UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
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| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 30, 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 ☒ No ☐
Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrants are large accelerated filers, accelerated filers, non-accelerated filers, 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 | ☒ | | | | | | | | |
| Interstate Power and Light Company | | | | | ☒ | | | | |
| Wisconsin Power and Light Company | | | | | ☒ | | | | |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Number of shares outstanding of each class of common stock as of September 30, 20162017:
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| Alliant Energy Corporation | Common stock, $0.01 par value, 227,500,428231,204,360 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 |
CDD | | Cooling degree days |
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 purchased power |
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 |
MWhCDD | Cooling degree days | 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, earning a return on rate base additions and the recovery of costs, including fuel costs, operating costs, transmission costs, environmental compliance and remediation costs, deferred expenditures, deferred tax assets, capital expenditures, and remaining costs related to EGUs that may be permanently closed, earning their authorized rates of return, and the payments to their parent of expected levels of dividends;
the ability to continue cost controls and operational efficiencies;
the impact of IPL’s pending retail electric base rate freeze in Iowa during 2016;
the impacts of WPL’s retail electric and gas base rate freeze in Wisconsin during 2016 and WPL’s pending retail base rate case for the 2017/2018 Test Period;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 issues with planned and potential new wind generation projects, IPL’s Marshalltown EGU, WPL’s Riverside expansion and related third party purchase options, new environmental control equipment for various fossil-fueled EGUs of IPL and WPL, various replacements, modernization and expansion of IPL’s and WPL’s electric and gas distribution systems, the proposed transfer of the Franklin County wind farm to IPL, and the potential decommissioning of certain EGUs of IPL and WPL;plan;
the ability to qualify for the full level of production tax credits on planned and potential new wind farms and the impact of 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 electric and gas distribution systems, such as leaks, explosions and mechanical problems and explosions or fires, and compliance with electric and 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;regulations;
impacts of IPL’s future tax benefits from Iowa rate-making practices, including deductions for repairs expenditures and allocation of mixed service costs, and recoverability of the associated regulatory assets from customers, when the differences reverse in future periods;
risks associated with non-regulated renewable investments;
any material post-closing adjustments related to any past asset divestitures, including the sales of IPL’s Minnesota electric and natural gas assets, 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, battery 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;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 Nine Months | For the Three Months | | For the Nine Months |
| | Ended September 30, | | Ended September 30, | Ended September 30, | | Ended September 30, |
| | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 |
| | (in millions, except per share amounts) | (in millions, except per share amounts) |
| Operating revenues: | | | | | | | | | | | | | | |
| Electric utility |
| $864.3 |
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| $835.8 |
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| $2,209.1 |
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| $2,147.5 |
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| $840.6 |
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| $864.3 |
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| $2,199.1 |
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| $2,209.1 |
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| Gas utility | 39.5 |
| | 38.0 |
| | 248.7 |
| | 288.1 |
| 45.8 |
| | 39.5 |
| | 262.7 |
| | 248.7 |
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| Other utility | 9.4 |
| | 13.4 |
| | 35.0 |
| | 44.6 |
| 11.2 |
| | 9.4 |
| | 34.4 |
| | 35.0 |
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| Non-regulated | 11.4 |
| | 11.7 |
| | 30.2 |
| | 33.3 |
| 9.3 |
| | 11.4 |
| | 29.9 |
| | 30.2 |
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| Total operating revenues | 924.6 |
| | 898.9 |
| | 2,523.0 |
| | 2,513.5 |
| 906.9 |
| | 924.6 |
| | 2,526.1 |
| | 2,523.0 |
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| Operating expenses: | | | | | | | | | | | | | | |
| Electric production fuel and purchased power | 245.9 |
| | 245.8 |
| | 646.3 |
| | 646.9 |
| 222.6 |
| | 245.9 |
| | 614.7 |
| | 646.3 |
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| Electric transmission service | 138.6 |
| | 127.6 |
| | 396.8 |
| | 367.7 |
| 121.0 |
| | 138.6 |
| | 363.3 |
| | 396.8 |
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| Cost of gas sold | 12.5 |
| | 13.6 |
| | 132.3 |
| | 166.3 |
| 15.0 |
| | 12.5 |
| | 135.5 |
| | 132.3 |
|
| Asset valuation charges for Franklin County wind farm | 86.4 |
| | — |
| | 86.4 |
| | — |
| — |
| | 86.4 |
| | — |
| | 86.4 |
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| Other operation and maintenance | 148.6 |
| | 151.1 |
| | 438.2 |
| | 456.3 |
| 169.1 |
| | 148.6 |
| | 467.1 |
| | 438.2 |
|
| Depreciation and amortization | 104.1 |
| | 99.3 |
| | 308.7 |
| | 299.9 |
| 120.7 |
| | 104.1 |
| | 342.7 |
| | 308.7 |
|
| Taxes other than income taxes | 25.9 |
| | 25.6 |
| | 77.2 |
| | 78.6 |
| 27.0 |
| | 25.9 |
| | 79.1 |
| | 77.2 |
|
| Total operating expenses | 762.0 |
| | 663.0 |
| | 2,085.9 |
| | 2,015.7 |
| 675.4 |
| | 762.0 |
| | 2,002.4 |
| | 2,085.9 |
|
| Operating income | 162.6 |
| | 235.9 |
| | 437.1 |
| | 497.8 |
| 231.5 |
| | 162.6 |
| | 523.7 |
| | 437.1 |
|
| Interest expense and other: | | | | | | | | | | | | | | |
| Interest expense | 48.8 |
| | 46.4 |
| | 144.8 |
| | 139.5 |
| 53.9 |
| | 48.8 |
| | 159.0 |
| | 144.8 |
|
| Equity income from unconsolidated investments, net | (9.2 | ) | | (11.1 | ) | | (28.8 | ) | | (28.9 | ) | (10.1 | ) | | (9.2 | ) | | (32.9 | ) | | (28.8 | ) |
| Allowance for funds used during construction | (15.8 | ) | | (9.7 | ) | | (44.3 | ) | | (25.1 | ) | (9.6 | ) | | (15.8 | ) | | (36.7 | ) | | (44.3 | ) |
| Interest income and other | (0.1 | ) | | (0.1 | ) | | (0.3 | ) | | (0.4 | ) | (0.2 | ) | | (0.1 | ) | | (0.4 | ) | | (0.3 | ) |
| Total interest expense and other | 23.7 |
| | 25.5 |
| | 71.4 |
| | 85.1 |
| 34.0 |
| | 23.7 |
| | 89.0 |
| | 71.4 |
|
| Income from continuing operations before income taxes | 138.9 |
| | 210.4 |
| | 365.7 |
| | 412.7 |
| 197.5 |
| | 138.9 |
| | 434.7 |
| | 365.7 |
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| Income taxes | 7.5 |
| | 27.8 |
| | 47.2 |
| | 59.5 |
| 26.1 |
| | 7.5 |
| | 64.9 |
| | 47.2 |
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| Income from continuing operations, net of tax | 131.4 |
| | 182.6 |
| | 318.5 |
| | 353.2 |
| 171.4 |
| | 131.4 |
| | 369.8 |
| | 318.5 |
|
| Loss from discontinued operations, net of tax | (0.4 | ) | | (0.1 | ) | | (2.0 | ) | | (1.4 | ) | |
| Income (loss) from discontinued operations, net of tax | | — |
| | (0.4 | ) | | 1.4 |
| | (2.0 | ) |
| Net income | 131.0 |
| | 182.5 |
| | 316.5 |
| | 351.8 |
| 171.4 |
| | 131.0 |
| | 371.2 |
| | 316.5 |
|
| Preferred dividend requirements of Interstate Power and Light Company | 2.6 |
| | 2.6 |
| | 7.7 |
| | 7.7 |
| 2.6 |
| | 2.6 |
| | 7.7 |
| | 7.7 |
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| Net income attributable to Alliant Energy common shareowners |
| $128.4 |
| |
| $179.9 |
| |
| $308.8 |
| |
| $344.1 |
|
| $168.8 |
| |
| $128.4 |
| |
| $363.5 |
| |
| $308.8 |
|
Weighted average number of common shares outstanding (basic and diluted) (a) | 227.2 |
| | 226.4 |
| | 227.0 |
| | 225.0 |
| 231.0 |
| | 227.2 |
| | 229.2 |
| | 227.0 |
|
Earnings per weighted average common share attributable to Alliant Energy common shareowners (basic and diluted) (a): | | | | | | | | |
Earnings per weighted average common share attributable to Alliant Energy common shareowners (basic and diluted): | | | | | | | | |
| Income from continuing operations, net of tax |
| $0.57 |
| |
| $0.79 |
| |
| $1.37 |
| |
| $1.54 |
|
| $0.73 |
| |
| $0.57 |
| |
| $1.58 |
| |
| $1.37 |
|
| Loss from discontinued operations, net of tax | — |
| | — |
| | (0.01 | ) | | (0.01 | ) | |
| Income (loss) from discontinued operations, net of tax | | — |
| | — |
| | 0.01 |
| | (0.01 | ) |
| Net income |
| $0.57 |
| |
| $0.79 |
| |
| $1.36 |
| |
| $1.53 |
|
| $0.73 |
| |
| $0.57 |
| |
| $1.59 |
| |
| $1.36 |
|
| Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | | | | | | |
| Income from continuing operations, net of tax |
| $128.8 |
| |
| $180.0 |
| |
| $310.8 |
| |
| $345.5 |
|
| $168.8 |
| |
| $128.8 |
| |
| $362.1 |
| |
| $310.8 |
|
| Loss from discontinued operations, net of tax | (0.4 | ) | | (0.1 | ) | | (2.0 | ) | | (1.4 | ) | |
| Income (loss) from discontinued operations, net of tax | | — |
| | (0.4 | ) | | 1.4 |
| | (2.0 | ) |
| Net income |
| $128.4 |
| |
| $179.9 |
| |
| $308.8 |
| |
| $344.1 |
|
| $168.8 |
| |
| $128.4 |
| |
| $363.5 |
| |
| $308.8 |
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Dividends declared per common share (a) |
| $0.29375 |
| |
| $0.275 |
| |
| $0.88125 |
| |
| $0.825 |
|
| $0.315 |
| |
| $0.29375 |
| |
| $0.945 |
| |
| $0.88125 |
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The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
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(a) | Amounts reflect the effects of a two-for-one common stock split distributed in May 2016. Refer to Note 6 for additional details. | |
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
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| | | | | | | |
| | September 30,
2017 | | December 31,
2016 |
| | (in millions, except per share and share amounts) |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents |
| $9.2 |
| |
| $8.2 |
|
| Accounts receivable, less allowance for doubtful accounts | 336.1 |
| | 493.3 |
|
| Production fuel, at weighted average cost | 80.9 |
| | 98.1 |
|
| Gas stored underground, at weighted average cost | 40.6 |
| | 37.6 |
|
| Materials and supplies, at weighted average cost | 99.1 |
| | 86.6 |
|
| Regulatory assets | 84.2 |
| | 57.8 |
|
| Other | 101.4 |
| | 95.5 |
|
| Total current assets | 751.5 |
| | 877.1 |
|
| Property, plant and equipment, net | 10,931.1 |
| | 10,279.2 |
|
| Investments: | | | |
| ATC Investment | 339.2 |
| | 317.6 |
|
| Other | 119.4 |
| | 20.0 |
|
| Total investments | 458.6 |
| | 337.6 |
|
| Other assets: | | | |
| Regulatory assets | 1,952.3 |
| | 1,857.3 |
|
| Deferred charges and other | 21.4 |
| | 22.6 |
|
| Total other assets | 1,973.7 |
| | 1,879.9 |
|
| Total assets |
| $14,114.9 |
| |
| $13,373.8 |
|
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| | | | | | | |
| LIABILITIES AND EQUITY | | | |
| Current liabilities: | | | |
| Current maturities of long-term debt |
| $105.2 |
| |
| $4.6 |
|
| Commercial paper | 390.3 |
| | 244.1 |
|
| Other short-term borrowings | 95.0 |
| | — |
|
| Accounts payable | 478.1 |
| | 445.3 |
|
| Regulatory liabilities | 145.1 |
| | 186.2 |
|
| Accrued taxes | 39.4 |
| | 59.5 |
|
| Other | 217.0 |
| | 222.3 |
|
| Total current liabilities | 1,470.1 |
| | 1,162.0 |
|
| Long-term debt, net (excluding current portion) | 4,255.1 |
| | 4,315.6 |
|
| Other liabilities: | | | |
| Deferred tax liabilities | 2,774.7 |
| | 2,570.2 |
|
| Regulatory liabilities | 483.4 |
| | 494.8 |
|
| Pension and other benefit obligations | 481.3 |
| | 489.9 |
|
| Other | 296.1 |
| | 279.3 |
|
| Total other liabilities | 4,035.5 |
| | 3,834.2 |
|
Commitments and contingencies (Note 12) |
|
| |
|
|
| Equity: | | | |
| Alliant Energy Corporation common equity: | | | |
| Common stock - $0.01 par value - 480,000,000 shares authorized; 231,204,360 and 227,673,654 shares outstanding | 2.3 |
| | 2.3 |
|
| Additional paid-in capital | 1,838.2 |
| | 1,693.1 |
|
| Retained earnings | 2,324.8 |
| | 2,177.0 |
|
| Accumulated other comprehensive loss | (0.4 | ) | | (0.4 | ) |
| Shares in deferred compensation trust - 454,532 and 441,695 shares at a weighted average cost of $23.52 and $22.71 per share | (10.7 | ) | | (10.0 | ) |
| Total Alliant Energy Corporation common equity | 4,154.2 |
| | 3,862.0 |
|
| Cumulative preferred stock of Interstate Power and Light Company | 200.0 |
| | 200.0 |
|
| Total equity | 4,354.2 |
| | 4,062.0 |
|
| Total liabilities and equity |
| $14,114.9 |
| |
| $13,373.8 |
|
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)
|
| | | | | | | |
| | September 30,
2016 | | December 31,
2015 |
| | (in millions, except per share and share amounts) |
| ASSETS | | | |
| Current assets: | | | |
| Cash and cash equivalents |
| $84.7 |
| |
| $5.8 |
|
| Accounts receivable, less allowance for doubtful accounts | 491.5 |
| | 397.6 |
|
| Production fuel, at weighted average cost | 92.6 |
| | 98.8 |
|
| Gas stored underground, at weighted average cost | 37.8 |
| | 43.3 |
|
| Materials and supplies, at weighted average cost | 89.5 |
| | 81.4 |
|
| Regulatory assets | 63.1 |
| | 120.2 |
|
| Other | 98.9 |
| | 79.7 |
|
| Total current assets | 958.1 |
| | 826.8 |
|
| Property, plant and equipment, net | 9,920.4 |
| | 9,519.1 |
|
| Investments: | | | |
| Investment in American Transmission Company LLC | 309.9 |
| | 293.3 |
|
| Other | 19.7 |
| | 53.0 |
|
| Total investments | 329.6 |
| | 346.3 |
|
| Other assets: | | | |
| Regulatory assets | 1,811.7 |
| | 1,788.4 |
|
| Deferred charges and other | 9.4 |
| | 14.6 |
|
| Total other assets | 1,821.1 |
| | 1,803.0 |
|
| Total assets |
| $13,029.2 |
| |
| $12,495.2 |
|
|
| | | | | | | |
| | For the Nine Months |
| | Ended September 30, |
| | 2017 | | 2016 |
| | (in millions) |
| Cash flows from operating activities: | | | |
| Net income |
| $371.2 |
| |
| $316.5 |
|
| Adjustments to reconcile net income to net cash flows from operating activities: | | | |
| Depreciation and amortization | 342.7 |
| | 308.7 |
|
| Deferred tax expense and tax credits | 102.7 |
| | 76.7 |
|
| Asset valuation charges for Franklin County wind farm | — |
| | 86.4 |
|
| Other | (7.1 | ) | | (44.0 | ) |
| Other changes in assets and liabilities: | | | |
| Accounts receivable | 72.8 |
| | (101.0 | ) |
| Sales of accounts receivable | 91.0 |
| | (4.0 | ) |
| Regulatory assets | (108.9 | ) | | 36.6 |
|
| Regulatory liabilities | (64.8 | ) | | (66.5 | ) |
| Deferred income taxes | 101.0 |
| | 71.8 |
|
| Other | (17.2 | ) | | (27.2 | ) |
| Net cash flows from operating activities | 883.4 |
| | 654.0 |
|
| Cash flows used for investing activities: | | | |
| Construction and acquisition expenditures: | | | |
| Utility business | (909.7 | ) | | (743.6 | ) |
| Alliant Energy Corporate Services, Inc. and non-regulated businesses | (139.7 | ) | | (43.3 | ) |
| Other | (22.9 | ) | | 15.1 |
|
| Net cash flows used for investing activities | (1,072.3 | ) | | (771.8 | ) |
| Cash flows from financing activities: | | | |
| Common stock dividends | (215.7 | ) | | (199.8 | ) |
| Proceeds from issuance of common stock, net | 143.2 |
| | 20.4 |
|
| Proceeds from issuance of long-term debt | — |
| | 300.0 |
|
| Net change in commercial paper and other short-term borrowings | 281.2 |
| | 78.5 |
|
| Other | (18.8 | ) | | (2.4 | ) |
| Net cash flows from financing activities | 189.9 |
| | 196.7 |
|
| Net increase in cash and cash equivalents | 1.0 |
| | 78.9 |
|
| Cash and cash equivalents at beginning of period | 8.2 |
| | 5.8 |
|
| Cash and cash equivalents at end of period |
| $9.2 |
| |
| $84.7 |
|
| Supplemental cash flows information: | | | |
| Cash paid during the period for: | | | |
| Interest, net of capitalized interest |
| ($158.5 | ) | |
| ($140.7 | ) |
| Income taxes, net |
| ($11.4 | ) | |
| ($8.3 | ) |
| Significant non-cash investing and financing activities: | | | |
| Accrued capital expenditures |
| $197.2 |
| |
| $99.9 |
|
|
| | | | | | | |
| LIABILITIES AND EQUITY | | | |
| Current liabilities: | | | |
| Current maturities of long-term debt |
| $314.0 |
| |
| $313.4 |
|
| Commercial paper | 238.3 |
| | 159.8 |
|
| Accounts payable | 365.1 |
| | 402.4 |
|
| Regulatory liabilities | 178.4 |
| | 187.1 |
|
| Other | 273.9 |
| | 296.6 |
|
| Total current liabilities | 1,369.7 |
| | 1,359.3 |
|
| Long-term debt, net (excluding current portion) | 3,816.9 |
| | 3,522.2 |
|
| Other liabilities: | | | |
| Deferred tax liabilities | 2,530.6 |
| | 2,381.2 |
|
| Regulatory liabilities | 497.4 |
| | 550.6 |
|
| Pension and other benefit obligations | 455.3 |
| | 451.8 |
|
| Other | 300.2 |
| | 306.0 |
|
| Total other liabilities | 3,783.5 |
| | 3,689.6 |
|
Commitments and contingencies (Note 13) |
|
| |
|
|
| Equity: | | | |
| Alliant Energy Corporation common equity: | | | |
| Common stock - $0.01 par value - 480,000,000 shares authorized; 227,500,428 and 226,918,432 shares outstanding (a) | 2.3 |
| | 2.3 |
|
| Additional paid-in capital | 1,686.0 |
| | 1,661.8 |
|
| Retained earnings | 2,181.0 |
| | 2,068.9 |
|
| Accumulated other comprehensive loss | (0.4 | ) | | (0.4 | ) |
| Shares in deferred compensation trust - 432,619 and 430,186 shares at a weighted average cost of $22.54 and $19.84 per share (a) | (9.8 | ) | | (8.5 | ) |
| Total Alliant Energy Corporation common equity | 3,859.1 |
| | 3,724.1 |
|
| Cumulative preferred stock of Interstate Power and Light Company | 200.0 |
| | 200.0 |
|
| Total equity | 4,059.1 |
| | 3,924.1 |
|
| Total liabilities and equity |
| $13,029.2 |
| |
| $12,495.2 |
|
| |
(a) | Share and per share amounts reflect the effects of a two-for-one common stock split 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 STATEMENTS OF CASH FLOWS (UNAUDITED)
|
| | | | | | | |
| | For the Nine Months |
| | Ended September 30, |
| | 2016 | | 2015 |
| | (in millions) |
| Cash flows from operating activities: | | | |
| Net income |
| $316.5 |
| |
| $351.8 |
|
| Adjustments to reconcile net income to net cash flows from operating activities: | | | |
| Depreciation and amortization | 308.7 |
| | 299.9 |
|
| Deferred tax expense and investment tax credits | 76.7 |
| | 101.0 |
|
| Asset valuation charges for Franklin County wind farm | 86.4 |
| | — |
|
| Other | (44.0 | ) | | (2.5 | ) |
| Other changes in assets and liabilities: | | | |
| Accounts receivable | (101.0 | ) | | 11.7 |
|
| Sales of accounts receivable | (4.0 | ) | | (21.0 | ) |
| Regulatory assets | 36.6 |
| | (51.3 | ) |
| Regulatory liabilities | (66.5 | ) | | (61.5 | ) |
| Deferred income taxes | 71.8 |
| | 74.1 |
|
| Other | (27.2 | ) | | (6.9 | ) |
| Net cash flows from operating activities | 654.0 |
| | 695.3 |
|
| Cash flows used for investing activities: | | | |
| Construction and acquisition expenditures: | | | |
| Utility business | (743.6 | ) | | (678.9 | ) |
| Alliant Energy Corporate Services, Inc. and non-regulated businesses | (43.3 | ) | | (47.5 | ) |
| Proceeds from Minnesota electric and natural gas distribution asset sales | — |
| | 138.1 |
|
| Other | 15.1 |
| | (24.7 | ) |
| Net cash flows used for investing activities | (771.8 | ) | | (613.0 | ) |
| Cash flows from financing activities: | | | |
| Common stock dividends | (199.8 | ) | | (185.1 | ) |
| Proceeds from issuance of common stock, net | 20.4 |
| | 145.4 |
|
| Proceeds from issuance of long-term debt | 300.0 |
| | 250.7 |
|
| Payments to retire long-term debt | (1.9 | ) | | (182.0 | ) |
| Net change in commercial paper | 78.5 |
| | (32.2 | ) |
| Other | (0.5 | ) | | 3.2 |
|
| Net cash flows from financing activities | 196.7 |
| | — |
|
| Net increase in cash and cash equivalents | 78.9 |
| | 82.3 |
|
| Cash and cash equivalents at beginning of period | 5.8 |
| | 56.9 |
|
| Cash and cash equivalents at end of period |
| $84.7 |
| |
| $139.2 |
|
| Supplemental cash flows information: | | | |
| Cash (paid) refunded during the period for: | | | |
| Interest, net of capitalized interest |
| ($140.7 | ) | |
| ($133.9 | ) |
| Income taxes, net |
| ($8.3 | ) | |
| $— |
|
| Significant non-cash investing and financing activities: | | | |
| Accrued capital expenditures |
| $99.9 |
| |
| $180.0 |
|
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 Nine Months | For the Three Months | | For the Nine Months |
| | Ended September 30, | | Ended September 30, | Ended September 30, | | Ended September 30, |
| | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 |
| | (in millions) | (in millions) |
| Operating revenues: | | | | | | | | | | | | | | |
| Electric utility |
| $483.2 |
| |
| $468.6 |
| |
| $1,209.2 |
| |
| $1,170.6 |
|
| $489.0 |
| |
| $483.2 |
| |
| $1,217.6 |
| |
| $1,209.2 |
|
| Gas utility | 23.9 |
| | 23.1 |
| | 142.6 |
| | 164.1 |
| 27.4 |
| | 23.9 |
| | 147.2 |
| | 142.6 |
|
| Steam and other | 9.1 |
| | 12.9 |
| | 34.1 |
| | 41.1 |
| 11.0 |
| | 9.1 |
| | 33.3 |
| | 34.1 |
|
| Total operating revenues | 516.2 |
| | 504.6 |
| | 1,385.9 |
| | 1,375.8 |
| 527.4 |
| | 516.2 |
| | 1,398.1 |
| | 1,385.9 |
|
| Operating expenses: | | | | | | | | | | | | | | |
| Electric production fuel and purchased power | 125.0 |
| | 131.4 |
| | 324.8 |
| | 332.0 |
| 122.5 |
| | 125.0 |
| | 330.0 |
| | 324.8 |
|
| Electric transmission service | 95.9 |
| | 87.5 |
| | 270.7 |
| | 249.3 |
| 78.2 |
| | 95.9 |
| | 235.0 |
| | 270.7 |
|
| Cost of gas sold | 8.0 |
| | 9.4 |
| | 76.3 |
| | 93.4 |
| 9.9 |
| | 8.0 |
| | 74.6 |
| | 76.3 |
|
| Other operation and maintenance | 94.8 |
| | 94.3 |
| | 279.8 |
| | 287.5 |
| 104.4 |
| | 94.8 |
| | 288.7 |
| | 279.8 |
|
| Depreciation and amortization | 52.7 |
| | 51.2 |
| | 157.8 |
| | 155.1 |
| 66.2 |
| | 52.7 |
| | 181.0 |
| | 157.8 |
|
| Taxes other than income taxes | 13.9 |
| | 13.8 |
| | 40.6 |
| | 42.2 |
| 14.4 |
| | 13.9 |
| | 41.1 |
| | 40.6 |
|
| Total operating expenses | 390.3 |
| | 387.6 |
| | 1,150.0 |
| | 1,159.5 |
| 395.6 |
| | 390.3 |
| | 1,150.4 |
| | 1,150.0 |
|
| Operating income | 125.9 |
| | 117.0 |
| | 235.9 |
| | 216.3 |
| 131.8 |
| | 125.9 |
| | 247.7 |
| | 235.9 |
|
| Interest expense and other: | | | | | | | | | | | | | | |
| Interest expense | 25.5 |
| | 23.8 |
| | 75.4 |
| | 71.8 |
| 27.9 |
| | 25.5 |
| | 83.5 |
| | 75.4 |
|
| Allowance for funds used during construction | (13.8 | ) | | (7.3 | ) | | (36.2 | ) | | (19.3 | ) | (4.7 | ) | | (13.8 | ) | | (25.1 | ) | | (36.2 | ) |
| Interest income and other | — |
| | 0.1 |
| | (0.1 | ) | | — |
| (0.1 | ) | | — |
| | (0.2 | ) | | (0.1 | ) |
| Total interest expense and other | 11.7 |
| | 16.6 |
| | 39.1 |
| | 52.5 |
| 23.1 |
| | 11.7 |
| | 58.2 |
| | 39.1 |
|
| Income before income taxes | 114.2 |
| | 100.4 |
| | 196.8 |
| | 163.8 |
| 108.7 |
| | 114.2 |
| | 189.5 |
| | 196.8 |
|
| Income tax benefit | (2.5 | ) | | (18.7 | ) | | (2.5 | ) | | (24.4 | ) | (14.3 | ) | | (2.5 | ) | | (18.6 | ) | | (2.5 | ) |
| Net income | 116.7 |
| | 119.1 |
| | 199.3 |
| | 188.2 |
| 123.0 |
| | 116.7 |
| | 208.1 |
| | 199.3 |
|
| Preferred dividend requirements | 2.6 |
| | 2.6 |
| | 7.7 |
| | 7.7 |
| 2.6 |
| | 2.6 |
| | 7.7 |
| | 7.7 |
|
| Earnings available for common stock |
| $114.1 |
| |
| $116.5 |
| |
| $191.6 |
| |
| $180.5 |
|
| $120.4 |
| |
| $114.1 |
| |
| $200.4 |
| |
| $191.6 |
|
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)
| | | | September 30,
2016 | | December 31,
2015 | September 30,
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 |
| $77.7 |
| |
| $4.5 |
|
| $4.7 |
| |
| $3.3 |
|
| Accounts receivable, less allowance for doubtful accounts | 266.8 |
| | 200.0 |
| 143.5 |
| | 240.7 |
|
| Production fuel, at weighted average cost | 70.0 |
| | 60.2 |
| 56.7 |
| | 70.3 |
|
| Gas stored underground, at weighted average cost | 17.4 |
| | 18.2 |
| 21.6 |
| | 16.3 |
|
| Materials and supplies, at weighted average cost | 50.0 |
| | 45.7 |
| 52.6 |
| | 46.5 |
|
| Regulatory assets | 15.0 |
| | 39.6 |
| 38.9 |
| | 17.7 |
|
| Other | 37.2 |
| | 28.2 |
| 39.3 |
| | 27.7 |
|
| Total current assets | 534.1 |
| | 396.4 |
| 357.3 |
| | 422.5 |
|
| Property, plant and equipment, net | 5,220.1 |
| | 4,925.1 |
| 5,764.9 |
| | 5,435.6 |
|
| Investments | 0.8 |
| | 19.6 |
| |
| Other assets: | | | | | | |
| Regulatory assets | 1,402.2 |
| | 1,363.0 |
| 1,552.0 |
| | 1,441.1 |
|
| Deferred charges and other | 3.8 |
| | 5.0 |
| 8.5 |
| | 5.5 |
|
| Total other assets | 1,406.0 |
| | 1,368.0 |
| 1,560.5 |
| | 1,446.6 |
|
| Total assets |
| $7,161.0 |
| |
| $6,709.1 |
|
| $7,682.7 |
| |
| $7,304.7 |
|
| | | LIABILITIES AND EQUITY | | |
| Current liabilities: | | | | | | |
| Current maturities of long-term debt | |
| $100.0 |
| |
| $— |
|
| Commercial paper | | 4.0 |
| | — |
|
| Accounts payable |
| $172.6 |
| |
| $197.2 |
| 224.6 |
| | 186.3 |
|
| Accounts payable to associated companies | 55.0 |
| | 37.7 |
| 56.4 |
| | 43.3 |
|
| Regulatory liabilities | 132.5 |
| | 130.9 |
| 85.9 |
| | 149.6 |
|
| Accrued taxes | 41.2 |
| | 67.6 |
| 39.3 |
| | 53.8 |
|
| Other | 85.9 |
| | 97.7 |
| 92.8 |
| | 88.8 |
|
| Total current liabilities | 487.2 |
| | 531.1 |
| 603.0 |
| | 521.8 |
|
| Long-term debt, net (excluding current portion) | 2,153.1 |
| | 1,856.9 |
| 2,095.0 |
| | 2,153.5 |
|
| Other liabilities: | | | | | | |
| Deferred tax liabilities | 1,493.6 |
| | 1,378.0 |
| 1,643.5 |
| | 1,511.8 |
|
| Regulatory liabilities | 298.9 |
| | 358.3 |
| 298.9 |
| | 281.2 |
|
| Pension and other benefit obligations | 161.2 |
| | 160.2 |
| 171.4 |
| | 173.2 |
|
| Other | 229.1 |
| | 229.3 |
| 238.5 |
| | 214.2 |
|
| Total other liabilities | 2,182.8 |
| | 2,125.8 |
| 2,352.3 |
| | 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 | 1,472.8 |
| | 1,407.8 |
| 1,697.8 |
| | 1,597.8 |
|
| Retained earnings | 631.7 |
| | 554.1 |
| 701.2 |
| | 617.8 |
|
| Total Interstate Power and Light Company common equity | 2,137.9 |
| | 1,995.3 |
| 2,432.4 |
| | 2,249.0 |
|
| Cumulative preferred stock | 200.0 |
| | 200.0 |
| 200.0 |
| | 200.0 |
|
| Total equity | 2,337.9 |
| | 2,195.3 |
| 2,632.4 |
| | 2,449.0 |
|
| Total liabilities and equity |
| $7,161.0 |
| |
| $6,709.1 |
|
| $7,682.7 |
| |
| $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 Nine Months | For the Nine Months |
| | Ended September 30, | Ended September 30, |
| | 2016 | | 2015 | 2017 | | 2016 |
| | (in millions) | (in millions) |
| Cash flows from operating activities: | | | | | | |
| Net income |
| $199.3 |
| |
| $188.2 |
|
| $208.1 |
| |
| $199.3 |
|
| Adjustments to reconcile net income to net cash flows from operating activities: | | | | | | |
| Depreciation and amortization | 157.8 |
| | 155.1 |
| 181.0 |
| | 157.8 |
|
| Other | 24.3 |
| | 32.3 |
| 26.2 |
| | 24.3 |
|
| Other changes in assets and liabilities: | | | | | | |
| Accounts receivable | (66.5 | ) | | (8.3 | ) | 12.4 |
| | (66.5 | ) |
| Sales of accounts receivable | (4.0 | ) | | (21.0 | ) | 91.0 |
| | (4.0 | ) |
| Regulatory assets | (14.1 | ) | | (38.1 | ) | (107.8 | ) | | (14.1 | ) |
| Regulatory liabilities | (64.5 | ) | | (63.1 | ) | (49.6 | ) | | (64.5 | ) |
| Deferred income taxes | 67.7 |
| | 72.0 |
| 88.9 |
| | 67.7 |
|
| Other | (43.5 | ) | | 0.9 |
| 20.4 |
| | (43.5 | ) |
| Net cash flows from operating activities | 256.5 |
| | 318.0 |
| 470.6 |
| | 256.5 |
|
| Cash flows used for investing activities: | | | | | | |
| Utility construction and acquisition expenditures | (436.5 | ) | | (432.6 | ) | (470.1 | ) | | (436.5 | ) |
| Proceeds from Minnesota electric and natural gas distribution asset sales | — |
| | 138.1 |
| |
| Other | 1.1 |
| | (24.9 | ) | (23.5 | ) | | 1.1 |
|
| Net cash flows used for investing activities | (435.4 | ) | | (319.4 | ) | (493.6 | ) | | (435.4 | ) |
| Cash flows from financing activities: | | | | | | |
| Common stock dividends | (114.0 | ) | | (105.0 | ) | (117.0 | ) | | (114.0 | ) |
| Capital contributions from parent | 65.0 |
| | 100.0 |
| 100.0 |
| | 65.0 |
|
| Proceeds from issuance of long-term debt | 300.0 |
| | 250.0 |
| — |
| | 300.0 |
|
| Payments to retire long-term debt | — |
| | (150.0 | ) | |
| Net change in commercial paper | | 44.0 |
| | — |
|
| Other | 1.1 |
| | 0.5 |
| (2.6 | ) | | 1.1 |
|
| Net cash flows from financing activities | 252.1 |
| | 95.5 |
| 24.4 |
| | 252.1 |
|
| Net increase in cash and cash equivalents | 73.2 |
| | 94.1 |
| 1.4 |
| | 73.2 |
|
| Cash and cash equivalents at beginning of period | 4.5 |
| | 5.3 |
| 3.3 |
| | 4.5 |
|
| Cash and cash equivalents at end of period |
| $77.7 |
| |
| $99.4 |
|
| $4.7 |
| |
| $77.7 |
|
| Supplemental cash flows information: | | | | | | |
| Cash (paid) refunded during the period for: | | | | | | |
| Interest |
| ($72.5 | ) | |
| ($66.7 | ) |
| ($84.1 | ) | |
| ($72.5 | ) |
| Income taxes, net |
| $0.7 |
| |
| $31.1 |
|
| $13.2 |
| |
| $0.7 |
|
| Significant non-cash investing and financing activities: | | | | | | |
| Accrued capital expenditures |
| $44.5 |
| |
| $115.5 |
|
| $71.0 |
| |
| $44.5 |
|
The accompanying Combined Notes to Condensed Consolidated Financial Statements are an integral part of these statements.
WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| | | | For the Three Months | | For the Nine Months | For the Three Months | | For the Nine Months |
| | Ended September 30, | | Ended September 30, | Ended September 30, | | Ended September 30, |
| | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 |
| | (in millions) | (in millions) |
| Operating revenues: | | | | | | | | | | | | | | |
| Electric utility |
| $381.1 |
| |
| $367.2 |
| |
| $999.9 |
| |
| $976.9 |
|
| $351.6 |
| |
| $381.1 |
| |
| $981.5 |
| |
| $999.9 |
|
| Gas utility | 15.6 |
| | 14.9 |
| | 106.1 |
| | 124.0 |
| 18.4 |
| | 15.6 |
| | 115.5 |
| | 106.1 |
|
| Other | 0.3 |
| | 0.5 |
| | 0.9 |
| | 3.5 |
| 0.2 |
| | 0.3 |
| | 1.1 |
| | 0.9 |
|
| Total operating revenues | 397.0 |
| | 382.6 |
| | 1,106.9 |
| | 1,104.4 |
| 370.2 |
| | 397.0 |
| | 1,098.1 |
| | 1,106.9 |
|
| Operating expenses: | | | | | | | | | | | | | | |
| Electric production fuel and purchased power | 120.9 |
| | 114.4 |
| | 321.5 |
| | 314.9 |
| 100.1 |
| | 120.9 |
| | 284.7 |
| | 321.5 |
|
| Electric transmission service | 42.7 |
| | 40.1 |
| | 126.1 |
| | 118.4 |
| 42.8 |
| | 42.7 |
| | 128.3 |
| | 126.1 |
|
| Cost of gas sold | 4.5 |
| | 4.2 |
| | 56.0 |
| | 72.9 |
| 5.1 |
| | 4.5 |
| | 60.9 |
| | 56.0 |
|
| Other operation and maintenance | 54.2 |
| | 57.0 |
| | 157.2 |
| | 167.7 |
| 66.1 |
| | 54.2 |
| | 179.7 |
| | 157.2 |
|
| Depreciation and amortization | 48.7 |
| | 45.7 |
| | 143.5 |
| | 137.5 |
| 53.6 |
| | 48.7 |
| | 158.8 |
| | 143.5 |
|
| Taxes other than income taxes | 11.0 |
| | 10.9 |
| | 33.8 |
| | 33.6 |
| 11.8 |
| | 11.0 |
| | 35.3 |
| | 33.8 |
|
| Total operating expenses | 282.0 |
| | 272.3 |
| | 838.1 |
| | 845.0 |
| 279.5 |
| | 282.0 |
| | 847.7 |
| | 838.1 |
|
| Operating income | 115.0 |
| | 110.3 |
| | 268.8 |
| | 259.4 |
| 90.7 |
| | 115.0 |
| | 250.4 |
| | 268.8 |
|
| Interest expense and other: | | | | | | | | | | | | | | |
| Interest expense | 22.9 |
| | 23.1 |
| | 68.7 |
| | 69.5 |
| 23.1 |
| | 22.9 |
| | 69.1 |
| | 68.7 |
|
| Equity income from unconsolidated investments | (9.3 | ) | | (11.1 | ) | | (29.0 | ) | | (30.2 | ) | (0.2 | ) | | (9.3 | ) | | (0.4 | ) | | (29.0 | ) |
| Allowance for funds used during construction | (2.0 | ) | | (2.4 | ) | | (8.1 | ) | | (5.8 | ) | (4.9 | ) | | (2.0 | ) | | (11.6 | ) | | (8.1 | ) |
| Interest income and other | 0.1 |
| | (0.3 | ) | | (0.2 | ) | | (0.3 | ) | (0.1 | ) | | 0.1 |
| | (0.2 | ) | | (0.2 | ) |
| Total interest expense and other | 11.7 |
| | 9.3 |
| | 31.4 |
| | 33.2 |
| 17.9 |
| | 11.7 |
| | 56.9 |
| | 31.4 |
|
| Income before income taxes | 103.3 |
| | 101.0 |
| | 237.4 |
| | 226.2 |
| 72.8 |
| | 103.3 |
| | 193.5 |
| | 237.4 |
|
| Income taxes | 33.7 |
| | 32.6 |
| | 77.1 |
| | 73.0 |
| 23.0 |
| | 33.7 |
| | 60.1 |
| | 77.1 |
|
| Net income | 69.6 |
| | 68.4 |
| | 160.3 |
| | 153.2 |
| 49.8 |
| | 69.6 |
| | 133.4 |
| | 160.3 |
|
| Net income attributable to noncontrolling interest | 0.6 |
| | 0.4 |
| | 1.6 |
| | 1.1 |
| — |
| | 0.6 |
| | — |
| | 1.6 |
|
| Earnings available for common stock |
| $69.0 |
| |
| $68.0 |
| |
| $158.7 |
| |
| $152.1 |
|
| $49.8 |
| |
| $69.0 |
| |
| $133.4 |
| |
| $158.7 |
|
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)
| | | | September 30,
2016 | | December 31,
2015 | September 30,
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 |
| $5.6 |
| |
| $0.4 |
|
| $3.2 |
| |
| $4.2 |
|
| Accounts receivable, less allowance for doubtful accounts | 190.7 |
| | 185.4 |
| 185.8 |
| | 226.3 |
|
| Production fuel, at weighted average cost | 22.6 |
| | 38.6 |
| 24.2 |
| | 27.8 |
|
| Gas stored underground, at weighted average cost | 20.4 |
| | 25.1 |
| 19.0 |
| | 21.3 |
|
| Materials and supplies, at weighted average cost | 35.7 |
| | 33.5 |
| 43.6 |
| | 36.3 |
|
| Regulatory assets | 48.1 |
| | 80.6 |
| 45.3 |
| | 40.1 |
|
| Other | 53.9 |
| | 59.9 |
| 64.6 |
| | 60.5 |
|
| Total current assets | 377.0 |
| | 423.5 |
| 385.7 |
| | 416.5 |
|
| Property, plant and equipment, net | 4,289.1 |
| | 4,103.7 |
| 4,782.4 |
| | 4,426.7 |
|
| Investments: | | | | |
| Investment in American Transmission Company LLC | 309.9 |
| | 293.3 |
| |
| Other | 13.4 |
| | 15.4 |
| |
| Total investments | 323.3 |
| | 308.7 |
| |
| Other assets: | | | | | | |
| Regulatory assets | 409.5 |
| | 425.4 |
| 400.3 |
| | 416.2 |
|
| Deferred charges and other | 6.9 |
| | 9.1 |
| 25.7 |
| | 30.9 |
|
| Total other assets | 416.4 |
| | 434.5 |
| 426.0 |
| | 447.1 |
|
| Total assets |
| $5,405.8 |
| |
| $5,270.4 |
|
| $5,594.1 |
| |
| $5,290.3 |
|
| | | LIABILITIES AND EQUITY | | |
| Current liabilities: | | | | | | |
| Commercial paper |
| $11.8 |
| |
| $19.9 |
|
| $224.6 |
| |
| $52.3 |
|
| Accounts payable | 122.3 |
| | 136.0 |
| 197.2 |
| | 192.9 |
|
| Accounts payable to associated companies | 32.8 |
| | 21.6 |
| |
| Regulatory liabilities | 45.9 |
| | 56.2 |
| 59.2 |
| | 36.6 |
|
| Other | 91.0 |
| | 103.2 |
| 108.7 |
| | 112.9 |
|
| Total current liabilities | 303.8 |
| | 336.9 |
| 589.7 |
| | 394.7 |
|
| Long-term debt, net (excluding current portion) | 1,534.9 |
| | 1,533.9 |
| |
| Long-term debt, net | | 1,536.2 |
| | 1,535.2 |
|
| Other liabilities: | | | | | | |
| Deferred tax liabilities | 1,108.8 |
| | 1,005.4 |
| 1,035.2 |
| | 971.6 |
|
| Regulatory liabilities | 198.5 |
| | 192.3 |
| 184.5 |
| | 213.6 |
|
| Capital lease obligations - Sheboygan Falls Energy Facility | 78.9 |
| | 83.6 |
| 72.0 |
| | 77.2 |
|
| Pension and other benefit obligations | 186.2 |
| | 188.7 |
| 204.2 |
| | 207.8 |
|
| Other | 162.4 |
| | 162.0 |
| 162.6 |
| | 159.4 |
|
| Total other liabilities | 1,734.8 |
| | 1,632.0 |
| 1,658.5 |
| | 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 | 959.0 |
| | 959.0 |
| 1,059.0 |
| | 1,019.0 |
|
| Retained earnings | 788.6 |
| | 731.1 |
| 684.5 |
| | 645.6 |
|
| Total Wisconsin Power and Light Company common equity | 1,813.8 |
| | 1,756.3 |
| 1,809.7 |
| | 1,730.8 |
|
| Noncontrolling interest | 18.5 |
| | 11.3 |
| |
| Total equity | 1,832.3 |
| | 1,767.6 |
| |
| Total liabilities and equity |
| $5,405.8 |
| |
| $5,270.4 |
|
| $5,594.1 |
| |
| $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 Nine Months |
| | Ended September 30, |
| | 2017 | | 2016 |
| | (in millions) |
| Cash flows from operating activities: | | | |
| Net income |
| $133.4 |
| |
| $160.3 |
|
| Adjustments to reconcile net income to net cash flows from operating activities: | | | |
| Depreciation and amortization | 158.8 |
| | 143.5 |
|
| Deferred tax expense and tax credits | 60.1 |
| | 97.9 |
|
| Other | 4.8 |
| | (20.3 | ) |
| Other changes in assets and liabilities: | | | |
| Accounts receivable | 41.8 |
| | (12.8 | ) |
| Regulatory assets | (1.1 | ) | | 50.7 |
|
| Other | (36.6 | ) | | 20.0 |
|
| Net cash flows from operating activities | 361.2 |
| | 439.3 |
|
| Cash flows used for investing activities: | | | |
| Utility construction and acquisition expenditures | (454.0 | ) | | (307.1 | ) |
| Other | (16.2 | ) | | (19.6 | ) |
| Net cash flows used for investing activities | (470.2 | ) | | (326.7 | ) |
| Cash flows from (used for) financing activities: | | | |
| Common stock dividends | (94.5 | ) | | (101.2 | ) |
| Capital contribution from parent | 40.0 |
| | — |
|
| Net change in commercial paper | 172.3 |
| | (8.1 | ) |
| Other | (9.8 | ) | | 1.9 |
|
| Net cash flows from (used for) financing activities | 108.0 |
| | (107.4 | ) |
| Net increase (decrease) in cash and cash equivalents | (1.0 | ) | | 5.2 |
|
| Cash and cash equivalents at beginning of period | 4.2 |
| | 0.4 |
|
| Cash and cash equivalents at end of period |
| $3.2 |
| |
| $5.6 |
|
| Supplemental cash flows information: | | | |
| Cash (paid) refunded during the period for: | | | |
| Interest |
| ($68.1 | ) | |
| ($67.7 | ) |
| Income taxes, net |
| ($20.2 | ) | |
| $19.6 |
|
| Significant non-cash investing and financing activities: | | | |
| Accrued capital expenditures |
| $122.3 |
| |
| $50.8 |
|
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 Nine Months |
| | Ended September 30, |
| | 2016 | | 2015 |
| | (in millions) |
| Cash flows from operating activities: | | | |
| Net income |
| $160.3 |
| |
| $153.2 |
|
| Adjustments to reconcile net income to net cash flows from operating activities: | | | |
| Depreciation and amortization | 143.5 |
| | 137.5 |
|
| Deferred tax expense and investment tax credits | 97.9 |
| | 60.0 |
|
| Other | (20.3 | ) | | (8.3 | ) |
| Other changes in assets and liabilities: | | | |
| Regulatory assets | 50.7 |
| | (13.2 | ) |
| Derivative liabilities | (13.3 | ) | | 19.0 |
|
| Other | 20.5 |
| | 27.7 |
|
| Net cash flows from operating activities | 439.3 |
| | 375.9 |
|
| Cash flows used for investing activities: | | | |
| Utility construction and acquisition expenditures | (307.1 | ) | | (246.3 | ) |
| Other | (19.6 | ) | | (13.3 | ) |
| Net cash flows used for investing activities | (326.7 | ) | | (259.6 | ) |
| Cash flows used for financing activities: | | | |
| Common stock dividends | (101.2 | ) | | (95.3 | ) |
| Payments to retire long-term debt | — |
| | (30.6 | ) |
| Other | (6.2 | ) | | (1.4 | ) |
| Net cash flows used for financing activities | (107.4 | ) | | (127.3 | ) |
| Net increase (decrease) in cash and cash equivalents | 5.2 |
| | (11.0 | ) |
| Cash and cash equivalents at beginning of period | 0.4 |
| | 46.7 |
|
| Cash and cash equivalents at end of period |
| $5.6 |
| |
| $35.7 |
|
| Supplemental cash flows information: | | | |
| Cash (paid) refunded during the period for: | | | |
| Interest |
| ($67.7 | ) | |
| ($69.2 | ) |
| Income taxes, net |
| $19.6 |
| |
| ($10.0 | ) |
| Significant non-cash investing and financing activities: | | | |
| Accrued capital expenditures |
| $50.8 |
| |
| $57.2 |
|
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 nine months ended September 30, 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,
Discontinued operations reported in Alliant Energy’s income statements is related to various warranty claims associated with the
Notes herein exclude discontinued operations for all periods presented. Insale of RMT in 2013, which have resulted in operating expenses and income subsequent to 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 discussed in Note 6, all Alliant Energy share and per share amounts have been adjusted to reflect a two-for-one common stock split distributed in May 2016. As required by GAAP, all prior period financial statements and disclosures presented herein have been restated to reflect the tax method change and common stock split.sale.
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 and currently expect to use the modified retrospective method of adoption. If applicable, this method requires a cumulative-effect adjustment to the opening retained earnings balance on January 1, 2018, as if the standard had always been in effect. Alliant Energy, IPL and WPL have continued to make progress in the evaluation of the revenue recognition standard and do not currently anticipate a significant change in revenue recognition for retail electric and gas sales. These sales represent the majority of Alliant Energy’s, IPL’s and WPL’s revenues and are evaluatingfrom tariff offerings that provide electricity or natural gas without a defined contractual term. For such arrangements, revenues from contracts with customers will be equivalent to the electricity or natural gas supplied and billed, or estimated to be billed, and there will be no significant shift in the timing or pattern of revenue recognition for such sales. The most significant impact to the financial statements for Alliant Energy, IPL and WPL is expected to be in the form of additional disclosures. The incremental disclosures could include disaggregation of revenue by location and customer class. Alliant Energy, IPL and WPL expect to complete the evaluation of the impact of thisthe revenue recognition standard on their financial condition, and results of operations.operations and disclosures by January 1, 2018.
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 currently evaluating the impact of this standard on their financial condition and results of operations. Early adoption of this standard is permitted.operations and expect an increase in assets and liabilities from recognizing operating leases on their balance sheets.
NOTE 1(c) Property, PlantPresentation of Net Periodic Pension and Equipment -
Utility PlantPostretirement Benefit Costs -
Depreciation -In September 2016,March 2017, the PSCWFinancial Accounting Standards Board issued an order approvingaccounting standard amending the implementationincome statement presentation of updated depreciation ratesthe components of net periodic benefit costs for WPL effective January 1, 2017 as a resultdefined benefit pension and other postretirement plans. The standard requires entities to (1) disaggregate the current service cost component from the other components of a recently completed depreciation study. WPL estimatesnet periodic benefit costs and present it with other employee compensation costs in the income statement; and (2) include the other components in the income statement outside of operating income. This new average ratespresentation will shift the majority of depreciationthe net periodic benefit costs from “Other operation and maintenance” expenses to “Interest expense and other” expenses in the income statements. In addition, only the service cost component of net periodic benefit costs is eligible for its electric generation, electric distributioncapitalization into property, plant and gas properties will be approximately 3.2%, 2.6% and 2.3%, respectively, during 2017.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. 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 continue to evaluate additional impacts of this standard on their financial condition and results of operations.
NOTE 2. REGULATORY MATTERS
Regulatory Assets and Regulatory Liabilities -
Regulatory assets were comprised of the following items (in millions):
| | | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
| | September 30,
2016 | | December 31,
2015 | | September 30,
2016 | | December 31,
2015 | | September 30,
2016 | | December 31,
2015 | September 30,
2017 | | December 31,
2016 | | September 30,
2017 | | December 31,
2016 | | September 30,
2017 | | December 31,
2016 |
| Tax-related |
| $1,033.5 |
| |
| $987.7 |
| |
| $1,000.7 |
| |
| $958.2 |
| |
| $32.8 |
| |
| $29.5 |
|
| $1,147.9 |
| |
| $1,055.6 |
| |
| $1,107.9 |
| |
| $1,022.4 |
| |
| $40.0 |
| |
| $33.2 |
|
| Pension and OPEB costs | 551.0 |
| | 579.5 |
| | 284.7 |
| | 298.1 |
| | 266.3 |
| | 281.4 |
| 547.8 |
| | 578.7 |
| | 279.3 |
| | 294.0 |
| | 268.5 |
| | 284.7 |
|
| AROs | 103.9 |
| | 92.4 |
| | 61.5 |
| | 50.8 |
| | 42.4 |
| | 41.6 |
| |
| WPL’s EGUs retired early | 43.1 |
| | 45.0 |
| | — |
| | — |
| | 43.1 |
| | 45.0 |
| |
| Asset retirement obligations | | 107.9 |
| | 105.9 |
| | 71.9 |
| | 64.3 |
| | 36.0 |
| | 41.6 |
|
| EGUs retired early | | 67.4 |
| | 41.4 |
| | 32.9 |
| | — |
| | 34.5 |
| | 41.4 |
|
| Derivatives | 39.0 |
| | 70.6 |
| | 10.6 |
| | 28.2 |
| | 28.4 |
| | 42.4 |
| 49.9 |
| | 30.7 |
| | 22.3 |
| | 10.0 |
| | 27.6 |
| | 20.7 |
|
| Emission allowances | 26.3 |
| | 26.9 |
| | 26.3 |
| | 26.9 |
| | — |
| | — |
| 25.6 |
| | 26.2 |
| | 25.6 |
| | 26.2 |
| | — |
| | — |
|
| Commodity cost recovery | 10.1 |
| | 35.9 |
| | 0.4 |
| | 2.8 |
| | 9.7 |
| | 33.1 |
| |
| Other | 67.9 |
| | 70.6 |
| | 33.0 |
| | 37.6 |
| | 34.9 |
| | 33.0 |
| 90.0 |
| | 76.6 |
| | 51.0 |
| | 41.9 |
| | 39.0 |
| | 34.7 |
|
| |
| $1,874.8 |
| |
| $1,908.6 |
| |
| $1,417.2 |
| |
| $1,402.6 |
| |
| $457.6 |
| |
| $506.0 |
|
| $2,036.5 |
| |
| $1,915.1 |
| |
| $1,590.9 |
| |
| $1,458.8 |
| |
| $445.6 |
| |
| $456.3 |
|
Regulatory liabilities were comprised of the following items (in millions):
| | | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
| | September 30,
2016 | | December 31,
2015 | | September 30,
2016 | | December 31,
2015 | | September 30,
2016 | | December 31,
2015 | September 30,
2017 | | December 31,
2016 | | September 30,
2017 | | December 31,
2016 | | September 30,
2017 | | December 31,
2016 |
| Cost of removal obligations |
| $410.6 |
| |
| $406.0 |
| |
| $267.2 |
| |
| $260.4 |
| |
| $143.4 |
| |
| $145.6 |
|
| $412.1 |
| |
| $411.6 |
| |
| $272.9 |
| |
| $269.4 |
| |
| $139.2 |
| |
| $142.2 |
|
| Electric transmission cost recovery | | 94.8 |
| | 72.0 |
| | 35.9 |
| | 35.7 |
| | 58.9 |
| | 36.3 |
|
| IPL’s tax benefit riders | 103.1 |
| | 159.2 |
| | 103.1 |
| | 159.2 |
| | — |
| | — |
| 45.0 |
| | 83.5 |
| | 45.0 |
| | 83.5 |
| | — |
| | — |
|
| Electric transmission cost recovery | 54.5 |
| | 43.5 |
| | 25.0 |
| | 21.9 |
| | 29.5 |
| | 21.6 |
| |
| Commodity cost recovery | 39.1 |
| | 37.6 |
| | 15.1 |
| | 23.5 |
| | 24.0 |
| | 14.1 |
| 21.2 |
| | 30.8 |
| | 15.0 |
| | 17.8 |
| | 6.2 |
| | 13.0 |
|
| Energy efficiency cost recovery | 28.0 |
| | 48.3 |
| | — |
| | — |
| | 28.0 |
| | 48.3 |
| 20.0 |
| | 20.5 |
| | — |
| | — |
| | 20.0 |
| | 20.5 |
|
| Derivatives | | 10.9 |
| | 31.5 |
| | 5.8 |
| | 12.1 |
| | 5.1 |
| | 19.4 |
|
| Other | 40.5 |
| | 43.1 |
| | 21.0 |
| | 24.2 |
| | 19.5 |
| | 18.9 |
| 24.5 |
| | 31.1 |
| | 10.2 |
| | 12.3 |
| | 14.3 |
| | 18.8 |
|
| |
| $675.8 |
| |
| $737.7 |
| |
| $431.4 |
| |
| $489.2 |
| |
| $244.4 |
| |
| $248.5 |
|
| $628.5 |
| |
| $681.0 |
| |
| $384.8 |
| |
| $430.8 |
| |
| $243.7 |
| |
| $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 nine months ended September 30, 2016,2017, Alliant Energy’s and IPL’s tax-related regulatory assets increased primarily due to property-related differences for qualifying repair expenditures.
Asset retirement obligations - In September 2017, IPL reached a partial settlement agreement related to its retail electric rate review (2016 Test Year), subject to IUB approval. The proposed settlement does not include the recovery of certain asset retirement obligation costs previously recorded as regulatory assets, and as a result, Alliant Energy and IPL recorded a write-down of regulatory assets in the third quarter of 2017 as discussed in “IPL’s Retail Electric Rate Review (2016 Test Year)” below.
Electric generating units retired early - In June 2017, IPL retired Sutherland Units 1 and 3 and reclassified the remaining net book value of these EGUs from property, plant and equipment to a regulatory asset on Alliant Energy’s and IPL’s balance sheets. IPL is currently earning a return on the remaining net book value of these EGUs, as well as recovering the remaining net book value of these EGUs from both its retail and wholesale customers. IPL’s proposed settlement reached in September 2017 includes recovery of the remaining net book value of these EGUs from IPL’s retail customers over a 10-year period. However, the proposed settlement does not allow IPL to earn a return on the remaining net book value of these EGUs from its retail customers when final rates are implemented, and as a result, Alliant Energy and IPL recorded a write-down of regulatory assets in the third quarter of 2017 as discussed in “IPL’s Retail Electric Rate Review (2016 Test Year)” below. IPL has requested continued recovery of the remaining net book value of these EGUs from its retail customers over a 10-year period from the IUB, with a decision currently expected in the first quarter of 2018. In September 2017, FERC approved continued recovery of the remaining net book value of these EGUs from IPL’s wholesale customers over a 10-year period.
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). During the nine months ended September 30, 2017, Alliant Energy, IPL and WPL received the refunds for the first complaint period of $50 million, $39 million and $11 million, respectively, after final true-ups. IPL and WPL each initially recorded the retail portion of the refunds to a regulatory liability. Pursuant to IUB approval, IPL’s retail portion of the refund from ITC is currently being refunded to its retail customers in 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 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.expenditures, and a rate-making accounting change for capitalized interest. For the nine months ended September 30, 2016,2017, Alliant Energy’s and IPL’s “IPL’s tax benefit riders” regulatory liabilities decreased by $56($39) million as follows (in millions):
|
| | | |
| Electric tax benefit rider credits |
| ($4751 |
) |
| Gas tax benefit rider credits | 9(5 | ) |
| Rate-making accounting change | 17 |
|
| |
| ($5639 |
) |
ReferIn the third quarter of 2017, Alliant Energy and IPL implemented a rate-making accounting change for capitalized interest. IPL currently anticipates crediting its related tax benefits from this rate-making accounting change to Note 8 for additional details regardingits Iowa retail electric and gas customers in the future, and as a result, Alliant Energy and IPL recorded an increase of $17 million to IPL’s tax benefit riders.riders regulatory liabilities during the nine months ended September 30, 2017.
Utility Rate CasesReviews -
WPL’s WisconsinIPL’s Retail Electric and Gas Rate Case (2017/2018Review (2016 Test Period)Year) - In May 2016, WPLApril 2017, IPL filed a retail base rate caserequest with the PSCW based on a forward-looking test period that includes 2017 and 2018. WPL’s filingIUB to increase annual electric base rates for its Iowa retail electric customers by $176 million, or approximately 12%. The request was based on a stipulated agreement reached between PSCW staff, intervener groups2016 historical Test Year as adjusted for certain known and WPL.measurable changes occurring up to 12 months after the commencement of the proceeding. The key drivers for the filing requested approval for WPL to implement a $13included recovery of capital projects, primarily power grid modernization and investments that advance cleaner energy, including Marshalltown. An interim retail electric base rate increase of $102 million, or approximately 1%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 annual2017 and 2018. For the three and nine months ended September 30, 2017, Alliant Energy and IPL recorded increases in electric base rates for WPL’sof $34 million and $54 million, respectively, in conjunction with the interim retail electric customers.base rate increase.
In September 2017, IPL reached a partial, non-unanimous settlement agreement with the Iowa Office of Consumer Advocate, the Iowa Business Energy Coalition and the Large Energy Group for an annual electric base rate increase of $130 million, or approximately 9%. The net requestedfinal proposed rate increase for 2017 compared to WPL’s(based on proposed settlement) includes increased depreciation expense resulting from an updated depreciation study; recovery over a four-year period of asset retirement obligation expenditures since the last retail electric rate casefiling in 2010; recovery over a 10-year period of the remaining net book value of Sutherland Units 1 and 3, unamortized forward contract costs for SO2 emission allowances through the 2015/2016 Test Period reflectedenergy adjustment clause and cancelled project costs approved in a $65prior emissions plan and budget; and no double leverage applied to the weighted-average cost of capital. The proposed settlement did not address rate design or IPL’s proposal to continue the electric transmission cost rider. As a result of the proposed settlement, in the third quarter of 2017, IPL recorded a write-down of regulatory assets of $9 million, increaseincluding $4 million to “Other operation and maintenance” expenses primarily related to IPL being no longer probable of earning a return on the remaining net book value of Sutherland Units 1 and 3 from its retail customers when final rates are implemented, and $5 million to “Depreciation and amortization” expenses for asset retirement obligations deemed no longer probable of recovery in base rates, partially offset by a $52 million reduction in fuel-related costs, using a preliminary estimate for 2017 fuel-related costs. The filing also requested approval for WPLfuture rates. IPL currently expects to implement final rates in the first quarter of 2018. The IUB must issue a $9 million, or approximately 13%, increase indecision 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 WPL’s retail gas customers. Any rate changes granted from this request are expected to be2017 fuel-related costs. These increases were effective January 1, 2017 and extend through the end of 2018. WPL currently expects a decision from the PSCW regarding this base rate case filing in the fourth quarter of 2016.
IPL’s Iowa Retail Electric Rate Settlement Agreement - The IUB approved a settlement agreement in 2014 related to rates charged to IPL’s Iowa retail electric customers. The settlement agreement extends IPL’s Iowa retail electric base rates authorized in its 2009 Test Year rate case through 2016 and provides targeted retail electric customer billing credits. For the three and nine months ended September 30, IPL2017, Alliant Energy and WPL recorded billing credits to reduce retailincreases in electric customers’ bills as follows (in millions):base rates of $4 million and $42 million, and increases in gas base rates of $2 million and $6 million, respectively, in conjunction with the base rate increases authorized in the PSCW’s December 2016 order.
|
| | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Billing credits to reduce retail electric customers’ bills | $3 | |
| $7 |
| |
| $7 |
| |
| $19 |
|
WPL’s Retail Fuel-related Rate Filing (2016 Test Year) - Pursuant to a 2015 PSCW order, WPL’s 2016 fuel-related costs will bewere subject to deferral if they are 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 September 30, 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 September 30, 2016, fuel-related costs outside of the approved range were $9 million and are included in “Commodity cost recovery” in Alliant Energy’s and WPL’s regulatory liabilities table above.
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 in 20152016 were lower than fuel-related costs used to determine rates for such period resulting in an over-collection of fuel-related costs. PursuantIn August 2017, the PSCW authorized WPL to utilize $6 million of the over-collections as an offset to projected 2017 fuel-related cost under-collections. As of September 30, 2017, $3 million of remaining fuel-related costs for 2016 outside of the approved bandwidth are included in “Commodity cost recovery” in Alliant Energy’s and WPL’s regulatory liabilities table above, and these costs are expected to offset any rate changes for WPL’s 2018 fuel-related costs.
WPL’s Retail Fuel-related Rate Filing (2017 Test Year) - In March 2017, WPL filed an application with the PSCW for a mid-year fuel-related cost adjustment for 2017. Fuel-related costs for 2017 are currently expected to exceed the approved 2017 fuel-related cost plan by more than the 2% annual bandwidth. In August 2017, the PSCW authorized WPL to utilize $6 million of the 2016 fuel-related cost over-collections to offset a portion of the projected fuel-related cost under-collections for 2017. As of September 30, 2017, after applying the 2016 over-recovery amounts, the remaining fuel-related costs for 2017 outside of the approved bandwidth were $3 million and are included in “Other” in Alliant Energy’s and WPL’s regulatory assets table above.
WPL’s Retail Fuel-related Rate Filing (2018 Test Year) - In July 2017, WPL filed a request with the PSCW order, WPL will refund $10 million, including interest, to itsincrease annual rates for WPL’s retail electric customers by $6 million, or approximately 1%, in the fourth quarter2018. The increase primarily reflects a change in expected fuel-related costs in 2018, which are expected to be offset by $3 million of over-collections from WPL’s 2016 for these over-collections.fuel-related costs as discussed above. Any rate changes granted from this request are expected to be effective January 1, 2018.
NOTE 3. PROPERTY, PLANT AND EQUIPMENT
Utility -
Emission Controls Project -
WPL’s Edgewater Unit 5 - Construction of the scrubber and baghouse at Edgewater Unit 5 was completed in July 2016. As of September 30, 2016, Alliant Energy and WPL recorded capitalized expenditures of $223 million and AFUDC of $12 million for the scrubber and baghouse in “Property, plant and equipment, net” on their balance sheets.
Natural Gas-Fired Generation ProjectProjects -
IPL’s Marshalltown Generating Station - IPL is currently constructingIPL’s construction of Marshalltown, an approximate 650660 MW natural gas-fired combined-cycle EGU. Construction beganEGU, was completed and the EGU was placed into service in 2014 and is expected to be completed in the second quarter ofApril 2017. As of September 30, 20162017, Alliant Energy and IPL recorded capitalized expenditures for construction work in progresstotal project costs of $600$643 million and AFUDC of $56$81 million for Marshalltown in “Property, plant and equipment, net” on their balance sheets.
SalesWPL’s West Riverside Energy Center - WPL is currently constructing West Riverside, an approximate 730 MW natural gas-fired combined-cycle EGU. Construction began in 2016 and is currently expected to be completed by early 2020. As of IPL’s Minnesota ElectricSeptember 30, 2017, Alliant Energy and Natural Gas Distribution Assets - In 2015, IPL completed the saleWPL recorded capitalized expenditures for construction work in progress of its Minnesota natural gas distribution assets and received proceeds of $11$278 million and a promissory noteAFUDC of $2 million. In 2015, IPL completed the sale of its Minnesota electric distribution assets and received proceeds of $129 million. The proceeds from the natural gas distribution assets were used$9 million for general corporate purposes and the proceeds from the electric distribution assets were used to reduce cash amounts received from IPL’s sales of accounts receivable program. The premium received over the book value of the property,West Riverside in “Property, plant and equipment, sold was more than offsetnet” on their balance sheets. These capital expenditures do not yet reflect any potential impacts from the exercise of purchase options by certain WPL electric cooperatives for a reductionpartial ownership interest in tax-related regulatory assets associated with the distribution assets.West Riverside.
