy’s Board of Directors.Directors and is dependent upon, among other factors, regulatory limitations, earnings, cash flows, capital requirements and general financial condition of subsidiaries. Alliant Energy’s general long-term goal is to maintain a dividend payout ratio that is competitive with the industry average. Based on that, Alliant Energy’s goal is to maintain a dividend payout ratio of approximately 60% to 70% of consolidated earnings from continuing operations. IPL’s and WPL’s goal is to maintain dividend payout ratios of approximately 65% to 75%. Alliant Energy’s, IPL’s and WPL’s dividend payout ratios were 61%, 59% and 62% of their consolidated earnings from continuing operations in 2019, respectively. Refer to “Results of Operations” for discussion of expected common stock dividends in 2020.2023.
Common Stock Issuances - Refer to Note 7 for discussion of common stock issuances by Alliant Energy in 20182021 and 2019,2022, and “Results of Operations” for discussion of expected issuances of common stock in 2020.2023.
Short-term Debt - In 2017,2021, Alliant Energy, IPL and WPL entered into a single revolving credit facility agreement, which expires in August 2023December 2026 and is discussed in Note 9(a). There are currently 13 lenders that participate in the credit facility, with respective commitments ranging from $20 million to $130 million. The credit facility includes a $100 million letter of credit commitment and $50 million swingline commitment, which are available to each of Alliant Energy, IPL and WPL. Subject to certain conditions, Alliant Energy, IPL and WPL may exercise onetwo extension option,options, each extending the maturity date by one year. The credit facility has a provision to expand the facility size up to an additional $300 million, for a potential total commitment of $1.3 billion, subject to lender approval for Alliant Energy and subject to lender and regulatory approvals for IPL and WPL.
The credit agreement contains customary events of default, including a cross-default provision that would be triggered if Alliant Energy or certain of its significant subsidiaries (including IPL and WPL) defaults on debt (other than non-recourse debt) totaling $100 million or more. IPL and WPL are subject to a similar cross-default provision with respect to their own respective consolidated debt. A default by Alliant Energy or its non-utility subsidiaries would not trigger a cross-default at IPL or WPL, nor would a default by either of IPL or WPL constitute a cross-default event for the other. If an event of default under the credit agreement occurs and is continuing, then the lenders may declare any outstanding obligations of the
defaulting borrower under the credit agreement immediately due and payable. At December 31, 2019,
The single credit facility agreement contains a financial covenant, which requires Alliant Energy, IPL and WPL to maintain certain debt-to-capital ratios in order to borrow under the credit facility. AEF’s term loan credit agreement contains a financial covenant, which requires Alliant Energy to maintain a certain debt-to-capital ratio in order to borrow under the term loan credit agreement. The required debt-to-capital ratios compared to the actual debt-to-capital ratios at December 31, 2022 were in compliance with financial covenantsas follows:
| Alliant Energy | IPL | WPL | |||||||||||||||
| Requirement, not to exceed | 65% | 65% | 65% | ||||||||||||||
| Actual | 58% | 49% | 48% | ||||||||||||||
The debt component of the capital ratios includes, when applicable, long- and short-term debt (excluding non-recourse debt and hybrid securities to the extent the total carrying value of such hybrid securities does not exceed 15% of consolidated capital of the applicable borrower), finance lease obligations, certain letters of credit, agreement.guarantees of the foregoing and new synthetic leases. Unfunded vested benefits under qualified pension plans and sales of accounts receivable are not included in the debt-to-capital ratios. The equity component of the capital ratios excludes accumulated other comprehensive income (loss).
Long-term Debt - Refer to Note 9(b) for discussion of issuances and retirements of long-term debt in 20192022 and 2023, and “Results of Operations” for discussion of expected issuances of long-term debt in 2020.2023. In 2018,2021, IPL issued $500 million of 4.1% senior debentures (green bonds) due September 2028. In 2018, AEF entered into a $300 million variable-rate term loan credit agreement due April 2020. In 2018, AEF issued $400 million of 3.75% senior notes due June 2023 and $300 million of 4.25%3.1% senior notesdebentures due June 2028,2051, and a portion of the net proceeds from the issuancesissuance were used by AEFIPL to retire its $500 millioncumulative preferred stock in 2021 and $95 million variable-rate term loan credit agreements expiring in 2018.for general corporate purposes. In addition, IPL retired $2502021, WPL issued $300 million of 7.25% senior1.95% green bond debentures due 2031, and $100 millionan amount in excess of 5.875% senior debentures in 2018.the net proceeds was disbursed for the construction and development of WPL’s wind and solar EGUs.
Impact of Credit Ratings on Liquidity and Collateral Obligations -
Ratings Triggers - The long-term debt of Alliant Energy and its subsidiaries is not subject to any repayment requirements as a result of explicit credit rating downgrades or so-called “ratings triggers.” However, Alliant Energy and its subsidiaries are parties to various agreements that contain provisions dependent on credit ratings. In the event of a significant downgrade, Alliant Energy or its subsidiaries may need to provide credit support, such as letters of credit or cash collateral equal to the amount of any exposure, or may need to unwind contracts or pay underlying obligations. In the event of a significant downgrade, management believes Alliant Energy, IPL and WPL have sufficient liquidity to cover counterparty credit support or collateral requirements under these various agreements. In addition, a downgrade in the credit ratings of Alliant Energy, IPL or WPL could also result in them paying higher interest rates in future financings, reduce flexibility with future financing plans, reduce their pool of potential lenders, increase their borrowing costs under existing credit facilities or limit their access to the commercial paper market. Credit ratings and outlooks as of the date of this report are as follows:
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| Standard & Poor’s Ratings Services | Moody’s Investors Service | |||||||||||||
| Alliant Energy: | Corporate/issuer | A- | Baa2 | |||||||||||
| Commercial paper | A-2 | P-2 | ||||||||||||
| Senior unsecured long-term debt | N/A | N/A | ||||||||||||
| Outlook | Stable | Stable | ||||||||||||
| IPL: | Corporate/issuer | A- | Baa1 | |||||||||||
| Commercial paper | A-2 | P-2 | ||||||||||||
| Senior unsecured long-term debt | A- | Baa1 | ||||||||||||
| WPL: | ||||||||||||||
| Senior unsecured long-term debt | A | A3 | ||||||||||||
| Outlook | ||||||||||||||
Standard & Poor’s Ratings Services and Moody’s Investors Service issued credit ratings of BBB+ and Baa2, respectively, for the senior notes issued by AEF in 2018, 2020 and 2022 (with Alliant Energy as guarantor). Credit ratings are not recommendations to buy or sell securities and are subject to change, and each rating should be evaluated independently of any other rating. Each of Alliant Energy, IPL or WPL assumes no obligation to update their respective credit ratings. Refer to Note 15 for additional information on ratings triggers for commodity contracts accounted for as derivatives.
Off-Balance Sheet Arrangements -
Special Purpose Entities - IPL maintains a Receivables Agreement whereby it may sell its customer accounts receivables, unbilled revenues and certain other accounts receivables to a third party through wholly-owned and consolidated special purpose entities. The purchase commitment from the third party to which IPL sells its receivables expires in March 2021.2023. IPL currently expects to amend and extend the purchase commitment. In 20192022 and 2018,2021, IPL evaluated the third party that purchases IPL’s receivable assets under the Receivables Agreement and believes that the third party is a VIE. However,VIE; however, IPL concluded consolidation of the third party was not required.
In addition, IPL’s sales of accounts receivable program agreement contains a cross-default provision that is triggered if IPL or Alliant Energy incurs an event of default on debt totaling $100 million or more. If an event of default under IPL’s sales of accounts receivable program agreement occurs, then the counterparty could terminate such agreement. Refer to Note 5(b) for additional information regarding IPL’s sales of accounts receivable program.
Guarantees and Indemnifications - At December 31, 2019,2022, various guarantees and indemnifications are outstanding related to Alliant Energy’s cash equity ownership interest in a non-utility wind farm and Alliant Energy’s and IPL’s prior divestiture activities. Refer to Note 17(d) for additional information.
Certain Financial Commitments -
Contractual Obligations - ConsolidatedAlliant Energy, IPL and WPL have various long-term contractual obligations as of December 31, 20192022, which include long-term debt maturities in were as follows (in millions):Note 9(b)
| Alliant Energy | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | ||||||||||||||||||||
| $499 | $223 | $160 | $128 | $84 | $199 | $1,293 | |||||||||||||||||||||
| 657 | 8 | 333 | 408 | 509 | 4,325 | 6,240 | |||||||||||||||||||||
| Interest - long-term debt obligations | 251 | 237 | 237 | 220 | 213 | 2,182 | 3,340 | ||||||||||||||||||||
| 110 | — | — | — | — | — | 110 | |||||||||||||||||||||
| 77 | — | — | — | — | — | 77 | |||||||||||||||||||||
| 2 | 2 | 2 | 2 | 2 | 10 | 20 | |||||||||||||||||||||
| $1,596 | $470 | $732 | $758 | $808 | $6,716 | $11,080 | |||||||||||||||||||||
| IPL | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | ||||||||||||||||||||
| $315 | $126 | $91 | $80 | $56 | $99 | $767 | |||||||||||||||||||||
| 200 | — | — | — | 500 | 2,475 | 3,175 | |||||||||||||||||||||
| Interest - long-term debt obligations | 133 | 125 | 125 | 125 | 125 | 1,276 | 1,909 | ||||||||||||||||||||
| 110 | — | — | — | — | — | 110 | |||||||||||||||||||||
| 60 | — | — | — | — | — | 60 | |||||||||||||||||||||
| 1 | 1 | 1 | 1 | 1 | 7 | 12 | |||||||||||||||||||||
| $819 | $252 | $217 | $206 | $682 | $3,857 | $6,033 | |||||||||||||||||||||
| WPL | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | ||||||||||||||||||||
| $176 | $89 | $63 | $43 | $23 | $99 | $493 | |||||||||||||||||||||
| 150 | — | 250 | — | — | 1,550 | 1,950 | |||||||||||||||||||||
| Interest - long-term debt obligations | 84 | 80 | 80 | 74 | 74 | 862 | 1,254 | ||||||||||||||||||||
| 17 | — | — | — | — | — | 17 | |||||||||||||||||||||
| 1 | 1 | 1 | 1 | 1 | 3 | 8 | |||||||||||||||||||||
| 15 | 15 | 15 | 15 | 15 | 5 | 80 | |||||||||||||||||||||
| $443 | $185 | $409 | $133 | $113 | $2,519 | $3,802 | |||||||||||||||||||||
, operating and finance leases in Note 10, capital purchase obligations in Note 17(a), and other purchase obligations in Note 17(b). At December 31, 2019,2022, Alliant Energy, IPL and WPL had no uncertain tax positions recorded as liabilities. Refer to Note 13(a) for anticipated pension and OPEB funding amounts, which are not included in the above tables.amounts. Refer to “Construction“Construction and Acquisition Expenditures”Expenditures” above for additional information on construction and acquisition programs. In addition, at December 31, 2019,2022, there were various other liabilities included on the balance sheets that, due to the nature of the liabilities, the timing of payments cannot be estimated and are therefore excluded from the above tables.estimated.
OTHER MATTERS
Market Risk Sensitive Instruments and Positions - Primary market risk exposures are associated with commodity prices, counterparty credit risk, investment prices and interest rates. Risk management policies are used to monitor and assist in mitigating these market risks and derivative instruments are used to manage some of the exposures related to commodity prices.prices and interest rates. Refer to Notes 1(h) and 15 for further discussion of derivative instruments, and Note 1(g) for details of utility cost recovery mechanisms that significantly reduce commodity risk.
Commodity Price - Alliant Energy, IPL and WPL are exposed to the impact of market fluctuations in the price and transportation costs of commodities they procure and market. Established policies and procedures mitigate risks associated with these market fluctuations, including the use of various commodity derivatives and contracts of various durations for the forward sale and purchase of these commodities. Exposure to commodity price risks in the utility businesses is also significantly mitigated by current rate-making structures in place for recovery of fuel-related costs as well as the cost of natural gas purchased for resale. IPL’s electric and gas tariffs and WPL’s wholesale electric and gas tariffs provide for subsequent monthly adjustments to their tariff rates for material changes in prudently incurred commodity costs. IPL’s and WPL’s rate mechanisms, combined with commodity derivatives, significantly reduce commodity risk associated with their electric and gas
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margins. WPL’s retail electric margins have modest exposure to the impact of changes in commodity prices due largely to the current retail recovery mechanism in place in Wisconsin for fuel-related costs.
Investment Price - Alliant Energy, IPL and WPL are exposed to investment price risk as a result of their investments in securities, largely related to securities held by their pension and OPEB plans. Refer to Note 13(a) for details of the securities held by their pension and OPEB plans. Refer to “Critical Accounting Policies and Estimates” for the impact on retirement plan costs of changes in the rate of returns earned by plan assets.
Interest Rate - Alliant Energy, IPL and WPL are exposed to risk resulting from changes in interest rates associated with variable-rate borrowings. In addition, Alliant Energy and IPL are exposed to risk resulting from changes in interest rates on cash amounts outstanding under IPL’s sales of accounts receivable program. Assuming the impact of a hypothetical 100 basis point increase in interest rates on variable-rate borrowings and cash amounts outstanding under IPL’s sales of accounts receivable program at December 31, 2019,2022, Alliant Energy’s, IPL’s and WPL’s annual pre-tax expense would increase by approximately $7$11 million, $0$1 million and $2$3 million, respectively. Refer to Notes 5(b) and 9 for additional information on cash amounts outstanding under IPL’s sales of accounts receivable program, and short- and long-term variable-rate borrowings, respectively. Refer to “Critical Accounting Policies and Estimates” for the impacts of changes in discount rates on retirement plan obligations and costs.
Critical Accounting Policies and Estimates - Alliant Energy’s, IPL’s and WPL’s financial statements are prepared in conformity with GAAP, which requires management to apply accounting policies, judgments and assumptions, and make estimates that affect results of operations and the amounts of assets and liabilities reported in the financial statements. The following accounting policies and estimates are critical to the business and the understanding of financial results as they require critical assumptions and judgments by management. The results of these assumptions and judgments form the basis for making estimates regarding the results of operations and the amounts of assets and liabilities that are not readily apparent from other sources. Actual financial results may differ materially from estimates. Management has discussed these critical accounting policies and estimates with the Audit Committee of the Board of Directors. Refer to Note 1 for additional discussion of accounting policies and estimates used in the preparation of the financial statements.
Regulatory Assets and Regulatory Liabilities - IPL and WPL are regulated by various federal and state regulatory agencies. As a result, they are subject to GAAP for regulated operations, which recognizes that the actions of a regulator can provide reasonable assurance of the existence of an asset or liability. Regulatory assets or regulatory liabilities arise as a result of a difference between GAAP and actions imposed by the regulatory agencies in the rate-making process. Regulatory assets generally represent incurred costs that have been deferred as such costs are probable of recovery in future customer rates. Regulatory liabilities generally represent obligations to make refunds to customers or amounts collected in rates for which the related costs have not yet been incurred. Regulatory assets and regulatory liabilities are recognized in accordance with the rulings of applicable federal and state regulators, and future regulatory rulings may impact the carrying value and accounting treatment of regulatory assets and regulatory liabilities.
Assumptions and judgments are made each reporting period regarding whether regulatory assets are probable of future recovery and regulatory liabilities are probable future obligations by considering factors such as regulatory environment changes, rate orders issued by the applicable regulatory agencies, historical decisions by such regulatory agencies regarding similar regulatory assets and regulatory liabilities, and subsequent events of such regulatory agencies. The decisions made by regulatory authorities have an impact on the recovery of costs, the rate of return on invested capital and the timing and amount of assets to be recovered by rates. A change in these decisions may result in a material impact on results of operations and the amount of assets and liabilities in the financial statements. Note 2 provides details of the nature and amounts of regulatory assets and regulatory liabilities assessed at December 31, 2019.2022.
Income Taxes - Alliant Energy, IPL and WPL are subject to income taxes in various jurisdictions. Assumptions and judgments are made each reporting period to estimate income tax assets, liabilities, benefits and expenses. Judgments and assumptions are supported by historical data and reasonable projections. Significant changes in these judgments and assumptions could have a material impact on financial condition and results of operations. Alliant Energy’s and IPL’s critical assumptions and judgments for 2022 include estimates of qualifying deductions for repairs expenditures and allocation of mixed service costs due to the impact of Iowa rate-making principles on such property-related differences. Critical assumptions and judgments also include projections of future taxable income used to determine the ability to utilize federal credit carryforwards prior to their expiration. Refer to Note 12 for further discussion of tax matters.
Effect of Rate-making on Property-related Differences - Alliant Energy’s and IPL’s effective income tax rates are normally impacted by certain property-related differences at IPL for which deferred tax is not recorded in the income statement pursuant
to Iowa rate-making principles. Changes in methods or assumptions regarding the amount of IPL’s qualifying repairs expenditures, allocation of mixed service costs, and costs related to retirement or removal of depreciable property could result in a material impact on Alliant Energy’s and IPL’s financial condition and results of operations.
Carryforward Utilization - Significant federal tax credit carryforwards exist for Alliant Energy, IPL and WPL as of December 31, 2022. Based on projections of current and future taxable income, Alliant Energy, IPL and WPL plan to utilize all of these carryforwards prior to their expiration. Federal credit carryforwards generated from 2004 through 2008 are expected to be utilized within five years of expiration. All other federal credit carryforwards are expected to be utilized more than five years before expiration. Changes in tax regulations or assumptions regarding current and future taxable income could require valuation allowances in the future resulting in a material impact on financial condition and results of operations.
Long-Lived Assets - Periodic assessments regarding the recoverability of certain long-lived assets are completed when factors indicate the carrying value of such assets may not be recoverable or such assets are planned to be sold. These assessments require significant assumptions and judgments by management. The long-lived assets assessed for impairment generally include certain assets within regulated operations that may not be fully recovered from IPL’s and WPL’s customers as a result of regulatory decisions in the future, and assets within non-utility operations that are proposed to be sold or are currently generating operating losses.
Regulated Operations - Certain long-lived assets within regulated operations are reviewed for possible impairment whenever events or changes in circumstances indicate all or a portion of the carrying value of the assets may be disallowed for rate-making purposes. If IPL or WPL is disallowed recovery of any portion of the carrying value of its regulated property, plant and equipment that is under construction, has been recently completed or is probable of being retired early, an impairment charge is recognized equal to the amount of the carrying value that was disallowed recovery. If IPL or WPL is disallowed a full or partial return on the carrying value of its regulated property, plant and equipment that is under construction, has been recently completed or is probable of being retired early, an impairment charge is recognized equal to the difference between the carrying amount of the asset and the present value of the future revenues expected from its regulated property, plant and equipment. Alliant Energy’s, IPL’s and WPL’s long-lived assets within their regulated operations that were assessed for impairment andand/or plant abandonment in 20192022 included IPL’s and WPL’s generating units subject to early retirement and IPL’s analog electric meters retired in 2019.WPL’s solar generation projects recently completed and under construction.
Generating Units Subject to Early Retirement - Alliant Energy, IPL and WPL evaluate future plans for their electric generation fleet and have announced the early retirement of certain older and less-efficient EGUs. When it becomes probable that an EGU will be retired before the end of its useful life, Alliant Energy, IPL and WPL must assess whether the EGU meets the criteria to be considered probable of abandonment. EGUs that are considered probable of abandonment generally have material remaining net book values and are expected to cease operations in the near term significantly before the end of their original estimated useful lives. If an EGU meets such criteria to be considered probable of abandonment, Alliant Energy, IPL and WPL must assess the probability of full recovery of the remaining carrying value of such EGU. If it is probable that regulators will not allow full recovery of and a full return on the remaining net book value of the abandoned EGU, an impairment charge is recognized equal to the difference between the remaining carrying value and the present value of the future revenues expected from the abandoned EGU.
Alliant Energy and IPL concluded that Lansing (expected to be retired in the first half of 2023), and Alliant Energy and WPL evaluated their EGUsconcluded that are subjectEdgewater Unit 5 (expected to early retirementbe retired by June 1, 2025) and determined that no EGUs meetColumbia Units 1 and 2 (expected to be retired by June 1, 2026), met the criteria to be considered probable of abandonment as of December 31, 2019.
WPL’s Solar Generation Projects Recently Completed and Under Construction - As discussed in “Customer Investments,” WPL previously received authorization from the PSCW to acquire, construct, own and/or operate approximately 1,100 MW of new solar generation, which includes various projects in various Wisconsin counties. In 2022, WPL completed the construction of three solar projects, and the remaining solar projects are implemented, which arecurrently expected by the end of the first quarter of 2020.to be placed in service in 2023 and 2024. Alliant Energy and IPL recordedWPL review property, plant and equipment for possible impairment whenever events or changes in circumstances indicate all or a $4 million pre-tax charge in 2019 as a resultportion of the decision not to allowcarrying value of the assets may be disallowed for rate-making purposes. If WPL is disallowed recovery of any portion of, or is only allowed a partial return on, the remaining net bookcarrying value of IPL’s analog electric meters.the solar generation projects recently completed or under construction, then an impairment charge is recognized.
In July 2021, WPL notified the PSCW that it expected estimated construction costs associated with approximately 675 MW of new solar generation will exceed amounts previously approved by the PSCW by approximately 7-10%. In addition, the prior authorization received from the PSCW for approximately 1,100 MW of new solar generation assumed that a portion of the construction costs would be financed by a tax equity partner. Following the enactment of the Inflation Reduction Act of 2022, WPL determined that retaining full ownership of the approximately 1,100 MW of new solar generation is expected to result in more cost benefits for its customers. Alliant Energy and WPL no longer expect their solar generation project construction costs to be financed with capital from tax equity partners, which would result in higher rate base amounts compared to those previously approved by the PSCW for WPL’s planned approximately 1,100 MW of solar generation. Alliant Energy and WPL concluded that there was not a probable disallowance of anticipated higher rate base amounts as of December 31, 2022 given construction costs were reasonably and prudently incurred and full ownership of WPL’s planned solar generation is expected to result in more cost benefits for WPL's customers.
| 40 | ||||||||
Unbilled Revenues - Unbilled revenues are primarily associated with utility operations. Energy sales to individual customers are based on the reading of customers’ meters, which occurs on a systematic basis throughout the month. Amounts of energy delivered to customers since the date of the last meter reading are estimated at the end of each reporting period and the corresponding estimated unbilled revenue is recorded. The unbilled revenue is based on estimates of daily system demand volumes, customer usage by class, temperature impacts, line losses and the most recent customer rates. Such process involves the use of various judgments and assumptions and significant changes in these judgments and assumptions could have a material impact on results of operations. As of December 31, 2019,2022, unbilled revenues related to Alliant Energy’s utility operations were $178$247 million ($96132 million at IPL and $82$115 million at WPL).
Pensions and Other Postretirement Benefits - Alliant Energy, IPL and WPL sponsor various defined benefit pension and OPEB plans that provide benefits to a significant portion of their employees and retirees. Assumptions and judgments are made periodically to estimate the obligations and costs related to their retirement plans. There are many judgments and assumptions involved in determining an entity’s pension and other postretirement liabilities and costs each period including employee demographics (including life expectancies and compensation levels), discount rates, assumed rates of return and funding. Changes made to plan provisions may also impact current and future benefits costs. Judgments and assumptions are supported by historical data and reasonable projections and are reviewed at least annually. The following table shows the impacts of changing certain key actuarial assumptions discussed above (in millions):
| Defined Benefit Pension Plans | OPEB Plans | |||||||||||||||
| Change in Actuarial Assumption | Impact on Projected Benefit Obligation at December 31, 2019 | Impact on 2020 Net Periodic Benefit Costs | Impact on Accumulated Benefit Obligation at December 31, 2019 | Impact on 2020 Net Periodic Benefit Costs | ||||||||||||
| Alliant Energy | ||||||||||||||||
| 1% change in discount rate | $163 | $10 | $20 | $2 | ||||||||||||
| 1% change in expected rate of return | N/A | 9 | N/A | 1 | ||||||||||||
| IPL | ||||||||||||||||
| 1% change in discount rate | 76 | 5 | 8 | 1 | ||||||||||||
| 1% change in expected rate of return | N/A | 4 | N/A | 1 | ||||||||||||
| WPL | ||||||||||||||||
| 1% change in discount rate | 72 | 5 | 8 | 1 | ||||||||||||
| 1% change in expected rate of return | N/A | 4 | N/A | — | ||||||||||||
| Defined Benefit Pension Plans | OPEB Plans | |||||||||||||||||||||||||
| Change in Actuarial Assumption | Impact on Projected Benefit Obligation at December 31, 2022 | Impact on 2023 Net Periodic Benefit Costs | Impact on Accumulated Benefit Obligation at December 31, 2022 | Impact on 2023 Net Periodic Benefit Costs | ||||||||||||||||||||||
| Alliant Energy | ||||||||||||||||||||||||||
| 1% change in discount rate | $87 | $6 | $13 | $— | ||||||||||||||||||||||
| 1% change in expected rate of return | N/A | 7 | N/A | 1 | ||||||||||||||||||||||
| IPL | ||||||||||||||||||||||||||
| 1% change in discount rate | 40 | 3 | 5 | — | ||||||||||||||||||||||
| 1% change in expected rate of return | N/A | 3 | N/A | 1 | ||||||||||||||||||||||
| WPL | ||||||||||||||||||||||||||
| 1% change in discount rate | 39 | 3 | 5 | — | ||||||||||||||||||||||
| 1% change in expected rate of return | N/A | 3 | N/A | — | ||||||||||||||||||||||
Contingencies - Alliant Energy, IPL and WPL are subject to income taxes in various jurisdictions. Assumptions and judgments are made each reporting period regarding the future outcome of contingent events. Loss contingency amounts are recorded for any contingent events for which the likelihood of loss is probable and able to be reasonably estimated based upon current available information. The amounts recorded may differ from actuals when the uncertainty is resolved. The estimates made in accounting for contingencies, and the gains and losses that are recorded upon the ultimate resolution of these uncertainties, could have a significant effect on results of operations and the amount of assets and liabilities in the financial statements.
Effective January 1, 2020 upon the adoption of the new accounting standard for credit losses, certain contingencies, such as Alliant Energy Resources, LLC’s guarantees of the partnership obligations of an affiliate of Whiting Petroleum, require estimation each reporting period of the expected credit losses on those contingencies. These estimates require significant judgment and result in recognition of a credit loss liability sooner than the previous accounting standards, which required recognition when the contingency became probable and could be reasonably estimated based on then currently available information. With respect to Alliant Energy’s guarantees of the partnership obligations of an affiliate of Whiting Petroleum, the most significant judgments in determining the credit loss liability were the estimate income tax assets, liabilities, benefitsof the exposure under the guarantees and expenses. Judgmentsthe methodology used for calculating the credit loss liability. As of December 31, 2022, Alliant Energy currently estimates the exposure to be a portion of the known partnership abandonment obligations. The methodology used to determine the credit loss liability considers both quantitative and assumptions are supportedqualitative information, which utilizes potential outcomes in a range of possible estimated amounts. Factors considered include market and external data points, the creditworthiness of the other partners, Whiting Petroleum’s emergence from bankruptcy in the third quarter of 2020 as well as subsequent bankruptcy developments, payments by historical dataWhiting Petroleum related to abandonment obligations, forecasted cash flow expenditures associated with the abandonment obligations based on information made available to Alliant Energy, and reasonable projections. Significant changesWhiting Petroleum’s business combination with Oasis Petroleum Inc. in these judgments and assumptions couldthe third quarter of 2022. Note 1(l) provides discussion of the adoption of the new accounting standard for credit losses.
Note 17 provides further discussion of contingencies assessed at December 31, 2022 that may have a material impact on financial condition and results of operations. Alliant Energy’soperations, including various pending legal proceedings, guarantees and IPL’s critical assumptions and judgments for 2019 include estimates of qualifying deductions for repairs expenditures and allocation of mixed service costs due to the impact of Iowa rate-making principles on such property-related differences. Critical assumptions and judgments also include projections of future taxable income used to determine the ability to utilize net operating losses and credit carryforwards prior to their expiration. Refer to Note 12 for further discussion of tax matters.indemnifications.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative and Qualitative Disclosures About Market Risk are reported in “Other Matters - Market Risk Sensitive Instruments and Positions” in MDA.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareowners and the Board of Directors of Alliant Energy Corporation:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Alliant Energy Corporation and subsidiaries (the “Company”) as of December 31, 20192022 and 2018,2021, the related consolidated statements of income, equity, and cash flows, for each of the three years in the period ended December 31, 2019,2022, and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20192022 and 2018,2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019,2022, in conformity with accounting principles generally accepted in the United States of America.
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2019,2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21, 2020,24, 2023, expressed an unqualified opinion on the Company’s internal control over financial reporting.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the auditsaudit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Regulatory Assets and Regulatory Liabilities - Impact of rate regulation on the financial statements - Refer to Notes 1, 2, and 23 to the financial statements
Critical Audit Matter Description
Alliant Energy Corporation, through its wholly ownedwholly-owned subsidiaries Interstate Power and Light Company and Wisconsin Power and Light Company, (collectively, the “Company”) is subject to rate regulation by the Federal Energy Regulatory Commission and the respective state commissions in Iowa and Wisconsin (collectively the “regulatory agencies”). Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the Regulated Operations Topic 980 of the Financial Accounting Standards Board’s Accounting Standards Codification. As of December 31, 2019,2022, the Company had a recorded consolidated regulatory assets balance of $1,844.7$2,046 million and regulatory liabilities balance of $1,423.6$1,324 million.
The Company’s rates are subject to regulatory rate-setting processes and annualperiodic earnings oversight. The regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. Regulatory assets represent incurred costs that have been deferred and are probable of recovery in future customer rates. Regulatory liabilities represent obligations to make refunds to customers or amounts collected in rates for which the costs have not yet been incurred. The Company’s regulatory assets and regulatory liabilities are recognized in accordance with the rulings of the regulatory agencies. A change in these rulings may result in a material impact on results of operations and the amount of assets and liabilities in the financial statements. Future regulatory rulings may impact the carrying value and accounting treatment of the regulatory assets and regulatory liabilities.
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of the recovery of incurred costs and refund of obligations to customers in future rates. Given that management’s accounting judgments are based on assumptions about the outcome of future decisions by the regulatory agencies, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate-setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the regulatory filings by management and the uncertainty of future decisions by the regulatory agencies included the following, among others:
•We tested the design and operating effectiveness of management’s controls over the evaluation of the likelihood of recovery in future customer rates for regulatory assets and liabilities, includingthe likelihood of a probable refund to customers or reduction in future customer rates for regulatory liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
•We inspectedobtained the Company’s analysis supporting the probability of recovery for regulatory assets or refund to customers or future reduction in customer rates for regulatory liabilities not yet addressed in a regulatory order to assess the reasonabilitymanagement’s assertion that amounts are probable of management’s assertions.recovery in future customer rates or represent a probable refund to customers or reduction in future customer rates.
