UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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x☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 20162017
or
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¨☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
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Commission File Number | | Name of Registrant, State of Incorporation, Address of Principal Executive Offices and Telephone Number | | IRS Employer Identification Number |
1-9894 | | ALLIANT ENERGY CORPORATION | | 39-1380265 |
| | (a Wisconsin corporation) | | |
| | 4902 N. Biltmore Lane | | |
| | Madison, Wisconsin 53718 | | |
| | Telephone (608) 458-3311 | | |
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1-4117 | | INTERSTATE POWER AND LIGHT COMPANY | | 42-0331370 |
| | (an Iowa corporation) | | |
| | Alliant Energy Tower | | |
| | Cedar Rapids, Iowa 52401 | | |
| | Telephone (319) 786-4411 | | |
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0-337 | | WISCONSIN POWER AND LIGHT COMPANY | | 39-0714890 |
| | (a Wisconsin corporation) | | |
| | 4902 N. Biltmore Lane | | |
| | Madison, Wisconsin 53718 | | |
| | Telephone (608) 458-3311 | | |
This combined Form 10-Q is separately filed by Alliant Energy Corporation, Interstate Power and Light Company and Wisconsin Power and Light Company. Information contained in the Form 10-Q relating to Interstate Power and Light Company and Wisconsin Power and Light Company is filed by each such registrant on its own behalf. Each of Interstate Power and Light Company and Wisconsin Power and Light Company makes no representation as to information relating to registrants other than itself.
Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes x☒ No ¨☐
Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files). Yes x☒ No ¨☐
Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers, or smaller reporting companies, or emerging growth companies. See the definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.
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| Large Accelerated Filer | | Accelerated Filer | | Non-accelerated Filer | | Smaller Reporting Company Filer | | Emerging Growth Company |
Alliant Energy Corporation | x☒ | | | | | | | | |
Interstate Power and Light Company | | | | | x☒ | | | | |
Wisconsin Power and Light Company | | | | | x☒ | | | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act). Yes ¨☐ No x☒
Number of shares outstanding of each class of common stock as of March 31, 20162017:
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Alliant Energy Corporation | Common stock, $0.01 par value, 113,562,651227,823,278 shares outstanding |
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Interstate Power and Light Company | Common stock, $2.50 par value, 13,370,788 shares outstanding (all of which are owned beneficially and of record by Alliant Energy Corporation) |
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Wisconsin Power and Light Company | Common stock, $5 par value, 13,236,601 shares outstanding (all of which are owned beneficially and of record by Alliant Energy Corporation) |
TABLE OF CONTENTS
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DEFINITIONS
The following abbreviations or acronyms used in this Form 10-Q are defined below:
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Abbreviation or Acronym | Definition | Abbreviation or Acronym | Definition |
20152016 Form 10-K | | Combined Annual Report on Form 10-K filed by Alliant Energy, IPL and WPL for the year ended Dec. 31, 20152016 | ITC | ITC Midwest LLC |
AEF | Alliant Energy Finance, LLC | IUB | Iowa Utilities Board |
AFUDC | | Allowance for funds used during construction |
Alliant Energy | | Alliant Energy Corporation |
AROs | | Asset retirement obligations |
ATC | | American Transmission Company LLC |
CAA | | Clean Air Act |
CCR | | Coal Combustion Residuals |
CEO | | Chief Executive Officer |
CFO | | Chief Financial Officer |
Columbia | | Columbia Energy Center |
Corporate Services | | Alliant Energy Corporate Services, Inc. |
CRANDIC | | Cedar Rapids and Iowa City Railway Company |
DAEC | | Duane Arnold Energy Center |
Dth | | Dekatherm |
Edgewater | | Edgewater Generating Station |
EGU | | Electric generating unit |
EPA | | U.S. Environmental Protection Agency |
EPS | | Earnings per weighted average common share |
FERC | | Federal Energy Regulatory Commission |
Financial Statements | | Condensed Consolidated Financial Statements |
FTR | | Financial transmission right |
Fuel-related | | Electric production fuel and energy purchases |
GAAP | | U.S. generally accepted accounting principles |
HDD | | Heating degree days |
IPL | | Interstate Power and Light Company |
ITC | | ITC Midwest LLC |
IUB | | Iowa Utilities Board |
Marshalltown | | Marshalltown Generating Station |
MDAAlliant Energy | Alliant Energy Corporation | MDA | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
MGPATC | American Transmission Company | Manufactured gas plant |
MISO | | Midcontinent Independent System Operator, Inc. |
MWATI | AE Transco Investments, LLC | MW | Megawatt |
MWhCAA | Clean Air Act | MWh | Megawatt-hour |
Corporate Services | Alliant Energy Corporate Services, Inc. | N/A | | Not applicable |
NAAQSDth | Dekatherm | National Ambient Air Quality Standards |
Nelson Dewey | | Nelson Dewey Generating Station |
Note(s) | | Combined Notes to Condensed Consolidated Financial Statements |
NOxEGU | Electric generating unit | NOx | Nitrogen oxide |
OPEBEPA | U.S. Environmental Protection Agency | OPEB | Other postretirement benefits |
PSCWEPS | Earnings per weighted average common share | PSCW | Public Service Commission of Wisconsin |
Receivables AgreementFERC | Federal Energy Regulatory Commission | Receivables Purchase and Sale Agreement |
Resources | | Alliant Energy Resources, LLC |
Riverside | | Riverside Energy Center |
RMTFinancial Statements | Condensed Consolidated Financial Statements | RMT | RMT, Inc. |
SCRFTR | Financial transmission right | SCR | Selective catalytic reduction |
SO2Fuel-related | Electric production fuel and purchased power | SO2 | Sulfur dioxide |
U.S.GAAP | U.S. generally accepted accounting principles | U.S. | United States of America |
HDD | Heating degree days | Whiting Petroleum | | Whiting Petroleum Corporation |
WPLIPL | Interstate Power and Light Company | WPL | Wisconsin Power and Light Company |
FORWARD-LOOKING STATEMENTS
Statements contained in this report that are not of historical fact are forward-looking statements intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified as such because the statements include words such as “may,” “believe,” “expect,” “anticipate,” “plan,” “project,” “will,” “projections,” “estimate,” or other words of similar import. Similarly, statements that describe future financial performance or plans or strategies are forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in, or implied by, such statements. Some, but not all, of the risks and uncertainties of Alliant Energy, IPL and WPL that could materially affect actual results include:
federal and state regulatory or governmental actions, including the impact of energy, tax (including potential tax reform), financial and health care legislation, and of regulatory agency orders;
IPL’s and WPL’s ability to obtain adequate and timely rate relief to allow for, among other things, the recovery of fuel costs, operating costs, transmission costs, environmental compliance and remediation costs, deferred expenditures, capital expenditures, and remaining costs related to EGUs that may be permanently closed, earning their authorized rates of return, and the payments to their parent of expected levels of dividends;
the ability to continue cost controls and operational efficiencies;
the impact of IPL’s pending retail electric base rate freeze in Iowa during 2016;
the impact of WPL’s retail electric and gas base rate freeze in Wisconsin during 2016;review;
weather effects on results of utility operations, including impacts of temperature changes in IPL’s and WPL’s service territories on customers’ demand for electricity and gas;operations;
the impact of the economy in IPL’s and WPL’s service territories and the resulting impacts on sales volumes, margins and the ability to collect unpaid bills;
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 customer- and third party-owned generation and customer disconnects on sales volumes and margins;
the impact that price changes may have on IPL’s and WPL’s customers’ demand for electric, gas and steam services and their ability to pay their bills;
developments that adversely impact the ability to implement the strategic plan, including unanticipated issues withplan;
the ability to qualify for the full level of production tax credits on planned and potential new environmental control equipment for various fossil-fueled EGUs of IPL and WPL, IPL’s construction of Marshalltown, WPL’s Riverside expansion, various replacements, modernization and expansion of IPL’s and WPL’s electric and gas distribution systems, Resources’ electricity output and selling price of such output from its Franklin County wind farm,farms and the potential decommissioningimpact of certain EGUs of IPL and WPL;changes to production tax credits for existing wind farms;
issues related to the availability and operations of EGUs, including start-up risks, breakdown or failure of equipment, performance below expected or contracted levels of output or efficiency, operator error, employee safety, transmission
constraints, compliance with mandatory reliability standards and risks related to recovery of resulting incremental costs through rates;
disruptions in the supply and delivery of natural gas, purchased electricity and coal, including due to the bankruptcy of coal mining companies;coal;
changes in the price of delivered coal, natural gas, and purchased electricity and coal due to shifts in supply and demand caused by market conditions and regulations, and the ability to recover and to retain the recovery of related changes in purchased power, fuel and fuel-related costs through rates in a timely manner;regulations;
impacts on equity income from unconsolidated investments due to further potential changes to ATC’sATC, LLC’s authorized return on equity;
issues associated with environmental remediation and environmental compliance, including compliance with the Consent Decree between WPL, the EPA and the Sierra Club, the Consent Decree between IPL, the EPA, the Sierra Club, the State of Iowa and Linn County in Iowa, the CCRCoal Combustion Residuals Rule, the Clean Power Plan, future changes in environmental laws and regulations, including the EPA’s regulations for carbon dioxide emissions reductions from new and existing fossil-fueled EGUs, and litigation associated with environmental requirements;
the ability to defend against environmental claims brought by state and federal agencies, such as the EPA, state natural resources agencies or third parties, such as the Sierra Club, and the impact on operating expenses of defending and resolving such claims;
the ability to recover through rates all environmental compliance and remediation costs, including costs for projects put on hold due to uncertainty of future environmental laws and regulations;
impacts that storms or natural disasters in IPL’s and WPL’s service territories may have on their operations and recovery of and rate relief for, costs associated with restoration activities;
the direct or indirect effects resulting from terrorist incidents, including physical attacks and cyber attacks, or responses to such incidents;
the impact of penalties or third-party claims related to, or in connection with, a failure to maintain the security of personally identifiable information, including associated costs to notify affected persons and to mitigate their information security concerns;
the direct or indirect effects resulting from breakdown or failure of equipment in the operation of gas distribution systems, such as leaks, explosions and mechanical problems, and compliance with gas transmission and distribution safety regulations, such as proposed rules recently issued by the Pipeline and Hazardous Materials Safety Administration;
risks associated with integration of a new customer billing and information system, which was completed in the first quarter of 2016;
impacts of IPL’s future tax benefits from Iowa rate-making practices, including deductions for repairs expenditures and allocation of mixed service costs, and recoverability of the associated regulatory assets from customers, when the differences reverse in future periods;
any material post-closing adjustments related to any past asset divestitures, including the sales of IPL’s Minnesota electric and natural gas assets, RMT and Whiting Petroleum, which could result from, among other things, warranties, parental guarantees or litigation;
continued access to the capital markets on competitive terms and rates, and the actions of credit rating agencies;
inflation and interest rates;
changes to the creditworthiness of counterparties with which Alliant Energy, IPL and WPL have contractual arrangements, including participants in the energy markets and fuel suppliers and transporters;
issues related to electric transmission, including operating in Regional Transmission Organization energy and ancillary services markets, the impacts of potential future billing adjustments and cost allocation changes from Regional Transmission Organizations and recovery of costs incurred;
current or future litigation, regulatory investigations, proceedings or inquiries;
reputational damage from negative publicity, protests, fines, penalties and other negative consequences resulting in regulatory and/or legal actions;
Alliant Energy’s ability to sustain its dividend payout ratio goal;
employee workforce factors, including changes in key executives, collective bargaining agreements and negotiations, work stoppages or restructurings;
inability to access technological developments, including those related to wind turbines, solar generation, smart technology, energy storage and other future technologies;
changes in technology that alter the channels through which electric customers buy or utilize power;
impacts of ATC’s potential restructuring;electricity;
material changes in retirementemployee-related benefit and benefit plancompensation costs;
the impact of performance-based compensation plans accruals;
the effect of accounting standards issued periodically by standard-setting bodies, including revenue recognition and lease standards;
the impact of changes to production tax credits for wind farms;bodies;
the impact of adjustments made to deferred tax assets and liabilities from state apportionment assumptions;
the ability to utilize tax credits and net operating losses generated to date, and those that may be generated in the future, before they expire;
impacts of the extension of bonus depreciation deductions;
the ability to successfully complete tax audits and changes in tax accounting methods with no material impact on earnings and cash flows; and
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• | factors listed in MDA and Risk Factors in Item 1A in the 20152016 Form 10-K. |
Alliant Energy, IPL and WPL each assume no obligation, and disclaim any duty, to update the forward-looking statements in this report, except as required by law.
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| | | For the Three Months | For the Three Months |
| Ended March 31, | Ended March 31, |
| 2016 | | 2015 | 2017 | | 2016 |
| (in millions, except per share amounts) | (in millions, except per share amounts) |
Operating revenues: | | | | | | |
Electric utility |
| $668.9 |
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| $671.3 |
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| $677.6 |
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| $668.9 |
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Gas utility | 152.2 |
| | 198.4 |
| 154.3 |
| | 152.2 |
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Other utility | 13.2 |
| | 16.4 |
| 11.7 |
| | 13.2 |
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Non-regulated | 9.5 |
| | 11.3 |
| 10.3 |
| | 9.5 |
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Total operating revenues | 843.8 |
| | 897.4 |
| 853.9 |
| | 843.8 |
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Operating expenses: | | | | | | |
Electric production fuel and purchased power | 200.9 |
| | 215.9 |
| 207.8 |
| | 200.9 |
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Electric transmission service | 127.9 |
| | 123.2 |
| 124.7 |
| | 127.9 |
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Cost of gas sold | 95.2 |
| | 130.8 |
| 92.2 |
| | 95.2 |
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Other operation and maintenance | 145.1 |
| | 147.9 |
| 152.9 |
| | 145.1 |
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Depreciation and amortization | 102.5 |
| | 100.2 |
| 107.0 |
| | 102.5 |
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Taxes other than income taxes | 26.3 |
| | 26.5 |
| 26.4 |
| | 26.3 |
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Total operating expenses | 697.9 |
| | 744.5 |
| 711.0 |
| | 697.9 |
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Operating income | 145.9 |
| | 152.9 |
| 142.9 |
| | 145.9 |
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Interest expense and other: | | | | | | |
Interest expense | 48.0 |
| | 46.6 |
| 52.3 |
| | 48.0 |
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Equity income from unconsolidated investments, net | (10.5 | ) | | (6.5 | ) | (11.5 | ) | | (10.5 | ) |
Allowance for funds used during construction | (13.2 | ) | | (6.8 | ) | (17.0 | ) | | (13.2 | ) |
Interest income and other | (0.2 | ) | | (0.1 | ) | (0.1 | ) | | (0.2 | ) |
Total interest expense and other | 24.1 |
| | 33.2 |
| 23.7 |
| | 24.1 |
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Income from continuing operations before income taxes | 121.8 |
| | 119.7 |
| 119.2 |
| | 121.8 |
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Income taxes | 21.6 |
| | 20.5 |
| 17.6 |
| | 21.6 |
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Income from continuing operations, net of tax | 100.2 |
| | 99.2 |
| 101.6 |
| | 100.2 |
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Loss from discontinued operations, net of tax | (1.1 | ) | | — |
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Income (loss) from discontinued operations, net of tax | | 1.4 |
| | (1.1 | ) |
Net income | 99.1 |
| | 99.2 |
| 103.0 |
| | 99.1 |
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Preferred dividend requirements of Interstate Power and Light Company | 2.6 |
| | 2.6 |
| 2.6 |
| | 2.6 |
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Net income attributable to Alliant Energy common shareowners |
| $96.5 |
| |
| $96.6 |
|
| $100.4 |
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| $96.5 |
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Weighted average number of common shares outstanding (basic and diluted) (a) | 113.4 |
| | 111.1 |
| 227.6 |
| | 226.8 |
|
Earnings per weighted average common share attributable to Alliant Energy common shareowners (basic and diluted) (a): | | | | | | |
Income from continuing operations, net of tax |
| $0.86 |
| |
| $0.87 |
|
| $0.43 |
| |
| $0.43 |
|
Loss from discontinued operations, net of tax | (0.01 | ) | | — |
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Income from discontinued operations, net of tax | | 0.01 |
| | — |
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Net income |
| $0.85 |
| |
| $0.87 |
|
| $0.44 |
| |
| $0.43 |
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Amounts attributable to Alliant Energy common shareowners: | | | | | | |
Income from continuing operations, net of tax |
| $97.6 |
| |
| $96.6 |
|
| $99.0 |
| |
| $97.6 |
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Loss from discontinued operations, net of tax | (1.1 | ) | | — |
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Income (loss) from discontinued operations, net of tax | | 1.4 |
| | (1.1 | ) |
Net income |
| $96.5 |
| |
| $96.6 |
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| $100.4 |
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| $96.5 |
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Dividends declared per common share (a) |
| $0.5875 |
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| $0.55 |
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| $0.315 |
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| $0.29375 |
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(a) | Amounts do not reflect the effects of a two-for-one common stock split approved by Alliant Energy’s Board of Directors on April 20,distributed in May 2016. Refer to Note 6 for additional details. |
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
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| March 31, 2017 | | December 31, 2016 |
| (in millions, except per share and share amounts) |
ASSETS | | | |
Current assets: | | | |
Cash and cash equivalents |
| $8.4 |
| |
| $8.2 |
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Accounts receivable, less allowance for doubtful accounts | 424.9 |
| | 493.3 |
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Production fuel, at weighted average cost | 86.7 |
| | 98.1 |
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Gas stored underground, at weighted average cost | 12.2 |
| | 37.6 |
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Materials and supplies, at weighted average cost | 88.8 |
| | 86.6 |
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Regulatory assets | 58.4 |
| | 57.8 |
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Other | 70.4 |
| | 95.5 |
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Total current assets | 749.8 |
| | 877.1 |
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Property, plant and equipment, net | 10,448.8 |
| | 10,279.2 |
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Investments: | | | |
Investment in American Transmission Company LLC | 327.7 |
| | 317.6 |
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Other | 19.1 |
| | 20.0 |
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Total investments | 346.8 |
| | 337.6 |
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Other assets: | | | |
Regulatory assets | 1,904.6 |
| | 1,857.3 |
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Deferred charges and other | 14.9 |
| | 22.6 |
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Total other assets | 1,919.5 |
| | 1,879.9 |
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Total assets |
| $13,464.9 |
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| $13,373.8 |
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LIABILITIES AND EQUITY | | | |
Current liabilities: | | | |
Current maturities of long-term debt |
| $4.6 |
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| $4.6 |
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Commercial paper | 302.8 |
| | 244.1 |
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Accounts payable | 369.5 |
| | 445.3 |
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Regulatory liabilities | 215.2 |
| | 186.2 |
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Other | 272.9 |
| | 281.8 |
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Total current liabilities | 1,165.0 |
| | 1,162.0 |
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Long-term debt, net (excluding current portion) | 4,316.1 |
| | 4,315.6 |
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Other liabilities: | | | |
Deferred tax liabilities | 2,625.9 |
| | 2,570.2 |
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Regulatory liabilities | 481.4 |
| | 494.8 |
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Pension and other benefit obligations | 481.7 |
| | 489.9 |
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Other | 297.9 |
| | 279.3 |
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Total other liabilities | 3,886.9 |
| | 3,834.2 |
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Commitments and contingencies (Note 12) |
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Equity: | | | |
Alliant Energy Corporation common equity: | | | |
Common stock - $0.01 par value - 480,000,000 shares authorized; 227,823,278 and 227,673,654 shares outstanding | 2.3 |
| | 2.3 |
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Additional paid-in capital | 1,699.2 |
| | 1,693.1 |
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Retained earnings | 2,205.9 |
| | 2,177.0 |
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Accumulated other comprehensive loss | (0.4 | ) | | (0.4 | ) |
Shares in deferred compensation trust - 440,704 and 441,695 shares at a weighted average cost of $22.89 and $22.71 per share | (10.1 | ) | | (10.0 | ) |
Total Alliant Energy Corporation common equity | 3,896.9 |
| | 3,862.0 |
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Cumulative preferred stock of Interstate Power and Light Company | 200.0 |
| | 200.0 |
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Total equity | 4,096.9 |
| | 4,062.0 |
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Total liabilities and equity |
| $13,464.9 |
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| $13,373.8 |
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The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETSSTATEMENTS OF CASH FLOWS (UNAUDITED)
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| March 31, 2016 | | December 31, 2015 |
| (in millions, except per share and share amounts) |
ASSETS | | | |
Current assets: | | | |
Cash and cash equivalents |
| $4.8 |
| |
| $5.8 |
|
Accounts receivable, less allowance for doubtful accounts | 390.6 |
| | 397.6 |
|
Production fuel, at weighted average cost | 98.0 |
| | 98.8 |
|
Gas stored underground, at weighted average cost | 15.9 |
| | 43.3 |
|
Materials and supplies, at weighted average cost | 83.3 |
| | 81.4 |
|
Regulatory assets | 111.5 |
| | 120.2 |
|
Other | 64.4 |
| | 79.7 |
|
Total current assets | 768.5 |
| | 826.8 |
|
Property, plant and equipment, net | 9,626.6 |
| | 9,519.1 |
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Investments: | | | |
Investment in American Transmission Company LLC | 302.5 |
| | 293.3 |
|
Other | 21.0 |
| | 53.0 |
|
Total investments | 323.5 |
| | 346.3 |
|
Other assets: | | | |
Regulatory assets | 1,805.7 |
| | 1,788.4 |
|
Deferred charges and other | 10.7 |
| | 14.6 |
|
Total other assets | 1,816.4 |
| | 1,803.0 |
|
Total assets |
| $12,535.0 |
| |
| $12,495.2 |
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| | | | | | | |
| For the Three Months |
| Ended March 31, |
| 2017 | | 2016 |
| (in millions) |
Cash flows from operating activities: | | | |
Net income |
| $103.0 |
| |
| $99.1 |
|
Adjustments to reconcile net income to net cash flows from operating activities: | | | |
Depreciation and amortization | 107.0 |
| | 102.5 |
|
Deferred tax expense and tax credits | 22.7 |
| | 22.8 |
|
Other | (7.6 | ) | | (17.6 | ) |
Other changes in assets and liabilities: | | | |
Accounts receivable | 36.5 |
| | (47.8 | ) |
Sales of accounts receivable | 35.0 |
| | 57.0 |
|
Gas stored underground | 25.4 |
| | 27.4 |
|
Regulatory assets | (40.6 | ) | | (9.5 | ) |
Derivative assets | 28.1 |
| | 10.7 |
|
Accounts payable | (41.3 | ) | | (31.2 | ) |
Regulatory liabilities | 14.2 |
| | (28.7 | ) |
Deferred income taxes | 32.8 |
| | 20.3 |
|
Other | 18.5 |
| | 23.3 |
|
Net cash flows from operating activities | 333.7 |
| | 228.3 |
|
Cash flows used for investing activities: | | | |
Construction and acquisition expenditures: | | | |
Utility business | (276.4 | ) | | (220.4 | ) |
Alliant Energy Corporate Services, Inc. and non-regulated businesses | (15.1 | ) | | (18.8 | ) |
Other | (12.1 | ) | | 19.2 |
|
Net cash flows used for investing activities | (303.6 | ) | | (220.0 | ) |
Cash flows used for financing activities: | | | |
Common stock dividends | (71.5 | ) | | (66.5 | ) |
Net change in commercial paper | 58.7 |
| | 53.6 |
|
Other | (17.1 | ) | | 3.6 |
|
Net cash flows used for financing activities | (29.9 | ) | | (9.3 | ) |
Net increase (decrease) in cash and cash equivalents | 0.2 |
| | (1.0 | ) |
Cash and cash equivalents at beginning of period | 8.2 |
| | 5.8 |
|
Cash and cash equivalents at end of period |
| $8.4 |
| |
| $4.8 |
|
Supplemental cash flows information: | | | |
Cash paid during the period for: | | | |
Interest, net of capitalized interest |
| ($51.8 | ) | |
| ($44.5 | ) |
Income taxes, net |
| ($2.3 | ) | |
| $— |
|
Significant non-cash investing and financing activities: | | | |
Accrued capital expenditures |
| $139.3 |
| |
| $105.0 |
|
|
| | | | | | | |
LIABILITIES AND EQUITY | | | |
Current liabilities: | | | |
Current maturities of long-term debt |
| $313.4 |
| |
| $313.4 |
|
Commercial paper | 213.4 |
| | 159.8 |
|
Accounts payable | 323.8 |
| | 402.4 |
|
Regulatory liabilities | 193.1 |
| | 187.1 |
|
Other | 304.8 |
| | 296.6 |
|
Total current liabilities | 1,348.5 |
| | 1,359.3 |
|
Long-term debt, net (excluding current portion) | 3,522.7 |
| | 3,522.2 |
|
Other liabilities: | | | |
Deferred tax liabilities | 2,424.6 |
| | 2,381.2 |
|
Regulatory liabilities | 517.9 |
| | 550.6 |
|
Pension and other benefit obligations | 446.5 |
| | 451.8 |
|
Other | 310.2 |
| | 306.0 |
|
Total other liabilities | 3,699.2 |
| | 3,689.6 |
|
Commitments and contingencies (Note 13) |
|
| |
|
|
Equity: | | | |
Alliant Energy Corporation common equity: | | | |
Common stock - $0.01 par value - 240,000,000 shares authorized; 113,562,651 and 113,459,216 shares outstanding (a) | 1.1 |
| | 1.1 |
|
Additional paid-in capital | 1,673.7 |
| | 1,663.0 |
|
Retained earnings | 2,098.9 |
| | 2,068.9 |
|
Accumulated other comprehensive loss | (0.4 | ) | | (0.4 | ) |
Shares in deferred compensation trust - 214,881 and 215,093 shares at a weighted average cost of $40.36 and $39.69 per share (a) | (8.7 | ) | | (8.5 | ) |
Total Alliant Energy Corporation common equity | 3,764.6 |
| | 3,724.1 |
|
Cumulative preferred stock of Interstate Power and Light Company | 200.0 |
| | 200.0 |
|
Total equity | 3,964.6 |
| | 3,924.1 |
|
Total liabilities and equity |
| $12,535.0 |
| |
| $12,495.2 |
|
| |
(a) | Share and per share amounts do not reflect the effects of a two-for-one common stock split approved by Alliant Energy’s Board of Directors on April 20, 2016. Refer to Note 6 for additional details. |
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
| | | | | | | |
| For the Three Months |
| Ended March 31, |
| 2016 | | 2015 |
| (in millions) |
Cash flows from operating activities: | | | |
Net income |
| $99.1 |
| |
| $99.2 |
|
Adjustments to reconcile net income to net cash flows from operating activities: | | | |
Depreciation and amortization | 102.5 |
| | 100.2 |
|
Deferred tax expense and investment tax credits | 22.8 |
| | 29.7 |
|
Other | (17.6 | ) | | (0.1 | ) |
Other changes in assets and liabilities: | | | |
Accounts receivable | (47.8 | ) | | 6.6 |
|
Sales of accounts receivable | 57.0 |
| | 52.0 |
|
Gas stored underground | 27.4 |
| | 49.5 |
|
Accounts payable | (31.2 | ) | | (32.8 | ) |
Regulatory liabilities | (28.7 | ) | | (6.6 | ) |
Other | 44.8 |
| | 17.0 |
|
Net cash flows from operating activities | 228.3 |
| | 314.7 |
|
Cash flows used for investing activities: | | | |
Construction and acquisition expenditures: | | | |
Utility business | (220.4 | ) | | (226.0 | ) |
Alliant Energy Corporate Services, Inc. and non-regulated businesses | (18.8 | ) | | (19.8 | ) |
Other | 19.2 |
| | (5.1 | ) |
Net cash flows used for investing activities | (220.0 | ) | | (250.9 | ) |
Cash flows used for financing activities: | | | |
Common stock dividends | (66.5 | ) | | (60.7 | ) |
Proceeds from issuance of common stock, net | 6.2 |
| | 122.1 |
|
Net change in commercial paper | 53.6 |
| | (99.8 | ) |
Other | (2.6 | ) | | 15.3 |
|
Net cash flows used for financing activities | (9.3 | ) | | (23.1 | ) |
Net increase (decrease) in cash and cash equivalents | (1.0 | ) | | 40.7 |
|
Cash and cash equivalents at beginning of period | 5.8 |
| | 56.9 |
|
Cash and cash equivalents at end of period |
| $4.8 |
| |
| $97.6 |
|
Supplemental cash flows information: | | | |
Cash (paid) refunded during the period for: | | | |
Interest, net of capitalized interest |
| ($44.5 | ) | |
| ($40.2 | ) |
Income taxes, net |
| $— |
| |
| $0.1 |
|
Significant non-cash investing and financing activities: | | | |
Accrued capital expenditures |
| $105.0 |
| |
| $119.0 |
|
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
INTERSTATE POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| | | For the Three Months | For the Three Months |
| Ended March 31, | Ended March 31, |
| 2016 | | 2015 | 2017 | | 2016 |
| (in millions) | (in millions) |
Operating revenues: | | | | | | |
Electric utility |
| $361.6 |
| |
| $362.6 |
|
| $356.2 |
| |
| $361.6 |
|
Gas utility | 84.2 |
| | 111.2 |
| 83.1 |
| | 84.2 |
|
Steam and other | 12.9 |
| | 15.2 |
| 11.2 |
| | 12.9 |
|
Total operating revenues | 458.7 |
| | 489.0 |
| 450.5 |
| | 458.7 |
|
Operating expenses: | | | | | | |
Electric production fuel and purchased power | 99.4 |
| | 110.1 |
| 109.5 |
| | 99.4 |
|
Electric transmission service | 86.5 |
| | 83.9 |
| 81.7 |
| | 86.5 |
|
Cost of gas sold | 52.4 |
| | 71.0 |
| 47.8 |
| | 52.4 |
|
Other operation and maintenance | 92.0 |
| | 92.6 |
| 94.9 |
| | 92.0 |
|
Depreciation and amortization | 52.7 |
| | 51.8 |
| 53.6 |
| | 52.7 |
|
Taxes other than income taxes | 13.7 |
| | 14.1 |
| 13.4 |
| | 13.7 |
|
Total operating expenses | 396.7 |
| | 423.5 |
| 400.9 |
| | 396.7 |
|
Operating income | 62.0 |
| | 65.5 |
| 49.6 |
| | 62.0 |
|
Interest expense and other: | | | | | | |
Interest expense | 24.9 |
| | 24.1 |
| 27.7 |
| | 24.9 |
|
Allowance for funds used during construction | (10.3 | ) | | (5.3 | ) | (14.3 | ) | | (10.3 | ) |
Interest income and other | — |
| | (0.1 | ) | 0.1 |
| | — |
|
Total interest expense and other | 14.6 |
| | 18.7 |
| 13.5 |
| | 14.6 |
|
Income before income taxes | 47.4 |
| | 46.8 |
| 36.1 |
| | 47.4 |
|
Income tax benefit | (0.8 | ) | | (3.3 | ) | (3.7 | ) | | (0.8 | ) |
Net income | 48.2 |
| | 50.1 |
| 39.8 |
| | 48.2 |
|
Preferred dividend requirements | 2.6 |
| | 2.6 |
| 2.6 |
| | 2.6 |
|
Earnings available for common stock |
| $45.6 |
| |
| $47.5 |
|
| $37.2 |
| |
| $45.6 |
|
Earnings per share data is not disclosed given Alliant Energy Corporation is the sole shareowner of all shares of IPL’s common stock outstanding during the periods presented.