Wind Generation -
IPL’s Expansion of Wind Generation - IPL currently plans to add up to 1,000 MW of new wind projects to its existing generation portfolio. These wind projects are expected to be placed into service in 2019 and 2020. As a result,of September 30, 2017, Alliant Energy and IPL recorded pre-tax chargescapitalized expenditures for construction work in progress of $9$184 million and $3AFUDC of $7 million for the Minnesota electricthis expansion of wind generation in “Property, plant and natural gas distribution asset transactions, respectively, in “Other operation and maintenance” inequipment, net” on their income statements for the nine months ended September 30, 2015.balance sheets.
Non-regulated and Other -
Non-regulated Generation -
Franklin County Wind Farm - Based on an evaluation of the strategic options for the Franklin County wind farm performed in the third quarter of 2016, Alliant Energy concluded, as of September 30, 2016, it was probable the Franklin County wind farm willwould be transferred to IPL. As a result, Alliant Energy performed an impairment analysis of such assets in the third quarter of 2016. The impairment analysis evaluated the value of the assets and a reasonable estimate of the amount of costs associated with the Franklin County wind farm that would be allowed for recovery for IPL’s electric rate-making purposes. Based on various analyses, including discounted cash flows projected from the Franklin County wind farm, recently executed purchased power agreements associated with wind generating facilities located near the Franklin County wind farm, and the
cost of new wind farms identified through IPL’s planned wind expansion, the current value of the Franklin County wind farm assets as of September 30, 2016 was determined to be approximately $33 million, subject to working capital adjustments. Alliant Energy concluded such value represents a reasonable estimate of the amount IPL will be allowed for recovery for IPL’s electric rate-making purposes. As a result, the carrying amount of the Franklin County wind farm was reduced to its current value, resulting inrecorded non-cash, pre-tax asset valuation charges of $86 million (after-tax charges of $51 million, or $0.23 per share) in the third quarter of 2016. Alliant Energy recorded such charges as a reduction to “Property,property, plant and equipment net” on its balance sheet in 2016 and charges to “Asset valuation charges for Franklin County wind farm” in its income statements for the three and nine months ended September 30, 2016. The proposed settlement for IPL’s retail electric rate review (2016 Test Year) included recovery of the transfer price for the Franklin County wind farm.
In April 2017, the Franklin County wind farm was transferred from AEF to IPL as approved by a February 2017 FERC order. IPL’s purchase price, including certain transaction-related costs, was $32 million. As of the closing date, the estimated fair values of the assets purchased and liabilities assumed by IPL were as follows (in millions):
|
| | | |
| Electric plant in service |
| $40 |
|
| Current assets | 2 |
|
| Total assets acquired | 42 |
|
| Other liabilities | 10 |
|
| Net assets acquired |
| $32 |
|
WPL’s Proposed Acquisition of Forward Wind Energy Center - In October 2017, WPL entered into definitive agreements to acquire the assets of the Forward Wind Energy Center (FWEC), which is a 129 MW wind farm located in Wisconsin. WPL currently anticipates requestingexpects to acquire 55 MW of FWEC for approximately $74 million. WPL currently expects to file for approval from the PSCW and FERC in the fourth quarter of 2016 to transfer the Franklin County wind farm to IPL and expects to complete such transfer in the first quarter of 2017. The final amount to be recovered for IPL’s electric rate-making purposes will be determined2017, with decisions expected by the IUB as part of IPL’s Iowa retail electric rate case for the 2016 Test Year, currently anticipated to be filed in the second quarter of 2018.
Retirement of IPL’s Sutherland Units 1 and 3 - In June 2017, IPL retired Sutherland Units 1 and therefore3 and reclassified the finalremaining net book value of these EGUs from property, plant and equipment to a regulatory asset valuation charges are subjecton Alliant Energy’s and IPL’s balance sheets. Refer to change.Note 2 for further discussion.
NOTE 4. RECEIVABLES
Sales of Accounts Receivable - IPL maintains a Receivables Purchase and Sale Agreement (Receivables Agreement) whereby it may sell its customer accounts receivables, unbilled revenues and certain other accounts receivables to a third party through wholly-owned and consolidated special purpose entities. In March 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 September 30, 20162017, IPL sold $252.9had $1.5 million of receivablesavailable capacity under its sales of accounts receivable program. For the three and nine months ended September 30, 2017 and 2016, IPL’s costs incurred related to the third party, received $1.0 million in cash proceeds and recorded deferred proceedssales of $239.7 million.accounts receivable program were not material.
IPL’s maximum and average outstanding cash proceeds (based on daily outstanding balances) related to the sales of accounts receivable program for the three and nine months ended September 30 were as follows (in millions):
|
| | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Maximum outstanding aggregate cash proceeds (based on daily outstanding balances) |
| $172.0 |
| |
| $137.0 |
| |
| $172.0 |
| |
| $137.0 |
|
| Average outstanding aggregate cash proceeds (based on daily outstanding balances) | 112.3 |
| | 41.2 |
| | 91.5 |
| | 62.1 |
|
For the three and nine months ended September 30, 2016 and 2015, IPL’s costs incurred related to the sales of accounts receivable program were not material. |
| | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Maximum outstanding aggregate cash proceeds |
| $112.0 |
| |
| $172.0 |
| |
| $112.0 |
| |
| $172.0 |
|
| Average outstanding aggregate cash proceeds | 66.2 |
| | 112.3 |
| | 58.7 |
| | 91.5 |
|
The attributes of IPL’s receivables sold under the Receivables Agreement were as follows (in millions):
| | | | September 30, 2016 | | December 31, 2015 | September 30, 2017 | | December 31, 2016 |
| Customer accounts receivable |
| $172.9 |
| |
| $109.7 |
|
| $153.6 |
| |
| $157.6 |
|
| Unbilled utility revenues | 79.8 |
| | 71.3 |
| 89.1 |
| | 90.4 |
|
| Other receivables | 0.2 |
| | 0.1 |
| 1.1 |
| | 0.1 |
|
| Receivables sold to third party | 252.9 |
| | 181.1 |
| 243.8 |
| | 248.1 |
|
| Less: cash proceeds (a) | 1.0 |
| | 5.0 |
| 112.0 |
| | 21.0 |
|
| Deferred proceeds | 251.9 |
| | 176.1 |
| 131.8 |
| | 227.1 |
|
| Less: allowance for doubtful accounts | 12.2 |
| | 4.1 |
| 16.5 |
| | 16.0 |
|
| Fair value of deferred proceeds |
| $239.7 |
| |
| $172.0 |
|
| $115.3 |
| |
| $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 September 30, 2016,2017, outstanding receivables past due under the Receivables Agreement were $64.5$54.1 million. Additional attributes of IPL’s receivables sold under the Receivables Agreement for the three and nine months ended September 30 were as follows (in millions):
|
| | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Collections reinvested in receivables |
| $499.7 |
| |
| $480.1 |
| |
| $1,362.1 |
| |
| $1,403.1 |
|
| Write-offs (recoveries), net | (0.3 | ) | | 3.3 |
| | (0.6 | ) | | 6.8 |
|
|
| | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | 2017 | | 2016 | | 2017 | | 2016 |
| Collections reinvested in receivables |
| $347.9 |
| |
| $499.7 |
| |
| $1,283.2 |
| |
| $1,362.1 |
|
| Write-off losses (recoveries), net | 3.5 |
| | (0.3 | ) | | 10.4 |
| | (0.6 | ) |
In connection with the implementation of IPL’s new customer billing and information system in the first quarter of 2016, IPL postponed the write-off of customer bills for a portion of 2016, resulting in lower write-offs for the three and nine months ended September 30, 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 and nine months ended September 30 was as follows (in millions):
| | | | Alliant Energy | | WPL | Alliant Energy | | WPL |
| | Three Months | | Nine Months | | Three Months | | Nine Months | Three Months | | Nine Months | | Three Months | | Nine Months |
| | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| ATC |
| ($9.1 | ) | |
| ($10.9 | ) | |
| ($28.6 | ) | |
| ($29.6 | ) | |
| ($9.1 | ) | |
| ($10.9 | ) | |
| ($28.6 | ) | |
| ($29.6 | ) | |
| ATC Investment | |
| ($10.1 | ) | |
| ($9.1 | ) | |
| ($32.7 | ) | |
| ($28.6 | ) | |
| $— |
| |
| ($9.1 | ) | |
| $— |
| |
| ($28.6 | ) |
| Other | (0.1 | ) | | (0.2 | ) | | (0.2 | ) | | 0.7 |
| | (0.2 | ) | | (0.2 | ) | | (0.4 | ) | | (0.6 | ) | — |
| | (0.1 | ) | | (0.2 | ) | | (0.2 | ) | | (0.2 | ) | | (0.2 | ) | | (0.4 | ) | | (0.4 | ) |
| |
| ($9.2 | ) | |
| ($11.1 | ) | |
| ($28.8 | ) | |
| ($28.9 | ) | |
| ($9.3 | ) | |
| ($11.1 | ) | |
| ($29.0 | ) | |
| ($30.2 | ) |
| ($10.1 | ) | |
| ($9.2 | ) | |
| ($32.9 | ) | |
| ($28.8 | ) | |
| ($0.2 | ) | |
| ($9.3 | ) | |
| ($0.4 | ) | |
| ($29.0 | ) |
MISO Transmission Owner Return on Equity ComplaintsATC Investment- A group of MISO cooperative and municipal utilities previously filed two complaints with FERC requestingOn December 31, 2016, pursuant to a reduction of the base return on equity used by MISO transmission owners, including ATC. In September 2016, FERC issued an order on the first complaint to reduce the base return on equity for the refund period from November 12, 2013 through February 11, 2015. In June 2016 a FERC administrative law judge issued an initial decision regarding the second complaint recommending a reduction of the base return on equity for the refund period from February 12, 2015 through May 11, 2016. A final decision on the second complaint from FERC is currently expected in the first half of 2017. Alliant EnergyPSCW order, WPL Transco, LLC was liquidated and WPL have realizedtransferred its investment in ATC LLC to ATI. As a cumulative $24 million of reductions in the amount ofresult, WPL no longer records equity income from its prior investment in ATC asLLC. 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.
Non-regulated Wind Investment in Oklahoma - In July 2017, a resultwholly-owned subsidiary of AEF acquired a 50% cash equity ownership interest in a 225 MW non-regulated wind farm located in Oklahoma, which started commercial operations in December 2016. The wind farm provides electricity to a third-party under a long-term purchased power agreement. In the third quarter of 2017, Alliant Energy’s “Other investments” assets increased $98 million from this acquisition. Alliant Energy will not maintain or operate the wind farm, and provided a parent guarantee of its subsidiary’s indemnification obligations under the operating agreement and purchased power agreement. Refer to Note 12(d) for discussion of the two complaints through September 30, 2016, including $9guarantee. Alliant Energy accounts for this non-regulated investment under the equity method of accounting, with the related equity (income) loss from unconsolidated investments included in the “Other” line in the above table. In conjunction with the acquisition, in July 2017, AEF entered into a $95 million, during the nine months ended September 30, 2016.364-day variable-rate term loan credit agreement (with Alliant Energy as guarantor).
NOTE 5(b) Cash Surrender Value of Life Insurance Policies - During the nine months ended September 30, 2016, certain of Alliant Energy’s and IPL’s company-owned life insurance policies were liquidated. The related proceeds of $31 million and $19 million were recorded in investing activities in Alliant Energy’s and IPL’s cash flows statements, respectively.
NOTE 6. COMMON EQUITY
Common Share Activity - A summary of Alliant Energy’s common stock activity was as follows:
|
| | |
Shares outstanding, January 1, 20162017 | 226,918,432227,673,654 |
|
| At-the-market offering program | 3,074,931 |
|
| Shareowner Direct Plan issuances | 559,588496,437 |
|
| 22,4085,185 |
|
| Other | (45,847 | ) |
Shares outstanding, September 30, 20162017 | 227,500,428231,204,360 |
|
At-the-Market Offering Program - During the nine months ended September 30, 2015,In May 2017, Alliant Energy issued 4,373,234 sharesfiled a prospectus supplement under which it could sell up to $125 million of its common stock through an at-the-market offering program. As of September 30, 2017, Alliant Energy issued 3,074,931 shares of common stock through this program and received cash proceeds of $133$124 million, net of $2$1 million in feescommissions and commissions.fees. The proceeds from the issuances of common stock were used for general corporate purposes. Alliant Energy currently has no plans to issue any additional common stock through this at-the-market offering program.
Common Stock Split - On April 20, 2016, Alliant Energy’s Board
Dividend Restrictions - As of September 30, 20162017, IPL’s amount of retained earnings that were free of dividend restrictions was $632701 million. As of September 30, 20162017, WPL’s amount of retained earnings that were free of dividend restrictions was $3432 million for the remainder of 20162017.
Restricted Net Assets of Subsidiaries - As of September 30, 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 $1.51.7 billion and $1.8 billion, respectively.
Capital Transactions with Subsidiaries - For the nine months ended September 30, 2016, IPL received capital contributions of $65.0 million from its parent company. For the nine months ended September 30, 2016, IPL and WPL paid common stock dividends of $114.0 million and $101.2 million, respectively, to their parent company.
Comprehensive Income - For the three and nine months ended September 30, 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 and nine months ended September 30, 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
NOTENote 7(a) Short-term Debt - In August 2017, Alliant Energy, IPL and WPL entered into a single new credit facility agreement, which expires in August 2022. The new credit facility agreement includes financial covenants similar to those that were included in the previous credit facility agreements. As of September 30, 2017, the short-term borrowing capacity under the new credit facility agreement totaled $1 billion ($300 million for Alliant Energy at the parent company level, $300 million for IPL and $400 million for WPL). Subject to certain conditions, Alliant Energy (at the parent company level), IPL and WPL may each reallocate and change its initial sublimit up to $500 million, $400 million and $500 million, respectively, within the $1 billion total commitment. Information regarding commercial paper classified as short-term debt was as follows (dollars in millions):
|
| | | | | | | |
| | Alliant Energy | | Parent | | | | |
| September 30, 2016 | (Consolidated) | | Company | | IPL | | WPL |
| Commercial paper: | | | | | | | |
| Amount outstanding | $238.3 | | $226.5 | | $— | | $11.8 |
| Weighted average remaining maturity | 4 days | | 4 days | | N/A | | 3 days |
| Weighted average interest rates | 0.6% | | 0.7% | | N/A | | 0.4% |
| Available credit facility capacity | $761.7 | | $73.5 | | $300.0 | | $388.2 |
|
| | | | | |
| September 30, 2017 | Alliant Energy | | IPL | | WPL |
| Commercial paper outstanding | $390.3 | | $4.0 | | $224.6 |
| Commercial paper weighted average interest rates | 1.2% | | 1.4% | | 1.1% |
| Available credit facility capacity (a) | $569.7 | | $256.0 | | $175.4 |
| | | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
| Three Months Ended September 30 | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
Maximum amount outstanding (based on daily outstanding balances) |
| $248.0 |
| |
| $181.2 |
| |
| $3.1 |
| |
| $18.4 |
| | $55.4 | | $— | $424.4 | | $248.0 | | $20.0 | | $3.1 | | $271.2 | | $55.4 |
Average amount outstanding (based on daily outstanding balances) |
| $220.1 |
| |
| $122.4 |
| |
| $0.1 |
| |
| $0.5 |
| | $36.4 | | $— | $386.2 | | $220.1 | | $0.4 | | $0.1 | | $217.0 | | $36.4 |
| Weighted average interest rates | 0.6 | % | | 0.4 | % | | 0.6 | % | | 0.4 | % | | 0.4% | | N/A | 1.3% | | 0.6% | | 1.4% | | 0.6% | | 1.1% | | 0.4% |
| Nine Months Ended September 30 | | | | | | | | | |
Maximum amount outstanding (based on daily outstanding balances) |
| $248.0 |
| |
| $181.2 |
| |
| $3.1 |
| |
| $18.4 |
| | $62.9 | | $— | $424.4 | | $248.0 | | $20.0 | | $3.1 | | $271.2 | | $62.9 |
Average amount outstanding (based on daily outstanding balances) |
| $210.7 |
| |
| $114.5 |
| |
| $— |
| |
| $0.2 |
| | $33.2 | | $— | $323.9 | | $210.7 | | $0.5 | | $— | | $144.2 | | $33.2 |
| Weighted average interest rates | 0.6 | % | | 0.4 | % | | 0.6 | % | | 0.4 | % | | 0.4% | | N/A | 1.1% | | 0.6% | | 1.2% | | 0.6% | | 1.0% | | 0.4% |
| |
| (a) | Alliant Energy’s and IPL’s available credit facility capacities reflect outstanding commercial paper classified as both short- and long-term debt at September 30, 2017. |
NOTE 7(b) Long-term Debt - In September 2016, IPL issued $300 million of 3.7% senior debentures due 2046. The proceeds from the issuance were used by IPL to reduce cash amounts received from its sales of accounts receivable program, reduce commercial paper classified as long-term debt by $100 million and for general corporate purposes.
In October 2016,July 2017, AEF entered into a
$500$95 million,
364-day variable-rate
(1.3%(1.8% at
October 31, 2016)September 30, 2017) term loan credit agreement
and used(with Alliant Energy as guarantor) related to the
proceeds from borrowings under this agreement to retire borrowings under Alliant Energy’s and Franklin County Holdings LLC’s variable-rate term loan credit agreements that maturedacquisition of a non-regulated wind farm located in
2016, reduce outstanding commercial paper and for general corporate purposes. AEF’s term loan credit agreement expires in October 2018 andOklahoma, which includes substantially the same financial covenants that are included in Alliant Energy’s
current credit facility agreement.
Refer to Note 5(a) for further discussion of the non-regulated wind farm acquisition.
NOTE 7(b) Long-term Debt - As of September 30, 2017, $40.0 million of commercial paper was recorded in “Long-term debt, net” on Alliant Energy’s and IPL’s balance sheets due to the existence of a long-term credit facility that back-stops this commercial paper balance, along with Alliant Energy’s and IPL’s intent and ability to refinance these balances on a long-term basis. As of September 30, 2017, this commercial paper balance had a 1.4% interest rate.
In October 2017, WPL issued $300 million of 3.05% debentures due 2027. The proceeds from the issuance were used by WPL to reduce commercial paper and for general corporate purposes.
NOTE 8. INCOME TAXES
Income Tax Rates - The overall income tax rates shown in the following table were computed by dividing income tax expense (benefit) by income from continuing operations before income taxes.
| | | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
| Three Months Ended September 30 | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Statutory federal income tax rate | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % |
| Effect of rate-making on property-related differences | | (10.1 | ) | | (11.9 | ) | | (22.6 | ) | | (16.5 | ) | | (1.9 | ) | | (0.7 | ) |
| IPL’s tax benefit riders | (13.1 | ) | | (11.0 | ) | | (20.1 | ) | | (30.0 | ) | | — |
| | — |
| (8.3 | ) | | (13.1 | ) | | (20.9 | ) | | (20.1 | ) | | — |
| | — |
|
| Effect of rate-making on property-related differences | (11.9 | ) | | (7.1 | ) | | (16.5 | ) | | (18.7 | ) | | (0.7 | ) | | (0.7 | ) | |
| Production tax credits | (9.0 | ) | | (6.7 | ) | | (6.0 | ) | | (8.6 | ) | | (5.7 | ) | | (6.1 | ) | (6.2 | ) | | (9.0 | ) | | (7.0 | ) | | (6.0 | ) | | (7.0 | ) | | (5.7 | ) |
| Other items, net | 4.4 |
| | 3.0 |
| | 5.4 |
| | 3.7 |
| | 4.0 |
| | 4.1 |
| 2.8 |
| | 4.4 |
| | 2.3 |
| | 5.4 |
| | 5.5 |
| | 4.0 |
|
| Overall income tax rate | 5.4 | % | | 13.2 | % | | (2.2 | %) | | (18.6 | %) | | 32.6 | % | | 32.3 | % | 13.2 | % | | 5.4 | % | | (13.2 | %) | | (2.2 | %) | | 31.6 | % | | 32.6 | % |
|
| | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| Nine Months Ended September 30 | 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 | (10.2 | ) | | (10.6 | ) | | (19.6 | ) | | (28.2 | ) | | — |
| | — |
|
| Effect of rate-making on property-related differences | (8.2 | ) | | (7.1 | ) | | (14.8 | ) | | (17.9 | ) | | (0.8 | ) | | (0.6 | ) |
| Production tax credits | (7.2 | ) | | (6.6 | ) | | (6.1 | ) | | (8.0 | ) | | (6.1 | ) | | (6.3 | ) |
| Other items, net | 3.5 |
| | 3.7 |
| | 4.2 |
| | 4.2 |
| | 4.4 |
| | 4.2 |
|
| Overall income tax rate | 12.9 | % | | 14.4 | % | | (1.3 | %) | | (14.9 | %) | | 32.5 | % | | 32.3 | % |
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 |
| Nine Months Ended September 30 | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Statutory federal income tax rate | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % | | 35.0 | % |
| Effect of rate-making on property-related differences | (9.1 | ) | | (8.2 | ) | | (20.6 | ) | | (14.8 | ) | | (1.8 | ) | | (0.8 | ) |
| IPL’s tax benefit riders | (8.1 | ) | | (10.2 | ) | | (20.1 | ) | | (19.6 | ) | | — |
| | — |
|
| Production tax credits | (6.0 | ) | | (7.2 | ) | | (6.8 | ) | | (6.1 | ) | | (7.0 | ) | | (6.1 | ) |
| Other items, net | 3.1 |
| | 3.5 |
| | 2.7 |
| | 4.2 |
| | 4.9 |
| | 4.4 |
|
| Overall income tax rate | 14.9 | % | | 12.9 | % | | (9.8 | %) | | (1.3 | %) | | 31.1 | % | | 32.5 | % |
Deferred Tax Assets and Liabilities - For the nine months ended September 30, 2016,2017, Alliant Energy’s, IPL’s and WPL’s deferred tax liabilities increased $149.4$204.5 million, $115.6$131.7 million and $103.4$63.6 million, respectively. These increases in deferred tax liabilities were primarily due to property-related differences recorded during the nine months ended September 30, 2016.2017. Alliant Energy’s and IPL’s increases were partially offset by the generation of federal net operating losses recorded during the nine months ended September 30, 2017, which are primarily due to accelerated tax depreciation associated with Marshalltown.
Carryforwards - At September 30, 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 | |
| $587 |
| |
| $201 |
| |
| $255 |
| |
| $86 |
| |
| $242 |
| |
| $85 |
| 2030-2037 | |
| $815 |
| |
| $500 |
| |
| $208 |
|
| State net operating losses | 2018 | | 674 |
| | 35 |
| | 15 |
| | 1 |
| | 3 |
| | — |
| 2018-2037 | | 701 |
| | 14 |
| | 2 |
|
| Federal tax credits | 2022 | | 264 |
| | 260 |
| | 95 |
| | 91 |
| | 108 |
| | 107 |
| 2022-2037 | | 297 |
| | 110 |
| | 125 |
|
| | | | |
| $496 |
| | | |
| $178 |
| | | |
| $192 |
| |
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 and nine months ended September 30 are included in the tables below (in millions). In IPL’s and WPL’s tables below, the defined benefit pension plans costsplan amounts 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 |
| | Three Months | | Nine Months | | Three Months | | Nine Months |
| Alliant Energy | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Service cost |
| $3.1 |
| |
| $3.2 |
| |
| $9.3 |
| |
| $9.5 |
| |
| $1.2 |
| |
| $1.4 |
| |
| $3.7 |
| |
| $4.0 |
|
| Interest cost | 12.7 |
| | 13.2 |
| | 38.3 |
| | 39.7 |
| | 2.2 |
| | 2.3 |
| | 6.5 |
| | 7.0 |
|
| Expected return on plan assets | (16.3 | ) | | (16.3 | ) | | (49.1 | ) | | (49.1 | ) | | (1.5 | ) | | (1.6 | ) | | (4.6 | ) | | (4.6 | ) |
| Amortization of prior service credit | (0.1 | ) | | (0.1 | ) | | (0.3 | ) | | (0.2 | ) | | (0.1 | ) | | (1.0 | ) | | (0.2 | ) | | (3.1 | ) |
| Amortization of actuarial loss | 9.4 |
| | 9.3 |
| | 28.2 |
| | 28.0 |
| | 1.0 |
| | 1.2 |
| | 2.9 |
| | 3.6 |
|
| Settlement losses (a) | 0.9 |
| | — |
| | 0.9 |
| | — |
| | — |
| | — |
| | — |
| | — |
|
| |
| $9.7 |
| |
| $9.3 |
| |
| $27.3 |
| |
| $27.9 |
| |
| $2.8 |
| |
| $2.3 |
| |
| $8.3 |
| |
| $6.9 |
|
| | | | Defined Benefit Pension Plans | | OPEB Plans | Defined Benefit Pension Plans | | OPEB Plans |
| | Three Months | | Nine Months | | Three Months | | Nine Months | Three Months | | Nine Months | | Three Months | | Nine Months |
| Alliant Energy | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | |
| IPL | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Service cost |
| $3.2 |
| |
| $4.0 |
| |
| $9.5 |
| |
| $11.9 |
| |
| $1.4 |
| |
| $1.3 |
| |
| $4.0 |
| |
| $4.1 |
|
| $1.8 |
| |
| $1.8 |
| |
| $5.5 |
| |
| $5.6 |
| |
| $0.5 |
| |
| $0.5 |
| |
| $1.6 |
| |
| $1.7 |
|
| Interest cost | 13.2 |
| | 13.5 |
| | 39.7 |
| | 40.3 |
| | 2.3 |
| | 2.3 |
| | 7.0 |
| | 6.8 |
| 5.9 |
| | 6.1 |
| | 17.6 |
| | 18.4 |
| | 0.8 |
| | 1.0 |
| | 2.6 |
| | 2.9 |
|
| Expected return on plan assets | (16.3 | ) | | (18.7 | ) | | (49.1 | ) | | (56.2 | ) | | (1.6 | ) | | (2.1 | ) | | (4.6 | ) | | (6.3 | ) | (7.7 | ) | | (7.7 | ) | | (23.1 | ) | | (23.2 | ) | | (1.0 | ) | | (1.0 | ) | | (3.2 | ) | | (3.2 | ) |
| Amortization of prior service credit | (0.1 | ) | | (0.1 | ) | | (0.2 | ) | | (0.2 | ) | | (1.0 | ) | | (2.8 | ) | | (3.1 | ) | | (8.4 | ) | — |
| | — |
| | (0.1 | ) | | (0.1 | ) | | — |
| | (0.7 | ) | | — |
| | (2.0 | ) |
| Amortization of actuarial loss | 9.3 |
| | 8.8 |
| | 28.0 |
| | 26.5 |
| | 1.2 |
| | 1.2 |
| | 3.6 |
| | 3.6 |
| 4.0 |
| | 4.2 |
| | 12.1 |
| | 12.4 |
| | 0.5 |
| | 0.7 |
| | 1.5 |
| | 2.0 |
|
| Additional benefit costs | — |
| | 0.1 |
| | — |
| | 0.4 |
| | — |
| | — |
| | — |
| | — |
| |
| |
| $9.3 |
| |
| $7.6 |
| |
| $27.9 |
| |
| $22.7 |
| |
| $2.3 |
| |
| ($0.1 | ) | |
| $6.9 |
| |
| ($0.2 | ) |
| $4.0 |
| |
| $4.4 |
| |
| $12.0 |
| |
| $13.1 |
| |
| $0.8 |
| |
| $0.5 |
| |
| $2.5 |
| |
| $1.4 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Defined Benefit Pension Plans | | OPEB Plans |
| | Three Months | | Nine Months | | Three Months | | Nine Months |
| IPL | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 |
| Service cost |
| $1.8 |
| |
| $2.2 |
| |
| $5.6 |
| |
| $6.6 |
| |
| $0.5 |
| |
| $0.6 |
| |
| $1.7 |
| |
| $1.8 |
|
| Interest cost | 6.1 |
| | 6.2 |
| | 18.4 |
| | 18.7 |
| | 1.0 |
| | 0.9 |
| | 2.9 |
| | 2.8 |
|
| Expected return on plan assets | (7.7 | ) | | (8.9 | ) | | (23.2 | ) | | (26.8 | ) | | (1.0 | ) | | (1.4 | ) | | (3.2 | ) | | (4.2 | ) |
| Amortization of prior service credit | — |
| | — |
| | (0.1 | ) | | (0.1 | ) | | (0.7 | ) | | (1.5 | ) | | (2.0 | ) | | (4.6 | ) |
| Amortization of actuarial loss | 4.2 |
| | 3.8 |
| | 12.4 |
| | 11.5 |
| | 0.7 |
| | 0.6 |
| | 2.0 |
| | 1.7 |
|
| |
| $4.4 |
| |
| $3.3 |
| |
| $13.1 |
| |
| $9.9 |
| |
| $0.5 |
| |
| ($0.8 | ) | |
| $1.4 |
| |
| ($2.5 | ) |
| | | | Defined Benefit Pension Plans | | OPEB Plans | Defined Benefit Pension Plans | | OPEB Plans |
| | Three Months | | Nine Months | | Three Months | | Nine Months | Three Months | | Nine Months | | Three Months | | Nine Months |
| WPL | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Service cost |
| $1.3 |
| |
| $1.4 |
| |
| $3.7 |
| |
| $4.3 |
| |
| $0.5 |
| |
| $0.5 |
| |
| $1.5 |
| |
| $1.6 |
|
| $1.2 |
| |
| $1.3 |
| |
| $3.6 |
| |
| $3.7 |
| |
| $0.5 |
| |
| $0.5 |
| |
| $1.4 |
| |
| $1.5 |
|
| Interest cost | 5.5 |
| | 5.6 |
| | 16.7 |
| | 16.9 |
| | 0.9 |
| | 0.9 |
| | 2.8 |
| | 2.7 |
| 5.5 |
| | 5.5 |
| | 16.4 |
| | 16.7 |
| | 0.9 |
| | 0.9 |
| | 2.6 |
| | 2.8 |
|
| Expected return on plan assets | (7.0 | ) | | (8.1 | ) | | (21.2 | ) | | (24.3 | ) | | (0.2 | ) | | (0.3 | ) | | (0.6 | ) | | (1.1 | ) | (7.2 | ) | | (7.0 | ) | | (21.4 | ) | | (21.2 | ) | | (0.2 | ) | | (0.2 | ) | | (0.6 | ) | | (0.6 | ) |
| Amortization of prior service cost (credit) | — |
| | 0.1 |
| | 0.1 |
| | 0.2 |
| | (0.3 | ) | | (0.9 | ) | | (0.7 | ) | | (2.6 | ) | 0.1 |
| | — |
| | 0.1 |
| | 0.1 |
| | (0.1 | ) | | (0.3 | ) | | (0.2 | ) | | (0.7 | ) |
| Amortization of actuarial loss | 4.4 |
| | 4.2 |
| | 13.2 |
| | 12.6 |
| | 0.5 |
| | 0.6 |
| | 1.4 |
| | 1.7 |
| 4.6 |
| | 4.4 |
| | 13.9 |
| | 13.2 |
| | 0.4 |
| | 0.5 |
| | 1.2 |
| | 1.4 |
|
| Additional benefit costs | — |
| | 0.1 |
| | — |
| | 0.4 |
| | — |
| | — |
| | — |
| | — |
| |
| |
| $4.2 |
| |
| $3.3 |
| |
| $12.5 |
| |
| $10.1 |
| |
| $1.4 |
| |
| $0.8 |
| |
| $4.4 |
| |
| $2.3 |
|
| $4.2 |
| |
| $4.2 |
| |
| $12.6 |
| |
| $12.5 |
| |
| $1.5 |
| |
| $1.4 |
| |
| $4.4 |
| |
| $4.4 |
|
401(k) Savings Plan - A significant number of employees participate in a defined contribution retirement plan (401(k) savings plan). For the three and nine months ended September 30, costs related to the 401(k) savings plan, which are partially based on the participants’ contributions and include allocated costs associated with Corporate Services employees for IPL and WPL, were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | Three Months | | Nine Months | | Three Months | | Nine Months | | Three Months | | Nine Months |
| | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 |
| 401(k) costs |
| $5.6 |
| |
| $6.4 |
| |
| $17.5 |
| |
| $18.7 |
| |
| $2.8 |
| |
| $3.3 |
| |
| $8.8 |
| |
| $9.6 |
| |
| $2.6 |
| |
| $2.9 |
| |
| $8.0 |
| |
| $8.4 |
|
Voluntary Employee Separation Charges - In the third quarter of 2015, Alliant Energy offered certain employees a voluntary separation package. Approximately 2% of total Alliant Energy employees accepted this package, which resulted in Alliant Energy, IPL and WPL recording charges of $8 million, $5 million and $3 million, respectively, in the third quarter of 2015.
| |
| (a) | Settlement losses related to payments made to retired executives of Alliant Energy. |
NOTE 9(b) Equity-based Compensation Plans - All shares, units and awards included below have been adjusted to reflect the common stock split discussed in Note 6.