•We inquired of management regarding current events impacting the Company and inspected minutes of the board of directors and other committees of the Company and evaluated whether matters were identified that may have an impact on recorded regulatory asset and liability balances.
•We read relevant regulatory orders issued by the regulatory agencies for the Company and other relevant public utilities, regulatory statutes, interpretations, procedural memorandums, filings made by interveners,certain stakeholders, and other publicly available information issued byto assess the likelihood of recovery in future customer rates based on precedents of the regulatory agencies that pertain to the Company as well as to other relevant public utilities.agencies’ treatment of similar costs under similar circumstances. We evaluated the external information and assessed whether there were matters in such information that would be contradictory to the assessment of recovery of the Company’s regulatory assets or refund of regulatory liabilities.
•We obtained representation letters frominquired of management as well as legal letters from internalabout property, plant, and external legal counsel and evaluated such letters to assess whether information was presentequipment, net that wouldmay be relevant to the assessment of recoveryabandoned. We inspected minutes of the Company’sboard of directors and other committees of the Company, regulatory assetsorders and other filings with the regulatory agencies to identify evidence that may contradict management’s assertion regarding probability of an abandonment or refund of regulatory liabilities.that may have an impact on the recorded balances.
•We evaluated the Company’s disclosures related to the impacts of rate regulation and regulatory developments, including disclosures related to the regulatory balances recorded.
/s/ DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
February 21, 202024, 2023
We have served as the Company’s auditor since 2002.
ALLIANT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
| Year Ended December 31, | |||||||||||||||||
| 2022 | 2021 | 2020 | |||||||||||||||
| (in millions, except per share amounts) | |||||||||||||||||
| Revenues: | |||||||||||||||||
| Electric utility | $3,421 | $3,081 | $2,920 | ||||||||||||||
| Gas utility | 642 | 456 | 373 | ||||||||||||||
| Other utility | 49 | 49 | 49 | ||||||||||||||
| Non-utility | 93 | 83 | 74 | ||||||||||||||
| Total revenues | 4,205 | 3,669 | 3,416 | ||||||||||||||
| Operating expenses: | |||||||||||||||||
| Electric production fuel and purchased power | 830 | 642 | 652 | ||||||||||||||
| Electric transmission service | 573 | 537 | 449 | ||||||||||||||
| Cost of gas sold | 389 | 258 | 182 | ||||||||||||||
| Other operation and maintenance | 704 | 676 | 670 | ||||||||||||||
| Depreciation and amortization | 671 | 657 | 615 | ||||||||||||||
| Taxes other than income taxes | 110 | 104 | 108 | ||||||||||||||
| Total operating expenses | 3,277 | 2,874 | 2,676 | ||||||||||||||
| Operating income | 928 | 795 | 740 | ||||||||||||||
| Other (income) and deductions: | |||||||||||||||||
| Interest expense | 325 | 277 | 275 | ||||||||||||||
| Equity income from unconsolidated investments, net | (51) | (62) | (61) | ||||||||||||||
| Allowance for funds used during construction | (60) | (25) | (55) | ||||||||||||||
| Other | 6 | 5 | 14 | ||||||||||||||
| Total other (income) and deductions | 220 | 195 | 173 | ||||||||||||||
| Income before income taxes | 708 | 600 | 567 | ||||||||||||||
| Income tax expense (benefit) | 22 | (74) | (57) | ||||||||||||||
| Net income | 686 | 674 | 624 | ||||||||||||||
| Preferred dividend requirements of Interstate Power and Light Company | — | 15 | 10 | ||||||||||||||
| Net income attributable to Alliant Energy common shareowners | $686 | $659 | $614 | ||||||||||||||
| Weighted average number of common shares outstanding: | |||||||||||||||||
| Basic | 250.9 | 250.2 | 248.4 | ||||||||||||||
| Diluted | 251.2 | 250.7 | 248.7 | ||||||||||||||
| Earnings per weighted average common share attributable to Alliant Energy common shareowners (basic and diluted) | $2.73 | $2.63 | $2.47 | ||||||||||||||
| Year Ended December 31, | |||||||||||
| 2019 | 2018 | 2017 | |||||||||
| (in millions, except per share amounts) | |||||||||||
| Revenues: | |||||||||||
| Electric utility | $3,063.6 | $3,000.3 | $2,894.7 | ||||||||
| Gas utility | 455.2 | 446.6 | 400.9 | ||||||||
| Other utility | 46.5 | 48.0 | 47.5 | ||||||||
| Non-utility | 82.4 | 39.6 | 39.1 | ||||||||
| Total revenues | 3,647.7 | 3,534.5 | 3,382.2 | ||||||||
| Operating expenses: | |||||||||||
| Electric production fuel and purchased power | 776.7 | 855.0 | 818.1 | ||||||||
| Electric transmission service | 481.4 | 495.7 | 480.9 | ||||||||
| Cost of gas sold | 221.7 | 232.3 | 211.4 | ||||||||
| Other operation and maintenance | 712.2 | 645.8 | 633.2 | ||||||||
| Depreciation and amortization | 567.2 | 506.9 | 461.8 | ||||||||
| Taxes other than income taxes | 110.8 | 104.4 | 105.6 | ||||||||
| Total operating expenses | 2,870.0 | 2,840.1 | 2,711.0 | ||||||||
| Operating income | 777.7 | 694.4 | 671.2 | ||||||||
| Other (income) and deductions: | |||||||||||
| Interest expense | 272.9 | 247.0 | 215.6 | ||||||||
| Equity income from unconsolidated investments, net | (53.0 | ) | (54.6 | ) | (44.8 | ) | |||||
| Allowance for funds used during construction | (92.7 | ) | (75.6 | ) | (49.7 | ) | |||||
| Other | 14.4 | 7.6 | 17.3 | ||||||||
| Total other (income) and deductions | 141.6 | 124.4 | 138.4 | ||||||||
| Income from continuing operations before income taxes | 636.1 | 570.0 | 532.8 | ||||||||
| Income taxes | 68.7 | 47.7 | 66.7 | ||||||||
| Income from continuing operations, net of tax | 567.4 | 522.3 | 466.1 | ||||||||
| Income from discontinued operations, net of tax | — | — | 1.4 | ||||||||
| Net income | 567.4 | 522.3 | 467.5 | ||||||||
| Preferred dividend requirements of Interstate Power and Light Company | 10.2 | 10.2 | 10.2 | ||||||||
| Net income attributable to Alliant Energy common shareowners | $557.2 | $512.1 | $457.3 | ||||||||
| Weighted average number of common shares outstanding: | |||||||||||
| Basic | 238.5 | 233.6 | 229.7 | ||||||||
| Diluted | 239.0 | 233.6 | 229.7 | ||||||||
| Earnings per weighted average common share attributable to Alliant Energy common shareowners: | |||||||||||
| Basic | $2.34 | $2.19 | $1.99 | ||||||||
| Diluted | $2.33 | $2.19 | $1.99 | ||||||||
| Amounts attributable to Alliant Energy common shareowners: | |||||||||||
| Income from continuing operations, net of tax | $557.2 | $512.1 | $455.9 | ||||||||
| Income from discontinued operations, net of tax | — | — | 1.4 | ||||||||
| Net income | $557.2 | $512.1 | $457.3 | ||||||||
Refer to accompanying Combined Notes to Consolidated Financial Statements.
ALLIANT ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
| December 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| (in millions, except per share and share amounts) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $20 | $39 | |||||||||
| Accounts receivable, less allowance for expected credit losses | 516 | 440 | |||||||||
| Production fuel, at weighted average cost | 53 | 51 | |||||||||
| Gas stored underground, at weighted average cost | 132 | 82 | |||||||||
| Materials and supplies, at weighted average cost | 140 | 113 | |||||||||
| Regulatory assets | 166 | 104 | |||||||||
| Other | 223 | 240 | |||||||||
| Total current assets | 1,250 | 1,069 | |||||||||
| Property, plant and equipment, net | 16,247 | 14,987 | |||||||||
| Investments: | |||||||||||
| ATC Holdings | 358 | 338 | |||||||||
| Other | 201 | 179 | |||||||||
| Total investments | 559 | 517 | |||||||||
| Other assets: | |||||||||||
| Regulatory assets | 1,880 | 1,836 | |||||||||
| Deferred charges and other | 227 | 144 | |||||||||
| Total other assets | 2,107 | 1,980 | |||||||||
| Total assets | $20,163 | $18,553 | |||||||||
| December 31, | |||||||
| 2019 | 2018 | ||||||
(in millions, except per share and share amounts) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $16.3 | $20.9 | |||||
| Accounts receivable, less allowance for doubtful accounts | 402.1 | 350.4 | |||||
| Production fuel, at weighted average cost | 77.7 | 61.4 | |||||
| Gas stored underground, at weighted average cost | 49.1 | 49.0 | |||||
| Materials and supplies, at weighted average cost | 100.5 | 101.4 | |||||
| Regulatory assets | 86.4 | 79.8 | |||||
| Prepaid gross receipts tax | 41.7 | 42.2 | |||||
| Other | 101.7 | 80.0 | |||||
| Total current assets | 875.5 | 785.1 | |||||
| Property, plant and equipment, net | 13,527.1 | 12,462.4 | |||||
| Investments: | |||||||
| ATC Holdings | 320.1 | 293.6 | |||||
| Other | 147.7 | 137.7 | |||||
| Total investments | 467.8 | 431.3 | |||||
| Other assets: | |||||||
| Regulatory assets | 1,758.3 | 1,657.5 | |||||
| Deferred charges and other | 72.0 | 89.7 | |||||
| Total other assets | 1,830.3 | 1,747.2 | |||||
| Total assets | $16,700.7 | $15,426.0 | |||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current maturities of long-term debt | $408 | $633 | |||||||||
| Commercial paper | 642 | 515 | |||||||||
| Accounts payable | 756 | 436 | |||||||||
| Regulatory liabilities | 206 | 186 | |||||||||
| Other | 351 | 284 | |||||||||
| Total current liabilities | 2,363 | 2,054 | |||||||||
| Long-term debt, net (excluding current portion) | 7,668 | 6,735 | |||||||||
| Other liabilities: | |||||||||||
| Deferred tax liabilities | 1,943 | 1,927 | |||||||||
| Regulatory liabilities | 1,118 | 1,085 | |||||||||
| Pension and other benefit obligations | 277 | 374 | |||||||||
| Other | 518 | 388 | |||||||||
| Total other liabilities | 3,856 | 3,774 | |||||||||
| Equity: | |||||||||||
| Alliant Energy Corporation common equity: | |||||||||||
| Common stock - $0.01 par value - 480,000,000 shares authorized; 251,134,966 and 250,474,529 shares outstanding | 3 | 3 | |||||||||
| Additional paid-in capital | 2,777 | 2,749 | |||||||||
| Retained earnings | 3,509 | 3,250 | |||||||||
| Shares in deferred compensation trust - 402,134 and 383,532 shares at a weighted average cost of $32.63 and $30.59 per share | (13) | (12) | |||||||||
| Total Alliant Energy Corporation common equity | 6,276 | 5,990 | |||||||||
| Total liabilities and equity | $20,163 | $18,553 | |||||||||
| LIABILITIES AND EQUITY | |||||||
| Current liabilities: | |||||||
| Current maturities of long-term debt | $657.2 | $256.5 | |||||
| Commercial paper | 337.4 | 441.2 | |||||
| Accounts payable | 422.3 | 543.3 | |||||
| Regulatory liabilities | 212.0 | 142.7 | |||||
| Other | 425.2 | 260.4 | |||||
| Total current liabilities | 2,054.1 | 1,644.1 | |||||
| Long-term debt, net (excluding current portion) | 5,533.0 | 5,246.3 | |||||
| Other liabilities: | |||||||
| Deferred tax liabilities | 1,714.0 | 1,603.1 | |||||
| Regulatory liabilities | 1,211.6 | 1,350.5 | |||||
| Pension and other benefit obligations | 484.0 | 509.1 | |||||
| Other | 298.9 | 287.2 | |||||
| Total other liabilities | 3,708.5 | 3,749.9 | |||||
| Equity: | |||||||
| Alliant Energy Corporation common equity: | |||||||
| Common stock - $0.01 par value - 480,000,000 shares authorized; 245,022,800 and 236,063,279 shares outstanding | 2.5 | 2.4 | |||||
| Additional paid-in capital | 2,445.9 | 2,045.5 | |||||
| Retained earnings | 2,765.4 | 2,545.9 | |||||
| Accumulated other comprehensive income | 1.3 | 1.7 | |||||
| Shares in deferred compensation trust - 381,232 and 384,580 shares at a weighted average cost of $26.24 and $25.60 per share | (10.0 | ) | (9.8 | ) | |||
| Total Alliant Energy Corporation common equity | 5,205.1 | 4,585.7 | |||||
| Cumulative preferred stock of Interstate Power and Light Company | 200.0 | 200.0 | |||||
| Total equity | 5,405.1 | 4,785.7 | |||||
| Total liabilities and equity | $16,700.7 | $15,426.0 | |||||
Refer to accompanying Combined Notes to Consolidated Financial Statements.
ALLIANT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2022 | 2021 | 2020 | |||||||||||||||||||||||
| (in millions) | (in millions) | |||||||||||||||||||||||||||
| Cash flows from operating activities: | Cash flows from operating activities: | |||||||||||||||||||||||||||
| Net income | $567.4 | $522.3 | $467.5 | Net income | $686 | $674 | $624 | |||||||||||||||||||||
| Adjustments to reconcile net income to net cash flows from operating activities: | Adjustments to reconcile net income to net cash flows from operating activities: | |||||||||||||||||||||||||||
| Depreciation and amortization | 567.2 | 506.9 | 461.8 | Depreciation and amortization | 671 | 657 | 615 | |||||||||||||||||||||
| Deferred tax expense and tax credits | 55.6 | 67.0 | 139.6 | |||||||||||||||||||||||||
| Equity component of allowance for funds used during construction | (65.5 | ) | (51.4 | ) | (33.6 | ) | ||||||||||||||||||||||
| Deferred tax expense (benefit) and tax credits | Deferred tax expense (benefit) and tax credits | 13 | (78) | (66) | ||||||||||||||||||||||||
| Other | 19.9 | 7.7 | 21.7 | Other | (18) | 17 | (2) | |||||||||||||||||||||
| Other changes in assets and liabilities: | Other changes in assets and liabilities: | |||||||||||||||||||||||||||
| Accounts receivable | (471.7 | ) | (475.4 | ) | (441.2 | ) | Accounts receivable | (672) | (530) | (468) | ||||||||||||||||||
| Regulatory assets | (16.2 | ) | (16.2 | ) | (130.8 | ) | Regulatory assets | (108) | 51 | (130) | ||||||||||||||||||
| Derivative assets | Derivative assets | (61) | (142) | (7) | ||||||||||||||||||||||||
| Accounts payable | Accounts payable | 78 | 37 | (3) | ||||||||||||||||||||||||
| Regulatory liabilities | (40.3 | ) | 1.3 | (83.8 | ) | Regulatory liabilities | 22 | (66) | (113) | |||||||||||||||||||
| Derivative liabilities | Derivative liabilities | 70 | (17) | (12) | ||||||||||||||||||||||||
| Deferred income taxes | 53.8 | 55.9 | 81.7 | Deferred income taxes | 4 | 193 | 171 | |||||||||||||||||||||
| Pension and other benefit obligations | Pension and other benefit obligations | (97) | (137) | 27 | ||||||||||||||||||||||||
| DAEC PPA amendment buyout payment | DAEC PPA amendment buyout payment | — | — | (110) | ||||||||||||||||||||||||
| Other | (9.8 | ) | (90.4 | ) | 38.7 | Other | (102) | (77) | (25) | |||||||||||||||||||
| Net cash flows from operating activities | 660.4 | 527.7 | 521.6 | Net cash flows from operating activities | 486 | 582 | 501 | |||||||||||||||||||||
| Cash flows used for investing activities: | Cash flows used for investing activities: | |||||||||||||||||||||||||||
| Construction and acquisition expenditures: | Construction and acquisition expenditures: | |||||||||||||||||||||||||||
| Utility business | (1,538.4 | ) | (1,568.3 | ) | (1,281.8 | ) | Utility business | (1,392) | (1,070) | (1,293) | ||||||||||||||||||
| Other | (101.7 | ) | (65.6 | ) | (185.1 | ) | Other | (92) | (99) | (73) | ||||||||||||||||||
| Cash receipts on sold receivables | 413.2 | 605.3 | 461.8 | Cash receipts on sold receivables | 598 | 502 | 458 | |||||||||||||||||||||
| Other | (60.4 | ) | (38.2 | ) | (28.3 | ) | Other | (47) | (61) | (43) | ||||||||||||||||||
| Net cash flows used for investing activities | (1,287.3 | ) | (1,066.8 | ) | (1,033.4 | ) | Net cash flows used for investing activities | (933) | (728) | (951) | ||||||||||||||||||
| Cash flows from financing activities: | Cash flows from financing activities: | |||||||||||||||||||||||||||
| Common stock dividends | (337.7 | ) | (312.2 | ) | (288.3 | ) | Common stock dividends | (428) | (403) | (377) | ||||||||||||||||||
| Proceeds from issuance of common stock, net | 390.3 | 196.6 | 149.6 | Proceeds from issuance of common stock, net | 25 | 28 | 247 | |||||||||||||||||||||
| Payments to redeem cumulative preferred stock of IPL | Payments to redeem cumulative preferred stock of IPL | — | (200) | — | ||||||||||||||||||||||||
| Proceeds from issuance of long-term debt | 950.0 | 1,500.0 | 550.0 | Proceeds from issuance of long-term debt | 1,338 | 600 | 1,250 | |||||||||||||||||||||
| Payments to retire long-term debt | (256.5 | ) | (855.7 | ) | (4.6 | ) | Payments to retire long-term debt | (633) | (8) | (657) | ||||||||||||||||||
| Net change in commercial paper and other short-term borrowings | (103.8 | ) | 26.0 | 171.1 | ||||||||||||||||||||||||
| Net change in commercial paper | Net change in commercial paper | 127 | 126 | 52 | ||||||||||||||||||||||||
| Contributions from noncontrolling interest | Contributions from noncontrolling interest | 29 | — | — | ||||||||||||||||||||||||
| Distributions to noncontrolling interest | Distributions to noncontrolling interest | (29) | — | — | ||||||||||||||||||||||||
| Other | (23.2 | ) | (24.0 | ) | (45.2 | ) | Other | 2 | (13) | (27) | ||||||||||||||||||
| Net cash flows from financing activities | 619.1 | 530.7 | 532.6 | Net cash flows from financing activities | 431 | 130 | 488 | |||||||||||||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (7.8 | ) | (8.4 | ) | 20.8 | Net increase (decrease) in cash, cash equivalents and restricted cash | (16) | (16) | 38 | |||||||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 25.5 | 33.9 | 13.1 | Cash, cash equivalents and restricted cash at beginning of period | 40 | 56 | 18 | |||||||||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $17.7 | $25.5 | $33.9 | Cash, cash equivalents and restricted cash at end of period | $24 | $40 | $56 | |||||||||||||||||||||
| Supplemental cash flows information: | Supplemental cash flows information: | |||||||||||||||||||||||||||
| Cash (paid) refunded during the period for: | Cash (paid) refunded during the period for: | |||||||||||||||||||||||||||
| Interest | ($267.9 | ) | ($247.5 | ) | ($212.6 | ) | Interest | ($311) | ($272) | ($274) | ||||||||||||||||||
| Income taxes, net | $20.5 | ($5.0 | ) | ($11.3 | ) | Income taxes, net | ($6) | ($3) | $5 | |||||||||||||||||||
| Significant non-cash investing and financing activities: | Significant non-cash investing and financing activities: | |||||||||||||||||||||||||||
| Accrued capital expenditures | $195.8 | $299.5 | $196.5 | Accrued capital expenditures | $382 | $141 | $131 | |||||||||||||||||||||
| Beneficial interest obtained in exchange for securitized accounts receivable | $187.7 | $119.4 | $222.1 | Beneficial interest obtained in exchange for securitized accounts receivable | $185 | $214 | $188 | |||||||||||||||||||||
Refer to accompanying Combined Notes to Consolidated Financial Statements.
ALLIANT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF EQUITY
| Total Alliant Energy Common Equity | |||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated | Shares in | Cumulative | |||||||||||||||||||||||||||||||||||||||||||||
| Additional | Other | Deferred | Preferred | ||||||||||||||||||||||||||||||||||||||||||||
| Common | Paid-In | Retained | Comprehensive | Compensation | Stock | Noncontrolling | Total | ||||||||||||||||||||||||||||||||||||||||
| Stock | Capital | Earnings | Income (Loss) | Trust | of IPL | Interest | Equity | ||||||||||||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||||||||||||||
| 2020: | |||||||||||||||||||||||||||||||||||||||||||||||
| Beginning balance | $2 | $2,446 | $2,766 | $1 | ($10) | $200 | $— | $5,405 | |||||||||||||||||||||||||||||||||||||||
| Net income attributable to Alliant Energy common shareowners | 614 | 614 | |||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends ($1.52 per share) | (377) | (377) | |||||||||||||||||||||||||||||||||||||||||||||
| Equity forward settlements and Shareowner Direct Plan issuances | 247 | 247 | |||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation plans and other | 11 | (1) | 10 | ||||||||||||||||||||||||||||||||||||||||||||
| (9) | (9) | ||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss, net of tax | (2) | (2) | |||||||||||||||||||||||||||||||||||||||||||||
| Ending balance | 2 | 2,704 | 2,994 | (1) | (11) | 200 | — | 5,888 | |||||||||||||||||||||||||||||||||||||||
| 2021: | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to Alliant Energy common shareowners | 659 | 659 | |||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends ($1.61 per share) | (403) | (403) | |||||||||||||||||||||||||||||||||||||||||||||
| Shareowner Direct Plan issuances | 1 | 27 | 28 | ||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation plans and other | 18 | (1) | 17 | ||||||||||||||||||||||||||||||||||||||||||||
| Redemption of IPL’s cumulative preferred stock | (200) | (200) | |||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income, net of tax | 1 | 1 | |||||||||||||||||||||||||||||||||||||||||||||
| Ending balance | 3 | 2,749 | 3,250 | — | (12) | — | — | 5,990 | |||||||||||||||||||||||||||||||||||||||
| 2022: | |||||||||||||||||||||||||||||||||||||||||||||||
| Net income attributable to Alliant Energy common shareowners | 686 | 686 | |||||||||||||||||||||||||||||||||||||||||||||
| Common stock dividends ($1.71 per share) | (428) | (428) | |||||||||||||||||||||||||||||||||||||||||||||
| Shareowner Direct Plan issuances | 25 | 25 | |||||||||||||||||||||||||||||||||||||||||||||
| Equity-based compensation plans and other | 3 | 1 | (1) | 3 | |||||||||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interest | 29 | 29 | |||||||||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest | (29) | (29) | |||||||||||||||||||||||||||||||||||||||||||||
| Ending balance | $3 | $2,777 | $3,509 | $— | ($13) | $— | $— | $6,276 | |||||||||||||||||||||||||||||||||||||||
| Total Alliant Energy Common Equity | |||||||||||||||||||||||||||
| Accumulated | Shares in | Cumulative | |||||||||||||||||||||||||
| Additional | Other | Deferred | Preferred | ||||||||||||||||||||||||
| Common | Paid-In | Retained | Comprehensive | Compensation | Stock | Total | |||||||||||||||||||||
| Stock | Capital | Earnings | Income (Loss) | Trust | of IPL | Equity | |||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||
| 2017: | |||||||||||||||||||||||||||
| Beginning balance | $2.3 | $1,693.1 | $2,177.0 | ($0.4 | ) | ($10.0 | ) | $200.0 | $4,062.0 | ||||||||||||||||||
| Net income attributable to Alliant Energy common shareowners | 457.3 | 457.3 | |||||||||||||||||||||||||
| Common stock dividends ($1.26 per share) | (288.3 | ) | (288.3 | ) | |||||||||||||||||||||||
| At-the-market offering program and Shareowner Direct Plan issuances | 149.6 | 149.6 | |||||||||||||||||||||||||
| Equity-based compensation plans and other | 2.8 | (1.1 | ) | 1.7 | |||||||||||||||||||||||
| Other comprehensive loss, net of tax | (0.1 | ) | (0.1 | ) | |||||||||||||||||||||||
| Ending balance | 2.3 | 1,845.5 | 2,346.0 | (0.5 | ) | (11.1 | ) | 200.0 | 4,382.2 | ||||||||||||||||||
| 2018: | |||||||||||||||||||||||||||
| Net income attributable to Alliant Energy common shareowners | 512.1 | 512.1 | |||||||||||||||||||||||||
| Common stock dividends ($1.34 per share) | (312.2 | ) | (312.2 | ) | |||||||||||||||||||||||
| At-the-market offering program and Shareowner Direct Plan issuances | 0.1 | 196.5 | 196.6 | ||||||||||||||||||||||||
| Equity-based compensation plans and other | 3.5 | 1.3 | 4.8 | ||||||||||||||||||||||||
| Other comprehensive income, net of tax | 2.2 | 2.2 | |||||||||||||||||||||||||
| Ending balance | 2.4 | 2,045.5 | 2,545.9 | 1.7 | (9.8 | ) | 200.0 | 4,785.7 | |||||||||||||||||||
| 2019: | |||||||||||||||||||||||||||
| Net income attributable to Alliant Energy common shareowners | 557.2 | 557.2 | |||||||||||||||||||||||||
| Common stock dividends ($1.42 per share) | (337.7 | ) | (337.7 | ) | |||||||||||||||||||||||
| Equity forward settlements and Shareowner Direct Plan issuances | 0.1 | 390.2 | 390.3 | ||||||||||||||||||||||||
| Equity-based compensation plans and other | 10.2 | (0.2 | ) | 10.0 | |||||||||||||||||||||||
| Other comprehensive loss, net of tax | (0.4 | ) | (0.4 | ) | |||||||||||||||||||||||
| Ending balance | $2.5 | $2,445.9 | $2,765.4 | $1.3 | ($10.0 | ) | $200.0 | $5,405.1 | |||||||||||||||||||
Refer to accompanying Combined Notes to Consolidated Financial Statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the ShareownersShareowner and the Board of Directors of Interstate Power and Light Company:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Interstate Power and Light Company and subsidiarysubsidiaries (the “Company”) as of December 31, 20192022 and 2018,2021, the related consolidated statements of income, equity, and cash flows, for each of the three years in the period ended December 31, 2019,2022, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20192022 and 2018,2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019,2022, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Regulatory Assets and Regulatory Liabilities - Impact of rate regulation on the financial statements - Refer to Notes 1, 2, and 3 to the financial statements
Critical Audit Matter Description
Interstate Power and Light Company is subject to rate regulation by the Federal Energy Regulatory Commission and state commission in Iowa (collectively the “regulatory agencies”). Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the Regulated Operations Topic 980 of the Financial Accounting Standards Board’s Accounting Standards Codification. As of December 31, 2022, the Company had a recorded consolidated regulatory assets balance of $1,386 million and regulatory liabilities balance of $754 million.
The Company’s rates are subject to regulatory rate-setting processes and periodic earnings oversight. The regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. Regulatory assets represent incurred costs that have been deferred and are probable of recovery in future customer rates. Regulatory liabilities represent obligations to make refunds to customers or amounts collected in rates for which the costs have not yet been incurred. The Company’s regulatory assets and regulatory liabilities are recognized in accordance with the rulings of the regulatory agencies. A change in these rulings may result in a material impact on results of operations and the amount of assets and liabilities in the financial statements. Future regulatory rulings may impact the carrying value and accounting treatment of the regulatory assets and regulatory liabilities.
| 48 | ||||||||
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of the recovery of incurred costs and refund of obligations to customers in future rates. Given that management’s accounting judgments are based on assumptions about the outcome of future decisions by the regulatory agencies, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate-setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the regulatory filings by management and the uncertainty of future decisions by the regulatory agencies included the following, among others:
•We tested the effectiveness of management’s controls over the evaluation of the likelihood of recovery in future customer rates for regulatory assets and the likelihood of a probable refund to customers or reduction in future customer rates for regulatory liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
•We obtained the Company’s analysis supporting the probability of recovery for regulatory assets or refund to customers or future reduction in customer rates for regulatory liabilities not yet addressed in a regulatory order to assess management’s assertion that amounts are probable of recovery in future customer rates or represent a probable refund to customers or reduction in future customer rates.
•We inquired of management regarding current events impacting the Company and inspected minutes of the board of directors and other committees of the Company and evaluated whether matters were identified that may have an impact on recorded regulatory asset and liability balances.
•We read relevant regulatory orders issued by the regulatory agencies for the Company and other relevant public utilities, regulatory statutes, interpretations, procedural memorandums, filings made by certain stakeholders, and other publicly available information to assess the likelihood of recovery in future customer rates based on precedents of the regulatory agencies’ treatment of similar costs under similar circumstances. We evaluated the external information and whether there were matters in such information that would be contradictory to the assessment of recovery of the Company’s regulatory assets or refund of regulatory liabilities.
•We inquired of management about property, plant, and equipment, net that may be abandoned. We inspected minutes of the board of directors and other committees of the Company, regulatory orders, and other filings with the regulatory agencies to identify evidence that may contradict management’s assertion regarding probability of an abandonment or that may have an impact on the recorded balances.
•We evaluated the Company’s disclosures related to the impacts of rate regulation and regulatory developments, including the regulatory balances recorded.
/s/ DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
February 21, 202024, 2023
We have served as the Company’s auditor since 2002.