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
INTERSTATE POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| | | March 31, 2016 | | December 31, 2015 | March 31, 2017 | | December 31, 2016 |
| (in millions, except per share and share amounts) | (in millions, except per share and share amounts) |
ASSETS | | |
Current assets: | | | | | | |
Cash and cash equivalents |
| $3.0 |
| |
| $4.5 |
|
| $4.1 |
| |
| $3.3 |
|
Accounts receivable, less allowance for doubtful accounts | 180.9 |
| | 200.0 |
| 177.2 |
| | 240.7 |
|
Production fuel, at weighted average cost | 60.8 |
| | 60.2 |
| 64.1 |
| | 70.3 |
|
Gas stored underground, at weighted average cost | 3.1 |
| | 18.2 |
| 2.8 |
| | 16.3 |
|
Materials and supplies, at weighted average cost | 47.0 |
| | 45.7 |
| 48.8 |
| | 46.5 |
|
Regulatory assets | 29.7 |
| | 39.6 |
| 18.4 |
| | 17.7 |
|
Other | 13.8 |
| | 28.2 |
| 14.7 |
| | 27.7 |
|
Total current assets | 338.3 |
| | 396.4 |
| 330.1 |
| | 422.5 |
|
Property, plant and equipment, net | 4,993.8 |
| | 4,925.1 |
| 5,503.9 |
| | 5,435.6 |
|
Investments | 0.7 |
| | 19.6 |
| |
Other assets: | | | | | | |
Regulatory assets | 1,376.2 |
| | 1,363.0 |
| 1,482.4 |
| | 1,441.1 |
|
Deferred charges and other | 4.4 |
| | 5.0 |
| 6.6 |
| | 5.5 |
|
Total other assets | 1,380.6 |
| | 1,368.0 |
| 1,489.0 |
| | 1,446.6 |
|
Total assets |
| $6,713.4 |
| |
| $6,709.1 |
|
| $7,323.0 |
| |
| $7,304.7 |
|
| | LIABILITIES AND EQUITY | | |
Current liabilities: | | | | | | |
Commercial paper | |
| $9.2 |
| |
| $— |
|
Accounts payable |
| $153.5 |
| |
| $197.2 |
| 149.2 |
| | 186.3 |
|
Regulatory liabilities | 133.1 |
| | 130.9 |
| 166.6 |
| | 149.6 |
|
Accrued taxes | | 37.2 |
| | 53.8 |
|
Other | 198.3 |
| | 203.0 |
| 131.5 |
| | 132.1 |
|
Total current liabilities | 484.9 |
| | 531.1 |
| 493.7 |
| | 521.8 |
|
Long-term debt, net (excluding current portion) | 1,857.4 |
| | 1,856.9 |
| |
Long-term debt, net | | 2,154.0 |
| | 2,153.5 |
|
Other liabilities: | | | | | | |
Deferred tax liabilities | 1,408.9 |
| | 1,378.0 |
| 1,553.2 |
| | 1,511.8 |
|
Regulatory liabilities | 335.1 |
| | 358.3 |
| 281.7 |
| | 281.2 |
|
Pension and other benefit obligations | 160.5 |
| | 160.2 |
| 172.2 |
| | 173.2 |
|
Other | 223.7 |
| | 229.3 |
| 221.1 |
| | 214.2 |
|
Total other liabilities | 2,128.2 |
| | 2,125.8 |
| 2,228.2 |
| | 2,180.4 |
|
Commitments and contingencies (Note 13) |
|
| |
|
| |
Commitments and contingencies (Note 12) | |
|
| |
|
|
Equity: | | | | | | |
Interstate Power and Light Company common equity: | | | | | | |
Common stock - $2.50 par value - 24,000,000 shares authorized; 13,370,788 shares outstanding | 33.4 |
| | 33.4 |
| 33.4 |
| | 33.4 |
|
Additional paid-in capital | 1,447.9 |
| | 1,407.8 |
| 1,597.8 |
| | 1,597.8 |
|
Retained earnings | 561.6 |
| | 554.1 |
| 615.9 |
| | 617.8 |
|
Total Interstate Power and Light Company common equity | 2,042.9 |
| | 1,995.3 |
| 2,247.1 |
| | 2,249.0 |
|
Cumulative preferred stock | 200.0 |
| | 200.0 |
| 200.0 |
| | 200.0 |
|
Total equity | 2,242.9 |
| | 2,195.3 |
| 2,447.1 |
| | 2,449.0 |
|
Total liabilities and equity |
| $6,713.4 |
| |
| $6,709.1 |
|
| $7,323.0 |
| |
| $7,304.7 |
|
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
INTERSTATE POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| | | For the Three Months | For the Three Months |
| Ended March 31, | Ended March 31, |
| 2016 | | 2015 | 2017 | | 2016 |
| (in millions) | (in millions) |
Cash flows from operating activities: | | | | | | |
Net income |
| $48.2 |
| |
| $50.1 |
|
| $39.8 |
| |
| $48.2 |
|
Adjustments to reconcile net income to net cash flows from operating activities: | | | | | | |
Depreciation and amortization | 52.7 |
| | 51.8 |
| 53.6 |
| | 52.7 |
|
Other | 3.2 |
| | 12.8 |
| 3.1 |
| | 3.2 |
|
Other changes in assets and liabilities: | | | | | | |
Accounts receivable | (37.5 | ) | | (2.2 | ) | 32.7 |
| | (37.5 | ) |
Sales of accounts receivable | 57.0 |
| | 52.0 |
| 35.0 |
| | 57.0 |
|
Gas stored underground | 15.1 |
| | 26.4 |
| |
Regulatory assets | | (29.3 | ) | | (3.8 | ) |
Accounts payable | (19.5 | ) | | (36.1 | ) | (24.7 | ) | | (19.5 | ) |
Regulatory liabilities | (23.6 | ) | | (11.8 | ) | 15.7 |
| | (23.6 | ) |
Deferred income taxes | | 29.1 |
| | 20.9 |
|
Other | 20.8 |
| | 27.1 |
| 21.3 |
| | 18.8 |
|
Net cash flows from operating activities | 116.4 |
| | 170.1 |
| 176.3 |
| | 116.4 |
|
Cash flows used for investing activities: | | | | | | |
Utility construction and acquisition expenditures | (135.3 | ) | | (150.6 | ) | (127.6 | ) | | (135.3 | ) |
Other | 12.1 |
| | (5.7 | ) | (8.7 | ) | | 12.1 |
|
Net cash flows used for investing activities | (123.2 | ) | | (156.3 | ) | (136.3 | ) | | (123.2 | ) |
Cash flows from (used for) financing activities: | | | | | | |
Common stock dividends | (38.1 | ) | | (35.0 | ) | (39.1 | ) | | (38.1 | ) |
Capital contributions from parent | 40.0 |
| | — |
| — |
| | 40.0 |
|
Other | 3.4 |
| | 18.5 |
| (0.1 | ) | | 3.4 |
|
Net cash flows from (used for) financing activities | 5.3 |
| | (16.5 | ) | (39.2 | ) | | 5.3 |
|
Net decrease in cash and cash equivalents | (1.5 | ) | | (2.7 | ) | |
Net increase (decrease) in cash and cash equivalents | | 0.8 |
| | (1.5 | ) |
Cash and cash equivalents at beginning of period | 4.5 |
| | 5.3 |
| 3.3 |
| | 4.5 |
|
Cash and cash equivalents at end of period |
| $3.0 |
| |
| $2.6 |
|
| $4.1 |
| |
| $3.0 |
|
Supplemental cash flows information: | | | | | | |
Cash (paid) refunded during the period for: | | | | | | |
Interest |
| ($22.6 | ) | |
| ($18.4 | ) |
| ($28.4 | ) | |
| ($22.6 | ) |
Income taxes, net |
| $1.1 |
| |
| $6.2 |
|
| ($2.6 | ) | |
| $1.1 |
|
Significant non-cash investing and financing activities: | | | | | | |
Accrued capital expenditures |
| $47.6 |
| |
| $82.8 |
|
| $44.2 |
| |
| $47.6 |
|
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| | | For the Three Months | For the Three Months |
| Ended March 31, | Ended March 31, |
| 2016 | | 2015 | 2017 | | 2016 |
| (in millions) | (in millions) |
Operating revenues: | | | | | | |
Electric utility |
| $307.3 |
| |
| $308.7 |
|
| $321.4 |
| |
| $307.3 |
|
Gas utility | 68.0 |
| | 87.2 |
| 71.2 |
| | 68.0 |
|
Other | 0.3 |
| | 1.2 |
| 0.5 |
| | 0.3 |
|
Total operating revenues | 375.6 |
| | 397.1 |
| 393.1 |
| | 375.6 |
|
Operating expenses: | | | | | | |
Electric production fuel and purchased power | 101.5 |
| | 105.8 |
| 98.3 |
| | 101.5 |
|
Electric transmission service | 41.4 |
| | 39.3 |
| 43.0 |
| | 41.4 |
|
Cost of gas sold | 42.8 |
| | 59.8 |
| 44.4 |
| | 42.8 |
|
Other operation and maintenance | 52.1 |
| | 54.0 |
| 57.0 |
| | 52.1 |
|
Depreciation and amortization | 47.4 |
| | 46.0 |
| 52.4 |
| | 47.4 |
|
Taxes other than income taxes | 11.6 |
| | 11.4 |
| 12.0 |
| | 11.6 |
|
Total operating expenses | 296.8 |
| | 316.3 |
| 307.1 |
| | 296.8 |
|
Operating income | 78.8 |
| | 80.8 |
| 86.0 |
| | 78.8 |
|
Interest expense and other: | | | | | | |
Interest expense | 22.9 |
| | 23.1 |
| 22.9 |
| | 22.9 |
|
Equity income from unconsolidated investments | (10.7 | ) | | (7.8 | ) | — |
| | (10.7 | ) |
Allowance for funds used during construction | (2.9 | ) | | (1.5 | ) | (2.7 | ) | | (2.9 | ) |
Interest income and other | (0.1 | ) | | 0.1 |
| (0.1 | ) | | (0.1 | ) |
Total interest expense and other | 9.2 |
| | 13.9 |
| 20.1 |
| | 9.2 |
|
Income before income taxes | 69.6 |
| | 66.9 |
| 65.9 |
| | 69.6 |
|
Income taxes | 22.6 |
| | 21.8 |
| 20.4 |
| | 22.6 |
|
Net income | 47.0 |
| | 45.1 |
| 45.5 |
| | 47.0 |
|
Net income attributable to noncontrolling interest | 0.5 |
| | 0.2 |
| — |
| | 0.5 |
|
Earnings available for common stock |
| $46.5 |
| |
| $44.9 |
|
| $45.5 |
| |
| $46.5 |
|
Earnings per share data is not disclosed given Alliant Energy Corporation is the sole shareowner of all shares of WPL’s common stock outstanding during the periods presented.
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| | | March 31, 2016 | | December 31, 2015 | March 31, 2017 | | December 31, 2016 |
| (in millions, except per share and share amounts) | (in millions, except per share and share amounts) |
ASSETS | | |
Current assets: | | | | | | |
Cash and cash equivalents |
| $1.3 |
| |
| $0.4 |
|
| $2.1 |
| |
| $4.2 |
|
Accounts receivable, less allowance for doubtful accounts | 192.6 |
| | 185.4 |
| 212.0 |
| | 226.3 |
|
Production fuel, at weighted average cost | 37.2 |
| | 38.6 |
| 22.6 |
| | 27.8 |
|
Gas stored underground, at weighted average cost | 12.8 |
| | 25.1 |
| 9.4 |
| | 21.3 |
|
Materials and supplies, at weighted average cost | 34.0 |
| | 33.5 |
| 36.5 |
| | 36.3 |
|
Regulatory assets | 81.8 |
| | 80.6 |
| 40.0 |
| | 40.1 |
|
Other | 51.2 |
| | 59.9 |
| 45.5 |
| | 60.5 |
|
Total current assets | 410.9 |
| | 423.5 |
| 368.1 |
| | 416.5 |
|
Property, plant and equipment, net | 4,141.6 |
| | 4,103.7 |
| 4,523.9 |
| | 4,426.7 |
|
Investments: | | | | |
Investment in American Transmission Company LLC | 302.5 |
| | 293.3 |
| |
Other | 14.7 |
| | 15.4 |
| |
Total investments | 317.2 |
| | 308.7 |
| |
Other assets: | | | | | | |
Regulatory assets | 429.5 |
| | 425.4 |
| 422.2 |
| | 416.2 |
|
Deferred charges and other | 6.7 |
| | 9.1 |
| 20.8 |
| | 30.9 |
|
Total other assets | 436.2 |
| | 434.5 |
| 443.0 |
| | 447.1 |
|
Total assets |
| $5,305.9 |
| |
| $5,270.4 |
|
| $5,335.0 |
| |
| $5,290.3 |
|
| | LIABILITIES AND EQUITY | | |
Current liabilities: | | | | | | |
Commercial paper |
| $25.5 |
| |
| $19.9 |
|
| $91.2 |
| |
| $52.3 |
|
Accounts payable | 111.0 |
| | 136.0 |
| 157.2 |
| | 192.9 |
|
Regulatory liabilities | 60.0 |
| | 56.2 |
| 48.6 |
| | 36.6 |
|
Other | 146.7 |
| | 124.8 |
| 123.0 |
| | 112.9 |
|
Total current liabilities | 343.2 |
| | 336.9 |
| 420.0 |
| | 394.7 |
|
Long-term debt, net (excluding current portion) | 1,534.2 |
| | 1,533.9 |
| |
Long-term debt, net | | 1,535.5 |
| | 1,535.2 |
|
Other liabilities: | | | | | | |
Deferred tax liabilities | 1,025.1 |
| | 1,005.4 |
| 984.7 |
| | 971.6 |
|
Regulatory liabilities | 182.8 |
| | 192.3 |
| 199.7 |
| | 213.6 |
|
Capital lease obligations - Sheboygan Falls Energy Facility | 82.1 |
| | 83.6 |
| 75.5 |
| | 77.2 |
|
Pension and other benefit obligations | 186.4 |
| | 188.7 |
| 205.9 |
| | 207.8 |
|
Other | 169.0 |
| | 162.0 |
| 168.9 |
| | 159.4 |
|
Total other liabilities | 1,645.4 |
| | 1,632.0 |
| 1,634.7 |
| | 1,629.6 |
|
Commitments and contingencies (Note 13) |
| |
| |
Commitments and contingencies (Note 12) | |
| |
|
Equity: | | | | | | |
Wisconsin Power and Light Company common equity: | | | | | | |
Common stock - $5 par value - 18,000,000 shares authorized; 13,236,601 shares outstanding | 66.2 |
| | 66.2 |
| 66.2 |
| | 66.2 |
|
Additional paid-in capital | 959.1 |
| | 959.0 |
| 1,019.0 |
| | 1,019.0 |
|
Retained earnings | 743.8 |
| | 731.1 |
| 659.6 |
| | 645.6 |
|
Total Wisconsin Power and Light Company common equity | 1,769.1 |
| | 1,756.3 |
| 1,744.8 |
| | 1,730.8 |
|
Noncontrolling interest | 14.0 |
| | 11.3 |
| |
Total equity | 1,783.1 |
| | 1,767.6 |
| |
Total liabilities and equity |
| $5,305.9 |
| |
| $5,270.4 |
|
| $5,335.0 |
| |
| $5,290.3 |
|
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
| | | | | | | |
| For the Three Months |
| Ended March 31, |
| 2017 | | 2016 |
| (in millions) |
Cash flows from operating activities: | | | |
Net income |
| $45.5 |
| |
| $47.0 |
|
Adjustments to reconcile net income to net cash flows from operating activities: | | | |
Depreciation and amortization | 52.4 |
| | 47.4 |
|
Deferred tax expense and tax credits | 11.8 |
| | 18.8 |
|
Other | 2.6 |
| | (10.9 | ) |
Other changes in assets and liabilities: | | | |
Accounts receivable | 13.3 |
| | (8.9 | ) |
Derivative assets | 16.1 |
| | 1.0 |
|
Accounts payable | (25.5 | ) | | (15.3 | ) |
Derivative liabilities | 8.7 |
| | 19.5 |
|
Other | 20.7 |
| | 25.0 |
|
Net cash flows from operating activities | 145.6 |
| | 123.6 |
|
Cash flows used for investing activities: | | | |
Utility construction and acquisition expenditures | (141.3 | ) | | (85.1 | ) |
Other | (8.0 | ) | | (6.3 | ) |
Net cash flows used for investing activities | (149.3 | ) | | (91.4 | ) |
Cash flows from (used for) financing activities: | | | |
Common stock dividends | (31.5 | ) | | (33.8 | ) |
Net change in commercial paper | 38.9 |
| | 5.6 |
|
Other | (5.8 | ) | | (3.1 | ) |
Net cash flows from (used for) financing activities | 1.6 |
| | (31.3 | ) |
Net increase (decrease) in cash and cash equivalents | (2.1 | ) | | 0.9 |
|
Cash and cash equivalents at beginning of period | 4.2 |
| | 0.4 |
|
Cash and cash equivalents at end of period |
| $2.1 |
| |
| $1.3 |
|
Supplemental cash flows information: | | | |
Cash paid during the period for: | | | |
Interest |
| ($21.9 | ) | |
| ($21.9 | ) |
Income taxes, net |
| $— |
| |
| ($7.4 | ) |
Significant non-cash investing and financing activities: | | | |
Accrued capital expenditures |
| $90.5 |
| |
| $49.7 |
|
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
| | | | | | | |
| For the Three Months |
| Ended March 31, |
| 2016 | | 2015 |
| (in millions) |
Cash flows from operating activities: | | | |
Net income |
| $47.0 |
| |
| $45.1 |
|
Adjustments to reconcile net income to net cash flows from operating activities: | | | |
Depreciation and amortization | 47.4 |
| | 46.0 |
|
Deferred tax expense and investment tax credits | 18.8 |
| | 10.1 |
|
Other | (10.9 | ) | | (0.9 | ) |
Other changes in assets and liabilities: | | | |
Gas stored underground | 12.3 |
| | 23.1 |
|
Accounts payable | (15.3 | ) | | 4.0 |
|
Derivative liabilities | 19.5 |
| | 4.6 |
|
Other | 4.8 |
| | 25.8 |
|
Net cash flows from operating activities | 123.6 |
| | 157.8 |
|
Cash flows used for investing activities: | | | |
Utility construction and acquisition expenditures | (85.1 | ) | | (75.4 | ) |
Other | (6.3 | ) | | (3.0 | ) |
Net cash flows used for investing activities | (91.4 | ) | | (78.4 | ) |
Cash flows used for financing activities: | | | |
Common stock dividends | (33.8 | ) | | (31.8 | ) |
Other | 2.5 |
| | (3.4 | ) |
Net cash flows used for financing activities | (31.3 | ) | | (35.2 | ) |
Net increase in cash and cash equivalents | 0.9 |
| | 44.2 |
|
Cash and cash equivalents at beginning of period | 0.4 |
| | 46.7 |
|
Cash and cash equivalents at end of period |
| $1.3 |
| |
| $90.9 |
|
Supplemental cash flows information: | | | |
Cash (paid) refunded during the period for: | | | |
Interest |
| ($21.9 | ) | |
| ($22.6 | ) |
Income taxes, net |
| ($7.4 | ) | |
| $9.1 |
|
Significant non-cash investing and financing activities: | | | |
Accrued capital expenditures |
| $49.7 |
| |
| $32.9 |
|
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
ALLIANT ENERGY CORPORATION
INTERSTATE POWER AND LIGHT COMPANY
WISCONSIN POWER AND LIGHT COMPANY
COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 1(a) General - The interim unaudited Financial Statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, although management believes that the disclosures are adequate to make the information presented not misleading. These Financial Statements should be read in conjunction with the financial statements and the notes thereto included in the latest combined Annual Report on Form 10-K.
In the opinion of management, all adjustments, which unless otherwise noted are normal and recurring in nature, necessary for a fair presentation of the results of operations, financial position and cash flows have been made. Results for the three months ended March 31, 20162017 are not necessarily indicative of results that may be expected for the year ending December 31, 2016.2017. A change in management’s estimates or assumptions could have a material impact on financial condition and results of operations during the period in which such change occurred. Certain prior period amounts in the Financial Statements and Notes have been reclassified to conform to the current period presentation for comparative purposes. Unless otherwise noted, the Notes herein exclude discontinued operations for all periods presented. In the fourth quarter of 2015, IPL and WPL implemented a change in method of recording income taxes that impacts the separate financial statements of IPL and WPL. As required by GAAP, all prior period financial statements and disclosures presented herein, including all Alliant Energy share and per share amounts, have been restated to reflect these changes.a two-for-one common stock split distributed in May 2016.
NOTE 1(b) New Accounting Standards -
Revenue Recognition - In May 2014, the Financial Accounting Standards Board issued an accounting standard providing principles for recognizing revenue for the transfer of promised goods or services to customers with the consideration to which the entity expects to be entitled in exchange for those goods or services. This standard also requires disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Alliant Energy, IPL and WPL currently expect towill adopt this standard on January 1, 2018. Upon adoption, the standard can be applied retrospectively to all prior reporting periods presented, or retrospectively with a cumulative effect to the opening retained earnings balance on January 1, 2018. Alliant Energy, IPL and WPL are currently evaluating the impact of this standard on their financial condition and results of operations.operations and do not anticipate a significant change in revenue recognition for retail electric and gas sales, which represent the majority of Alliant Energy’s, IPL’s and WPL’s revenues. Alliant Energy, IPL and WPL continue to evaluate additional impacts of this standard, as well as which transition method will be utilized.
Leases - In February 2016, the Financial Accounting Standards Board issued an accounting standard requiring lease assets and lease liabilities, including operating leases, to be recognized on the balance sheet for all leases with terms longer than 12 months. The standard also requires disclosure of key information about leasing arrangements. Alliant Energy, IPL and WPL are requiredcurrently expect to adopt this standard on January 1, 2019 and are evaluating the impact of this standard on their financial condition and results of operations and expect an increase in assets and liabilities from recognizing operating leases on their balance sheets.
Presentation of Net Periodic Pension and Postretirement Benefit Costs - In March 2017, the Financial Accounting Standards Board issued an accounting standard amending the income statement presentation of the components of net periodic benefit costs for defined benefit pension and other postretirement plans. The standard requires entities to (1) disaggregate the current service cost component from the other components of net periodic benefit costs and present it with other employee compensation costs in the income statement; and (2) include the other components in the income statement outside of operating income. In addition, only the service cost component of net periodic benefit costs is eligible for capitalization into property, plant and equipment, when applicable. IPL and WPL, as rate-regulated entities, currently expect to capitalize the other components of net periodic benefit costs into regulatory assets or regulatory liabilities, when applicable in accordance with regulations by FERC and various state regulatory commissions. Alliant Energy, IPL and WPL will adopt this standard on January 1, 2018. Upon adoption, the standard must be applied retrospectively for the presentation requirements and prospectively for the capitalization requirements. Alliant Energy, IPL and WPL are currently evaluating the impact of this standard on their financial condition and results of operations. Early adoption of this standard is permitted.