A summary of compensation expense, including amounts allocated to IPL and WPL, and the related income tax benefits recognized for share-based compensation awards for the three and nine months ended September 30 was as follows (in millions):
| | | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
| | Three Months | | Nine Months | | Three Months | | Nine Months | | Three Months | | Nine Months | Three Months | | Nine Months | | Three Months | | Nine Months | | Three Months | | Nine Months |
| | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Compensation expense |
| $4.4 |
| |
| $0.3 |
| |
| $16.8 |
| |
| $5.8 |
| |
| $2.4 |
| |
| $0.2 |
| |
| $8.9 |
| |
| $3.1 |
| |
| $1.9 |
| |
| $0.1 |
| |
| $7.3 |
| |
| $2.5 |
|
| $5.1 |
| |
| $4.4 |
| |
| $9.9 |
| |
| $16.8 |
| |
| $2.8 |
| |
| $2.4 |
| |
| $5.4 |
| |
| $8.9 |
| |
| $2.1 |
| |
| $1.9 |
| |
| $4.1 |
| |
| $7.3 |
|
| Income tax benefits | 1.7 |
| | 0.2 |
| | 6.8 |
| | 2.4 |
| | 1.0 |
| | 0.1 |
| | 3.7 |
| | 1.3 |
| | 0.7 |
| | — |
| | 2.9 |
| | 1.0 |
| 2.1 |
| | 1.7 |
| | 4.0 |
| | 6.8 |
| | 1.1 |
| | 1.0 |
| | 2.2 |
| | 3.7 |
| | 0.9 |
| | 0.7 |
| | 1.7 |
| | 2.9 |
|
As of September 30, 2016,2017, Alliant Energy’s, IPL’s and WPL’s total unrecognized compensation cost related to share-based compensation awards was $8.2$8.5 million, $4.7 million and $3.5 million, respectively, 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 for the nine months ended September 30, 2017, with amounts representing the target number of awards, was as follows:
|
| | | | | | | | | | | |
| | Performance Shares | | Performance Units |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Nonvested awards, January 1 | 288,430 |
| | 288,848 |
| | 116,412 |
| | 127,330 |
|
| Granted | 68,585 |
| | 90,806 |
| | 23,918 |
| | 35,674 |
|
| Vested | (98,186 | ) | | (91,224 | ) | | (42,760 | ) | | (45,690 | ) |
| Forfeited | (1,230 | ) | | — |
| | (4,250 | ) | | (902 | ) |
| Nonvested awards, September 30 | 257,599 |
| | 288,430 |
| | 93,320 |
| | 116,412 |
|
Granted Awards - For performance units granted in 2016, the final value is based on the closing market price of one share of Alliant Energy’s common stock at the end of the performance period. Compensation expense for performance shares and performance units is recorded ratably over the performance period based on the fair value of the awards at each reporting period. |
| | | | | |
| | Performance Shares | | Performance Units |
| Nonvested awards, January 1 | 257,599 |
| | 93,320 |
|
| Granted | 65,350 |
| | 21,558 |
|
| Vested | (99,438 | ) | | (37,395 | ) |
| Forfeited | — |
| | (4,243 | ) |
| Nonvested awards, September 30 | 223,511 |
| | 73,240 |
|
Vested Awards - During the nine months ended September 30, 2017, certain performance shares and performance units that were granted in 2014 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 | |
| | 2016 | | 2015 | | 2016 | | 2015 | | | | | |
| | 2013 Grant | | 2012 Grant | | 2013 Grant | | 2012 Grant | Performance Shares | | Performance Units |
| Performance awards vested | 98,186 |
| | 91,224 |
| | 42,760 |
| | 45,690 |
| 99,438 |
| | 37,395 |
|
| Percentage of target number of performance awards | 165.0 | % | | 167.5 | % | | 165.0 | % | | 167.5 | % | 147.5 | % | | 147.5 | % |
| Aggregate payout value (in millions) |
| $5.1 |
| |
| $5.1 |
| |
| $1.7 |
| |
| $1.6 |
|
| $5.6 |
| |
| $1.5 |
|
| Payout - cash (in millions) |
| $2.9 |
| |
| $3.2 |
| |
| $1.7 |
| |
| $1.6 |
|
| $5.1 |
| |
| $1.5 |
|
| Payout - common stock shares issued | 22,408 |
| | 21,950 |
| | N/A | | N/A | 5,185 |
| | N/A |
|
Fair Value of Awards - Information related to fair values of nonvested performance shares and performance units at September 30, 20162017, by year of grant, was as follows:
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Performance Shares | | Performance Units |
| | 2016 Grant | | 2015 Grant | | 2014 Grant | | 2016 Grant | | 2015 Grant | | 2014 Grant |
| Nonvested awards | 67,355 |
| | 90,806 |
| | 99,438 |
| | 22,657 |
| | 33,268 |
| | 37,395 |
|
| Alliant Energy common stock closing price on September 30, 2016 |
| $38.31 |
| |
| $38.31 |
| |
| $38.31 |
| |
| $38.31 |
| | N/A | | N/A |
| Alliant Energy common stock closing price on grant date | N/A | | N/A | | N/A | | N/A | |
| $32.55 |
| |
| $26.89 |
|
| Estimated payout percentage based on performance criteria | 125 | % | | 168 | % | | 175 | % | | 125 | % | | 168 | % | | 175 | % |
| Fair values of each nonvested award |
| $47.89 |
| |
| $64.36 |
| |
| $67.04 |
| |
| $47.89 |
| |
| $54.68 |
| |
| $47.05 |
|
Performance Contingent Restricted Stock - A summary of the 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 | 190,244 |
| |
| $29.59 |
| | 197,624 |
| |
| $25.35 |
|
| Granted | — |
| | — |
| | 90,806 |
| | 32.55 |
|
| Vested (a) | — |
| | — |
| | (98,186 | ) | | 23.79 |
|
| Nonvested shares, September 30 | 190,244 |
| | 29.59 |
| | 190,244 |
| | 29.59 |
|
| |
(a) | In 2015, 98,186 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 performance restricted stock units, performance restricted units and key employee performance restricted units. Payouts 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. |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Performance Shares | | Performance Units |
| | 2017 Grant | | 2016 Grant | | 2015 Grant | | 2017 Grant | | 2016 Grant | | 2015 Grant |
| Nonvested awards at target | 65,350 |
| | 67,355 |
| | 90,806 |
| | 19,531 |
| | 21,751 |
| | 31,958 |
|
| Alliant Energy common stock closing price on September 29, 2017 |
| $41.57 |
| |
| $41.57 |
| |
| $41.57 |
| |
| $41.57 |
| |
| $41.57 |
| | N/A |
| Alliant Energy common stock closing price on grant date | N/A | | N/A | | N/A | | N/A | | N/A | |
| $32.55 |
|
| Estimated payout percentage based on performance criteria | 100 | % | | 138 | % | | 113 | % | | 100 | % | | 138 | % | | 113 | % |
| Fair values of each nonvested award |
| $41.57 |
| |
| $57.37 |
| |
| $46.97 |
| |
| $41.57 |
| |
| $57.37 |
| |
| $36.78 |
|
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 for the nine months ended September 30, 2017, with amounts representing the target number of units, was as follows:
| | | | 2016 | Units | | Weighted Average Grant Date Fair Value |
| | Units | | Weighted Average Grant Date Fair Value | |
| Nonvested units, January 1 | | 67,355 |
| |
| $33.96 |
|
| Granted | 68,585 |
| |
| $33.96 |
| 65,350 |
| | 39.12 |
|
| Forfeited | (1,230 | ) | | 33.90 |
| |
| Nonvested units, September 30 | 67,355 |
| | 33.96 |
| 132,705 |
| | 36.50 |
|
Performance Restricted Stock Units - Performance restricted units must be paid out in cash and are accounted for as liability awards. Each performance restricted unit’s final value is based on the closing market price of one share of Alliant Energy’s common stock at the end of the performance period. Compensation expense is recorded ratably over the performance period based on the fair value of the awards at each reporting period. A summary of the performance restricted stock units activity with amounts representingfor the target number of units,nine months ended September 30, 2017, was as follows:
|
| | |
| Nonvested units, January 1 | 201657,736 |
|
| Granted | 23,91856,013 |
|
Forfeited | (1,261 | ) |
| Nonvested units, September 30 | 22,657113,749 |
|
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 final value is based on the closing market price of one share of Alliant Energy’s common stock on the grant date of the award. Compensation expense is recorded ratably over the performance period based on a probability assessment of payouts for the awards at each reporting period. A summary of the key employee performance restricted units activity, with amounts representing the target number of units, was as follows:
|
| | |
| 2016 |
Granted | 45,056 |
|
Forfeited | (2,016 | ) |
Nonvested units, September 30 | 43,040 |
|
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 final 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. Compensation expense is recorded ratably over the performance period based on the fair value of the awards at each reporting period. Restricted stock units can be paid out in shares of Alliant Energy common stock, cash or a combination of cash and stock. 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. A summary of the restricted stock units and restricted units activity was as follows:
|
| | | | | |
| | 2016 |
| | Restricted Stock Units | | Restricted Units |
| Granted | 58,790 |
| | 20,502 |
|
| Forfeited | (1,054 | ) | | (1,082 | ) |
| Nonvested units, September 30 | 57,736 |
| | 19,420 |
|
Performance-Contingent Cash Awards - A summary of the performance-contingent cash awards activity was as follows:
|
| | | | | |
| | 2016 | | 2015 |
| Nonvested awards, January 1 | 163,752 |
| | 157,860 |
|
| Granted | — |
| | 82,210 |
|
| Vested (a) | — |
| | (74,664 | ) |
| Forfeited | (3,652 | ) | | (1,654 | ) |
| Nonvested awards, September 30 | 160,100 |
| | 163,752 |
|
| |
(a) | In 2015, 74,664 performance-contingent cash awards granted in 2013 vested, resulting in cash payouts valued at $2.4 million. |
NOTE 10. ASSET RETIREMENT OBLIGATIONS
A reconciliation 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 (a) | 3.9 |
| | 8.9 |
| | 4.2 |
| | 11.9 |
| | (0.3 | ) | | (1.9 | ) |
| Liabilities settled | (11.2 | ) | | (7.1 | ) | | (5.0 | ) | | (3.1 | ) | | (6.2 | ) | | (4.0 | ) |
| Liabilities incurred (a) | 2.6 |
| | 76.1 |
| | 0.7 |
| | 59.9 |
| | 1.9 |
| | 16.2 |
|
| Accretion expense | 4.8 |
| | 3.4 |
| | 2.8 |
| | 1.6 |
| | 1.7 |
| | 1.4 |
|
| Balance, September 30 |
| $214.1 |
| |
| $195.3 |
| |
| $135.6 |
| |
| $122.1 |
| |
| $69.0 |
| |
| $64.1 |
|
| |
(a) | In April 2015, the EPA published the final CCR Rule, which regulates CCR as a non-hazardous waste and was effective October 2015. IPL and WPL have nine and three coal-fired EGUs, respectively, with coal ash ponds that are impacted by this rule. In addition, IPL and WPL have four and two active CCR landfills, respectively, that are impacted by this rule. During the nine months ended September 30, 2015, Alliant Energy, IPL and WPL recognized additional AROs of $74 million, $57 million and $17 million, respectively, as a result of the final CCR Rule. The increases in AROs resulted in corresponding increases in property, plant and equipment, net on the respective balance sheets. |
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. Refer to Note 7(b) for additional information regarding long-term debt.
Cumulative preferred stock - The fair value of IPL’s 5.1% cumulative preferred stock was based on its closing market price quoted by the New York Stock Exchange at each reporting date.
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 | September 30, 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 |
| $27.8 |
| |
| $— |
| |
| $1.9 |
| |
| $25.9 |
| |
| $27.8 |
| |
| $18.4 |
| |
| $— |
| |
| $2.5 |
| |
| $15.9 |
| |
| $18.4 |
|
| Deferred proceeds | 239.7 |
| | — |
| | — |
| | 239.7 |
| | 239.7 |
| | 172.0 |
| | — |
| | — |
| | 172.0 |
| | 172.0 |
|
| Liabilities and equity: | | | | | | | | | | | | | | | | | | | |
| Derivatives | 36.9 |
| | — |
| | 3.1 |
| | 33.8 |
| | 36.9 |
| | 64.6 |
| | — |
| | 16.0 |
| | 48.6 |
| | 64.6 |
|
| Long-term debt (including current maturities) | 4,130.9 |
| | — |
| | 4,868.3 |
| | 3.3 |
| | 4,871.6 |
| | 3,835.6 |
| | — |
| | 4,332.4 |
| | 3.7 |
| | 4,336.1 |
|
| Cumulative preferred stock of IPL | 200.0 |
| | 215.4 |
| | — |
| | — |
| | 215.4 |
| | 200.0 |
| | 206.6 |
| | — |
| | — |
| | 206.6 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IPL | September 30, 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 |
| $22.2 |
| |
| $— |
| |
| $1.2 |
| |
| $21.0 |
| |
| $22.2 |
| |
| $15.5 |
| |
| $— |
| |
| $2.0 |
| |
| $13.5 |
| |
| $15.5 |
|
| Deferred proceeds | 239.7 |
| | — |
| | — |
| | 239.7 |
| | 239.7 |
| | 172.0 |
| | — |
| | — |
| | 172.0 |
| | 172.0 |
|
| Liabilities and equity: | | | | | | | | | | | | | | | | | | | |
| Derivatives | 9.0 |
| | — |
| | 1.4 |
| | 7.6 |
| | 9.0 |
| | 23.4 |
| | — |
| | 8.0 |
| | 15.4 |
| | 23.4 |
|
| Long-term debt (including current maturities) | 2,153.1 |
| | — |
| | 2,495.8 |
| | — |
| | 2,495.8 |
| | 1,856.9 |
| | — |
| | 2,092.7 |
| | — |
| | 2,092.7 |
|
| Cumulative preferred stock | 200.0 |
| | 215.4 |
| | — |
| | — |
| | 215.4 |
| | 200.0 |
| | 206.6 |
| | — |
| | — |
| | 206.6 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| WPL | September 30, 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 |
| $5.6 |
| |
| $— |
| |
| $0.7 |
| |
| $4.9 |
| |
| $5.6 |
| |
| $2.9 |
| |
| $— |
| |
| $0.5 |
| |
| $2.4 |
| |
| $2.9 |
|
| Liabilities and equity: | | | | | | | | | | | | | | | | | | | |
| Derivatives | 27.9 |
| | — |
| | 1.7 |
| | 26.2 |
| | 27.9 |
| | 41.2 |
| | — |
| | 8.0 |
| | 33.2 |
| | 41.2 |
|
| Long-term debt (including current maturities) | 1,534.9 |
| | — |
| | 1,920.4 |
| | — |
| | 1,920.4 |
| | 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.
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | September 30, 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 |
| $29.4 |
| |
| $— |
| |
| $2.9 |
| |
| $26.5 |
| |
| $29.4 |
| |
| $41.4 |
| |
| $— |
| |
| $4.6 |
| |
| $36.8 |
| |
| $41.4 |
|
| Deferred proceeds | 115.3 |
| | — |
| | — |
| | 115.3 |
| | 115.3 |
| | 211.1 |
| | — |
| | — |
| | 211.1 |
| | 211.1 |
|
| Liabilities and equity: | | | | | | | | | | | | | | | | | | | |
| Derivatives | 45.1 |
| | — |
| | 14.9 |
| | 30.2 |
| | 45.1 |
| | 28.6 |
| | — |
| | 0.5 |
| | 28.1 |
| | 28.6 |
|
| Long-term debt (incl. current maturities) | 4,360.3 |
| | — |
| | 4,893.3 |
| | 2.9 |
| | 4,896.2 |
| | 4,320.2 |
| | — |
| | 4,795.7 |
| | 3.3 |
| | 4,799.0 |
|
| Cumulative preferred stock of IPL | 200.0 |
| | 202.3 |
| | — |
| | — |
| | 202.3 |
| | 200.0 |
| | 194.8 |
| | — |
| | — |
| | 194.8 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IPL | September 30, 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 |
| $21.1 |
| |
| $— |
| |
| $1.6 |
| |
| $19.5 |
| |
| $21.1 |
| |
| $20.8 |
| |
| $— |
| |
| $2.8 |
| |
| $18.0 |
| |
| $20.8 |
|
| Deferred proceeds | 115.3 |
| | — |
| | — |
| | 115.3 |
| | 115.3 |
| | 211.1 |
| | — |
| | — |
| | 211.1 |
| | 211.1 |
|
| Liabilities and equity: | | | | | | | | | | | | | | | | | | | |
| Derivatives | 18.7 |
| | — |
| | 4.5 |
| | 14.2 |
| | 18.7 |
| | 8.3 |
| | — |
| | 0.4 |
| | 7.9 |
| | 8.3 |
|
| Long-term debt (incl. current maturities) | 2,195.0 |
| | — |
| | 2,430.1 |
| | — |
| | 2,430.1 |
| | 2,153.5 |
| | — |
| | 2,352.3 |
| | — |
| | 2,352.3 |
|
| Cumulative preferred stock | 200.0 |
| | 202.3 |
| | — |
| | — |
| | 202.3 |
| | 200.0 |
| | 194.8 |
| | — |
| | — |
| | 194.8 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| WPL | September 30, 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 |
| $8.3 |
| |
| $— |
| |
| $1.3 |
| |
| $7.0 |
| |
| $8.3 |
| |
| $20.6 |
| |
| $— |
| |
| $1.8 |
| |
| $18.8 |
| |
| $20.6 |
|
| Liabilities: | | | | | | | | | | | | | | | | | | | |
| Derivatives | 26.4 |
| | — |
| | 10.4 |
| | 16.0 |
| | 26.4 |
| | 20.3 |
| | — |
| | 0.1 |
| | 20.2 |
| | 20.3 |
|
| Long-term debt | 1,536.2 |
| | — |
| | 1,829.3 |
| | — |
| | 1,829.3 |
| | 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 | | | Commodity Contract Derivative | | |
| | Assets and (Liabilities), net | | Deferred Proceeds | Assets and (Liabilities), net | | Deferred Proceeds |
| Three Months Ended September 30 | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 |
| Beginning balance, July 1 |
| $0.6 |
| |
| $0.6 |
| |
| $74.4 |
| |
| $73.4 |
|
| $9.2 |
| |
| $0.6 |
| |
| $170.0 |
| |
| $74.4 |
|
| Total net losses included in changes in net assets (realized/unrealized) | (5.1 | ) | | (21.1 | ) | | — |
| | — |
| (4.3 | ) | | (5.1 | ) | | — |
| | — |
|
| Transfers out of Level 3 | 0.8 |
| | — |
| | — |
| | — |
| — |
| | 0.8 |
| | — |
| | — |
|
| Sales | (0.2 | ) | | (0.4 | ) | | — |
| | — |
| (0.1 | ) | | (0.2 | ) | | — |
| | — |
|
| Settlements (a) | (4.0 | ) | | (3.7 | ) | | 165.3 |
| | 122.1 |
| (8.5 | ) | | (4.0 | ) | | (54.7 | ) | | 165.3 |
|
| Ending balance, September 30 |
| ($7.9 | ) | |
| ($24.6 | ) | |
| $239.7 |
| |
| $195.5 |
|
| ($3.7 | ) | |
| ($7.9 | ) | |
| $115.3 |
| |
| $239.7 |
|
| 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 September 30 |
| ($5.0 | ) | |
| ($18.4 | ) | |
| $— |
| |
| $— |
|
| ($4.2 | ) | |
| ($5.0 | ) | |
| $— |
| |
| $— |
|
|
| | | | | | | | | | | | | | | |
| Alliant Energy | Commodity Contract Derivative | | |
| | Assets and (Liabilities), net | | Deferred Proceeds |
| Nine Months Ended September 30 | 2016 | | 2015 | | 2016 | | 2015 |
| Beginning balance, January 1 |
| ($32.7 | ) | |
| $17.9 |
| |
| $172.0 |
| |
| $177.2 |
|
| Total net gains (losses) included in changes in net assets (realized/unrealized) | 8.0 |
| | (58.2 | ) | | — |
| | — |
|
| Transfers into Level 3 | 0.9 |
| | — |
| | — |
| | — |
|
| Transfers out of Level 3 | 1.2 |
| | 0.6 |
| | — |
| | — |
|
| Purchases | 22.0 |
| | 36.9 |
| | — |
| | — |
|
| Sales | (0.9 | ) | | (1.7 | ) | | — |
| | — |
|
| Settlements (a) | (6.4 | ) | | (20.1 | ) | | 67.7 |
| | 18.3 |
|
| Ending balance, September 30 |
| ($7.9 | ) | |
| ($24.6 | ) | |
| $239.7 |
| |
| $195.5 |
|
| The amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at September 30 |
| $9.7 |
| |
| ($52.2 | ) | |
| $— |
| |
| $— |
|
|
| | | | | | | | | | | | | | | |
| IPL | Commodity Contract Derivative | | |
| | Assets and (Liabilities), net | | Deferred Proceeds |
| Three Months Ended September 30 | 2016 | | 2015 | | 2016 | | 2015 |
| Beginning balance, July 1 |
| $18.3 |
| |
| $18.3 |
| |
| $74.4 |
| |
| $73.4 |
|
| Total net losses included in changes in net assets (realized/unrealized) | (0.4 | ) | | (8.6 | ) | | — |
| | — |
|
| Transfers out of Level 3 | 0.3 |
| | — |
| | — |
| | — |
|
| Sales | (0.2 | ) | | (0.4 | ) | | — |
| | — |
|
| Settlements (a) | (4.6 | ) | | (5.5 | ) | | 165.3 |
| | 122.1 |
|
| Ending balance, September 30 |
| $13.4 |
| |
| $3.8 |
| |
| $239.7 |
| |
| $195.5 |
|
| 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 September 30 |
| ($0.4 | ) | |
| ($8.0 | ) | |
| $— |
| |
| $— |
|
| | | IPL | Commodity Contract Derivative | | | |
| Alliant Energy | | Commodity Contract Derivative | | |
| | Assets and (Liabilities), net | | Deferred Proceeds | Assets and (Liabilities), net | | Deferred Proceeds |
| Nine Months Ended September 30 | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 |
| Beginning balance, January 1 |
| ($1.9 | ) | |
| $19.4 |
| |
| $172.0 |
| |
| $177.2 |
|
| $8.7 |
| |
| ($32.7 | ) | |
| $211.1 |
| |
| $172.0 |
|
| Total net gains (losses) included in changes in net assets (realized/unrealized) | 4.8 |
| | (26.0 | ) | | — |
| | — |
| (31.3 | ) | | 8.0 |
| | — |
| | — |
|
| Transfers into Level 3 | 0.5 |
| | — |
| | — |
| | — |
| — |
| | 0.9 |
| | — |
| | — |
|
| Transfers out of Level 3 | 0.2 |
| | — |
| | — |
| | — |
| 12.2 |
| | 1.2 |
| | — |
| | — |
|
| Purchases | 20.6 |
| | 33.1 |
| | — |
| | — |
| 28.3 |
| | 22.0 |
| | — |
| | — |
|
| Sales | (0.9 | ) | | (1.6 | ) | | — |
| | — |
| (0.3 | ) | | (0.9 | ) | | — |
| | — |
|
| Settlements (a) | (9.9 | ) | | (21.1 | ) | | 67.7 |
| | 18.3 |
| (21.3 | ) | | (6.4 | ) | | (95.8 | ) | | 67.7 |
|
| Ending balance, September 30 |
| $13.4 |
| |
| $3.8 |
| |
| $239.7 |
| |
| $195.5 |
|
| ($3.7 | ) | |
| ($7.9 | ) | |
| $115.3 |
| |
| $239.7 |
|
| The amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at September 30 |
| $5.7 |
| |
| ($21.2 | ) | |
| $— |
| |
| $— |
|
| ($29.4 | ) | |
| $9.7 |
| |
| $— |
| |
| $— |
|
| | | WPL | Commodity Contract Derivative | |
| IPL | | Commodity Contract Derivative | | |
| | Assets and (Liabilities), net | Assets and (Liabilities), net | | Deferred Proceeds |
| Three Months Ended September 30 | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 |
| Beginning balance, July 1 |
| ($17.7 | ) | |
| ($17.7 | ) |
| $17.1 |
| |
| $18.3 |
| |
| $170.0 |
| |
| $74.4 |
|
| Total net losses included in changes in net assets (realized/unrealized) | (4.7 | ) | | (12.5 | ) | (4.4 | ) | | (0.4 | ) | | — |
| | — |
|
| Transfers out of Level 3 | 0.5 |
| | — |
| — |
| | 0.3 |
| | — |
| | — |
|
| Settlements | 0.6 |
| | 1.8 |
| |
| Sales | | (0.1 | ) | | (0.2 | ) | | — |
| | — |
|
| Settlements (a) | | (7.3 | ) | | (4.6 | ) | | (54.7 | ) | | 165.3 |
|
| Ending balance, September 30 |
| ($21.3 | ) | |
| ($28.4 | ) |
| $5.3 |
| |
| $13.4 |
| |
| $115.3 |
| |
| $239.7 |
|
| 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 September 30 |
| ($4.6 | ) | |
| ($10.4 | ) |
| ($4.5 | ) | |
| ($0.4 | ) | |
| $— |
| |
| $— |
|
| | | WPL | Commodity Contract Derivative | |
| IPL | | Commodity Contract Derivative | | |
| | Assets and (Liabilities), net | Assets and (Liabilities), net | | Deferred Proceeds |
| Nine Months Ended September 30 | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 |
| Beginning balance, January 1 |
| ($30.8 | ) | |
| ($1.5 | ) |
| $10.1 |
| |
| ($1.9 | ) | |
| $211.1 |
| |
| $172.0 |
|
| Total net gains (losses) included in changes in net assets (realized/unrealized) | 3.2 |
| | (32.2 | ) | (13.9 | ) | | 4.8 |
| | — |
| | — |
|
| Transfers into Level 3 | 0.4 |
| | — |
| — |
| | 0.5 |
| | — |
| | — |
|
| Transfers out of Level 3 | 1.0 |
| | 0.6 |
| 3.1 |
| | 0.2 |
| | — |
| | — |
|
| Purchases | 1.4 |
| | 3.8 |
| 24.6 |
| | 20.6 |
| | — |
| | — |
|
| Sales | — |
| | (0.1 | ) | (0.2 | ) | | (0.9 | ) | | — |
| | — |
|
Settlements | 3.5 |
| | 1.0 |
| (18.4 | ) | | (9.9 | ) | | (95.8 | ) | | 67.7 |
|
| Ending balance, September 30 |
| ($21.3 | ) | |
| ($28.4 | ) |
| $5.3 |
| |
| $13.4 |
| |
| $115.3 |
| |
| $239.7 |
|
| The amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at September 30 |
| $4.0 |
| |
| ($31.0 | ) |
| ($12.6 | ) | |
| $5.7 |
| |
| $— |
| |
| $— |
|
|
| | | | | | | |
| WPL | Commodity Contract Derivative |
| | Assets and (Liabilities), net |
| Three Months Ended September 30 | 2017 | | 2016 |
| Beginning balance, July 1 |
| ($7.9 | ) | |
| ($17.7 | ) |
| Total net gains (losses) included in changes in net assets (realized/unrealized) | 0.1 |
| | (4.7 | ) |
| Transfers out of Level 3 | — |
| | 0.5 |
|
| Settlements | (1.2 | ) | | 0.6 |
|
| Ending balance, September 30 |
| ($9.0 | ) | |
| ($21.3 | ) |
| The amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at September 30 |
| $0.3 |
| |
| ($4.6 | ) |
|
| | | | | | | |
| WPL | Commodity Contract Derivative |
| | Assets and (Liabilities), net |
| Nine Months Ended September 30 | 2017 | | 2016 |
| Beginning balance, January 1 |
| ($1.4 | ) | |
| ($30.8 | ) |
| Total net gains (losses) included in changes in net assets (realized/unrealized) | (17.4 | ) | | 3.2 |
|
| Transfers into Level 3 | — |
| | 0.4 |
|
| Transfers out of Level 3 | 9.1 |
| | 1.0 |
|
| Purchases | 3.7 |
| | 1.4 |
|
| Sales | (0.1 | ) | | — |
|
| Settlements | (2.9 | ) | | 3.5 |
|
| Ending balance, September 30 |
| ($9.0 | ) | |
| ($21.3 | ) |
| The amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at September 30 |
| ($16.8 | ) | |
| $4.0 |
|
| |
| (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, coal and coaldiesel fuel commodity contracts categorized as Level 3 was recognized as net derivative assets (liabilities) as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | Excluding FTRs | | FTRs | | Excluding FTRs | | FTRs | | Excluding FTRs | | FTRs |
| September 30, 2016 |
| ($26.3 | ) | |
| $18.4 |
| |
| ($3.5 | ) | |
| $16.9 |
| |
| ($22.8 | ) | |
| $1.5 |
|
| 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 |
| September 30, 2017 |
| ($22.2 | ) | |
| $18.5 |
| |
| ($10.4 | ) | |
| $15.7 |
| |
| ($11.8 | ) | |
| $2.8 |
|
| 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 September 30, 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 | 3,427 |
| | 2016-2018 | | 14,437 | | 2016-2017 | | 82,277 |
| | 2016-2020 | | 4,640 |
| | 2016-2019 | | 3,780 |
| | 2016-2017 |
| IPL | 187 |
| | 2016 | | 8,865 |
| | 2016-2017 | | 47,141 |
| | 2016-2020 | | 2,202 |
| | 2016-2019 | | — |
| | — |
| WPL | 3,240 |
| | 2016-2018 | | 5,572 |
| | 2016-2017 | | 35,136 |
| | 2016-2020 | | 2,438 |
| | 2016-2018 | | 3,780 |
| | 2016-2017 |
|
| | | | | | | | | | | | | | | | | | | | | | | | |
| | Electricity | | FTRs | | Natural Gas | | Coal | | Diesel Fuel |
| | MWhs | | Years | | MWhs | | Years | | Dths | | Years | | Tons | | Years | | Gallons | | Years |
| Alliant Energy | 1,645 |
| | 2017-2018 | | 14,745 |
| | 2017-2018 | | 173,234 |
| | 2017-2026 | | 4,963 |
| | 2017-2019 | | 7,308 |
| | 2017-2019 |
| IPL | — |
| | — | | 9,219 |
| | 2017-2018 | | 79,561 |
| | 2017-2026 | | 1,820 |
| | 2017-2019 | | — |
| | — |
| WPL | 1,645 |
| | 2017-2018 | | 5,526 |
| | 2017-2018 | | 93,673 |
| | 2017-2026 | | 3,143 |
| | 2017-2018 | | 7,308 |
| | 2017-2019 |
Financial Statement Presentation - Derivative instruments are recorded at fair value each reporting date on the balance sheets as assets or liabilities. The fair values of current derivative assets are included in “Other current assets,” non-current derivative assets are included in “Deferred charges and other,” current derivative liabilities are included in “Other current liabilities” and non-current derivative liabilities are included in “Other liabilities” on the balance sheets as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| Commodity contracts | September 30,
2016 | | December 31,
2015 | | September 30,
2016 | | December 31,
2015 | | September 30,
2016 | | December 31,
2015 |
| Current derivative assets |
| $25.1 |
| |
| $15.1 |
| |
| $20.5 |
| |
| $13.8 |
| |
| $4.6 |
| |
| $1.3 |
|
| Non-current derivative assets | 2.7 |
| | 3.3 |
| | 1.7 |
| | 1.7 |
| | 1.0 |
| | 1.6 |
|
| Current derivative liabilities | 21.2 |
| | 47.3 |
| | 5.4 |
| | 18.5 |
| | 15.8 |
| | 28.8 |
|
| Non-current derivative liabilities | 15.7 |
| | 17.3 |
| | 3.6 |
| | 4.9 |
| | 12.1 |
| | 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 |
| | September 30,
2017 | | December 31,
2016 | | September 30,
2017 | | December 31,
2016 | | September 30,
2017 | | December 31,
2016 |
| Current derivative assets |
| $26.7 |
| |
| $29.4 |
| |
| $20.3 |
| |
| $19.1 |
| |
| $6.4 |
| |
| $10.3 |
|
| Non-current derivative assets | 2.7 |
| | 12.0 |
| | 0.8 |
| | 1.7 |
| | 1.9 |
| | 10.3 |
|
| Current derivative liabilities | 18.5 |
| | 13.3 |
| | 4.6 |
| | 2.7 |
| | 13.9 |
| | 10.6 |
|
| Non-current derivative liabilities | 26.6 |
| | 15.3 |
| | 14.1 |
| | 5.6 |
| | 12.5 |
| | 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 September 30, 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 September 30, 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 the installation of an SCR system at Ottumwa Unit 1 to reduce NOx emissions at the EGU. WPL’s projects include the Riverside expansion, the installation of an SCR system at Columbia Unit 2 to reduce NOx emissions at the EGU, and generation maintenance and performance improvements at Columbia Units 1 and 2.West Riverside. At September 30, 2016,2017, Alliant Energy’s, IPL’s and WPL’s minimum future commitments related to certain contractual obligations for these projects were $27$105 million, $1$8 million and $26$97 million, respectively.
NOTE 13(b) Operating Expense12(b) Other Purchase Obligations - Various commodity supply, transportation and storage contracts help meet obligations to provide electricity and natural gas to utility customers. Other operating expenseIn addition, there are various purchase obligations associated with various vendors provide other goods and services. At September 30, 2016,2017, minimum future commitments related to these operating expense purchase obligations were as follows (in millions):
|
| | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| Purchased power (a): | | | | | |
| DAEC (IPL) |
| $1,320 |
| |
| $1,320 |
| |
| $— |
|
| Other | 139 |
| | 1 |
| | 138 |
|
| | 1,459 |
| | 1,321 |
| | 138 |
|
| Natural gas | 557 |
| | 231 |
| | 326 |
|
| Coal (b) | 193 |
| | 85 |
| | 108 |
|
| SO2 emission allowances | 8 |
| | 8 |
| | — |
|
| Other (c) | 21 |
| | 4 |
| | 1 |
|
| |
| $2,238 |
| |
| $1,649 |
| |
| $573 |
|
|
| | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| Purchased power (a) |
| $1,278 |
| |
| $1,194 |
| |
| $84 |
|
| Natural gas | 847 |
| | 422 |
| | 425 |
|
| Coal (b) | 144 |
| | 66 |
| | 78 |
|
| Other (c) | 34 |
| | 25 |
| | 1 |
|
| |
| $2,303 |
| |
| $1,707 |
| |
| $588 |
|
| |
| (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 September 30, 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 September 30, 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 August 2016, the Iowa District Court for Linn County dismissed all claims against the remaining defendants. In September 2016, plaintiffs filed a notice of appeal with the Supreme Court of Iowa. Alliant Energy does not currently believe any material losses for this complaint are both probable and reasonably estimated, and therefore has not recognized any material loss contingency amounts as of September 30, 2016.2017.