INTERSTATE POWER AND LIGHT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
| Year Ended December 31, | Year Ended December 31, | |||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2022 | 2021 | 2020 | |||||||||||||||||||||||
| (in millions) | (in millions) | |||||||||||||||||||||||||||
| Revenues: | Revenues: | |||||||||||||||||||||||||||
| Electric utility | $1,781.2 | $1,731.1 | $1,598.9 | Electric utility | $1,859 | $1,752 | $1,695 | |||||||||||||||||||||
| Gas utility | 264.2 | 266.2 | 226.0 | Gas utility | 351 | 265 | 208 | |||||||||||||||||||||
| Steam and other | 44.2 | 45.0 | 45.4 | Steam and other | 46 | 46 | 44 | |||||||||||||||||||||
| Total revenues | 2,089.6 | 2,042.3 | 1,870.3 | Total revenues | 2,256 | 2,063 | 1,947 | |||||||||||||||||||||
| Operating expenses: | Operating expenses: | |||||||||||||||||||||||||||
| Electric production fuel and purchased power | 434.5 | 469.0 | 443.6 | Electric production fuel and purchased power | 383 | 295 | 352 | |||||||||||||||||||||
| Electric transmission service | 340.2 | 352.9 | 310.4 | Electric transmission service | 407 | 367 | 298 | |||||||||||||||||||||
| Cost of gas sold | 119.9 | 129.6 | 115.6 | Cost of gas sold | 206 | 149 | 99 | |||||||||||||||||||||
| Other operation and maintenance | 404.6 | 402.6 | 396.6 | Other operation and maintenance | 369 | 362 | 375 | |||||||||||||||||||||
| Depreciation and amortization | 326.7 | 283.5 | 245.0 | Depreciation and amortization | 381 | 375 | 356 | |||||||||||||||||||||
| Taxes other than income taxes | 60.9 | 53.9 | 55.0 | Taxes other than income taxes | 57 | 55 | 57 | |||||||||||||||||||||
| Total operating expenses | 1,686.8 | 1,691.5 | 1,566.2 | Total operating expenses | 1,803 | 1,603 | 1,537 | |||||||||||||||||||||
| Operating income | 402.8 | 350.8 | 304.1 | Operating income | 453 | 460 | 410 | |||||||||||||||||||||
| Other (income) and deductions: | Other (income) and deductions: | |||||||||||||||||||||||||||
| Interest expense | 126.9 | 119.4 | 112.4 | Interest expense | 148 | 139 | 139 | |||||||||||||||||||||
| Allowance for funds used during construction | (49.4 | ) | (42.2 | ) | (31.4 | ) | Allowance for funds used during construction | (11) | (9) | (24) | ||||||||||||||||||
| Other | 6.9 | 2.6 | 7.0 | Other | 6 | 1 | 8 | |||||||||||||||||||||
| Total other (income) and deductions | 84.4 | 79.8 | 88.0 | Total other (income) and deductions | 143 | 131 | 123 | |||||||||||||||||||||
| Income before income taxes | 318.4 | 271.0 | 216.1 | Income before income taxes | 310 | 329 | 287 | |||||||||||||||||||||
| Income tax expense (benefit) | 24.1 | (3.2 | ) | (10.9 | ) | |||||||||||||||||||||||
| Income tax benefit | Income tax benefit | (50) | (36) | (47) | ||||||||||||||||||||||||
| Net income | 294.3 | 274.2 | 227.0 | Net income | 360 | 365 | 334 | |||||||||||||||||||||
| Preferred dividend requirements | 10.2 | 10.2 | 10.2 | Preferred dividend requirements | — | 15 | 10 | |||||||||||||||||||||
| Net income available for common stock | $284.1 | $264.0 | $216.8 | Net income available for common stock | $360 | $350 | $324 | |||||||||||||||||||||
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.
Refer to accompanying Combined Notes to Consolidated Financial Statements.
INTERSTATE POWER AND LIGHT COMPANY
CONSOLIDATED BALANCE SHEETS
| December 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| (in millions, except per share and share amounts) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $15 | $34 | |||||||||
| Accounts receivable, less allowance for expected credit losses | 259 | 241 | |||||||||
| Production fuel, at weighted average cost | 23 | 29 | |||||||||
| Gas stored underground, at weighted average cost | 60 | 40 | |||||||||
| Materials and supplies, at weighted average cost | 83 | 70 | |||||||||
| Regulatory assets | 85 | 73 | |||||||||
| Other | 93 | 77 | |||||||||
| Total current assets | 618 | 564 | |||||||||
| Property, plant and equipment, net | 8,046 | 7,983 | |||||||||
| Other assets: | |||||||||||
| Regulatory assets | 1,301 | 1,370 | |||||||||
| Deferred charges and other | 110 | 79 | |||||||||
| Total other assets | 1,411 | 1,449 | |||||||||
| Total assets | $10,075 | $9,996 | |||||||||
| December 31, | |||||||
| 2019 | 2018 | ||||||
(in millions, except per share and share amounts) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $9.3 | $9.7 | |||||
| Accounts receivable, less allowance for doubtful accounts | 202.8 | 153.5 | |||||
| Production fuel, at weighted average cost | 47.1 | 44.8 | |||||
| Gas stored underground, at weighted average cost | 21.7 | 26.1 | |||||
| Materials and supplies, at weighted average cost | 55.0 | 55.4 | |||||
| Regulatory assets | 43.5 | 39.2 | |||||
| Other | 30.0 | 43.1 | |||||
| Total current assets | 409.4 | 371.8 | |||||
| Property, plant and equipment, net | 7,480.7 | 6,781.5 | |||||
| Other assets: | |||||||
| Regulatory assets | 1,355.8 | 1,239.8 | |||||
| Deferred charges and other | 31.6 | 18.3 | |||||
| Total other assets | 1,387.4 | 1,258.1 | |||||
| Total assets | $9,277.5 | $8,411.4 | |||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $239 | $173 | |||||||||
| Accounts payable to associated companies | 28 | 39 | |||||||||
| Accrued taxes | 52 | 56 | |||||||||
| Accrued interest | 35 | 36 | |||||||||
| Regulatory liabilities | 114 | 84 | |||||||||
| Other | 113 | 67 | |||||||||
| Total current liabilities | 581 | 455 | |||||||||
| Long-term debt, net | 3,646 | 3,643 | |||||||||
| Other liabilities: | |||||||||||
| Deferred tax liabilities | 1,047 | 1,083 | |||||||||
| Regulatory liabilities | 640 | 607 | |||||||||
| Pension and other benefit obligations | 62 | 127 | |||||||||
| Other | 291 | 312 | |||||||||
| Total other liabilities | 2,040 | 2,129 | |||||||||
| Equity: | |||||||||||
| Interstate Power and Light Company common equity: | |||||||||||
| Common stock - $2.50 par value - 24,000,000 shares authorized; 13,370,788 shares outstanding | 33 | 33 | |||||||||
| Additional paid-in capital | 2,807 | 2,807 | |||||||||
| Retained earnings | 968 | 929 | |||||||||
| Total Interstate Power and Light Company common equity | 3,808 | 3,769 | |||||||||
| Total liabilities and equity | $10,075 | $9,996 | |||||||||
| LIABILITIES AND EQUITY | |||||||
| Current liabilities: | |||||||
| Current maturities of long-term debt | $200.0 | $— | |||||
| Commercial paper | — | 50.4 | |||||
| Accounts payable | 207.0 | 304.9 | |||||
| Regulatory liabilities | 115.9 | 90.0 | |||||
| Accrued taxes | 63.3 | 45.8 | |||||
| Accrued interest | 36.6 | 31.2 | |||||
| Other | 207.7 | 84.8 | |||||
| Total current liabilities | 830.5 | 607.1 | |||||
| Long-term debt, net (excluding current portion) | 2,947.3 | 2,552.3 | |||||
| Other liabilities: | |||||||
| Deferred tax liabilities | 1,008.0 | 957.3 | |||||
| Regulatory liabilities | 598.8 | 664.9 | |||||
| Pension and other benefit obligations | 167.7 | 178.4 | |||||
| Other | 253.4 | 220.7 | |||||
| Total other liabilities | 2,027.9 | 2,021.3 | |||||
| Equity: | |||||||
| Interstate Power and Light Company common equity: | |||||||
| Common stock - $2.50 par value - 24,000,000 shares authorized; 13,370,788 shares outstanding | 33.4 | 33.4 | |||||
| Additional paid-in capital | 2,347.8 | 2,222.8 | |||||
| Retained earnings | 890.6 | 774.5 | |||||
| Total Interstate Power and Light Company common equity | 3,271.8 | 3,030.7 | |||||
| Cumulative preferred stock | 200.0 | 200.0 | |||||
| Total equity | 3,471.8 | 3,230.7 | |||||
| Total liabilities and equity | $9,277.5 | $8,411.4 | |||||
Refer to accompanying Combined Notes to Consolidated Financial Statements.
INTERSTATE POWER AND LIGHT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended December 31, | |||||||||||||||||
| 2022 | 2021 | 2020 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Cash flows from (used for) operating activities: | |||||||||||||||||
| Net income | $360 | $365 | $334 | ||||||||||||||
| Adjustments to reconcile net income to net cash flows from (used for) operating activities: | |||||||||||||||||
| Depreciation and amortization | 381 | 375 | 356 | ||||||||||||||
| Deferred tax benefit and tax credits | (13) | (14) | (52) | ||||||||||||||
| Equity component of allowance for funds used during construction | (8) | (7) | (17) | ||||||||||||||
| Other | — | 11 | 12 | ||||||||||||||
| Other changes in assets and liabilities: | |||||||||||||||||
| Accounts receivable | (611) | (539) | (466) | ||||||||||||||
| Regulatory assets | 56 | 30 | (93) | ||||||||||||||
| Derivative assets | (54) | (55) | (7) | ||||||||||||||
| Gas stored underground, at weighted average cost | (20) | (20) | 2 | ||||||||||||||
| Accounts payable | 65 | 15 | 6 | ||||||||||||||
| Regulatory liabilities | 53 | 1 | (20) | ||||||||||||||
| Derivative liabilities | 42 | (8) | (5) | ||||||||||||||
| Deferred income taxes | (24) | 62 | 79 | ||||||||||||||
| Pension and other benefit obligations | (65) | (59) | 18 | ||||||||||||||
| DAEC PPA amendment buyout payment | — | — | (110) | ||||||||||||||
| Other | (79) | (4) | (43) | ||||||||||||||
| Net cash flows from (used for) operating activities | 83 | 153 | (6) | ||||||||||||||
| Cash flows from (used for) investing activities: | |||||||||||||||||
| Construction and acquisition expenditures | (372) | (384) | (687) | ||||||||||||||
| Cash receipts on sold receivables | 598 | 502 | 458 | ||||||||||||||
| Other | (11) | (27) | (72) | ||||||||||||||
| Net cash flows from (used for) investing activities | 215 | 91 | (301) | ||||||||||||||
| Cash flows from (used for) financing activities: | |||||||||||||||||
| Common stock dividends | (321) | (400) | (236) | ||||||||||||||
| Capital contributions from parent | — | 50 | 404 | ||||||||||||||
| Payments to redeem cumulative preferred stock | — | (200) | — | ||||||||||||||
| Proceeds from issuance of long-term debt | — | 300 | 400 | ||||||||||||||
| Payments to retire long-term debt | — | — | (200) | ||||||||||||||
| Other | 4 | (10) | (20) | ||||||||||||||
| Net cash flows from (used for) financing activities | (317) | (260) | 348 | ||||||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (19) | (16) | 41 | ||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 34 | 50 | 9 | ||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $15 | $34 | $50 | ||||||||||||||
| Supplemental cash flows information: | |||||||||||||||||
| Cash (paid) refunded during the period for: | |||||||||||||||||
| Interest | ($148) | ($138) | ($141) | ||||||||||||||
| Income taxes, net | $36 | $47 | ($18) | ||||||||||||||
| Significant non-cash investing and financing activities: | |||||||||||||||||
| Accrued capital expenditures | $56 | $57 | $73 | ||||||||||||||
| Beneficial interest obtained in exchange for securitized accounts receivable | $185 | $214 | $188 | ||||||||||||||
| Year Ended December 31, | |||||||||||
| 2019 | 2018 | 2017 | |||||||||
| (in millions) | |||||||||||
| Cash flows from (used for) operating activities: | |||||||||||
| Net income | $294.3 | $274.2 | $227.0 | ||||||||
| Adjustments to reconcile net income to net cash flows from (used for) operating activities: | |||||||||||
| Depreciation and amortization | 326.7 | 283.5 | 245.0 | ||||||||
| Deferred tax expense and tax credits | 15.3 | 2.2 | 55.8 | ||||||||
| Equity component of allowance for funds used during construction | (35.2 | ) | (28.6 | ) | (21.1 | ) | |||||
| Other | 1.0 | 3.6 | 1.5 | ||||||||
| Other changes in assets and liabilities: | |||||||||||
| Accounts receivable | (466.6 | ) | (494.0 | ) | (478.7 | ) | |||||
| Regulatory assets | (11.5 | ) | (20.2 | ) | (126.2 | ) | |||||
| Accounts payable | (20.5 | ) | (24.9 | ) | 24.0 | ||||||
| Regulatory liabilities | 2.0 | 0.6 | (71.2 | ) | |||||||
| Deferred income taxes | 35.2 | 43.8 | 103.7 | ||||||||
| Other | 32.2 | (45.2 | ) | 18.4 | |||||||
| Net cash flows from (used for) operating activities | 172.9 | (5.0 | ) | (21.8 | ) | ||||||
| Cash flows used for investing activities: | |||||||||||
| Construction and acquisition expenditures | (1,019.6 | ) | (990.7 | ) | (676.0 | ) | |||||
| Cash receipts on sold receivables | 413.2 | 605.3 | 461.8 | ||||||||
| Other | (60.6 | ) | (44.0 | ) | (27.7 | ) | |||||
| Net cash flows used for investing activities | (667.0 | ) | (429.4 | ) | (241.9 | ) | |||||
| Cash flows from financing activities: | |||||||||||
| Common stock dividends | (168.0 | ) | (168.0 | ) | (156.1 | ) | |||||
| Capital contributions from parent | 125.0 | 425.0 | 200.0 | ||||||||
| Proceeds from issuance of long-term debt | 600.0 | 500.0 | 250.0 | ||||||||
| Payments to retire long-term debt | — | (350.0 | ) | — | |||||||
| Net change in commercial paper | (50.4 | ) | 50.4 | — | |||||||
| Other | (15.6 | ) | (17.8 | ) | (27.2 | ) | |||||
| Net cash flows from financing activities | 491.0 | 439.6 | 266.7 | ||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (3.1 | ) | 5.2 | 3.0 | |||||||
| Cash, cash equivalents and restricted cash at beginning of period | 12.4 | 7.2 | 4.2 | ||||||||
| Cash, cash equivalents and restricted cash at end of period | $9.3 | $12.4 | $7.2 | ||||||||
| Supplemental cash flows information: | |||||||||||
| Cash (paid) refunded during the period for: | |||||||||||
| Interest | ($121.6 | ) | ($120.3 | ) | ($111.8 | ) | |||||
| Income taxes, net | $6.9 | ($23.8 | ) | $8.6 | |||||||
| Significant non-cash investing and financing activities: | |||||||||||
| Accrued capital expenditures | $111.6 | $186.6 | $76.4 | ||||||||
| Beneficial interest obtained in exchange for securitized accounts receivable | $187.7 | $119.4 | $222.1 | ||||||||
Refer to accompanying Combined Notes to Consolidated Financial Statements.
INTERSTATE POWER AND LIGHT COMPANY
CONSOLIDATED STATEMENTS OF EQUITY
| Total IPL Common Equity | |||||||||||||||||||||||||||||
| Additional | Cumulative | ||||||||||||||||||||||||||||
| Common | Paid-In | Retained | Preferred | Total | |||||||||||||||||||||||||
| Stock | Capital | Earnings | Stock | Equity | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| 2020: | |||||||||||||||||||||||||||||
| Beginning balance | $33 | $2,348 | $891 | $200 | $3,472 | ||||||||||||||||||||||||
| Net income available for common stock | 324 | 324 | |||||||||||||||||||||||||||
| Common stock dividends | (236) | (236) | |||||||||||||||||||||||||||
| Capital contributions from parent | 404 | 404 | |||||||||||||||||||||||||||
| Ending balance | 33 | 2,752 | 979 | 200 | 3,964 | ||||||||||||||||||||||||
| 2021: | |||||||||||||||||||||||||||||
| Net income available for common stock | 350 | 350 | |||||||||||||||||||||||||||
| Common stock dividends | (400) | (400) | |||||||||||||||||||||||||||
| Capital contributions from parent | 50 | 50 | |||||||||||||||||||||||||||
| Redemption of cumulative preferred stock | (200) | (200) | |||||||||||||||||||||||||||
| Other | 5 | 5 | |||||||||||||||||||||||||||
| Ending balance | 33 | 2,807 | 929 | — | 3,769 | ||||||||||||||||||||||||
| 2022: | |||||||||||||||||||||||||||||
| Net income available for common stock | 360 | 360 | |||||||||||||||||||||||||||
| Common stock dividends | (321) | (321) | |||||||||||||||||||||||||||
| Ending balance | $33 | $2,807 | $968 | $— | $3,808 | ||||||||||||||||||||||||
| Total IPL Common Equity | |||||||||||||||||||
| Additional | Cumulative | ||||||||||||||||||
| Common | Paid-In | Retained | Preferred | Total | |||||||||||||||
| Stock | Capital | Earnings | Stock | Equity | |||||||||||||||
| (in millions) | |||||||||||||||||||
| 2017: | |||||||||||||||||||
| Beginning balance | $33.4 | $1,597.8 | $617.8 | $200.0 | $2,449.0 | ||||||||||||||
| Net income available for common stock | 216.8 | 216.8 | |||||||||||||||||
| Common stock dividends | (156.1 | ) | (156.1 | ) | |||||||||||||||
| Capital contribution from parent | 200.0 | 200.0 | |||||||||||||||||
| Ending balance | 33.4 | 1,797.8 | 678.5 | 200.0 | 2,709.7 | ||||||||||||||
| 2018: | |||||||||||||||||||
| Net income available for common stock | 264.0 | 264.0 | |||||||||||||||||
| Common stock dividends | (168.0 | ) | (168.0 | ) | |||||||||||||||
| Capital contribution from parent | 425.0 | 425.0 | |||||||||||||||||
| Ending balance | 33.4 | 2,222.8 | 774.5 | 200.0 | 3,230.7 | ||||||||||||||
| 2019: | |||||||||||||||||||
| Net income available for common stock | 284.1 | 284.1 | |||||||||||||||||
| Common stock dividends | (168.0 | ) | (168.0 | ) | |||||||||||||||
| Capital contribution from parent | 125.0 | 125.0 | |||||||||||||||||
| Ending balance | $33.4 | $2,347.8 | $890.6 | $200.0 | $3,471.8 | ||||||||||||||
Refer to accompanying Combined Notes to Consolidated Financial Statements.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareowner and the Board of Directors of Wisconsin Power and Light Company:
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of Wisconsin Power and Light Company and subsidiarysubsidiaries (the “Company”) as of December 31, 20192022 and 2018,2021, the related consolidated statements of income, equity, and cash flows, for each of the three years in the period ended December 31, 2019,2022, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 20192022 and 2018,2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019,2022, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Regulatory Assets and Regulatory Liabilities - Impact of rate regulation on the financial statements - Refer to Notes 1, 2, and 3 to the financial statements
Critical Audit Matter Description
Wisconsin Power and Light Company is subject to rate regulation by the Federal Energy Regulatory Commission and state commission in Wisconsin (collectively the “regulatory agencies”). Management has determined it meets the requirements under accounting principles generally accepted in the United States of America to prepare its financial statements applying the Regulated Operations Topic 980 of the Financial Accounting Standards Board’s Accounting Standards Codification. As of December 31, 2022, the Company had a recorded consolidated regulatory assets balance of $660 million and regulatory liabilities balance of $570 million.
The Company’s rates are subject to regulatory rate-setting processes and periodic earnings oversight. The regulation of rates is premised on the full recovery of prudently incurred costs and a reasonable rate of return on invested capital. Regulatory assets represent incurred costs that have been deferred and are probable of recovery in future customer rates. Regulatory liabilities represent obligations to make refunds to customers or amounts collected in rates for which the costs have not yet been incurred. The Company’s regulatory assets and regulatory liabilities are recognized in accordance with the rulings of the regulatory agencies. A change in these rulings may result in a material impact on results of operations and the amount of assets and liabilities in the financial statements. Future regulatory rulings may impact the carrying value and accounting treatment of the regulatory assets and regulatory liabilities.
| 54 | ||||||||
We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. Management judgments include assessing the likelihood of the recovery of incurred costs and refund of obligations to customers in future rates. Given that management’s accounting judgments are based on assumptions about the outcome of future decisions by the regulatory agencies, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate-setting process due to its inherent complexities.
How the Critical Audit Matter Was Addressed in the Audit
Our audit procedures related to the regulatory filings by management and the uncertainty of future decisions by the regulatory agencies included the following, among others:
•We tested the effectiveness of management’s controls over the evaluation of the likelihood of recovery in future customer rates for regulatory assets and the likelihood of a probable refund to customers or reduction in future customer rates for regulatory liabilities; and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.
•We obtained the Company’s analysis supporting the probability of recovery for regulatory assets or refund to customers or future reduction in customer rates for regulatory liabilities not yet addressed in a regulatory order to assess management’s assertion that amounts are probable of recovery in future customer rates or represent a probable refund to customers or reduction in future customer rates.
•We inquired of management regarding current events impacting the Company and inspected minutes of the board of directors and other committees of the Company and evaluated whether matters were identified that may have an impact on recorded regulatory asset and liability balances.
•We read relevant regulatory orders issued by the regulatory agencies for the Company and other relevant public utilities, regulatory statutes, interpretations, procedural memorandums, filings made by certain stakeholders, and other publicly available information to assess the likelihood of recovery in future customer rates based on precedents of the regulatory agencies’ treatment of similar costs under similar circumstances. We evaluated the external information and whether there were matters in such information that would be contradictory to the assessment of recovery of the Company’s regulatory assets or refund of regulatory liabilities.
•We inquired of management about property, plant, and equipment, net that may be abandoned. We inspected minutes of the board of directors and other committees of the Company, regulatory orders, and other filings with the regulatory agencies to identify evidence that may contradict management’s assertion regarding probability of an abandonment or that may have an impact on the recorded balances.
•We evaluated the Company’s disclosures related to the impacts of rate regulation and regulatory developments, including the regulatory balances recorded.
/s/ DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
February 21, 202024, 2023
We have served as the Company’s auditor since 2002.
WISCONSIN POWER AND LIGHT COMPANY
CONSOLIDATED STATEMENTS OF INCOME
| Year Ended December 31, | |||||||||||||||||
| 2022 | 2021 | 2020 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Revenues: | |||||||||||||||||
| Electric utility | $1,562 | $1,329 | $1,225 | ||||||||||||||
| Gas utility | 291 | 191 | 165 | ||||||||||||||
| Other | 3 | 3 | 5 | ||||||||||||||
| Total revenues | 1,856 | 1,523 | 1,395 | ||||||||||||||
| Operating expenses: | |||||||||||||||||
| Electric production fuel and purchased power | 447 | 347 | 300 | ||||||||||||||
| Electric transmission service | 166 | 170 | 151 | ||||||||||||||
| Cost of gas sold | 183 | 109 | 83 | ||||||||||||||
| Other operation and maintenance | 278 | 268 | 254 | ||||||||||||||
| Depreciation and amortization | 283 | 276 | 254 | ||||||||||||||
| Taxes other than income taxes | 47 | 45 | 47 | ||||||||||||||
| Total operating expenses | 1,404 | 1,215 | 1,089 | ||||||||||||||
| Operating income | 452 | 308 | 306 | ||||||||||||||
| Other (income) and deductions: | |||||||||||||||||
| Interest expense | 121 | 105 | 104 | ||||||||||||||
| Allowance for funds used during construction | (49) | (16) | (31) | ||||||||||||||
| Other | (1) | 2 | 3 | ||||||||||||||
| Total other (income) and deductions | 71 | 91 | 76 | ||||||||||||||
| Income before income taxes | 381 | 217 | 230 | ||||||||||||||
| Income tax expense (benefit) | 66 | (51) | (19) | ||||||||||||||
| Net income | $315 | $268 | $249 | ||||||||||||||
| Year Ended December 31, | |||||||||||
| 2019 | 2018 | 2017 | |||||||||
| (in millions) | |||||||||||
| Revenues: | |||||||||||
| Electric utility | $1,282.4 | $1,269.2 | $1,295.8 | ||||||||
| Gas utility | 191.0 | 180.4 | 174.9 | ||||||||
| Other | 2.3 | 3.0 | 2.1 | ||||||||
| Total revenues | 1,475.7 | 1,452.6 | 1,472.8 | ||||||||
| Operating expenses: | |||||||||||
| Electric production fuel and purchased power | 342.2 | 386.0 | 374.5 | ||||||||
| Electric transmission service | 141.2 | 142.8 | 170.5 | ||||||||
| Cost of gas sold | 101.8 | 102.7 | 95.8 | ||||||||
| Other operation and maintenance | 260.9 | 241.6 | 238.5 | ||||||||
| Depreciation and amortization | 235.6 | 219.4 | 212.9 | ||||||||
| Taxes other than income taxes | 46.8 | 47.2 | 46.9 | ||||||||
| Total operating expenses | 1,128.5 | 1,139.7 | 1,139.1 | ||||||||
| Operating income | 347.2 | 312.9 | 333.7 | ||||||||
| Other (income) and deductions: | |||||||||||
| Interest expense | 102.2 | 97.8 | 93.8 | ||||||||
| Allowance for funds used during construction | (43.3 | ) | (33.4 | ) | (18.3 | ) | |||||
| Other | 6.0 | 4.2 | 9.7 | ||||||||
| Total other (income) and deductions | 64.9 | 68.6 | 85.2 | ||||||||
| Income before income taxes | 282.3 | 244.3 | 248.5 | ||||||||
| Income taxes | 49.3 | 36.2 | 61.9 | ||||||||
| Net income | $233.0 | $208.1 | $186.6 | ||||||||
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.
Refer to accompanying Combined Notes to Consolidated Financial Statements.
WISCONSIN POWER AND LIGHT COMPANY
CONSOLIDATED BALANCE SHEETS
| December 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| (in millions, except per share and share amounts) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $5 | $2 | |||||||||
| Accounts receivable, less allowance for expected credit losses | 244 | 188 | |||||||||
| Production fuel, at weighted average cost | 29 | 23 | |||||||||
| Gas stored underground, at weighted average cost | 73 | 42 | |||||||||
| Materials and supplies, at weighted average cost | 54 | 41 | |||||||||
| Regulatory assets | 81 | 31 | |||||||||
| Prepaid gross receipts tax | 42 | 40 | |||||||||
| Other | 60 | 86 | |||||||||
| Total current assets | 588 | 453 | |||||||||
| Property, plant and equipment, net | 7,722 | 6,538 | |||||||||
| Other assets: | |||||||||||
| Regulatory assets | 579 | 466 | |||||||||
| Deferred charges and other | 98 | 61 | |||||||||
| Total other assets | 677 | 527 | |||||||||
| Total assets | $8,987 | $7,518 | |||||||||
| December 31, | |||||||
| 2019 | 2018 | ||||||
(in millions, except per share and share amounts) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $4.4 | $8.7 | |||||
| Accounts receivable, less allowance for doubtful accounts | 190.9 | 190.1 | |||||
| Production fuel, at weighted average cost | 30.6 | 16.6 | |||||
| Gas stored underground, at weighted average cost | 27.4 | 22.9 | |||||
| Materials and supplies, at weighted average cost | 43.1 | 42.9 | |||||
| Regulatory assets | 42.9 | 40.6 | |||||
| Prepaid gross receipts tax | 41.7 | 42.2 | |||||
| Other | 61.7 | 20.6 | |||||
| Total current assets | 442.7 | 384.6 | |||||
| Property, plant and equipment, net | 5,638.3 | 5,287.3 | |||||
| Other assets: | |||||||
| Regulatory assets | 402.5 | 417.7 | |||||
| Deferred charges and other | 23.0 | 62.9 | |||||
| Total other assets | 425.5 | 480.6 | |||||
| Total assets | $6,506.5 | $6,152.5 | |||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current maturities of long-term debt | $— | $250 | |||||||||
| Commercial paper | 290 | 236 | |||||||||
| Accounts payable | 456 | 190 | |||||||||
| Regulatory liabilities | 92 | 102 | |||||||||
| Other | 111 | 112 | |||||||||
| Total current liabilities | 949 | 890 | |||||||||
| Long-term debt, net (excluding current portion) | 2,770 | 2,179 | |||||||||
| Other liabilities: | |||||||||||
| Deferred tax liabilities | 789 | 753 | |||||||||
| Regulatory liabilities | 478 | 478 | |||||||||
| Pension and other benefit obligations | 140 | 159 | |||||||||
| Other | 370 | 236 | |||||||||
| Total other liabilities | 1,777 | 1,626 | |||||||||
| Equity: | |||||||||||
| Wisconsin Power and Light Company common equity: | |||||||||||
| Common stock - $5 par value - 18,000,000 shares authorized; 13,236,601 shares outstanding | 66 | 66 | |||||||||
| Additional paid-in capital | 2,233 | 1,704 | |||||||||
| Retained earnings | 1,192 | 1,053 | |||||||||
| Total Wisconsin Power and Light Company common equity | 3,491 | 2,823 | |||||||||
| Total liabilities and equity | $8,987 | $7,518 | |||||||||
| LIABILITIES AND EQUITY | |||||||
| Current liabilities: | |||||||
| Current maturities of long-term debt | $150.0 | $250.0 | |||||
| Commercial paper | 168.2 | 105.5 | |||||
| Accounts payable | 159.9 | 180.9 | |||||
| Accounts payable to associated companies | 41.8 | 31.8 | |||||
| Regulatory liabilities | 96.1 | 52.7 | |||||
| Other | 74.3 | 73.7 | |||||
| Total current liabilities | 690.3 | 694.6 | |||||
| Long-term debt, net (excluding current portion) | 1,782.7 | 1,584.9 | |||||
| Other liabilities: | |||||||
| Deferred tax liabilities | 626.2 | 582.0 | |||||
| Regulatory liabilities | 612.8 | 685.6 | |||||
| Finance lease obligations - Sheboygan Falls Energy Facility | 51.4 | 60.0 | |||||
| Pension and other benefit obligations | 210.8 | 217.7 | |||||
| Other | 168.7 | 178.2 | |||||
| Total other liabilities | 1,669.9 | 1,723.5 | |||||
| Equity: | |||||||
| Wisconsin Power and Light Company common equity: | |||||||
| Common stock - $5 par value - 18,000,000 shares authorized; 13,236,601 shares outstanding | 66.2 | 66.2 | |||||
| Additional paid-in capital | 1,434.0 | 1,309.0 | |||||
| Retained earnings | 863.4 | 774.3 | |||||
| Total Wisconsin Power and Light Company common equity | 2,363.6 | 2,149.5 | |||||
| Total liabilities and equity | $6,506.5 | $6,152.5 | |||||
Refer to accompanying Combined Notes to Consolidated Financial Statements.