NOTE 2. REGULATORY MATTERS
Regulatory Assets and Regulatory Liabilities -
Regulatory assets were comprised of the following items (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| March 31, 2016 | | December 31, 2015 | | March 31, 2016 | | December 31, 2015 | | March 31, 2016 | | December 31, 2015 |
Tax-related |
| $1,002.7 |
| |
| $987.7 |
| |
| $972.0 |
| |
| $958.2 |
| |
| $30.7 |
| |
| $29.5 |
|
Pension and OPEB costs | 570.0 |
| | 579.5 |
| | 293.6 |
| | 298.1 |
| | 276.4 |
| | 281.4 |
|
AROs | 96.1 |
| | 92.4 |
| | 54.1 |
| | 50.8 |
| | 42.0 |
| | 41.6 |
|
Derivatives | 86.6 |
| | 70.6 |
| | 25.5 |
| | 28.2 |
| | 61.1 |
| | 42.4 |
|
WPL’s EGUs retired early | 43.2 |
| | 45.0 |
| | — |
| | — |
| | 43.2 |
| | 45.0 |
|
Emission allowances | 26.7 |
| | 26.9 |
| | 26.7 |
| | 26.9 |
| | — |
| | — |
|
Commodity cost recovery | 26.3 |
| | 35.9 |
| | 0.3 |
| | 2.8 |
| | 26.0 |
| | 33.1 |
|
Other | 65.6 |
| | 70.6 |
| | 33.7 |
| | 37.6 |
| | 31.9 |
| | 33.0 |
|
|
| $1,917.2 |
| |
| $1,908.6 |
| |
| $1,405.9 |
| |
| $1,402.6 |
| |
| $511.3 |
| |
| $506.0 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| March 31, 2017 | | December 31, 2016 | | March 31, 2017 | | December 31, 2016 | | March 31, 2017 | | December 31, 2016 |
Tax-related |
| $1,080.2 |
| |
| $1,055.6 |
| |
| $1,044.9 |
| |
| $1,022.4 |
| |
| $35.3 |
| |
| $33.2 |
|
Pension and OPEB costs | 568.5 |
| | 578.7 |
| | 289.1 |
| | 294.0 |
| | 279.4 |
| | 284.7 |
|
Asset retirement obligations | 108.6 |
| | 105.9 |
| | 67.1 |
| | 64.3 |
| | 41.5 |
| | 41.6 |
|
Derivatives | 46.4 |
| | 30.7 |
| | 17.2 |
| | 10.0 |
| | 29.2 |
| | 20.7 |
|
WPL’s EGUs retired early | 39.7 |
| | 41.4 |
| | — |
| | — |
| | 39.7 |
| | 41.4 |
|
Emission allowances | 26.0 |
| | 26.2 |
| | 26.0 |
| | 26.2 |
| | — |
| | — |
|
Other | 93.6 |
| | 76.6 |
| | 56.5 |
| | 41.9 |
| | 37.1 |
| | 34.7 |
|
|
| $1,963.0 |
| |
| $1,915.1 |
| |
| $1,500.8 |
| |
| $1,458.8 |
| |
| $462.2 |
| |
| $456.3 |
|
Regulatory liabilities were comprised of the following items (in millions):
| | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
| March 31, 2016 | | December 31, 2015 | | March 31, 2016 | | December 31, 2015 | | March 31, 2016 | | December 31, 2015 | March 31, 2017 | | December 31, 2016 | | March 31, 2017 | | December 31, 2016 | | March 31, 2017 | | December 31, 2016 |
Cost of removal obligations |
| $408.1 |
| |
| $406.0 |
| |
| $263.1 |
| |
| $260.4 |
| |
| $145.0 |
| |
| $145.6 |
|
| $413.0 |
| |
| $411.6 |
| |
| $271.1 |
| |
| $269.4 |
| |
| $141.9 |
| |
| $142.2 |
|
Electric transmission cost recovery | | 128.3 |
| | 72.0 |
| | 75.9 |
| | 35.7 |
| | 52.4 |
| | 36.3 |
|
IPL’s tax benefit riders | 141.1 |
| | 159.2 |
| | 141.1 |
| | 159.2 |
| | — |
| | — |
| 64.7 |
| | 83.5 |
| | 64.7 |
| | 83.5 |
| | — |
| | — |
|
Electric transmission cost recovery | 51.4 |
| | 43.5 |
| | 25.5 |
| | 21.9 |
| | 25.9 |
| | 21.6 |
| |
Commodity cost recovery | | 32.9 |
| | 30.8 |
| | 20.1 |
| | 17.8 |
| | 12.8 |
| | 13.0 |
|
Energy efficiency cost recovery | 41.6 |
| | 48.3 |
| | — |
| | — |
| | 41.6 |
| | 48.3 |
| 20.6 |
| | 20.5 |
| | — |
| | — |
| | 20.6 |
| | 20.5 |
|
Commodity cost recovery | 35.2 |
| | 37.6 |
| | 20.4 |
| | 23.5 |
| | 14.8 |
| | 14.1 |
| |
Derivatives | | 9.0 |
| | 31.5 |
| | 5.1 |
| | 12.1 |
| | 3.9 |
| | 19.4 |
|
Other | 33.6 |
| | 43.1 |
| | 18.1 |
| | 24.2 |
| | 15.5 |
| | 18.9 |
| 28.1 |
| | 31.1 |
| | 11.4 |
| | 12.3 |
| | 16.7 |
| | 18.8 |
|
|
| $711.0 |
| |
| $737.7 |
| |
| $468.2 |
| |
| $489.2 |
| |
| $242.8 |
| |
| $248.5 |
|
| $696.6 |
| |
| $681.0 |
| |
| $448.3 |
| |
| $430.8 |
| |
| $248.3 |
| |
| $250.2 |
|
Tax-related - Alliant Energy’s and IPL’s tax-related regulatory assets are generally impacted by certain property-related differences at IPL for which deferred tax is not recorded in the income statement pursuant to Iowa rate-making principles. Deferred tax amounts for such property-related differences at IPL are recorded to regulatory assets, along with the necessary revenue requirement tax gross-ups. During the three months ended March 31, 2016,2017, Alliant Energy’s and IPL’s tax-related regulatory assets increased primarily due to property-related differences for qualifying repair expenditures.
Derivatives - Refer to Note 1211 for discussion of derivative assets and derivative liabilities.
Electric transmission cost recovery - A group of MISO cooperative and municipal utilities previously filed two complaints with FERC requesting a reduction to the base return on equity used by MISO transmission owners, including ITC and ATC, LLC to determine electric transmission costs billed to utilities, including IPL and WPL. In September 2016, FERC issued an order on the first complaint and established a base return on equity of 10.32%, excluding any incentive adders granted by FERC, effective September 28, 2016, and for the refund period from November 12, 2013 through February 11, 2015 (first complaint period). In the first quarter of 2017, Alliant Energy, IPL and WPL received the refunds for the first complaint period of $51 million, $40 million and $11 million, respectively, subject to final true-up by the end of July 2017. IPL and WPL each recorded the retail portion of the refunds to a regulatory liability. Pursuant to IUB approval, IPL’s retail portion of the refund from ITC will be refunded to its retail customers in 2017 beginning in May 2017. WPL’s retail portion of the refund from ATC, LLC will remain in a regulatory liability until such refunds are approved to be returned to retail customers in a future rate proceeding. IPL’s and WPL’s wholesale customers received their share of the refunds through normal monthly billing practices in the first quarter of 2017.
IPL’s tax benefit riders - IPL’s tax benefit riders utilize regulatory liabilities to credit bills of IPL’s Iowa retail electric and gas customers to help offset the impact of rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs expenditures, allocation of mixed service costs, allocation of insurance proceeds from floods in 2008, and cost of removal expenditures. For the three months ended March 31, 20162017, Alliant Energy’s and IPL’s “IPL’s tax benefit riders” regulatory liabilities decreased by $18$19 million as follows (in millions):
|
| | | |
Electric tax benefit rider credits |
| $1517 |
|
Gas tax benefit rider credits | 32 |
|
|
| $1819 |
|
Refer to
Utility Rate CasesReviews -
IPL’s Iowa Retail Electric Rate Settlement AgreementReview (2016 Test Year) - TheIn April 2017, IPL filed a request with the IUB approved a settlement agreement in 2014 related to increase annual electric rates charged to IPL’sfor its Iowa retail electric customers.customers by $176 million, or approximately 12%. The settlement agreement extends IPL’s Iowarequest was based on a 2016 historical Test Year as adjusted for certain known and measurable changes occurring up to 12 months after the commencement of the proceeding. The key drivers for the filing included recovery of capital projects, primarily power grid modernization and investments that advance cleaner energy, including Marshalltown. An interim retail electric rate increase of $102 million, or approximately 7%, on an annual basis, was implemented effective April 13, 2017, without regulatory review, and will be subject to refund pending determination of final rates. Tax benefit rider credits and MISO transmission owner return on equity refunds are expected to reduce the effect of the rate increase on customer bills in 2017 and 2018. IPL requested a decision from the IUB in 2017 with final rates effective in the first quarter of 2018. The IUB must issue a decision on requests for retail rate changes within 10 months of the date of the application for which changes are filed.
WPL’s Retail Electric and Gas Rate Review (2017/2018 Test Period) - In December 2016, WPL received an order from the PSCW authorizing WPL to implement an increase in annual retail electric rates of $9 million, or approximately 1%, and an increase in annual retail gas base rates of $9 million, or approximately 13%. The $9 million net annual retail electric rate increase reflects a $60 million increase in base rates, partially offset by a $51 million reduction in fuel-related costs, using an estimate for 2017 fuel-related costs. These increases were effective January 1, 2017 and extend through the end of 2018. In the first quarter of 2017, Alliant Energy and WPL recorded a $22 million increase in electric revenues and a $2 million increase in gas revenues in conjunction with the base rate increases authorized in its 2009the PSCW’s December 2016 order.
WPL’s Retail Fuel-related Rate Filing (2017 Test YearYear) - In March 2017, WPL filed an application with the PSCW for a mid-year fuel-related cost adjustment for 2017. Fuel-related costs for 2017 are currently expected to exceed the approved 2017 fuel-related cost plan by more than the 2% annual bandwidth and result in a deferral of under-collected fuel-related costs of $8 million for 2017. The primary driver for the anticipated under-collection of fuel-related costs is an unplanned extended outage of Riverside during the first half of 2017. WPL’s application proposes to offset any deferral of projected under-collection of fuel-related costs from 2017 against the balance owed to customers for over-collected fuel-related costs for 2016 discussed below, and any remaining net balance at the end of 2017 would then be returned to, or collected from, customers in a future rate case through 2016 and provides targeted retail electricproceeding. Under WPL’s proposal, customer billing credits. Forrates would not change during 2017 for the three months endedmid-year fuel-related cost adjustment. As of March 31, IPL recorded billing credits2017, fuel-related costs for 2017 outside of the approved bandwidth were $1 million and are included in “Other” in Alliant Energy’s and WPL’s regulatory assets table above.
WPL’s Retail Fuel-related Rate Filing (2016 Test Year) - Pursuant to reduce retail electric customers’ bills as follows (in millions):a 2015 PSCW order, WPL’s 2016 fuel-related costs were subject to deferral since they were outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Retail fuel-related costs incurred by WPL in 2016 were lower than fuel-related costs used to determine rates for such period resulting in an over-collection of fuel-related costs. As of March 31, 2017, fuel-related costs for 2016 outside of the approved bandwidth were $9 million and are included in “Commodity cost recovery” in Alliant Energy’s and WPL’s regulatory liabilities table above.
|
| | | | | |
| 2016 | | 2015 |
Billing credits to reduce retail electric customers’ bills | $2 | |
| $6 |
|
NOTE 3. PROPERTY, PLANT AND EQUIPMENT
Utility -
Emission Controls ProjectNatural Gas-Fired Generation Projects -
IPL’s Marshalltown Generating Station - IPL’s construction of Marshalltown, an approximate 660 MW natural gas-fired combined-cycle EGU, was completed and the EGU was placed into service in April 2017. As of March 31, 2017, Alliant Energy and IPL recorded capitalized expenditures of $635 million and AFUDC of $79 million for Marshalltown in “Property, plant and equipment, net” on their balance sheets.
WPL’s Edgewater Unit 5Riverside Expansion - WPL is currently constructing a scrubber and baghouse at Edgewater Unit 5 to reduce SO2 and mercury emissions at the Riverside expansion, an approximate 730 MW natural gas-fired combined-cycle EGU. Construction began in 20142016 and is currently expected to be completed in 2016.by early 2020. As of March 31, 2016,2017, Alliant Energy and WPL recorded capitalized expenditures for construction work in progress of $207$129 million and AFUDC of $10$3 million for the scrubber and baghouseRiverside expansion in “Property, plant and equipment, net” on their balance sheets. These capital expenditures do not yet reflect any potential impacts from the intent to exercise purchase options by certain WPL electric cooperatives for a partial ownership interest in the Riverside expansion.
Natural Gas-FiredWind Generation Project -
IPL’s Marshalltown Generating StationFranklin County Wind Farm Transfer - In April 2017, the Franklin County wind farm was transferred from AEF to IPL is currently constructing Marshalltown, an approximate 650 MW natural gas-fired combined-cycle EGU. Construction began in 2014 and is expectedpursuant to a February 2017 FERC order, at a value of approximately $33 million, subject to final working capital adjustments. The final amount to be completedrecovered for IPL’s electric rate-making purposes will be determined by the IUB as part of IPL’s Iowa retail electric rate review for the 2016 Test Year, which was filed in April 2017. As of March 31, 2016, Alliant Energy and IPL recorded capitalized expenditures for construction work in progress of $492 million and AFUDC of $33 million for Marshalltown in “Property, plant and equipment, net” on their balance sheets.
NOTE 4. RECEIVABLES
Sales of Accounts Receivable - IPL maintains a Receivables Purchase and Sale Agreement (Receivables Agreement) whereby it may sell its customer accounts receivables, unbilled revenues and certain other accounts receivables to a third party through wholly-owned and consolidated special purpose entities. In March 2016, IPL extended through March 2018 the purchase commitment from the third party to which it sells its receivables. The transfers of receivables meet the criteria for sale accounting established by the transfer of financial assets accounting rules. As of March 31, 20162017, IPL sold $220.5$221.0 million of receivables to the third party, received $62.0$56.0 million in cash proceeds, and recorded deferred proceeds of $154.2 million.$149.0 million and had $41.8 million of available capacity under its sales of accounts receivable program. For the three months ended March 31, 2017 and 2016, IPL’s costs incurred related to the sales of accounts receivable program were not material.
IPL’s maximum and average outstanding cash proceeds (based on daily outstanding balances) related to the sales of accounts receivable program for the three months ended March 31 were as follows (in millions):
|
| | | | | | | |
| 2016 | | 2015 |
Maximum outstanding aggregate cash proceeds (based on daily outstanding balances) |
| $75.0 |
| |
| $118.0 |
|
Average outstanding aggregate cash proceeds (based on daily outstanding balances) | 39.1 |
| | 68.0 |
|
For the three months ended March 31, 2016 and 2015, IPL’s costs incurred related to the sales of accounts receivable program were not material. |
| | | | | | | |
| 2017 | | 2016 |
Maximum outstanding aggregate cash proceeds |
| $79.0 |
| |
| $75.0 |
|
Average outstanding aggregate cash proceeds | 38.4 |
| | 39.1 |
|
The attributes of IPL’s receivables sold under the Receivables Agreement were as follows (in millions):
| | | March 31, 2016 | | December 31, 2015 | March 31, 2017 | | December 31, 2016 |
Customer accounts receivable |
| $142.7 |
| |
| $109.7 |
|
| $143.7 |
| |
| $157.6 |
|
Unbilled utility revenues | 77.5 |
| | 71.3 |
| 76.8 |
| | 90.4 |
|
Other receivables | 0.3 |
| | 0.1 |
| 0.5 |
| | 0.1 |
|
Receivables sold to third party | 220.5 |
| | 181.1 |
| 221.0 |
| | 248.1 |
|
Less: cash proceeds (a) | 62.0 |
| | 5.0 |
| 56.0 |
| | 21.0 |
|
Deferred proceeds | 158.5 |
| | 176.1 |
| 165.0 |
| | 227.1 |
|
Less: allowance for doubtful accounts | 4.3 |
| | 4.1 |
| 16.0 |
| | 16.0 |
|
Fair value of deferred proceeds |
| $154.2 |
| |
| $172.0 |
|
| $149.0 |
| |
| $211.1 |
|
| |
(a) | Changes in cash proceeds are presented in “Sales of accounts receivable” in operating activities in Alliant Energy’s and IPL’s cash flows statements. |
As of March 31, 2016,2017, outstanding receivables past due under the Receivables Agreement were $47.5$69.9 million. Additional attributes of IPL’s receivables sold under the Receivables Agreement for the three months ended March 31 were as follows (in millions):
| | | 2016 | | 2015 | 2017 | | 2016 |
Collections reinvested in receivables |
| $440.2 |
| |
| $505.9 |
|
| $501.2 |
| |
| $440.2 |
|
Credit losses, net of recoveries | 0.4 |
| | 1.0 |
| |
Write-offs, net of recoveries | | 4.6 |
| | 0.4 |
|
In connection with the implementation of IPL’s new customer billing and information system in 2016, IPL postponed the write-off of customer bills for a portion of 2016, resulting in lower write-offs for the three months ended March 31, 2016.
NOTE 5. INVESTMENTS
NOTE 5(a) Unconsolidated Equity Investments - Equity (income) loss from unconsolidated investments accounted for under the equity method of accounting for the three months ended March 31 was as follows (in millions):
| | | Alliant Energy | | WPL | Alliant Energy | | WPL |
| 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 |
ATC |
| ($10.7 | ) | |
| ($7.8 | ) | |
| ($10.7 | ) | |
| ($7.8 | ) | |
ATC Investment | |
| ($11.5 | ) | |
| ($10.7 | ) | |
| $— |
| |
| ($10.7 | ) |
Other | 0.2 |
| | 1.3 |
| | — |
| | — |
| — |
| | 0.2 |
| | — |
| | — |
|
|
| ($10.5 | ) | |
| ($6.5 | ) | |
| ($10.7 | ) | |
| ($7.8 | ) |
| ($11.5 | ) | |
| ($10.5 | ) | |
| $— |
| |
| ($10.7 | ) |
On December 31, 2016, pursuant to a June 2016 PSCW order, WPL Transco, LLC was liquidated and WPL transferred its investment in ATC, LLC to ATI. As a result, WPL no longer records equity income from its prior investment in ATC, LLC. There were no impacts of this transfer to Alliant Energy’s consolidated financial statements. As of December 31, 2016, ATI owns Alliant Energy’s entire investment in ATC.
NOTE 5(b) Cash Surrender Value of Life Insurance Policies - During the three months ended March 31, 2016, certain of Alliant Energy’s and IPL’s company-owned life insurance policies were liquidated. The related proceeds of $26 million and $18 million were recorded in investing activities in Alliant Energy’s and IPL’s cash flows statements, respectively.
NOTE 6. COMMON EQUITY
Common Share Activity - A summary of Alliant Energy’s common stock activity was as follows:
|
| | |
Shares outstanding, January 1, 20162017 | 113,459,216227,673,654 |
|
Shareowner Direct Plan issuances | 92,231190,286 |
|
| 11,2045,185 |
|
Other | (45,847 | ) |
Shares outstanding, March 31, 20162017 | 113,562,651227,823,278 |
|
Common Stock Split - On April 20, 2016, Alliant Energy’s Board of Directors approved a two-for-one common stock split and a proportionate increase in the number of shares of common stock of Alliant Energy from 240 million shares to 480 million shares to implement the stock split. Alliant Energy shareowners of record at the close of business on May 4, 2016 will receive one additional share of Alliant Energy common stock for each share held on that date. The proportionate interest that a shareowner owns in Alliant Energy will not change as a result of the stock split. The additional shares are expected to be distributed on May 19, 2016 and post-split trading is expected to begin on May 20, 2016. Based on common shares outstanding as of March 31, 2016, upon the completion of the stock split, Alliant Energy will have approximately 227 million shares of common stock outstanding. Except as disclosed in the pro forma EPS information below, all share and per share amounts for the three months ended March 31, 2016 and 2015 in this report have been reflected on a pre-split basis. The stock split will require all historical common stock shares and EPS data to be recast in the second quarter of 2016. For the three months ended March 31, pro forma basic and diluted EPS attributable to Alliant Energy common shareowners to reflect the two-for-one common stock split is as follows:
|
| | | | | | | |
| 2016 | | 2015 |
Basic and diluted EPS: | | | |
As reported |
| $0.85 |
| |
| $0.87 |
|
Pro forma | 0.43 |
| | 0.43 |
|
Dividend Restrictions - As of March 31, 20162017, IPL’s amount of retained earnings that were free of dividend restrictions was $562616 million. As of March 31, 20162017, WPL’s amount of retained earnings that were free of dividend restrictions was $10195 million for the remainder of 20162017.
Restricted Net Assets of Subsidiaries - As of March 31, 20162017, the amount of IPL’s and WPL’s net assets of IPL and WPL that were not available to be transferred to their parent company, Alliant Energy, in the form of loans, advances or cash dividends without the consent of IPL’s and WPL’s regulatory authorities was $1.51.6 billion and $1.7 billion, respectively.
Capital Transactions with Subsidiaries - For the three months ended March 31, 2016, IPL received capital contributions of $40.0 million from its parent company. For the three months ended March 31, 2016, IPL and WPL paid common stock dividends of $38.1 million and $33.8 million, respectively, to their parent company.
Comprehensive Income - For the three months ended March 31, 20162017 and 20152016, Alliant Energy had no other comprehensive income; therefore, its comprehensive income was equal to its net income and its comprehensive income attributable to Alliant Energy common shareowners was equal to its net income attributable to Alliant Energy common shareowners for such periods. For the three months ended March 31, 20162017 and 2015,2016, IPL and WPL had no other comprehensive income; therefore, their comprehensive income was equal to their net income and their comprehensive income available for common stock was equal to their earnings available for common stock for such periods.
NOTE 7. DEBT
Short-term Debt - Information regarding commercial paper classified as short-term debt and back-stopped by the credit facilities was as follows (dollars in millions):
|
| | | | | | | |
| Alliant Energy | | Parent | | | | |
March 31, 2016 | (Consolidated) | | Company | | IPL | | WPL |
Commercial paper: | | | | | | | |
Amount outstanding | $213.4 | | $187.9 | | $— | | $25.5 |
Weighted average remaining maturity | 2 days | | 2 days | | N/A | | 1 day |
Weighted average interest rates | 0.6% | | 0.6% | | N/A | | 0.4% |
Available credit facility capacity | $786.6 | | $112.1 | | $300.0 | | $374.5 |
|
| | | | | | | |
| Alliant Energy | | Parent | | | | |
March 31, 2017 | (Consolidated) | | Company | | IPL | | WPL |
Commercial paper outstanding | $302.8 | | $202.4 | | $9.2 | | $91.2 |
Commercial paper weighted average interest rates | 1.1% | | 1.2% | | 1.2% | | 0.9% |
Available credit facility capacity | $697.2 | | $97.6 | | $290.8 | | $308.8 |
| | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
Three Months Ended March 31 | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
Maximum amount outstanding (based on daily outstanding balances) |
| $242.6 |
| |
| $151.3 |
| |
| $— |
| |
| $1.4 |
| | $55.7 | |
| $— |
| $325.5 | | $242.6 | | $9.2 | | $— | | $113.6 | | $55.7 |
Average amount outstanding (based on daily outstanding balances) |
| $199.0 |
| |
| $127.9 |
| |
| $— |
| |
| $— |
| | $25.8 | |
| $— |
| $276.5 | | $199.0 | | $0.1 | | $— | | $79.1 | | $25.8 |
Weighted average interest rates | 0.6 | % | | 0.4 | % | | N/A |
| | 0.4 | % | | 0.4% | | N/A |
| 0.9% | | 0.6% | | 1.1% | | N/A | | 0.7% | | 0.4% |
NOTE 8. INCOME TAXES
Income Tax Rates - The provision for income taxes for earnings from continuing operations is based on an estimated annual effective income tax rate that excludes the impact of significant unusual or infrequently occurring items, discontinued operations or extraordinary items. The overall income tax rates shown in the following table were computed by dividing income tax expense (benefit) by income from continuing operations before income taxes.
|
| | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Three Months Ended March 31 | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 |
Statutory federal income tax rate | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % |
IPL’s tax benefit riders | (8.7 | ) | | (9.9 | ) | | (20.7 | ) | | (25.2 | ) | | — |
| | — |
|
Effect of rate-making on property-related differences | (6.8 | ) | | (6.1 | ) | | (15.2 | ) | | (14.6 | ) | | (0.8 | ) | | (0.6 | ) |
Production tax credits | (6.3 | ) | | (6.2 | ) | | (6.7 | ) | | (7.1 | ) | | (6.5 | ) | | (6.2 | ) |
Other items, net | 4.5 |
| | 4.3 |
| | 5.9 |
| | 4.8 |
| | 4.8 |
| | 4.4 |
|
Overall income tax rate | 17.7 | % | | 17.1 | % | | (1.7 | %) | | (7.1 | %) | | 32.5 | % | | 32.6 | % |
IPL’s tax benefit riders - Alliant Energy’s and IPL’s effective income tax rates include the impact of reducing income tax expense with offsetting reductions to regulatory liabilities as a result of implementing IPL’s tax benefit riders. Refer to Note 2 for additional details of the tax benefit riders. |
| | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Three Months Ended March 31 | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
Statutory federal income tax rate | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % |
IPL’s tax benefit riders | (7.8 | ) | | (8.7 | ) | | (19.4 | ) | | (20.7 | ) | | — |
| | — |
|
Effect of rate-making on property-related differences | (7.5 | ) | | (6.8 | ) | | (17.9 | ) | | (15.2 | ) | | (1.7 | ) | | (0.8 | ) |
Production tax credits | (5.9 | ) | | (6.3 | ) | | (6.6 | ) | | (6.7 | ) | | (7.0 | ) | | (6.5 | ) |
Other items, net | 1.0 |
| | 4.5 |
| | (1.3 | ) | | 5.9 |
| | 4.7 |
| | 4.8 |
|
Overall income tax rate | 14.8 | % | | 17.7 | % | | (10.2 | %) | | (1.7 | %) | | 31.0 | % | | 32.5 | % |
Deferred Tax Assets and Liabilities - For the three months ended March 31, 2016,2017, Alliant Energy’s, IPL’s and WPL’s non-current deferred tax liabilities increased $43.4$55.7 million, $30.9$41.4 million and $19.7$13.1 million, respectively. These increases in non-current deferred tax liabilities were primarily due to property-related differences recorded during the three months ended March 31, 2016.2017. Alliant Energy’s and IPL’s increases were partially offset by the generation of federal net operating losses recorded during the three months ended March 31, 2017, which are primarily due to the accelerated tax depreciation associated with Marshalltown.