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. AsIn the first quarter of September 30, 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 September 30, 2016. Alliant Energy does not currently believe that the range of future potential loss from any warranty claims will be material. Refer to Note 16 for further discussion of RMT, including amounts Alliant Energy recorded to “Operating expenses” during the nine months ended September 30, 2016 and 2015 related to certain warranty claims.were resolved.
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 September 30, 20162017, the present value of the abandonment obligations is estimated at $30$33 million. Alliant Energy is not aware of any material liabilities related to these guarantees of which it is probable that Alliant Energy Resources, LLC will be obligated to pay and therefore has not recognized any material liabilities related to this guarantee as of September 30, 2016.2017.
Non-regulated Wind Investment in Oklahoma - In July 2017, a wholly-owned subsidiary of AEF acquired a cash equity ownership interest in a non-regulated wind farm located in Oklahoma. The wind farm provides electricity to a third-party under a long-term purchased power agreement. Alliant Energy provided a parent guarantee of its subsidiary’s indemnification obligations under the related operating agreement and purchased power agreement. Alliant Energy’s obligations under the operating agreement were $98 million as of September 30, 2017 and will reduce annually until expiring in July 2047. Alliant Energy’s obligations under the purchased power agreement are subject to a maximum limit of $17 million and expire in December 2031, subject to potential extension. Alliant Energy is not aware of any material liabilities related to this guarantee that it is probable that it will be obligated to pay and therefore has not recognized any material
liabilities related to this guarantee as of September 30, 2017. Refer to Note 5(a) for further discussion of the non-regulated wind investment.
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 September 30, 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 23 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 September 30, 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 September 30, 2017, such amounts for WPL were not material.
| | | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL |
| Range of estimated future costs |
| $11 |
| - | $27 | |
| $9 |
| - | $23 | |
| $2 |
| - | $4 |
| $12 |
| - | $31 | |
| $10 |
| - | $27 |
| Current and non-current environmental liabilities | 15 | | 12 | | 3 | 16 | | 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 CAAClean Air Act (CAA) and the Wisconsin State Implementation Plan designed to implement the CAA.
WPL has completed various requirements under the Consent Decree. WPL’s remaining requirements include installing an SCR system at Columbia Unit 2 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, and Edgewater Units 4 and 5. TheIn addition, the Consent Decree also includes annual plant-wide emission caps for SO2 and NOx emission caps for Columbia and Edgewater. WPL is also in the process of completing approximately $7 million in environmental mitigation projects.
Alliant Energy and WPL currently expect to recover material costs incurred by WPL related to compliance with the terms of the Consent Decree from WPL’s electric customers. 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, 2019.2025.
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 willis also completein the process of completing approximately $6 million in environmental mitigation projects.
Alliant Energy and IPL currently expect to recover material
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 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. Refer to Note 5(a) for discussion of Alliant Energy’s acquisition of an interest in a non-regulated wind farm in Oklahoma in July 2017, which increased the assets for “Non-Regulated, Parent and Other.” Refer to Note 3 for discussion of asset valuation charges recorded in the third quarter of 2016 related to the Franklin County wind farm, which decreased the assets for “Non-Regulated, Parent and Other.”farm. | | | | 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 September 30, 2017 | | | | | | | | | | | | |
| Operating revenues | |
| $840.6 |
| |
| $45.8 |
| |
| $11.2 |
| |
| $897.6 |
| |
| $9.3 |
| |
| $906.9 |
|
| Operating income (loss) | | 232.6 |
| | (2.4 | ) | | (7.7 | ) | | 222.5 |
| | 9.0 |
| | 231.5 |
|
| Net income (loss) attributable to Alliant Energy common shareowners | | | | | | | | 176.3 |
| | (7.5 | ) | | 168.8 |
|
| Three Months Ended September 30, 2016 | | | | | | | | | | | | | | | | | | | | | | |
| Operating revenues |
| $864.3 |
| |
| $39.5 |
| |
| $9.4 |
| |
| $913.2 |
| |
| $11.4 |
| |
| $924.6 |
|
| $864.3 |
| |
| $39.5 |
| |
| $9.4 |
| |
| $913.2 |
| |
| $11.4 |
| |
| $924.6 |
|
| Operating income (loss) | 244.2 |
| | (3.7 | ) | | 0.4 |
| | 240.9 |
| | (78.3 | ) | | 162.6 |
| 244.2 |
| | (3.7 | ) | | 0.4 |
| | 240.9 |
| | (78.3 | ) | | 162.6 |
|
| Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from continuing operations, net of tax | | | | | | | 183.1 |
| | (54.3 | ) | | 128.8 |
| | | | | | | 183.1 |
| | (54.3 | ) | | 128.8 |
|
| Loss from discontinued operations, net of tax | | | | | | | — |
| | (0.4 | ) | | (0.4 | ) | | | | | | | — |
| | (0.4 | ) | | (0.4 | ) |
| Net income (loss) | | | | | | | 183.1 |
| | (54.7 | ) | | 128.4 |
| | | | | | | 183.1 |
| | (54.7 | ) | | 128.4 |
|
| Three Months Ended September 30, 2015 | | | | | | | | | | | | |
| Operating revenues |
| $835.8 |
| |
| $38.0 |
| |
| $13.4 |
| |
| $887.2 |
| |
| $11.7 |
| |
| $898.9 |
| |
| Operating income (loss) | 232.8 |
| | (5.7 | ) | | 0.2 |
| | 227.3 |
| | 8.6 |
| | 235.9 |
| |
| Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | | | | |
| Income (loss) from continuing operations, net of tax | | | | | | | 184.5 |
| | (4.5 | ) | | 180.0 |
| |
| Loss from discontinued operations, net of tax | | | | | | | — |
| | (0.1 | ) | | (0.1 | ) | |
| Net income (loss) | | | | | | | 184.5 |
| | (4.6 | ) | | 179.9 |
| |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Utility (a) | | Non-Regulated, | | Alliant Energy |
| | Electric | | Gas | | Other | | Total | | Parent and Other | | Consolidated |
| | (in millions) |
| Nine Months Ended September 30, 2017 | | | | | | | | | | | |
| Operating revenues |
| $2,199.1 |
| |
| $262.7 |
| |
| $34.4 |
| |
| $2,496.2 |
| |
| $29.9 |
| |
| $2,526.1 |
|
| Operating income (loss) | 475.4 |
| | 29.5 |
| | (6.8 | ) | | 498.1 |
| | 25.6 |
| | 523.7 |
|
| Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | | | |
| Income from continuing operations, net of tax | | | | | | | 353.5 |
| | 8.6 |
| | 362.1 |
|
| Income from discontinued operations, net of tax | | | | | | | — |
| | 1.4 |
| | 1.4 |
|
| Net income | | | | | | | 353.5 |
| | 10.0 |
| | 363.5 |
|
| Nine Months Ended September 30, 2016 | | | | | | | | | | | |
| Operating revenues |
| $2,209.1 |
| |
| $248.7 |
| |
| $35.0 |
| |
| $2,492.8 |
| |
| $30.2 |
| |
| $2,523.0 |
|
| Operating income (loss) | 473.3 |
| | 27.0 |
| | 4.4 |
| | 504.7 |
| | (67.6 | ) | | 437.1 |
|
| Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | | | |
| Income (loss) from continuing operations, net of tax | | | | | | | 350.3 |
| | (39.5 | ) | | 310.8 |
|
| Loss from discontinued operations, net of tax | | | | | | | — |
| | (2.0 | ) | | (2.0 | ) |
| Net income (loss) | | | | | | | 350.3 |
| | (41.5 | ) | | 308.8 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Utility | | Non-Regulated, | | Alliant Energy |
| | Electric | | Gas | | Other | | Total | | Parent and Other | | Consolidated |
| | (in millions) |
| Nine Months Ended September 30, 2016 | | | | | | | | | | | |
| Operating revenues |
| $2,209.1 |
| |
| $248.7 |
| |
| $35.0 |
| |
| $2,492.8 |
| |
| $30.2 |
| |
| $2,523.0 |
|
| Operating income (loss) | 473.3 |
| | 27.0 |
| | 4.4 |
| | 504.7 |
| | (67.6 | ) | | 437.1 |
|
| Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | | | |
| Income (loss) from continuing operations, net of tax | | | | | | | 350.3 |
| | (39.5 | ) | | 310.8 |
|
| Loss from discontinued operations, net of tax | | | | | | | — |
| | (2.0 | ) | | (2.0 | ) |
| Net income (loss) | | | | | | | 350.3 |
| | (41.5 | ) | | 308.8 |
|
| Nine Months Ended September 30, 2015 | | | | | | | | | | | |
| Operating revenues |
| $2,147.5 |
| |
| $288.1 |
| |
| $44.6 |
| |
| $2,480.2 |
| |
| $33.3 |
| |
| $2,513.5 |
|
| Operating income | 438.4 |
| | 28.6 |
| | 8.7 |
| | 475.7 |
| | 22.1 |
| | 497.8 |
|
| Amounts attributable to Alliant Energy common shareowners: | | | | | | | | | | | |
| Income from continuing operations, net of tax | | | | | | | 332.6 |
| | 12.9 |
| | 345.5 |
|
| Loss from discontinued operations, net of tax | | | | | | | — |
| | (1.4 | ) | | (1.4 | ) |
| Net income | | | | | | | 332.6 |
| | 11.5 |
| | 344.1 |
|
| |
| (a) | Alliant Energy’s utility business segments include: a) utility electric operations, which include Alliant Energy’s entire investment in ATC; b) utility gas operations; and c) utility other, which includes steam operations and the unallocated portions of the utility business. |
IPL - Certain financial information relating to IPL’s business segments is as follows. Intersegment revenues were not material to IPL’s operations.
|
| | | | | | | | | | | | | | | |
| | Electric | | Gas | | Other | | Total |
| | (in millions) |
| Three Months Ended September 30, 2016 | | | | | | | |
| Operating revenues |
| $483.2 |
| |
| $23.9 |
| |
| $9.1 |
| |
| $516.2 |
|
| Operating income (loss) | 125.9 |
| | (1.4 | ) | | 1.4 |
| | 125.9 |
|
| Earnings available for common stock | | | | | | | 114.1 |
|
| Three Months Ended September 30, 2015 | | | | | | | |
| Operating revenues |
| $468.6 |
| |
| $23.1 |
| |
| $12.9 |
| |
| $504.6 |
|
| Operating income (loss) | 119.4 |
| | (2.9 | ) | | 0.5 |
| | 117.0 |
|
| Earnings available for common stock | | | | | | | 116.5 |
|
| Nine Months Ended September 30, 2016 | | | | | | | |
| Operating revenues |
| $1,209.2 |
| |
| $142.6 |
| |
| $34.1 |
| |
| $1,385.9 |
|
| Operating income | 213.8 |
| | 15.3 |
| | 6.8 |
| | 235.9 |
|
| Earnings available for common stock | | | | | | | 191.6 |
|
| Nine Months Ended September 30, 2015 | | | | | | | |
| Operating revenues |
| $1,170.6 |
| |
| $164.1 |
| |
| $41.1 |
| |
| $1,375.8 |
|
| Operating income | 193.6 |
| | 15.3 |
| | 7.4 |
| | 216.3 |
|
| Earnings available for common stock | | | | | | | 180.5 |
|
|
| | | | | | | | | | | | | | | |
| | Electric | | Gas | | Other | | Total |
| | (in millions) |
| Three Months Ended September 30, 2017 | | | | | | | |
| Operating revenues |
| $489.0 |
| |
| $27.4 |
| |
| $11.0 |
| |
| $527.4 |
|
| Operating income (loss) | 138.3 |
| | (2.1 | ) | | (4.4 | ) | | 131.8 |
|
| Earnings available for common stock | | | | | | | 120.4 |
|
| Three Months Ended September 30, 2016 | | | | | | | |
| Operating revenues |
| $483.2 |
| |
| $23.9 |
| |
| $9.1 |
| |
| $516.2 |
|
| Operating income (loss) | 125.9 |
| | (1.4 | ) | | 1.4 |
| | 125.9 |
|
| Earnings available for common stock | | | | | | | 114.1 |
|
| Nine Months Ended September 30, 2017 | | | | | | | |
| Operating revenues |
| $1,217.6 |
| |
| $147.2 |
| |
| $33.3 |
| |
| $1,398.1 |
|
| Operating income (loss) | 234.5 |
| | 14.7 |
| | (1.5 | ) | | 247.7 |
|
| Earnings available for common stock | | | | | | | 200.4 |
|
| Nine Months Ended September 30, 2016 | | | | | | | |
| Operating revenues |
| $1,209.2 |
| |
| $142.6 |
| |
| $34.1 |
| |
| $1,385.9 |
|
| Operating income | 213.8 |
| | 15.3 |
| | 6.8 |
| | 235.9 |
|
| Earnings available for common stock | | | | | | | 191.6 |
|
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 September 30, 2017 | | | | | | | | |
| Operating revenues | |
| $351.6 |
| |
| $18.4 |
| |
| $0.2 |
| |
| $370.2 |
|
| Operating income (loss) | | 94.3 |
| | (0.3 | ) | | (3.3 | ) | | 90.7 |
|
| Earnings available for common stock | | | | | | | | 49.8 |
|
| Three Months Ended September 30, 2016 | | | | | | | | | | | | | | |
| Operating revenues |
| $381.1 |
| |
| $15.6 |
| |
| $0.3 |
| |
| $397.0 |
|
| $381.1 |
| |
| $15.6 |
| |
| $0.3 |
| |
| $397.0 |
|
| Operating income (loss) | 118.3 |
| | (2.3 | ) | | (1.0 | ) | | 115.0 |
| 118.3 |
| | (2.3 | ) | | (1.0 | ) | | 115.0 |
|
| Earnings available for common stock | | | | | | | 69.0 |
| | | | | | | 69.0 |
|
| Three Months Ended September 30, 2015 | | | | | | | | |
| Nine Months Ended September 30, 2017 | | | | | | | | |
| Operating revenues |
| $367.2 |
| |
| $14.9 |
| |
| $0.5 |
| |
| $382.6 |
|
| $981.5 |
| |
| $115.5 |
| |
| $1.1 |
| |
| $1,098.1 |
|
| Operating income (loss) | 113.4 |
| | (2.8 | ) | | (0.3 | ) | | 110.3 |
| 240.9 |
| | 14.8 |
| | (5.3 | ) | | 250.4 |
|
| Earnings available for common stock | | | | | | | 68.0 |
| | | | | | | 133.4 |
|
| Nine Months Ended September 30, 2016 | | | | | | | | | | | | | | |
| Operating revenues |
| $999.9 |
| |
| $106.1 |
| |
| $0.9 |
| |
| $1,106.9 |
|
| $999.9 |
| |
| $106.1 |
| |
| $0.9 |
| |
| $1,106.9 |
|
| Operating income (loss) | 259.5 |
| | 11.7 |
| | (2.4 | ) | | 268.8 |
| 259.5 |
| | 11.7 |
| | (2.4 | ) | | 268.8 |
|
| Earnings available for common stock | | | | | | | 158.7 |
| | | | | | | 158.7 |
|
| Nine Months Ended September 30, 2015 | | | | | | | | |
| Operating revenues |
| $976.9 |
| |
| $124.0 |
| |
| $3.5 |
| |
| $1,104.4 |
| |
| Operating income | 244.8 |
| | 13.3 |
| | 1.3 |
| | 259.4 |
| |
| Earnings available for common stock | | | | | | | 152.1 |
| |
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 and nine months ended September 30 were as follows (in millions):
| | | | IPL | | WPL | IPL | | WPL |
| | Three Months | | Nine Months | | Three Months | | Nine Months | Three Months | | Nine Months | | Three Months | | Nine Months |
| | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | | 2016 | | 2015 | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Corporate Services billings |
| $41 |
| |
| $38 |
| |
| $124 |
| |
| $114 |
| |
| $33 |
| |
| $30 |
| |
| $103 |
| |
| $90 |
|
| $48 |
| |
| $41 |
| |
| $130 |
| |
| $124 |
| |
| $37 |
| |
| $33 |
| |
| $100 |
| |
| $103 |
|
| Sales credited | 4 |
| | 2 |
| | 7 |
| | 8 |
| | 3 |
| | 9 |
| | 6 |
| | 21 |
| 8 |
| | 4 |
| | 15 |
| | 7 |
| | 6 |
| | 3 |
| | 8 |
| | 6 |
|
| Purchases billed | 126 |
| | 110 |
| | 324 |
| | 278 |
| | 23 |
| | 16 |
| | 65 |
| | 49 |
| 109 |
| | 126 |
| | 271 |
| | 324 |
| | 32 |
| | 23 |
| | 99 |
| | 65 |
|
Net intercompany payables to Corporate Services were as follows (in millions):
|
| | | | | | | |
| | IPL | | WPL |
| | September 30, 2016 | | December 31, 2015 | | September 30, 2016 | | December 31, 2015 |
| Net payables to Corporate Services | $114 | | $93 | | $68 | | $54 |
|
| | | | | | | |
| | IPL | | WPL |
| | September 30, 2017 | | December 31, 2016 | | September 30, 2017 | | December 31, 2016 |
| Net payables to Corporate Services | $118 | | $104 | | $64 | | $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 and nine months ended September 30 were as follows (in millions):
|
| | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | 2016 | | 2015 | | 2016 | | 2015 |
| ATC billings to WPL |
| $28 |
| |
| $25 |
| |
| $82 |
| |
| $75 |
|
| WPL billings to ATC | 4 |
| | 4 |
| | 10 |
| | 9 |
|
|
| | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | 2017 | | 2016 | | 2017 | | 2016 |
| ATC LLC billings to WPL |
| $26 |
| |
| $28 |
| |
| $79 |
| |
| $82 |
|
| WPL billings to ATC LLC | 2 |
| | 4 |
| | 8 |
| | 10 |
|
WPL owed ATC LLC net amounts of $9$8 million as of September 30, 20162017 and $8 million as of December 31, 20152016.
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 IPL’s anticipated filing with FERC in the fourth quartertransfer of 2016 requesting approval to transfer the Franklin County wind farm assets from AEF to IPL in April 2017.
NOTE 16. 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 and nine months ended September 30 was as follows (in millions):
|
| | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | 2016 | | 2015 | | 2016 | | 2015 |
| Operating expenses |
| $0.6 |
| |
| $0.3 |
| |
| $3.3 |
| |
| $2.3 |
|
| Loss before income taxes | (0.6 | ) | | (0.3 | ) | | (3.3 | ) | | (2.3 | ) |
| Income tax benefit | (0.2 | ) | | (0.2 | ) | | (1.3 | ) | | (0.9 | ) |
| Loss from discontinued operations, net of tax |
| ($0.4 | ) | |
| ($0.1 | ) | |
| ($2.0 | ) | |
| ($1.4 | ) |
Refer to Note 13(d) for further discussion of warranty claims associated with RMT that have resulted in operating expenses 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 AEF and Corporate Services. Where appropriate, information relating to a specific entity has been segregated and labeled as such. The following discussion and analysis should be read in conjunction with the Financial Statements and the Notes included in this report, as well as the financial statements, notes and MDA included in the 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, AEF 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 September 30, 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. Effective October 1, 2016, AEF 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 (AEF) |
| - Retail electric and gas services in WI (WPL) | | - Non-regulated Generationwind investment (AEF) |
- 16% interest in ATC (primarily WPL)Investment (ATI) | | - Parent CompanySheboygan Falls Energy Facility (AEF) |
| - Wholesale electric service in MN, IL & IA (IPL) | | - Parent Company |
| - 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 third quarter were as follows (dollars in millions, except per share amounts):
| | | | 2016 | | 2015 | 2017 | | 2016 |
| | Income (Loss) | | EPS (a) | | Income (Loss) | | EPS (a) | Income (Loss) | | EPS | | Income (Loss) | | EPS |
| Continuing operations: | | | | | | | | | | | | | | |
| Utilities, ATC and Corporate Services |
| $186.7 |
| |
| $0.82 |
| |
| $187.7 |
| |
| $0.83 |
| |
| Utilities, ATC Investment and Corporate Services | |
| $179.7 |
| |
| $0.78 |
| |
| $186.7 |
| |
| $0.82 |
|
| Non-regulated and Parent | (57.9 | ) | | (0.25 | ) | | (7.7 | ) | | (0.04 | ) | (10.9 | ) | | (0.05 | ) | | (57.9 | ) | | (0.25 | ) |
| Income from continuing operations | 128.8 |
| | 0.57 |
| | 180.0 |
| | 0.79 |
| 168.8 |
| | 0.73 |
| | 128.8 |
| | 0.57 |
|
| Loss from discontinued operations | (0.4 | ) | | — |
| | (0.1 | ) | | — |
| — |
| | — |
| | (0.4 | ) | | — |
|
| Net income |
| $128.4 |
| |
| $0.57 |
| |
| $179.9 |
| |
| $0.79 |
|
| $168.8 |
| |
| $0.73 |
| |
| $128.4 |
| |
| $0.57 |
|
| |
(a) | Amounts reflect the effects of a two-for-one common stock split 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 and Corporate Services, and non-regulated and parentthese non-GAAP financial measures are useful to investors because they facilitate an understanding of segment performance and trends and provide additional information about Alliant Energy’s operations on a basis consistent with the measures that management uses to manage its operations and evaluate its performance.
Lower netAlliant Energy’s, IPL’s and WPL’s income and EPS from continuing operations inincreased (decreased) by $40 million, $6 million and ($19) million, respectively, for the third quarter of 2016 compared to the third quarter of 2015three-month period. Alliant Energy’s increase was primarily due to asset valuation charges at AEF related to the Franklin County wind farm in the third quarter of 2016, timing of income tax expense, higher reserves for ATC return on equity at WPL,revenues resulting from IPL’s interim retail electric base rate increase implemented in April 2017 and higher stock-based performance compensation expense. These items wereWPL’s retail electric and gas base rate increases implemented in January 2017, partially offset by estimated temperature impacts on IPL’s and WPL’s retail electric and gas sales, higher depreciation expense, higher energy efficiency cost recovery amortization at WPL, and lower AFUDC at IPL. WPL’s decrease was also impacted by reduced equity income resulting from the transfer of WPL’s investment in the third quarter of 2016, higher AFUDC, and voluntary employee separation charges in the third quarter of 2015.ATC LLC to ATI on December 31, 2016.
Refer to “Results of Operations” for additional details regarding the various factors impacting earnings during the third quarters of 20162017 and 2015.2016.
20162017 Overview - Alliant Energy, IPL and WPL continue to focus on achieving their 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.
| |
| • | IPL’s and WPL’s Potential Expansion of Wind Generation - In addition to IPL’s 500 MW expansion of wind generation approved by the IUB in October 2016 and transfer of the 99 MW Franklin County wind farm to IPL in 2017, IPL and the Iowa OfficeWPL are currently exploring options to own and operate up to 500 MW and 200 MW, respectively, of Consumer Advocate, among other customer groups,additional new wind generation. In August 2017, IPL filed a settlement agreementan application with the IUB regarding the appropriatefor advance rate-making principles for the up to 500 MW of the additional wind generation at IPL.generation. In October 2016, the IUB issued an order approvingfourth quarter of 2017, WPL expects to file for approval from the settlement agreement, with limited modifications,PSCW and establishing rate-making principles, which IPL accepted, with key terms as follows.FERC for the acquisition of 55 MW of the Forward Wind Energy Center, and plans to file for authority for the remaining up to 200 MW of new wind generation. Refer to “Strategic Overview” for further discussion. The amount and timing of these wind projects will largely depend on regulatory approvals and the acquisition of wind sites. |
| |
▪ | Up to 500 MW of additional wind generation that qualifies for the full level of production tax credits, regardless of the location in Iowa, with a cost cap of $1,830/kilowatt, including AFUDC and transmission costs. Any costs incurred in excess of this $1,830/kilowatt cost cap are expected to be incorporated into rates if determined to be reasonable and prudent. |
| |
▪ | A depreciable life of the wind generation of 40 years, unless changed as a result of a contested case before the IUB. |
| |
▪ | An 11.0% return on common equity, with the exception of certain transmission facilities classified as intangible assets, which would earn the rate of return on common equity the IUB finds reasonable during a future rate case. |
Franklin County Wind Farm - In addition to IPL’s expansion of wind generation discussed above, IPL currently anticipates requesting approval from FERC in the fourth quarter of 2016 to transfer the 99 MW Franklin County wind farm from AEF to IPL in 2017.
IPL’s and WPL’s Potential Expansion of Wind Generation - In addition to IPL’s 500 MW expansion of wind generation and planned transfer of the 99 MW Franklin County wind farm to IPL in 2017 discussed above, IPL and WPL are exploring options to own and operate up to 400 MW of additional new wind generation in aggregate.
WPL’s Construction of theWest Riverside Expansion- - In May 2016,October 2017, WPL received an order from the PSCW authorizing WPL to construct a natural gas-fired combined-cycle EGU in Beloit, Wisconsin, referred to as the Riverside expansion. After receiving the final necessary regulatory approvals and permits in the third quarter of 2016, WPL began constructing the Riverside expansion. WPL currently expects to place the Riverside expansion in service by early 2020. In November 2016, various electric cooperatives, notifiedwhich currently have wholesale power supply agreements with WPL, of their intent to exercise their options to acquire approximately 6065 MW of theWest Riverside expansion while the EGU is being constructed. As a resultpart of the electric cooperatives’ acquisitions, which are currently expected to be completed in the fourth quarter of 2017, the current wholesale power supply agreements with the various electric cooperatives will be extended by at least four years until 2026 with automatic continuation of such agreements unless terminated by either party, with a five-year notice requirement.
| |
| • | Non-regulated Wind Investment in Oklahoma - In July 2017, a wholly-owned subsidiary of AEF acquired a 50% cash equity ownership interest in a 225 MW non-regulated wind farm located in Oklahoma. Refer to Note 5(a) for further discussion. |
IPL’s Retail Electric Rate Review (2016 Test Year) - In April 2017, IPL filed a request with the IUB to increase annual electric base rates for its Iowa retail electric customers. The request was based on a 2016 historical Test Year as adjusted for certain known and measurable changes occurring up to 12 months after the commencement of the proceeding. The key drivers for the filing included recovery of capital projects, primarily power grid modernization and investments that
cooperatives fundingadvance cleaner energy, including Marshalltown. An interim retail electric base rate increase of $102 million, or approximately 7%, on an annual basis, was implemented effective April 13, 2017. In September 2017, IPL reached a portionpartial, non-unanimous settlement agreement with the Iowa Office of Consumer Advocate, the Iowa Business Energy Coalition and the Large Energy Group to increase annual retail electric base rates by $130 million, or approximately 9%, subject to IUB approval. As a result of the capital expenditures during construction, WPL’s estimated portionproposed settlement, in the third quarter of capital expenditures is now expected2017, IPL recorded a write-down of regulatory assets of $9 million. IPL currently expects to be approximately $640 million.implement final rates in the first quarter of 2018.
WPL’s Wisconsin Retail Electric and GasFuel-related Rate Case (2017/2018Filing (2018 Test Period)Year) - In May 2016,July 2017, WPL filed a retail base rate caserequest with the PSCW based on a forward-looking test period that includes 2017 and 2018. WPL’s filing was based on a stipulated agreement reached between PSCW staff, intervener groups and WPL. The filing requested approval for WPL to implement a $13 million, or approximately 1%, increase in annual rates for WPL’s retail electric customers. Based on updated fuel-related cost information at the time of rate case hearings in September 2016, the current estimate of the net increase in annual rates for WPL’s retail electric customers is $17 million. The filing also requested approval for WPL to implement a $9by $6 million, or approximately 13%1%, in 2018. The increase primarily reflects a change in annual base rates forexpected fuel-related costs in 2018, which are expected to be offset by $3 million of over-collections from WPL’s retail gas customers.2016 fuel-related costs. Any rate changes granted from this request are expected to be effective January 1, 2017 and extend through the end of 2018. WPL currently expects a decision from the PSCW regarding this base rate filing in the fourth quarter of 2016.
MISO Transmission Owner Return on Equity Complaints - A group of MISO cooperative and municipal utilities previously filed two complaints with FERC requesting a reduction to the base return on equity used by MISO transmission owners, including ITC and ATC.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. In October 2016, in response to MISO’s2015 (first complaint period). During the nine months ended September 30, 2017, Alliant Energy, IPL and WPL received the MISO transmission owners’ request, FERC ordered the related refunds be issued by July 2017. In June 2016, a FERC administrative law judge issued an initial decision regarding the second complaint and recommended a base return on equity of 9.70%, excluding any incentive adders granted by FERC, for the first complaint period of $50 million, $39 million and $11 million, respectively, after final true-ups. Pursuant to IUB approval, IPL’s retail portion of the refund period from February 12, 2015 through May 11, 2016. A final decision from FERC on the second complaintITC is currently expectedbeing refunded to its retail customers in 2017. WPL’s retail portion of the first half of 2017.
WPL’s Future Transfer of Investmentrefund from ATC LLC will remain in ATC - In June 2016, WPL received an order from the PSCW requiring WPLa regulatory liability until such refunds are approved to transfer its investmentbe returned to retail customers in ATC to Alliant Energy or an Alliant Energy subsidiary by December 31, 2022. In addition, WPL is required to obtain PSCW approval prior to transferring any additional capital or assets to ATC.Subsequent to WPL transferring its investment in ATC,a future contributions to, and equity earnings and dividends from, the investment in ATC would occur at the entity to which the investment in ATC was transferred and would not be reflected in WPL’s consolidated financial statements. As a result, WPL’s earnings and cash flows from operations are expected to decrease subsequent to the transfer. This transfer is not expected to impact Alliant Energy’s consolidated financial statements.rate proceeding.
Credit RatingsFacility Agreement - In July 2016, Moody’s Investors Service changedAugust 2017, Alliant Energy’sEnergy, IPL and IPL’s corporate/issuerWPL entered into a single new credit facility agreement, which expires in August 2022. The new credit facility agreement includes financial covenants similar to those that were included in the previous credit facility agreements. As of September 30, 2017, the short-term borrowing capacity totaled $1 billion ($300 million for Alliant Energy at the parent company level, $300 million for IPL and senior unsecured long-term debt credit ratings from A3 to Baa1. IPL’s preferred stock credit rating also changed from Baa2 to Baa3. In addition, WPL’s corporate/issuer and senior unsecured long-term debt credit ratings changed from A1 to A2. Alliant Energy’s, IPL’s and WPL’s outlooks also changed from negative to stable. Alliant Energy’s, IPL’s and WPL’s commercial paper ratings remained unchanged. These credit ratings changes are not expected to have a material impact on Alliant Energy’s, IPL’s, and WPL’s liquidity or collateral obligations.$400 million for WPL).
Common Stock SplitAt-the-Market Offering Program -In April 2016, Alliant Energy’s Board of Directors approved a two-for-one common stock split and a proportionate increase inIn the numbersecond quarter of authorized2017, Alliant Energy issued 3.1 million shares of common stock through an at-the-market offering program and received cash proceeds of Alliant Energy$124 million, net of $1 million in commissions and fees. The proceeds from 240 million shares to 480 million shares to implement the stock split. Alliant Energy shareownersissuances of record at the close of business on May 4, 2016 received one additional share of Alliant Energy common stock were used for each share held on that date. The proportionate interest that a shareowner owns in Alliant Energy did not change as a result of the stock split. The additional shares were distributed on May 19, 2016 and post-split trading began on May 20, 2016. All Alliant Energy share and per share amounts in this report have been reflected on a post-split basis.general corporate purposes.
Future Developments - The following includes key items expected to impact Alliant Energy, IPL and WPL in the future that have been identified since the filing of the 20152016 Form 10-K:
20172018 Forecast - In 2017,2018, the following financing activities, and impacts to results of operations, are currently anticipated to occur:
Financing Plans -Alliant Energy currently expects to issue up to $150$200 million of common stock in 20172018 through one or more offerings and its Shareowner Direct Plan. IPL and WPL currently expect to receive capital contributions of approximately $150 million and $90 million, respectively, from their parent company, Alliant Energy, in 2017. IPL and WPL currently expectexpects to issue up to $250$700 million and $300 million, respectively, of long-term debt securities in 2017.2018, of which $350 million would be used to retire maturing long-term debt in 2018. AEF currently expects to issue up to $1.0 billion of long-term debt in 2018, of which $595 million would be used to refinance term loans.
Common Stock Dividends -Alliant Energy announced ana 6% increase in its targeted 20172018 annual common stock dividend to $1.26$1.34 per share, which is equivalent to a quarterly rate of $0.315$0.335 per share, beginning with the February 20172018 dividend payment. The timing and amount of future dividends is subject to an approved dividend declaration from Alliant Energy’s Board of Directors, and is dependent upon earnings expectations, capital requirements, and general financial business conditions, among other factors. In addition,
| |
| • | Utility Electric and Gas Margins - Alliant Energy and IPL currently expect an increase in electric and gas margins in 2018 compared to 2017 as a result of base rate increases in effect from IPL’s retail electric rate review (2016 Test Year) and IPL’s planned retail gas rate review (2017 Test Year). Refer to “Rate Matters” for further discussion of these rate reviews, as well as “Other Future Considerations” for discussion of expected changes in Alliant Energy’s, IPL’s and WPL’s electric transmission service expense in 2018 compared to 2017. |
Depreciation and Amortization Expenses - Alliant Energy and IPL and WPL currently expect an increase in depreciation and amortization expenses in 2018 compared to pay common stock dividends2017 due to property additions, and the implementation of $156 millionupdated depreciation rates for IPL as a result of a recently completed depreciation study, which is expected to be effective with the implementation of final rates from IPL’s retail electric rate review (2016 Test Year).
Interest Expense - Alliant Energy currently expects interest expense to increase in 2018 compared to 2017 due to financings completed in 2017 and $126 million, respectively,planned in 2018 as discussed above.