WISCONSIN POWER AND LIGHT COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Year Ended December 31, | |||||||||||||||||
| 2022 | 2021 | 2020 | |||||||||||||||
| (in millions) | |||||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||
| Net income | $315 | $268 | $249 | ||||||||||||||
| Adjustments to reconcile net income to net cash flows from operating activities: | |||||||||||||||||
| Depreciation and amortization | 283 | 276 | 254 | ||||||||||||||
| Deferred tax expense (benefit) and tax credits | 4 | (79) | (15) | ||||||||||||||
| Other | (15) | 11 | 2 | ||||||||||||||
| Other changes in assets and liabilities: | |||||||||||||||||
| Accounts receivable | (53) | 3 | (1) | ||||||||||||||
| Regulatory assets | (163) | 21 | (37) | ||||||||||||||
| Derivative assets | (7) | (87) | — | ||||||||||||||
| Regulatory liabilities | (31) | (67) | (93) | ||||||||||||||
| Deferred income taxes | 32 | 132 | 90 | ||||||||||||||
| Pension and other benefit obligations | (19) | (63) | 11 | ||||||||||||||
| Other | (47) | (44) | 6 | ||||||||||||||
| Net cash flows from operating activities | 299 | 371 | 466 | ||||||||||||||
| Cash flows used for investing activities: | |||||||||||||||||
| Construction and acquisition expenditures | (1,020) | (686) | (606) | ||||||||||||||
| Other | (13) | (30) | (7) | ||||||||||||||
| Net cash flows used for investing activities | (1,033) | (716) | (613) | ||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||
| Common stock dividends | (176) | (168) | (160) | ||||||||||||||
| Capital contributions from parent | 530 | 245 | 25 | ||||||||||||||
| Proceeds from issuance of long-term debt | 588 | 300 | 350 | ||||||||||||||
| Payments to retire long-term debt | (250) | — | (150) | ||||||||||||||
| Net change in commercial paper | 54 | (21) | 89 | ||||||||||||||
| Contributions from noncontrolling interest | 29 | — | — | ||||||||||||||
| Distributions to noncontrolling interest | (29) | — | — | ||||||||||||||
| Other | (9) | (12) | (8) | ||||||||||||||
| Net cash flows from financing activities | 737 | 344 | 146 | ||||||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 3 | (1) | (1) | ||||||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 2 | 3 | 4 | ||||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $5 | $2 | $3 | ||||||||||||||
| Supplemental cash flows information: | |||||||||||||||||
| Cash (paid) refunded during the period for: | |||||||||||||||||
| Interest | ($111) | ($101) | ($102) | ||||||||||||||
| Income taxes, net | ($56) | ($38) | $13 | ||||||||||||||
| Significant non-cash investing and financing activities: | |||||||||||||||||
| Accrued capital expenditures | $319 | $81 | $55 | ||||||||||||||
| Year Ended December 31, | |||||||||||
| 2019 | 2018 | 2017 | |||||||||
| (in millions) | |||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $233.0 | $208.1 | $186.6 | ||||||||
| Adjustments to reconcile net income to net cash flows from operating activities: | |||||||||||
| Depreciation and amortization | 235.6 | 219.4 | 212.9 | ||||||||
| Deferred tax expense and tax credits | 23.6 | 49.8 | 53.9 | ||||||||
| Other | (11.5 | ) | (17.5 | ) | 4.4 | ||||||
| Other changes in assets and liabilities: | |||||||||||
| Regulatory liabilities | (42.3 | ) | 0.7 | (12.6 | ) | ||||||
| Other | (15.2 | ) | (3.5 | ) | 20.5 | ||||||
| Net cash flows from operating activities | 423.2 | 457.0 | 465.7 | ||||||||
| Cash flows used for investing activities: | |||||||||||
| Construction and acquisition expenditures | (518.8 | ) | (577.6 | ) | (637.4 | ) | |||||
| Other | (38.4 | ) | (29.9 | ) | (29.9 | ) | |||||
| Net cash flows used for investing activities | (557.2 | ) | (607.5 | ) | (667.3 | ) | |||||
| Cash flows from financing activities: | |||||||||||
| Common stock dividends | (143.9 | ) | (140.1 | ) | (125.9 | ) | |||||
| Capital contribution from parent | 125.0 | 200.0 | 90.0 | ||||||||
| Proceeds from issuance of long-term debt | 350.0 | — | 300.0 | ||||||||
| Payments to retire long-term debt | (250.0 | ) | — | — | |||||||
| Net change in commercial paper | 62.7 | 80.5 | (27.3 | ) | |||||||
| Other | (14.6 | ) | (4.9 | ) | (17.9 | ) | |||||
| Net cash flows from financing activities | 129.2 | 135.5 | 218.9 | ||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (4.8 | ) | (15.0 | ) | 17.3 | ||||||
| Cash, cash equivalents and restricted cash at beginning of period | 9.2 | 24.2 | 6.9 | ||||||||
| Cash, cash equivalents and restricted cash at end of period | $4.4 | $9.2 | $24.2 | ||||||||
| Supplemental cash flows information: | |||||||||||
| Cash (paid) refunded during the period for: | |||||||||||
| Interest | ($102.5 | ) | ($98.1 | ) | ($91.7 | ) | |||||
| Income taxes, net | ($28.9 | ) | $14.0 | ($8.4 | ) | ||||||
| Significant non-cash investing and financing activities: | |||||||||||
| Accrued capital expenditures | $81.5 | $102.5 | $114.5 | ||||||||
Refer to accompanying Combined Notes to Consolidated Financial Statements.
WISCONSIN POWER AND LIGHT COMPANY
CONSOLIDATED STATEMENTS OF EQUITY
| Total WPL Common Equity | |||||||||||||||||||||||||||||
| Additional | |||||||||||||||||||||||||||||
| Common | Paid-In | Retained | Noncontrolling | Total | |||||||||||||||||||||||||
| Stock | Capital | Earnings | Interest | Equity | |||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||
| 2020: | |||||||||||||||||||||||||||||
| Beginning balance | $66 | $1,434 | $864 | $— | $2,364 | ||||||||||||||||||||||||
| Net income | 249 | 249 | |||||||||||||||||||||||||||
| Common stock dividends | (160) | (160) | |||||||||||||||||||||||||||
| Capital contributions from parent | 25 | 25 | |||||||||||||||||||||||||||
| Ending balance | 66 | 1,459 | 953 | — | 2,478 | ||||||||||||||||||||||||
| 2021: | |||||||||||||||||||||||||||||
| Net income | 268 | 268 | |||||||||||||||||||||||||||
| Common stock dividends | (168) | (168) | |||||||||||||||||||||||||||
| Capital contributions from parent | 245 | 245 | |||||||||||||||||||||||||||
| Ending balance | 66 | 1,704 | 1,053 | — | 2,823 | ||||||||||||||||||||||||
| 2022: | |||||||||||||||||||||||||||||
| Net income | 315 | 315 | |||||||||||||||||||||||||||
| Common stock dividends | (176) | (176) | |||||||||||||||||||||||||||
| Capital contributions from parent | 530 | 530 | |||||||||||||||||||||||||||
| Contributions from noncontrolling interest | 29 | 29 | |||||||||||||||||||||||||||
| Distributions to noncontrolling interest | (29) | (29) | |||||||||||||||||||||||||||
| Other | (1) | (1) | |||||||||||||||||||||||||||
| Ending balance | $66 | $2,233 | $1,192 | $— | $3,491 | ||||||||||||||||||||||||
| Additional | Total | ||||||||||||||
| Common | Paid-In | Retained | Common | ||||||||||||
| Stock | Capital | Earnings | Equity | ||||||||||||
| (in millions) | |||||||||||||||
| 2017: | |||||||||||||||
| Beginning balance | $66.2 | $1,019.0 | $645.6 | $1,730.8 | |||||||||||
| Net income | 186.6 | 186.6 | |||||||||||||
| Common stock dividends | (125.9 | ) | (125.9 | ) | |||||||||||
| Capital contribution from parent | 90.0 | 90.0 | |||||||||||||
| Ending balance | 66.2 | 1,109.0 | 706.3 | 1,881.5 | |||||||||||
| 2018: | |||||||||||||||
| Net income | 208.1 | 208.1 | |||||||||||||
| Common stock dividends | (140.1 | ) | (140.1 | ) | |||||||||||
| Capital contribution from parent | 200.0 | 200.0 | |||||||||||||
| Ending balance | 66.2 | 1,309.0 | 774.3 | 2,149.5 | |||||||||||
| 2019: | |||||||||||||||
| Net income | 233.0 | 233.0 | |||||||||||||
| Common stock dividends | (143.9 | ) | (143.9 | ) | |||||||||||
| Capital contribution from parent | 125.0 | 125.0 | |||||||||||||
| Ending balance | $66.2 | $1,434.0 | $863.4 | $2,363.6 | |||||||||||
Refer to accompanying Combined Notes to Consolidated Financial Statements.
ALLIANT ENERGY CORPORATION
INTERSTATE POWER AND LIGHT COMPANY
WISCONSIN POWER AND LIGHT COMPANY
COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 1(a) General -
Description of Business - Alliant Energy’s financial statements include the accounts of Alliant Energy and its consolidated subsidiaries. Alliant Energy is a Midwest U.S. energy holding company, whose primary wholly-owned subsidiaries are IPL, WPL, AEF and Corporate Services.
IPL’s financial statements include the accounts of IPL and its consolidated subsidiary,subsidiaries, including IPL SPE LLC, which is used for IPL’s sales of accounts receivable program. IPL is a direct subsidiary of Alliant Energy and is a public utility engaged principally in the generation and distribution of electricity and the distribution and transportation of natural gas to retail customers in select markets in Iowa. IPL also sells electricity to wholesale customers in Minnesota, Illinois and Iowa, and is engaged in the generation and distribution of steam for 2two customers in Cedar Rapids, Iowa.
WPL’s financial statements include the accounts of WPL and its consolidated subsidiary.subsidiaries. WPL is a direct subsidiary of Alliant Energy and is a public utility engaged principally in the generation and distribution of electricity and the distribution and transportation of natural gas to retail customers in select markets in Wisconsin. WPL also sells electricity to wholesale customers in Wisconsin.
AEF is comprised of Transportation,Travero, ATI, corporate venture investments, a non-utility wind farm, the Sheboygan Falls Energy Facility and other non-utility holdings. TransportationTravero includes a short-line railway that providesrail freight service between Cedar Rapids, Iowa and Iowa City,in Iowa; a Mississippi River barge, rail and truck freight terminal and hauling services on the Mississippi River; customized supply chain solution capabilities;in Illinois; freight and logistics brokeringbrokerage services; and other transfer and storage services.a rail-served warehouse in Iowa. ATI, a wholly-owned subsidiary of AEF, holds all of Alliant Energy’s interest in ATC Holdings. Corporate venture investments includes various minority ownership interests in regional and national venture funds, including a global coalition of energy companies working together to help advance the transition towards a cleaner, more sustainable, and inclusive energy future, by identifying and researching innovative technologies and business models within the emerging energy economy. The non-utility wind farm includes a 50% cash equity ownership interest in a 225 MW wind farm located in Oklahoma. The Sheboygan Falls Energy Facility is a 347 MW, simple-cycle, natural gas-fired EGU near Sheboygan Falls, Wisconsin, which is leased to WPL for an initial period of 20 years ending in 2025.
Corporate Services is the subsidiary formed to provide administrative services to Alliant Energy and its subsidiaries.
Basis of Presentation - The financial statements reflect investments in controlled subsidiaries on a consolidated basis and Alliant Energy’s, IPL’s and WPL’s proportionate shares of jointly-owned utility EGUs. Unconsolidated investments that Alliant Energy and WPL do not control are accounted for under the equity method of accounting. Under the equity method of accounting, Alliant Energy and WPL initially record the investment at cost, and adjust the carrying amount of the investment to recognize their respective share of the earnings or losses of the investee. Dividends received from an investee reduce the carrying amount of the equity investment. Investments that do not meet the criteria for consolidation or the equity method of accounting are accounted for under the cost method.
All intercompany balances and transactions, other than certain transactions affecting the rate-making process at IPL and WPL, have been eliminated from the financial statements. Such transactions not eliminated include costs that are recoverable from customers through rate-making processes. The financial statements are prepared in conformity with GAAP, which give recognition to the rate-making practices of FERC and state commissions having regulatory jurisdiction.
Certain prior period amounts in the Financial Statements and Notes have been reclassified to conform to the current period presentation for comparative purposes. Discontinued operations reported in Alliant Energy’s income statements are related to various warranty claims associated with the sale of RMT, Inc. in 2013, which has resulted in income subsequent to the sale. Alliant Energy presents cash flows from continuing operations together with cash flows from discontinued operations in its cash flows statements.
Use of Estimates - The preparation of the financial statements requires management to make estimates and assumptions that affect: (a) the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements; and (b) the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NOTE 1(b) Regulatory Assets and Regulatory Liabilities - Alliant Energy, IPL and WPL are subject to regulation by FERC and various state regulatory commissions. As a result, Alliant Energy, IPL and WPL are subject to GAAP provisions for regulated operations, which provide that rate-regulated public utilities record certain costs and credits allowed in the rate-making process in different periods than for non-utility entities. Regulatory assets generally represent incurred costs that have been deferred as such costs are probable of recovery in future customer rates. Regulatory liabilities generally represent obligations to make refunds to customers or amounts collected in rates for which the related costs have not yet been incurred. Amounts recorded as regulatory assets or regulatory liabilities are generally recognized in the income statements at the time they are reflected in rates.
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NOTE 1(c) Income Taxes - The liability method of accounting is followed for deferred taxes, which requires the establishment of deferred tax assets and liabilities, as appropriate, for temporary differences between the tax basis of assets and liabilities and the amounts reported in the financial statements. Deferred taxes are recorded using currently enacted tax rates and estimates of state apportionment. Changes in deferred tax assets and liabilities associated with certain property-related differences at IPL are accounted for differently than other subsidiaries of Alliant Energy due to rate-making practices in Iowa. Rate-making practices in Iowa do not includeallow the impact of certain deferred tax expenses (benefits) to be included in the determination of retail rates. Based on these rate-making practices, deferred tax expense (benefit) related to these property-related differences at IPL is not recorded in the income statement but instead recorded to regulatory assets or regulatory liabilities until these temporary differences reverse. In Wisconsin, the PSCW allows rate recovery of deferred tax expense on all temporary differences.
Federal Tax Reform repealed corporate federal alternative minimum tax and allowsallowed unutilized alternative minimum tax credits to be refunded over four tax years beginning with the U.S. federal tax return for calendar year 2018. OtherPursuant to the Coronavirus Aid, Relief, and Economic Security Act, Alliant Energy received the remaining alternative minimum tax credits reduce income tax expenserefunds in the year claimed.2020.
Alliant Energy files a consolidated federal income tax return and a combined return in Wisconsin, which include Alliant Energy and its subsidiaries. Alliant Energy subsidiaries with a presence in Iowa file as part of a consolidated return in Iowa.
Alliant Energy allocates consolidated income tax expense to its subsidiaries that are members of the group that file a consolidated or combined income tax return. IPL and WPL use the modified separate return approach for calculating their income tax provisions and related deferred tax assets and liabilities. IPL and WPL are assumed to file separate tax returns with the federal and state taxing authorities, except that net operating losses (and other current or deferred tax attributes) are characterized as realized (or realizable) by IPL and WPL when those tax attributes are realized (or realizable) by the consolidated tax return group of Alliant Energy (even if IPL and WPL would not otherwise have realized the attributes on a stand-alone basis). The difference in the income taxes recorded for IPL and WPL under the modified separate return method compared to the income taxes recorded on a separate return basis was not material in 2019, 20182022, 2021 and 2017.2020.
NOTE 1(d) Cash, Cash Equivalents and Restricted Cash - Cash and cash equivalents include short-term liquid investments that have original maturities of less than 90 days. At December 31, 20192022 and 2018,2021, Alliant Energy’s restricted cash primarily related to requirements in Sheboygan Power, LLC’s debt agreement.
NOTE 1(e) Property, Plant and Equipment -
Utility Plant -
General - Utility plant is recorded at the original cost of acquisition or construction, which includes material, labor, contractor services, AFUDC and allocable overheads, such as supervision, engineering, benefits, certain taxes and transportation. Repairs, replacements and renewals of items of property determined to be less than a unit of property or that do not increase the property’s life or functionality are charged to maintenance expense. Property, plant and equipment that is probable of being retired early is classified as plant anticipated to be retired early. Generally, ordinary retirements of utility plant and salvage value are netted and charged to accumulated depreciation upon removal from utility plant accounts and no gain or loss is recognized consistent with rate-making principles. However, if regulators have approved recovery of the remaining net book value of property, plant and equipment that is retired early, or such approval by regulators is probable, the remaining net book value is reclassified from property, plant and equipment to regulatory assets upon retirement.
Depreciation - IPL and WPL use a combination of remaining life and straight-line depreciation methods as approved by their respective regulatory commissions. The composite or group method of depreciation is used, in which a single depreciation rate is applied to the gross investment in a particular class of property. This method pools similar assets and then depreciates each group as a whole. Periodic depreciation studies are performed to determine the appropriate group lives, net salvage, estimated cost of removal and group depreciation rates. These depreciation studies are subject to review and approval by
IPL’s and WPL’s respective regulatory commissions. Depreciation expense is included within the recoverable cost of service component of rates collected from customers. The average rates of depreciation for electric, gas and other properties, consistent with current rate-making practices, were as follows:
| IPL | WPL | ||||||||||
| 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||
| Electric - generation | 3.8% | 3.6% | 3.5% | 3.6% | 3.6% | 3.5% | |||||
| Electric - distribution | 2.9% | 2.8% | 2.4% | 2.6% | 2.6% | 2.6% | |||||
| Electric - other | 5.3% | 4.7% | 4.5% | 5.8% | 5.7% | 6.9% | |||||
| Gas | 3.3% | 3.2% | 3.4% | 2.5% | 2.5% | 2.5% | |||||
| Other | 5.9% | 5.2% | 4.0% | 5.6% | 5.8% | 6.0% | |||||
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| IPL | WPL | ||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||
| Electric - generation | 3.4% | 3.4% | 3.5% | 3.4% | 3.5% | 3.5% | |||||||||||||||||||||||||||||
| Electric - distribution | 2.8% | 2.9% | 2.8% | 2.5% | 2.6% | 2.6% | |||||||||||||||||||||||||||||
| Electric - other | 5.7% | 5.7% | 5.2% | 6.8% | 7.4% | 6.1% | |||||||||||||||||||||||||||||
| Gas | 3.3% | 3.3% | 3.3% | 2.4% | 2.4% | 2.4% | |||||||||||||||||||||||||||||
| Other | 6.1% | 6.1% | 6.3% | 4.9% | 5.4% | 5.9% | |||||||||||||||||||||||||||||
In December 2021, the PSCW issued an order approving the implementation of updated depreciation rates for WPL effective January 1, 2023 as a result of a recently completed depreciation study. WPL estimates the new average rates of depreciation for its electric generation, electric distribution and gas properties will be approximately 3.6%, 2.7% and 2.9%, respectively, during 2023.
AFUDC - AFUDC represents costs to finance construction additions, including a return on equity component and cost of debt component as required by regulatory accounting. AFUDC for IPL’s construction projects is calculated in accordance with FERC guidelines. AFUDC for WPL’s retail and wholesale jurisdiction construction projects is calculated in accordance with PSCW and FERC guidelines, respectively. The AFUDC rates, computed in accordance with the prescribed regulatory formula, were as follows:
| 2022 | 2021 | 2020 | |||||||||||||||
| IPL (Wind generation CWIP) | 6.9% | 7.0% | 7.1% | ||||||||||||||
| IPL (other CWIP) | 7.0% | 7.2% | 7.2% | ||||||||||||||
| WPL (retail jurisdiction) | 7.0% | 7.0% | 7.0% | ||||||||||||||
| WPL (wholesale jurisdiction) | 6.2% | 5.6% | 6.3% | ||||||||||||||
| 2019 | 2018 | 2017 | |||
| IPL (Marshalltown CWIP) | N/A | N/A | 7.8% | ||
| IPL (Wind generation CWIP) | 7.4% | 7.5% | 7.6% | ||
| IPL (other CWIP) | 7.5% | 7.5% | 7.6% | ||
| WPL (retail jurisdiction) | 6.8% | 7.7% | 7.6% | ||
| WPL (wholesale jurisdiction) | 6.9% | 7.2% | 6.0% | ||
In accordance with their respective regulatory commission decisions, IPL applies its AFUDC rates to 100% of applicable CWIP balances, and WPL generally applies its AFUDC rates to 50% of applicable CWIP balances.balances and the remaining 50% of applicable CWIP balances earns a return on such balances as part of its rate base. WPL may apply its AFUDC rates to 100% of the retail portion of the CWIP balances for construction projects requiring a CA or CPCN that were approved by the PSCW after its then most recent rate order, including West Riverside.the first and second solar generation CAs.
Non-utility and Other Property -
General - Non-utility property is recorded at the original cost of acquisition or construction, which includes material, labor and contractor services. Repairs, replacements and renewals of items of property determined to be less than a unit of property or that do not increase the property’s life or functionality are charged to maintenance expense. Upon retirement or sale of non-utility property, the original cost and related accumulated depreciation are removed from the accounts and any gain or loss is included in the income statements.
Costs related to software developed or obtained for internal use are capitalized and amortized on a straight-line basis over the estimated useful life of the related software. If software is retired prior to being fully amortized, the remaining book value is recorded as a loss in the income statements.
NOTE 1(f) Revenue Recognition -
Utility - Revenues from Alliant Energy’s utility business are primarily from 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 end of each customer’s last billing period. The unbilled revenuecomponent 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 December 31, 2019,2022, 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.
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Non-utility - Revenues from Alliant Energy’s non-utility businesses are primarily from its TransportationTravero business and are recognized over time as services are rendered 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 services performed.
NOTE 1(g) Utility Cost Recovery Mechanisms
Electric Production Fuel and Purchased Power (Fuel-related Costs) - Fuel-related costs are incurred to generate and purchase electricity to meet the demand of IPL’s and WPL’s electric customers. These fuel-related costs include the cost of fossil fuels (primarily natural gas and coal) used to produce electricity at their EGUs, and electricity purchased from MISO wholesale energy markets and under PPAs. These fuel-related costs are recorded in “Electric production fuel and purchased power” in the income statements.
IPL Retail - The cost recovery mechanisms for IPL’s retail electric customers provide for monthly adjustments to their electric rates for changes in fuel-related costs. Changes in the under-/over-collection of these costs are recognized in “Electric production fuel and purchased power” in Alliant Energy’s and IPL’s income statements. The cumulative effects of the under-/over-collection of these costs are recorded in regulatory assets or regulatory liabilities on Alliant Energy’s and IPL’s balance sheets until they are reflected in future billings to customers.
WPL Retail - The cost recovery mechanism for WPL’s retail electric customers is based on forecasts of certain fuel-related costs expected to be incurred during forward-looking test periods and fuel monitoring ranges determined by the PSCW during each retail electric rate proceeding or in a separate fuel cost plan approval proceeding. If WPL’s actual fuel-related costs fall outside these fuel monitoring ranges, WPL is authorized to defer the incremental under-/over-collection of fuel-related costs that are outside the approved ranges. Deferral of under-collections are reduced to the extent actual return on common equity earned by WPL during the fuel cost plan year exceeds the most recently authorized return on common equity. Deferred amounts for fuel-related costs outside the approved fuel monitoring ranges are recognized in “Electric production fuel and purchased power” in Alliant Energy’s and WPL’s income statements. The cumulative effects of these deferred amounts are recorded in regulatory assets or regulatory liabilities on Alliant Energy’s and WPL’s balance sheets until they are reflected in future billings to customers.
IPL and WPL Wholesale - The cost recovery mechanisms for IPL’s and WPL’s wholesale electric customers provide for subsequent adjustments to their electric rates for changes in fuel-related costs. Changes in the under-/over-collection of these costs are recognized in “Electric production fuel and purchased power” in the income statements. The cumulative effects of the under-/over-collection of these costs are recorded in regulatory assets or regulatory liabilities on the balance sheets until they are reflected in future billings to customers.
Electric Transmission Service - Costs incurred for the transmission of electricity to meet the demands of IPL’s and WPL’s customers are charged to “Electric transmission service” in the income statements.
IPL Retail - Electric transmission service expense is recovered from IPL’s retail electric customers through a transmission cost rider. This cost recovery mechanism provides for annualperiodic adjustments to electric rates charged to retail electric customers for changes in electric transmission service expense. Changes in the under-/over-collection of these costs are recognized in “Electric transmission service” in Alliant Energy’s and IPL’s income statements. The cumulative effects of the under-/over-collection of these costs are recorded in regulatory assets or regulatory liabilities on Alliant Energy’s and IPL’s balance sheets until they are reflected in future billings to customers.
WPL Retail - Electric transmission service expense is recovered from WPL’s retail electric customers through changes in base rates determined during periodic rate proceedings. Pursuant to escrow accounting treatment approved by the PSCW, the difference between actual electric transmission service expense incurred and the amount of electric transmission service costs collected from customers as electric revenues is recognized in “Electric transmission service” in Alliant Energy’s and WPL’s
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income statements. An offsetting amount is recorded in regulatory assets or regulatory liabilities on Alliant Energy’s and WPL’s balance sheets until reflected in future billings to customers.
IPL and WPL Wholesale - IPL and WPL arrange transmission service for the majority of their respective wholesale electric customers. Electric transmission service expense is allocated to and recovered from these customers based on a load ratio share computation.
Cost of Gas Sold - Costs are incurred for the purchase, transportation and storage of natural gas to serve IPL’s and WPL’s gas customers and the costs associated with the natural gas delivered to customers are charged to “Cost of gas sold” in the income statements. The tariffs for IPL’s and WPL’s retail gas customers provide for subsequent adjustments to their rates each monthperiodically for changes in the cost of gas sold. Changes in the under-/over-collection of these costs are also recognized in “Cost of gas sold” in the income statements. The cumulative effects of the under-/over-collection of these costs are recorded in regulatory assets or regulatory liabilities on the balance sheets until they are reflected in future billings to customers.
Energy Efficiency Costs - Costs incurred to fund energy efficiency programs and initiatives that help customers reduce their energy usage are charged to “Other operation and maintenance” in the income statements. Energy efficiency costs incurred by IPL are recovered from its retail electric and gas customers through an additional tariff called an energy efficiency and demand response cost recovery factor tariffs, which isare revised annually and includesinclude a reconciliation to eliminate any under-/over-collection of energy efficiency costs from prior periods. EnergyPursuant to escrow accounting treatment approved by the PSCW, the difference between actual energy efficiency costs incurred by WPL are recoveredand the amount collected from its retail electric and gas customers is recovered through changes in base rates determined during periodic rate proceedings. Reconciliations ofproceedings, and reconciliations eliminate any under-/over-collection of energy efficiency costs from prior periods are also addressed in WPL’s periodic rate proceedings.periods. Changes in the under-/over-collection of energy efficiency costs for IPL and WPL are recognized in “Other operation and maintenance” in the income statements. The cumulative effects of the under-/over-collection of these costs for IPL and WPL are recorded in regulatory assets or regulatory liabilities on the balance sheets until they are reflected in future billings to customers.
Renewable Energy Rider - Effective with the implementation of final rates covering the 2020 forward-looking Test Period, IPL will recoverrecovers a return of, as well as earnearns a return on, its 1,000 MW of new wind generation placed in service in 2019 and 2020 from its retail electric customers through a renewable energy rider. Other applicable costs and tax benefits associated with the newthis wind generation, excluding operation and maintenance expenses, willare also be included in the rider. This cost recovery mechanism provides for annual adjustments to electric rates charged to IPL’s retail electric customers for actual renewable energy costs and tax benefits. Changes in the under-/over-collection of these costs will beare recognized in “Electric utility revenue” in Alliant Energy’s and IPL’s income statements. The cumulative effects of the under-/over-collection of these costs for IPL will beare recorded in regulatory assets or regulatory liabilities on Alliant Energy’s and IPL’s balance sheets until they are reflected in future billings to customers.
NOTE 1(h) Financial Instruments - Financial instruments are periodically used for risk management purposes to mitigate exposures to fluctuations in certain commodity prices and transmission congestion costs. The fair value of those financial instruments that are determined to be derivatives are recorded as assets or liabilities on the balance sheets. Certain commodity purchase and sales contracts qualifyqualified for and have beenwere designated under the normal purchase and sale exception, and arewere accounted for on the accrual basis of accounting. Alliant Energy, IPL and WPL have elected to not net the fair value amounts of derivatives subject to a master netting arrangement by counterparty. Alliant Energy, IPL and WPL do not offset fair value amounts recognized for the right to reclaim cash collateral (receivable) or the obligation to return cash collateral (payable) against fair value amounts recognized for derivative instruments that are executed with the same counterparty under the same master netting arrangement. Refer to Note 2 for discussion of the recognition of regulatory assets and regulatory liabilities related to the unrealized losses and gains on derivative instruments. Refer to Notes 15, 16 and 17(f) for further discussion of derivatives and related credit risk.
NOTE 1(i) Asset Impairments -
Property, Plant and Equipment of Regulated Operations - Property, plant and equipment of regulated operations are reviewed for possible impairment whenever events or changes in circumstances indicate all or a portion of the carrying value of the assets may be disallowed for rate-making purposes. If IPL or WPL are disallowed recovery of any portion of, the carrying value of their regulated property, plant and equipment that is under construction, has been recently completed or is probable of abandonment, or conclude it is probable recovery will be disallowed, an impairment charge is recognized equal
Property, Plant and Equipment of Non-utility Operations - Property, plant and equipment of non-utility operations are reviewed for possible impairment whenever events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Impairment is indicated if the carrying value of an asset exceeds its undiscounted future cash flows. If an impairment is indicated, a charge is recognized equal to the amount the carrying value exceeds the asset’s fair value.
Unconsolidated Equity Investments - If events or circumstances indicate the carrying value of investments accounted for under the equity method of accounting exceeds fair value and the decline in value is other than temporary, potential impairment is assessed. If an impairment is indicated, a charge is recognized equal to the amount the carrying value exceeds the investment’s fair value.