Carryforwards - At March 31, 2016, tax2017, carryforwards and associated deferred tax assets and expiration dates were estimated as follows (dollars in(in millions):
| | | | Alliant Energy | | IPL | | WPL | | | | | | | | |
| Earliest Expiration Date | | Tax Carryforwards | | Deferred Tax Assets | | Tax Carryforwards | | Deferred Tax Assets | | Tax Carryforwards | | Deferred Tax Assets | Range of Expiration Dates | | Alliant Energy | | IPL | | WPL |
Federal net operating losses | 2030 | |
| $733 |
| |
| $252 |
| |
| $330 |
| |
| $111 |
| |
| $298 |
| |
| $104 |
| 2030-2037 | |
| $633 |
| |
| $315 |
| |
| $217 |
|
State net operating losses | 2018 | | 748 |
| | 39 |
| | 20 |
| | 1 |
| | 47 |
| | 2 |
| 2018-2037 | | 696 |
| | 13 |
| | 2 |
|
Federal tax credits | 2022 | | 250 |
| | 246 |
| | 89 |
| | 86 |
| | 101 |
| | 101 |
| 2022-2037 | | 284 |
| | 104 |
| | 118 |
|
| | | |
| $537 |
| | | |
| $198 |
| | | |
| $207 |
| |
NOTE 9. BENEFIT PLANS
NOTE 9(a) Pension and Other Postretirement Benefits Plans -
Net Periodic Benefit Costs (Credits) - The components of net periodic benefit costs (credits) for sponsored defined benefit pension and OPEB plans for the three months ended March 31 are included in the tables below (in millions). In IPL’s and WPL’s tables below, the defined benefit pension plans costsamounts represent those respective costsamounts for their bargaining unit employees covered under the qualified plans that they sponsor, as well as amounts directly assigned to them related to their current and former non-bargaining employees who are participants in the Alliant Energy and Corporate Services sponsored qualified and non-qualified defined benefit pension plans. In IPL’s and WPL’s tables below, the OPEB plans costs (credits)amounts represent respective costs (credits)amounts for their employees, as well as amounts directly assigned to them related to their current and former non-bargaining employees who are participants in the Corporate Services sponsored OPEB plan.
|
| | | | | | | | | | | | | | | |
| Defined Benefit Pension Plans | | OPEB Plans |
Alliant Energy | 2017 | | 2016 | | 2017 | | 2016 |
Service cost |
| $3.1 |
| |
| $3.2 |
| |
| $1.2 |
| |
| $1.3 |
|
Interest cost | 12.8 |
| | 13.3 |
| | 2.2 |
| | 2.3 |
|
Expected return on plan assets | (16.4 | ) | | (16.4 | ) | | (1.5 | ) | | (1.5 | ) |
Amortization of prior service credit | (0.1 | ) | | (0.1 | ) | | (0.1 | ) | | (1.0 | ) |
Amortization of actuarial loss | 9.4 |
| | 9.3 |
| | 1.0 |
| | 1.2 |
|
|
| $8.8 |
| |
| $9.3 |
| |
| $2.8 |
| |
| $2.3 |
|
| | | Defined Benefit Pension Plans | | OPEB Plans | Defined Benefit Pension Plans | | OPEB Plans |
Alliant Energy | 2016 | | 2015 | | 2016 | | 2015 | |
IPL | | 2017 | | 2016 | | 2017 | | 2016 |
Service cost |
| $3.2 |
| |
| $4.0 |
| |
| $1.3 |
| |
| $1.4 |
|
| $1.8 |
| |
| $1.9 |
| |
| $0.5 |
| |
| $0.6 |
|
Interest cost | 13.3 |
| | 13.4 |
| | 2.3 |
| | 2.2 |
| 5.9 |
| | 6.1 |
| | 0.9 |
| | 1.0 |
|
Expected return on plan assets | (16.4 | ) | | (18.7 | ) | | (1.5 | ) | | (2.1 | ) | (7.7 | ) | | (7.7 | ) | | (1.1 | ) | | (1.0 | ) |
Amortization of prior service credit | (0.1 | ) | | (0.1 | ) | | (1.0 | ) | | (2.8 | ) | — |
| | — |
| | — |
| | (0.7 | ) |
Amortization of actuarial loss | 9.3 |
| | 8.8 |
| | 1.2 |
| | 1.2 |
| 4.0 |
| | 4.1 |
| | 0.5 |
| | 0.6 |
|
Additional benefit costs | — |
| | 0.2 |
| | — |
| | — |
| |
|
| $9.3 |
| |
| $7.6 |
| |
| $2.3 |
| |
| ($0.1 | ) |
| $4.0 |
| |
| $4.4 |
| |
| $0.8 |
| |
| $0.5 |
|
|
| | | | | | | | | | | | | | | |
| Defined Benefit Pension Plans | | OPEB Plans |
IPL | 2016 | | 2015 | | 2016 | | 2015 |
Service cost |
| $1.9 |
| |
| $2.2 |
| |
| $0.6 |
| |
| $0.6 |
|
Interest cost | 6.1 |
| | 6.2 |
| | 1.0 |
| | 0.9 |
|
Expected return on plan assets | (7.7 | ) | | (8.9 | ) | | (1.0 | ) | | (1.4 | ) |
Amortization of prior service credit | — |
| | — |
| | (0.7 | ) | | (1.5 | ) |
Amortization of actuarial loss | 4.1 |
| | 3.8 |
| | 0.6 |
| | 0.6 |
|
|
| $4.4 |
| |
| $3.3 |
| |
| $0.5 |
| |
| ($0.8 | ) |
| | | Defined Benefit Pension Plans | | OPEB Plans | Defined Benefit Pension Plans | | OPEB Plans |
WPL | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 |
Service cost |
| $1.2 |
| |
| $1.4 |
| |
| $0.5 |
| |
| $0.6 |
|
| $1.2 |
| |
| $1.2 |
| |
| $0.5 |
| |
| $0.5 |
|
Interest cost | 5.6 |
| | 5.6 |
| | 0.9 |
| | 0.9 |
| 5.5 |
| | 5.6 |
| | 0.9 |
| | 0.9 |
|
Expected return on plan assets | (7.1 | ) | | (8.1 | ) | | (0.2 | ) | | (0.4 | ) | (7.1 | ) | | (7.1 | ) | | (0.2 | ) | | (0.2 | ) |
Amortization of prior service cost (credit) | 0.1 |
| | 0.1 |
| | (0.2 | ) | | (0.9 | ) | — |
| | 0.1 |
| | (0.1 | ) | | (0.2 | ) |
Amortization of actuarial loss | 4.4 |
| | 4.2 |
| | 0.5 |
| | 0.6 |
| 4.6 |
| | 4.4 |
| | 0.4 |
| | 0.5 |
|
Additional benefit costs | — |
| | 0.2 |
| | — |
| | — |
| |
|
| $4.2 |
| |
| $3.4 |
| |
| $1.5 |
| |
| $0.8 |
|
| $4.2 |
| |
| $4.2 |
| |
| $1.5 |
| |
| $1.5 |
|
401(k) Savings PlansPlan - A significant number of employees participate in a defined contribution retirement plansplan (401(k) savings plans)plan). For the three months ended March 31, costs related to the 401(k) savings plans,plan, which are partially based on the participants’ contributions and include allocated costs associated with Corporate Services employees for IPL and WPL, were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 |
401(k) costs |
| $6.2 |
| |
| $6.7 |
| |
| $3.1 |
| |
| $3.4 |
| |
| $2.8 |
| |
| $2.9 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
401(k) costs |
| $6.5 |
| |
| $6.2 |
| |
| $3.4 |
| |
| $3.1 |
| |
| $2.9 |
| |
| $2.8 |
|
NOTE 9(b) Equity-based Compensation Plans - All shares, units and awards included below have been adjusted to reflect the common stock split distributed in May 2016.
A summary of compensation expense, including amounts allocated to IPL and WPL, and the related income tax benefits recognized for share-based compensation awards for the three months ended March 31 was as follows (in millions):
| | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
| 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
Compensation expense |
| $5.3 |
| |
| $3.2 |
| |
| $2.8 |
| |
| $1.7 |
| |
| $2.3 |
| |
| $1.4 |
|
| $3.2 |
| |
| $5.3 |
| |
| $1.7 |
| |
| $2.8 |
| |
| $1.4 |
| |
| $2.3 |
|
Income tax benefits | 2.2 |
| | 1.3 |
| | 1.1 |
| | 0.7 |
| | 0.9 |
| | 0.6 |
| 1.3 |
| | 2.2 |
| | 0.7 |
| | 1.1 |
| | 0.5 |
| | 0.9 |
|
As of March 31, 2016,2017, Alliant Energy’s, IPL’s and WPL’s total unrecognized compensation cost related to share-based compensation awards was $12.9$14.0 million, $7.6 million and $5.9 million, which is expected to be recognized over a weighted average period of between one and two years. Share-based compensation expense is recognized on a straight-line basis over the requisite service periods and is primarily recorded in “Other operation and maintenance” in the income statements.
Performance Shares and Performance Units - A summary of the performance shares and performance units activity, with amounts representing the target number of awards, was as follows:
|
| | | | | | | | | | | |
| Performance Shares | | Performance Units |
| 2016 | | 2015 | | 2016 | | 2015 |
Nonvested awards, January 1 | 144,215 |
| | 144,424 |
| | 58,206 |
| | 63,665 |
|
Granted | 33,776 |
| | 45,403 |
| | 11,959 |
| | 17,837 |
|
Vested | (49,093 | ) | | (45,612 | ) | | (21,380 | ) | | (22,845 | ) |
Forfeited | (615 | ) | | — |
| | (382 | ) | | (93 | ) |
Nonvested awards, March 31 | 128,283 |
| | 144,215 |
| | 48,403 |
| | 58,564 |
|
Granted Awards - For the performance units granted in 2016, each performance unit’s value is based on the closing market price of one share of Alliant Energy’s common stock at the end of the performance period. For the performance units granted prior to 2016, each performance unit’s value is based on the closing market price of one share of Alliant Energy’s common stock on the grant date of the award. |
| | | | | | | | | | | |
| Performance Shares | | Performance Units |
| 2017 | | 2016 | | 2017 | | 2016 |
Nonvested awards, January 1 | 257,599 |
| | 288,430 |
| | 93,320 |
| | 116,412 |
|
Granted | 63,804 |
| | 67,552 |
| | 21,558 |
| | 23,918 |
|
Vested | (99,438 | ) | | (98,186 | ) | | (37,395 | ) | | (42,760 | ) |
Forfeited | — |
| | (1,230 | ) | | (497 | ) | | (764 | ) |
Nonvested awards, March 31 | 221,965 |
| | 256,566 |
| | 76,986 |
| | 96,806 |
|
Vested Awards - During the three months ended March 31, certain performance shares and performance units vested, resulting in payouts (a combination of cash and common stock for the performance shares and cash only for the performance units) as follows:
| | | Performance Shares | | Performance Units | Performance Shares | | Performance Units |
| 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 |
| 2013 Grant | | 2012 Grant | | 2013 Grant | | 2012 Grant | 2014 Grant | | 2013 Grant | | 2014 Grant | | 2013 Grant |
Performance awards vested | 49,093 |
| | 45,612 |
| | 21,380 |
| | 22,845 |
| 99,438 |
| | 98,186 |
| | 37,395 |
| | 42,760 |
|
Percentage of target number of performance awards | 165.0 | % | | 167.5 | % | | 165.0 | % | | 167.5 | % | 147.5 | % | | 165.0 | % | | 147.5 | % | | 165.0 | % |
Aggregate payout value (in millions) |
| $5.1 |
| |
| $5.1 |
| |
| $1.7 |
| |
| $1.6 |
|
| $5.6 |
| |
| $5.1 |
| |
| $1.5 |
| |
| $1.7 |
|
Payout - cash (in millions) |
| $2.9 |
| |
| $3.2 |
| |
| $1.7 |
| |
| $1.6 |
|
| $5.1 |
| |
| $2.9 |
| |
| $1.5 |
| |
| $1.7 |
|
Payout - common stock shares issued | 11,204 |
| | 10,975 |
| | N/A | | N/A | 5,185 |
| | 22,408 |
| | N/A | | N/A |
Fair Value of Awards - Information related to fair values of nonvested performance shares and performance units at March 31, 20162017, by year of grant, was as follows:
| | | Performance Shares | | Performance Units | Performance Shares | | Performance Units |
| 2016 Grant | | 2015 Grant | | 2014 Grant | | 2016 Grant | | 2015 Grant | | 2014 Grant | 2017 Grant | | 2016 Grant | | 2015 Grant | | 2017 Grant | | 2016 Grant | | 2015 Grant |
Nonvested awards | 33,161 |
| | 45,403 |
| | 49,719 |
| | 11,959 |
| | 17,209 |
| | 19,235 |
| |
Alliant Energy common stock closing price on March 31, 2016 |
| $74.28 |
| |
| $74.28 |
| |
| $74.28 |
| |
| $74.28 |
| | N/A | | N/A | |
Nonvested awards at target | | 63,804 |
| | 67,355 |
| | 90,806 |
| | 21,061 |
| | 22,657 |
| | 33,268 |
|
Alliant Energy common stock closing price on March 31, 2017 | |
| $39.61 |
| |
| $39.61 |
| |
| $39.61 |
| |
| $39.61 |
| |
| $39.61 |
| | N/A |
Alliant Energy common stock closing price on grant date | N/A | | N/A | | N/A | | N/A | |
| $65.09 |
| |
| $53.77 |
| N/A | | N/A | | N/A | | N/A | | N/A | |
| $32.55 |
|
Estimated payout percentage based on performance criteria | 108 | % | | 90 | % | | 138 | % | | 108 | % | | 90 | % | | 138 | % | 100 | % | | 160 | % | | 130 | % | | 100 | % | | 160 | % | | 130 | % |
Fair values of each nonvested award |
| $80.22 |
| |
| $66.85 |
| |
| $102.51 |
| |
| $80.22 |
| |
| $58.58 |
| |
| $74.20 |
|
| $39.61 |
| |
| $63.38 |
| |
| $51.49 |
| |
| $39.61 |
| |
| $63.38 |
| |
| $42.32 |
|
At March 31, 2016, fair values of nonvested performance shares and performance units were calculated based on Alliant Energy’s stock price and anticipated total shareowner returns of Alliant Energy and its investor-owned utility peer group over the performance period. The portion of the fair values based on anticipated total shareowner returns was estimated using a model that incorporates the probability of meeting performance targets based on historical returns relative to the peer group.
Performance ContingentPerformance-Contingent Restricted Stock - A summary of the performance contingentAlliant Energy has not granted any performance-contingent restricted stock activity was as follows:
|
| | | | | | | | | | | | | |
| 2016 | | 2015 |
| Shares | | Weighted Average Grant Date Fair Value | | Shares | | Weighted Average Grant Date Fair Value |
Nonvested shares, January 1 | 95,122 |
| |
| $59.17 |
| | 98,812 |
| |
| $50.69 |
|
Granted | — |
| | — |
| | 45,403 |
| | 65.09 |
|
Vested (a) | — |
| | — |
| | (49,093 | ) | | 47.58 |
|
Nonvested shares, March 31 | 95,122 |
| | 59.17 |
| | 95,122 |
| | 59.17 |
|
| |
(a) | In 2015, 49,093 performance contingent restricted shares granted in 2013 vested because the specified performance criteria for such shares were met. |
Performance Restricted Stock Units and Performance Restricted Units - Alliant Energy granted new types of share-based compensation awards to key employees in the first quarter of 2016 referred to as performancenonvested performance-contingent restricted stock units, performance restricted units and key employee performance restricted units. Payoutsoutstanding at March 31, 2017, with a weighted average grant date fair value of these units are based on the achievement of certain performance targets (currently specified growth of consolidated income from continuing operations) during the three-year performance period. The actual number of units that will be paid out upon vesting is dependent upon actual performance and may range from zero to 200% of the target number of units. If performance targets are not met during the performance period, these units are forfeited. Subject to achievement of the performance criteria, payouts of nonvested units are prorated in the event of retirement, death or disability during the first year of the performance period based on time worked during the first year of the period, and are prorated upon involuntary termination without cause based on time worked during the entire period. Subject to achievement of the performance criteria, payouts of units to participants who terminate employment after the first year of the performance period due to retirement, death or disability are not prorated. Participants’ nonvested units are forfeited if the participant voluntarily leaves Alliant Energy or is terminated for cause during the performance period.$32.55.
Performance Restricted Stock Units - Performance restricted stock units must be paid out in shares and are accounted for as equity awards. Each performance restricted stock unit’s value is based on the closing market price of one share of Alliant Energy’s common stock on the grant date of the award. A summary of the performance restricted stock units activity, with amounts representing the target number of units, was as follows:
|
| | | | | | |
| 2016 |
| Units | | Weighted Average Grant Date Fair Value |
Granted | 33,776 |
| |
| $67.85 |
|
Forfeited | (615 | ) | | 67.80 |
|
Nonvested units, March 31 | 33,161 |
| | 67.85 |
|
Performance Restricted Units - Performance restricted units must be paid out in cash and are accounted for as liability awards. Each performance restricted unit’s value is based on the closing market price of one share of Alliant Energy’s common stock at the end of the performance period. A summary of the performance restricted units activity, with amounts representing the target number of units, was as follows:
|
| | |
| 2016 |
Granted | 11,959 |
|
Nonvested units, March 31 | 11,959 |
|
Key Employee Performance Restricted Units - Key employee performance restricted units must be paid out in cash and are accounted for as liability awards. Each key employee performance restricted unit’s value is based on the closing market price of one share of Alliant Energy’s common stock on the grant date of the award. A summary of the key employee performance restricted units activity, with amounts representing the target number of units, was as follows:
|
| | | | | | |
| 2016 |
| Units | | Weighted Average Grant Date Fair Value |
Granted | 22,528 |
| |
| $67.80 |
|
Nonvested units, March 31 | 22,528 |
| | 67.80 |
|
Restricted Stock Units and Restricted Units - Alliant Energy granted new types of share-based compensation awards to key employees in the first quarter of 2016 referred to as restricted stock units and restricted units. Payouts of these units are based on the expiration of a three-year time-vesting period. Payouts of nonvested units are prorated in the event of retirement, death or disability during the first year of the time-vesting period based on time worked during the first year of the period, and are prorated upon involuntary termination without cause based on time worked during the entire period. Upon expiration of the time-vesting period, payouts of units to participants who terminate employment after the first year of the period due to retirement, death or disability are not prorated. Participants’ nonvested units are forfeited if the participant voluntarily leaves Alliant Energy or is terminated for cause during the time-vesting period. Each restricted stock unit’s and restricted unit’s value is based on the closing market price of one share of Alliant Energy’s common stock at the end of the time-vesting period. Restricted stock units can be paid out in shares of Alliant Energy common stock, cash or a combination
|
| | | | | | | | | | | | | |
| 2017 | | 2016 |
| Units | | Weighted Average Grant Date Fair Value | | Units | | Weighted Average Grant Date Fair Value |
Nonvested units, January 1 | 67,355 |
| |
| $33.96 |
| | — |
| |
| $— |
|
Granted | 63,804 |
| | 39.11 |
| | 67,552 |
| | 33.93 |
|
Forfeited | — |
| | — |
| | (1,230 | ) | | 33.90 |
|
Nonvested units, March 31 | 131,159 |
| | 36.46 |
| | 66,322 |
| | 33.93 |
|
Restricted units must be paid out in cash. Alliant Energy assumes it will make future payouts of its restricted stock units and restricted units in cash; therefore, restricted stock units and restricted units are accounted for as liability awards. Stock Units - A summary of the restricted stock units and restricted units activity was as follows:
| | | 2016 | 2017 | | 2016 |
| Restricted Stock Units | | Restricted Units | |
Nonvested units, January 1 | | 57,736 |
| | — |
|
Granted | 28,952 |
| | 10,251 |
| 54,688 |
| | 57,904 |
|
Forfeited | (527 | ) | | — |
| — |
| | (1,054 | ) |
Nonvested units, March 31 | 28,425 |
| | 10,251 |
| 112,424 |
| | 56,850 |
|
Performance-Contingent Cash Awards - A summary of theAlliant Energy has not granted any performance-contingent cash awards activity was as follows:
|
| | | | | |
| 2016 | | 2015 |
Nonvested awards, January 1 | 81,876 |
| | 78,930 |
|
Granted | — |
| | 41,105 |
|
Vested (a) | — |
| | (37,332 | ) |
Forfeited | (382 | ) | | (469 | ) |
Nonvested awards, March 31 | 81,494 |
| | 82,234 |
|
| |
(a) | In 2015, 37,332 performance-contingent cash awards granted in 2013 vested, resulting in cash payouts valued at $2.4 million. |
NOTE 10. ASSET RETIREMENT OBLIGATIONS
A reconciliationsince 2015. In 2017, 79,719 performance-contingent cash awards granted in 2014 vested, resulting in cash payouts valued at $3.1 million. There were 79,616 shares of the changes in AROs associated with long-lived assets is as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 |
Balance, January 1 |
| $214.0 |
| |
| $114.0 |
| |
| $132.9 |
| |
| $51.8 |
| |
| $71.9 |
| |
| $52.4 |
|
Revisions in estimated cash flows | 0.5 |
| | — |
| | 0.5 |
| | — |
| | — |
| | — |
|
Liabilities settled | (2.7 | ) | | (2.2 | ) | | (0.7 | ) | | (2.2 | ) | | (2.0 | ) | | — |
|
Liabilities incurred | 0.7 |
| | — |
| | 0.7 |
| | — |
| | — |
| | — |
|
Accretion expense | 1.6 |
| | 1.0 |
| | 0.9 |
| | 0.4 |
| | 0.6 |
| | 0.4 |
|
Balance, March 31 |
| $214.1 |
| |
| $112.8 |
| |
| $134.3 |
| |
| $50.0 |
| |
| $70.5 |
| |
| $52.8 |
|
nonvested performance-contingent cash awards outstanding at March 31, 2017.
NOTE 11.10. FAIR VALUE MEASUREMENTS
Valuation Hierarchy - At each reporting date, Level 1 items included IPL’s 5.1% cumulative preferred stock, Level 2 items included certain non-exchange traded commodity contracts and substantially all of the long-term debt instruments, and Level 3 items included FTRs, certain non-exchange traded commodity contracts and IPL’s deferred proceeds.
Valuation Techniques -
Derivative assets and derivative liabilities - Derivative instruments are periodically used for risk management purposes to mitigate exposures to fluctuations in certain commodity prices, transmission congestion costs and rail transportation costs. Risk policies are maintained that govern the use of such derivative instruments. Derivative instruments were not designated as hedging instruments and included the following:
|
| |
Risk management purpose | Type of instrument |
Mitigate pricing volatility for: | |
Electricity purchased to supply customers | Electric swap and physical forward contracts (IPL and WPL) |
Fuel used to supply natural gas-fired EGUs | Natural gas swap and physical forward contracts (IPL and WPL) |
Natural gas supplied to retail customers | Natural gas options and physical forward contracts (IPL and WPL) |
| Natural gas swap contracts (IPL) |
Fuel used at coal-fired EGUs | Coal physical forward contracts (IPL and WPL) |
Optimize the value of natural gas pipeline capacity | Natural gas physical forward contracts (IPL and WPL) |
| Natural gas swap contracts (IPL) |
Manage transmission congestion costs | FTRs (IPL and WPL) |
Manage rail transportation costs | Diesel fuel swap contracts (WPL) |
Swap, option and physical forward commodity contracts were non-exchange-based derivative instruments and were valued using indicative price quotations from a pricing vendor that provides daily exchange forward price settlements, from broker or dealer quotations, from market publications or from on-line exchanges. The indicative price quotations reflected the average of the bid-ask mid-point prices and were obtained from sources believed to provide the most liquid market for the commodity. A portion of these indicative price quotations were corroborated using quoted prices for similar assets or liabilities in active markets and categorized derivative instruments based on such indicative price quotations as Level 2. Commodity contracts that were valued using indicative price quotations based on significant assumptions such as seasonal or monthly shaping and indicative price quotations that could not be readily corroborated were categorized as Level 3. Swap, option and physical forward commodity contracts were predominately at liquid trading points. FTRs were valued using monthly or annual auction shadow prices from relevant auctions and were categorized as Level 3. Refer to Note 12 for additional details of derivative assets and derivative liabilities.
The fair value measurements of Level 3 derivative instruments include observable and unobservable inputs. The observable inputs are obtained from third-party pricing sources, counterparties and brokers and include bids, offers, historical transactions (including historical price differences between locations with both observable and unobservable prices) and executed trades. The significant unobservable inputs used in the fair value measurement of commodity contracts are forecasted electricity, natural gas and coal prices, and the expected volatility of such prices. Significant changes in any of those inputs would result in a significantly lower or higher fair value measurement.
Deferred proceeds (sales of receivables) - The fair value of IPL’s deferred proceeds related to its sales of accounts receivable program was calculated each reporting date using the cost approach valuation technique. The fair value represents the carrying amount of receivables sold less the allowance for doubtful accounts associated with the receivables sold and cash amounts received from the receivables sold due to the short-term nature of the collection period. These inputs were considered unobservable and deferred proceeds were categorized as Level 3. Deferred proceeds represent IPL’s maximum exposure to loss related to the receivables sold. Refer to Note 4 for additional information regarding deferred proceeds.
Long-term debt (including current maturities) - The fair value of long-term debt instruments was based on quoted market prices for similar liabilities at each reporting date or on a discounted cash flow methodology, which utilizes assumptions of current market pricing curves at each reporting date.
Cumulative preferred stock - The fair value of IPL’s 5.1% cumulative preferred stock was based on its closing market price quoted by the New York Stock Exchange at each reporting date.