AFUDC - Alliant Energy currently expects AFUDC to their parent companyincrease in 2017.2018 compared to 2017 primarily due to increased construction work in progress balances related to IPL’s expansion of wind generation and WPL’s West Riverside facility.
Electric Transmission Service Expense - Alliant Energy currently expects a decrease in electric transmission service expense in 2017 compared to 2016 primarily due to expected lower return on equity resulting from the MISO transmission owner return on equity complaints. Alliant Energy’s estimated 2017 electric transmission service expense remains subject to change pending the IUB’s approval of IPL’s 2017 transmission rates and the PSCW’s final decision in WPL’s retail electric rate case for the 2017/2018 Test Period. Based on IPL’s and WPL’s electric transmission cost recovery mechanisms, IPL and WPL currently do not expect that any changes to electric transmission service costs billed by ITC and ATC will have a material impact on their financial condition and results of operations. IPL and WPL could have a material impact on their cash flows depending on the final timing of refunds resulting from the MISO return on equity complaints, and the subsequent timing of the refunds being credited to their customers.
RESULTS OF OPERATIONS
Overview - Third Quarter Results -
Alliant Energy -“Executive SummaryOverview” provides an overview of Alliant Energy’s, third quarterIPL’s and WPL’s earnings for the three months ended September 30, 2017 and 2016. Additional earnings details for the three and nine months ended September 30, 2017 and 2016 and 2015 earnings and the various components of its business.are discussed below.
IPL - Earnings available for common stock decreased $2 million primarily due to timingResults of income tax expense, partially offset by higher retailoperations include financial information prepared in accordance with GAAP as well as utility electric sales due to changes in temperatures in IPL’s service territorymargins and higher AFUDC in the third quarterutility gas margins, which are not measures of 2016 compared to the third quarter of 2015 related to Marshalltown.
WPL - Earnings available for common stock increased $1 million primarily due to lower energy efficiency cost recovery amortizations during the third quarter of 2016 and higher retailfinancial performance under GAAP. Utility electric sales due to changes in temperatures in WPL’s service territory, partially offset by lower equity income from WPL’s ATC investment.
Additional details of Alliant Energy’s, IPL’s and WPL’s third quarter 2016 and 2015 earnings are discussed below.
Utility Electric Margins - Electric margins are defined as electric operating revenues less electric production fuel, purchased power and electric transmission service expenses. Utility gas margins are defined as gas operating revenues less cost of gas sold. Utility electric margins and utility gas margins are non-GAAP financial measures because they exclude other utility and non-regulated operating revenues, other operation and maintenance expenses, depreciation and amortization expenses, and taxes other than income tax expense.
Management believes that utility electric and gas margins provide a more meaningful basis for evaluating and managing utility operations than electric operating revenues since electric production fuel, purchased power and electric transmission service expenses and cost of gas sold are generally passed through to customers, and therefore, result in changes to electric and gas operating revenues that are comparable to changes in such expenses. The presentation of utility electric and gas margins herein is intended to provide supplemental information for investors regarding operating performance. These utility electric and gas margins may not be comparable to how other entities define utility electric and gas margin. Furthermore, these measures are not intended to replace operating income as determined in accordance with GAAP as an indicator of operating performance.
Third Quarter 2016 vs. Third Quarter 2015 Summary - Electric marginsFor the three and MWh sales for the threenine months ended September 30, wereoperating income and a reconciliation of utility electric and gas margins to the most directly comparable GAAP measure, operating income, was as follows:follows (in millions):
|
| | | | | | | | | | | | | | | | | | | |
| Alliant Energy | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
| Residential (a) |
| $313.5 |
| |
| $303.2 |
| | 3 | % | | 2,091 |
| | 2,047 |
| | 2 | % |
| Commercial (a) | 212.8 |
| | 200.3 |
| | 6 | % | | 1,771 |
| | 1,694 |
| | 5 | % |
| Industrial - IPL co-generation customers | 15.4 |
| | 16.9 |
| | (9 | %) | | 218 |
| | 242 |
| | (10 | %) |
| Industrial - other (a) | 230.8 |
| | 227.0 |
| | 2 | % | | 2,855 |
| | 2,849 |
| | — | % |
| Retail subtotal (a) | 772.5 |
| | 747.4 |
| | 3 | % | | 6,935 |
| | 6,832 |
| | 2 | % |
| Sales for resale: | | | | | | | | | | | |
| Wholesale (a) | 73.0 |
| | 66.6 |
| | 10 | % | | 1,120 |
| | 1,028 |
| | 9 | % |
| Bulk power and other | 4.5 |
| | 9.5 |
| | (53 | %) | | 151 |
| | 378 |
| | (60 | %) |
| Other | 14.3 |
| | 12.3 |
| | 16 | % | | 24 |
| | 28 |
| | (14 | %) |
| Total revenues/sales | 864.3 |
| | 835.8 |
| | 3 | % | | 8,230 |
| | 8,266 |
| | — | % |
| Electric production fuel expense | 139.1 |
| | 155.7 |
| | (11 | %) | | | | | | |
| Purchased power expense | 106.8 |
| | 90.1 |
| | 19 | % | | | | | | |
| Electric transmission service expense | 138.6 |
| | 127.6 |
| | 9 | % | | | | | | |
| Electric margins (b) |
| $479.8 |
| |
| $462.4 |
| | 4 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | Three Months | | Nine Months | | Three Months | | Nine Months | | Three Months | | Nine Months |
| | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Operating income |
| $231.5 |
| |
| $162.6 |
| |
| $523.7 |
| |
| $437.1 |
| |
| $131.8 |
| |
| $125.9 |
| |
| $247.7 |
| |
| $235.9 |
| |
| $90.7 |
| |
| $115.0 |
| |
| $250.4 |
| |
| $268.8 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| Three Months | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Electric utility operating revenues |
| $840.6 |
| |
| $864.3 |
| |
| $489.0 |
| |
| $483.2 |
| |
| $351.6 |
| |
| $381.1 |
|
| Electric production fuel and purchased power expenses | (222.6 | ) | | (245.9 | ) | | (122.5 | ) | | (125.0 | ) | | (100.1 | ) | | (120.9 | ) |
| Electric transmission service expense | (121.0 | ) | | (138.6 | ) | | (78.2 | ) | | (95.9 | ) | | (42.8 | ) | | (42.7 | ) |
| Utility Electric Margin (non-GAAP) | 497.0 |
| | 479.8 |
| | 288.3 |
| | 262.3 |
| | 208.7 |
| | 217.5 |
|
| | | | | | | | | | | | |
| Gas utility operating revenues | 45.8 |
| | 39.5 |
| | 27.4 |
| | 23.9 |
| | 18.4 |
| | 15.6 |
|
| Cost of gas sold | (15.0 | ) | | (12.5 | ) | | (9.9 | ) | | (8.0 | ) | | (5.1 | ) | | (4.5 | ) |
| Utility Gas Margin (non-GAAP) | 30.8 |
| | 27.0 |
| | 17.5 |
| | 15.9 |
| | 13.3 |
| | 11.1 |
|
| | | | | | | | | | | | |
| Other utility operating revenues | 11.2 |
| | 9.4 |
| | 11.0 |
| | 9.1 |
| | 0.2 |
| | 0.3 |
|
| Non-regulated operating revenues | 9.3 |
| | 11.4 |
| | — |
| | — |
| | — |
| | — |
|
| Asset valuation charges for Franklin County wind farm | — |
| | (86.4 | ) | | — |
| | — |
| | — |
| | — |
|
| Other operation and maintenance expenses | (169.1 | ) | | (148.6 | ) | | (104.4 | ) | | (94.8 | ) | | (66.1 | ) | | (54.2 | ) |
| Depreciation and amortization expenses | (120.7 | ) | | (104.1 | ) | | (66.2 | ) | | (52.7 | ) | | (53.6 | ) | | (48.7 | ) |
| Taxes other than income tax expense | (27.0 | ) | | (25.9 | ) | | (14.4 | ) | | (13.9 | ) | | (11.8 | ) | | (11.0 | ) |
| Operating income |
| $231.5 |
| |
| $162.6 |
| |
| $131.8 |
| |
| $125.9 |
| |
| $90.7 |
| |
| $115.0 |
|
|
| | | | | | | | | | | | | | | | | | | |
| IPL | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
| Residential (a) |
| $173.7 |
| |
| $173.7 |
| | — | % | | 1,062 |
| | 1,081 |
| | (2 | %) |
| Commercial (a) | 133.1 |
| | 126.5 |
| | 5 | % | | 1,092 |
| | 1,053 |
| | 4 | % |
| Industrial - IPL co-generation customers | 15.4 |
| | 16.9 |
| | (9 | %) | | 218 |
| | 242 |
| | (10 | %) |
| Industrial - other (a) | 121.5 |
| | 121.3 |
| | — | % | | 1,526 |
| | 1,540 |
| | (1 | %) |
| Retail subtotal (a) | 443.7 |
| | 438.4 |
| | 1 | % | | 3,898 |
| | 3,916 |
| | — | % |
| Sales for resale: | | | | | | | | | | | |
| Wholesale (a) | 28.1 |
| | 20.4 |
| | 38 | % | | 366 |
| | 275 |
| | 33 | % |
| Bulk power and other | 1.4 |
| | 1.1 |
| | 27 | % | | 23 |
| | 28 |
| | (18 | %) |
| Other | 10.0 |
| | 8.7 |
| | 15 | % | | 11 |
| | 14 |
| | (21 | %) |
| Total revenues/sales | 483.2 |
| | 468.6 |
| | 3 | % | | 4,298 |
| | 4,233 |
| | 2 | % |
| Electric production fuel expense | 54.7 |
| | 72.0 |
| | (24 | %) | | | | | | |
| Purchased power expense | 70.3 |
| | 59.4 |
| | 18 | % | | | | | | |
| Electric transmission service expense | 95.9 |
| | 87.5 |
| | 10 | % | | | | | | |
| Electric margins (b) |
| $262.3 |
| |
| $249.7 |
| | 5 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| Nine Months | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Electric utility operating revenues |
| $2,199.1 |
| |
| $2,209.1 |
| |
| $1,217.6 |
| |
| $1,209.2 |
| |
| $981.5 |
| |
| $999.9 |
|
| Electric production fuel and purchased power expenses | (614.7 | ) | | (646.3 | ) | | (330.0 | ) | | (324.8 | ) | | (284.7 | ) | | (321.5 | ) |
| Electric transmission service expense | (363.3 | ) | | (396.8 | ) | | (235.0 | ) | | (270.7 | ) | | (128.3 | ) | | (126.1 | ) |
| Utility Electric Margin (non-GAAP) | 1,221.1 |
| | 1,166.0 |
| | 652.6 |
| | 613.7 |
| | 568.5 |
| | 552.3 |
|
| | | | | | | | | | | | |
| Gas utility operating revenues | 262.7 |
| | 248.7 |
| | 147.2 |
| | 142.6 |
| | 115.5 |
| | 106.1 |
|
| Cost of gas sold | (135.5 | ) | | (132.3 | ) | | (74.6 | ) | | (76.3 | ) | | (60.9 | ) | | (56.0 | ) |
| Utility Gas Margin (non-GAAP) | 127.2 |
| | 116.4 |
| | 72.6 |
| | 66.3 |
| | 54.6 |
| | 50.1 |
|
| | | | | | | | | | | | |
| Other utility operating revenues | 34.4 |
| | 35.0 |
| | 33.3 |
| | 34.1 |
| | 1.1 |
| | 0.9 |
|
| Non-regulated operating revenues | 29.9 |
| | 30.2 |
| | — |
| | — |
| | — |
| | — |
|
| Asset valuation charges for Franklin County wind farm | — |
| | (86.4 | ) | | — |
| | — |
| | — |
| | — |
|
| Other operation and maintenance expenses | (467.1 | ) | | (438.2 | ) | | (288.7 | ) | | (279.8 | ) | | (179.7 | ) | | (157.2 | ) |
| Depreciation and amortization expenses | (342.7 | ) | | (308.7 | ) | | (181.0 | ) | | (157.8 | ) | | (158.8 | ) | | (143.5 | ) |
| Taxes other than income tax expense | (79.1 | ) | | (77.2 | ) | | (41.1 | ) | | (40.6 | ) | | (35.3 | ) | | (33.8 | ) |
| Operating income |
| $523.7 |
| |
| $437.1 |
| |
| $247.7 |
| |
| $235.9 |
| |
| $250.4 |
| |
| $268.8 |
|
Operating Income Variances - Variances between periods in operating income for the three and nine months ended September 30, 2017 compared to the same periods in 2016 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | |
| WPL | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
| Residential |
| $139.8 |
| |
| $129.5 |
| | 8 | % | | 1,029 |
| | 966 |
| | 7 | % |
| Commercial | 79.7 |
| | 73.8 |
| | 8 | % | | 679 |
| | 641 |
| | 6 | % |
| Industrial | 109.3 |
| | 105.7 |
| | 3 | % | | 1,329 |
| | 1,309 |
| | 2 | % |
| Retail subtotal | 328.8 |
| | 309.0 |
| | 6 | % | | 3,037 |
| | 2,916 |
| | 4 | % |
| Sales for resale: | | | | | | | | | | | |
| Wholesale | 44.9 |
| | 46.2 |
| | (3 | %) | | 754 |
| | 753 |
| | — | % |
| Bulk power and other | 3.1 |
| | 8.4 |
| | (63 | %) | | 128 |
| | 350 |
| | (63 | %) |
| Other | 4.3 |
| | 3.6 |
| | 19 | % | | 13 |
| | 14 |
| | (7 | %) |
| Total revenues/sales | 381.1 |
| | 367.2 |
| | 4 | % | | 3,932 |
| | 4,033 |
| | (3 | %) |
| Electric production fuel expense | 84.4 |
| | 83.7 |
| | 1 | % | | | | | | |
| Purchased power expense | 36.5 |
| | 30.7 |
| | 19 | % | | | | | | |
| Electric transmission service expense | 42.7 |
| | 40.1 |
| | 6 | % | | | | | | |
| Electric margins |
| $217.5 |
| |
| $212.7 |
| | 2 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
Asset valuation charges for Franklin County wind farm in 2016 (refer to Note 3 for details) |
| $86 |
| |
| $— |
| |
| $— |
| |
| $86 |
| |
| $— |
| |
| $— |
|
| Total utility electric margin variance (refer to details below) | 17 |
| | 26 |
| | (9 | ) | | 55 |
| | 39 |
| | 16 |
|
| Total utility gas margin variance (refer to details below) | 4 |
| | 2 |
| | 2 |
| | 11 |
| | 6 |
| | 5 |
|
| Total other operation and maintenance expenses variance (refer to details below) | (21 | ) | | (10 | ) | | (12 | ) | | (29 | ) | | (9 | ) | | (23 | ) |
| Higher depreciation expense primarily due to additional plant in service in 2017, including impacts from Marshalltown | (9 | ) | | (9 | ) | | (2 | ) | | (20 | ) | | (18 | ) | | (6 | ) |
| Higher depreciation expense at WPL due to updated depreciation rates effective January 2017 approved by the PSCW and FERC | (3 | ) | | — |
| | (3 | ) | | (9 | ) | | — |
| | (9 | ) |
| Higher depreciation expense at IPL due to write-down of regulatory assets resulting from the proposed IPL electric rate review settlement in 2017 | (5 | ) | | (5 | ) | | — |
| | (5 | ) | | (5 | ) | | — |
|
| Other | — |
| | 2 |
| | — |
| | (2 | ) | | (1 | ) | | (1 | ) |
| |
| $69 |
| |
| $6 |
| |
| ($24 | ) | |
| $87 |
| |
| $12 |
| |
| ($18 | ) |
| |
(a) | On July 31, 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 $20 million of credits on IPL’s Iowa retail electric customers’ bills for the third quarters of 2016 and 2015, respectively, resulting from the electric tax benefit rider. 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, 2016 and 2015.
|
Electric and Gas Revenues and Sales Summary - Electric and gas revenues (in millions), and MWh and Dth sales (in thousands), for the three and nine months ended September 30 were as follows:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Alliant Energy | Electric | | Gas |
| | Revenues | | MWhs Sold | | Revenues | | Dths Sold |
| | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Three Months | | | | | | | | | | | | | | | |
| Retail |
| $745.7 |
| |
| $772.5 |
| | 6,722 |
| | 6,935 |
| |
| $37.4 |
| |
| $30.9 |
| | 3,744 |
| | 3,926 |
|
| Sales for resale | 75.6 |
| | 77.5 |
| | 1,390 |
| | 1,271 |
| | — |
| | — |
| | — |
| | — |
|
| Transportation/Other | 19.3 |
| | 14.3 |
| | 22 |
| | 24 |
| | 8.4 |
| | 8.6 |
| | 19,787 |
| | 20,302 |
|
| |
| $840.6 |
| |
| $864.3 |
| | 8,134 |
| | 8,230 |
| |
| $45.8 |
| |
| $39.5 |
| | 23,531 |
| | 24,228 |
|
| Nine Months | | | | | | | | | | | | | | | |
| Retail |
| $1,950.4 |
| |
| $1,970.4 |
| | 18,851 |
| | 19,139 |
| |
| $236.9 |
| |
| $222.9 |
| | 30,971 |
| | 32,720 |
|
| Sales for resale | 204.8 |
| | 204.9 |
| | 3,564 |
| | 3,372 |
| | — |
| | — |
| | — |
| | — |
|
| Transportation/Other | 43.9 |
| | 33.8 |
| | 72 |
| | 75 |
| | 25.8 |
| | 25.8 |
| | 54,849 |
| | 61,615 |
|
| |
| $2,199.1 |
| |
| $2,209.1 |
| | 22,487 |
| | 22,586 |
| |
| $262.7 |
| |
| $248.7 |
| | 85,820 |
| | 94,335 |
|
Nine Months Ended September 30, 2016 vs. Nine Months Ended September 30, 2015Summary - Electric margins and MWh sales for the nine months ended September 30 were as follows: |
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| IPL | Electric | | Gas |
| | Revenues | | MWhs Sold | | Revenues | | Dths Sold |
| | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Three Months | | | | | | | | | | | | | | | |
| Retail |
| $443.3 |
| |
| $443.7 |
| | 3,784 |
| | 3,898 |
| |
| $22.0 |
| |
| $18.9 |
| | 2,189 |
| | 2,486 |
|
| Sales for resale | 33.6 |
| | 29.5 |
| | 692 |
| | 389 |
| | — |
| | — |
| | — |
| | — |
|
| Transportation/Other | 12.1 |
| | 10.0 |
| | 9 |
| | 11 |
| | 5.4 |
| | 5.0 |
| | 9,374 |
| | 8,783 |
|
| |
| $489.0 |
| |
| $483.2 |
| | 4,485 |
| | 4,298 |
| |
| $27.4 |
| |
| $23.9 |
| | 11,563 |
| | 11,269 |
|
| Nine Months | | | | | | | | | | | | | | | |
| Retail |
| $1,105.5 |
| |
| $1,110.8 |
| | 10,761 |
| | 10,944 |
| |
| $129.9 |
| |
| $127.2 |
| | 16,548 |
| | 18,097 |
|
| Sales for resale | 83.5 |
| | 75.5 |
| | 1,527 |
| | 1,056 |
| | — |
| | — |
| | — |
| | — |
|
| Transportation/Other | 28.6 |
| | 22.9 |
| | 30 |
| | 31 |
| | 17.3 |
| | 15.4 |
| | 29,092 |
| | 27,066 |
|
| |
| $1,217.6 |
| |
| $1,209.2 |
| | 12,318 |
| | 12,031 |
| |
| $147.2 |
| |
| $142.6 |
| | 45,640 |
| | 45,163 |
|
|
| | | | | | | | | | | | | | | | | | | |
| Alliant Energy | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
| Residential (a) |
| $779.9 |
| |
| $775.7 |
| | 1 | % | | 5,518 |
| | 5,679 |
| | (3 | %) |
| Commercial (a) | 543.0 |
| | 512.9 |
| | 6 | % | | 4,904 |
| | 4,816 |
| | 2 | % |
| Industrial - IPL co-generation customers | 48.2 |
| | 45.5 |
| | 6 | % | | 704 |
| | 700 |
| | 1 | % |
| Industrial - other (a) | 599.3 |
| | 588.8 |
| | 2 | % | | 8,013 |
| | 8,217 |
| | (2 | %) |
| Retail subtotal (a) | 1,970.4 |
| | 1,922.9 |
| | 2 | % | | 19,139 |
| | 19,412 |
| | (1 | %) |
| Sales for resale: | | | | | | | | | | | |
| Wholesale (a) | 196.7 |
| | 165.5 |
| | 19 | % | | 3,025 |
| | 2,663 |
| | 14 | % |
| Bulk power and other | 8.2 |
| | 24.2 |
| | (66 | %) | | 347 |
| | 1,051 |
| | (67 | %) |
| Other | 33.8 |
| | 34.9 |
| | (3 | %) | | 75 |
| | 102 |
| | (26 | %) |
| Total revenues/sales | 2,209.1 |
| | 2,147.5 |
| | 3 | % | | 22,586 |
| | 23,228 |
| | (3 | %) |
| Electric production fuel expense | 325.8 |
| | 376.3 |
| | (13 | %) | | | | | | |
| Purchased power expense | 320.5 |
| | 270.6 |
| | 18 | % | | | | | | |
| Electric transmission service expense | 396.8 |
| | 367.7 |
| | 8 | % | | | | | | |
| Electric margins (b) |
| $1,166.0 |
| |
| $1,132.9 |
| | 3 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
| IPL | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
| Residential (a) |
| $422.2 |
| |
| $434.8 |
| | (3 | %) | | 2,827 |
| | 3,055 |
| | (7 | %) |
| Commercial (a) | 336.1 |
| | 318.9 |
| | 5 | % | | 3,076 |
| | 3,043 |
| | 1 | % |
| Industrial - IPL co-generation customers | 48.2 |
| | 45.5 |
| | 6 | % | | 704 |
| | 700 |
| | 1 | % |
| Industrial - other (a) | 304.3 |
| | 307.6 |
| | (1 | %) | | 4,337 |
| | 4,591 |
| | (6 | %) |
| Retail subtotal (a) | 1,110.8 |
| | 1,106.8 |
| | — | % | | 10,944 |
| | 11,389 |
| | (4 | %) |
| Sales for resale: | | | | | | | | | | | |
| Wholesale (a) | 72.7 |
| | 35.6 |
| | 104 | % | | 1,012 |
| | 509 |
| | 99 | % |
| Bulk power and other | 2.8 |
| | 4.0 |
| | (30 | %) | | 44 |
| | 163 |
| | (73 | %) |
| Other | 22.9 |
| | 24.2 |
| | (5 | %) | | 31 |
| | 54 |
| | (43 | %) |
| Total revenues/sales | 1,209.2 |
| | 1,170.6 |
| | 3 | % | | 12,031 |
| | 12,115 |
| | (1 | %) |
| Electric production fuel expense | 120.6 |
| | 162.6 |
| | (26 | %) | | | | | | |
| Purchased power expense | 204.2 |
| | 169.4 |
| | 21 | % | | | | | | |
| Electric transmission service expense | 270.7 |
| | 249.3 |
| | 9 | % | | | | | | |
| Electric margins (b) |
| $613.7 |
| |
| $589.3 |
| | 4 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
| WPL | Revenues and Costs (dollars in millions) | | MWhs Sold (MWhs in thousands) |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
| Residential |
| $357.7 |
| |
| $340.9 |
| | 5 | % | | 2,691 |
| | 2,624 |
| | 3 | % |
| Commercial | 206.9 |
| | 194.0 |
| | 7 | % | | 1,828 |
| | 1,773 |
| | 3 | % |
| Industrial | 295.0 |
| | 281.2 |
| | 5 | % | | 3,676 |
| | 3,626 |
| | 1 | % |
| Retail subtotal | 859.6 |
| | 816.1 |
| | 5 | % | | 8,195 |
| | 8,023 |
| | 2 | % |
| Sales for resale: | | | | | | | | | | | |
| Wholesale | 124.0 |
| | 129.9 |
| | (5 | %) | | 2,013 |
| | 2,154 |
| | (7 | %) |
| Bulk power and other | 5.4 |
| | 20.2 |
| | (73 | %) | | 303 |
| | 888 |
| | (66 | %) |
| Other | 10.9 |
| | 10.7 |
| | 2 | % | | 44 |
| | 48 |
| | (8 | %) |
| Total revenues/sales | 999.9 |
| | 976.9 |
| | 2 | % | | 10,555 |
| | 11,113 |
| | (5 | %) |
| Electric production fuel expense | 205.2 |
| | 213.7 |
| | (4 | %) | | | | | | |
| Purchased power expense | 116.3 |
| | 101.2 |
| | 15 | % | | | | | | |
| Electric transmission service expense | 126.1 |
| | 118.4 |
| | 7 | % | | | | | | |
| Electric margins |
| $552.3 |
| |
| $543.6 |
| | 2 | % | | | | | | |
| |
(a) | On July 31, 2015, IPL sold its electric distribution assets in Minnesota. 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 $47 million and $55 million of credits on Iowa retail electric customers’ bills for the nine months ended September 30, 2016 and 2015, respectively, resulting from IPL’s electric tax benefit rider. 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, 2016 and 2015. |
Variances - Variances between periods in electric margins for the three and nine months ended September 30, 2016 compared to the same periods in 2015 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
Retail electric customer billing credits at IPL (Refer to Note 2 for further details) |
| $4 |
| |
| $4 |
| |
| $— |
| |
| $12 |
| |
| $12 |
| |
| $— |
|
| Estimated changes in sales caused by temperatures | 12 |
| | 9 |
| | 3 |
| | 10 |
| | 9 |
| | 1 |
|
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 |
| | — |
| | 8 |
| | 8 |
| | — |
|
| Higher retail electric sales due to one additional day in 2016 for leap year | — |
| | — |
| | — |
| | 4 |
| | 2 |
| | 2 |
|
| Other | (2 | ) | | (3 | ) | | 2 |
| | (1 | ) | | (7 | ) | | 6 |
|
| |
| $17 |
| |
| $13 |
| |
| $5 |
| |
| $33 |
| |
| $24 |
| |
| $9 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| WPL | Electric | | Gas |
| | Revenues | | MWhs Sold | | Revenues | | Dths Sold |
| | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 | | 2017 | | 2016 |
| Three Months | | | | | | | | | | | | | | | |
| Retail |
| $302.4 |
| |
| $328.8 |
| | 2,938 |
| | 3,037 |
| |
| $15.4 |
| |
| $12.0 |
| | 1,555 |
| | 1,440 |
|
| Sales for resale | 42.0 |
| | 48.0 |
| | 698 |
| | 882 |
| | — |
| | — |
| | — |
| | — |
|
| Transportation/Other | 7.2 |
| | 4.3 |
| | 13 |
| | 13 |
| | 3.0 |
| | 3.6 |
| | 10,413 |
| | 11,519 |
|
| |
| $351.6 |
| |
| $381.1 |
| | 3,649 |
| | 3,932 |
| |
| $18.4 |
| |
| $15.6 |
| | 11,968 |
| | 12,959 |
|
| Nine Months | | | | | | | | | | | | | | | |
| Retail |
| $844.9 |
| |
| $859.6 |
| | 8,090 |
| | 8,195 |
| |
| $107.0 |
| |
| $95.7 |
| | 14,423 |
| | 14,623 |
|
| Sales for resale | 121.3 |
| | 129.4 |
| | 2,037 |
| | 2,316 |
| | — |
| | — |
| | — |
| | — |
|
| Transportation/Other | 15.3 |
| | 10.9 |
| | 42 |
| | 44 |
| | 8.5 |
| |
| $10.4 |
| | 25,757 |
| | 34,549 |
|
| |
| $981.5 |
| |
| $999.9 |
| | 10,169 |
| | 10,555 |
| |
| $115.5 |
| |
| $106.1 |
| | 40,180 |
| | 49,172 |
|
Temperatures - HDD and CDD are calculated using a simple average of the high and low temperatures each day compared to a 65 degree base. Normal degree days are calculated using a rolling 20-year average of historical HDD and CDD. HDD and CDD in Alliant Energy’s service territories for the three and nine months ended September 30 were as follows:
|
| | | | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | Actual | | | | Actual | | |
| | 2016 | | 2015 | | Normal | | 2016 | | 2015 | | Normal |
| HDD: | | | | | | | | | | | |
| Cedar Rapids, Iowa (IPL) | 39 |
| | 83 |
| | 142 |
| | 3,759 |
| | 4,355 |
| | 4,276 |
|
| Madison, Wisconsin (WPL) | 49 |
| | 98 |
| | 175 |
| | 4,135 |
| | 4,653 |
| | 4,529 |
|
| CDD: | | | | | | | | | | | |
| Cedar Rapids, Iowa (IPL) | 651 |
| | 530 |
| | 534 |
| | 948 |
| | 730 |
| | 754 |
|
| Madison, Wisconsin (WPL) | 570 |
| | 503 |
| | 474 |
| | 771 |
| | 664 |
| | 655 |
|
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 | 2017 | | 2016 | | Resulting Impact in 2017 Compared to 2016 |
| 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 | 13% warmer than normal | | 10% warmer than normal | | Decrease in IPL’s and WPL’s electric and gas sales due to lower demand by customers for heating |
| Second quarter (CDD) | 10% - 35% warmer than normal | | 10% colder than normal | | Increase in IPL’s and WPL’s electric sales due to higher demand by customers for air cooling | 2% cooler - 13% warmer than normal | | 10% - 35% warmer than normal | | Decrease in IPL’s and WPL’s electric sales due to lower demand by customers for air cooling |
| Third quarter (CDD) | 20% warmer than normal | | Normal | | Increase in IPL’s and WPL’s electric sales due to higher demand by customers for air cooling | 7% - 14% cooler than normal | | 20% warmer than normal | | Decrease in IPL’s and WPL’s electric sales due to lower demand by customers for air cooling |
Estimated increases (decreases) to electric and gas margins from the impacts of temperatures for the three and nine months ended September 30 were as follows (in millions):
| | | | | | | | | | | | | | | | Electric Margins | | Gas Margins |
| | Three Months | | Nine Months | Three Months | | Nine Months | | Three Months | | Nine Months |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change | 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change | | 2017 | | 2016 | | Change |
| IPL |
| $7 |
| |
| ($2 | ) | |
| $9 |
| |
| $7 |
| |
| ($2 | ) | |
| $9 |
|
| ($4 | ) | |
| $7 |
| |
| ($11 | ) | |
| ($8 | ) | |
| $7 |
| |
| ($15 | ) | |
| $— |
| |
| $— |
| |
| $— |
| |
| ($3 | ) | |
| ($2 | ) | |
| ($1 | ) |
| WPL | 4 |
| | 1 |
| | 3 |
| | 3 |
| | 2 |
| | 1 |
| (4 | ) | | 4 |
| | (8 | ) | | (9 | ) | | 3 |
| | (12 | ) | | (1 | ) | | (1 | ) | | — |
| | (3 | ) | | (2 | ) | | (1 | ) |
| Total Alliant Energy |
| $11 |
| |
| ($1 | ) | |
| $12 |
| |
| $10 |
| |
| $— |
| |
| $10 |
|
| ($8 | ) | |
| $11 |
| |
| ($19 | ) | |
| ($17 | ) | |
| $10 |
| |
| ($27 | ) | |
| ($1 | ) | |
| ($1 | ) | |
| $— |
| |
| ($6 | ) | |
| ($4 | ) | |
| ($2 | ) |
Utility Electric Margin Variances - The following items contributed to increased (decreased) utility electric margins for the three and nine months ended September 30, 2017 compared to the same periods in 2016 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
| Higher margins at IPL from the impact of its 2016 Test Year interim retail electric base rate increase (a) |
| $34 |
| |
| $34 |
| |
| $— |
| |
| $54 |
| |
| $54 |
| |
| $— |
|
| Higher margins at WPL from the impact of its 2017/2018 Test Period retail electric base rate increase (b) | 4 |
| | — |
| | 4 |
| | 42 |
| | — |
| | 42 |
|
| Retail electric customer billing credits at IPL in 2016 | 3 |
| | 3 |
| | — |
| | 7 |
| | 7 |
| | — |
|
| Estimated changes in sales caused by temperatures (Refer to “Temperatures” above for details) | (19 | ) | | (11 | ) | | (8 | ) | | (27 | ) | | (15 | ) | | (12 | ) |
| Changes in electric fuel-related costs, net of recoveries at WPL (c) | (2 | ) | | — |
| | (2 | ) | | (11 | ) | | — |
| | (11 | ) |
| Revenue requirement adjustment in 2016 related to certain tax benefits from tax accounting method changes at IPL | (4 | ) | | (4 | ) | | — |
| | (11 | ) | | (11 | ) | | — |
|
| Lower wholesale margins at WPL primarily due to the expiration of a wholesale power supply agreement on May 31, 2017 | (6 | ) | | — |
| | (6 | ) | | (8 | ) | | — |
| | (8 | ) |
| Other | 7 |
| | 4 |
| | 3 |
| | 9 |
| | 4 |
| | 5 |
|
| |
| $17 |
| |
| $26 |
| |
| ($9 | ) | |
| $55 |
| |
| $39 |
| |
| $16 |
|
| |
| (a) | In April 2017, IPL filed a request with the IUB to increase annual electric base rates for its Iowa retail electric customers by $176 million, or approximately 12%. An interim retail electric base rate increase of $102 million, or approximately 7%, on an annual basis, was implemented effective April 13, 2017. Refer to “Rate Matters” for discussion of IPL’s proposed IPL electric rate review settlement. |
| |
| (b) | In December 2016,WPL received an order from the PSCW authorizing WPL to implement an increase in annual retail electric rates of $9 million, or approximately 1%. The $9 million net annual retail electric rate increase reflects a $60 million increase in base rates, partially offset by a $51 million reduction in fuel-related costs, using an estimate for 2017 fuel-related costs. The increase was effective January 1, 2017 and extends through the end of 2018. WPL no longer has winter rates that are lower than summer rates. Thus, the quarter-over-quarter variances resulting from the retail electric base rate increase will be smaller during the summer quarters, compared to the winter quarters. |
| |
| (c) | WPL estimates the decrease to electric margins from amounts within the approved bandwidth of plus or minus 2% of forecasted fuel-related expenses determined by the PSCW each year was approximately $6 million for the nine months ended September 30, 2017. WPL estimates the increases to electric margins from amounts within the bandwidth were approximately $2 million and $5 million for the three and nine months ended September 30, 2016, respectively. |
Electric Sales Trends - Alliant Energy’s retail sales volumes increaseddecreased 3% and 2% and decreased 1% for the three and nine months ended September 30, 20162017 compared to the same periods in 2015,2016, respectively. The three-month increase wasdecreases were primarily due to the impact of temperatures onlower residential and commercial sales due to cooler summer temperatures during the warmer than normal temperaturesthree and resultingnine months ended September 30, 2017 compared to the same periods in 2016, partially offset by increases in WPL’s industrial sales from higher air cooling demand in the third quarter of 2016.customer production and customer expansions. The nine-month decrease was primarily due to decreases in IPL’s industrial sales due to large customer maintenance outages in 2016 and decreased retail sales related to IPL’s sale of its Minnesota electric distribution assets in July 2015, partially offsetalso impacted by an extra day of retail sales during the first quarter of 2016 due to the leap year, and increases in WPL’s commercial and industrial sales due to customer expansions.year.