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NOTE 1(j) Asset Retirement Obligations - The fair value of a legal obligation associated with the retirement of an asset is recorded as a liability when an asset is placed in service, when a legal obligation is subsequently identified or when sufficient information becomes available to determine a reasonable estimate of the fair value of future retirement costs. When an ARO is recorded as a liability, an equivalent amount is added to the asset cost. The fair value of AROs at inception is determined using discounted cash flows analyses. The liability is accreted to its present value and the capitalized cost is depreciated over the useful life of the related asset. Accretion and depreciation expenses related to AROs for IPL’s and WPL’s regulated operations are recorded to regulatory assets on the balance sheets. Revisions in estimated cash flows for IPL’s and WPL’s regulated operations are recorded as an increase or decrease to the ARO liability, with an offset to the asset cost, unless the asset is already retired and then the offset is recorded to regulatory assets or regulatory liabilities on the balance sheets. Upon regulatory approval to recover IPL’s AROs expenditures, its regulatory assets are amortized to depreciation and amortization expenses in Alliant Energy’s and IPL’s income statements over the same time period the ARO expenditures are recovered from IPL’s customers. WPL’s regulatory assets related to AROs are being recovered as a component of depreciation rates pursuant to PSCW and FERC orders. Accretion and depreciation expenses related to AROs for Alliant Energy’s non-utility operations are recorded to depreciation and amortization expenses in Alliant Energy’s income statements. Upon settlement of the ARO liability, an entity settles the obligation for its recorded amount or incurs a gain or loss. Any gains or losses related to AROs for IPL’s and WPL’s regulated operations are recorded to regulatory liabilities or regulatory assets on the balance sheets.
NOTE 1(k) Debt Issuance and Retirement Costs - Debt issuance costs and debt premiums or discounts are presented on the balance sheetsheets as a direct adjustment to the carrying amount of the related debt liability, and are deferred and amortized over the expected life of each debt issue, considering maturity dates and, if applicable, redemption rights held by others. Alliant Energy’s non-utility businesses and Corporate Services record to interest expense in the period of retirement any unamortized debt issuance costs and debt premiums or discounts on debt retired early.
NOTE 1(l) Allowance for Doubtful AccountsCurrent Expected Credit Losses Estimates - AllowancesCurrent expected credit losses are estimated for doubtful accountstrade and other receivables and credit exposures on guarantees of the performance by third parties. The current expected credit losses for short-term trade receivables are recorded for estimatedbased on estimates of losses resulting from the inability of customers to make required payments. Allowances for doubtful accounts are estimatedThe methodology used to estimate losses is based on historical write-offs, customer arrearsregional economic conditions, significant events that could impact collectability, such as impacts related to COVID-19, significant weather related matters including the derecho windstorm and other economic factors within IPL’srelated regulatory actions, and WPL’s service territories.forecasted changes to the accounts receivable aging portfolio and write-offs. The current expected credit losses related to guarantees of the performance by third parties are estimated using both quantitative and qualitative information, which utilizes potential outcomes in a range of possible estimated amounts.
In 2016, the Financial Accounting Standards Board issued an accounting standard requiring use of a current expected credit loss model rather than an incurred loss method, which is intended to result in more timely recognition of credit losses on trade receivables, certain other assets and off-balance sheet credit exposures. Alliant Energy, IPL and WPL adopted this standard on January 1, 2020 using a modified retrospective method of adoption, which required cumulative effect adjustments to retained earnings on January 1, 2020. IPL and WPL did not record a cumulative effect adjustment to retained earnings and Alliant Energy recorded a pre-tax $12 million (after-tax $9 million) cumulative effect adjustment to decrease retained earnings related to Alliant Energy’s guarantees in the partnership obligations of an affiliate of Whiting Petroleum (refer to Note 17(d) for further discussion). This adjustment is included in “Adoption of new accounting standard” in Alliant Energy’s equity statement for 2020.
NOTE 1(m) Variable Interest Entities - An entity is considered a VIE if its equity investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties, the entity is structured with disproportionate voting rights and substantially all of the entity’s activities are conducted on behalf of the investor with disproportionately fewer voting rights, or its equity investors lack any of the following characteristics: (1) power, through voting rights or similar rights, to direct the activities of the entity that most significantly impact the entity’s economic performance; (2) the obligation to absorb expected losses of the entity; or (3) the right to receive expected benefits of the entity. The primary beneficiary of a VIE is required to consolidate the VIE. The financial statements do not reflect any consolidation of VIEs.
In 2022, WPL 2022 Solar Holdco, LLC was formed as a joint venture to own and operate project companies responsible for the construction, ownership and operation of various solar generation assets. Members of the joint venture were a WPL subsidiary (the managing member) and a tax equity partner. In the second quarter of 2022, the WPL subsidiary and the tax equity partner contributed $62 million and $29 million, respectively, to WPL 2022 Solar Holdco, LLC in exchange for membership interests, and $88 million of the contributed funds were paid to WPL in exchange for equity interests in the project companies. The tax equity partner's contributions were represented as a noncontrolling interest within total equity on Alliant Energy’s and WPL’s balance sheets as of June 30, 2022. In the second quarter of 2022, Alliant Energy and WPL consolidated this joint venture as it was a VIE in which WPL held a variable interest, and WPL controlled decisions that were significant to the joint venture’s ongoing operations and economic results (i.e., WPL was the primary beneficiary).
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In August 2022, the Inflation Reduction Act of 2022 was enacted. Following its enactment, WPL evaluated the provisions of the new legislation and determined that retaining full ownership of the solar projects is expected to result in more cost benefits for its customers. As a result, in the third quarter of 2022, WPL and the tax equity partner terminated the tax equity partnership, and WPL returned the $29 million of initial funding to the tax equity partner, resulting in the reversal of the noncontrolling interest within total equity on Alliant Energy’s and WPL’s balance sheets as of December 31, 2022. Alliant Energy and WPL no longer expect their solar generation project construction costs to be financed with capital from tax equity partners, which would result in higher rate base amounts compared to those previously approved by the PSCW for WPL’s planned approximately 1,100 MW of solar generation. Alliant Energy and WPL concluded that no disallowance of anticipated higher rate base amounts was required as of December 31, 2022 given full ownership of WPL's planned solar generation is expected to result in more cost benefits for WPL's customers.
NOTE 1(n) Leases - The determination of whether an arrangement qualifies as a lease occurs at the inception of the arrangement. Arrangements that qualify as leases are classified as either operating or finance. Operating and finance lease liabilities represent obligations to make payments arising from the lease. Operating and finance lease assets represent the right to use an underlying asset for the lease term and are recognized at the lease commencement date based on the present value of the lease payments over the lease term. Leases with initial terms less than 12 months are not recognized as leases. For operating leases, an incremental borrowing rate, as determined at the lease commencement date, is used to determine the present value of the lease payments. For finance leases, the rate implicit in the lease, if known, is used to determine the present value of the lease payments. If the rate implicit in the lease is not known, the incremental borrowing rate, as determined at the lease commencement date, is used to determine the present value of the lease payments. Lease terms include options to extend or terminate the lease when it is reasonably
certain that the option will be exercised. Operating lease expense is recognized on a straight-line basis over the expected lease term. Finance lease expense is comprised of depreciation and amortization, and interest expenses. Finance lease assets related to leased land for solar generation are amortized on a straight-line basis over the lease term, and are accounted for as operating leases for rate-making purposes. All other finance lease assets are depreciated on a straight-line basis over the shorter of the useful life of the underlying asset or the lease term.
NOTE 2. REGULATORY MATTERS
Regulatory Assets - Alliant Energy, IPL and WPL assess whether IPL’s and WPL’s regulatory assets are probable of future recovery by considering factors such as applicable regulations, recent orders by the applicable regulatory agencies, historical treatment of similar costs by the applicable regulatory agencies and regulatory environment changes. Based on these assessments, Alliant Energy, IPL and WPL believe the regulatory assets recognized as of December 31, 20192022 are probable of future recovery. However, no assurance can be made that IPL and WPL will recover all of these regulatory assets in future rates. If future recovery of a regulatory asset ceases to be probable, the regulatory asset will be charged to expense. At December 31, regulatory assets were comprised of the following items (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||
| Tax-related | $929 | $934 | $848 | $884 | $81 | $50 | |||||||||||||||||||||||||||||
| Pension and OPEB costs | 392 | 462 | 197 | 228 | 195 | 234 | |||||||||||||||||||||||||||||
| Commodity cost recovery | 160 | 42 | 1 | 2 | 159 | 40 | |||||||||||||||||||||||||||||
| AROs | 151 | 128 | 110 | 89 | 41 | 39 | |||||||||||||||||||||||||||||
| Derivatives | 84 | 8 | 48 | 4 | 36 | 4 | |||||||||||||||||||||||||||||
| Assets retired early | 70 | 92 | 53 | 66 | 17 | 26 | |||||||||||||||||||||||||||||
| IPL’s DAEC PPA amendment | 66 | 90 | 66 | 90 | — | — | |||||||||||||||||||||||||||||
| WPL’s Western Wisconsin gas distribution expansion investments | 48 | 52 | — | — | 48 | 52 | |||||||||||||||||||||||||||||
| Other | 146 | 132 | 63 | 80 | 83 | 52 | |||||||||||||||||||||||||||||
| $2,046 | $1,940 | $1,386 | $1,443 | $660 | $497 | ||||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
| Tax-related | $817.6 | $820.6 | $776.8 | $783.1 | $40.8 | $37.5 | |||||||||||||||||
| Pension and OPEB costs | 524.0 | 542.3 | 262.5 | 274.0 | 261.5 | 268.3 | |||||||||||||||||
| Assets retired early | 134.0 | 111.6 | 87.9 | 55.4 | 46.1 | 56.2 | |||||||||||||||||
| AROs | 111.8 | 110.8 | 76.2 | 76.3 | 35.6 | 34.5 | |||||||||||||||||
| IPL’s DAEC PPA amendment | 108.2 | — | 108.2 | — | — | — | |||||||||||||||||
| Derivatives | 39.5 | 28.0 | 18.3 | 15.1 | 21.2 | 12.9 | |||||||||||||||||
| Emission allowances | 21.1 | 23.6 | 21.1 | 23.6 | — | — | |||||||||||||||||
| Other | 88.5 | 100.4 | 48.3 | 51.5 | 40.2 | 48.9 | |||||||||||||||||
| $1,844.7 | $1,737.3 | $1,399.3 | $1,279.0 | $445.4 | $458.3 | ||||||||||||||||||
At December 31, 2019,2022, IPL and WPL had $78$66 million and $6$28 million, respectively, of regulatory assets that were not earning a return.return on investment. IPL’s regulatory assets that were not earning a return consisted primarily of certain assets retired early,analog electric meters, emission allowances debt redemption costs and costs for clean air compliancecertain construction projects. WPL’s regulatory assets that were not earning a return consisted primarily of environmental-relatedamounts related to the wholesale portion of under-collected costs, and costs for future expansion projects. The other regulatory
assets reported in the above table either earn a return or the cash has not yet been expended, in which case the assets are offset by liabilities that also do not incur a carrying cost.
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Tax-related - IPL and WPL record regulatory assets for certain temporary differences (primarily related to utility property, plant and equipment at IPL) that result in a decrease in current rates charged to customers and an increase in future rates charged to customers based on the timing of income tax expense that is used to determine such rates. These temporary differences for IPL include the impacts of qualifying deductions for repairs expenditures, allocation of mixed service costs, and Iowa accelerated tax depreciation, which all contribute to lower current income tax expense during the first part of an asset’s useful life and higher current income tax expense during the latter part of an asset’s useful life. These regulatory assets will be recovered from customers in the future when these temporary differences reverse resulting in additional current income tax expense used to determine customers’ rates. Refer to Note 12 for discussion of Iowa Tax Reform, which resulted in a decrease in Alliant Energy’s and IPL’s tax-related regulatory assets in 2022.
Pension and other postretirement benefits costs - The IUB, PSCW and FERC have authorized IPL and WPL to record the previously unrecognized net actuarial gains and losses, and prior service costs and credits, as regulatory assets in lieu of accumulated other comprehensive loss on the balance sheets, as these amounts are expected to be recovered in future rates. These regulatory assets will be increased or decreased as the net actuarial gains or losses, and prior service costs or credits, are subsequently amortized and recognized as a component of net periodic benefit costs. Regulatory assets are also increased or decreased as a result of the annual defined benefit plan measurement process. Pension and OPEB costs are included within the recoverable cost of service component of rates charged to IPL’s and WPL’s retail and wholesale customers, which are based upon pension and OPEB costs determined in accordance with GAAP and are calculated in accordance with IPL’s and WPL’s respective regulatory jurisdictions.
| Entity | Asset | Retirement Date | Regulatory Asset Balance as of Dec. 31, 2019 | Recovery | Regulatory Approval | |||||||
| IPL | Sutherland Units 1 and 3 | 2017 | $28.5 | Return of and return on remaining net book value over 10 years (return on effective with new rates expected to be implemented by the end of the first quarter of 2020) | IUB and FERC | |||||||
| IPL | M.L. Kapp Unit 2 | 2018 | 23.6 | Return of and return on remaining net book value over 10 years | IUB and FERC | |||||||
| IPL | Analog electric meters | 2019 | 35.8 | Return of remaining net book value over 10 years (effective with new rates expected to be implemented by the end of the first quarter of 2020) | IUB | |||||||
| WPL | Nelson Dewey Units 1 and 2 and Edgewater Unit 3 | 2015 | 20.2 | Return of and return on remaining net book value over 10 years | PSCW and FERC | |||||||
| WPL | Edgewater Unit 4 | 2018 | 25.9 | Return of and return on remaining net book value over 10 years | PSCW and FERC | |||||||
AROs - Alliant Energy, IPL and WPL believe it is probable that certain differences between expenses accrued for legal AROs related to their utility operations and expenses recovered currently in rates will be recoverable in future rates, and are deferring the differences as regulatory assets.
Derivatives - In accordance with IPL’s and WPL’s fuel and natural gas recovery mechanisms, prudently incurred costs from derivative instruments are recoverable from customers in the future after any losses are realized, and gains from derivative instruments are refundable to customers in the future after any gains are realized. Based on these recovery mechanisms, the changes in the fair value of derivative liabilities/assets resulted in comparable changes to regulatory assets/liabilities on the balance sheets. Refer to Note 15 for discussion of changes in Alliant Energy’s, IPL’s and WPL’s derivative liabilities/assets during 2022, which result in comparable changes to regulatory assets/liabilities on the balance sheets.
Assets retired early - IPL and WPL have retired various natural gas- and coal-fired EGUs, and IPL has retired certain analog electric meters. As a result, the remaining net book value of these assets was reclassified from property, plant and equipment to a regulatory asset on their respective balance sheets. Details regarding the recovery of the remaining net book value of these assets from IPL’s and WPL’s customers are as follows (dollars in millions):
| Entity | Asset | Retirement Date | Regulatory Asset Balance as of Dec. 31, 2022 | Recovery | Regulatory Approval | |||||||||||||||||||||||||||
| IPL | Sutherland Units 1 and 3 | 2017 | $16 | Return of and return on remaining net book value through 2027 | IUB and FERC | |||||||||||||||||||||||||||
| IPL | M.L. Kapp Unit 2 | 2018 | 13 | Return of and return on remaining net book value through 2029 | IUB and FERC | |||||||||||||||||||||||||||
| IPL | Analog electric meters | 2019 | 24 | Return of remaining net book value through 2028 | IUB and FERC | |||||||||||||||||||||||||||
| WPL | Edgewater Unit 4 | 2018 | 17 | Return of and return on remaining net book value through 2028 | PSCW and FERC | |||||||||||||||||||||||||||
IPL’s DAEC PPA Amendment - In 2020, IPL made a buyout payment of $110 million in exchange for shortening the term of its DAEC PPA by 5 years. The payment was included in “DAEC PPA amendment buyout payment” in Alliant Energy’s and IPL’s cash flows used for operating activities in 2020. The buyout payment, including a return on, will be recovered from IPL’s retail and wholesale customers from 2021 through the end of 2025, and is currently being amortized to “Electric production fuel and purchased power” in Alliant Energy’s and IPL’s income statements.
Regulatory Liabilities - At December 31, regulatory liabilities were comprised of the following items (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||
| Tax-related | $579 | $585 | $303 | $312 | $276 | $273 | |||||||||||||||||||||||||||||
| Cost of removal obligations | 398 | 384 | 259 | 252 | 139 | 132 | |||||||||||||||||||||||||||||
| Derivatives | 210 | 166 | 115 | 77 | 95 | 89 | |||||||||||||||||||||||||||||
| Commodity cost recovery | 40 | 17 | 38 | 15 | 2 | 2 | |||||||||||||||||||||||||||||
| WPL’s West Riverside liquidated damages | 32 | 36 | — | — | 32 | 36 | |||||||||||||||||||||||||||||
| Electric transmission cost recovery | 20 | 51 | 10 | 27 | 10 | 24 | |||||||||||||||||||||||||||||
| Other | 45 | 32 | 29 | 8 | 16 | 24 | |||||||||||||||||||||||||||||
| $1,324 | $1,271 | $754 | $691 | $570 | $580 | ||||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
| Tax-related | $835.6 | $890.6 | $350.9 | $390.1 | $484.7 | $500.5 | |||||||||||||||||
| Cost of removal obligations | 387.7 | 401.2 | 257.0 | 273.3 | 130.7 | 127.9 | |||||||||||||||||
| Electric transmission cost recovery | 88.6 | 104.0 | 51.3 | 47.7 | 37.3 | 56.3 | |||||||||||||||||
| Commodity cost recovery | 24.2 | 16.8 | 8.8 | 11.9 | 15.4 | 4.9 | |||||||||||||||||
| WPL’s earnings sharing mechanism | 21.9 | 25.4 | — | — | 21.9 | 25.4 | |||||||||||||||||
| Derivatives | 19.9 | 18.5 | 17.4 | 10.2 | 2.5 | 8.3 | |||||||||||||||||
| Other | 45.7 | 36.7 | 29.3 | 21.7 | 16.4 | 15.0 | |||||||||||||||||
| $1,423.6 | $1,493.2 | $714.7 | $754.9 | $708.9 | $738.3 | ||||||||||||||||||
Tax-related regulatory liabilities reduce revenue requirement calculations utilized in IPL’s and WPL’s respective rate proceedings. Cost of removal obligations, to the extent expensed through depreciation rates, reduce rate base. A significant portion of the remaining regulatory liabilities areis not used to adjust revenue requirement calculations.
Tax-related - Alliant Energy’s, IPL’s and WPL’s tax-related regulatory liabilities are primarily related to excess deferred tax benefits resulting from the remeasurement of accumulated deferred income taxes caused by Federal Tax Reform. The majority of these benefits related to accelerated depreciation are subject to tax normalization rules. These rules limit the rate at which these tax benefits are allowed to be passed on to customers.
Cost of removal obligations - Alliant Energy, IPL and WPL collect in rates future removal costs for many assets that do not have associated legalAROs or that have removal costs in addition to AROs. Alliant Energy, IPL and WPL record a regulatory liability for the amounts collected in rates for these future removal costs and reduce the regulatory liability for amounts spent on removal activities. Cash payments related to cost of removal obligations are included in “Other” in cash flows used for investing activities.
WPL’s West Riverside liquidated damages - Pursuant to terms included in the related West Riverside construction procurement contracts, WPL reached agreement with the contractor on liquidated damages in 2020. A significant portion of the liquidated damages was settled by WPL offsetting amounts owed to the contractor that were previously withheld for payment, which were non-cash investing activities. In 2020, the PSCW authorized WPL to record the liquidated damages as a regulatory liability, which the PSCW authorized to be returned to WPL’s retail customers in 2022 and 2023, resulting in decreases in regulatory liabilities on Alliant Energy’s and WPL’s balance sheets and decreases in depreciation and amortization expenses in Alliant Energy’s and WPL’s income statements in 2022.
Electric transmission cost recovery - Refer to Note 1(g) for details of IPL’s and WPL’s electric transmission cost recovery mechanisms. Beginning in March 2018, amounts billed by transmission providers decreased dueIn 2020, pursuant to the impacts from Federal Tax Reform. During 2018, Alliant Energy,an IUB order, IPL and WPL recorded the benefits associated with lower transmission expense as regulatory liabilities. In May 2018, IPL began providing these benefits backissued $42 million of credits to its retail electric customers utilizing thethrough its transmission cost rider. WPL is currently reflecting these benefitsrider for its retailamounts previously collected in rates, which resulted in a reduction to “Electric transmission service” expense in Alliant Energy’s and IPL’s income statements in 2020.
Derecho Windstorm - In August 2020, a derecho windstorm caused considerable damage to IPL’s electric customers in 2019 and 2020 through transmission expense amortizations as authorizeddistribution system in its retail electric rate review (2019/2020 Test Period).
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IPL’s Retail Electric Rate Review (2020 Forward-looking Test Period) - In March 2019, IPL filed a request with the IUB to increase annual electric base rates for its Iowa retail electric customers based on a 2020 forward-looking Test Period. The key drivers for IPL’s request included recovery of capital projects, including new wind generation. IPL concurrently filed for interim retail electric rates based on 2018 historical data as adjusted for certain known and measurable changes occurring in the first quarter of 2019. An interim retail electric base rate increase of $90 million, on an annual basis, was implemented effective April 1, 2019. In October 2019, IPL reached a settlement agreement with certain intervenor groupsstakeholders for an annual retail electric base rate increase of $127 million. In January 2020, the IUB issued an order approving the settlement with final rates, which were effective February 26, 2020. The agreement includes both the recovery of and a return on IPL’s early retired EGUs, and the recovery of IPL’s retired analog electric meters. In addition, as discussed in Note 1(g), the net impact of certain costs and benefits resulting from IPL’s 1,000 MW expansion of wind generation in 2019 and 2020 will beis being recovered from its retail electric customers through a newthe renewable energy rider. The settlement agreement also includes IPL providing retail electric billing credits, over a 12-month period beginning with final rates, includingwhich began in the third quarter of 2020 through June 2021, and in aggregate include $27 million of excess deferred tax benefits and $8 million from a partial refund of interim rates implemented in 2019. In January 2020,2021, the IUB issued an order approving the settlement with final rates,for IPL’s 2020 forward-looking Test Period electric subsequent proceeding, which are expectedcompared actual revenues and costs to be effectivethose initially forecasted by the end of the first quarter of 2020.IPL, and authorized IPL to maintain its current retail electric rates.
IPL’s Retail Gas Rate Review (2020 Forward-looking Test Period) - In March 2019, IPL filed a request with the IUB to increase annual gas base rates for its Iowa retail gas customers based on a 2020 forward-looking Test Period. In October 2019, IPL reached a settlement agreement with intervenor groupscertain stakeholders for an annual retail gas base rate increase of $12 million. In December 2019, the IUB issued an order approving the settlement with final rates, which were effective January 10, 2020.
WPL’s Retail Electric and Gas Rate Review (2019/2020 Forward-looking Test Period) - In December 2018, the PSCW issued an order approving WPL’s proposed settlement for its retail electric and gas rate review covering the 2019/2020 Test Period, which was based on a stipulated agreement between WPL and intervenor groups.certain stakeholders. Under the settlement, WPL retail electric and gas base rates willdid not change from then current levels through the end of 2020. In September 2020, pursuant to an August 2020 PSCW order, WPL refunded $12 million of 2019 fuel-related cost over-collections to its retail electric customers. In addition, WPL’s amortization of excess deferred taxes resulting from the remeasurement of accumulated deferred income taxes caused by Federal Tax Reform was used to offset increases in WPL’s 2020 increased revenue requirements.
WPL’s Retail Electric and Gas Rate Review (2021 Forward-looking Test Period) - In December 2020, the PSCW issued an order authorizing WPL to maintain its then current retail electric and gas base rates, authorized return on common equity, regulatory capital structure and earnings sharing mechanism through the end of 2021. WPL utilized anticipated fuel-related cost savings and excess deferred income tax benefits in 2021 to offset the revenue requirement impacts of increasing electric and gas rate base, including the Kossuth wind farm, which was placed in service in October 2020, and the expansion of its gas distribution system in Western Wisconsin, which was placed in service in November 2020.
WPL’s Retail Electric and Gas Rate Reviews (2022/2023 Forward-looking Test Period) - In December 2021, the PSCW issued an order authorizing annual base rate increases of $114 million and $15 million for WPL’s retail electric and gas customers, respectively, covering the 2022/2023 forward-looking Test Period, which was based on a stipulated agreement between WPL and certain stakeholders. The key drivers for the annual base rate increases include higher retail fuel-related costs in 2022, lower excess deferred income tax benefits in 2022 and 2023 and revenue requirement impacts of increasing electric and gas rate base, including investments in solar generation. In addition, the PSCW authorized WPL to receive a recovery of and a return on the remaining net book value of Edgewater Unit 5 through 2023. Retail electric rate changes were effective on January 1, 2022 and extend through the end of 2023. Retail gas rate changes were effective on January 1, 2022 and extended through the end of 2022.
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NOTE 3. PROPERTY, PLANT AND EQUIPMENT
At December 31, details of property, plant and equipment on the balance sheets were as follows (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||
| Utility: | |||||||||||||||||||||||||||||||||||
| Electric plant: | |||||||||||||||||||||||||||||||||||
| Generation in service | $8,060 | $7,539 | $4,962 | $4,922 | $3,098 | $2,617 | |||||||||||||||||||||||||||||
| Distribution in service | 6,912 | 6,537 | 3,876 | 3,652 | 3,036 | 2,885 | |||||||||||||||||||||||||||||
| Other in service | 543 | 540 | 354 | 363 | 189 | 177 | |||||||||||||||||||||||||||||
| Anticipated to be retired early (a) | 2,103 | 2,094 | 491 | 487 | 1,612 | 1,607 | |||||||||||||||||||||||||||||
| Total electric plant | 17,618 | 16,710 | 9,683 | 9,424 | 7,935 | 7,286 | |||||||||||||||||||||||||||||
| Gas plant in service | 1,705 | 1,636 | 910 | 878 | 795 | 758 | |||||||||||||||||||||||||||||
| Other plant in service | 624 | 621 | 402 | 398 | 222 | 223 | |||||||||||||||||||||||||||||
| Accumulated depreciation | (5,690) | (5,263) | (3,149) | (2,897) | (2,541) | (2,366) | |||||||||||||||||||||||||||||
| Net plant | 14,257 | 13,704 | 7,846 | 7,803 | 6,411 | 5,901 | |||||||||||||||||||||||||||||
| Leased Sheboygan Falls Energy Facility, net (b) | — | — | — | — | 15 | 21 | |||||||||||||||||||||||||||||
| Leased land for solar generation, net | 133 | 11 | — | — | 133 | 11 | |||||||||||||||||||||||||||||
| Construction work in progress | 1,357 | 778 | 194 | 174 | 1,163 | 604 | |||||||||||||||||||||||||||||
| Other, net | 6 | 7 | 6 | 6 | — | 1 | |||||||||||||||||||||||||||||
| Total utility | 15,753 | 14,500 | 8,046 | 7,983 | 7,722 | 6,538 | |||||||||||||||||||||||||||||
| Non-utility and other: | |||||||||||||||||||||||||||||||||||
| Non-utility Generation, net (c) | 71 | 75 | — | — | — | — | |||||||||||||||||||||||||||||
| Corporate Services and other, net (d) | 423 | 412 | — | — | — | — | |||||||||||||||||||||||||||||
| Total non-utility and other | 494 | 487 | — | — | — | — | |||||||||||||||||||||||||||||
| Total property, plant and equipment | $16,247 | $14,987 | $8,046 | $7,983 | $7,722 | $6,538 | |||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
| Utility: | |||||||||||||||||||||||
| Electric plant: | |||||||||||||||||||||||
| Generation in service | $7,625.3 | $6,800.6 | $4,432.4 | $3,610.4 | $3,192.9 | $3,190.2 | |||||||||||||||||
| Distribution in service | 5,783.3 | 5,452.2 | 3,190.0 | 3,023.7 | 2,593.3 | 2,428.5 | |||||||||||||||||
| Other in service | 456.0 | 410.8 | 298.6 | 260.4 | 157.4 | 150.4 | |||||||||||||||||
| Total electric plant | 13,864.6 | 12,663.6 | 7,921.0 | 6,894.5 | 5,943.6 | 5,769.1 | |||||||||||||||||
| Gas plant in service | 1,462.7 | 1,387.6 | 801.5 | 763.1 | 661.2 | 624.5 | |||||||||||||||||
| Other plant in service | 519.7 | 513.2 | 344.7 | 322.4 | 175.0 | 190.8 | |||||||||||||||||
| Accumulated depreciation | (4,601.4 | ) | (4,314.6 | ) | (2,498.3 | ) | (2,294.7 | ) | (2,103.1 | ) | (2,019.9 | ) | |||||||||||
| Net plant | 11,245.6 | 10,249.8 | 6,568.9 | 5,685.3 | 4,676.7 | 4,564.5 | |||||||||||||||||
| Leased Sheboygan Falls Energy Facility, net (a) | — | — | — | — | 32.3 | 38.1 | |||||||||||||||||
| Construction work in progress | 1,835.0 | 1,774.8 | 906.8 | 1,091.2 | 928.2 | 683.6 | |||||||||||||||||
| Other, net | 6.1 | 6.1 | 5.0 | 5.0 | 1.1 | 1.1 | |||||||||||||||||
| Total utility | 13,086.7 | 12,030.7 | 7,480.7 | 6,781.5 | 5,638.3 | 5,287.3 | |||||||||||||||||
| Non-utility and other: | |||||||||||||||||||||||
| Non-utility Generation, net (b) | 82.9 | 86.9 | — | — | — | — | |||||||||||||||||
| Corporate Services and other, net (c) | 357.5 | 344.8 | — | — | — | — | |||||||||||||||||
| Total non-utility and other | 440.4 | 431.7 | — | — | — | — | |||||||||||||||||
| Total property, plant and equipment | $13,527.1 | $12,462.4 | $7,480.7 | $6,781.5 | $5,638.3 | $5,287.3 | |||||||||||||||||
(a)In 2020, IPL and WPL received approval from MISO to retire Lansing and Edgewater Unit 5, respectively, and currently anticipate retiring Lansing in the first half of 2023 and Edgewater Unit 5 by June 1, 2025. In 2021, WPL received approval from MISO to retire Columbia Units 1 and 2, and currently anticipates retiring Columbia Units 1 and 2 by June 1, 2026. Alliant Energy and IPL concluded that Lansing, and Alliant Energy and WPL concluded that Edgewater Unit 5 and Columbia Units 1 and 2, met the criteria to be considered probable of abandonment as of December 31, 2022. IPL and WPL are currently allowed a full recovery of and a full return on its respective EGUs from both its retail and wholesale customers, and as a result, Alliant Energy, IPL and WPL concluded that no disallowance was required as of December 31, 2022. As of December 31, 2022, net book values were $233 million for Lansing, $511 million for Edgewater Unit 5, and $440 million for Columbia Units 1 and 2 in aggregate.
(b)Less accumulated amortization of $106 million and $100 million for WPL as of December 31, 2022 and 2021, respectively. For Alliant Energy, the leased Sheboygan Falls Energy Facility is eliminated upon consolidation and is included in the “Non-utility Generation, net” line within Alliant Energy’s consolidated property, plant and equipment.