Fair Value of Financial Instruments - The carrying amounts of current assets and current liabilities approximate fair value because of the short maturity of such financial instruments. Carrying amounts and related estimated fair values of other financial instruments were as follows (in millions):
| | Alliant Energy | March 31, 2016 | | December 31, 2015 | March 31, 2017 | | December 31, 2016 |
| | | Fair Value | | | | Fair Value | | | Fair Value | | | | Fair Value |
| Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | | Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | |
| Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total | Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total |
Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivatives |
| $7.7 |
| |
| $— |
| |
| $1.2 |
| |
| $6.5 |
| |
| $7.7 |
| |
| $18.4 |
| |
| $— |
| |
| $2.5 |
| |
| $15.9 |
| |
| $18.4 |
|
| $13.3 |
| |
| $— |
| |
| $1.7 |
| |
| $11.6 |
| |
| $13.3 |
| |
| $41.4 |
| |
| $— |
| |
| $4.6 |
| |
| $36.8 |
| |
| $41.4 |
|
Deferred proceeds | 154.2 |
| | — |
| | — |
| | 154.2 |
| | 154.2 |
| | 172.0 |
| | — |
| | — |
| | 172.0 |
| | 172.0 |
| 149.0 |
| | — |
| | — |
| | 149.0 |
| | 149.0 |
| | 211.1 |
| | — |
| | — |
| | 211.1 |
| | 211.1 |
|
Liabilities and equity: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Derivatives | 84.0 |
| | — |
| | 11.6 |
| | 72.4 |
| | 84.0 |
| | 64.6 |
| | — |
| | 16.0 |
| | 48.6 |
| | 64.6 |
| 45.3 |
| | — |
| | 0.8 |
| | 44.5 |
| | 45.3 |
| | 28.6 |
| | — |
| | 0.5 |
| | 28.1 |
| | 28.6 |
|
Long-term debt (including current maturities) | 3,836.1 |
| | — |
| | 4,452.3 |
| | 3.3 |
| | 4,455.6 |
| | 3,835.6 |
| | — |
| | 4,332.4 |
| | 3.7 |
| | 4,336.1 |
| 4,320.7 |
| | — |
| | 4,768.3 |
| | 2.9 |
| | 4,771.2 |
| | 4,320.2 |
| | — |
| | 4,795.7 |
| | 3.3 |
| | 4,799.0 |
|
Cumulative preferred stock of IPL | 200.0 |
| | 208.3 |
| | — |
| | — |
| | 208.3 |
| | 200.0 |
| | 206.6 |
| | — |
| | — |
| | 206.6 |
| 200.0 |
| | 202.6 |
| | — |
| | — |
| | 202.6 |
| | 200.0 |
| | 194.8 |
| | — |
| | — |
| | 194.8 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
IPL | March 31, 2017 | | December 31, 2016 |
| | | Fair Value | | | | Fair Value |
| Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | |
| Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total |
Assets: | | | | | | | | | | | | | | | | | | | |
Derivatives |
| $8.8 |
| |
| $— |
| |
| $1.3 |
| |
| $7.5 |
| |
| $8.8 |
| |
| $20.8 |
| |
| $— |
| |
| $2.8 |
| |
| $18.0 |
| |
| $20.8 |
|
Deferred proceeds | 149.0 |
| | — |
| | — |
| | 149.0 |
| | 149.0 |
| | 211.1 |
| | — |
| | — |
| | 211.1 |
| | 211.1 |
|
Liabilities and equity: | | | | | | | | | | | | | | | | | | | |
Derivatives | 16.3 |
| | — |
| | 0.5 |
| | 15.8 |
| | 16.3 |
| | 8.3 |
| | — |
| | 0.4 |
| | 7.9 |
| | 8.3 |
|
Long-term debt | 2,154.0 |
| | — |
| | 2,342.1 |
| | — |
| | 2,342.1 |
| | 2,153.5 |
| | — |
| | 2,352.3 |
| | — |
| | 2,352.3 |
|
Cumulative preferred stock | 200.0 |
| | 202.6 |
| | — |
| | — |
| | 202.6 |
| | 200.0 |
| | 194.8 |
| | — |
| | — |
| | 194.8 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
IPL | March 31, 2016 | | December 31, 2015 |
| | | Fair Value | | | | Fair Value |
| Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | |
| Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total |
Assets: | | | | | | | | | | | | | | | | | | | |
Derivatives |
| $5.8 |
| |
| $— |
| |
| $1.1 |
| |
| $4.7 |
| |
| $5.8 |
| |
| $15.5 |
| |
| $— |
| |
| $2.0 |
| |
| $13.5 |
| |
| $15.5 |
|
Deferred proceeds | 154.2 |
| | — |
| | — |
| | 154.2 |
| | 154.2 |
| | 172.0 |
| | — |
| | — |
| | 172.0 |
| | 172.0 |
|
Liabilities and equity: | | | | | | | | | | | | | | | | | | | |
Derivatives | 23.3 |
| | — |
| | 5.5 |
| | 17.8 |
| | 23.3 |
| | 23.4 |
| | — |
| | 8.0 |
| | 15.4 |
| | 23.4 |
|
Long-term debt (including current maturities) | 1,857.4 |
| | — |
| | 2,147.2 |
| | — |
| | 2,147.2 |
| | 1,856.9 |
| | — |
| | 2,092.7 |
| | — |
| | 2,092.7 |
|
Cumulative preferred stock | 200.0 |
| | 208.3 |
| | — |
| | — |
| | 208.3 |
| | 200.0 |
| | 206.6 |
| | — |
| | — |
| | 206.6 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
WPL | March 31, 2016 | | December 31, 2015 |
| | | Fair Value | | | | Fair Value |
| Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | |
| Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total |
Assets: | | | | | | | | | | | | | | | | | | | |
Derivatives |
| $1.9 |
| |
| $— |
| |
| $0.1 |
| |
| $1.8 |
| |
| $1.9 |
| |
| $2.9 |
| |
| $— |
| |
| $0.5 |
| |
| $2.4 |
| |
| $2.9 |
|
Liabilities and equity: | | | | | | | | | | | | | | | | | | | |
Derivatives | 60.7 |
| | — |
| | 6.1 |
| | 54.6 |
| | 60.7 |
| | 41.2 |
| | — |
| | 8.0 |
| | 33.2 |
| | 41.2 |
|
Long-term debt (including current maturities) | 1,534.2 |
| | — |
| | 1,854.3 |
| | — |
| | 1,854.3 |
| | 1,533.9 |
| | — |
| | 1,793.0 |
| | — |
| | 1,793.0 |
|
Unrealized gains and losses from derivative instruments are generally recorded with offsets to regulatory assets or regulatory liabilities, based on fuel and natural gas cost recovery mechanisms, as well as other specific regulatory authorizations. Based on these recovery mechanisms, the changes in the fair value of derivative liabilities resulted in comparable changes to regulatory assets, and the changes in the fair value of derivative assets resulted in comparable changes to regulatory liabilities. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
WPL | March 31, 2017 | | December 31, 2016 |
| | | Fair Value | | | | Fair Value |
| Carrying | | Level | | Level | | Level | | | | Carrying | | Level | | Level | | Level | | |
| Amount | | 1 | | 2 | | 3 | | Total | | Amount | | 1 | | 2 | | 3 | | Total |
Assets: | | | | | | | | | | | | | | | | | | | |
Derivatives |
| $4.5 |
| |
| $— |
| |
| $0.4 |
| |
| $4.1 |
| |
| $4.5 |
| |
| $20.6 |
| |
| $— |
| |
| $1.8 |
| |
| $18.8 |
| |
| $20.6 |
|
Liabilities: | | | | | | | | | | | | | | | | | | | |
Derivatives | 29.0 |
| | — |
| | 0.3 |
| | 28.7 |
| | 29.0 |
| | 20.3 |
| | — |
| | 0.1 |
| | 20.2 |
| | 20.3 |
|
Long-term debt | 1,535.5 |
| | — |
| | 1,790.9 |
| | — |
| | 1,790.9 |
| | 1,535.2 |
| | — |
| | 1,807.4 |
| | — |
| | 1,807.4 |
|
Information for fair value measurements using significant unobservable inputs (Level 3 inputs) was as follows (in millions):
|
| | | | | | | | | | | | | | | |
Alliant Energy | Commodity Contract Derivative | | |
| Assets and (Liabilities), net | | Deferred Proceeds |
Three Months Ended March 31 | 2016 | | 2015 | | 2016 | | 2015 |
Beginning balance, January 1 |
| ($32.7 | ) | |
| $17.9 |
| |
| $172.0 |
| |
| $177.2 |
|
Total net losses included in changes in net assets (realized/unrealized) | (31.4 | ) | | (18.1 | ) | | — |
| | — |
|
Transfers into Level 3 | 0.9 |
| | — |
| | — |
| | — |
|
Sales | (0.6 | ) | | (0.9 | ) | | — |
| | — |
|
Settlements (a) | (2.1 | ) | | (12.0 | ) | | (17.8 | ) | | (59.5 | ) |
Ending balance, March 31 |
| ($65.9 | ) | |
| ($13.1 | ) | |
| $154.2 |
| |
| $117.7 |
|
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at March 31 |
| ($30.0 | ) | |
| ($16.5 | ) | |
| $— |
| |
| $— |
|
|
| | | | | | | | | | | | | | | |
Alliant Energy | Commodity Contract Derivative | | |
| Assets and (Liabilities), net | | Deferred Proceeds |
Three Months Ended March 31 | 2017 | | 2016 | | 2017 | | 2016 |
Beginning balance, January 1 |
| $8.7 |
| |
| ($32.7 | ) | |
| $211.1 |
| |
| $172.0 |
|
Total net losses included in changes in net assets (realized/unrealized) | (35.2 | ) | | (31.4 | ) | | — |
| | — |
|
Transfers into Level 3 | — |
| | 0.9 |
| | — |
| | — |
|
Sales | (0.1 | ) | | (0.6 | ) | | — |
| | — |
|
Settlements (a) | (6.3 | ) | | (2.1 | ) | | (62.1 | ) | | (17.8 | ) |
Ending balance, March 31 |
| ($32.9 | ) | |
| ($65.9 | ) | |
| $149.0 |
| |
| $154.2 |
|
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at March 31 |
| ($33.7 | ) | |
| ($30.0 | ) | |
| $— |
| |
| $— |
|
| | IPL | Commodity Contract Derivative | | | Commodity Contract Derivative | | |
| Assets and (Liabilities), net | | Deferred Proceeds | Assets and (Liabilities), net | | Deferred Proceeds |
Three Months Ended March 31 | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 |
Beginning balance, January 1 |
| ($1.9 | ) | |
| $19.4 |
| |
| $172.0 |
| |
| $177.2 |
|
| $10.1 |
| |
| ($1.9 | ) | |
| $211.1 |
| |
| $172.0 |
|
Total net losses included in changes in net assets (realized/unrealized) | (7.6 | ) | | (12.5 | ) | | — |
| | — |
| (12.7 | ) | | (7.6 | ) | | — |
| | — |
|
Transfers into Level 3 | 0.5 |
| | — |
| | — |
| | — |
| — |
| | 0.5 |
| | — |
| | — |
|
Sales | (0.6 | ) | | (0.9 | ) | | — |
| | — |
| (0.1 | ) | | (0.6 | ) | | — |
| | — |
|
Settlements (a) | (3.5 | ) | | (11.0 | ) | | (17.8 | ) | | (59.5 | ) | (5.6 | ) | | (3.5 | ) | | (62.1 | ) | | (17.8 | ) |
Ending balance, March 31 |
| ($13.1 | ) | |
| ($5.0 | ) | |
| $154.2 |
| |
| $117.7 |
|
| ($8.3 | ) | |
| ($13.1 | ) | |
| $149.0 |
| |
| $154.2 |
|
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at March 31 |
| ($6.6 | ) | |
| ($10.7 | ) | |
| $— |
| |
| $— |
|
| ($11.4 | ) | |
| ($6.6 | ) | |
| $— |
| |
| $— |
|
| | WPL | Commodity Contract Derivative | Commodity Contract Derivative |
| Assets and (Liabilities), net | Assets and (Liabilities), net |
Three Months Ended March 31 | 2016 | | 2015 | 2017 | | 2016 |
Beginning balance, January 1 |
| ($30.8 | ) | |
| ($1.5 | ) |
| ($1.4 | ) | |
| ($30.8 | ) |
Total net losses included in changes in net assets (realized/unrealized) | (23.8 | ) | | (5.6 | ) | (22.5 | ) | | (23.8 | ) |
Transfers into Level 3 | 0.4 |
| | — |
| — |
| | 0.4 |
|
Settlements | 1.4 |
| | (1.0 | ) | (0.7 | ) | | 1.4 |
|
Ending balance, March 31 |
| ($52.8 | ) | |
| ($8.1 | ) |
| ($24.6 | ) | |
| ($52.8 | ) |
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at March 31 |
| ($23.4 | ) | |
| ($5.8 | ) |
| ($22.3 | ) | |
| ($23.4 | ) |
| |
(a) | Settlements related to deferred proceeds are due to the change in the carrying amount of receivables sold less the allowance for doubtful accounts associated with the receivables sold and cash proceedsamounts received from the receivables sold. |
Commodity Contracts - The fair value of electric, natural gas and coal commodity contracts categorized as Level 3 was recognized as net derivative assets (liabilities) as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| Excluding FTRs | | FTRs | | Excluding FTRs | | FTRs | | Excluding FTRs | | FTRs |
March 31, 2016 |
| ($67.9 | ) | |
| $2.0 |
| |
| ($15.0 | ) | |
| $1.9 |
| |
| ($52.9 | ) | |
| $0.1 |
|
December 31, 2015 | (43.1 | ) | | 10.4 |
| | (12.3 | ) | | 10.4 |
| | (30.8 | ) | | — |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| Excluding FTRs | | FTRs | | Excluding FTRs | | FTRs | | Excluding FTRs | | FTRs |
March 31, 2017 |
| ($37.0 | ) | |
| $4.1 |
| |
| ($11.6 | ) | |
| $3.3 |
| |
| ($25.4 | ) | |
| $0.8 |
|
December 31, 2016 | (2.3 | ) | | 11.0 |
| | 0.1 |
| | 10.0 |
| | (2.4 | ) | | 1.0 |
|
NOTE 12.11. DERIVATIVE INSTRUMENTS
Commodity Derivatives -
Purpose - Derivative instruments are periodically used for risk management purposes to mitigate exposures to fluctuations in certain commodity prices and transmission congestion costs. Refer to Note 11 for detailed discussion of derivative instruments.
Notional Amounts - As of March 31, 2016,2017, gross notional amounts and settlement/delivery years related to outstanding swap contracts, option contracts, physical forward contracts, FTRs, coal contracts and diesel fuel contracts that were accounted for as commodity derivative instruments were as follows (units in thousands):
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| Electricity | | FTRs | | Natural Gas | | Coal | | Diesel Fuel |
| MWhs | | Years | | MWhs | | Years | | Dths | | Years | | Tons | | Years | | Gallons | | Years |
Alliant Energy | 5,115 |
| | 2016-2018 | | 3,768 |
| | 2016 | | 94,635 |
| | 2016-2020 | | 4,240 |
| | 2016-2018 | | 5,292 |
| | 2016-2017 |
IPL | 660 |
| | 2016 | | 2,232 |
| | 2016 | | 49,747 |
| | 2016-2020 | | 1,661 |
| | 2016-2018 | | — |
| | — |
WPL | 4,455 |
| | 2016-2018 | | 1,536 |
| | 2016 | | 44,888 |
| | 2016-2020 | | 2,579 |
| | 2016-2018 | | 5,292 |
| | 2016-2017 |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| Electricity | | FTRs | | Natural Gas | | Coal | | Diesel Fuel |
| MWhs | | Years | | MWhs | | Years | | Dths | | Years | | Tons | | Years | | Gallons | | Years |
Alliant Energy | 2,304 |
| | 2017-2018 | | 3,537 |
| | 2017 | | 160,048 |
| | 2017-2026 | | 4,113 |
| | 2017-2019 | | 5,796 |
| | 2017-2018 |
IPL | — |
| | — | | 2,229 |
| | 2017 | | 72,924 |
| | 2017-2026 | | 1,680 |
| | 2017-2019 | | — |
| | — |
WPL | 2,304 |
| | 2017-2018 | | 1,308 |
| | 2017 | | 87,124 |
| | 2017-2026 | | 2,433 |
| | 2017-2018 | | 5,796 |
| | 2017-2018 |
Financial Statement Presentation - Derivative instruments are recorded at fair value each reporting date on the balance sheets as assets or liabilities. The fair values of current derivative assets are included in “Other current assets,” non-current derivative assets are included in “Deferred charges and other,” current derivative liabilities are included in “Other current liabilities” and non-current derivative liabilities are included in “Other liabilities” on the balance sheets as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Commodity contracts | March 31, 2016 | | December 31, 2015 | | March 31, 2016 | | December 31, 2015 | | March 31, 2016 | | December 31, 2015 |
Current derivative assets |
| $6.1 |
| |
| $15.1 |
| |
| $4.8 |
| |
| $13.8 |
| |
| $1.3 |
| |
| $1.3 |
|
Non-current derivative assets | 1.6 |
| | 3.3 |
| | 1.0 |
| | 1.7 |
| | 0.6 |
| | 1.6 |
|
Current derivative liabilities | 56.3 |
| | 47.3 |
| | 18.7 |
| | 18.5 |
| | 37.6 |
| | 28.8 |
|
Non-current derivative liabilities | 27.7 |
| | 17.3 |
| | 4.6 |
| | 4.9 |
| | 23.1 |
| | 12.4 |
|
Unrealized gains and losses from commodity derivative instruments were recorded with offsets to regulatory assets or regulatory liabilities on the balance sheets. Refer to Notes 2 and 11 for further discussion. |
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Commodity contracts | March 31, 2017 | | December 31, 2016 | | March 31, 2017 | | December 31, 2016 | | March 31, 2017 | | December 31, 2016 |
Current derivative assets |
| $12.2 |
| |
| $29.4 |
| |
| $8.2 |
| |
| $19.1 |
| |
| $4.0 |
| |
| $10.3 |
|
Non-current derivative assets | 1.1 |
| | 12.0 |
| | 0.6 |
| | 1.7 |
| | 0.5 |
| | 10.3 |
|
Current derivative liabilities | 13.4 |
| | 13.3 |
| | 2.9 |
| | 2.7 |
| | 10.5 |
| | 10.6 |
|
Non-current derivative liabilities | 31.9 |
| | 15.3 |
| | 13.4 |
| | 5.6 |
| | 18.5 |
| | 9.7 |
|
Credit Risk-related Contingent Features - Various agreements contain credit risk-related contingent features, including requirements to maintain certain credit ratings and/or limitations on liability positions under the agreements based on credit ratings. Certain of these agreements with credit risk-related contingency features are accounted for as derivative instruments. In the event of a material change in creditworthiness or if liability positions exceed certain contractual limits, credit support may need to be provided in the form of letters of credit or cash collateral up to the amount of exposure under the contracts, or the contracts may need to be unwound and underlying liability positions paid. At March 31, 20162017 and December 31, 2015,2016, the aggregate fair value of all derivative instruments with credit risk-related contingent features in a net liability position was not materially different than amounts that would be required to be posted as credit support to counterparties by Alliant Energy, IPL or WPL if the most restrictive credit risk-related contingent features for derivative agreements in a net liability position were triggered.
Balance Sheet Offsetting - The fair value amounts of derivative instruments subject to a master netting arrangement are not netted by counterparty on the balance sheets. However, if the fair value amounts of derivative instruments by counterparty were netted, amounts would not be materially different from gross amounts of derivative assets and derivative liabilities at March 31, 20162017 and December 31, 2015.2016. Fair value amounts recognized for the right to reclaim cash collateral (receivable) or the obligation to return cash collateral (payable) are not offset against fair value amounts recognized for derivative instruments executed with the same counterparty under the same master netting arrangement.
NOTE 13.12. COMMITMENTS AND CONTINGENCIES
NOTE 13(a)12(a) Capital Purchase Obligations - Various contractual obligations contain minimum future commitments related to capital expenditures for certain construction projects. IPL’s projects include generation maintenance and performance improvements for Marshalltown Combustion Turbine Units 1-3.the installation of an SCR system at Ottumwa Unit 1 to reduce NOx emissions at the EGU. WPL’s projects include generation maintenance and performance improvements at Columbia Units 1 and 2, the installation of a scrubber and baghouse at Edgewater Unit 5 to reduce SO2 and mercury emissions, andRiverside expansion, the installation of an SCR system at Columbia Unit 2 to reduce NOx emissions at the EGU.EGU, and generation maintenance and performance improvements at Columbia Units 1 and 2. At March 31, 2016,2017, Alliant Energy’s, IPL’s and WPL’s minimum future commitments related to certain contractual obligations for these projects were $30$36 million, $15$5 million and $15$31 million, respectively.
NOTE 13(b)12(b) Operating Expense Purchase Obligations - Various commodity supply, transportation and storage contracts help meet obligations to provide electricity and natural gas to utility customers. Other operating expense purchase obligations with various vendors provide other goods and services. At March 31, 20162017, minimum future commitments related to these operating expense purchase obligations were as follows (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Purchased power (a): | | | | | |
DAEC (IPL) |
| $1,390 |
| |
| $1,390 |
| |
| $— |
|
Other | 145 |
| | 1 |
| | 144 |
|
| 1,535 |
| | 1,391 |
| | 144 |
|
Natural gas | 408 |
| | 225 |
| | 183 |
|
Coal (b) | 238 |
| | 102 |
| | 136 |
|
SO2 emission allowances | 8 |
| | 8 |
| | — |
|
Other (c) | 24 |
| | 5 |
| | 2 |
|
|
| $2,213 |
| |
| $1,731 |
| |
| $465 |
|
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Purchased power (a) |
| $1,372 |
| |
| $1,266 |
| |
| $106 |
|
Natural gas | 812 |
| | 426 |
| | 386 |
|
Coal (b) | 165 |
| | 73 |
| | 92 |
|
Other (c) | 38 |
| | 20 |
| | 3 |
|
|
| $2,387 |
| |
| $1,785 |
| |
| $587 |
|
| |
(a) | Includes payments required by purchased power agreements for capacity rights and minimum quantities of MWhs required to be purchased. |
| |
(b) | Corporate Services entered into system-wide coal contracts on behalf of IPL and WPL that include minimum future commitments. These commitments were assigned to IPL and WPL based on information available as of March 31, 20162017 regarding expected future usage, which is subject to change. |
| |
(c) | Includes individual commitments incurred during the normal course of business that exceeded $1 million at March 31, 20162017. |
NOTE 13(c)12(c) Legal Proceedings -
Flood Damage Claims - In 2013, several plaintiffs purporting to represent a class of residential and commercial property owners filed a complaint against CRANDIC,Cedar Rapids and Iowa City Railway Company (CRANDIC), Alliant Energy and various other defendants in the Iowa District Court for Linn County. Plaintiffs assert claims of negligence and strict liability based on their allegations that CRANDIC (along with other defendants) caused or exacerbated flooding of the Cedar River in June 2008. In February 2016, the Iowa District Court for Linn County ruled in favor of Alliant Energy and CRANDIC and dismissed all claims against them, resulting in no loss. In MarchAugust 2016, the Iowa District Court for Linn County dismissed all claims against the remaining defendants. In September 2016, plaintiffs filed a notice of appeal with the Supreme Court of Iowa,Iowa. Alliant Energy does not currently believe any material losses for this complaint are both probable and the plaintiffs’ right to appealreasonably estimated, and therefore has been challenged by another defendant. There is no deadline for the Supreme Courtnot recognized any material loss contingency amounts as of Iowa to rule on the motion challenging the appeal.March 31, 2017.
NOTE 13(d)12(d) Guarantees and Indemnifications -
RMT - In 2013, Alliant Energy sold RMT. RMT provided renewable energy services, including construction and high voltage connection services for wind and solar projects. As part of the sale, Alliant Energy indemnified the buyer for any claims, including claims of warranty under the project obligations that were commenced or are based on actions that occurred prior to the sale, except for liabilities already accounted for through adjustments to the purchase price. The indemnification obligations either cease to exist when the statute of limitation for such claims is met or, in the case of RMT’s projects, when the warranty period under the agreements expires. The contractual warranty periods for RMT’s projects generally range from 12 to 60 months with the latest expiring in 2016. Limited warranties may be extended in certain cases for warranty work performed.
Alliant Energy also continues to guaranteeguaranteed RMT’s performance obligations related to certain of RMT’s projects that were commenced prior to Alliant Energy’s sale of RMT. As of March 31, 2016, Alliant Energy had $123 million of2017, all warranty periods and performance guarantees outstanding, with $48 millionexpired and $75 million currently expected to expire in 2016 and 2017, respectively. The expiration of these performance guarantees may be extended depending on when all validoutstanding warranty claims are resolved for the respective projects.
Although Alliant Energy has received warranty claims related to certain of these projects, it does not currently believe that material losses are both probable and reasonably estimated, and therefore, has not recognized any material liabilities related to these matters as of March 31, 2016. Alliant Energy does not currently believe that the range of future potential loss from any warranty claims will be material.were resolved. Refer to Note 1615 for further discussion of RMT, including amounts Alliant Energy recorded to “Operating expenses”expenses (income)” during the three months ended March 31, 2017 and 2016 related to certain warranty claims.
Whiting Petroleum - In 2004, Alliant Energy sold its remaining interest in Whiting Petroleum. Whiting Petroleum is an independent oil and gas company. Alliant Energy Resources, LLC, as the successor to a predecessor entity that owned Whiting Petroleum, and a wholly-owned subsidiary of AEF, continues to guarantee the partnership obligations of an affiliate of Whiting Petroleum under general partnership agreements in the oil and gas industry, including with respect to the future abandonment of certain platforms off the coast of California and related onshore plant and equipment owned by the partnerships. The guarantees do not include a maximum limit. As of March 31, 20162017, the present value of the abandonment obligations is estimated at $29$31 million. Alliant Energy is not aware of any material liabilities related to these guarantees of which it is probable that Alliant Energy Resources, LLC will be obligated to pay and therefore has not recognized any material liabilities related to this guarantee as of March 31, 2016.2017.
IPL’s Minnesota Electric Distribution Assets - IPL provided indemnifications associated with the July 2015 sale of its Minnesota electric distribution assets for losses resulting from potential breach of IPL’s representations, warranties and obligations under the sale agreement. Alliant Energy and IPL believe the likelihood of having to make any material cash payments under these indemnifications is remote. IPL has not recorded any material liabilities related to these indemnifications as of March 31, 2016.2017. The general terms of the indemnifications provided by IPL included a maximum limit of $17 million and expire in October 2020.
NOTE 13(e)12(e) Environmental Matters -
MGPManufactured Gas Plant (MGP) Sites - IPL and WPL have current or previous ownership interests in various sites that are previously associated with the production of gas for which IPL and WPL have, or may have in the future, liability for investigation, remediation and monitoring costs. IPL and WPL are working pursuant to the requirements of various federal and state agencies to investigate, mitigate, prevent and remediate, where necessary, the environmental impacts to property, including natural resources, at and around these former MGP sites in order to protect public health and the environment. IPL and WPL are currently monitoring and/or remediating 24 and 5 sites, respectively.
Environmental liabilities related to the MGP sites are recorded based upon periodic studies. Such amounts are based on the best current estimate of the remaining amount to be incurred for investigation, remediation and monitoring costs for those sites where the investigation process has been or is substantially completed, and the minimum of the estimated cost range for those sites where the investigation is in its earlier stages. There are inherent uncertainties associated with the estimated remaining costs for MGP projects primarily due to unknown site conditions and potential changes in regulatory agency requirements. It is possible that future cost estimates will be greater than current estimates as the investigation process proceeds and as additional facts become known. The amounts recognized as liabilities are reduced for expenditures incurred and are adjusted as further information develops or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted. At March 31, 20162017, estimated future costs expected to be incurred for the investigation, remediation and monitoring of the MGP sites, as well as environmental liabilities recorded on the balance sheets for these sites, were as follows (in millions):. At March 31, 2017, such amounts for WPL were not material.
| | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL |
Range of estimated future costs |
| $12 |
| - | $28 | |
| $10 |
| - | $24 | |
| $2 |
| - | $4 |
| $12 |
| - | $31 | |
| $10 |
| - | $28 |
Current and non-current environmental liabilities | 16 | | 13 | | 3 | 17 | | 14 |
WPL Consent Decree - In 2013, the U.S. District Court for the Western District of Wisconsin approved a Consent Decree that WPL, along with the other owners of Edgewater and Columbia, entered into with the EPA and the Sierra Club, thereby resolving claims against WPL. Such claims included allegations that the owners of Edgewater, Nelson Dewey and Columbia violated the Prevention of Significant Deterioration program requirements, Title V Operating Permit requirements of the CAA and the Wisconsin State Implementation Plan designed to implement the CAA.
WPL has completed various requirements under the Consent Decree. WPL’s remaining requirements include installing a scrubber and baghouse at Edgewater Unit 5 by December 31, 2016 and an SCR system at Columbia Unit 2 by December 31, 2018. WPL is also required toand fuel switchswitching or retireretiring Edgewater Unit 4 by December 31, 2018. In addition, theThe Consent Decree also establishes emission rate limits for SO2, NOx and particulate matter emission rate limits for Columbia Units 1 and 2, Nelson Dewey Units 1 and 2, and Edgewater Units 4 and 5. TheIn addition, the Consent Decree also includes annual plant-wide SO2 and NOx emission caps for SO2Columbia and NOx for Columbia, Edgewater and Nelson Dewey.Edgewater. WPL is in the process of completing approximately $7$7 million in environmental mitigation projects.
Alliant Energy and WPL currently expect to recover material costs incurred by WPL related to compliance with the terms of the Consent Decree from WPL’s electric customers. The recovery of such costs will be decided by the PSCW in future rate cases or other proceedings.
IPL Consent Decree - In 2015, the U.S. District Court for the Northern District of Iowa approved a Consent Decree that IPL entered into with the EPA, the Sierra Club, the State of Iowa and Linn County in Iowa, thereby resolving potential CAA issues associated with emissions from IPL’s coal-fired generating facilities in Iowa. IPL has completed various requirements under the Consent Decree. IPL’s remaining requirements include installing an SCR system or equivalent NOx reduction system at the Ottumwa Generating Station by December 31, 2019; fuel switching or retiring Prairie Creek Unit 4 by June 1, 2018, the Burlington Generating Station by December 31, 2021 and Prairie Creek Units 1 and 3 by December 31, 2025; and either installing combined cycle technology at, or retiring, the Dubuque and Sutherland Generating Stations by June 1, 2019.
The Consent Decree also establishes SO2, NOx and particulate matter emission rate limits with varying averaging times for the Burlington, Lansing, M.L. Kapp, Ottumwa and Prairie Creek Generating Stations.Creek. In addition, the Consent Decree includes calendar-year SO2 and NOx emission caps for the Prairie Creek, Generating Station, and calendar-year SO2 and NOx emission caps in aggregate for the Burlington, Dubuque, Lansing, M.L. Kapp, Ottumwa, Prairie Creek and Sutherland Generating Stations.Sutherland. IPL will also completeis in the process of completing approximately $6 million in environmental mitigation projects.
Alliant Energy and IPL currently expect to recover material costs incurred by IPL related to the environmental control systems and environmental mitigation projects from IPL’s electric customers. The recovery of such costs will be decided by IPL’s regulators in future rate cases or other proceedings.
Other Environmental Contingencies - In addition to the environmental liabilities discussed above, various environmental rules are monitored that may have a significant impact on future operations. Several of these environmental rules are subject to legal challenges, reconsideration and/or other uncertainties. Given uncertainties regarding the outcome, timing and compliance plans for these environmental matters, the complete financial impact of each of these rules is not able to be determined; however future capital investments and/or modifications to EGUs to comply with certain of these rules could be significant. Specific current, proposed or potential environmental matters include, among others: Cross-State Air Pollution Rule, Ozone NAAQS Rule, Federal Clean Water Act including Section 316(b), Effluent Limitation Guidelines, Hydroelectric Fish Passage Device, CCRCoal Combustion Residuals Rule, and various legislation and EPA regulations to
monitor and regulate the emission of greenhouse gases, including carbon emissions from new (CAA Section 111(b)) and existing (CAA Section 111(d)) fossil-fueled EGUs.
NOTE 12(f) Collective Bargaining Agreements - At March 31, 2017, employees covered by collective bargaining agreements represented 56% and 64% of total employees of Alliant Energy and IPL, respectively. In August 2017, IPL’s collective bargaining agreement with International Brotherhood of Electrical Workers Local 204 (Cedar Rapids) expires, representing 19% and 45% of total employees of Alliant Energy and IPL, respectively.