Alliant Energy’s wholesale sales volumesUtility Gas Margin Variances - The following items contributed to increased 9% and 14%(decreased) utility gas margins for the three and nine months ended September 30, 20162017 compared to the same periods in 2015, respectively. These increases2016 were primarily due to additional sales from IPL’s new wholesale power supply agreement with Southern Minnesota Energy Cooperative effective August 1, 2015. These increases were partially offset by decreased 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.as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
| Higher margins at WPL from the impact of its 2017/2018 Test Period retail gas base rate increase (a) |
| $2 |
| |
| $— |
| |
| $2 |
| |
| $6 |
| |
| $— |
| |
| $6 |
|
Higher revenues at IPL due to lower gas tax benefit rider credits on customer’s bills (Refer to Note 2 for details) | 1 |
| | 1 |
| | — |
| | 4 |
| | 4 |
| | — |
|
| Estimated changes in sales caused by temperatures (Refer to “Temperatures” above for details) | — |
| | — |
| | — |
| | (2 | ) | | (1 | ) | | (1 | ) |
| Other | 1 |
| | 1 |
| | — |
| | 3 |
| | 3 |
| | — |
|
| |
| $4 |
| |
| $2 |
| |
| $2 |
| |
| $11 |
| |
| $6 |
| |
| $5 |
|
Alliant Energy’s bulk power and other sales volumes changes were largely due to changes in sales in the wholesale energy markets operated by MISO. These changes are impacted by several factors, including the availability and dispatch of Alliant Energy’s EGUs and electricity demand within these wholesale energy markets. Changes in bulk power and other sales revenues were largely offset by changes in fuel-related costs, and therefore, did not have a significant impact on electric margins.
Electric Production Fuel and Purchased Power (Fuel-related) Expenses - Fossil fuels, such as natural gas and coal, are burned to produce electricity at EGUs. The cost of fossil fuels used during each period is included in electric production fuel expense. Electricity is also purchased to meet customer demand and these costs are charged to purchased power expense.
Due to IPL’s cost recovery mechanisms for fuel-related expenses, 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 increases to electric margins from amounts within the bandwidth were approximately $2 million and $5 million for the three and nine months ended September 30, 2016, respectively. WPL estimates the increases to electric margins from amounts within the bandwidth were approximately $2 million and $6 million for the three and nine months ended September 30, 2015, respectively.
Alliant Energy’s electric production fuel expense decreased $17 million and $51 million for the three and nine months ended September 30, 2016 compared to the same periods in 2015, respectively. The decreases were primarily due to lower dispatch of IPL’s and WPL’s coal-fired EGUs during the three and nine months ended September 30, 2016 partially due to lower wholesale energy market prices and WPL’s retirement of Nelson Dewey Units 1 and 2 in December 2015. The decreases were also due to 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 and nine months ended September 30, 2016 of $8 million and $22 million, respectively, of under-recovered fuel-related expenses deferred by WPL in 2014, and $4 million and $9 million of deferrals recorded during the three and nine months ended September 30, 2016, respectively, for over-recovered fuel-related costs in 2016 that were outside the approved bandwidth for WPL. The 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 purchased power expense increased $17 million and $50 million for the three and nine months ended September 30, 2016 compared to the same periods in 2015, respectively, primarily due to increased volumes purchased resulting from lower dispatch of IPL’s and WPL’s coal-fired EGUs during the three- and nine-month periods.
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, subject to an over/under escrow | |
| (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. |
treatment. 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 $11 million and $29 million for the three and nine months ended September 30, 2016 compared to the same periods in 2015, respectively, primarily due to higher electric transmission service rates billed by ITC, ATC and MISO.
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.
Third Quarter 2016 vs. Third Quarter 2015 Summary - Gas margins and Dth sales for the three months ended September 30 were as follows:
|
| | | | | | | | | | | | | | | | | | | |
| Alliant Energy | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
| Residential |
| $17.8 |
| |
| $17.6 |
| | 1 | % | | 1,397 |
| | 1,204 |
| | 16 | % |
| Commercial | 10.6 |
| | 11.0 |
| | (4 | %) | | 1,972 |
| | 1,616 |
| | 22 | % |
| Industrial | 2.5 |
| | 2.4 |
| | 4 | % | | 557 |
| | 541 |
| | 3 | % |
| Retail subtotal | 30.9 |
| | 31.0 |
| | — | % | | 3,926 |
| | 3,361 |
| | 17 | % |
| Transportation/other | 8.6 |
| | 7.0 |
| | 23 | % | | 20,302 |
| | 18,772 |
| | 8 | % |
| Total revenues/sales | 39.5 |
| | 38.0 |
| | 4 | % | | 24,228 |
| | 22,133 |
| | 9 | % |
| Cost of gas sold | 12.5 |
| | 13.6 |
| | (8 | %) | | | | | | |
| Gas margins (a) |
| $27.0 |
| |
| $24.4 |
| | 11 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
| IPL | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
| Residential |
| $10.3 |
| |
| $10.3 |
| | — | % | | 799 |
| | 638 |
| | 25 | % |
| Commercial | 6.6 |
| | 6.8 |
| | (3 | %) | | 1,245 |
| | 854 |
| | 46 | % |
| Industrial | 2.0 |
| | 2.0 |
| | — | % | | 442 |
| | 442 |
| | — | % |
| Retail subtotal | 18.9 |
| | 19.1 |
| | (1 | %) | | 2,486 |
| | 1,934 |
| | 29 | % |
| Transportation/other | 5.0 |
| | 4.0 |
| | 25 | % | | 8,783 |
| | 7,819 |
| | 12 | % |
| Total revenues/sales | 23.9 |
| | 23.1 |
| | 3 | % | | 11,269 |
| | 9,753 |
| | 16 | % |
| Cost of gas sold | 8.0 |
| | 9.4 |
| | (15 | %) | | | | | | |
| Gas margins (a) |
| $15.9 |
| |
| $13.7 |
| | 16 | % | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
| WPL | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
| Residential |
| $7.5 |
| |
| $7.3 |
| | 3 | % | | 598 |
| | 566 |
| | 6 | % |
| Commercial | 4.0 |
| | 4.2 |
| | (5 | %) | | 727 |
| | 762 |
| | (5 | %) |
| Industrial | 0.5 |
| | 0.4 |
| | 25 | % | | 115 |
| | 99 |
| | 16 | % |
| Retail subtotal | 12.0 |
| | 11.9 |
| | 1 | % | | 1,440 |
| | 1,427 |
| | 1 | % |
| Transportation/other | 3.6 |
| | 3.0 |
| | 20 | % | | 11,519 |
| | 10,953 |
| | 5 | % |
| Total revenues/sales | 15.6 |
| | 14.9 |
| | 5 | % | | 12,959 |
| | 12,380 |
| | 5 | % |
| Cost of gas sold | 4.5 |
| | 4.2 |
| | 7 | % | | | | | | |
| Gas margins |
| $11.1 |
| |
| $10.7 |
| | 4 | % | | | | | | |
| |
(a) | Includes $3 million of credits on IPL’s Iowa retail gas customers’ bills for both the third 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.
|
Nine Months Ended September 30, 2016 vs. Nine Months Ended September 30, 2015 - Gas margins and Dth sales for the nine months ended September 30 were as follows:
|
| | | | | | | | | | | | | | | | | | | |
| Alliant Energy | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
| Residential |
| $135.7 |
| |
| $162.1 |
| | (16 | %) | | 17,317 |
| | 19,475 |
| | (11 | %) |
| Commercial | 77.1 |
| | 91.3 |
| | (16 | %) | | 13,194 |
| | 13,879 |
| | (5 | %) |
| Industrial | 10.1 |
| | 10.4 |
| | (3 | %) | | 2,209 |
| | 2,092 |
| | 6 | % |
| Retail subtotal | 222.9 |
| | 263.8 |
| | (16 | %) | | 32,720 |
| | 35,446 |
| | (8 | %) |
| Transportation/other | 25.8 |
| | 24.3 |
| | 6 | % | | 61,615 |
| | 57,213 |
| | 8 | % |
| Total revenues/sales | 248.7 |
| | 288.1 |
| | (14 | %) | | 94,335 |
| | 92,659 |
| | 2 | % |
| Cost of gas sold | 132.3 |
| | 166.3 |
| | (20 | %) | | | | | | |
| Gas margins (a) |
| $116.4 |
| |
| $121.8 |
| | (4 | %) | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
| IPL | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
| Residential |
| $76.5 |
| |
| $90.9 |
| | (16 | %) | | 9,477 |
| | 10,709 |
| | (12 | %) |
| Commercial | 43.7 |
| | 50.7 |
| | (14 | %) | | 7,119 |
| | 7,335 |
| | (3 | %) |
| Industrial | 7.0 |
| | 7.6 |
| | (8 | %) | | 1,501 |
| | 1,562 |
| | (4 | %) |
| Retail subtotal | 127.2 |
| | 149.2 |
| | (15 | %) | | 18,097 |
| | 19,606 |
| | (8 | %) |
| Transportation/other | 15.4 |
| | 14.9 |
| | 3 | % | | 27,066 |
| | 25,962 |
| | 4 | % |
| Total revenues/sales | 142.6 |
| | 164.1 |
| | (13 | %) | | 45,163 |
| | 45,568 |
| | (1 | %) |
| Cost of gas sold | 76.3 |
| | 93.4 |
| | (18 | %) | | | | | | |
| Gas margins (a) |
| $66.3 |
| |
| $70.7 |
| | (6 | %) | | | | | | |
|
| | | | | | | | | | | | | | | | | | | |
| WPL | Revenues and Costs (dollars in millions) | | Dths Sold (Dths in thousands) |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
| Residential |
| $59.2 |
| |
| $71.2 |
| | (17 | %) | | 7,840 |
| | 8,766 |
| | (11 | %) |
| Commercial | 33.4 |
| | 40.6 |
| | (18 | %) | | 6,075 |
| | 6,544 |
| | (7 | %) |
| Industrial | 3.1 |
| | 2.8 |
| | 11 | % | | 708 |
| | 530 |
| | 34 | % |
| Retail subtotal | 95.7 |
| | 114.6 |
| | (16 | %) | | 14,623 |
| | 15,840 |
| | (8 | %) |
| Transportation/other | 10.4 |
| | 9.4 |
| | 11 | % | | 34,549 |
| | 31,251 |
| | 11 | % |
| Total revenues/sales | 106.1 |
| | 124.0 |
| | (14 | %) | | 49,172 |
| | 47,091 |
| | 4 | % |
| Cost of gas sold | 56.0 |
| | 72.9 |
| | (23 | %) | | | | | | |
| Gas margins |
| $50.1 |
| |
| $51.1 |
| | (2 | %) | | | | | | |
| |
(a) | Includes $9 million of credits on IPL’s Iowa retail gas customers’ bills for both the nine months ended September 30, 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 and nine months ended September 30, 2016 compared to the same periods in 2015 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
| Estimated changes in sales caused by temperatures |
| $— |
| |
| $— |
| |
| $— |
| |
| ($5 | ) | |
| ($3 | ) | |
| ($2 | ) |
| Higher (lower) revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (a) | 1 |
| | 1 |
| | — |
| | (3 | ) | | (3 | ) | | — |
|
| Other | 2 |
| | 1 |
| | — |
| | 3 |
| | 2 |
| | 1 |
|
| |
| $3 |
| |
| $2 |
| |
| $— |
| |
| ($5 | ) | |
| ($4 | ) | |
| ($1 | ) |
| |
(a) | Changes in gas energy efficiency revenues were 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 and nine months ended September 30 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | 2016 | | 2015 | | Change | | 2016 | | 2015 | | Change |
| IPL |
| $— |
| |
| $— |
| |
| $— |
| |
| ($2 | ) | |
| $1 |
| |
| ($3 | ) |
| WPL | (1 | ) | | (1 | ) | | — |
| | (2 | ) | | — |
| | (2 | ) |
| Total Alliant Energy |
| ($1 | ) | |
| ($1 | ) | |
| $— |
| |
| ($4 | ) | |
| $1 |
| |
| ($5 | ) |
Refer to “Utility Electric Margins” for HDD data details. Refer to Note 2 for discussion of IPL’s gas tax benefit rider.
Asset Valuation Charges for Franklin County Wind Farm - Refer to Note 3 for details of asset valuation charges recorded in the third quarter of 2016 by Alliant Energy for the Franklin County wind farm.
Other Operation and Maintenance Expenses - Variances between periods inThe following items contributed to (increased) decreased other operation and maintenance expenses for the three and nine months ended September 30, 20162017 compared to the same periods in 20152016 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
Losses on sales of IPL’s Minnesota distribution assets recorded in the second quarter of 2015 (Refer to Note 3 for further details) |
| $— |
| |
| $— |
| |
| $— |
| |
| ($12 | ) | |
| ($12 | ) | |
| $— |
|
| Lower energy efficiency cost recovery amortizations at WPL (a) | (4 | ) | | — |
| | (4 | ) | | (11 | ) | | — |
| | (11 | ) |
Voluntary employee separation charges in the third quarter of 2015 (Refer to Note 9(a) for further details) | (8 | ) | | (5 | ) | | (3 | ) | | (8 | ) | | (5 | ) | | (3 | ) |
| Changes in energy efficiency expense at IPL (b) | — |
| | — |
| | — |
| | (4 | ) | | (4 | ) | | — |
|
| Higher stock-based performance compensation expense | 4 |
| | 2 |
| | 2 |
| | 11 |
| | 6 |
| | 5 |
|
| Higher employee benefits-related expense | 2 |
| | 1 |
| | 1 |
| | 5 |
| | 4 |
| | 1 |
|
| Other | 3 |
| | 3 |
| | 1 |
| | 1 |
| | 3 |
| | (3 | ) |
| |
| ($3 | ) | |
| $1 |
| |
| ($3 | ) | |
| ($18 | ) | |
| ($8 | ) | |
| ($11 | ) |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
| Higher energy efficiency cost recovery amortizations at WPL (a) |
| ($7 | ) | |
| $— |
| |
| ($7 | ) | |
| ($20 | ) | |
| $— |
| |
| ($20 | ) |
| (Higher) lower bad debt expense | (1 | ) | | 1 |
| | (2 | ) | | (9 | ) | | (3 | ) | | (6 | ) |
| Charges related to cancelled software projects in 2017 | (6 | ) | | (3 | ) | | (3 | ) | | (6 | ) | | (3 | ) | | (3 | ) |
| Write-down of regulatory assets due to the proposed IPL electric rate review settlement in 2017 | (4 | ) | | (4 | ) | | — |
| | (4 | ) | | (4 | ) | | — |
|
| (Higher) lower equity-based performance compensation expense | (1 | ) | | — |
| | — |
| | 7 |
| | 4 |
| | 3 |
|
| Other | (2 | ) | | (4 | ) | | — |
| | 3 |
| | (3 | ) | | 3 |
|
| |
| ($21 | ) | |
| ($10 | ) | |
| ($12 | ) | |
| ($29 | ) | |
| ($9 | ) | |
| ($23 | ) |
| |
| (a) | The July 2014December 2016 PSCW order for WPL’s 2015/20162017/2018 Test Period electric and gas base rate casereview authorized lowerchanges in energy efficiency cost recovery amortizations for 20152017 and 2016. |
| |
(b) | Changes in IPL’s energy efficiency expense were offset by changes in gas energy efficiency revenues.2018. |
DepreciationInterest Expense and Amortization ExpensesOther Variances - Variances between periods in depreciationThe following items contributed to (increased) decreased interest expense and amortization expensesother for the three and nine months ended September 30, 20162017 compared to the same periods in 20152016 were as follows (in millions):
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months | | Nine Months |
| | Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
| Higher amortization expense from the new customer billing and information system placed in service in 2015 |
| $3 |
| |
| $2 |
| |
| $1 |
| |
| $7 |
| |
| $4 |
| |
| $3 |
|
| Lower depreciation expense from the sale of IPL’s Minnesota distribution assets in 2015 | — |
| | — |
| | — |
| | (3 | ) | | (3 | ) | | — |
|
| Other (includes the impact of property additions) | 2 |
| | — |
| | 2 |
| | 5 |
| | 2 |
| | 3 |
|
| |
| $5 |
| |
| $2 |
| |
| $3 |
| |
| $9 |
| |
| $3 |
| |
| $6 |
|
Equity Income from Unconsolidated Investments, Net - Alliant Energy’s and WPL’s equity income from unconsolidated investments both decreased $2 million for the three-month period, primarily due to higher reserves for rate refunds recorded at ATC during the three months ended September 30, 2016 compared to the same period in 2015. Refer to “Other Future Considerations” for discussion of WPL’s future transfer of its investment in ATC to Alliant Energy or an Alliant Energy subsidiary.
AFUDC - Variances between periods in AFUDC for the three and nine months ended September 30, 2016 compared to the same periods in 2015 were as follows (in millions):
| | | | Three Months | | Nine Months | Three Months | | Nine Months |
| | Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL | | Alliant Energy | | IPL | | WPL |
| Marshalltown (IPL) |
| $5 |
| |
| $5 |
| |
| $— |
| |
| $17 |
| |
| $17 |
| |
| $— |
| |
| Higher interest expense primarily due to higher average outstanding long-term debt balances | |
| ($5 | ) | |
| ($2 | ) | |
| $— |
| |
| ($14 | ) | |
| ($8 | ) | |
| $— |
|
| Lower equity income from unconsolidated investments at WPL from the transfer of its investment in ATC LLC to ATI on December 31, 2016 | | — |
| | — |
| | (9 | ) | | — |
| | — |
| | (29 | ) |
| Higher (lower) AFUDC primarily due to increased (decreased) construction work in progress balances | | (6 | ) | | (9 | ) | | 3 |
| | (8 | ) | | (11 | ) | | 4 |
|
| Other | 1 |
| | 2 |
| | — |
| | 2 |
| | — |
| | 2 |
| 1 |
| | — |
| | — |
| | 4 |
| | — |
| | (1 | ) |
| |
| $6 |
| |
| $7 |
| |
| $— |
| |
| $19 |
| |
| $17 |
| |
| $2 |
|
| ($10 | ) | |
| ($11 | ) | |
| ($6 | ) | |
| ($18 | ) | |
| ($19 | ) | |
| ($26 | ) |
Income Taxes - Refer to Note 8 for details of effective income tax rates forfrom continuing operations.
STRATEGIC OVERVIEW
The strategic overview summary included in the 20152016 Form 10-K has not changed materially, except as described below.
Gas Transmission and Distribution Systems - In April 2016, the Pipeline and Hazardous Materials Safety Administration published proposed regulations to update safety requirements for gas transmission 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. Alliant Energy, 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 gas transmission regulations, Alliant Energy, IPL and WPL are currently unable to predict with certainty the impact of these regulations on their financial condition and results of operations.
IPL’s Clinton Natural Gas Pipeline - In August 2016, IPL received an order from the IUB authorizing IPL to construct, maintain, and operate a natural gas pipeline in Scott and Clinton Counties in Iowa, referred to as the Clinton pipeline. Construction is expected to be completed in the first quarter of 2017. Capital expenditures to construct the pipeline, excluding AFUDC, are currently estimated to be approximately $30 million to $35 million.
Generation Plans -
Natural Gas-Fired Generation -
WPL’sIPL’s Construction of the Riverside ExpansionMarshalltown - In May 2016, WPL received an order from the PSCW authorizing WPLRefer to construct a natural gas-fired combined-cycle EGUNote 3 for discussion of IPL’s construction of Marshalltown, which was completed in Beloit, Wisconsin, referred to as the Riverside expansion. In June 2016, WPL executed a design, engineering, procurement and construction contract for the Riverside expansion. After receiving the final necessary regulatory approvals and permits in the third quarter of 2016, WPL began constructing the Riverside expansion. WPL currently expects to place the Riverside expansion in service by early 2020.
In November 2016, various electric cooperatives notified WPL of their intent to exercise their options to acquire approximately 60 MW of the Riverside expansion while the EGU is being constructed. As a result of the various electric cooperatives funding a portion of theApril 2017. Final capital expenditures during construction, WPL’sare currently estimated portion of capital expenditures is now expected to be approximately $640 million. The capital expenditures include costs$645 million to construct the EGU and a pipeline to supply natural gas to the EGU, and excludeexcluding transmission network upgrades and AFUDC. Upon exercise
WPL’s Construction of their options,West Riverside - In October 2017, WPL received an order from the PSCW authorizing various electric cooperatives, which currently have wholesale power supply agreements with WPL, to acquire approximately 65 MW of West Riverside while the EGU is being constructed. As part of the electric cooperatives’ acquisitions, which are currently expected to be completed in the fourth quarter of 2017, the current wholesale power supply agreements with the various electric cooperatives will be extended by at least four years until 2026 with automatic continuation of such agreements unless terminated by either party, with a five-year notice requirement.
Pursuant to agreements WPL entered into with Wisconsin Public Service Corporation (WPSC) and Madison Gas and Electric Company (MGE) related to the Riverside expansion, WPL, WPSC and MGE filed a request with the PSCW seeking approval of amendments to the Columbia joint operating agreement. In October 2016, WPL received a decision from the PSCW approving such amendments, which allow WPSC and MGE to forgo certain capital expenditures at Columbia, resulting in WPL incurring these additional capital expenditures in exchange for a proportional increase in its ownership share of Columbia. Based upon the additional capital expenditures WPL currently expects to incur through June 1, 2020, WPL’s ownership interest in Columbia is expected to increase from 46.2% to 53.4%. WPL currently expects to file a request with FERC in the fourth quarter of 2016 for approval of these amendments to the Columbia joint operating agreement.
IPL’s Construction of Marshalltown - IPL began constructing Marshalltown in the second quarter of 2014 after receiving the final necessary regulatory approvals and permits. IPL executed an engineering, procurement and construction contract for Marshalltown after a competitive bidding process. In September 2016, Marshalltown’s engineering, procurement and construction contractor announced that costs to construct Marshalltown will exceed its expectations and that it expects to
seek compensation from vendors performing work on Marshalltown. IPL does not currently anticipate it will be responsible for these increased costs. Capital expenditures are currently estimated to be approximately $700 million to construct the EGU and a pipeline to supply natural gas to the EGU. The estimated capital expenditures exclude transmission network upgrades and AFUDC. IPL expects to place Marshalltown in service by the second quarter of 2017.
Wind Generation - The strategic plan includes the planned and potential additionexpansion of wind generation of up to 1,000 MW to Alliant Energy’s resources portfolio as follows. Estimated capital expenditures for the planned and potential wind generation projects for 20162017 through 2020 are included in the “Renewable projects” line in the construction and acquisition expenditures table in “Liquidity and Capital Resources.” |
| | |
| Wind Generation (a) | | Regulatory Application Filing Status |
| IPL - up to 500 MW | | Approved by the IUB in October 2016 |
| IPL - up to 500 MW (b) | | Filed with the IUB in August 2017 |
| WPL - up to 200 MW (b) | | Plan to file with the PSCW in the fourth quarter of 2017 |
| |
| (a) | IPL and WPL believe their respective planned expansion of wind generation will qualify for the full level of production tax credits as a result of progress payments in 2016 for wind turbines, and plan to place these wind projects into service by the fourth quarter of 2020. |
| |
| (b) | The amount and timing of these wind projects will largely depend on regulatory approvals and the acquisition of wind sites. |
IPL’s Expansion of Wind Generation - In October 2016, IPL andreceived approval from the Iowa OfficeIUB for up to 500 MW of Consumer Advocate, among other customer groups,new wind generation. In August 2017, IPL filed a settlement agreementan application with the IUB regarding the appropriatefor advance rate-making principles for up to 500 MW of additional wind generation at IPL. In October 2016, the IUB issued an order approving the settlement agreement, with limited modifications, and establishinggeneration. The advance rate-making principles whichrequested by IPL accepted,in the August 2017 application were as follows:
Up to 500 MW of additional wind generation that qualifies for the full level of production tax credits, regardless ofas long as the locationproject is located in Iowa, with a cost cap of $1,830/$1,780/kilowatt, including AFUDC and transmission costs. Any costs incurred in excess of this $1,830/$1,780/kilowatt cost cap are expected to be incorporated into rates if determined to be reasonable and prudent.
A depreciable life of the wind generation facilities of 40 years, unless changed as a result of a contested case before the IUB.
An 11.0% return on common equity, with the exception of certain transmission facilities classified as intangible assets, which would earn the rate of return on common equity the IUB finds reasonable during a future rate case.review.
A return on common equity for the calculation of AFUDC during the construction period that is the greater of 10.0% or the percentage the IUB finds reasonable during IPL’s nextretail electric rate case.review for the 2016 Test Year.
The application of double leverage is deferred until IPL’s next retail electric base rate casereview or other future proceeding.
Amortization over a 10-year period of IPL’s prudently incurred and unreimbursed costs, effective with IPL’s next retail electric base rate case,review, if IPL cancels the construction of the wind generation.
Withdrawal of IPL’s proposed renewable energy rider, which would have allowed IPL to commence recovery of the wind projects from its retail electric customers at the time the additional wind generation was placed in service.
IPL currently expects to add wind generation near its Whispering Willow - East wind farm, and is evaluating other siting options to build and operate the 500 MW of additional wind. IPL plans to commence the construction process in 2016, and as a result, be eligible for the full level of production tax credits from the electricity generated during the first 10 years of operation. IPL anticipates placing the 500 MW of additional wind generation in service in 2019 and 2020.
Franklin County Wind Farm - In addition to IPL’s expansion of wind generation discussed above, referRefer to Note 3 for discussion of IPL’s anticipated filing with FERC in the fourth quartertransfer of 2016 requesting approval to transfer the 99 MW Franklin County wind farm assets from AEF to IPL in April 2017.
IPL’s and WPL’s Potential ExpansionProposed Acquisition of Forward Wind GenerationEnergy Center - In additionOctober 2017, WPL, along with Wisconsin Public Service Corporation and Madison Gas and Electric Company, entered into definitive agreements to IPL’s 500 MW expansion of wind generation and planned transferacquire the assets of the 99Forward Wind Energy Center (FWEC), which is a 129 MW Franklin County wind farm located in Wisconsin. WPL currently expects to IPLacquire 55 MW of FWEC for approximately $74 million. WPL currently expects to file for approval from the PSCW and FERC in the fourth quarter of 2017, discussed above, IPLwith decisions expected by the second quarter of 2018. WPL, Wisconsin Public Service Corporation and WPL are exploring options to ownMadison Gas and operateElectric Company have been receiving electricity from FWEC under purchased power agreements since FWEC began commercial operations in 2008. Upon completion of the acquisitions, such purchased power agreements will terminate. This proposed acquisition is included in WPL’s plans for up to 400200 MW of additional new wind generation in aggregate. The estimated capital expenditures included in “Liquidity and Capital Resources” assume this 400 MW of additional new wind generation will be equally allocated between IPL and WPL. The final amount and allocation of this potential expansion of wind generation for IPL and WPL is subject to change pending further evaluation.discussed above.
Coal-Fired Generation -
IPL’s Environmental Controls Projects - In May 2017, the IUB approved IPL’s most recent emissions plan and budget, which includes the SCR currently under construction at Ottumwa Unit 1.
Plant Retirements and Fuel Switching - In June 2017, IPL retired Sutherland Units 1 and 3 and Dubuque Units 3 and 4, and fuel switched Marshalltown Combustion Turbine Units 1-3 from oil to natural gas. Refer to Note 32 for further discussion of the Sutherland Units 1 and 3 retirement.
Non-regulated Operations - The strategic plan for Alliant Energy’s non-regulated operations involves maintaining a scrubbermodest portfolio of businesses that are accretive to earnings and baghouse project at Edgewater Unit 5, which was completedcash flows. The non-regulated strategic plan continues to evolve through exploration of renewable investment opportunities within and outside of Alliant Energy’s service territories.
Non-regulated Wind Investment in Oklahoma - In July 2016.2017, a wholly-owned subsidiary of AEF acquired a 50% cash equity ownership interest in a 225 MW non-regulated wind farm located in Oklahoma. Refer to Note 5(a) for further discussion.
RATE MATTERS
The rate matters summary included in the 20152016 Form 10-K has not changed materially, except as described below.
WPL’s WisconsinIPL’s Retail Electric and Gas Rate Case (2017/2018Review (2016 Test Period)Year) - In May 2016, WPLApril 2017, IPL filed a retail base rate caserequest with the PSCW based on a forward-looking test period that includes 2017 and 2018. WPL’s filing was based on a stipulated agreement reached between PSCW staff, intervener groups and WPL. The filing requested approval for WPLIUB to
implement a $13 million, or approximately 1%, increase in annual electric base rates for WPL’s retail electric customers. The net requested increase for 2017 compared to WPL’s retail electric rate case for the 2015/2016 Test Period reflects a $65 million increase in base rates, partially offset by a $52 million reduction in fuel-related costs, using a preliminary estimate for 2017 fuel-related costs. Based on updated fuel-related cost information at the time of rate case hearings in September 2016, the current estimate of the net increase in annual rates for WPL’sits Iowa retail electric customers is $17 million, consistingand interim rates were implemented effective April 13, 2017. In September 2017, IPL reached a partial, non-unanimous settlement agreement with the Iowa Office of Consumer Advocate, the original $65 million increase in base rates, partially offset by a $48 million reduction in fuel-related costs.Iowa Business Energy Coalition and the Large Energy Group. The filing also requested approval for WPL to implement a $9 million, or approximately 13%, increase in annual base rates for WPL’s retail gas customers. Any rate changes granted from this request are expected to be effective January 1, 2017interim and extend through the end of 2018. The key drivers for the electric and gas basefinal (based on proposed settlement) rate increases are recovery of the costs for environmental controls projects at Edgewater and Columbia, and investments in electric and gas distribution systems, including expansion of natural gas pipeline infrastructure. The filing also included utilization of amounts that WPL previously over-recovered from its customers for energy efficiency cost recovery and electric transmission cost recovery, as well as amounts deferred under the returnwere calculated based on common equity sharing mechanism for the 2013/2014 Test Period to reduce the requested base rate increases. The fuel-related cost component of WPL’s retail electric rates for 2018 will be addressed in a separate filing, which is currently expected to be filed in the second or third quarter of 2017.
WPL’s May 2016 retail base rate filing included a return on common equity of 10.0% and continues a regulatory return on common equity sharing mechanism, whereby WPL must defer a portion of its earnings if its annual regulatory return on common equity exceeds 10.25% during the 2017 and 2018 Test Period. WPL must defer 50% of its excess earnings between 10.25% and 11.00%, and 100% of any excess earnings above 11.00%. The May 2016 filing also included the following key assumptions (Common(Return on Common Equity (CE); Long-term Debt (LD); Short-term Debt (SD); Weighted-average Cost of Capital (WACC)(ROE)):
|
| | | | | | | | | | | | | | |
| Utility | | Test | | Regulatory Capital Structure | | After-tax | | Average Retail Rate |
| Type | | Period | | CE | | LD | | SD | | WACC | Base (in millions) (a) |
| Electric | | 2017 | | 52.23% | | 43.92% | | 3.85% | | 7.57% | |
| $2,699 |
|
| Electric | | 2018 | | 52.20% | | 45.16% | | 2.64% | | 7.59% | | 2,851 |
|
| Gas | | 2017 | | 52.23% | | 43.92% | | 3.85% | | 7.57% | | 259 |
|
| Gas | | 2018 | | 52.20% | | 45.16% | | 2.64% | | 7.59% | | 284 |
|
|
| | | |
| | Interim Rates | | Final Rates (Proposed Settlement) |
| Regulatory capital structure: | | | |
| Common equity | 49.1% | | 49.0% |
| Long-term debt | 46.3% | | 46.8% |
| Preferred equity | 4.6% | | 4.2% |
| After-tax weighted-average cost of capital: | | | |
| Marshalltown (ROE - 11.0%) | 8.1% | | 8.0% |
| Emery (ROE - 12.23%) | 8.7% | | 8.6% |
| Whispering Willow - East (ROE - 11.7%) | 8.4% | | 8.3% |
| Other (ROE - 9.6%) (a) | 7.4% | | 7.3% |
| Retail electric rate base (b) | $3.8 billion | | $4.0 billion |
| |
| (a) | AverageOther ROE of 9.6% for interim rates reflects the application of double leverage. Prior to application of double leverage, Other ROE for interim rates was 10.0%. Other ROE of 9.6% for final rates (based on proposed settlement) does not reflect the application of double leverage. |
| |
| (b) | The retail electric rate base is calculated using a 13-month average.for interim rates includes post-test year capital additions placed in service prior to the rate filing in April 2017, including Marshalltown and the Franklin County wind farm. The retail electric rate base for final rates (based on proposed settlement) also includes deferred tax assets for production tax credits generated by Whispering Willow - East and post-test year capital additions placed in service by September 30, 2017. |
The May 2016 retail base rate filing also reflected the impactRefer to Note 2 for discussion of the anticipated transferIPL’s initial request, interim rates and proposed settlement, as well as details for a write-down of ATC from WPL to Alliant Energy or one of its subsidiariesregulatory assets recorded by December 31, 2016 as discussed in “Other Future Considerations,” approved changes to depreciation rates pursuant to a September 2016 PSCW order, continued escrow treatment of transmission charges and application of AFUDC rates to 100% of the retail portion of the CWIP balances for the Riverside expansion. If WPL does not complete the anticipated transfer of ATC to Alliant Energy or one of its subsidiaries by December 31, 2016, WPL would expect to defer the revenue requirement impacts until such time the transfer occurs or until WPL’s next base rate case filing. The filing also assumed deferral of any potential changes in revenue requirement due to anticipated increases in WPL’s ownership share of Columbia resulting from the Riverside expansion agreements WPL previously entered into with neighboring utilities.