(c)Less accumulated depreciation of $71 million and $67 million for Alliant Energy as of December 31, 2022 and 2021, respectively.
(d)Less accumulated depreciation of $269 million and $245 million for Alliant Energy as of December 31, 2022 and 2021, respectively.
AFUDC - AFUDC represents costs to finance construction additions, including a return on equity component and cost of debt component as required by regulatory accounting. The concurrent credit for the amount of AFUDC capitalized is recorded as “Allowance for funds used during construction” in the income statements. The amount of AFUDC generated by equity and debt components was as follows (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||
| Equity | $44 | $18 | $39 | $8 | $7 | $17 | $36 | $11 | $22 | ||||||||||||||||||||||||||||||||||||||||||||
| Debt | 16 | 7 | 16 | 3 | 2 | 7 | 13 | 5 | 9 | ||||||||||||||||||||||||||||||||||||||||||||
| $60 | $25 | $55 | $11 | $9 | $24 | $49 | $16 | $31 | |||||||||||||||||||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||
| Equity | $65.5 | $51.4 | $33.6 | $35.2 | $28.6 | $21.1 | $30.3 | $22.8 | $12.5 | ||||||||||||||||||||||||||
| Debt | 27.2 | 24.2 | 16.1 | 14.2 | 13.6 | 10.3 | 13.0 | 10.6 | 5.8 | ||||||||||||||||||||||||||
| $92.7 | $75.6 | $49.7 | $49.4 | $42.2 | $31.4 | $43.3 | $33.4 | $18.3 | |||||||||||||||||||||||||||
Non-utility and Other - The non-utility and other property, plant and equipment recorded on Alliant Energy’s balance sheets include the following:
Non-utility Generation - The Sheboygan Falls Energy Facility was placed intoin service in 2005 and is depreciated using the straight-line method over a 35-year period.
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Corporate Services and Other - Property, plant and equipment related to Corporate Services include a customer billing and information system for IPL and WPL and other computer software, and the corporate headquarters building located in Madison, Wisconsin. The customer billing and information system is amortized using the straight-line method over a 12-year period. The majority of the remaining software is amortized over a 5-year period. Other property, plant and equipment include TransportationTravero assets (a short-line railwayrail freight service in IowaIowa; a Mississippi River barge, rail and truck freight terminal in Illinois; and a barge terminal on the Mississippi River)rail-served warehouse in Iowa). All Corporate Services and Other property, plant and equipment are depreciated using the straight-line method over periods ranging from 5 to 30 years.
NOTE 4. JOINTLY-OWNED ELECTRIC UTILITY PLANT
Under joint ownership agreements with other utilities, IPL and WPL have undivided ownership interests in jointly-owned EGUs. Each of the respective owners is responsible for the financing of its portion of the construction costs. KWh generation and operating expenses are primarily divided between the joint owners on the same basis as ownership. IPL’s and WPL’s shares of expenses from jointly-owned EGUs are included in the corresponding operating expenses (e.g., electric production fuel, other operation and maintenance, etc.) in theirthe income statements. Information relative to IPL’s and WPL’s ownership interest in these jointly-owned EGUs at December 31, 20192022 was as follows (dollars in millions):
| Ownership | Electric | Accumulated Provision | Construction | ||||||||||||||||||||
| Interest % | Plant | for Depreciation | Work in Progress | ||||||||||||||||||||
| IPL | |||||||||||||||||||||||
| Ottumwa Unit 1 | 48.0% | $612 | $241 | $17 | |||||||||||||||||||
| George Neal Unit 4 | 25.7% | 193 | 103 | 4 | |||||||||||||||||||
| George Neal Unit 3 | 28.0% | 176 | 80 | 6 | |||||||||||||||||||
| Louisa Unit 1 | 4.0% | 43 | 21 | — | |||||||||||||||||||
| 1,024 | 445 | 27 | |||||||||||||||||||||
| WPL | |||||||||||||||||||||||
| Columbia Units 1-2 | 53.5% | 805 | 338 | 13 | |||||||||||||||||||
| West Riverside Energy Center and Solar Facility | 91.0% | 716 | 53 | 2 | |||||||||||||||||||
| Forward Wind Energy Center | 42.6% | 118 | 50 | — | |||||||||||||||||||
| 1,639 | 441 | 15 | |||||||||||||||||||||
| Alliant Energy | $2,663 | $886 | $42 | ||||||||||||||||||||
| Ownership | Electric | Accumulated Provision | Construction | |||||||||||
| Interest % | Plant | for Depreciation | Work in Progress | |||||||||||
| IPL | ||||||||||||||
| Ottumwa Unit 1 | 48.0 | % | $571.5 | $180.8 | $18.8 | |||||||||
| George Neal Unit 4 | 25.7 | % | 191.8 | 93.5 | 0.8 | |||||||||
| George Neal Unit 3 | 28.0 | % | 163.7 | 63.2 | 0.9 | |||||||||
| Louisa Unit 1 | 4.0 | % | 39.9 | 24.9 | 0.2 | |||||||||
| 966.9 | 362.4 | 20.7 | ||||||||||||
| WPL | ||||||||||||||
| Columbia Units 1-2 | 53.3 | % | 777.0 | 264.7 | 5.5 | |||||||||
| FWEC | 42.6 | % | 120.2 | 43.6 | — | |||||||||
| West Riverside | 91.8 | % | — | — | 647.5 | |||||||||
| 897.2 | 308.3 | 653.0 | ||||||||||||
| Alliant Energy | $1,864.1 | $670.7 | $673.7 | |||||||||||
NOTE 5. RECEIVABLES
NOTE 5(a) Accounts Receivable - Details for accounts receivable included on the balance sheets as of December 31 were as follows (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||
| Customer | $114 | $93 | $— | $— | $102 | $82 | |||||||||||||||||||||||||||||
| Unbilled utility revenues | 115 | 91 | — | — | 115 | 91 | |||||||||||||||||||||||||||||
| Deferred proceeds | 185 | 214 | 185 | 214 | — | — | |||||||||||||||||||||||||||||
| Other | 109 | 53 | 74 | 28 | 34 | 25 | |||||||||||||||||||||||||||||
| Allowance for expected credit losses | (7) | (11) | — | (1) | (7) | (10) | |||||||||||||||||||||||||||||
| $516 | $440 | $259 | $241 | $244 | $188 | ||||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
| Customer | $91.6 | $91.0 | $— | $— | $83.5 | $84.8 | |||||||||||||||||
| Unbilled utility revenues | 82.1 | 74.2 | — | — | 82.1 | 74.2 | |||||||||||||||||
| Deferred proceeds | 187.7 | 119.4 | 187.7 | 119.4 | — | — | |||||||||||||||||
| Other | 48.0 | 76.3 | 16.3 | 37.2 | 31.4 | 38.5 | |||||||||||||||||
| Allowance for doubtful accounts | (7.3 | ) | (10.5 | ) | (1.2 | ) | (3.1 | ) | (6.1 | ) | (7.4 | ) | |||||||||||
| $402.1 | $350.4 | $202.8 | $153.5 | $190.9 | $190.1 | ||||||||||||||||||
NOTE 5(b) Sales of Accounts Receivable - IPL maintains a Receivables Agreement whereby it may sell its customer accounts receivables, unbilled revenues and certain other accounts receivables to a third party through wholly-owned and consolidated special purpose entities. The purchase commitment from the third party to which itIPL sells its receivables expires
in March 2021.2023. IPL currently expects to amend and extend the purchase commitment. IPL pays a monthly fee to the third party that varies based on interest rates, limits on cash proceeds and cash amounts received from the third party. Deferred proceeds represent IPL’s interest in the receivables sold to the third party. At IPL’s request, deferred proceeds are paid to IPL from collections of receivables, after paying any required expenses incurred by the third party and the collection agent. Corporate Services acts as collection agent for the third party and receives a fee for collection services. The Receivables Agreement can be terminated by the third party if arrears or write-offs exceed certain levels. The transfers of receivables meet the criteria for sale accounting established by the transfer of financial assets accounting rules. IPL believes that the allowance for doubtful accountsexpected credit losses related to its sales of receivables is a reasonable approximation of credit risk of the customers that generated the receivables. Refer to Note 16 for discussion of the fair value of deferred proceeds.
Under the Receivables Agreement, IPL has the right to receive cash proceeds, up to a certain limit, from the third party in exchange for the receivables sold. TheEffective April 2021, the limit on cash proceeds fluctuates between $90 million andis $110 million. Cash proceeds are used by IPL to meet short-term financing needs, and cannot exceed the current limit or amount of receivables available for sale, whichever is less. As of December 31, 2019,2022, IPL had $83$30 million of available capacity under its sales of accounts receivable program. IPL’s maximum and average outstanding aggregate cash proceeds (based on daily outstanding balances) related to the sales of accounts receivable program were as follows (in millions):
| Maximum | Average | ||||||||||
| 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||
| Outstanding aggregate cash proceeds | $108.0 | $116.0 | $112.0 | $35.9 | $53.4 | $62.2 | |||||
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| Maximum | Average | ||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||
| Outstanding aggregate cash proceeds | $80 | $110 | $96 | $14 | $46 | $9 | |||||||||||||||||||||||||||||
As of December 31, the attributes of IPL’s receivables sold under the Receivables Agreement were as follows (in millions):
| 2022 | 2021 | ||||||||||
| Customer accounts receivable | $145 | $125 | |||||||||
| Unbilled utility revenues | 132 | 104 | |||||||||
| Receivables sold to third party | 277 | 229 | |||||||||
| Less: cash proceeds | 80 | 1 | |||||||||
| Deferred proceeds | 197 | 228 | |||||||||
| Less: allowance for expected credit losses | 12 | 14 | |||||||||
| Fair value of deferred proceeds | $185 | $214 | |||||||||
| Outstanding receivables past due | $26 | $22 | |||||||||
| 2019 | 2018 | ||
| Customer accounts receivable | $124.7 | $140.1 | |
| Unbilled utility revenues | 95.5 | 97.1 | |
| Other receivables | 0.9 | 0.1 | |
| Receivables sold to third party | 221.1 | 237.3 | |
| Less: cash proceeds | 27.0 | 108.0 | |
| Deferred proceeds | 194.1 | 129.3 | |
| Less: allowance for doubtful accounts | 6.4 | 9.9 | |
| Fair value of deferred proceeds | $187.7 | $119.4 | |
| Outstanding receivables past due | $26.0 | $35.5 | |
Additional attributes of IPL’s receivables sold under the Receivables Agreement were as follows (in millions):
| 2022 | 2021 | 2020 | |||||||||||||||
| Collections | $2,302 | $2,134 | $2,025 | ||||||||||||||
| Write-offs, net of recoveries | 9 | 9 | 7 | ||||||||||||||
| 2019 | 2018 | 2017 | |||
| Collections | $2,192.8 | $2,076.7 | $1,647.1 | ||
| Write-offs, net of recoveries | 19.2 | 21.3 | 17.7 | ||
NOTE 6. INVESTMENTS
Unconsolidated Equity Investments - Alliant Energy’s unconsolidated investments accounted for under the equity method of accounting are as follows (in millions):
| Ownership Interest at | Carrying Value at December 31, | Equity (Income) / Loss | |||||||||||||||||||||||||||||||||
| December 31, 2022 | 2022 | 2021 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||
| ATC Holdings | 16%, 20% | $358 | $338 | ($41) | ($43) | ($47) | |||||||||||||||||||||||||||||
| Non-utility wind farm in Oklahoma | 50% | 101 | 99 | (5) | (4) | (8) | |||||||||||||||||||||||||||||
| Corporate venture investments | Various | 62 | 52 | (3) | (13) | (4) | |||||||||||||||||||||||||||||
| Other | Various | 21 | 19 | (2) | (2) | (2) | |||||||||||||||||||||||||||||
| $542 | $508 | ($51) | ($62) | ($61) | |||||||||||||||||||||||||||||||
| Ownership Interest at | Carrying Value at December 31, | Equity (Income) / Loss | |||||||||||||||||||
| December 31, 2019 | 2019 | 2018 | 2019 | 2018 | 2017 | ||||||||||||||||
| ATC Holdings | 16%, 20% | $320.1 | $293.6 | ($45.3 | ) | ($38.1 | ) | ($42.4 | ) | ||||||||||||
| Non-utility wind farm in Oklahoma | 50% | 105.3 | 105.1 | (5.2 | ) | (15.6 | ) | (1.8 | ) | ||||||||||||
| Other | Various | 32.9 | 22.6 | (2.5 | ) | (0.9 | ) | (0.6 | ) | ||||||||||||
| $458.3 | $421.3 | ($53.0 | ) | ($54.6 | ) | ($44.8 | ) | ||||||||||||||
Summary aggregate financial information from the financial statements of these holdings is as follows (in millions):
| Alliant Energy | |||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||
| Revenues | $813 | $802 | $801 | ||||||||||||||||||||||||||||||||
| Operating income | 350 | 357 | 376 | ||||||||||||||||||||||||||||||||
| Net income | 675 | 358 | 343 | ||||||||||||||||||||||||||||||||
| As of December 31: | |||||||||||||||||||||||||||||||||||
| Current assets | 227 | 112 | |||||||||||||||||||||||||||||||||
| Non-current assets | 8,292 | 7,036 | |||||||||||||||||||||||||||||||||
| Current liabilities | 620 | 455 | |||||||||||||||||||||||||||||||||
| Non-current liabilities | 3,285 | 3,110 | |||||||||||||||||||||||||||||||||
| Noncontrolling interest | 289 | 247 | |||||||||||||||||||||||||||||||||
ATC Holdings - As of December 31, 2019,2022, Alliant Energy has a 16% ownership interest in ATC and a 20% ownership interest in ATC Holdco LLC, collectively referred to as ATC Holdings. ATC is an independent, for-profit, transmission-only company. ATC Holdco LLC holds Duke-American Transmission Company, LLC, a joint venture between Duke Energy Corporation and ATC, that owns electric transmission infrastructure in North America. Refer to Note 17(g) for discussion of a reduction in earnings recorded in 2022 related to a court decision, which is currently expected to reduce the base return on equity authorized for MISO transmission owners, including ATC.
Non-utility Wind Farm in Oklahoma - The non-utility wind farm located in Oklahoma provides electricity to a third-party under a long-term PPA, and has both cash and tax equity ownership. The equity income recognized in 2018 was primarily related to the impacts of Federal Tax 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
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Corporate Venture Investments - Alliant Energy has various minority ownership interests in regional and national venture funds, including a global coalition of energy companies working together to help advance the transition towards a cleaner, more sustainable, and inclusive energy future, by identifying and researching innovative technologies and business models within the emerging energy economy.
NOTE 7. COMMON EQUITY
Common Share Activity - A summary of Alliant Energy’s common stock activity was as follows:
| 2022 | 2021 | 2020 | |||||||||||||||
| Shares outstanding, January 1 | 250,474,529 | 249,868,415 | 245,022,800 | ||||||||||||||
| Equity forward agreements | — | — | 4,275,127 | ||||||||||||||
| Shareowner Direct Plan | 437,669 | 492,565 | 472,283 | ||||||||||||||
| Equity-based compensation plans | 222,768 | 113,549 | 98,205 | ||||||||||||||
| Shares outstanding, December 31 | 251,134,966 | 250,474,529 | 249,868,415 | ||||||||||||||
| 2019 | 2018 | 2017 | ||||||
| Shares outstanding, January 1 | 236,063,279 | 231,348,646 | 227,673,654 | |||||
| Equity forward agreements | 8,358,973 | — | — | |||||
| At-the-market offering programs | — | 4,171,013 | 3,074,931 | |||||
| Shareowner Direct Plan | 501,808 | 576,965 | 640,723 | |||||
| Equity-based compensation plans | 101,478 | 5,078 | 5,185 | |||||
| Other | (2,738 | ) | (38,423 | ) | (45,847 | ) | ||
| Shares outstanding, December 31 | 245,022,800 | 236,063,279 | 231,348,646 | |||||
At December 31, 2019,2022, Alliant Energy had a total of 12.113 million shares available for issuance in the aggregate, pursuant to its Amended and Restated2020 OIP, Shareowner Direct Plan and 401(k) Savings Plan.
At-the-Market Offering Program - In December 2022, Alliant Energy filed a prospectus supplement under which it may sell up to $225 million of its common stock through an at-the-market offering program. Alliant Energy has not issued any shares under this program.
Equity Forward Agreements - In December 2018, Alliant Energy entered into forward sale agreements with various counterparties in connection with a public offering of 8,358,973 shares of Alliant Energy common stock. In 2019, Alliant Energy settled $366 million under the forward sale agreements by delivering 8,358,973 shares of newly issued Alliant Energy common stock at a weighted average forward sale price of $43.75 per share. Alliant Energy used the net proceeds from the settlements for general corporate purposes.
share. Alliant Energy has concluded thatused the forward sale agreements meet the derivative scope exception for certain contracts involving an entity’s own equity. Until settlement of the forward sale agreements, Alliant Energy’s EPS dilution resultingnet proceeds from the agreements, if any, is determined using the treasury stock method. Share dilution occurs when the average market price of Alliant Energy stock during the reporting period is higher than the forward sale price as of the end of the reporting period. As of December 31, 2019, 67,689 incremental shares were included in the calculation of diluted EPS related to the securities under the forward sale agreements.
Shareowner Direct Plan - Alliant Energy satisfies its requirements under the Shareowner Direct Plan (dividend reinvestment and stock purchase plan) by acquiring Alliant Energy common stock through original issue, rather than on the open market.
NOTE 8. PREFERRED STOCK
In 2021, IPL is authorized to issue up to 16,000,000redeemed all 8,000,000 outstanding shares of cumulative preferred stock in aggregate. Information related to the carrying value of IPL’sits 5.1% cumulative preferred stock at December 31 was as follows:
| Series | Liquidation Preference/Stated Value | Shares Authorized | Shares Outstanding | 2019 | 2018 | |||||||||
| (in millions) | ||||||||||||||
| 5.1% | $25 | 8,000,000 | 8,000,000 | $200.0 | $200.0 | |||||||||
NOTE 9. DEBT
NOTE 9(a) Short-term Debt - Alliant Energy and its subsidiaries maintain committed bank lines of credit to provide short-term borrowing flexibility and back-stop liquidity for commercial paper outstanding. At December 31, 2019,2022, the short-term borrowing capacity under a single credit facility agreement, which expires in August 2023,December 2026, totaled $1 billion ($450500 million for Alliant Energy at the parent company level, $250$100 million for IPL and $300$400 million for WPL). Subject to certain conditions, Alliant Energy (at the parent company level), IPL and WPL may each reallocate and change its sublimit up to $500 million, $400 million and $500 million, respectively, within the $1 billion total commitment. Information regarding Alliant Energy’s, IPL’s and WPL’s commercial paper classified as short-term debt and back-stopped by the credit facility was as follows (dollars in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| December 31 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||
| Amount outstanding | $642 | $515 | $— | $— | $290 | $236 | |||||||||||||||||||||||||||||
| Weighted average interest rates | 4.6% | 0.2% | N/A | N/A | 4.5% | 0.2% | |||||||||||||||||||||||||||||
| Available credit facility capacity | $358 | $485 | $100 | $250 | $110 | $64 | |||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||
| December 31 | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||
| Commercial paper outstanding | $337.4 | $441.2 | $— | $50.4 | $168.2 | $105.5 | |||||
| Commercial paper weighted average interest rates | 1.9% | 2.8% | N/A | 2.8% | 1.8% | 2.5% | |||||
| Available credit facility capacity | $662.6 | $558.8 | $250.0 | $199.6 | $131.8 | $244.5 | |||||
| Alliant Energy | IPL | WPL | |||||||||
| For the year ended | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||
| Maximum amount outstanding (based on daily outstanding balances) | $600.6 | $446.5 | $50.4 | $50.4 | $195.1 | $126.0 | |||||
| Average amount outstanding (based on daily outstanding balances) | $453.5 | $221.4 | $0.1 | $1.5 | $92.6 | $36.6 | |||||
| Weighted average interest rates | 2.5% | 2.2% | 2.8% | 2.3% | 2.4% | 2.1% | |||||
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| For the year ended | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||
| Maximum amount outstanding (based on daily outstanding balances) | $665 | $648 | $— | $19 | $325 | $320 | |||||||||||||||||||||||||||||
| Average amount outstanding (based on daily outstanding balances) | $411 | $459 | $— | $— | $153 | $172 | |||||||||||||||||||||||||||||
| Weighted average interest rates | 2.1% | 0.2% | —% | 0.2% | 1.6% | 0.1% | |||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | |||
| Requirement, not to exceed | 65% | 65% | 65% | ||
| Actual | 55% | 48% | 48% | ||
NOTE 9(b) Long-Term Debt - Long-term debt, net as of December 31 was as follows (dollars in millions):
| 2022 | 2021 | ||||||||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | Alliant Energy | IPL | WPL | ||||||||||||||||||||||||||||||
| Senior Debentures (a): | |||||||||||||||||||||||||||||||||||
| 3.25%, due 2024 | $500 | $500 | $— | $500 | $500 | $— | |||||||||||||||||||||||||||||
| 3.4%, due 2025 | 250 | 250 | — | 250 | 250 | — | |||||||||||||||||||||||||||||
| 5.5%, due 2025 | 50 | 50 | — | 50 | 50 | — | |||||||||||||||||||||||||||||
| 4.1%, due 2028 | 500 | 500 | — | 500 | 500 | — | |||||||||||||||||||||||||||||
| 3.6%, due 2029 | 300 | 300 | — | 300 | 300 | — | |||||||||||||||||||||||||||||
| 2.3%, due 2030 | 400 | 400 | — | 400 | 400 | — | |||||||||||||||||||||||||||||
| 6.45%, due 2033 | 100 | 100 | — | 100 | 100 | — | |||||||||||||||||||||||||||||
| 6.3%, due 2034 | 125 | 125 | — | 125 | 125 | — | |||||||||||||||||||||||||||||
| 6.25%, due 2039 | 300 | 300 | — | 300 | 300 | — | |||||||||||||||||||||||||||||
| 4.7%, due 2043 | 250 | 250 | — | 250 | 250 | — | |||||||||||||||||||||||||||||
| 3.7%, due 2046 | 300 | 300 | — | 300 | 300 | — | |||||||||||||||||||||||||||||
| 3.5%, due 2049 | 300 | 300 | — | 300 | 300 | — | |||||||||||||||||||||||||||||
| 3.1%, due 2051 | 300 | 300 | — | 300 | 300 | — | |||||||||||||||||||||||||||||
| 3,675 | 3,675 | — | 3,675 | 3,675 | — | ||||||||||||||||||||||||||||||
| Debentures (a): | |||||||||||||||||||||||||||||||||||
| 3.05%, due 2027 | 300 | — | 300 | 300 | — | 300 | |||||||||||||||||||||||||||||
| 3%, due 2029 | 350 | — | 350 | 350 | — | 350 | |||||||||||||||||||||||||||||
| 1.95%, due 2031 | 300 | — | 300 | 300 | — | 300 | |||||||||||||||||||||||||||||
| 3.95%, due 2032 (b) | 600 | — | 600 | — | — | — | |||||||||||||||||||||||||||||
| 6.25%, due 2034 | 100 | — | 100 | 100 | — | 100 | |||||||||||||||||||||||||||||
| 6.375%, due 2037 | 300 | — | 300 | 300 | — | 300 | |||||||||||||||||||||||||||||
| 7.6%, due 2038 | 250 | — | 250 | 250 | — | 250 | |||||||||||||||||||||||||||||
| 4.1%, due 2044 | 250 | — | 250 | 250 | — | 250 | |||||||||||||||||||||||||||||
| 3.65%, due 2050 | 350 | — | 350 | 350 | — | 350 | |||||||||||||||||||||||||||||
| 2.25% (Retired in 2022) | — | — | — | 250 | — | 250 | |||||||||||||||||||||||||||||
| 2,800 | — | 2,800 | 2,450 | — | 2,450 | ||||||||||||||||||||||||||||||
| Other: | |||||||||||||||||||||||||||||||||||
| AEF 3.75% senior notes, due 2023 (with Alliant Energy as guarantor) (a) | 400 | — | — | 400 | — | — | |||||||||||||||||||||||||||||
| AEF term loan credit agreement through March 2024, 5% at December 31, 2022 (with Alliant Energy as guarantor) (c) | 400 | — | — | — | — | — | |||||||||||||||||||||||||||||
| AEF 1.4% senior notes, due 2026 (with Alliant Energy as guarantor) (a) | 200 | — | — | 200 | — | — | |||||||||||||||||||||||||||||
| AEF 4.25% senior notes, due 2028 (with Alliant Energy as guarantor) (a) | 300 | — | — | 300 | — | — | |||||||||||||||||||||||||||||
| AEF 3.6% senior notes, due 2032 (with Alliant Energy as guarantor) (a)(d) | 350 | — | — | — | — | — | |||||||||||||||||||||||||||||
| Sheboygan Power, LLC 5.06% senior secured notes, due 2023 to 2024 (secured by the Sheboygan Falls Energy Facility and related assets) (a) | 17 | — | — | 24 | — | — | |||||||||||||||||||||||||||||
| AEF term loan credit agreement, 1% at December 31, 2021 (with Alliant Energy as guarantor) (Retired in 2022) | — | — | — | 300 | — | — | |||||||||||||||||||||||||||||
| Corporate Services 3.45% senior notes (Retired in 2022) | — | — | — | 75 | — | — | |||||||||||||||||||||||||||||
| Other, 1% at December 31, 2022, due 2023 to 2025 | 1 | — | — | 1 | — | — | |||||||||||||||||||||||||||||
| 1,668 | — | — | 1,300 | — | — | ||||||||||||||||||||||||||||||
| Subtotal | 8,143 | 3,675 | 2,800 | 7,425 | 3,675 | 2,450 | |||||||||||||||||||||||||||||
| Current maturities | (408) | — | — | (633) | — | (250) | |||||||||||||||||||||||||||||
| Unamortized debt issuance costs | (45) | (21) | (19) | (42) | (23) | (15) | |||||||||||||||||||||||||||||
| Unamortized debt (discount) and premium, net | (22) | (8) | (11) | (15) | (9) | (6) | |||||||||||||||||||||||||||||
| Long-term debt, net (e) | $7,668 | $3,646 | $2,770 | $6,735 | $3,643 | $2,179 | |||||||||||||||||||||||||||||
| 2019 | 2018 | ||||||||||||||||||||||
| Alliant Energy | IPL | WPL | Alliant Energy | IPL | WPL | ||||||||||||||||||
| Senior Debentures (a): | |||||||||||||||||||||||
| 3.65%, due 2020 | $200.0 | $200.0 | $— | $200.0 | $200.0 | $— | |||||||||||||||||
| 3.25%, due 2024 | 500.0 | 500.0 | — | 500.0 | 500.0 | — | |||||||||||||||||
| 3.4%, due 2025 | 250.0 | 250.0 | — | 250.0 | 250.0 | — | |||||||||||||||||
| 5.5%, due 2025 | 50.0 | 50.0 | — | 50.0 | 50.0 | — | |||||||||||||||||
| 4.1%, due 2028 | 500.0 | 500.0 | — | 500.0 | 500.0 | — | |||||||||||||||||
| 3.6%, due 2029 (b) | 300.0 | 300.0 | — | — | — | — | |||||||||||||||||
| 6.45%, due 2033 | 100.0 | 100.0 | — | 100.0 | 100.0 | — | |||||||||||||||||
| 6.3%, due 2034 | 125.0 | 125.0 | — | 125.0 | 125.0 | — | |||||||||||||||||
| 6.25%, due 2039 | 300.0 | 300.0 | — | 300.0 | 300.0 | — | |||||||||||||||||
| 4.7%, due 2043 | 250.0 | 250.0 | — | 250.0 | 250.0 | — | |||||||||||||||||
| 3.7%, due 2046 | 300.0 | 300.0 | — | 300.0 | 300.0 | — | |||||||||||||||||
| 3.5%, due 2049 (b) | 300.0 | 300.0 | — | — | — | — | |||||||||||||||||
| 3,175.0 | 3,175.0 | — | 2,575.0 | 2,575.0 | — | ||||||||||||||||||
| Debentures (a): | |||||||||||||||||||||||
| 4.6%, due 2020 | 150.0 | — | 150.0 | 150.0 | — | 150.0 | |||||||||||||||||
| 2.25%, due 2022 | 250.0 | — | 250.0 | 250.0 | — | 250.0 | |||||||||||||||||
| 3.05%, due 2027 | 300.0 | — | 300.0 | 300.0 | — | 300.0 | |||||||||||||||||
| 3%, due 2029 (c) | 350.0 | — | 350.0 | — | — | — | |||||||||||||||||
| 6.25%, due 2034 | 100.0 | — | 100.0 | 100.0 | — | 100.0 | |||||||||||||||||
| 6.375%, due 2037 | 300.0 | — | 300.0 | 300.0 | — | 300.0 | |||||||||||||||||
| 7.6%, due 2038 | 250.0 | — | 250.0 | 250.0 | — | 250.0 | |||||||||||||||||
| 4.1%, due 2044 | 250.0 | — | 250.0 | 250.0 | — | 250.0 | |||||||||||||||||
| 5% (Retired in 2019) | — | — | — | 250.0 | — | 250.0 | |||||||||||||||||
| 1,950.0 | — | 1,950.0 | 1,850.0 | — | 1,850.0 | ||||||||||||||||||
| Other: | |||||||||||||||||||||||
| AEF term loan credit agreement through April 2020, 2% at December 31, 2019 (with Alliant Energy as guarantor) | 300.0 | — | — | 300.0 | — | — | |||||||||||||||||
| Corporate Services 3.45% senior notes, due 2022 (a) | 75.0 | — | — | 75.0 | — | — | |||||||||||||||||
| AEF 3.75% senior notes, due 2023 (with Alliant Energy as guarantor) (a) | 400.0 | — | — | 400.0 | — | — | |||||||||||||||||
| AEF 4.25% senior notes, due 2028 (with Alliant Energy as guarantor) (a) | 300.0 | — | — | 300.0 | — | — | |||||||||||||||||
| Sheboygan Power, LLC 5.06% senior secured notes, due 2020 to 2024 (secured by the Sheboygan Falls Energy Facility and related assets) (a) | 38.2 | — | — | 44.3 | — | — | |||||||||||||||||
| Other, 1% at December 31, 2019, due 2020 to 2025 | 2.1 | — | — | 2.4 | — | — | |||||||||||||||||
| 1,115.3 | — | — | 1,121.7 | — | — | ||||||||||||||||||
| Subtotal | 6,240.3 | 3,175.0 | 1,950.0 | 5,546.7 | 2,575.0 | 1,850.0 | |||||||||||||||||
| Current maturities | (657.2 | ) | (200.0 | ) | (150.0 | ) | (256.5 | ) | — | (250.0 | ) | ||||||||||||
| Unamortized debt issuance costs | (36.9 | ) | (21.0 | ) | (11.3 | ) | (32.1 | ) | (17.2 | ) | (9.6 | ) | |||||||||||
| Unamortized debt (discount) and premium, net | (13.2 | ) | (6.7 | ) | (6.0 | ) | (11.8 | ) | (5.5 | ) | (5.5 | ) | |||||||||||
| Long-term debt, net (d) | $5,533.0 | $2,947.3 | $1,782.7 | $5,246.3 | $2,552.3 | $1,584.9 | |||||||||||||||||
(c)In March 2022, AEF entered into a $300 million variable rate term loan credit agreement and used the borrowings under this agreement to retire its $300 million variable rate term loan credit agreement that expired in March 2022. In December 2022, AEF increased the amount outstanding under the new term loan credit agreement by $100 million and used the additional borrowings to reduce Alliant Energy’s outstanding commercial paper and for general corporate purposes. In January 2023, AEF entered into a $300 million interest rate swap maturing in January 2026. Under the terms of the swap, AEF exchanged variable rate borrowings for a fixed rate of 3.93%.