NOTE 14.13. SEGMENTS OF BUSINESS
Alliant Energy - Certain financial information relating to Alliant Energy’s business segments is as follows. Intersegment revenues were not material to Alliant Energy’s operations.
| | | Utility | | Non-Regulated, | | Alliant Energy | Utility (a) | | Non-Regulated, | | Alliant Energy |
| Electric | | Gas | | Other | | Total | | Parent and Other | | Consolidated | Electric | | Gas | | Other | | Total | | Parent and Other | | Consolidated |
| (in millions) | (in millions) |
Three Months Ended March 31, 2017 | | | | | | | | | | | | |
Operating revenues | |
| $677.6 |
| |
| $154.3 |
| |
| $11.7 |
| |
| $843.6 |
| |
| $10.3 |
| |
| $853.9 |
|
Operating income | | 107.2 |
| | 28.0 |
| | 0.4 |
| | 135.6 |
| | 7.3 |
| | 142.9 |
|
Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | | | | |
Income from continuing operations, net of tax | | | | | | | | 89.6 |
| | 9.4 |
| | 99.0 |
|
Income from discontinued operations, net of tax | | | | | | | | — |
| | 1.4 |
| | 1.4 |
|
Net income | | | | | | | | 89.6 |
| | 10.8 |
| | 100.4 |
|
Three Months Ended March 31, 2016 | | | | | | | | | | | | | | | | | | | | | | |
Operating revenues |
| $668.9 |
| |
| $152.2 |
| |
| $13.2 |
| |
| $834.3 |
| |
| $9.5 |
| |
| $843.8 |
|
| $668.9 |
| |
| $152.2 |
| |
| $13.2 |
| |
| $834.3 |
| |
| $9.5 |
| |
| $843.8 |
|
Operating income | 109.8 |
| | 28.8 |
| | 2.2 |
| | 140.8 |
| | 5.1 |
| | 145.9 |
| 109.8 |
| | 28.8 |
| | 2.2 |
| | 140.8 |
| | 5.1 |
| | 145.9 |
|
Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | | | | | | | | | | | | | | |
Income from continuing operations, net of tax | | | | | | | 92.1 |
| | 5.5 |
| | 97.6 |
| | | | | | | 92.1 |
| | 5.5 |
| | 97.6 |
|
Loss from discontinued operations, net of tax | | | | | | | — |
| | (1.1 | ) | | (1.1 | ) | | | | | | | — |
| | (1.1 | ) | | (1.1 | ) |
Net income | | | | | | | 92.1 |
| | 4.4 |
| | 96.5 |
| | | | | | | 92.1 |
| | 4.4 |
| | 96.5 |
|
Three Months Ended March 31, 2015 | | | | | | | | | | | | |
Operating revenues |
| $671.3 |
| |
| $198.4 |
| |
| $16.4 |
| |
| $886.1 |
| |
| $11.3 |
| |
| $897.4 |
| |
Operating income | 104.7 |
| | 36.3 |
| | 5.3 |
| | 146.3 |
| | 6.6 |
| | 152.9 |
| |
Net income attributable to Alliant Energy common shareowners | | | | | | | 92.4 |
| | 4.2 |
| | 96.6 |
| |
|
| | |
(a) | 28 | Alliant Energy’s utility business segments include: a) utility electric operations, which include Alliant Energy’s entire investment in ATC; b) utility gas operations; and c) utility other, which includes steam operations and the unallocated portions of the utility business. |
IPL - Certain financial information relating to IPL’s business segments is as follows. Intersegment revenues were not material to IPL’s operations.
| | | Electric | | Gas | | Other | | Total | Electric | | Gas | | Other | | Total |
| (in millions) | (in millions) |
Three Months Ended March 31, 2017 | | | | | | | | |
Operating revenues | |
| $356.2 |
| |
| $83.1 |
| |
| $11.2 |
| |
| $450.5 |
|
Operating income | | 33.8 |
| | 14.4 |
| | 1.4 |
| | 49.6 |
|
Earnings available for common stock | | | | | | | | 37.2 |
|
Three Months Ended March 31, 2016 | | | | | | | | | | | | | | |
Operating revenues |
| $361.6 |
| |
| $84.2 |
| |
| $12.9 |
| |
| $458.7 |
|
| $361.6 |
| |
| $84.2 |
| |
| $12.9 |
| |
| $458.7 |
|
Operating income | 43.4 |
| | 15.8 |
| | 2.8 |
| | 62.0 |
| 43.4 |
| | 15.8 |
| | 2.8 |
| | 62.0 |
|
Earnings available for common stock | | | | | | | 45.6 |
| | | | | | | 45.6 |
|
Three Months Ended March 31, 2015 | | | | | | | | |
Operating revenues |
| $362.6 |
| |
| $111.2 |
| |
| $15.2 |
| |
| $489.0 |
| |
Operating income | 40.3 |
| | 20.6 |
| | 4.6 |
| | 65.5 |
| |
Earnings available for common stock | | | | | | | 47.5 |
| |
WPL - Certain financial information relating to WPL’s business segments is as follows. Intersegment revenues were not material to WPL’s operations.
| | | Electric | | Gas | | Other | | Total | Electric | | Gas | | Other | | Total |
| (in millions) | (in millions) |
Three Months Ended March 31, 2017 | | | | | | | | |
Operating revenues | |
| $321.4 |
| |
| $71.2 |
| |
| $0.5 |
| |
| $393.1 |
|
Operating income (loss) | | 73.4 |
| | 13.6 |
| | (1.0 | ) | | 86.0 |
|
Earnings available for common stock | | | | | | | | 45.5 |
|
Three Months Ended March 31, 2016 | | | | | | | | | | | | | | |
Operating revenues |
| $307.3 |
| |
| $68.0 |
| |
| $0.3 |
| |
| $375.6 |
|
| $307.3 |
| |
| $68.0 |
| |
| $0.3 |
| |
| $375.6 |
|
Operating income (loss) | 66.4 |
| | 13.0 |
| | (0.6 | ) | | 78.8 |
| 66.4 |
| | 13.0 |
| | (0.6 | ) | | 78.8 |
|
Earnings available for common stock | | | | | | | 46.5 |
| | | | | | | 46.5 |
|
Three Months Ended March 31, 2015 | | | | | | | | |
Operating revenues |
| $308.7 |
| |
| $87.2 |
| |
| $1.2 |
| |
| $397.1 |
| |
Operating income | 64.4 |
| | 15.7 |
| | 0.7 |
| | 80.8 |
| |
Earnings available for common stock | | | | | | | 44.9 |
| |
NOTE 15.14. RELATED PARTIES
Service Agreements - IPL and WPL are parties to service agreements with an affiliate, Corporate Services. Pursuant to these service agreements, IPL and WPL receive various administrative and general services.services from an affiliate, Corporate Services. These services are billed to IPL and WPL at cost based on expenses incurred by Corporate Services for the benefit of IPL and WPL, respectively. These costs consisted primarily of employee compensation and benefits, fees associated with various professional services, depreciation and amortization of property, plant and equipment, and a return on net assets. Corporate Services also acts as agent on behalf of IPL and WPL pursuant to the service agreements. As agent, Corporate Services enters into energy, capacity, ancillary services, and transmission sale and purchase transactions within MISO. Corporate Services assigns such sales and purchases among IPL and WPL based on statements received from MISO. The amounts billed for services provided, sales credited and purchases for the three months ended March 31 were as follows (in millions):
| | | IPL | | WPL | IPL | | WPL |
| 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 |
Corporate Services billings |
| $38 |
| |
| $36 |
| |
| $33 |
| |
| $28 |
|
| $39 |
| |
| $38 |
| |
| $31 |
| |
| $33 |
|
Sales credited | 1 |
| | 4 |
| | 1 |
| | 6 |
| 2 |
| | 1 |
| | — |
| | 1 |
|
Purchases billed | 96 |
| | 79 |
| | 19 |
| | 14 |
| 66 |
| | 96 |
| | 34 |
| | 19 |
|
Net intercompany payables to Corporate Services were as follows (in millions):
|
| | | | | | | |
| IPL | | WPL |
| March 31, 2016 | | December 31, 2015 | | March 31, 2016 | | December 31, 2015 |
Net payables to Corporate Services | $100 | | $93 | | $59 | | $54 |
|
| | | | | | | |
| IPL | | WPL |
| March 31, 2017 | | December 31, 2016 | | March 31, 2017 | | December 31, 2016 |
Net payables to Corporate Services | $103 | | $104 | | $65 | | $72 |
ATC, LLC - Pursuant to various agreements, WPL receives a range of transmission services from ATC.ATC, LLC. WPL provides operation, maintenance, and construction services to ATC.ATC, LLC. WPL and ATC, LLC also bill each other for use of shared facilities owned by each party. The related amounts billed between the parties for the three months ended March 31 were as follows (in millions):
|
| | | | | | | |
| 2016 | | 2015 |
ATC billings to WPL |
| $27 |
| |
| $25 |
|
WPL billings to ATC | 3 |
| | 2 |
|
|
| | | | | | | |
| 2017 | | 2016 |
ATC, LLC billings to WPL |
| $26 |
| |
| $27 |
|
WPL billings to ATC, LLC | 3 |
| | 3 |
|
WPL owed ATC, LLC net amounts of $8 million as of March 31, 2017 and $8 million as of December 31, 2016.
Refer to Note 5(a) for discussion of WPL’s transfer of its investment in ATC, LLC to ATI on December 31, 2016.
Franklin County Wind Farm - Refer to Note 3 for discussion of the transfer of the Franklin County wind farm from AEF to IPL in April 2017.
WPL owed ATC net amounts of $8 million as of March 31, 2016 and $8 million as of December 31, 2015.
NOTE 16.15. DISCONTINUED OPERATIONS
In 2013, Alliant Energy sold RMT to narrow its strategic focus and risk profile. The operating results of RMT have been separately classified and reported as discontinued operations in Alliant Energy’s income statements. A summary of the components of discontinued operations in Alliant Energy’s income statements for the three months ended March 31 was as follows (in millions):
|
| | | |
| 2016 |
Operating expenses |
| $1.9 |
|
Loss before income taxes | (1.9 | ) |
Income tax benefit | (0.8 | ) |
Loss from discontinued operations, net of tax |
| ($1.1 | ) |
|
| | | | | | | |
| 2017 | | 2016 |
Operating expenses (income) |
| ($2.3 | ) | |
| $1.9 |
|
Income (loss) before income taxes | 2.3 |
| | (1.9 | ) |
Income tax expense (benefit) | 0.9 |
| | (0.8 | ) |
Income (loss) from discontinued operations, net of tax |
| $1.4 |
| |
| ($1.1 | ) |
Refer to Note 13(d)12(d) for further discussion of warranty claims associated with RMT that have resulted in operating expenses and income subsequent to the sale.
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This MDA includes information relating to Alliant Energy, IPL and WPL, as well as ResourcesAEF and Corporate Services. Where appropriate, information relating to a specific entity has been segregated and labeled as such. The following discussion and analysis should be read in conjunction with the Financial Statements and the Notes included in this report, as well as the financial statements, notes and MDA included in the 20152016 Form 10-K. Unless otherwise noted, all “per share” references in MDA refer to earnings per diluted share.
EXECUTIVE SUMMARYOVERVIEW
Description of Business
General - Alliant Energy is an investor-owned public utilitya Midwest U.S. energy holding company whose primary subsidiaries are IPL, WPL, ResourcesAEF and Corporate Services. IPL is aand WPL are public utility engaged principally in the generationutilities, 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. 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 also sells electricity to wholesale customers in Wisconsin. At March 31, 2016, WPL and Resources, through their ownership interests in WPL Transco, LLC, in aggregate held an approximate 16% ownership interest in ATC, a transmission-only utility operating primarily in the Midwest. ResourcesAEF is the parent company for Alliant Energy’s non-regulated businesses.businesses and holds all of Alliant Energy’s investment in ATC. Corporate Services provides administrative services to Alliant Energy and its subsidiaries. An illustration of Alliant Energy’s primary businesses is shown below.
|
| | | | | |
| | Alliant Energy | | |
| | | | | |
| | | | |
Utilities, ATC Investment and Corporate Services | | Non-regulated and Parent |
- Retail electric and gas services in IA (IPL) | | - Transportation (Resources)(AEF) |
- Retail electric and gas services in WI (WPL) | | - Non-regulated Generation (Resources)(AEF) |
- 16% interest in ATC (primarily WPL)Investment (ATI) | | - Parent Company |
- Wholesale electric service in MN, IL & IA (IPL) | | |
- Wholesale electric service in WI (WPL) | | |
- Corporate Services | |
|
Financial Results - Alliant Energy’s net income and EPS attributable to Alliant Energy common shareowners for the first quarter were as follows (dollars in millions, except per share amounts):
| | | 2016 | | 2015 | 2017 | | 2016 |
| Income (Loss) | | EPS (a) | | Income (Loss) | | EPS (a) | Income | | EPS (a) | | Income (Loss) | | EPS (a) |
Continuing operations: | | | | | | | | | | | | | | |
Utilities, ATC and Corporate Services |
| $95.4 |
| |
| $0.84 |
| |
| $95.1 |
| |
| $0.86 |
| |
Utilities, ATC Investment and Corporate Services | |
| $92.8 |
| |
| $0.41 |
| |
| $95.4 |
| |
| $0.42 |
|
Non-regulated and Parent | 2.2 |
| | 0.02 |
| | 1.5 |
| | 0.01 |
| 6.2 |
| | 0.02 |
| | 2.2 |
| | 0.01 |
|
Income from continuing operations | 97.6 |
| | 0.86 |
| | 96.6 |
| | 0.87 |
| 99.0 |
| | 0.43 |
| | 97.6 |
| | 0.43 |
|
Loss from discontinued operations | (1.1 | ) | | (0.01 | ) | | — |
| | — |
| |
Income (loss) from discontinued operations | | 1.4 |
| | 0.01 |
| | (1.1 | ) | | — |
|
Net income |
| $96.5 |
| |
| $0.85 |
| |
| $96.6 |
| |
| $0.87 |
|
| $100.4 |
| |
| $0.44 |
| |
| $96.5 |
| |
| $0.43 |
|
| |
(a) | Amounts do not reflect the effects of a two-for-one common stock split approved by Alliant Energy’s Board of Directors on April 20,distributed in May 2016. Refer to Note 6 for additional details. |
The table above includes EPS from continuing operations for utilities, ATC Investment and Corporate Services, and non-regulated and parent, which are non-GAAP financial measures. Alliant Energy believes EPS from continuing operations for utilities, ATC Investment and Corporate Services, and non-regulated and parent 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.
Lower EPSIncome from continuing operations in the first quarter of 20162017 compared to the first quarter of 2015 was primarily due to2016 included higher revenues resulting from WPL’s retail electric and gas base rate increases implemented in January 2017. The higher revenues were offset by lower electric and gas sales attributed to warmervolumes largely caused by unusually mild temperatures in early 20162017, higher electric fuel-related costs, net of recoveries, at WPL, and higher depreciation expense. This resulted in relatively flat income from continuing operations compared to early 2015, higher depreciation expense and the dilution impactfirst quarter of common shares issued in 2015. These items were partially offset by higher AFUDC, lower retail electric customer billing credits at IPL, higher electric sales due to the additional day for leap year in 2016, and lower energy efficiency cost recovery amortization at WPL.2016.
Refer to “Results of Operations” for additional details regarding the various factors impacting earnings during the first quarters of 20162017 and 2015.2016.
20162017 Overview - Alliant Energy, IPL and WPL continue to focus on achieving financial objectives and executing their strategic plan, including providing competitive value and exceptional service for their customers and finding innovative ways to operate the business more efficiently and provide flexible energy resources.plan. Key developments since the filing of the 20152016 Form 10-K include the following:
Marshalltown Generating Station - IPL’s construction of Marshalltown, an approximate 660 MW natural gas-fired combined-cycle EGU, was completed in April 2017. Final capital expenditures are currently estimated to be approximately $645 million to construct the EGU and a pipeline to supply natural gas to the EGU, excluding transmission network upgrades and AFUDC.
Franklin County Wind Farm - In April 2017, the 99 MW Franklin County wind farm was transferred from AEF to IPL pursuant to a February 2017 FERC order.
IPL’s and WPL’s ConstructionPotential Expansion of Wind Generation - In addition to IPL’s 500 MW expansion of wind generation and transfer of the Riverside Expansion99 MW Franklin County wind farm to IPL in 2017, IPL and WPL are currently exploring options to own and operate up to 400 MW and 200 MW, respectively, of additional new wind generation. Current estimated capital expenditures assume 200 MW of wind generation for each of IPL and WPL as they work to secure additional siting capacity and assess the economic benefits of these projects for their customers.
IPL’s Retail Electric Rate Review (2016 Test Year) - - In MarchApril 2017, IPL filed a request with the IUB to increase annual electric rates for its Iowa retail electric customers by $176 million, or approximately 12%. The request was based on a 2016 WPL receivedhistorical Test Year as adjusted for certain known and measurable changes occurring up to 12 months after the commencement of the proceeding. The key drivers for the filing included recovery of capital projects, primarily power grid modernization and investments that advance cleaner energy, including Marshalltown. An interim retail electric rate increase of $102 million, or approximately 7%, on an annual basis, was implemented effective April 13, 2017. IPL requested a decision from the PSCW authorizing WPL to construct a natural gas-fired combined-cycle EGUIUB in Beloit, Wisconsin, referred to as2017 with final rates effective in the Riverside expansion. The Riverside expansion is subject to the receiptfirst quarter of various other approvals and permits necessary to construct and operate the EGU and connect such EGU to the transmission system. Subject to such approvals, construction is currently expected to begin in 2016 and be completed by early 2020.2018.
Common Stock SplitMISO Transmission Owner Return on Equity Complaints - -A group of MISO cooperative and municipal utilities previously filed two complaints with FERC requesting a reduction to the base return on equity used by MISO transmission owners, including ITC and ATC, LLC to determine electric transmission costs billed to utilities, including IPL and WPL. In AprilSeptember 2016, Alliant Energy’s BoardFERC issued an order on the first complaint and established a base return on equity of Directors approved a two-for-one common stock split and a proportionate increase in the number of shares of common stock of Alliant Energy from 240 million shares to 480 million shares to implement the stock split. Alliant Energy shareowners of record at the close of business on May 4, 2016 will receive one additional share of Alliant Energy common stock for each share held on that date. The proportionate interest that a shareowner owns in Alliant Energy will not change as a result of the stock split. The additional shares are expected to be distributed on May 19,10.32%, excluding any incentive adders granted by FERC, effective September 28, 2016, and post-split trading is expected to begin on May 20, 2016. Based on common shares outstanding as of March 31, 2016, uponfor the completion ofrefund period from November 12, 2013 through February 11, 2015 (first complaint period). In the stock split, Alliant Energy will have approximately 227 million shares of common stock outstanding. The stock split will require all historical common stock shares and EPS data to be recast in the secondfirst quarter of 2016.
Future Developments - The following includes key items expected to impact2017, Alliant Energy, IPL and WPL inreceived the future that have been identified sincerefunds for the filingfirst complaint period of $51 million, $40 million and $11 million, respectively, subject to final true-up by the 2015 Form 10-K:
Gas Transmission and Distribution Systems - In March 2016, the Pipeline and Hazardous Materials Safety Administration announced proposed regulations to update safety requirements for gas pipelines. The proposed regulations would add new assessment and repair criteria for gas pipelines, and require a systematic approach to verify a pipeline’s maximum allowable operating pressure.end of July 2017. IPL and WPL currently anticipate final regulationseach recorded the retail portion of the refunds to a regulatory liability. Pursuant to IUB approval, IPL’s retail portion of the refund from ITC will be issuedrefunded to its retail customers in 2017 beginning in May 2017.
Attachment “O” Rates - In March 2016, FERC issued an order concluding that ITC acted imprudently by failing to take advantage of tax savings benefits available through bonus tax depreciation deductions. The FERC order requires ITC to recalculate its Attachment “O” rate to simulate taking bonus tax depreciation deductions beginning January 1, 2015. In April 2016, ITC filedthe refund from ATC, LLC will remain in a request for rehearing of FERC’s March 2016 order. IPL subsequently filed a response to ITC’s request for rehearing, requesting that FERC require ITC to also take bonus tax depreciation deductions for 2012 through 2014. Alliant Energy and IPLregulatory liability until such refunds are unable to determine the magnitude of resulting changes to future electric transmission service charges from this proceeding, but do expect such chargesapproved to be lower asreturned to retail customers in a resultfuture rate proceeding. IPL’s and WPL’s wholesale customers received their share of FERC’s March 2016 order.the refunds through normal monthly billing practices in the first quarter of 2017.
RESULTS OF OPERATIONS
Overview - First Quarter Results -
Alliant Energy - “Executive SummaryOverview” provides an overview of Alliant Energy’s first quarter 20162017 and 20152016 earnings and the various components of its business.
IPL - Earnings available for common stock decreased $2$8 million primarily due to lower retail electric and gas sales due to changes in temperatures in IPL’s service territory, partially offset by higher AFUDC, lower retail electric customer billing credits in the first quarter of 2016 compared to the first quarter of 2015, and higher electric sales due to the additional day for leap year in 2016.margins.
WPL - Earnings available for common stock increased $2decreased $1 million primarily due to lower energy efficiency cost recovery amortizations duringreduced equity income resulting from the transfer of WPL’s investment in ATC, LLC to ATI on December 31, 2016, changes in electric fuel-related costs, net of recoveries in the first quarter of 2017 compared to the first quarter of 2016, higher equity income from ATC and higher electric sales due to the additional day for leap year in 2016, partiallydepreciation expense. These items were largely offset by lowerthe impact of WPL’s retail electric and gas sales due to changes in temperatures in WPL’s service territory.base rate increases implemented January 1, 2017.
Additional details of Alliant Energy’s, IPL’s and WPL’s first quarter 20162017 and 20152016 earnings are discussed below.
Utility Electric Margins - Electric margins are defined as electric operating revenues less electric production fuel, energy purchases, purchased electric capacitypower and electric transmission service expenses. Management believes that electric margins provide a more meaningful basis for evaluating utility operations than electric operating revenues since electric production fuel, energy purchases, purchased electric capacitypower and electric transmission service expenses are generally passed through to customers, and therefore, result in changes to electric operating revenues that are comparable to changes in such expenses. These electric production fuel, energy purchases, purchased electric capacity and electric transmission service expenses.margins may not be comparable to how other entities define utility margin.
First Quarter 20162017 vs. First Quarter 20152016 Summary - Electric margins and MWh sales for the three months ended March 31 were as follows:
| | Alliant Energy | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change | 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential (a) |
| $241.3 |
| |
| $257.3 |
| | (6 | %) | | 1,841 |
| | 2,052 |
| | (10 | %) |
| $241.2 |
| |
| $241.3 |
| | — | % | | 1,764 |
| | 1,841 |
| | (4 | %) |
Commercial (a) | 162.1 |
| | 155.2 |
| | 4 | % | | 1,596 |
| | 1,596 |
| | — | % | 165.7 |
| | 162.1 |
| | 2 | % | | 1,585 |
| | 1,596 |
| | (1 | %) |
Industrial - IPL co-generation customers | 17.5 |
| | 14.6 |
| | 20 | % | | 262 |
| | 231 |
| | 13 | % | |
Industrial - other (a) | 175.1 |
| | 172.6 |
| | 1 | % | | 2,504 |
| | 2,629 |
| | (5 | %) | |
Industrial | | 177.7 |
| | 175.1 |
| | 1 | % | | 2,631 |
| | 2,504 |
| | 5 | % |
Industrial - co-generation | | 17.3 |
| | 17.5 |
| | (1 | %) | | 213 |
| | 262 |
| | (19 | %) |
Retail subtotal (a) | 596.0 |
| | 599.7 |
| | (1 | %) | | 6,203 |
| | 6,508 |
| | (5 | %) | 601.9 |
| | 596.0 |
| | 1 | % | | 6,193 |
| | 6,203 |
| | — | % |
Sales for resale: | | | | | | | | | | | | | | | | | | | | | | |
Wholesale (a) | 62.0 |
| | 52.0 |
| | 19 | % | | 980 |
| | 864 |
| | 13 | % | 63.4 |
| | 62.0 |
| | 2 | % | | 1,003 |
| | 980 |
| | 2 | % |
Bulk power and other | 1.3 |
| | 8.2 |
| | (84 | %) | | 99 |
| | 418 |
| | (76 | %) | 1.0 |
| | 1.3 |
| | (23 | %) | | 48 |
| | 99 |
| | (52 | %) |
Other | 9.6 |
| | 11.4 |
| | (16 | %) | | 25 |
| | 37 |
| | (32 | %) | 11.3 |
| | 9.6 |
| | 18 | % | | 26 |
| | 25 |
| | 4 | % |
Total revenues/sales | 668.9 |
| | 671.3 |
| | — | % | | 7,307 |
| | 7,827 |
| | (7 | %) | 677.6 |
| | 668.9 |
| | 1 | % | | 7,270 |
| | 7,307 |
| | (1 | %) |
Electric production fuel expense | 99.0 |
| | 136.8 |
| | (28 | %) | | | | | | | 84.3 |
| | 99.0 |
| | (15 | %) | | | | | | |
Energy purchases expense | 101.5 |
| | 78.9 |
| | 29 | % | | | | | | | |
Purchased electric capacity expense | 0.4 |
| | 0.2 |
| | 100 | % | | | | | | | |
Purchased power expense | | 123.5 |
| | 101.9 |
| | 21 | % | | | | | | |
Electric transmission service expense | 127.9 |
| | 123.2 |
| | 4 | % | | | | | | | 124.7 |
| | 127.9 |
| | (3 | %) | | | | | | |
Electric margins (b) |
| $340.1 |
| |
| $332.2 |
| | 2 | % | | | | | | | |
Electric margins (a) | |
| $345.1 |
| |
| $340.1 |
| | 1 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
IPL | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $123.3 |
| |
| $129.8 |
| | (5 | %) | | 915 |
| | 970 |
| | (6 | %) |
Commercial | 99.5 |
| | 98.3 |
| | 1 | % | | 993 |
| | 1,005 |
| | (1 | %) |
Industrial | 86.6 |
| | 86.0 |
| | 1 | % | | 1,432 |
| | 1,354 |
| | 6 | % |
Industrial - co-generation | 17.3 |
| | 17.5 |
| | (1 | %) | | 213 |
| | 262 |
| | (19 | %) |
Retail subtotal | 326.7 |
| | 331.6 |
| | (1 | %) | | 3,553 |
| | 3,591 |
| | (1 | %) |
Sales for resale: | | | | | | | | | | | |
Wholesale | 21.3 |
| | 23.2 |
| | (8 | %) | | 334 |
| | 340 |
| | (2 | %) |
Bulk power and other | 1.0 |
| | 0.6 |
| | 67 | % | | 16 |
| | 8 |
| | 100 | % |
Other | 7.2 |
| | 6.2 |
| | 16 | % | | 10 |
| | 9 |
| | 11 | % |
Total revenues/sales | 356.2 |
| | 361.6 |
| | (1 | %) | | 3,913 |
| | 3,948 |
| | (1 | %) |
Electric production fuel expense | 32.4 |
| | 35.2 |
| | (8 | %) | | | | | | |
Purchased power expense | 77.1 |
| | 64.2 |
| | 20 | % | | | | | | |
Electric transmission service expense | 81.7 |
| | 86.5 |
| | (6 | %) | | | | | | |
Electric margins (a) |
| $165.0 |
| |
| $175.7 |
| | (6 | %) | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
IPL | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
Residential (a) |
| $129.8 |
| |
| $143.1 |
| | (9 | %) | | 970 |
| | 1,131 |
| | (14 | %) |
Commercial (a) | 98.3 |
| | 96.5 |
| | 2 | % | | 1,005 |
| | 1,019 |
| | (1 | %) |
Industrial - IPL co-generation customers | 17.5 |
| | 14.6 |
| | 20 | % | | 262 |
| | 231 |
| | 13 | % |
Industrial - other (a) | 86.0 |
| | 90.4 |
| | (5 | %) | | 1,354 |
| | 1,502 |
| | (10 | %) |
Retail subtotal (a) | 331.6 |
| | 344.6 |
| | (4 | %) | | 3,591 |
| | 3,883 |
| | (8 | %) |
Sales for resale: | | | | | | | | | | | |
Wholesale (a) | 23.2 |
| | 7.6 |
| | 205 | % | | 340 |
| | 119 |
| | 186 | % |
Bulk power and other | 0.6 |
| | 2.5 |
| �� | (76 | %) | | 8 |
| | 124 |
| | (94 | %) |
Other | 6.2 |
| | 7.9 |
| | (22 | %) | | 9 |
| | 19 |
| | (53 | %) |
Total revenues/sales | 361.6 |
| | 362.6 |
| | — | % | | 3,948 |
| | 4,145 |
| | (5 | %) |
Electric production fuel expense | 35.2 |
| | 63.5 |
| | (45 | %) | | | | | | |
Energy purchases expense | 64.1 |
| | 46.6 |
| | 38 | % | | | | | | |
Purchased electric capacity expense | 0.1 |
| | — |
| | N/A |
| | | | | | |
Electric transmission service expense | 86.5 |
| | 83.9 |
| | 3 | % | | | | | | |
Electric margins (b) |
| $175.7 |
| |
| $168.6 |
| | 4 | % | | | | | | |
| | WPL | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change | 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $111.5 |
| |
| $114.2 |
| | (2 | %) | | 871 |
| | 921 |
| | (5 | %) |
| $117.9 |
| |
| $111.5 |
| | 6 | % | | 849 |
| | 871 |
| | (3 | %) |
Commercial | 63.8 |
| | 58.7 |
| | 9 | % | | 591 |
| | 577 |
| | 2 | % | 66.2 |
| | 63.8 |
| | 4 | % | | 592 |
| | 591 |
| | — | % |
Industrial | 89.1 |
| | 82.2 |
| | 8 | % | | 1,150 |
| | 1,127 |
| | 2 | % | 91.1 |
| | 89.1 |
| | 2 | % | | 1,199 |
| | 1,150 |
| | 4 | % |
Retail subtotal | 264.4 |
| | 255.1 |
| | 4 | % | | 2,612 |
| | 2,625 |
| | — | % | 275.2 |
| | 264.4 |
| | 4 | % | | 2,640 |
| | 2,612 |
| | 1 | % |
Sales for resale: | | | | | | | | | | | | | | | | | | | | | | |
Wholesale | 38.8 |
| | 44.4 |
| | (13 | %) | | 640 |
| | 745 |
| | (14 | %) | 42.1 |
| | 38.8 |
| | 9 | % | | 669 |
| | 640 |
| | 5 | % |
Bulk power and other | 0.7 |
| | 5.7 |
| | (88 | %) | | 91 |
| | 294 |
| | (69 | %) | — |
| | 0.7 |
| | (100 | %) | | 32 |
| | 91 |
| | (65 | %) |
Other | 3.4 |
| | 3.5 |
| | (3 | %) | | 16 |
| | 18 |
| | (11 | %) | 4.1 |
| | 3.4 |
| | 21 | % | | 16 |
| | 16 |
| | — | % |
Total revenues/sales | 307.3 |
| | 308.7 |
| | — | % | | 3,359 |
| | 3,682 |
| | (9 | %) | 321.4 |
| | 307.3 |
| | 5 | % | | 3,357 |
| | 3,359 |
| | — | % |
Electric production fuel expense | 63.8 |
| | 73.3 |
| | (13 | %) | | | | | | | 51.9 |
| | 63.8 |
| | (19 | %) | | | | | | |
Energy purchases expense | 37.4 |
| | 32.3 |
| | 16 | % | | | | | | | |
Purchased electric capacity expense | 0.3 |
| | 0.2 |
| | 50 | % | | | | | | | |
Purchased power expense | | 46.4 |
| | 37.7 |
| | 23 | % | | | | | | |
Electric transmission service expense | 41.4 |
| | 39.3 |
| | 5 | % | | | | | | | 43.0 |
| | 41.4 |
| | 4 | % | | | | | | |
Electric margins |
| $164.4 |
| |
| $163.6 |
| | — | % | | | | | | |
| $180.1 |
| |
| $164.4 |
| | 10 | % | | | | | | |
| |
(a) | In July 2015, IPL sold its electric distribution assets in Minnesota to Southern Minnesota Energy Cooperative. Prior to the asset sale, the electric sales to retail customers are included in residential, commercial and industrial sales. Subsequent to the asset sale, the related electric sales are included in wholesale electric sales pursuant to the wholesale power supply agreement between IPL and Southern Minnesota Energy Cooperative. |
| |
(b) | Includes $17 million and $15 million and $18 million of electric tax benefit rider credits on IPL’s Iowa retail electric customers’ bills for the first quarters of 2017 and 2016, and 2015, respectively, resulting from the electric tax benefit rider.respectively. The electric tax benefit rider results in reductions in electric revenues that are offset by reductions in income tax expense for the years ended December 31, 20162017 and 2015.2016. |
Variances - Variances between periods in electric margins for the three months ended March 31, 20162017 compared to the same period in 20152016 were as follows (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Retail electric customer billing credits at IPL (Refer to Note 2 for further details) |
| $4 |
| |
| $4 |
| |
| $— |
|
Higher retail electric sales due to one additional day in 2016 for leap year | 4 |
| | 2 |
| | 2 |
|
Higher revenues at IPL due to changes in credits on Iowa retail electric customers’ bills resulting from the electric tax benefit rider (Refer to Note 2 for further details) | 3 |
| | 3 |
| | — |
|
Estimated changes in sales caused by temperatures | (11 | ) | | (6 | ) | | (5 | ) |
Other (a) | 8 |
| | 4 |
| | 4 |
|
|
| $8 |
| |
| $7 |
| |
| $1 |
|
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Higher margins at WPL from the impact of its 2017/2018 Test Period retail electric base rate increase (a) |
| $22 |
| |
| $— |
| |
| $22 |
|
Changes in electric fuel-related costs, net of recoveries at WPL (Refer to “Electric Production Fuel and Purchased Power (Fuel-related) Expenses” below for details) | (8 | ) | | — |
| | (8 | ) |
Lower retail electric sales due to one additional day in 2016 for leap year | (4 | ) | | (2 | ) | | (2 | ) |
Estimated changes in sales caused by temperatures (Refer to “Temperatures” below for details) | (3 | ) | | (1 | ) | | (2 | ) |
Revenue requirement adjustment in 2016 related to certain tax benefits from tax accounting method changes at IPL | (3 | ) | | (3 | ) | | — |
|
Lower revenues at IPL due to higher electric tax benefit rider credits on customers’ bills (Refer to Note 2 for details) | (2 | ) | | (2 | ) | | — |
|
Other (Refer to “Sales Trends” below for details) | 3 |
| | (3 | ) | | 6 |
|
|
| $5 |
| |
| ($11 | ) | |
| $16 |
|
| |
(a) | Includes increasesIn December 2016,WPL received an order from the PSCW authorizing WPL to implement an increase in annual retail temperature-normalized sales volumes at IPLelectric rates of $9 million, or approximately 1%. The $9 million net annual retail electric rate increase reflects a $60 million increase in base rates, partially offset by a $51 million reduction in fuel-related costs, using an estimate for 2017 fuel-related costs. The increase was effective January 1, 2017 and WPL. Referextends through the end of 2018. WPL no longer has winter rates that are lower than summer rates. Thus, the quarter-over-quarter variances resulting from the retail electric base rate increase will be larger during the winter quarters, compared to “Sales Trends” below for further details.the summer quarters. |
Temperatures - HDD are calculated using a simple average of the high and low temperatures each day compared to a 65 degree base. Normal degree days are calculated using a rolling 20-year average of historical HDD. HDD in Alliant Energy’s service territories for the three months ended March 31 were as follows:
| | | Actual | | | Actual | | |
| 2016 | | 2015 | | Normal | 2017 | | 2016 | | Normal |
HDD (a): | | | | | | |
HDD: | | | | | | |
Cedar Rapids, Iowa (IPL) | 3,069 |
| | 3,690 |
| | 3,432 |
| 2,919 |
| | 3,069 |
| | 3,451 |
|
Madison, Wisconsin (WPL) | 3,258 |
| | 3,834 |
| | 3,519 |
| 3,130 |
| | 3,258 |
| | 3,539 |
|
|
| | |
(a) | HDD are calculated using a simple average of the high and low temperatures each day compared to a 65 degree base. Normal degree days are calculated using a rolling 20-year average of historical HDD.29 | |
The following table summarizes the approximate quarterly temperature statistics and resulting impacts on IPL’s and WPL’s electric and gas sales.