(d)In February 2022, AEF issued $350 million of 3.6% senior notes due 2032. The net proceeds from the issuance were used to reduce Alliant Energy’s outstanding commercial paper and for general corporate purposes.
(e)There were no significant sinking fund requirements related to the outstanding long-term debt.
In December 2022, AEF entered into a $50 million variable rate term loan credit agreement (with Alliant Energy as guarantor), which expires in January 2024. AEF received the proceeds from the issuance in January 2023, and used the borrowings under this agreement to reduce Alliant Energy’s outstanding commercial paper and for general corporate purposes.
Five-Year Schedule of Long-term Debt Maturities - At December 31, 2019,2022, long-term debt maturities for 20202023 through 20242027 were as follows (in millions):
| 2023 | 2024 | 2025 | 2026 | 2027 | |||||||||||||||||||||||||
| IPL | $— | $500 | $300 | $— | $— | ||||||||||||||||||||||||
| WPL | — | — | — | — | 300 | ||||||||||||||||||||||||
| AEF | 408 | 409 | — | 200 | — | ||||||||||||||||||||||||
| Alliant Energy | $408 | $909 | $300 | $200 | $300 | ||||||||||||||||||||||||
| 2020 | 2021 | 2022 | 2023 | 2024 | |||||||||||||||
| IPL | $200 | $— | $— | $— | $500 | ||||||||||||||
| WPL | 150 | — | 250 | — | — | ||||||||||||||
| Corporate Services | — | — | 75 | — | — | ||||||||||||||
| AEF | 307 | 8 | 8 | 408 | 9 | ||||||||||||||
| Alliant Energy | $657 | $8 | $333 | $408 | $509 | ||||||||||||||
Fair Value of Long-term Debt - Refer to Note 16 for information on the fair value of long-term debt outstanding.
NOTE 10. LEASES
Operating Leases - Alliant Energy’s, IPL’s and WPL’s operating leases primarily include leases of space on telecommunication towers and leases of property. Operating lease details are as follows (dollars in millions):
| December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | Alliant Energy | IPL | WPL | ||||||||||||||||||||||||||||||
| Property, plant and equipment, net | $16 | $9 | $6 | $14 | $9 | $5 | |||||||||||||||||||||||||||||
| Other current liabilities | $3 | $1 | $1 | $2 | $1 | $1 | |||||||||||||||||||||||||||||
| Other liabilities | 13 | 8 | 5 | 12 | 8 | 4 | |||||||||||||||||||||||||||||
| Total operating lease liabilities | $16 | $9 | $6 | $14 | $9 | $5 | |||||||||||||||||||||||||||||
| Weighted average remaining lease term | 10 years | 11 years | 9 years | 9 years | 11 years | 8 years | |||||||||||||||||||||||||||||
| Weighted average discount rate | 4% | 4% | 4% | 4% | 4% | 4% | |||||||||||||||||||||||||||||
| December 31, 2019 | |||||||||||
| Alliant Energy | IPL | WPL | |||||||||
| Property, plant and equipment, net | $16 | $10 | $6 | ||||||||
| Other current liabilities | $2 | $1 | $1 | ||||||||
| Other liabilities | 14 | 9 | 5 | ||||||||
| Total operating lease liabilities | $16 | $10 | $6 | ||||||||
| Weighted average remaining lease term | 11 years | 12 years | 10 years | ||||||||
| Weighted average discount rate | 4 | % | 4 | % | 4 | % | |||||
| 2019 | |||||||||||
| Alliant Energy | IPL | WPL | |||||||||
| Operating lease cost | $2 | $1 | $1 | ||||||||
Finance LeaseLeases - WPL is currently leasing the Sheboygan Falls Energy Facility from AEF’s Non-utility Generation business through 2025, the initial lease term. WPL is responsible for the operation of the EGU and has exclusive rights to its output. This finance lease contains 2two lease renewal periods, which are not included in the finance lease obligation, as well as an option to purchase the facility at the end of the initial lease term. WPL’s financeFor Alliant Energy, the leased Sheboygan Falls Energy Facility is eliminated upon consolidation and therefore is not reflected in Alliant Energy’s amounts below.
Related to its investments in solar generation, WPL entered into land lease agreements with unaffiliated parties that commenced in 2021 and 2022. The leases have various terms with optional renewal periods that are assumed to be extended through the end of the estimated useful lives of the solar generating facilities. The leases do not contain purchase options and are fixed lease payments.
| 75 | ||||||||
Finance lease details are as follows (dollars in millions):
| December 31, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
| Alliant Energy | WPL | Alliant Energy | WPL | ||||||||||||||||||||||||||||||||
| Property, plant and equipment, net: | |||||||||||||||||||||||||||||||||||
| Sheboygan Falls Energy Facility | n/a | $15 | n/a | $21 | |||||||||||||||||||||||||||||||
| Leased land for solar generation | $133 | 133 | $11 | 11 | |||||||||||||||||||||||||||||||
| $133 | $148 | $11 | $32 | ||||||||||||||||||||||||||||||||
| Other current liabilities: | |||||||||||||||||||||||||||||||||||
| Sheboygan Falls Energy Facility | n/a | $12 | n/a | $10 | |||||||||||||||||||||||||||||||
| Leased land for solar generation | $5 | 5 | $1 | 1 | |||||||||||||||||||||||||||||||
| 5 | 17 | 1 | 11 | ||||||||||||||||||||||||||||||||
| Other liabilities: | |||||||||||||||||||||||||||||||||||
| Sheboygan Falls Energy Facility | n/a | 19 | n/a | 31 | |||||||||||||||||||||||||||||||
| Leased land for solar generation | 131 | 131 | 11 | 11 | |||||||||||||||||||||||||||||||
| 131 | 150 | 11 | 42 | ||||||||||||||||||||||||||||||||
| Total finance lease liabilities | $136 | $167 | $12 | $53 | |||||||||||||||||||||||||||||||
| Weighted average remaining lease term | 34 years | 28 years | 34 years | 10 years | |||||||||||||||||||||||||||||||
| Weighted average discount rate | 5% | 5% | 3% | 9% | |||||||||||||||||||||||||||||||
| Alliant Energy | WPL | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization expenses | $— | $— | $— | $6 | $6 | $6 | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | 3 | — | — | 7 | 5 | 6 | |||||||||||||||||||||||||||||||||||||||||||||||
| Total finance lease expense | $3 | $— | $— | $13 | $11 | $12 | |||||||||||||||||||||||||||||||||||||||||||||||
Expected Maturities - As of December 31, 2019,2022, expected maturities of lease liabilities were as follows (in millions):
| 2023 | 2024 | 2025 | 2026 | 2027 | Thereafter | Total | Less: amount representing interest | Present value of minimum lease payments | |||||||||||||||||||||||||||||||||||||||||||||
| Operating Leases: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alliant Energy | $3 | $2 | $2 | $2 | $2 | $9 | $20 | $4 | $16 | ||||||||||||||||||||||||||||||||||||||||||||
| IPL | 1 | 1 | 1 | 1 | 1 | 6 | 11 | 2 | 9 | ||||||||||||||||||||||||||||||||||||||||||||
| WPL | 1 | 1 | 1 | 1 | 1 | 2 | 7 | 1 | 6 | ||||||||||||||||||||||||||||||||||||||||||||
| Finance Leases: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alliant Energy | 5 | 6 | 6 | 6 | 6 | 262 | 291 | 155 | 136 | ||||||||||||||||||||||||||||||||||||||||||||
| WPL | 20 | 21 | 12 | 6 | 6 | 262 | 327 | 160 | 167 | ||||||||||||||||||||||||||||||||||||||||||||
| 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | Less: amount representing interest | Present value of minimum lease payments | |||||||||||||||||||||||||||
| Operating Leases: | |||||||||||||||||||||||||||||||||||
| Alliant Energy | $2 | $2 | $2 | $2 | $2 | $10 | $20 | $4 | $16 | ||||||||||||||||||||||||||
| IPL | 1 | 1 | 1 | 1 | 1 | 7 | 12 | 2 | 10 | ||||||||||||||||||||||||||
| WPL | 1 | 1 | 1 | 1 | 1 | 3 | 8 | 2 | 6 | ||||||||||||||||||||||||||
| WPL’s Finance Lease: | |||||||||||||||||||||||||||||||||||
| Sheboygan Falls Energy Facility | 15 | 15 | 15 | 15 | 15 | 5 | 80 | 20 | 60 | ||||||||||||||||||||||||||
| 2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | Total | Less: amount representing interest | Present value of minimum capital lease payments | |||||||||||||||||||||||||||
| Operating Leases: | |||||||||||||||||||||||||||||||||||
| Alliant Energy | $5 | $5 | $3 | $3 | $2 | $12 | $30 | ||||||||||||||||||||||||||||
| IPL | 3 | 2 | 2 | 2 | 2 | 12 | 23 | ||||||||||||||||||||||||||||
| WPL | 2 | 3 | 1 | — | — | — | 6 | ||||||||||||||||||||||||||||
| WPL’s Capital Lease: | |||||||||||||||||||||||||||||||||||
| Sheboygan Falls Energy Facility | $15 | $15 | $15 | $15 | $15 | $19 | $94 | $26 | $68 | ||||||||||||||||||||||||||
NOTE 11. REVENUES
Revenues from Alliant Energy’s, IPL’s and WPL’s utility businesses are primarily from 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 sellsprovides 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
| 76 | ||||||||
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 TransportationTravero business, which includes a short-line railway that providesrail freight service;service in Iowa; a Mississippi River barge, rail and truck freight terminal and hauling services on the Mississippi River; customized supply chain solution capabilities;in Illinois; freight and logistics brokeringbrokerage services; and other transfer and storage services.a rail-served warehouse in Iowa.
Disaggregation of revenues from contracts with customers, which correlates to revenues for each reportable segment, was as follows (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||
| Electric Utility: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retail - residential | $1,233 | $1,115 | $1,093 | $673 | $620 | $602 | $560 | $495 | $491 | ||||||||||||||||||||||||||||||||||||||||||||
| Retail - commercial | 821 | 763 | 718 | 536 | 508 | 474 | 285 | 255 | 244 | ||||||||||||||||||||||||||||||||||||||||||||
| Retail - industrial | 965 | 893 | 841 | 538 | 505 | 488 | 427 | 388 | 353 | ||||||||||||||||||||||||||||||||||||||||||||
| Wholesale | 233 | 187 | 168 | 64 | 57 | 57 | 169 | 130 | 111 | ||||||||||||||||||||||||||||||||||||||||||||
| Bulk power and other | 169 | 123 | 100 | 48 | 62 | 74 | 121 | 61 | 26 | ||||||||||||||||||||||||||||||||||||||||||||
| Total Electric Utility | 3,421 | 3,081 | 2,920 | 1,859 | 1,752 | 1,695 | 1,562 | 1,329 | 1,225 | ||||||||||||||||||||||||||||||||||||||||||||
| Gas Utility: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Retail - residential | 371 | 257 | 214 | 202 | 146 | 116 | 169 | 111 | 98 | ||||||||||||||||||||||||||||||||||||||||||||
| Retail - commercial | 197 | 139 | 107 | 101 | 79 | 59 | 96 | 60 | 48 | ||||||||||||||||||||||||||||||||||||||||||||
| Retail - industrial | 20 | 17 | 12 | 14 | 12 | 8 | 6 | 5 | 4 | ||||||||||||||||||||||||||||||||||||||||||||
| Transportation/other | 54 | 43 | 40 | 34 | 28 | 25 | 20 | 15 | 15 | ||||||||||||||||||||||||||||||||||||||||||||
| Total Gas Utility | 642 | 456 | 373 | 351 | 265 | 208 | 291 | 191 | 165 | ||||||||||||||||||||||||||||||||||||||||||||
| Other Utility: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Steam | 39 | 36 | 36 | 39 | 36 | 36 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Other utility | 10 | 13 | 13 | 7 | 10 | 8 | 3 | 3 | 5 | ||||||||||||||||||||||||||||||||||||||||||||
| Total Other Utility | 49 | 49 | 49 | 46 | 46 | 44 | 3 | 3 | 5 | ||||||||||||||||||||||||||||||||||||||||||||
| Non-Utility and Other: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Travero and other | 93 | 83 | 74 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Total Non-Utility and Other | 93 | 83 | 74 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Total revenues | $4,205 | $3,669 | $3,416 | $2,256 | $2,063 | $1,947 | $1,856 | $1,523 | $1,395 | ||||||||||||||||||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||
| Electric Utility: | |||||||||||||||||||||||||||||||||||
| Retail - residential | $1,092.4 | $1,063.4 | $1,006.2 | $601.5 | $590.6 | $535.6 | $490.9 | $472.8 | $470.6 | ||||||||||||||||||||||||||
| Retail - commercial | 769.7 | 735.6 | 710.3 | 510.3 | 486.8 | 452.7 | 259.4 | 248.8 | 257.6 | ||||||||||||||||||||||||||
| Retail - industrial | 889.1 | 888.8 | 853.1 | 503.9 | 500.8 | 459.7 | 385.2 | 388.0 | 393.4 | ||||||||||||||||||||||||||
| Wholesale | 176.4 | 188.4 | 238.4 | 63.5 | 71.2 | 95.5 | 112.9 | 117.2 | 142.9 | ||||||||||||||||||||||||||
| Bulk power and other | 136.0 | 124.1 | 86.7 | 102.0 | 81.7 | 55.4 | 34.0 | 42.4 | 31.3 | ||||||||||||||||||||||||||
| Total Electric Utility | 3,063.6 | 3,000.3 | 2,894.7 | 1,781.2 | 1,731.1 | 1,598.9 | 1,282.4 | 1,269.2 | 1,295.8 | ||||||||||||||||||||||||||
| Gas Utility: | |||||||||||||||||||||||||||||||||||
| Retail - residential | 259.4 | 254.4 | 224.7 | 149.3 | 152.3 | 123.2 | 110.1 | 102.1 | 101.5 | ||||||||||||||||||||||||||
| Retail - commercial | 133.0 | 133.0 | 123.2 | 74.9 | 75.9 | 67.9 | 58.1 | 57.1 | 55.3 | ||||||||||||||||||||||||||
| Retail - industrial | 16.0 | 14.9 | 16.7 | 11.7 | 10.2 | 11.1 | 4.3 | 4.7 | 5.6 | ||||||||||||||||||||||||||
| Transportation/other | 46.8 | 44.3 | 36.3 | 28.3 | 27.8 | 23.8 | 18.5 | 16.5 | 12.5 | ||||||||||||||||||||||||||
| Total Gas Utility | 455.2 | 446.6 | 400.9 | 264.2 | 266.2 | 226.0 | 191.0 | 180.4 | 174.9 | ||||||||||||||||||||||||||
| Other Utility: | |||||||||||||||||||||||||||||||||||
| Steam | 37.2 | 35.2 | 34.6 | 37.2 | 35.2 | 34.6 | — | — | — | ||||||||||||||||||||||||||
| Other utility | 9.3 | 12.8 | 12.9 | 7.0 | 9.8 | 10.8 | 2.3 | 3.0 | 2.1 | ||||||||||||||||||||||||||
| Total Other Utility | 46.5 | 48.0 | 47.5 | 44.2 | 45.0 | 45.4 | 2.3 | 3.0 | 2.1 | ||||||||||||||||||||||||||
| Non-Utility and Other: | |||||||||||||||||||||||||||||||||||
| Transportation and other | 82.4 | 39.6 | 39.1 | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Total Non-Utility and Other | 82.4 | 39.6 | 39.1 | — | — | — | — | — | — | ||||||||||||||||||||||||||
| Total revenues | $3,647.7 | $3,534.5 | $3,382.2 | $2,089.6 | $2,042.3 | $1,870.3 | $1,475.7 | $1,452.6 | $1,472.8 | ||||||||||||||||||||||||||
NOTE 12. INCOME TAXES
Income Tax Expense (Benefit) - The components of “Income tax expense (benefit)” in the income statements were as follows (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||
| Current tax expense (benefit): | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Federal | $7 | $1 | $1 | ($29) | ($21) | $6 | $46 | $22 | ($11) | ||||||||||||||||||||||||||||||||||||||||||||
| State | 2 | 3 | 8 | (8) | (1) | (1) | 16 | 6 | 7 | ||||||||||||||||||||||||||||||||||||||||||||
| Deferred tax expense (benefit): | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Federal | 109 | 9 | 22 | 91 | 73 | 30 | 10 | (75) | (9) | ||||||||||||||||||||||||||||||||||||||||||||
| State | 28 | 15 | 8 | 1 | — | (2) | 12 | 11 | 10 | ||||||||||||||||||||||||||||||||||||||||||||
| Production tax credits | (123) | (101) | (95) | (105) | (87) | (80) | (18) | (14) | (15) | ||||||||||||||||||||||||||||||||||||||||||||
| Investment tax credits | (1) | (1) | (1) | — | — | — | — | (1) | (1) | ||||||||||||||||||||||||||||||||||||||||||||
| $22 | ($74) | ($57) | ($50) | ($36) | ($47) | $66 | ($51) | ($19) | |||||||||||||||||||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||
| Current tax expense (benefit): | |||||||||||||||||||||||||||||||||||
| Federal | ($6.6 | ) | ($1.0 | ) | ($41.0 | ) | ($11.0 | ) | $14.9 | ($27.9 | ) | $12.0 | ($9.2 | ) | $5.5 | ||||||||||||||||||||
| State | 24.2 | (5.1 | ) | 8.5 | 24.3 | (7.1 | ) | 1.6 | 13.7 | (4.4 | ) | 2.5 | |||||||||||||||||||||||
| IPL’s tax benefit riders | (4.5 | ) | (13.2 | ) | (40.4 | ) | (4.5 | ) | (13.2 | ) | (40.4 | ) | — | — | — | ||||||||||||||||||||
| Deferred tax expense (benefit): | |||||||||||||||||||||||||||||||||||
| Federal | 69.7 | 67.9 | 159.5 | 26.4 | 9.5 | 72.5 | 30.7 | 43.8 | 55.0 | ||||||||||||||||||||||||||
| State | 41.4 | 29.8 | 12.3 | 30.9 | 7.3 | (2.2 | ) | 6.3 | 22.1 | 16.6 | |||||||||||||||||||||||||
| Production tax credits | (54.7 | ) | (29.5 | ) | (31.1 | ) | (41.8 | ) | (14.0 | ) | (14.1 | ) | (12.8 | ) | (15.5 | ) | (17.0 | ) | |||||||||||||||||
| Investment tax credits | (0.8 | ) | (1.2 | ) | (1.1 | ) | (0.2 | ) | (0.6 | ) | (0.4 | ) | (0.6 | ) | (0.6 | ) | (0.7 | ) | |||||||||||||||||
| $68.7 | $47.7 | $66.7 | $24.1 | ($3.2 | ) | ($10.9 | ) | $49.3 | $36.2 | $61.9 | |||||||||||||||||||||||||
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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 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||
| Statutory federal income tax rate | 21% | 21% | 21% | 21% | 21% | 21% | 21% | 21% | 21% | ||||||||||||||||||||||||||||||||||||||||||||
| State income taxes, net of federal benefits | 3 | 2 | 2 | (2) | (1) | (1) | 6 | 6 | 6 | ||||||||||||||||||||||||||||||||||||||||||||
| Production tax credits | (18) | (17) | (17) | (34) | (27) | (28) | (5) | (6) | (7) | ||||||||||||||||||||||||||||||||||||||||||||
| (2) | (18) | (13) | (2) | (4) | (5) | (3) | (43) | (26) | |||||||||||||||||||||||||||||||||||||||||||||
| Effect of rate-making on property-related differences | (1) | (1) | (3) | (1) | (2) | (4) | (2) | (1) | (2) | ||||||||||||||||||||||||||||||||||||||||||||
| Adjustment for prior period taxes | 1 | 1 | 1 | 1 | 2 | 1 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Other items, net | (1) | — | (1) | 1 | — | — | — | (1) | — | ||||||||||||||||||||||||||||||||||||||||||||
| Overall income tax rate | 3% | (12%) | (10%) | (16%) | (11%) | (16%) | 17% | (24%) | (8%) | ||||||||||||||||||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | ||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
| Statutory federal income tax rate | 21.0 | % | 21.0 | % | 35.0 | % | 21.0 | % | 21.0 | % | 35.0 | % | 21.0 | % | 21.0 | % | 35.0 | % | ||||||||
| State income taxes, net of federal benefits | 6.8 | 7.0 | 5.5 | 8.5 | 7.7 | 6.5 | 6.2 | 6.2 | 5.1 | |||||||||||||||||
| Production tax credits | (8.6 | ) | (5.2 | ) | (6.1 | ) | (13.1 | ) | (5.2 | ) | (6.7 | ) | (4.5 | ) | (6.4 | ) | (7.1 | ) | ||||||||
| Effect of rate-making on property-related differences | (6.1 | ) | (7.6 | ) | (8.5 | ) | (9.8 | ) | (14.0 | ) | (19.1 | ) | (2.7 | ) | (2.3 | ) | (1.7 | ) | ||||||||
| Amortization of excess deferred taxes | (1.0 | ) | (0.3 | ) | (0.1 | ) | (0.3 | ) | — | (0.1 | ) | (1.8 | ) | (0.2 | ) | (0.1 | ) | |||||||||
| IPL’s tax benefit riders | (0.7 | ) | (2.3 | ) | (7.6 | ) | (1.4 | ) | (4.9 | ) | (18.7 | ) | — | — | — | |||||||||||
| Adjustment for prior period taxes | 0.6 | (2.3 | ) | (1.5 | ) | 3.1 | (4.8 | ) | (3.4 | ) | (0.3 | ) | (0.2 | ) | — | |||||||||||
| Federal Tax Reform adjustments | — | (1.0 | ) | (3.4 | ) | — | (0.4 | ) | 1.7 | — | (2.3 | ) | (5.8 | ) | ||||||||||||
| Other items, net | (1.2 | ) | (0.9 | ) | (0.8 | ) | (0.4 | ) | (0.6 | ) | (0.2 | ) | (0.4 | ) | (1.0 | ) | (0.5 | ) | ||||||||
| Overall income tax rate | 10.8 | % | 8.4 | % | 12.5 | % | 7.6 | % | (1.2 | %) | (5.0 | %) | 17.5 | % | 14.8 | % | 24.9 | % | ||||||||
Deferred Tax Assets and Liabilities - The deferred tax assets and liabilities included on the balance sheets at December 31 arise from the following temporary differences (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||
| Deferred tax liabilities: | |||||||||||||||||||||||||||||||||||
| Property | $2,442 | $2,389 | $1,440 | $1,416 | $938 | $913 | |||||||||||||||||||||||||||||
| ATC Holdings | 125 | 123 | — | — | — | — | |||||||||||||||||||||||||||||
| Other | 155 | 111 | 86 | 76 | 80 | 50 | |||||||||||||||||||||||||||||
| Total deferred tax liabilities | 2,722 | 2,623 | 1,526 | 1,492 | 1,018 | 963 | |||||||||||||||||||||||||||||
| Deferred tax assets: | |||||||||||||||||||||||||||||||||||
| Federal credit carryforwards | 672 | 560 | 450 | 345 | 209 | 192 | |||||||||||||||||||||||||||||
| Net operating losses carryforwards - federal | — | 39 | — | 36 | — | — | |||||||||||||||||||||||||||||
| Net operating losses carryforwards - state | 32 | 38 | — | 3 | — | — | |||||||||||||||||||||||||||||
| Other | 75 | 65 | 29 | 25 | 20 | 18 | |||||||||||||||||||||||||||||
| Subtotal deferred tax assets | 779 | 702 | 479 | 409 | 229 | 210 | |||||||||||||||||||||||||||||
| Valuation allowances | — | (6) | — | — | — | — | |||||||||||||||||||||||||||||
| Total deferred tax assets | 779 | 696 | 479 | 409 | 229 | 210 | |||||||||||||||||||||||||||||
| Total deferred tax liabilities, net | $1,943 | $1,927 | $1,047 | $1,083 | $789 | $753 | |||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||
| Deferred tax liabilities: | |||||||||||||||||||||||
| Property | $2,021.5 | $1,975.5 | $1,183.5 | $1,158.4 | $770.0 | $735.2 | |||||||||||||||||
| ATC Holdings | 110.8 | 102.4 | — | — | — | — | |||||||||||||||||
| Other | 85.1 | 80.5 | 76.5 | 69.4 | 32.1 | 34.4 | |||||||||||||||||
| Total deferred tax liabilities | 2,217.4 | 2,158.4 | 1,260.0 | 1,227.8 | 802.1 | 769.6 | |||||||||||||||||
| Deferred tax assets: | |||||||||||||||||||||||
| Federal credit carryforwards | 355.4 | 299.1 | 175.0 | 133.2 | 160.3 | 147.4 | |||||||||||||||||
| Net operating losses carryforwards - federal | 60.5 | 158.6 | 56.3 | 114.1 | 0.5 | 26.4 | |||||||||||||||||
| Net operating losses carryforwards - state | 36.6 | 47.0 | 0.6 | 0.9 | 0.1 | 0.5 | |||||||||||||||||
| Other | 60.5 | 59.8 | 20.6 | 22.8 | 15.8 | 14.1 | |||||||||||||||||
| Subtotal deferred tax assets | 513.0 | 564.5 | 252.5 | 271.0 | 176.7 | 188.4 | |||||||||||||||||
| Valuation allowances | (9.6 | ) | (9.2 | ) | (0.5 | ) | (0.5 | ) | (0.8 | ) | (0.8 | ) | |||||||||||
| Total deferred tax assets | 503.4 | 555.3 | 252.0 | 270.5 | 175.9 | 187.6 | |||||||||||||||||
| Total deferred tax liabilities, net | $1,714.0 | $1,603.1 | $1,008.0 | $957.3 | $626.2 | $582.0 | |||||||||||||||||
Carryforwards - At December 31, 2019,2022, carryforwards and expiration dates were estimated as follows (in millions):
| Range of Expiration Dates | Alliant Energy | IPL | WPL | ||||||||||||||||||||
| State net operating losses | 2025-2042 | $527 | $10 | $1 | |||||||||||||||||||
| Federal tax credits | 2024-2042 | 672 | 450 | 209 | |||||||||||||||||||
| Range of Expiration Dates | Alliant Energy | IPL | WPL | ||||||||||
| Federal net operating losses | 2037 | $297 | $276 | $2 | |||||||||
| State net operating losses | 2020-2039 | 615 | 9 | 2 | |||||||||
| Federal tax credits | 2022-2039 | 355 | 175 | 160 | |||||||||
Valuation Allowances - Due to the anticipated future reductions in revenues from utility customers due to Federal Tax Reform,In 2022, Alliant Energy expectsfully utilized its federal net operating losses carryforwards will not be fully utilized until 2024. Because taxable income must be reduced bycarryforwards. This allowed for the utilization of federal net operating losses carryforwards prior to utilizing federal tax credit carryforwards, Alliant Energy currently does not expect to utilize 2002 and 2003 vintage federal credit carryforwards prior to their expiration, resulting in 2022 and 2023, respectively. As a result,the reversal of Alliant Energy establishedEnergy’s valuation allowances for the 2002 and 2003 vintage federal credit carryforwards in 2017 that remain as of December 31, 2019.2022.
Uncertain Tax Positions - At December 31, 2019, 20182022, 2021 and 2017,2020, there were no uncertain tax positions or penalties accrued related to uncertain tax positions. As of December 31, 2019,2022, no material changes to unrecognized tax benefits are expected during the next 12 months.
Open tax years - Tax years that remain subject to the statute of limitations in the major jurisdictions for each of Alliant Energy, IPL and WPL are as follows:
| Consolidated federal income tax returns (a) | 2016 | - | 2018 |
| Consolidated Iowa income tax returns (b) | 2016 | - | 2018 |
| Wisconsin combined tax returns (c) | 2015 | - | 2018 |
| Consolidated federal income tax returns (a) | 2019 | - | 2021 | ||||||||
| Consolidated Iowa income tax returns (b) | 2019 | - | 2021 | ||||||||
| Wisconsin combined tax returns (c) | 2018 | - | 2021 | ||||||||
(b)The statute of limitations for these clarifying rules, Alliant Energy, IPL and WPL recordedIowa tax benefitsreturns expires three years from each filing date.
(c)The statute of $5.6 million, $1.1 million and $5.5 million, respectively, in 2018.limitations for these Wisconsin combined tax returns expires four years from each filing date.
Iowa Tax Reform - In May 2018, Iowa tax reform was enacted, resulting in a reduction in the Iowa income tax rate from 12% to 9.8%, effective January 1, 2021, and the elimination of the deduction for federal income taxes, effective January 1, 2022.2022, for taxes related to 2020 and prior.
In March 2022, additional Iowa tax reform was enacted. Annually, and by each November 1, the Iowa Department of Revenue will establish corporate income tax rates for the next tax year based on net corporate income tax receipts for the prior tax year, and reduce such rates if certain state income tax revenue triggers are satisfied. These corporate income tax rate reductions are currently expected to occur over a period of several years, with a target corporate income tax rate of 5.5%, compared to the 9.8% Iowa corporate income tax rate in effect at the time the Iowa tax reform was enacted. In September 2022, the Iowa Department of Revenue announced an Iowa corporate income tax rate of 8.4%, effective January 1, 2023. Deferred tax assets and liabilities are measured at the enacted tax rate expected to be applied when temporary differences are to be realized or settled. Given the announcement of the new Iowa corporate income tax rate, Alliant Energy’s and IPL’s deferred tax liabilities were remeasured based upon the new rate effective January 1, 2023, which resulted in a $77 million reduction of Alliant Energy’s and IPL’s tax-related regulatory assets and a decrease in their deferred tax liabilities in 2022. The reduction in tax-related regulatory assets is expected to provide cost benefits to IPL’s customers in the future. Alliant Energy parent company’s deferred tax assets were remeasured based upon the new rate effective January 1, 2023, which resulted in a charge of $8 million recorded to income tax expense in Alliant Energy’s income statement and a decrease in deferred income tax assets on Alliant Energy’s balance sheet in 2022. Alliant Energy is currently unable to predict with certainty the timing or amount of any future rate reductions.
NOTE 13. BENEFIT PLANS
NOTE 13(a) Pension and Other Postretirement Benefits Plans - Retirement benefits are provided to substantially all employees through various qualified and non-qualified non-contributory defined benefit pension plans (currently closed to new hires), and/or through defined contribution plans (including 401(k) savings plans). Benefits of the non-contributory defined benefit pension plans are based on the plan participant’s years of service, age and compensation. Benefits of the defined contribution plans are based on the plan participant’s years of service, age, compensation and contributions. Certain defined benefit postretirement health care and life benefits are provided to eligible retirees. In general, the retiree health care plans consist of fixed benefit subsidy structures and the retiree life insurance plans are non-contributory.
IPL and WPL account for their participation in Alliant Energy and Corporate Services sponsored plans as multiple-employer plans. For IPL and WPL, amounts below represent the amounts for their plan participants covered under plans they sponsor, as well as amounts directly assigned to them related to certain participants in the Alliant Energy and Corporate Services sponsored plans.
Assumptions - The assumptions for defined benefit pension and OPEB plans at the measurement date of December 31 were as follows:
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alliant Energy | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||
| Discount rate for benefit obligations | 5.54% | 2.91% | 2.57% | 5.53% | 2.81% | 2.31% | |||||||||||||||||||||||||||||||||||||||||||||||
| Discount rate for net periodic cost | 2.91% | 2.57% | 3.48% | 2.81% | 2.31% | 3.40% | |||||||||||||||||||||||||||||||||||||||||||||||
| Expected rate of return on plan assets | 7.80% | 7.10% | 7.10% | 6.40% | 4.80% | 4.50% | |||||||||||||||||||||||||||||||||||||||||||||||
| Interest crediting rate for Alliant Energy Cash Balance Pension Plan | 9.22% | 4.18% | 4.76% | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||
| Rate of compensation increase | 3.30% | - | 4.50% | 3.30% | - | 4.50% | 3.65% | - | 4.50% | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||
| Qualified Defined Benefit Pension Plan | OPEB Plans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| IPL | IPL | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||
| Discount rate for benefit obligations | Discount rate for benefit obligations | 5.55% | 2.94% | 2.61% | 5.53% | 2.80% | 2.28% | ||||||||||||||||||||||||||||||||||||||||||||||||
| Discount rate for net periodic cost | Discount rate for net periodic cost | 2.94% | 2.61% | 3.51% | 2.80% | 2.28% | 3.39% | ||||||||||||||||||||||||||||||||||||||||||||||||
| Expected rate of return on plan assets | Expected rate of return on plan assets | 7.80% | 7.10% | 7.10% | 6.50% | 5.10% | 4.50% | ||||||||||||||||||||||||||||||||||||||||||||||||
| Rate of compensation increase | Rate of compensation increase | 3.30% | 3.30% | 3.65% | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Alliant Energy | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Discount rate for benefit obligations | 3.48% | 4.34% | 3.66% | 3.40% | 4.24% | 3.53% | |||||||||||||||||||||||||||||||||||||||||||||||||
| Discount rate for net periodic cost | 4.34% | 3.66% | 4.19% | 4.24% | 3.53% | 3.98% | |||||||||||||||||||||||||||||||||||||||||||||||||
| Expected rate of return on plan assets | 7.60% | 7.60% | 7.60% | 5.44% | 5.44% | 5.80% | |||||||||||||||||||||||||||||||||||||||||||||||||
| Interest crediting rate for Alliant Energy Cash Balance Pension Plan | 5.52% | 5.04% | 4.64% | N/A | N/A | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||
| Rate of compensation increase | 3.65 | % | - | 4.50% | 3.65 | % | - | 4.50% | 3.65 | % | - | 4.50% | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||
| Qualified Defined Benefit Pension Plan | OPEB Plans | ||||||||||
| IPL | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||
| Discount rate for benefit obligations | 3.51% | 4.35% | 3.68% | 3.39% | 4.23% | 3.51% | |||||
| Discount rate for net periodic cost | 4.35% | 3.68% | 4.22% | 4.23% | 3.51% | 3.95% | |||||
| Expected rate of return on plan assets | 7.60% | 7.60% | 7.60% | 5.60% | 5.60% | 6.20% | |||||
| Rate of compensation increase | 3.65% | 3.65% | 3.65% | N/A | N/A | N/A | |||||
| 79 | ||||||||
| Qualified Defined Benefit Pension Plan | OPEB Plans | ||||||||||
| WPL | 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||
| Discount rate for benefit obligations | 3.50% | 4.35% | 3.69% | 3.39% | 4.23% | 3.51% | |||||
| Discount rate for net periodic cost | 4.35% | 3.69% | 4.23% | 4.23% | 3.51% | 3.96% | |||||
| Expected rate of return on plan assets | 7.60% | 7.60% | 7.60% | 3.81% | 3.84% | 3.50% | |||||
| Rate of compensation increase | 3.65% | 3.65% | 3.65% | N/A | N/A | N/A | |||||
| Qualified Defined Benefit Pension Plan | OPEB Plans | ||||||||||||||||||||||||||||||||||
| WPL | 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||
| Discount rate for benefit obligations | 5.54% | 2.94% | 2.64% | 5.53% | 2.79% | 2.27% | |||||||||||||||||||||||||||||
| Discount rate for net periodic cost | 2.94% | 2.64% | 3.50% | 2.79% | 2.27% | 3.39% | |||||||||||||||||||||||||||||
| Expected rate of return on plan assets | 7.80% | 7.10% | 7.10% | 5.49% | 4.02% | 3.28% | |||||||||||||||||||||||||||||
| Rate of compensation increase | 3.30% | 3.30% | 3.65% | N/A | N/A | N/A | |||||||||||||||||||||||||||||
Expected rate of return on plan assets - The expected rate of return on plan assets is based on projected asset class returns using target allocations. A forward-looking building blocks approach is used, and historical returns, survey information and capital market information are analyzed to support the expected rate of return on plan assets assumption. Refer to “Investment“Investment Strategy for Plan Assets”Assets” below for additional information related to investment strategy and mix of assets for the pension and OPEB plans.
Life Expectancy - The life expectancy assumption is used in determining the benefit obligation and net periodic benefit cost for defined benefit pension and OPEB plans. This assumption utilizes base mortality tables that were released in 2019 by the Society of Actuaries and mortality projection tables that were released in 2021 by the Society of Actuaries.
Net Periodic Benefit Costs - The components of net periodic benefit costs for sponsored defined benefit pension and OPEB plans are included 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.statements or regulatory assets on the balance sheets.
| Alliant Energy | Defined Benefit Pension Plans | OPEB Plans | |||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||
| Service cost | $9 | $11 | $11 | $3 | $4 | $3 | |||||||||||||||||||||||||||||
| Interest cost | 36 | 34 | 43 | 6 | 5 | 7 | |||||||||||||||||||||||||||||
| Expected return on plan assets (a) | (69) | (69) | (70) | (5) | (5) | (5) | |||||||||||||||||||||||||||||
| Amortization of prior service credit (b) | (1) | — | — | — | — | — | |||||||||||||||||||||||||||||
| Amortization of actuarial loss (c) | 32 | 39 | 34 | 2 | 5 | 3 | |||||||||||||||||||||||||||||
| Settlement losses (d) | 26 | — | 12 | — | — | — | |||||||||||||||||||||||||||||
| $33 | $15 | $30 | $6 | $9 | $8 | ||||||||||||||||||||||||||||||
| Alliant Energy | Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| IPL | IPL | Defined Benefit Pension Plans | OPEB Plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Service cost | $9.7 | $12.1 | $12.5 | $3.3 | $4.2 | $5.0 | Service cost | $6 | $7 | $7 | $1 | $1 | $1 | |||||||||||||||||||||||||||||||||||||||||||||
| Interest cost | 49.8 | 46.8 | 51.0 | 8.5 | 7.7 | 8.6 | Interest cost | 16 | 16 | 20 | 2 | 2 | 3 | |||||||||||||||||||||||||||||||||||||||||||||
| Expected return on plan assets (a) | (60.1 | ) | (69.7 | ) | (65.5 | ) | (5.0 | ) | (6.0 | ) | (6.1 | ) | Expected return on plan assets (a) | (31) | (32) | (33) | (4) | (3) | (4) | |||||||||||||||||||||||||||||||||||||||
| Amortization of prior service credit (b) | (0.7 | ) | (0.7 | ) | (0.4 | ) | (0.2 | ) | (0.2 | ) | (0.2 | ) | ||||||||||||||||||||||||||||||||||||||||||||||
| Amortization of actuarial loss (c) | 36.4 | 35.2 | 37.6 | 3.3 | 3.4 | 3.8 | Amortization of actuarial loss (c) | 13 | 17 | 15 | 1 | 2 | 1 | |||||||||||||||||||||||||||||||||||||||||||||
| Settlement losses (d) | — | — | 0.9 | — | — | — | Settlement losses (d) | 13 | — | 7 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| $35.1 | $23.7 | $36.1 | $9.9 | $9.1 | $11.1 | $17 | $8 | $16 | $— | $2 | $1 | |||||||||||||||||||||||||||||||||||||||||||||||
| WPL | Defined Benefit Pension Plans | OPEB Plans | |||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | 2022 | 2021 | 2020 | ||||||||||||||||||||||||||||||
| Service cost | $3 | $4 | $4 | $1 | $1 | $2 | |||||||||||||||||||||||||||||
| Interest cost | 16 | 15 | 19 | 2 | 2 | 3 | |||||||||||||||||||||||||||||
| Expected return on plan assets (a) | (31) | (31) | (31) | (1) | — | (1) | |||||||||||||||||||||||||||||
| Amortization of prior service credit (b) | — | — | — | — | — | (1) | |||||||||||||||||||||||||||||
| Amortization of actuarial loss (c) | 15 | 19 | 16 | 2 | 2 | 2 | |||||||||||||||||||||||||||||
| Settlement losses (d) | 13 | — | — | — | — | — | |||||||||||||||||||||||||||||
| $16 | $7 | $8 | $4 | $5 | $5 | ||||||||||||||||||||||||||||||
| IPL | Defined Benefit Pension Plans | OPEB Plans | |||||||||||||||||||||
| 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
| Service cost | $6.0 | $7.4 | $7.3 | $1.3 | $1.7 | $2.1 | |||||||||||||||||
| Interest cost | 22.7 | 21.4 | 23.5 | 3.4 | 3.1 | 3.5 | |||||||||||||||||
| Expected return on plan assets (a) | (28.1 | ) | (32.6 | ) | (30.8 | ) | (3.6 | ) | (4.4 | ) | (4.3 | ) | |||||||||||
| Amortization of prior service credit (b) | (0.2 | ) | (0.2 | ) | (0.2 | ) | — | — | — | ||||||||||||||
| Amortization of actuarial loss (c) | 15.7 | 14.9 | 16.1 | 1.5 | 1.3 | 2.0 | |||||||||||||||||
| $16.1 | $10.9 | $15.9 | $2.6 | $1.7 | $3.3 | ||||||||||||||||||
(a)The expected return on plan assets is based on the expected rate of return on plan assets and the fair value approach to the market-related value of plan assets.
| WPL | Defined Benefit Pension Plans | OPEB Plans | |||||||||||||||||||||
| 2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
| Service cost | $3.5 | $4.4 | $4.9 | $1.3 | $1.6 | $1.9 | |||||||||||||||||
| Interest cost | 21.5 | 20.2 | 21.8 | 3.3 | 3.1 | 3.4 | |||||||||||||||||
| Expected return on plan assets (a) | (26.2 | ) | (30.4 | ) | (28.5 | ) | (0.6 | ) | (0.6 | ) | (0.8 | ) | |||||||||||
| Amortization of prior service cost (credit) (b) | (0.2 | ) | (0.1 | ) | 0.1 | (0.2 | ) | (0.2 | ) | (0.2 | ) | ||||||||||||
| Amortization of actuarial loss (c) | 17.6 | 17.2 | 18.5 | 1.6 | 2.0 | 1.6 | |||||||||||||||||
| $16.2 | $11.3 | $16.8 | $5.4 | $5.9 | $5.9 | ||||||||||||||||||
(c)Unrecognized net actuarial gains or losses in excess of 10% of the greater of the plans’ benefit obligations or assets are amortized over the average future service lives of plan participants, except for the Alliant Energy Cash Balance Pension Plan where gains or losses outside the 10% threshold are amortized over the time period the participants are expected to receive benefits.
(d)Settlement losses related to payments made to retired executives of Alliant Energy and lump sum payments related to IPL’s and WPL’s qualified defined benefit pension plans. In 2022, the majority of Alliant Energy’s, IPL’s, and WPL’s pension settlement losses were recognized as regulatory assets in accordance with regulatory treatment, and $7 million was included in “Other (income) and deductions” in Alliant Energy’s and IPL’s income statements related to IPL’s qualified defined benefit pension plan.
Benefit Plan Assets and Obligations - A reconciliation of the funded status of qualified and non-qualified defined benefit pension and OPEB plans to the amounts recognized on the balance sheets at December 31 was as follows (in millions):
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||
| Alliant Energy | 2019 | 2018 | 2019 | 2018 | |||||||||||
| Change in benefit obligation: | |||||||||||||||
| Net benefit obligation at January 1 | $1,175.0 | $1,303.1 | $206.1 | $222.3 | |||||||||||
| Service cost | 9.7 | 12.1 | 3.3 | 4.2 | |||||||||||
| Interest cost | 49.8 | 46.8 | 8.5 | 7.7 | |||||||||||
| Plan participants’ contributions | — | — | 3.4 | 3.1 | |||||||||||
| Actuarial (gain) loss | 124.6 | (96.2 | ) | 13.6 | (8.2 | ) | |||||||||
| Gross benefits paid | (79.4 | ) | (90.8 | ) | (21.3 | ) | (23.0 | ) | |||||||
| Net benefit obligation at December 31 | 1,279.7 | 1,175.0 | 213.6 | 206.1 | |||||||||||
| Change in plan assets: | |||||||||||||||
| Fair value of plan assets at January 1 | 808.6 | 950.7 | 99.1 | 111.1 | |||||||||||
| Actual return on plan assets | 168.1 | (57.8 | ) | 14.6 | (2.6 | ) | |||||||||
| Employer contributions | 33.1 | 6.5 | 9.1 | 10.5 | |||||||||||
| Plan participants’ contributions | — | — | 3.4 | 3.1 | |||||||||||
| Gross benefits paid | (79.4 | ) | (90.8 | ) | (21.3 | ) | (23.0 | ) | |||||||
| Fair value of plan assets at December 31 | 930.4 | 808.6 | 104.9 | 99.1 | |||||||||||
| Under funded status at December 31 | ($349.3 | ) | ($366.4 | ) | ($108.7 | ) | ($107.0 | ) | |||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||||||||||
| Alliant Energy | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Change in benefit obligation: | |||||||||||||||||||||||
| Net benefit obligation at January 1 | $1,251 | $1,351 | $210 | $227 | |||||||||||||||||||
| Service cost | 9 | 11 | 3 | 4 | |||||||||||||||||||
| Interest cost | 36 | 34 | 6 | 5 | |||||||||||||||||||
| Plan participants’ contributions | — | — | 4 | 5 | |||||||||||||||||||
| Actuarial gain | (269) | (46) | (37) | (12) | |||||||||||||||||||
| Gross benefits paid | (152) | (99) | (18) | (19) | |||||||||||||||||||
| Net benefit obligation at December 31 | 875 | 1,251 | 168 | 210 | |||||||||||||||||||
| Change in plan assets: | |||||||||||||||||||||||
| Fair value of plan assets at January 1 | 1,011 | 984 | 106 | 108 | |||||||||||||||||||
| Actual return on plan assets | (204) | 87 | (17) | 4 | |||||||||||||||||||
| Employer contributions | 51 | 39 | 8 | 8 | |||||||||||||||||||
| Plan participants’ contributions | — | — | 4 | 5 | |||||||||||||||||||
| Gross benefits paid | (152) | (99) | (18) | (19) | |||||||||||||||||||
| Fair value of plan assets at December 31 | 706 | 1,011 | 83 | 106 | |||||||||||||||||||
| Under funded status at December 31 | ($169) | ($240) | ($85) | ($104) | |||||||||||||||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||
| Alliant Energy | 2019 | 2018 | 2019 | 2018 | |||||||||||
| Amounts recognized on the balance sheets consist of: | |||||||||||||||
| Non-current assets | $— | $— | $9.8 | $7.5 | |||||||||||
| Current liabilities | (14.3 | ) | (2.3 | ) | (8.1 | ) | (9.6 | ) | |||||||
| Pension and other benefit obligations | (335.0 | ) | (364.1 | ) | (110.4 | ) | (104.9 | ) | |||||||
| Net amounts recognized at December 31 | ($349.3 | ) | ($366.4 | ) | ($108.7 | ) | ($107.0 | ) | |||||||
| Amounts recognized in Regulatory Assets consist of: | |||||||||||||||
| Net actuarial loss | $485.3 | $505.2 | $45.2 | $44.5 | |||||||||||
| Prior service credit | (5.1 | ) | (5.8 | ) | (0.9 | ) | (1.1 | ) | |||||||
| $480.2 | $499.4 | $44.3 | $43.4 | ||||||||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||
| IPL | 2019 | 2018 | 2019 | 2018 | |||||||||||
| Change in benefit obligation: | |||||||||||||||
| Net benefit obligation at January 1 | $533.9 | $592.9 | $82.5 | $89.4 | |||||||||||
| Service cost | 6.0 | 7.4 | 1.3 | 1.7 | |||||||||||
| Interest cost | 22.7 | 21.4 | 3.4 | 3.1 | |||||||||||
| Plan participants’ contributions | — | — | 1.3 | 1.0 | |||||||||||
| Actuarial (gain) loss | 55.9 | (44.4 | ) | 5.7 | (4.3 | ) | |||||||||
| Gross benefits paid | (37.3 | ) | (43.4 | ) | (8.5 | ) | (8.4 | ) | |||||||
| Net benefit obligation at December 31 | 581.2 | 533.9 | 85.7 | 82.5 | |||||||||||
| Change in plan assets: | |||||||||||||||
| Fair value of plan assets at January 1 | 377.8 | 443.7 | 66.7 | 72.9 | |||||||||||
| Actual return on plan assets | 78.9 | (26.8 | ) | 10.1 | (1.4 | ) | |||||||||
| Employer contributions | 16.6 | 4.3 | 2.3 | 2.6 | |||||||||||
| Plan participants’ contributions | — | — | 1.3 | 1.0 | |||||||||||
| Gross benefits paid | (37.3 | ) | (43.4 | ) | (8.5 | ) | (8.4 | ) | |||||||
| Fair value of plan assets at December 31 | 436.0 | 377.8 | 71.9 | 66.7 | |||||||||||
| Under funded status at December 31 | ($145.2 | ) | ($156.1 | ) | ($13.8 | ) | ($15.8 | ) | |||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||||||||||
| Alliant Energy | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Amounts recognized on the balance sheets consist of: | |||||||||||||||||||||||
| Non-current assets | $— | $— | $9 | $13 | |||||||||||||||||||
| Current liabilities | (2) | (2) | (8) | (8) | |||||||||||||||||||
| Pension and other benefit obligations | (167) | (238) | (86) | (109) | |||||||||||||||||||
| Net amounts recognized at December 31 | ($169) | ($240) | ($85) | ($104) | |||||||||||||||||||
| Amounts recognized in Regulatory Assets consist of: | |||||||||||||||||||||||
| Net actuarial loss | $376 | $429 | $20 | $38 | |||||||||||||||||||
| Prior service credit | (3) | (4) | — | (1) | |||||||||||||||||||
| $373 | $425 | $20 | $37 | ||||||||||||||||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||||||||||
| IPL | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Change in benefit obligation: | |||||||||||||||||||||||
| Net benefit obligation at January 1 | $567 | $615 | $84 | $91 | |||||||||||||||||||
| Service cost | 6 | 7 | 1 | 1 | |||||||||||||||||||
| Interest cost | 16 | 16 | 2 | 2 | |||||||||||||||||||
| Plan participants’ contributions | — | — | 2 | 2 | |||||||||||||||||||
| Actuarial gain | (123) | (23) | (14) | (4) | |||||||||||||||||||
| Gross benefits paid | (77) | (48) | (7) | (8) | |||||||||||||||||||
| Net benefit obligation at December 31 | 389 | 567 | 68 | 84 | |||||||||||||||||||
| Change in plan assets: | |||||||||||||||||||||||
| Fair value of plan assets at January 1 | 462 | 453 | 74 | 74 | |||||||||||||||||||
| Actual return on plan assets | (92) | 40 | (12) | 4 | |||||||||||||||||||
| Employer contributions | 51 | 17 | 1 | 2 | |||||||||||||||||||
| Plan participants’ contributions | — | — | 2 | 2 | |||||||||||||||||||
| Gross benefits paid | (77) | (48) | (7) | (8) | |||||||||||||||||||
| Fair value of plan assets at December 31 | 344 | 462 | 58 | 74 | |||||||||||||||||||
| Under funded status at December 31 | ($45) | ($105) | ($10) | ($10) | |||||||||||||||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||||||||||
| IPL | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Amounts recognized on the balance sheets consist of: | |||||||||||||||||||||||
| Non-current assets | $— | $— | $6 | $10 | |||||||||||||||||||
| Current liabilities | — | — | (2) | (2) | |||||||||||||||||||
| Pension and other benefit obligations | (45) | (105) | (14) | (18) | |||||||||||||||||||
| Net amounts recognized at December 31 | ($45) | ($105) | ($10) | ($10) | |||||||||||||||||||
| Amounts recognized in Regulatory Assets consist of: | |||||||||||||||||||||||
| Net actuarial loss | $154 | $180 | $14 | $13 | |||||||||||||||||||
| Prior service credit | (1) | (1) | — | — | |||||||||||||||||||
| $153 | $179 | $14 | $13 | ||||||||||||||||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||||||||||
| WPL | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Change in benefit obligation: | |||||||||||||||||||||||
| Net benefit obligation at January 1 | $546 | $588 | $81 | $89 | |||||||||||||||||||
| Service cost | 3 | 4 | 1 | 1 | |||||||||||||||||||
| Interest cost | 16 | 15 | 2 | 2 | |||||||||||||||||||
| Plan participants’ contributions | — | — | 2 | 2 | |||||||||||||||||||
| Actuarial gain | (117) | (18) | (13) | (5) | |||||||||||||||||||
| Gross benefits paid | (67) | (43) | (8) | (8) | |||||||||||||||||||
| Net benefit obligation at December 31 | 381 | 546 | 65 | 81 | |||||||||||||||||||
| Change in plan assets: | |||||||||||||||||||||||
| Fair value of plan assets at January 1 | 450 | 436 | 17 | 18 | |||||||||||||||||||
| Actual return on plan assets | (92) | 39 | (2) | — | |||||||||||||||||||
| Employer contributions | — | 18 | 5 | 5 | |||||||||||||||||||
| Plan participants’ contributions | — | — | 2 | 2 | |||||||||||||||||||
| Gross benefits paid | (67) | (43) | (8) | (8) | |||||||||||||||||||
| Fair value of plan assets at December 31 | 291 | 450 | 14 | 17 | |||||||||||||||||||
| Under funded status at December 31 | ($90) | ($96) | ($51) | ($64) | |||||||||||||||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||
| IPL | 2019 | 2018 | 2019 | 2018 | |||||||||||
| Amounts recognized on the balance sheets consist of: | |||||||||||||||
| Non-current assets | $— | $— | $6.6 | $4.7 | |||||||||||
| Current liabilities | (0.5 | ) | (0.6 | ) | (1.8 | ) | (1.9 | ) | |||||||
| Pension and other benefit obligations | (144.7 | ) | (155.5 | ) | (18.6 | ) | (18.6 | ) | |||||||
| Net amounts recognized at December 31 | ($145.2 | ) | ($156.1 | ) | ($13.8 | ) | ($15.8 | ) | |||||||
| Amounts recognized in Regulatory Assets consist of: | |||||||||||||||
| Net actuarial loss | $208.2 | $218.8 | $16.6 | $18.8 | |||||||||||
| Prior service credit | (1.7 | ) | (1.8 | ) | — | — | |||||||||
| $206.5 | $217.0 | $16.6 | $18.8 | ||||||||||||
| 82 | ||||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||||||||||
| WPL | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Amounts recognized on the balance sheets consist of: | |||||||||||||||||||||||
| Non-current assets | $— | $— | $3 | $3 | |||||||||||||||||||
| Current liabilities | — | — | (5) | (6) | |||||||||||||||||||
| Pension and other benefit obligations | (90) | (96) | (49) | (61) | |||||||||||||||||||
| Net amounts recognized at December 31 | ($90) | ($96) | ($51) | ($64) | |||||||||||||||||||
| Amounts recognized in Regulatory Assets consist of: | |||||||||||||||||||||||
| Net actuarial loss | $165 | $188 | $6 | $18 | |||||||||||||||||||
| Prior service credit | — | (1) | — | (1) | |||||||||||||||||||
| $165 | $187 | $6 | $17 | ||||||||||||||||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||
| WPL | 2019 | 2018 | 2019 | 2018 | |||||||||||
| Change in benefit obligation: | |||||||||||||||
| Net benefit obligation at January 1 | $506.6 | $559.8 | $83.2 | $90.4 | |||||||||||
| Service cost | 3.5 | 4.4 | 1.3 | 1.6 | |||||||||||
| Interest cost | 21.5 | 20.2 | 3.3 | 3.1 | |||||||||||
| Plan participants’ contributions | — | — | 1.5 | 1.4 | |||||||||||
| Actuarial (gain) loss | 53.8 | (40.0 | ) | 5.0 | (2.5 | ) | |||||||||
| Gross benefits paid | (35.3 | ) | (37.8 | ) | (9.0 | ) | (10.8 | ) | |||||||
| Net benefit obligation at December 31 | 550.1 | 506.6 | 85.3 | 83.2 | |||||||||||
| Change in plan assets: | |||||||||||||||
| Fair value of plan assets at January 1 | 352.2 | 415.0 | 16.7 | 18.7 | |||||||||||
| Actual return on plan assets | 73.4 | (25.1 | ) | 1.7 | (0.1 | ) | |||||||||
| Employer contributions | 15.7 | 0.1 | 6.2 | 7.5 | |||||||||||
| Plan participants’ contributions | — | — | 1.5 | 1.4 | |||||||||||
| Gross benefits paid | (35.3 | ) | (37.8 | ) | (9.0 | ) | (10.8 | ) | |||||||
| Fair value of plan assets at December 31 | 406.0 | 352.2 | 17.1 | 16.7 | |||||||||||
| Under funded status at December 31 | ($144.1 | ) | ($154.4 | ) | ($68.2 | ) | ($66.5 | ) | |||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||
| WPL | 2019 | 2018 | 2019 | 2018 | |||||||||||
| Amounts recognized on the balance sheets consist of: | |||||||||||||||
| Non-current assets | $— | $— | $3.2 | $2.8 | |||||||||||
| Current liabilities | (0.1 | ) | (0.1 | ) | (6.0 | ) | (7.4 | ) | |||||||
| Pension and other benefit obligations | (144.0 | ) | (154.3 | ) | (65.4 | ) | (61.9 | ) | |||||||
| Net amounts recognized at December 31 | ($144.1 | ) | ($154.4 | ) | ($68.2 | ) | ($66.5 | ) | |||||||
| Amounts recognized in Regulatory Assets consist of: | |||||||||||||||
| Net actuarial loss | $212.0 | $223.0 | $22.2 | $19.9 | |||||||||||
| Prior service credit | (1.2 | ) | (1.3 | ) | (0.9 | ) | (1.1 | ) | |||||||
| $210.8 | $221.7 | $21.3 | $18.8 | ||||||||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||||||||||
| Alliant Energy | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Accumulated benefit obligations | $857 | $1,214 | $168 | $210 | |||||||||||||||||||
| Plans with accumulated benefit obligations in excess of plan assets: | |||||||||||||||||||||||
| Accumulated benefit obligations | 857 | 1,214 | 168 | 210 | |||||||||||||||||||
| Fair value of plan assets | 706 | 1,011 | 83 | 106 | |||||||||||||||||||
| Plans with projected benefit obligations in excess of plan assets: | |||||||||||||||||||||||
| Projected benefit obligations | 875 | 1,251 | N/A | N/A | |||||||||||||||||||
| Fair value of plan assets | 706 | 1,011 | N/A | N/A | |||||||||||||||||||
| Defined Benefit Pension Plans | OPEB Plans | |||||||||||||||||||||||||||||||||||||
| Defined Benefit Pension Plans | OPEB Plans | |||||||||||||||||||||||||||||||||||||
| Alliant Energy | 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||||||||||||||||
| IPL | IPL | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||
| Accumulated benefit obligations | $1,234.4 | $1,139.9 | $213.6 | $206.1 | Accumulated benefit obligations | $379 | $546 | $68 | $84 | |||||||||||||||||||||||||||||
| Plans with accumulated benefit obligations in excess of plan assets: | Plans with accumulated benefit obligations in excess of plan assets: | |||||||||||||||||||||||||||||||||||||
| Accumulated benefit obligations | 1,234.4 | 1,139.9 | 213.6 | 206.1 | Accumulated benefit obligations | 379 | 546 | 68 | 84 | |||||||||||||||||||||||||||||
| Fair value of plan assets | 930.4 | 808.6 | 104.9 | 99.1 | Fair value of plan assets | 344 | 462 | 58 | 74 | |||||||||||||||||||||||||||||
| Plans with projected benefit obligations in excess of plan assets: | Plans with projected benefit obligations in excess of plan assets: | |||||||||||||||||||||||||||||||||||||
| Projected benefit obligations | 1,279.7 | 1,175.0 | N/A | N/A | Projected benefit obligations | 389 | 567 | N/A | N/A | |||||||||||||||||||||||||||||
| Fair value of plan assets | 930.4 | 808.6 | N/A | N/A | Fair value of plan assets | 344 | 462 | N/A | N/A | |||||||||||||||||||||||||||||