|
| | | | | |
| 2016 | | 2015 | | Resulting Impact in 2016 Compared to 2015 |
First quarter (HDD) | 10% warmer than normal | | 10% colder than normal | | Decrease in IPL’s and WPL’s electric and gas sales due to lower demand by customers for heating |
|
| | | | | |
| 2017 | | 2016 | | Resulting Impact in 2017 Compared to 2016 |
First quarter (HDD) | 13% warmer than normal | | 10% warmer than normal | | Decrease in IPL’s and WPL’s electric and gas sales due to lower demand by customers for heating |
Estimated increases (decreases)decreases to electric margins from the impacts of temperatures for the three months ended March 31 were as follows (in millions):
| | | 2016 | | 2015 | | Change | 2017 | | 2016 | | Change |
IPL |
| ($4 | ) | |
| $2 |
| |
| ($6 | ) |
| ($5 | ) | |
| ($4 | ) | |
| ($1 | ) |
WPL | (2 | ) | | 3 |
| | (5 | ) | (4 | ) | | (2 | ) | | (2 | ) |
Total Alliant Energy |
| ($6 | ) | |
| $5 |
| |
| ($11 | ) |
| ($9 | ) | |
| ($6 | ) | |
| ($3 | ) |
Sales Trends - Alliant Energy’s retail sales volumes decreased 5%were unchanged for the three months ended March 31, 20162017 compared to the same period in 2015. The three-month decrease was primarily due to the impact of temperatures on residential2016. Increases in industrial sales from higher production and commercial sales due to the warmer than normal temperatures and resulting lower heating demand incustomer expansions during the first quarter of 2016, and decreased retail sales related to IPL’s sale of its Minnesota electric distribution assets in July 2015. These items2017 were partially offset by increases in temperature-normalized sales volumes due to customer expansions in WPL’s service territory and an extra day of retail sales during the first quarter of 2016 due to the leap year.year, the impact of lower residential and commercial sales due to the warmer temperatures during the first quarter of 2017 compared to the same period in 2016, and lower IPL co-generation customer sales due to customer outages.
Alliant Energy’s wholesale sales volumes increased 13%2% for the three months ended March 31, 20162017 compared to the same period in 2015.2016. The three-month increase was primarily due to additional sales from IPL’s new wholesale power supply agreement with Southern Minnesota Energy Cooperative. This increase was partially offset by decreasedhigher sales to WPL’s partial-requirement wholesale customers that have contractual options to be served by WPL, other power supply sources or the MISO market.
Alliant Energy’s bulk power and other revenuesales volumes changes were largely due to changes in sales in the wholesale energy markets operated by MISO. These changes are impacted by several factors, including the availability and dispatch of Alliant Energy’s EGUs and electricity demand within these wholesale energy markets. Changes in bulk power and other sales revenues were largely offset by changes in fuel-related costs, and therefore, did not have a significant impact on electric margins.
Electric Production Fuel and Energy PurchasesPurchased Power (Fuel-related) Expenses - Fossil fuels, such as coal and natural gas, are burned to produce electricity at EGUs. The cost of fossil fuels used during each period is included inAlliant Energy’s electric production fuel expense. Electricity isexpense decreased $15 million for the three months ended March 31, 2017 compared to the same period in 2016. The decrease was primarily due to lower dispatch of IPL’s and WPL’s natural gas-fired EGUs during the three months ended March 31, 2017 partially due to higher natural gas prices and an unplanned outage at Riverside in 2017. The decrease was also due to changes in the under-/over-collection of fuel-related expenses that were outside the approved bandwidth at WPL. These items were partially offset by changes in the under-/over-collection of fuel-related expenses at IPL.
Alliant Energy’s purchased power expense increased $22 million for the three months ended March 31, 2017 compared to meet customer demandthe same period in 2016 primarily due to higher prices for electricity purchased by IPL and these costs are charged toWPL from MISO wholesale energy purchases expense.markets and increased volumes purchased resulting from lower dispatch of IPL’s and WPL’s natural gas-fired EGUs during the three-month period.
Due to IPL’s cost recovery mechanismsmechanism for retail fuel-related expenses, these changes in fuel-related expenses resulted in comparable changes in electric revenues, and therefore did not have a significant impact on Alliant Energy’s and IPL’s electric margins. WPL’s cost recovery mechanism for wholesale fuel-related expenses also provides for adjustments to its wholesale electric rates for changes in commodity costs, thereby mitigating impacts of changes to commodity costs on Alliant Energy’s and WPL’s electric margins.
WPL’s cost recovery mechanism for retail fuel-related expenses supports deferrals of amounts that fall outside an approved bandwidth of plus or minus 2% of forecasted fuel-related expenses determined by the PSCW each year. The difference between revenue collected and actual fuel-related expenses incurred within the bandwidth increases or decreases Alliant Energy’s and WPL’s electric margins. WPL estimates the increasesincrease (decrease) to electric margins from amounts within the bandwidth were approximately $2($6) million and $1$2 million for the three months ended March 31, 2017 and 2016, and March 31, 2015, respectively.
Alliant Energy’s electric production fuel expense decreased $38 million for the three months ended March 31, 2016 compared to the same period in 2015. The decrease was primarily due to lower dispatch of IPL’s and WPL’s coal-fired EGUs during the first quarter of 2016 primarily due to lower wholesale energy market prices, changes in the under-/over-collection of fuel-related expenses at IPL, and lower natural gas prices. These items were partially offset by amortizations during the three months ended March 31, 2016 of $7 million of deferred fuel-related expenses incurred by WPL in 2014. These amortizations are based upon a July 2015 PSCW order authorizing WPL to recover $28 million, including interest, from its retail electric customers during 2016 for deferred fuel-related expenses incurred in 2014.
Alliant Energy’s energy purchases expense increased $23 million for the three months ended March 31, 2016 compared to the same period in 2015, primarily due to increased volumes purchased resulting from lower dispatch of IPL’s and WPL’s coal-fired EGUs during the first quarter of 2016.
Electric Transmission Service Expense - Costs incurred each period for the transmission of electricity to meet the demands of IPL’s and WPL’s customers are included in electric transmission service expense. Electric transmission service expense is recovered from IPL’s Iowa retail electric customers through a transmission cost rider and from WPL’s retail electric customers through changes in base rates determined during periodic rate proceedings. IPL and WPL arrange transmission service for the majority of their respective wholesale electric customers. The wholesale portion of electric transmission service expense is allocated to and recovered from these wholesale customers based on a load ratio share computation. Due to IPL’s and WPL’s cost recovery mechanisms for electric transmission service expense, changes in electric transmission service expense resulted in comparable changes in electric revenues and, therefore, did not have a significant impact on Alliant Energy’s, IPL’s and WPL’s electric margins. Alliant Energy’s electric transmission service expense increased $5decreased $3 million for the three months ended March 31, 20162017 compared to the same period in 2015,2016 primarily due to higherlower electric transmission service rates billed by ITC, ATC, LLC and MISO. These items were partially offset by changes at IPL in the under-/over-collection of electric transmission service expense through the transmission cost rider and changes in WPL’s costs deferred pursuant to escrow treatment for the difference between actual electric transmission service costs and those costs used to determine rates.
Refer to Note 2 for discussion of refunds received in 2017 from ITC and ATC, LLC resulting from MISO transmission owner return on equity complaints.
Utility Gas Margins - Gas margins are defined as gas operating revenues less cost of gas sold. Management believes that gas margins provide a more meaningful basis for evaluating utility operations than gas operating revenues since cost of gas sold is generally passed through to customers, and therefore, results in changes to gas operating revenues that are comparable to changes in cost of gas sold. These gas margins may not be comparable to how other entities define utility margin.
First Quarter 20162017 vs. First Quarter 20152016 Summary - Gas margins and Dth sales for the three months ended March 31 were as follows:
| | Alliant Energy | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change | 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $88.1 |
| |
| $116.9 |
| | (25 | %) | | 12,116 |
| | 14,986 |
| | (19 | %) |
| $89.9 |
| |
| $88.1 |
| | 2 | % | | 11,744 |
| | 12,116 |
| | (3 | %) |
Commercial | 49.9 |
| | 65.3 |
| | (24 | %) | | 8,084 |
| | 9,568 |
| | (16 | %) | 49.8 |
| | 49.9 |
| | — | % | | 7,844 |
| | 8,084 |
| | (3 | %) |
Industrial | 5.0 |
| | 5.9 |
| | (15 | %) | | 971 |
| | 1,023 |
| | (5 | %) | 4.8 |
| | 5.0 |
| | (4 | %) | | 972 |
| | 971 |
| | — | % |
Retail subtotal | 143.0 |
| | 188.1 |
| | (24 | %) | | 21,171 |
| | 25,577 |
| | (17 | %) | 144.5 |
| | 143.0 |
| | 1 | % | | 20,560 |
| | 21,171 |
| | (3 | %) |
Transportation/other | 9.2 |
| | 10.3 |
| | (11 | %) | | 22,235 |
| | 22,587 |
| | (2 | %) | 9.8 |
| | 9.2 |
| | 7 | % | | 19,108 |
| | 22,235 |
| | (14 | %) |
Total revenues/sales | 152.2 |
| | 198.4 |
| | (23 | %) | | 43,406 |
| | 48,164 |
| | (10 | %) | 154.3 |
| | 152.2 |
| | 1 | % | | 39,668 |
| | 43,406 |
| | (9 | %) |
Cost of gas sold | 95.2 |
| | 130.8 |
| | (27 | %) | | | | | | | 92.2 |
| | 95.2 |
| | (3 | %) | | | | | | |
Gas margins (a) |
| $57.0 |
| |
| $67.6 |
| | (16 | %) | | | | | | |
| $62.1 |
| |
| $57.0 |
| | 9 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
IPL | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $47.9 |
| |
| $48.8 |
| | (2 | %) | | 6,234 |
| | 6,616 |
| | (6 | %) |
Commercial | 25.8 |
| | 27.1 |
| | (5 | %) | | 3,958 |
| | 4,175 |
| | (5 | %) |
Industrial | 2.8 |
| | 2.9 |
| | (3 | %) | | 600 |
| | 552 |
| | 9 | % |
Retail subtotal | 76.5 |
| | 78.8 |
| | (3 | %) | | 10,792 |
| | 11,343 |
| | (5 | %) |
Transportation/other | 6.6 |
| | 5.4 |
| | 22 | % | | 10,740 |
| | 9,418 |
| | 14 | % |
Total revenues/sales | 83.1 |
| | 84.2 |
| | (1 | %) | | 21,532 |
| | 20,761 |
| | 4 | % |
Cost of gas sold | 47.8 |
| | 52.4 |
| | (9 | %) | | | | | | |
Gas margins (a) |
| $35.3 |
| |
| $31.8 |
| | 11 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
WPL | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
Residential |
| $42.0 |
| |
| $39.3 |
| | 7 | % | | 5,510 |
| | 5,500 |
| | — | % |
Commercial | 24.0 |
| | 22.8 |
| | 5 | % | | 3,886 |
| | 3,909 |
| | (1 | %) |
Industrial | 2.0 |
| | 2.1 |
| | (5 | %) | | 372 |
| | 419 |
| | (11 | %) |
Retail subtotal | 68.0 |
| | 64.2 |
| | 6 | % | | 9,768 |
| | 9,828 |
| | (1 | %) |
Transportation/other | 3.2 |
| | 3.8 |
| | (16 | %) | | 8,368 |
| | 12,817 |
| | (35 | %) |
Total revenues/sales | 71.2 |
| | 68.0 |
| | 5 | % | | 18,136 |
| | 22,645 |
| | (20 | %) |
Cost of gas sold | 44.4 |
| | 42.8 |
| | 4 | % | | | | | | |
Gas margins |
| $26.8 |
| |
| $25.2 |
| | 6 | % | | | | | | |
| |
(a) | Includes $2 million and $3 million of gas tax benefit rider credits on IPL’s Iowa retail gas customers’ bills for the first quarters of 2017 and 2016, respectively. The gas tax benefit rider results in reductions in gas revenues that are offset by reductions in income tax expense for the years ended December 31, 2017 and 2016. |
Variances - Variances between periods in gas margins for the three months ended March 31, 2017 compared to the same period in 2016 were as follows (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Higher margins at WPL from the impact of its 2017/2018 Test Period retail gas base rate increase (a) |
| $2 |
| |
| $— |
| |
| $2 |
|
Higher revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (b) | 2 |
| | 2 |
| | — |
|
Estimated changes in sales caused by temperatures (Refer to “Temperatures” below for details) | (2 | ) | | (1 | ) | | (1 | ) |
Other | 3 |
| | 3 |
| | 1 |
|
|
| $5 |
| |
| $4 |
| |
| $2 |
|
| |
(a) | In December 2016,WPL received an order from the PSCW authorizing WPL to implement an increase in annual retail gas base rates of $9 million, or approximately 13%. The increase is effective January 1, 2017 and extends through the end of 2018. |
| |
(b) | Changes in gas energy efficiency revenues were mostly offset by changes in energy efficiency expense included in other operation and maintenance expenses. |
Temperatures - Estimated decreases to gas margins from the impacts of temperatures for the three months ended March 31 were as follows (in millions):
|
| | | | | | | | | | | |
| 2017 | | 2016 | | Change |
IPL |
| ($3 | ) | |
| ($2 | ) | |
| ($1 | ) |
WPL | (2 | ) | | (1 | ) | | (1 | ) |
Total Alliant Energy |
| ($5 | ) | |
| ($3 | ) | |
| ($2 | ) |
Refer to “Utility Electric Margins” for HDD data details.
Other Operation and Maintenance Expenses - Variances between periods in other operation and maintenance expenses for the three months ended March 31, 2017 compared to the same period in 2016 were as follows (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Higher energy efficiency cost recovery amortizations at WPL (a) |
| $7 |
| |
| $— |
| |
| $7 |
|
Higher bad debt expense | 7 |
| | 4 |
| | 3 |
|
Other | (6 | ) | | (1 | ) | | (5 | ) |
|
| $8 |
| |
| $3 |
| |
| $5 |
|
| |
(a) | The December 2016 PSCW order for WPL’s 2017/2018 Test Period electric and gas base rate review authorized changes in energy efficiency cost recovery amortizations for 2017 and 2018. |
Depreciation and Amortization Expenses - Variances between periods in depreciation and amortization expenses for the three months ended March 31, 2017 compared to the same period in 2016 were as follows (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Higher depreciation expense at WPL due to updated depreciation rates effective January 2017 approved by the PSCW and FERC |
| $3 |
| |
| $— |
| |
| $3 |
|
Higher depreciation expense for WPL’s Edgewater Unit 5 scrubber and baghouse placed in service in 2016 | 2 |
| | — |
| | 2 |
|
Other | — |
| | 1 |
| | — |
|
|
| $5 |
| |
| $1 |
| |
| $5 |
|
Interest Expense - Alliant Energy’s and IPL’s interest expense increased $4 million and $3 million for the three months ended March 31, 2017 compared to the same period in 2016, respectively, primarily due to higher interest expense from the issuance of IPL’s $300 million, 3.7% senior debentures in September 2016.
Equity Income from Unconsolidated Investments, Net - WPL’s equity income from unconsolidated investments decreased $11 million for the three-month period due to the transfer of WPL’s investment in ATC, LLC to ATI on December 31, 2016.
AFUDC - Variances between periods in AFUDC for the three months ended March 31, 2017 compared to the same period in 2016 were as follows (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Marshalltown (IPL) |
| $2 |
| |
| $2 |
| |
| $— |
|
Riverside expansion (WPL) | 1 |
| | — |
| | 1 |
|
Other | 1 |
| | 2 |
| | (1 | ) |
|
| $4 |
| |
| $4 |
| |
| $— |
|
Income Taxes - Refer to Note 8 for details of effective income tax rates from continuing operations.
STRATEGIC OVERVIEW
The strategic overview summary included in the 2016 Form 10-K has not changed materially, except as described below.
Generation Plans -
Natural Gas-Fired Generation -
IPL’s Construction of Marshalltown - Refer to Note 3 for discussion of IPL’s construction of Marshalltown, which was completed in April 2017. Final capital expenditures are currently estimated to be approximately $645 million to construct the EGU and a pipeline to supply natural gas to the EGU, excluding transmission network upgrades and AFUDC.
Wind Generation - The strategic plan includes the planned and potential expansion of wind generation as follows:
|
| | |
Wind Generation (a) | | Regulatory Application Filing Status |
IPL - up to 500 MW | | Approved by the IUB |
IPL - up to 400 MW (b) | | Plan to file with the IUB in 2017 |
WPL - up to 200 MW (b) | | Plan to file with the PSCW in 2017 |
| |
(a) | IPL and WPL believe their respective planned and potential expansion of wind generation qualifies for the full level of production tax credits as a result of progress payments in 2016 for wind turbines. |
| |
(b) | Current estimated capital expenditures assume 200 MW of wind generation for each of IPL and WPL as they work to secure additional siting capacity and assess the economic benefits of these projects for their customers. |
Refer to Note 3 for discussion of the transfer of the Franklin County wind farm assets from AEF to IPL in April 2017 pursuant to a February 2017 FERC order.
Non-regulated Operations - The strategic plan for Alliant Energy’s non-regulated operations involves maintaining a modest portfolio of businesses that are accretive to earnings and cash flows but not significant users of capital. The non-regulated strategic plan continues to evolve through exploration of renewable investment opportunities within and outside of Alliant Energy’s service territories.
RATE MATTERS
The rate matters summary included in the 2016 Form 10-K has not changed materially, except as described below.
IPL’s Retail Electric Rate Review (2016 Test Year) - In April 2017, IPL filed a request with the IUB to increase annual electric rates for its Iowa retail electric customers by $176 million, or approximately 12%. The request was based on a 2016 historical Test Year as adjusted for certain known and measurable changes occurring up to 12 months after the commencement of the proceeding. The key drivers for the filing included recovery of capital projects, primarily power grid modernization and investments that advance cleaner energy, including Marshalltown. An interim retail electric rate increase of $102 million, or approximately 7%, on an annual basis, was implemented effective April 13, 2017. The interim rate increase does not require a regulatory review, however, it will be subject to refund pending determination of final rates. Tax benefit rider credits and MISO transmission owner return on equity refunds are expected to reduce the effect of the rate increase on customer bills in 2017 and 2018. IPL requested a decision from the IUB in 2017 with final rates effective in the first quarter of 2018. The IUB must issue a decision on requests for retail rate changes within 10 months of the date of the application for which changes are filed.
The requested interim and final rate increases were calculated based on the following (Return on Common Equity (ROE)):
|
| | | |
| Interim Rates | | Final Rates |
Regulatory capital structure: | | | |
Common equity | 49.1% | | 49.1% |
Long-term debt | 46.3% | | 46.7% |
Preferred equity | 4.6% | | 4.2% |
After-tax weighted average cost of capital: | | | |
Marshalltown (ROE - 11.0%) | 8.1% | | 8.0% |
Emery (ROE - 12.23%) | 8.7% | | 8.6% |
Whispering Willow - East (ROE - 11.7%) | 8.4% | | 8.3% |
Other (ROE - 9.6% for interim rates and 10.3% for final rates) (a) | 7.4% | | 7.7% |
Retail electric rate base (b) | $3.8 billion | | $4.1 billion |
| |
(a) | Other ROE for interim rates reflects the application of double leverage. Prior to application of double leverage, Other ROE for interim rates was 10.0%. |
| |
(b) | The retail electric rate base for interim rates includes post-test year capital additions placed in service prior to the rate filing in April 2017, including Marshalltown and the Franklin County wind farm. The proposed retail electric rate base for final rates also includes deferred tax assets for production tax credits for Whispering Willow-East and post-test year capital additions expected to be placed in service by September 30, 2017. |
In addition to capital investments, the final proposed rate increase includes increased depreciation expense resulting from an updated depreciation study, recovery of asset retirement obligation expenditures since the last retail electric rate filing in 2010, recovery of the remaining net book value of Sutherland Units 1 and 3, which are currently expected to be retired in 2017, recovery of forward contract costs for SO2 emission allowances, continuation of the electric transmission cost rider, and no double leverage applied to the weighted average cost of capital for final rates.
WPL’s Retail Fuel-related Rate Filings - Refer to Note 2 for discussion of WPL’s retail fuel-related rate filings for the 2016 and 2017 Test Years.
ENVIRONMENTAL MATTERS
The environmental matters summary included in the 2016 Form 10-K has not changed materially.
LEGISLATIVE MATTERS
The legislative matters summary included in the 2016 Form 10-K has not changed materially.
LIQUIDITY AND CAPITAL RESOURCES
The liquidity and capital resources matters summary included in the 2016 Form 10-K has not changed materially, except as described below.
Liquidity Position - At March 31, 2017, Alliant Energy had $8 million of cash and cash equivalents, $697 million ($97 million at the parent company, $291 million at IPL and $309 million at WPL) of available capacity under the revolving credit facilities and $42 million of available capacity at IPL under its sales of accounts receivable program.
Capital Structure - Capital structures at March 31, 2017 were as follows (Long-term Debt (including current maturities) (LD); Short-term Debt (SD); Common Equity (CE); IPL’s Preferred Stock (PS)):
Cash Flows - Selected information from the cash flows statements was as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
Cash and cash equivalents, January 1 |
| $8.2 |
| |
| $5.8 |
| |
| $3.3 |
| |
| $4.5 |
| |
| $4.2 |
| |
| $0.4 |
|
Cash flows from (used for): | | | | | | | | | | | |
Operating activities | 333.7 |
| | 228.3 |
| | 176.3 |
| | 116.4 |
| | 145.6 |
| | 123.6 |
|
Investing activities | (303.6 | ) | | (220.0 | ) | | (136.3 | ) | | (123.2 | ) | | (149.3 | ) | | (91.4 | ) |
Financing activities | (29.9 | ) | | (9.3 | ) | | (39.2 | ) | | 5.3 |
| | 1.6 |
| | (31.3 | ) |
Net increase (decrease) | 0.2 |
| | (1.0 | ) | | 0.8 |
| | (1.5 | ) | | (2.1 | ) | | 0.9 |
|
Cash and cash equivalents, March 31 |
| $8.4 |
| |
| $4.8 |
| |
| $4.1 |
| |
| $3.0 |
| |
| $2.1 |
| |
| $1.3 |
|
Operating Activities -
Three Months Ended March 31, 2017 vs. Three Months Ended March 31, 2016 - The following items contributed to increased (decreased) operating activity cash flows for the three months ended March 31, 2017 compared to the same period in 2016 (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Refunds received from ITC and ATC, LLC in 2017 (Refer to Note 2 for details) |
| $51 |
| |
| $40 |
| |
| $11 |
|
Higher collections at WPL due to new retail electric and gas base rates in 2017 | 24 |
| | — |
| | 24 |
|
Changes in the level of cash proceeds from IPL’s sales of accounts receivable | (22 | ) | | (22 | ) | | — |
|
Timing of WPL’s fuel-related cost recoveries from customers | (15 | ) | | — |
| | (15 | ) |
Other (primarily due to higher collections of receivables at IPL in 2017 and other changes in working capital) | 67 |
| | 42 |
| | 2 |
|
|
| $105 |
| |
| $60 |
| |
| $22 |
|
Investing Activities -
Three Months Ended March 31, 2017 vs. Three Months Ended March 31, 2016 - The following items contributed to increased (decreased) investing activity cash flows for the three months ended March 31, 2017 compared to the same period in 2016 (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Lower (higher) utility construction expenditures (largely due to higher expenditures for IPL’s and WPL’s electric and gas distribution systems and WPL’s Riverside expansion, partially offset by lower expenditures for IPL’s Marshalltown facility) |
| ($56 | ) | |
| $8 |
| |
| ($56 | ) |
Proceeds from the liquidation of company-owned life insurance policies in 2016 | (26 | ) | | (18 | ) | | — |
|
Other | (2 | ) | | (3 | ) | | (2 | ) |
|
| ($84 | ) | |
| ($13 | ) | |
| ($58 | ) |
Financing Activities -
Three Months Ended March 31, 2017 vs. Three Months Ended March 31, 2016 - The following items contributed to increased (decreased) financing activity cash flows for the three months ended March 31, 2017 compared to the same period in 2016 (in millions):
|
| | | | | | | | | | | | | | | | | | | |
IPL | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
Residential |
| $48.8 |
| |
| $65.1 |
| | (25 | %) | | 6,616 |
| | 8,390 |
| | (21 | %) |
Commercial | 27.1 |
| | 35.7 |
| | (24 | %) | | 4,175 |
| | 5,148 |
| | (19 | %) |
Industrial | 2.9 |
| | 3.9 |
| | (26 | %) | | 552 |
| | 701 |
| | (21 | %) |
Retail subtotal | 78.8 |
| | 104.7 |
| | (25 | %) | | 11,343 |
| | 14,239 |
| | (20 | %) |
Transportation/other | 5.4 |
| | 6.5 |
| | (17 | %) | | 9,418 |
| | 10,017 |
| | (6 | %) |
Total revenues/sales | 84.2 |
| | 111.2 |
| | (24 | %) | | 20,761 |
| | 24,256 |
| | (14 | %) |
Cost of gas sold | 52.4 |
| | 71.0 |
| | (26 | %) | | | | | | |
Gas margins (a) |
| $31.8 |
| |
| $40.2 |
| | (21 | %) | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
WPL | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
Residential |
| $39.3 |
| |
| $51.8 |
| | (24 | %) | | 5,500 |
| | 6,596 |
| | (17 | %) |
Commercial | 22.8 |
| | 29.6 |
| | (23 | %) | | 3,909 |
| | 4,420 |
| | (12 | %) |
Industrial | 2.1 |
| | 2.0 |
| | 5 | % | | 419 |
| | 322 |
| | 30 | % |
Retail subtotal | 64.2 |
| | 83.4 |
| | (23 | %) | | 9,828 |
| | 11,338 |
| | (13 | %) |
Transportation/other | 3.8 |
| | 3.8 |
| | — | % | | 12,817 |
| | 12,570 |
| | 2 | % |
Total revenues/sales | 68.0 |
| | 87.2 |
| | (22 | %) | | 22,645 |
| | 23,908 |
| | (5 | %) |
Cost of gas sold | 42.8 |
| | 59.8 |
| | (28 | %) | | | | | | |
Gas margins |
| $25.2 |
| |
| $27.4 |
| | (8 | %) | | | | | | |
| |
(a) | Includes $3 million of credits on IPL’s Iowa retail gas customers’ bills for both the first quarters of 2016 and 2015 resulting from the gas tax benefit rider. The gas tax benefit rider results in reductions in gas revenues that are offset by reductions in income tax expense for the years ended December 31, 2016 and 2015.
|
Variances - Variances between periods in gas margins for the three months ended March 31, 2016 compared to the same period in 2015 were as follows (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Estimated decrease from changes in sales caused by temperatures |
| ($6 | ) | |
| ($3 | ) | |
| ($3 | ) |
Lower revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (a) | (3 | ) | | (3 | ) | | — |
|
Other | (2 | ) | | (2 | ) | | 1 |
|
|
| ($11 | ) | |
| ($8 | ) | |
| ($2 | ) |
| |
(a) | Changes in energy efficiency revenues were mostly offset by changes in energy efficiency expense included in other operation and maintenance expenses. |
Temperatures - Estimated increases (decreases) to gas margins from the impacts of temperatures for the three months ended March 31 were as follows (in millions):
|
| | | | | | | | | | | |
| 2016 | | 2015 | | Change |
IPL |
| ($2 | ) | |
| $1 |
| |
| ($3 | ) |
WPL | (1 | ) | | 2 |
| | (3 | ) |
Total Alliant Energy |
| ($3 | ) | |
| $3 |
| |
| ($6 | ) |
Refer to “Utility Electric Margins” for HDD data details. Refer to Note 2 for discussion of IPL’s gas tax benefit rider.
Other Operation and Maintenance Expenses - Variances between periods in other operation and maintenance expenses for the three months ended March 31, 2016 compared to the same period in 2015 were as follows (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Lower energy efficiency cost recovery amortizations at WPL (a) |
| ($4 | ) | |
| $— |
| |
| ($4 | ) |
Changes in energy efficiency expense at IPL (b) | (3 | ) | | (3 | ) | | — |
|
Other | 4 |
| | 2 |
| | 2 |
|
|
| ($3 | ) | |
| ($1 | ) | |
| ($2 | ) |
| |
(a) | The July 2014 PSCW order for WPL’s 2015/2016 Test Period electric and gas base rate case authorized lower energy efficiency cost recovery amortizations for 2015 and 2016. |
| |
(b) | Changes in IPL’s energy efficiency expense were offset by changes in gas energy efficiency revenues. |
Depreciation and Amortization Expenses - Variances between periods in depreciation and amortization expenses for the three months ended March 31, 2016 compared to the same period in 2015 were as follows (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Lower depreciation expense from the sale of IPL’s Minnesota distribution assets in 2015 |
| ($2 | ) | |
| ($2 | ) | |
| $— |
|
Other (includes the impact of property additions) | 4 |
| | 3 |
| | 1 |
|
|
| $2 |
| |
| $1 |
| |
| $1 |
|
Equity Income from Unconsolidated Investments, Net - Alliant Energy’s and WPL’s equity income from unconsolidated investments increased $4 million and $3 million for the three-month period, respectively, primarily due to higher reserves for rate refunds recorded at ATC during the three months ended March 31, 2015 compared to the same period in 2016.
AFUDC - Variances between periods in AFUDC for the three months ended March 31, 2016 compared to the same period in 2015 were as follows (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Marshalltown at IPL |
| $6 |
| |
| $6 |
| |
| $— |
|
Other | — |
| | (1 | ) | | 1 |
|
|
| $6 |
| |
| $5 |
| |
| $1 |
|
Income Taxes - Refer to Note 8 for details of effective income tax rates for continuing operations.
STRATEGIC OVERVIEW
A strategic overview summary is included in the 2015 Form 10-K and has not changed materially from the items reported in the 2015 Form 10-K, except as described below.
Gas Transmission and Distribution Systems - In March 2016, the Pipeline and Hazardous Materials Safety Administration announced proposed regulations to update safety requirements for gas pipelines. The proposed regulations would add new assessment and repair criteria for gas pipelines, and require a systematic approach to verify a pipeline’s maximum allowable operating pressure. IPL and WPL currently anticipate final regulations will be issued in 2017. Given that the Pipeline and Hazardous Materials Safety Administration has not finalized these regulations, Alliant Energy, IPL and WPL are currently unable to predict with certainty the impact of these regulations on their financial condition and results of operations.
Generation Plans -
Natural Gas-Fired Generation -
WPL’s Construction of the Riverside Expansion - In March 2016, WPL received a decision from the PSCW authorizing WPL to construct a natural gas-fired combined-cycle EGU in Beloit, Wisconsin, referred to as the Riverside expansion. The Riverside expansion is subject to the receipt of various other approvals and permits necessary to construct and operate the EGU and connect such EGU to the transmission system. Subject to such approvals, construction is currently expected to begin in 2016 and be completed by early 2020.
RATE MATTERS
A rate matters summary is included in the 2015 Form 10-K and has not changed materially from the items reported in the 2015 Form 10-K, except as described below.
WPL’s Retail Fuel-related Rate Filing (2015 Test Year) - Pursuant to a 2014 PSCW order, WPL’s 2015 fuel-related costs were subject to deferral since they were outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Retail fuel-related costs incurred by WPL through December 31, 2015 were lower than fuel-related costs used to determine rates for such period resulting in an over-collection of fuel-related costs. In March 2016, WPL filed a fuel reconciliation application with the PSCW for approval to refund $10 million of over-collections, including interest, to its retail electric customers. WPL anticipates a decision from the PSCW regarding its application in the third quarter of 2016.
ENVIRONMENTAL MATTERS
An environmental matters summary is included in the 2015 Form 10-K and has not changed materially from the items reported in the 2015 Form 10-K, except as described below.
Air Quality -
Ozone NAAQS Rule - The 2008 Ozone NAAQS Rule may require a reduction of NOx emissions in certain non-attainment areas designated by the EPA. Sheboygan County in Wisconsin is currently the only non-attainment area for the 2008 Ozone NAAQS Rule in Alliant Energy’s service territory. WPL operates Edgewater and Sheboygan Falls in Sheboygan County, Wisconsin. In response to Wisconsin’s request for a one-year extension, in April 2016, the EPA changed the compliance deadline to July 2016 for Sheboygan County to meet the 2008 Ozone NAAQS Rule.
LEGISLATIVE MATTERS
A legislative matters summary is included in the 2015 Form 10-K and has not changed materially from the items reported in the 2015 Form 10-K.
LIQUIDITY AND CAPITAL RESOURCES
A liquidity and capital resources matters summary is included in the 2015 Form 10-K and has not changed materially from the items reported in the 2015 Form 10-K, except as described below.
Liquidity Position - At March 31, 2016, Alliant Energy had $5 million of cash and cash equivalents, $787 million ($112 million at the parent company, $300 million at IPL and $375 million at WPL) of available capacity under the revolving credit facilities and $118 million of available capacity at IPL under its sales of accounts receivable program.
Capital Structures - Capital structures at March 31, 2016 were as follows (dollars in millions):
|
| | | | | | | | | | | | | | | | | | | | |
| Alliant Energy (Consolidated) | | IPL | | WPL |
Common equity |
| $3,764.6 |
| | 47 | % | |
| $2,042.9 |
| | 50 | % | |
| $1,769.1 |
| | 53 | % |
Preferred stock of IPL | 200.0 |
| | 2 | % | | 200.0 |
| | 5 | % | | — |
| | — | % |
Noncontrolling interest | — |
| | — | % | | — |
| | — | % | | 14.0 |
| | — | % |
Long-term debt (incl. current maturities) | 3,836.1 |
| | 48 | % | | 1,857.4 |
| | 45 | % | | 1,534.2 |
| | 46 | % |
Short-term debt | 213.4 |
| | 3 | % | | — |
| | — | % | | 25.5 |
| | 1 | % |
|
| $8,014.1 |
| | 100 | % | |
| $4,100.3 |
| | 100 | % | |
| $3,342.8 |
| | 100 | % |
Cash Flows - Selected information from the cash flows statements was as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
| 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 |
Cash and cash equivalents, January 1 |
| $5.8 |
| |
| $56.9 |
| |
| $4.5 |
| |
| $5.3 |
| |
| $0.4 |
| |
| $46.7 |
|
Cash flows from (used for): | | | | | | | | | | | |
Operating activities | 228.3 |
| | 314.7 |
| | 116.4 |
| | 170.1 |
| | 123.6 |
| | 157.8 |
|
Investing activities | (220.0 | ) | | (250.9 | ) | | (123.2 | ) | | (156.3 | ) | | (91.4 | ) | | (78.4 | ) |
Financing activities | (9.3 | ) | | (23.1 | ) | | 5.3 |
| | (16.5 | ) | | (31.3 | ) | | (35.2 | ) |
Net increase (decrease) | (1.0 | ) | | 40.7 |
| | (1.5 | ) | | (2.7 | ) | | 0.9 |
| | 44.2 |
|
Cash and cash equivalents, March 31 |
| $4.8 |
| |
| $97.6 |
| |
| $3.0 |
| |
| $2.6 |
| |
| $1.3 |
| |
| $90.9 |
|
Operating Activities -
Three Months Ended March 31, 2016 vs. Three Months Ended March 31, 2015 - The following items contributed to increased (decreased) operating activity cash flows for the three months ended March 31, 2016 compared to the same period in 2015 (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Changes in levels of gas stored underground |
| ($22 | ) | |
| ($11 | ) | |
| ($11 | ) |
Changes in cash collateral balances | (19 | ) | | — |
| | (5 | ) |
Decreased collections from IPL’s and WPL’s retail customers caused by temperature impacts on electric and gas sales | (17 | ) | | (9 | ) | | (8 | ) |
Changes in levels of production fuel | (15 | ) | | (17 | ) | | 2 |
|
Changes in income taxes paid/refunded at IPL and WPL | — |
| | (5 | ) | | (17 | ) |
Other | (13 | ) | | (12 | ) | | 5 |
|
|
| ($86 | ) | |
| ($54 | ) | |
| ($34 | ) |
Investing Activities -
Three Months Ended March 31, 2016 vs. Three Months Ended March 31, 2015 - The following items contributed to increased (decreased) investing activity cash flows for the three months ended March 31, 2016 compared to the same period in 2015 (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Proceeds from the liquidation of company-owned life insurance policies |
| $26 |
| |
| $18 |
| |
| $— |
|
Lower (higher) utility construction expenditures | 6 |
| | 15 |
| | (10 | ) |
Other | (1 | ) | | — |
| | (3 | ) |
|
| $31 |
| |
| $33 |
| |
| ($13 | ) |
Financing Activities -
Three Months Ended March 31, 2016 vs. Three Months Ended March 31, 2015 - The following items contributed to increased (decreased) financing activity cash flows for the three months ended March 31, 2016 compared to the same period in 2015 (in millions):
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Net changes in the amount of commercial paper outstanding |
| $153 |
| |
| $— |
| |
| $6 |
|
Lower net proceeds from common stock issuances | (116 | ) | | — |
| | — |
|
Capital contributions from IPL’s parent company, Alliant Energy, in 2016 | — |
| | 40 |
| | — |
|
Other | (23 | ) | | (18 | ) | | (2 | ) |
|
| $14 |
| |
| $22 |
| |
| $4 |
|
Common Stock Dividends and Common Stock Split -As discussed in Note 6, Alliant Energy’s Board of Directors approved a two-for-one common stock split, which is expected to be effective on or about May 19, 2016. The next quarterly dividends are payable on May 13, 2016 to shareowners of record on April 29, 2016. This dividend payment will be made before the stock split, resulting in a $0.5875 per share dividend rate. After the two-for-one common stock split, the targeted 2016 quarterly common stock dividend payment will be $0.29375 per share.
|
| | | | | | | | | | | |
| Alliant Energy | | IPL | | WPL |
Changes in outstanding checks that have not yet cleared the bank |
| ($17 | ) | |
| ($13 | ) | |
| $— |
|
Net changes in the amount of commercial paper outstanding | 5 |
| | 9 |
| | 33 |
|
Capital contributions from IPL’s parent company, Alliant Energy, in 2016 | — |
| | (40 | ) | | — |
|
Other (includes higher dividend payments in 2017) | (9 | ) | | (1 | ) | | — |
|
|
| ($21 | ) | |
| ($45 | ) | |
| $33 |
|
Common Stock Issuances and Capital Contributions - Refer to Note 6 for discussion of common stock issuances by Alliant Energy payments of common stock dividends by IPL and WPL to their parent company, and capital contributions from Alliant Energy to IPL during the three months ended March 31, 2016. Refer to Note 9(b) for discussion of Alliant Energy’s common stock issuances during the three months ended March 31, 2016 under its equity-based compensation plans for employees.2017.
Off-Balance Sheet Arrangements - A summary of Alliant Energy’s off-balance sheet arrangements is included in the 20152016 Form 10-K and has not changed materially from the items reported in the 20152016 Form 10-K, except as described below. Refer to Note 4 for information regarding IPL’s sales of accounts receivable program. In March 2016, IPL extended through March 2018 the purchase commitment from the third party to which it sells its receivables. Refer to Note 13(d)12(d) for information regarding various guarantees and indemnifications related to Alliant Energy’s and IPL’s prior divestiture activities.
Certain Financial Commitments -
Contractual Obligations - A summary of Alliant Energy’s, IPL’s and WPL’s contractual obligations is included in the 20152016 Form 10-K and has not changed materially from the items reported in the 20152016 Form 10-K, except for the items described in Notes 13(a)12(a) and 13(b)12(b).
OTHER MATTERS
Market Risk Sensitive Instruments and Positions - A summary ofThe market risks issummary included in the 20152016 Form 10-K and such market risks havehas not changed materially, from those reported in the 2015 Form 10-K, except as described below.
Commodity Price - Refer to “Rate MattersNote 2” for discussion of WPL’s retail fuel-related rate filingfilings for the 2016 and 2017 Test Year 2015.Years.
New Accounting Standards - Refer to Note 1(b) for discussion of new accounting standards impacting Alliant Energy, IPL and WPL.
Critical Accounting Policies and Estimates - AThe summary of critical accounting policies and estimates is included in the 20152016 Form 10-K and such policies and estimates havehas not changed materially, from those reported inexcept as described below.
Contingencies - In the first quarter of 2017, all warranty periods and performance guarantees expired, and all outstanding warranty claims were resolved, related to Alliant Energy’s past divestiture of RMT. Refer to Note 12(d)2015 for further discussion.
Long-Lived Assets -
Non-regulated Operations Form 10-K.-
Franklin County Wind Farm - Refer to Note 3 for discussion of the transfer of the Franklin County wind farm assets from AEF to IPL in April 2017 pursuant to a February 2017 FERC order.
Other Future Considerations - AThe summary of other future considerations is included in the 20152016 Form 10-K and has not changed materially, from the items reported in the 2015 Form 10-K except as described below, and as discussed earlier in MDA and the Notes in Item 1.
ElectricMISO Transmission Service Expense -
Attachment “O” RatesOwner Return on Equity Complaints - In December 2015,Refer to Note 2 for discussion of refunds that Alliant Energy, IPL filedand WPL received in the first quarter of 2017 related to a complaint with FERC regarding ITC’s Attachment “O” rate pursuantpreviously filed by a group of MISO cooperative and municipal utilities requesting a reduction to FERC-approved Attachment “O” audit protocols. IPL’s complaint alleged thatthe base return on equity used by MISO transmission owners, including ITC acted imprudently by failing to take advantage of tax savings benefits available through bonus tax depreciation deductions, which results in higher Attachment “O” rates being billed by ITC to IPL. In March 2016, FERC issued an order concluding that ITC acted imprudently by failing to take advantage of tax savings benefits available through bonus tax depreciation deductions. The FERC order requires ITC to recalculate its Attachment “O” rate to simulate taking bonus tax depreciation deductions beginning January 1, 2015. In April 2016, ITC filed a request for rehearing of FERC’s March 2016 order. IPL subsequently filed a response to ITC’s request for rehearing, requesting that FERC require ITC to also take bonus tax depreciation deductions for 2012 through 2014. Alliant Energy and IPL are unable to determine the magnitude of resulting changes to future electric transmission service charges from this proceeding, but do expect such charges to be lower as a result of FERC’s March 2016 order. Alliant Energy and IPL currently expect any changes to future electric transmission service expense will be offset with changes to electric revenues.ATC, LLC.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 4. CONTROLS AND PROCEDURES
Alliant Energy’s, IPL’s and WPL’s management evaluated, with the participation of each of Alliant Energy’s, IPL’s and WPL’s CEO, CFOChief Executive Officer, Chief Financial Officer and Disclosure Committee, the effectiveness of the design and operation of Alliant Energy’s, IPL’s and WPL’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934) as of March 31, 20162017 pursuant to the requirements of the Securities Exchange Act of 1934, as amended. Based on their evaluation, the CEOChief Executive Officer and the CFOChief Financial Officer concluded that Alliant Energy’s, IPL’s and WPL’s disclosure controls and procedures were effective as of the quarter ended March 31, 2016.2017.
During the first quarter of 2016, IPL implemented a new customer billing and information system, which houses all customer records, and processes metering, billing and payment transactions. The new system more fully automates and improves the efficiency of IPL’s financial reporting process, and resulted in a material change in Alliant Energy’s and IPL’s internal control over financial reporting. Other than IPL’s new customer billing and information system, thereThere was no change in Alliant Energy’s, and IPL’s internal control over financial reporting that occurred during the quarter ended March 31, 2016 that has materially affected, or is reasonably likely to materially affect, Alliant Energy’s and IPL’s internal control over financial reporting. There was no change in WPL’s internal control over financial reporting that occurred during the quarter ended March 31, 20162017 that has materially affected, or is reasonably likely to materially affect, Alliant Energy’s, IPL’s or WPL’s internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1A. RISK FACTORS
A summary ofThe risk factors is includeddescribed in Item 1A in the 20152016 Form 10-K and such risk factors have not changed materially from the items reported in the 2015 Form 10-K.materially.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
A summary of Alliant Energy common stock repurchases for the quarter ended March 31, 20162017 was as follows:
| | | | Total Number | | Average Price | | Total Number of Shares | | Maximum Number (or Approximate | | 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 Yet | | of Shares | | Paid Per | | Purchased as Part of | | Dollar Value) of Shares That May |
Period | | Purchased (a) (b) | | Share (b) | | Publicly Announced Plan | | Be Purchased Under the Plan (a) | | Purchased (a) | | Share | | Publicly Announced Plan | | Yet Be Purchased Under the Plan (a) |
January 1 through January 31 | | 2,333 |
| |
| $62.66 |
| | — | | N/A | | 2,444 |
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| $37.58 |
| | — | | N/A |
February 1 through February 29 | | 1,925 |
| | 66.98 |
| | — | | N/A | |
February 1 through February 28 | | | 49,866 |
| | 38.99 |
| | — | | N/A |
March 1 through March 31 | | 397 |
| | 71.00 |
| | — | | N/A | | 2,067 |
| | 38.74 |
| | — | | N/A |
| | 4,655 |
| | 65.16 |
| | — | | | 54,377 |
| | 38.92 |
| | — | |
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(a) | AllIncludes 2,444, 4,019, and 2,067 shares wereof Alliant Energy common stock for January 1 through January 31, February 1 through February 28 and March 1 through March 31, respectively, purchased on the open market and held in a rabbi trust under the Alliant Energy Deferred Compensation Plan. There is no limit on the number of shares of Alliant Energy common stock that may be held under the Deferred Compensation Plan, which currently does not have an expiration date. |
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(b) | Share and per share amounts do not reflect the effects Also includes 45,847 shares of a two-for-oneAlliant Energy common stock split approved byfor February 1 through February 28 transferred from employees to Alliant Energy’s BoardEnergy to satisfy tax withholding requirements in connection with the vesting of Directors on April 20, 2016. Refer to Note 6 for additional details. certain restricted stock under equity-based compensation plans. |
Refer to Note 6 for discussion of IPL’s and WPL’s dividend restrictions and limitations on distributions to their parent company, Alliant Energy.
ITEM 5. OTHER INFORMATION
Alliant Energy filed with the Wisconsin Department of Financial Institutions an amendment (the Amendment) to Alliant Energy’s Restated Articles of Incorporation, as amended (the Articles) that, effective at the close of business on May 4, 2016 (the Record Date), (i) changed each share of common stock, $.01 par value, of Alliant Energy (the Common Stock) outstanding into two shares of Common Stock to effect a two-for-one split of the Common Stock, without a change in the par value, and (ii) increased Alliant Energy’s authorized shares of Common Stock from 240,000,000 to 480,000,000.
In connection with the two-for-one stock split, on the Record Date, each share of Common Stock outstanding immediately prior to the Record Date was changed into two shares of Common Stock. Stock certificates evidencing shares of Common Stock outstanding on the Record Date will continue to evidence the same number of shares that such certificates evidenced prior to the Record Date, and the additional shares will be issued in book-entry form only, without certificates, on or about May 19, 2016 to persons who were at the Record Date the holders of the Common Stock.
The Amendment is included in the Articles filed as Exhibit 3.1 to this Report on Form 10-Q and is incorporated by reference herein.
ITEM 6. EXHIBITS
Exhibits for Alliant Energy, IPL and WPL are listed in the Exhibit Index, which is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Alliant Energy Corporation, Interstate Power and Light Company and Wisconsin Power and Light Company have each duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on the 5th4th day of May 2016.2017.
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ALLIANT ENERGY CORPORATION | |
Registrant | |
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By: /s/ Robert J. DurianBenjamin M. Bilitz | Vice President, Chief Accounting Officer and Controller |
Robert J. DurianBenjamin M. Bilitz | (Principal Accounting Officer and Authorized Signatory) |
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INTERSTATE POWER AND LIGHT COMPANY | |
Registrant | |
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By: /s/ Robert J. DurianBenjamin M. Bilitz | Vice President, Chief Accounting Officer and Controller |
Robert J. DurianBenjamin M. Bilitz | (Principal Accounting Officer and Authorized Signatory) |
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WISCONSIN POWER AND LIGHT COMPANY | |
Registrant | |
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By: /s/ Robert J. DurianBenjamin M. Bilitz | Vice President, Chief Accounting Officer and Controller |
Robert J. DurianBenjamin M. Bilitz | (Principal Accounting Officer and Authorized Signatory) |
ALLIANT ENERGY CORPORATION
INTERSTATE POWER AND LIGHT COMPANY
WISCONSIN POWER AND LIGHT COMPANY
EXHIBIT INDEX
The following Exhibits are filed herewith.
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Exhibit Number | | Description |
3.1 | | Articles of Amendment to Restated Articles of Incorporation, as amended, effective May 4, 2016 |
12.1 | | |
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101.INS*101.INS | | XBRL Instance Document |
101.SCH*101.SCH | | XBRL Taxonomy Extension Schema Document |
101.CAL*101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB*101.LAB | | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE*101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF*101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document |
* Filed as Exhibit 101 to this report are the following documents formatted in Extensible Business Reporting Language (XBRL): (i) Alliant Energy’s, IPL’s and WPL’s Condensed Consolidated Statements of Income for the three months ended March 31, 2016 and 2015; (ii) Alliant Energy’s, IPL’s and WPL’s Condensed Consolidated Balance Sheets as of March 31, 2016 and December 31, 2015; (iii) Alliant Energy’s, IPL’s and WPL’s Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015; and (iv) the Combined Notes to Condensed Consolidated Financial Statements.