WPL currently expects a decision from the PSCW regarding this base rate filingIPL in the fourththird quarter of 2016.2017 related to the proposed settlement.
WPL’s Retail Fuel-related Rate Filings - Refer to Note 2 for discussion of WPL’s retail fuel-related rate filings for the 20152016, 2017 and 20162018 Test Years.
WPL’s Depreciation StudyPlanned Utility Rate Reviews -
ReferIPL’s Retail Gas Rate Review (2017 Test Year) - IPL currently expects to Note 1(c)make a retail gas rate filing in the second quarter of 2018 based on a 2017 historical Test Year. The key drivers for discussionthe anticipated filing include recovery of a September 2016 PSCW order approving updated depreciationcapital projects. Any rate changes are expected to be implemented in two phases with interim rates for WPL effective January 1, 2017 as a result of a recently completed depreciation study. The September 2016 PSCW order also authorized WPL to recoverapproximately 10 days after the remaining net book value of Edgewater Unit 4 over a 10-year period beginningfiling and final rates effective approximately 10 months after the later of the retirement date of the EGU or January 1, 2019.filing date.
IPL’s Tax Benefit RidersWPL’s Retail Electric and Gas Rate Review (2019/2020 Test Period) - - PursuantWPL currently expects to make a 2015 IUB order, IPL established tax benefit riders regulatory liabilities in 2014 to record additional tax savings related to repair expenditures and cost of removal expenditures on partial dispositions that were previously capitalized to help offset the impact of future rate increases on IPL’s retail electric and gas customers. In November 2016, IPL filed a tariff withrate filing in the IUBsecond quarter of 2018 for the 2019/2020 Test Period. Any rate changes granted from this request are expected to facilitate refunds of approximately $75 million of the related tax benefits to IPL’s retail electric and gas customers in 2017. IPLbe effective on January 1, 2019. WPL currently expects a decision from the IUB in December 2016.PSCW regarding this rate filing by the end of 2018.
ENVIRONMENTAL MATTERS
The environmental matters summary included in the 20152016 Form 10-K has not changed materially, 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 the Sheboygan Falls Energy Center in Sheboygan County, Wisconsin. The compliance deadline for Sheboygan County to meet the 2008 Ozone NAAQS Rule was July 2016. Alliant Energy and WPL are currently in compliance with applicable requirements resulting from the 2008 Ozone NAAQS rule.materially.
LEGISLATIVE MATTERS
The legislative matters summary included in the 20152016 Form 10-K has not changed materially.
LIQUIDITY AND CAPITAL RESOURCES
The liquidity and capital resources matters summary included in the 20152016 Form 10-K has not changed materially, except as described below.
Liquidity Position - At September 30, 2016,2017, Alliant Energy had $85$9 million of cash and cash equivalents, $762$570 million ($74139 million at the parent company, $300$256 million at IPL and $388$175 million at WPL) of available capacity under the revolving credit facilitiesfacility and $179$2 million of available capacity at IPL under its sales of accounts receivable program.
Capital StructuresStructure - Capital structures at September 30, 20162017 were as follows (dollars in millions)(Long-term Debt (including current maturities) (LD); Short-term Debt (SD); Common Equity (CE); IPL’s Preferred Stock (PS)):
|
| | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy (Consolidated) | | IPL | | WPL |
| Common equity |
| $3,859.1 |
| | 46 | % | |
| $2,137.9 |
| | 48 | % | |
| $1,813.8 |
| | 54 | % |
| Preferred stock of IPL | 200.0 |
| | 2 | % | | 200.0 |
| | 4 | % | | — |
| | — | % |
| Noncontrolling interest | — |
| | — | % | | — |
| | — | % | | 18.5 |
| | 1 | % |
| Long-term debt (incl. current maturities) | 4,130.9 |
| | 49 | % | | 2,153.1 |
| | 48 | % | | 1,534.9 |
| | 45 | % |
| Short-term debt | 238.3 |
| | 3 | % | | — |
| | — | % | | 11.8 |
| | — | % |
| |
| $8,428.3 |
| | 100 | % | |
| $4,491.0 |
| | 100 | % | |
| $3,379.0 |
| | 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 | 654.0 |
| | 695.3 |
| | 256.5 |
| | 318.0 |
| | 439.3 |
| | 375.9 |
|
| Investing activities | (771.8 | ) | | (613.0 | ) | | (435.4 | ) | | (319.4 | ) | | (326.7 | ) | | (259.6 | ) |
| Financing activities | 196.7 |
| | — |
| | 252.1 |
| | 95.5 |
| | (107.4 | ) | | (127.3 | ) |
| Net increase (decrease) | 78.9 |
| | 82.3 |
| | 73.2 |
| | 94.1 |
| | 5.2 |
| | (11.0 | ) |
| Cash and cash equivalents, September 30 |
| $84.7 |
| |
| $139.2 |
| |
| $77.7 |
| |
| $99.4 |
| |
| $5.6 |
| |
| $35.7 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | 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 | 883.4 |
| | 654.0 |
| | 470.6 |
| | 256.5 |
| | 361.2 |
| | 439.3 |
|
| Investing activities | (1,072.3 | ) | | (771.8 | ) | | (493.6 | ) | | (435.4 | ) | | (470.2 | ) | | (326.7 | ) |
| Financing activities | 189.9 |
| | 196.7 |
| | 24.4 |
| | 252.1 |
| | 108.0 |
| | (107.4 | ) |
| Net increase (decrease) | 1.0 |
| | 78.9 |
| | 1.4 |
| | 73.2 |
| | (1.0 | ) | | 5.2 |
|
| Cash and cash equivalents, September 30 |
| $9.2 |
| |
| $84.7 |
| |
| $4.7 |
| |
| $77.7 |
| |
| $3.2 |
| |
| $5.6 |
|
Operating Activities -
Nine Months Ended September 30, 20162017 vs. Nine Months Ended September 30, 20152016 - The following items contributed to increased (decreased) operating activity cash flows for the nine months ended September 30, 20162017 compared to the same period in 20152016 (in millions):
| | | | Alliant Energy | | IPL | | WPL | Alliant Energy | | IPL | | WPL |
| Changes in the level of cash proceeds from IPL’s sales of accounts receivable | |
| $95 |
| |
| $95 |
| |
| $— |
|
| Higher collections at IPL due to interim retail electric base rate increase effective April 13, 2017 | | 54 |
| | 54 |
| | — |
|
| Higher collections at WPL due to new retail electric and gas base rates in 2017 | | 48 |
| | — |
| | 48 |
|
| Changes in cash collateral balances |
| ($29 | ) | |
| $— |
| |
| $— |
| 38 |
| | — |
| | — |
|
| Changes in levels of gas stored underground and prepaid gas costs | (20 | ) | | (10 | ) | | (10 | ) | |
| Changes in levels of production fuel | | 11 |
| | 23 |
| | (12 | ) |
| Timing of WPL’s fuel-related cost recoveries from customers | | (49 | ) | | — |
| | (49 | ) |
| Changes in income taxes paid/refunded | (8 | ) | | (30 | ) | | 30 |
| (3 | ) | | 13 |
| | (40 | ) |
| Timing of WPL’s fuel-related cost recoveries from customers | 25 |
| | — |
| | 25 |
| |
| Changes in levels of production fuel | 10 |
| | (12 | ) | | 22 |
| |
| Other | (19 | ) | | (10 | ) | | (4 | ) | |
| Other (primarily due to other changes in working capital) | | 35 |
| | 29 |
| | (25 | ) |
| |
| ($41 | ) | |
| ($62 | ) | |
| $63 |
|
| $229 |
| |
| $214 |
| |
| ($78 | ) |
Investing Activities -
Nine Months Ended September 30, 20162017 vs. Nine Months Ended September 30, 20152016 - The following items contributed to increased (decreased) investing activity cash flows for the nine months ended September 30, 20162017 compared to the same period in 20152016 (in millions):
|
| | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| Proceeds from IPL’s Minnesota distribution asset sales in 2015 |
| ($138 | ) | |
| ($138 | ) | |
| $— |
|
| Higher utility construction expenditures | (65 | ) | | (4 | ) | | (61 | ) |
| Proceeds from the liquidation of company-owned life insurance policies | 31 |
| | 19 |
| | — |
|
| Other | 13 |
| | 7 |
| | (6 | ) |
| |
| ($159 | ) | |
| ($116 | ) | |
| ($67 | ) |
|
| | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| Higher utility construction expenditures (a) |
| ($166 | ) | |
| ($34 | ) | |
| ($147 | ) |
Non-regulated wind investment in Oklahoma (Refer to Note 5(a) for details) | (98 | ) | | — |
| | — |
|
| Proceeds from the liquidation of company-owned life insurance policies in 2016 | (31 | ) | | (19 | ) | | — |
|
| Other | (6 | ) | | (5 | ) | | 3 |
|
| |
| ($301 | ) | |
| ($58 | ) | |
| ($144 | ) |
| |
| (a) | Largely due to higher expenditures for WPL’s West Riverside facility, IPL’s and WPL’s electric and gas distribution systems and IPL’s expansion of wind generation, partially offset by lower expenditures for IPL’s Marshalltown facility and WPL’s scrubber and baghouse at Edgewater Unit 5. |
Construction and Acquisition Expenditures - Construction and acquisition expenditures for 20162017 through 20202021 are currently anticipated as follows (in millions). Cost estimates represent Alliant Energy’s, IPL’s and WPL’s estimated portion of total escalated construction expenditures and exclude AFUDC and capitalized interest, if applicable. Such estimates reflect impacts to Alliant Energy’s and WPL’s capital expenditures resulting from the intent to exercise purchase options by certain electric cooperatives for a partial ownership interest in theWest Riverside, expansion, as well as additional capital expenditures related to Columbia that WPL is expected to incur related to agreements entered into with Wisconsin Public Service Corporation and Madison Gas and Electric Company. Refer to “Strategic Overview” for further discussion of certain key projects impacting construction and acquisition plans related to the utility business. |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2016 | 2017 | 2018 | 2019 | 2020 | | 2016 | 2017 | 2018 | 2019 | 2020 | | 2016 | 2017 | 2018 | 2019 | 2020 |
| Generation: | | | | | | | | | | | | | | | | | |
| Renewable projects |
| $100 |
|
| $140 |
|
| $345 |
|
| $340 |
|
| $325 |
| |
| $70 |
|
| $175 |
|
| $325 |
|
| $270 |
|
| $115 |
| |
| $30 |
|
| $— |
|
| $20 |
|
| $70 |
|
| $210 |
|
| Riverside expansion | 75 |
| 295 |
| 180 |
| 85 |
| 5 |
| | — |
| — |
| — |
| — |
| — |
| | 75 |
| 295 |
| 180 |
| 85 |
| 5 |
|
| Marshalltown | 185 |
| 20 |
| — |
| — |
| — |
| | 185 |
| 20 |
| — |
| — |
| — |
| | — |
| — |
| — |
| — |
| — |
|
| Other | 270 |
| 235 |
| 185 |
| 180 |
| 160 |
| | 90 |
| 115 |
| 105 |
| 105 |
| 80 |
| | 180 |
| 120 |
| 80 |
| 75 |
| 80 |
|
| Distribution: | | | | | | | | | | | | | | | | | |
| Electric systems | 305 |
| 425 |
| 440 |
| 475 |
| 475 |
| | 175 |
| 230 |
| 255 |
| 285 |
| 295 |
| | 130 |
| 195 |
| 185 |
| 190 |
| 180 |
|
| Gas systems | 170 |
| 110 |
| 145 |
| 100 |
| 220 |
| | 120 |
| 70 |
| 75 |
| 60 |
| 160 |
| | 50 |
| 40 |
| 70 |
| 40 |
| 60 |
|
| Other | 105 |
| 155 |
| 120 |
| 100 |
| 100 |
| | 35 |
| 40 |
| 35 |
| 25 |
| 25 |
| | 20 |
| 15 |
| 10 |
| 10 |
| 10 |
|
| |
| $1,210 |
|
| $1,380 |
|
| $1,415 |
|
| $1,280 |
|
| $1,285 |
| |
| $675 |
|
| $650 |
|
| $795 |
|
| $745 |
|
| $675 |
| |
| $485 |
|
| $665 |
|
| $545 |
|
| $470 |
|
| $545 |
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| | 2017 | 2018 | 2019 | 2020 | 2021 | | 2017 | 2018 | 2019 | 2020 | 2021 | | 2017 | 2018 | 2019 | 2020 | 2021 |
| Generation: | | | | | | | | | | | | | | | | | |
| Renewable projects |
| $180 |
|
| $655 |
|
| $850 |
|
| $140 |
|
| $85 |
| |
| $210 |
|
| $565 |
|
| $725 |
|
| $50 |
|
| $85 |
| |
| $— |
|
| $90 |
|
| $125 |
|
| $90 |
|
| $— |
|
| West Riverside | 235 |
| 225 |
| 90 |
| 10 |
| — |
| | — |
| — |
| — |
| — |
| — |
| | 235 |
| 225 |
| 90 |
| 10 |
| — |
|
| Marshalltown | 30 |
| — |
| — |
| — |
| — |
| | 30 |
| — |
| — |
| — |
| — |
| | — |
| — |
| — |
| — |
| — |
|
| Other | 220 |
| 140 |
| 95 |
| 150 |
| 140 |
| | 85 |
| 60 |
| 50 |
| 80 |
| 75 |
| | 135 |
| 80 |
| 45 |
| 70 |
| 65 |
|
| Distribution: | | | | | | | | | | | | | | | | | |
| Electric systems | 480 |
| 440 |
| 435 |
| 485 |
| 560 |
| | 290 |
| 260 |
| 250 |
| 290 |
| 345 |
| | 190 |
| 180 |
| 185 |
| 195 |
| 215 |
|
| Gas systems | 130 |
| 130 |
| 95 |
| 90 |
| 115 |
| | 90 |
| 75 |
| 50 |
| 55 |
| 65 |
| | 40 |
| 55 |
| 45 |
| 35 |
| 50 |
|
| Other | 210 |
| 130 |
| 110 |
| 125 |
| 100 |
| | 30 |
| 25 |
| 20 |
| 25 |
| 20 |
| | 10 |
| 10 |
| 10 |
| 10 |
| 10 |
|
| |
| $1,485 |
|
| $1,720 |
|
| $1,675 |
|
| $1,000 |
|
| $1,000 |
| |
| $735 |
|
| $985 |
|
| $1,095 |
|
| $500 |
|
| $590 |
| |
| $610 |
|
| $640 |
|
| $500 |
|
| $410 |
|
| $340 |
|
Financing Activities -
Nine Months Ended September 30, 20162017 vs. Nine Months Ended September 30, 20152016 - The following items contributed to increased (decreased) financing activity cash flows for the nine months ended September 30, 20162017 compared to the same period in 20152016 (in millions):
|
| | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| Proceeds from the issuance of IPL’s 3.7% senior debentures in September 2016 |
| $300 |
| |
| $300 |
| |
| $— |
|
| Payments to retire IPL’s 3.3% senior debentures in June 2015 | 150 |
| | 150 |
| | — |
|
| Net changes in the amount of commercial paper outstanding | 111 |
| | — |
| | (8 | ) |
| Payments to retire WPL’s pollution control revenue bonds in the third quarter of 2015 | 31 |
| | — |
| | 31 |
|
| Proceeds from the issuance of IPL’s 3.4% senior debentures in August 2015 | (250 | ) | | (250 | ) | | — |
|
| Proceeds from Alliant Energy’s at-the-market offering program in 2015 | (133 | ) | | — |
| | — |
|
| Lower capital contributions from IPL’s parent company, Alliant Energy | — |
| | (35 | ) | | — |
|
| Other | (12 | ) | | (8 | ) | | (3 | ) |
| |
| $197 |
| |
| $157 |
| |
| $20 |
|
|
| | | | | | | | | | | |
| | Alliant Energy | | IPL | | WPL |
| Lower net proceeds from issuance of long-term debt |
| ($300 | ) | |
| ($300 | ) | |
| $— |
|
| Net changes in the amount of commercial paper and other short-term borrowings outstanding | 203 |
| | 44 |
| | 180 |
|
| Higher net proceeds from common stock issuances | 123 |
| | — |
| | — |
|
| Higher capital contributions from IPL’s and WPL’s parent company, Alliant Energy | — |
| | 35 |
| | 40 |
|
| Other (includes higher dividend payments in 2017) | (33 | ) | | (7 | ) | | (5 | ) |
| |
| ($7 | ) | |
| ($228 | ) | |
| $215 |
|
FERC Financing Authorization - After issuing $300 million of long-termPursuant to a 2015 FERC authorization, IPL’s current remaining authority for short-term debt securities inoutstanding at any one time (including borrowings from its parent) is $256 million as of September 2016, IPL currently has remaining authority to issue up to $250 million of long-term debt securities in aggregate through December 31, 2017 pursuant to a December 2015 FERC order.30, 2017.
State Regulatory Financing AuthorizationsAuthorization - In September 2016,August 2017, WPL received authorization from the PSCW to have up to $400 million of short-term borrowings and/or letters of credit outstanding at any time through the earlier of the expiration date of WPL’s credit facility agreement (including extensions) or December 2024.
WPL previously had remaining authority to issue up to $300 million of long-term debt securities in aggregate in 2016 pursuant to a November 2014 PSCW order. As a result of the Moody’s Investors Service’s credit ratings changes in July 2016 discussed below, WPL no longer has authority to issue long-term debt securities in 2016. WPL currently has no plans to issue long-term debt securities in 2016.
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 was distributed in May 2016. After the two-for-one common stock split, the targeted 2016 quarterly common stock dividend payment is $0.29375 per share. Refer to “Executive SummaryOverview” for discussion of expected common stock dividends in 2017.2018.
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 nine months ended September 30, 2016.2017. Refer to “Executive SummaryOverview” for discussion of expected issuances of common stock issuancesin 2018.
Short-term Debt - In July 2017, AEF entered into a $95 million, 364-day variable-rate term loan credit agreement (with Alliant Energy as guarantor) related to the acquisition of a non-regulated wind farm located in Oklahoma. Refer to Note 7(a) for further discussion.
In August 2017, Alliant Energy, IPL and capital contributionsWPL entered into a single new credit facility agreement, which expires in 2017.August 2022. The new credit facility agreement includes financial covenants similar to those that were included in the previous credit facility agreements. As of September 30, 2017, the short-term borrowing capacity totaled $1 billion ($300 million for Alliant Energy at the parent company level, $300 million for IPL and $400 million for WPL). There are currently 13 lenders that participate in the credit facility, with aggregate respective commitments ranging from $20 million to $130 million. The credit facility includes a $100 million letter of credit commitment and $50 million swingline commitment, which are available to each of Alliant Energy, IPL and WPL. Subject to certain conditions, Alliant Energy, IPL and WPL may each reallocate and change its initial sublimit up to $500 million, $400 million and $500 million, respectively, within the $1 billion total commitment. Subject to certain conditions, Alliant Energy, IPL and WPL may exercise two extension options, each extending the maturity date by one year. The credit facility has a provision to expand the facility size up to an additional $300 million, for a potential total commitment of $1.3 billion, subject to lender approval for Alliant Energy and subject to lender and regulatory approvals for IPL and WPL.
Long-term Debt - Refer to Note 7(b) for discussion of variousWPL’s issuance of $300 million of debentures in October 2017 and $40 million of commercial paper outstanding at September 30, 2017 classified as long-term debt issuancesat Alliant Energy and retirements.IPL. Refer to “Executive SummaryOverview” for discussion of expected issuances of long-term debt in 2017.
Impact of Credit Ratings on Liquidity and Collateral Obligations -
Ratings Triggers - In July 2016, Moody’s Investors Service changed Alliant Energy’s and IPL’s corporate/issuer and senior unsecured long-term debt credit ratings from A3 to Baa1. IPL’s preferred stock credit rating also changed from Baa2 to Baa3. In addition, WPL’s corporate/issuer and senior unsecured long-term debt credit ratings changed from A1 to A2. Alliant Energy’s, IPL’s and WPL’s outlooks also changed from negative to stable. Alliant Energy’s, IPL’s and WPL’s commercial paper ratings remained unchanged. These credit ratings changes are not expected to have a material impact on Alliant Energy’s, IPL’s, and WPL’s liquidity or collateral obligations.2018.
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 cash equity ownership interest in a non-regulated wind farm and 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 7(b), 13(a)12(a) and 13(b)12(b).
OTHER MATTERS
Market Risk Sensitive Instruments and Positions - The market risks summary included in the 20152016 Form 10-K has not changed materially, except as described below.materially.
Commodity Price - Refer to Note 2 for discussion of WPL’s retail fuel-related rate filings for the 20152016, 2017 and 20162018 Test 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 - The summary of critical accounting policies and estimates included in the 20152016 Form 10-K has not changed materially, except as described below.
Contingencies - In the first quarter of 2017, all warranty periods and performance guarantees expired, and all outstanding warranty claims were resolved, related to Alliant Energy’s past divestiture of RMT. Refer to Note 12(d) for further discussion.
Regulatory Assets and Regulatory Liabilities - Refer to Note 2 for discussion of a write-down of regulatory assets in the third quarter of 2017 related to the recovery of Sutherland Units 1 and 3, and asset retirement obligations deemed no longer probable of recovery in future rates, due to the proposed IPL electric rate review settlement.
Long-Lived Assets -
Regulated Operations -
Generating Units Subject to Early Retirement - Refer to Note 2 for discussion of IPL’s June 2017 retirement of Sutherland Units 1 and 3, and a write-down of regulatory assets in the third quarter of 2017 related to the recovery of these EGUs due to the proposed IPL electric rate review settlement.
Alliant Energy and WPL concluded that Edgewater Unit 4 met the criteria to be considered probable of abandonment as of September 30, 2017. WPL is currently allowed a full recovery of and a full return on this EGU from both its retail and wholesale customers, and as a result, Alliant Energy and WPL concluded that no impairment was required as of September 30, 2017.
Non-regulated Operations -
Franklin County Wind Farm - On a quarterly basis, Alliant Energy evaluates if there are any impairment indicators present related to the Franklin County wind farm. Based on an evaluation of the strategic options for the Franklin County wind farm performed in the third quarter of 2016, Alliant Energy concluded, as of September 30, 2016, it was probable the Franklin County wind farm will be transferred to IPL. As a result, Alliant Energy performed an impairment analysis of such assets in the third quarter of 2016. Refer to Note 3 for discussion of the impairment analysis, which resultedtransfer of the Franklin County wind farm assets from AEF to IPL in non-cash, pre-tax asset valuation charges of $86 million recorded by Alliant Energy in the third quarter of 2016.April 2017.
Other Future Considerations - The summary of other future considerations included in the 20152016 Form 10-K has not changed materially, except as described below, and as discussed earlier in MDA and the Notes in Item 1.
Electric Transmission Service Expense - IPL and WPL currently receive substantially all their transmission services from ITC and ATC, respectively. Due to the formula rates used by ITC and ATC to charge their customers and possible future changes to these rates as discussed below, there is uncertainty regarding the long-term trends of IPL’s and WPL’s future electric transmission service expense. Alliant Energy, IPL and WPL currently anticipate future changes to their electric transmission service expense as follows:
20172018 Electric Transmission Service Expense - Alliant Energy IPL and WPLIPL currently estimate their total electric transmission service expense in 2018 will be higher than the comparable expense in 2017 by approximately $10 million and $40 million, respectively, as a result of the timing of the MISO transmission owner return on equity complaint refunds received in 2017 and anticipated to be received in 2018, and the related impacts on IPL’s transmission cost rider. WPL currently estimates its total electric transmission service expense in 2018 will be lower than the comparable expense in 20162017 by approximately $20$30 million $15 milliondue to the return of a regulatory liability balance in the escrow account for its electric transmission service expense. WPL’s 2017 and $5 million, respectively. Such decreases are primarily due to2018 retail cost estimates were approved in WPL’s retail electric rate review for the 2017/2018 Test Period, and exclude the impacts of an expected lower return on equity and associated refunds resulting from the MISO transmission owner return on equity complaints. Alliant Energy’s, IPL’scomplaints received in 2017 and WPL’s estimated 2017 electric transmission service expense remains subjectanticipated to change pending the IUB’s approval of IPL’s 2017 transmission rates and the PSCW’s final decisionbe received in WPL’s retail electric rate case for the 2017/2018 Test Period.2018.
MISO Transmission Owner Return on Equity Complaints - ARefer to Note 2 for discussion of refunds that Alliant Energy, IPL and WPL received during the nine months ended September 30, 2017 related to a complaint previously filed by 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. 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, for the refund period from November 12, 2013 through February 11, 2015. In October 2016, in response to MISO’s and the MISO transmission owners’ request, FERC ordered the related refunds be issued by July 2017.
In June 2016, a FERC administrative law judge issued an initial decision regarding the second complaint and recommended a base return on equity of 9.70%, excluding any incentive adders granted by FERC, for the refund period from February 12, 2015 through May 11, 2016. A final decision from FERC on the second complaint is currently expected in the first half of 2017.
Alliant Energy and WPL have realized a cumulative $24 million of reductions in the amount of equity income from ATC as a result of the two complaints through September 30, 2016, including $9 million during the nine months ended September 30, 2016. These reductions are based upon a 10.32% base return on equity for the first complaint period and assume a 10.2% return on equity (9.70% base return on equity plus 50 basis point incentive adder approved in a previous FERC order) for the second complaint period and thereafter.
Attachment “O” Rates - The annual transmission service rates that ITC or ATC charges their customers are calculated each calendar year using a FERC-approved cost of service formula rate referred to as Attachment “O.” Because Attachment “O” is a FERC-approved formula rate, ITC and ATC can implement new rates each calendar year without filing a request with FERC. However, new rates are subject to challenge by either FERC or customers. If the rates proposed by ITC or ATC are determined by FERC to be unjust or unreasonable or another mechanism is determined by FERC to be just and reasonable, ITC’s or ATC’s rates would change accordingly.
2017 Rates Charged by ATC to WPL - In October 2016, ATC shared with its customers the Attachment “O” rate it proposes to charge them in 2017 for electric transmission services. The proposed rate was based on ATC’s estimated net revenue requirement for 2017 as well as a true-up adjustment credit related to amounts that ATC over-recovered from its customers in 2015 and expects to over-recover from its customers in 2016. Amounts billed under the 2017 Attachment “O” rate are currently expected to be approximately 5% lower than the amounts ATC is charging its customers in 2016. The proposed rate for 2017 reflects a 10.82% return on equity for the impact of FERC’s September 2016 order to lower the base return on equity for MISO transmission owners to 10.32% discussed above, plus a 50 basis point incentive return on equity adder based on ATC’s participation in MISO.
2017 Rates Charged by ITC to IPL - In October 2016, ITC filed with MISO the Attachment “O” rate it proposes to charge its customers in 2017 for electric transmission services. The proposed rate was based on ITC’s estimated net revenue requirement for 2017 as well as a true-up adjustment related to amounts that ITC under-recovered from its customers in 2015. Amounts billed under the 2017 Attachment “O” rate are currently expected to be approximately 4% higher than the amounts ITC is charging its customers in 2016. The proposed rate for 2017 reflects an 11.32% return on equity for the impact of FERC’s September 2016 order to lower the base return on equity for MISO transmission owners to 10.32% discussed above, plus a 50 basis point incentive return on equity adder based on ITC’s participation in MISO, as well as a 50 basis point incentive return on equity adder for ITC being an independent transmission company. The proposed rate for 2017 also reflects the impacts of bonus tax depreciation deductions for 2015, 2016 and 2017 in response to FERC’s March 2016 order discussed below.
ITC Bonus Tax Depreciation Deductions - In December 2015, IPL filed a complaint with FERC regarding ITC’s Attachment “O” rate pursuant to FERC-approved Attachment “O” protocols. IPL’s complaint alleged that 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 effective January 1, 2015 to simulate taking bonus tax depreciation deductions for 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. In June 2016, FERC issued an order rejecting ITC’s and IPL’s requests. If ITC does not take advantage of bonus tax depreciation deductions in 2016 or in future years, IPL retains the right under Attachment “O” protocols to challenge ITC’s decision if IPL deems that decision to be imprudent. Alliant Energy and IPL are currently reviewing ITC’s estimated impacts through the FERC-approved Attachment “O” protocols.
Electric Transmission Cost Recovery - Any changes in IPL’s electric transmission service costs billed by ITC to IPL are expected to be passed on to IPL’s Iowa retail electric customers through the transmission cost recovery rider. The difference between WPL’s actual electric transmission service expense incurred and amounts collected from customers as electric revenues in 2017 is expected to be recorded as electric transmission service expense with an offsetting amount recorded to a regulatory asset or regulatory liability due to the escrow treatment proposed by WPL in its 2017/2018 Test Period retail electric rate case. Based on IPL’s and WPL’s electric transmission cost recovery mechanisms, IPL and WPL currently do not expect that any changes to electric transmission service costs billed by ITC and ATC will have a material impact on their financial condition and results of operations. IPL and WPL could have a material impact on their cash flows depending on the final timing of refunds resulting from the MISO return on equity complaints, and the subsequent timing of the refunds being credited to their customers.
WPL’s Future Transfer of Investment in ATC - In June 2016, WPL received an order from the PSCW requiring WPL to transfer its investment in ATC to Alliant Energy or an Alliant Energy subsidiary by December 31, 2022. In addition, WPL is required to obtain PSCW approval prior to transferring any additional capital or assets to ATC. WPL is currently evaluating the impacts of the June 2016 PSCW order on its results of operations and financial condition. Subsequent to WPL transferring its investment in ATC, future contributions to, and equity earnings and dividends from, the investment in ATC would occur at the entity to which the investment in ATC was transferred and would not be reflected in WPL’s consolidated financial statements. As a result, WPL’s earnings and cash flows from operations are expected to decrease subsequent to the transfer. This transfer is not expected to impact Alliant Energy’s consolidated financial statements.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 September 30, 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 September 30, 2016.2017.
There was no change in Alliant Energy’s, IPL’s and WPL’s internal control over financial reporting that occurred during the quarter ended September 30, 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 September 30, 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) | | Share | | Publicly Announced Plan | | Be Purchased Under the Plan (a) | | Purchased (a) | | Share | | Publicly Announced Plan | | Yet Be Purchased Under the Plan (a) |
| July 1 through July 31 | | 3,751 |
| |
| $39.36 |
| | — | | N/A | | 2,299 |
| |
| $39.81 |
| | — | | N/A |
| August 1 through August 31 | | 3,372 |
| | 38.93 |
| | — | | N/A | | 3,727 |
| | 41.93 |
| | — | | N/A |
| September 1 through September 30 | | 92 |
| | 38.57 |
| | — | | N/A | | 337 |
| | 42.45 |
| | — | | N/A |
| | | 7,215 |
| | 39.15 |
| | — | | | 6,363 |
| | 41.19 |
| | — | |
| |
| (a) | All shares were 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. |
Refer to Note 6 for discussion of IPL’s and WPL’s dividend restrictions and limitations on distributions to their parent company, Alliant Energy.
ITEM 6. EXHIBITS
The following Exhibits for Alliant Energy, IPL and WPL are listed in the Exhibit Index, which isfiled herewith or incorporated herein by reference. |
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| 101.INS | | XBRL Instance Document |
| 101.SCH | | XBRL Taxonomy Extension Schema Document |
| 101.CAL | | XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.LAB | | XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE | | XBRL Taxonomy Extension Presentation Linkbase Document |
| 101.DEF | | XBRL Taxonomy Extension Definition Linkbase Document |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Alliant Energy Corporation, Interstate Power and Light Company and Wisconsin Power and Light Company have each duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on the 4th3rd day of November 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 TreasurerController |
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 TreasurerController |
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 TreasurerController |
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 or incorporated herein by reference.
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Exhibit Number | | Description |
4.1 | | Officer’s Certificate, dated as of September 15, 2016, creating IPL’s 3.70% Senior Debentures due September 15, 2046 (incorporated by reference to Exhibit 4.1 to IPL’s Form 8-K, filed September 15, 2016 (File No. 1-4117)) |
10.1 | | Term Loan Credit Agreement, dated as of October 7, 2016, among AEF, Alliant Energy, JPMorgan Chase Bank, N.A. and the lender parties set forth therein (incorporated by reference to Exhibit 10.1 to Alliant Energy’s Form 8-K, filed October 7, 2016 (File No. 1-9894)) |
12.1 | | Ratio of Earnings to Fixed Charges for Alliant Energy |
12.2 | | Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Dividend Requirements for IPL |
12.3 | | Ratio of Earnings to Fixed Charges for WPL |
31.1 | | Certification of the Chairman, President and CEO for Alliant Energy |
31.2 | | Certification of the Senior Vice President and CFO for Alliant Energy |
31.3 | | Certification of the Chairman and CEO for IPL |
31.4 | | Certification of the Senior Vice President and CFO for IPL |
31.5 | | Certification of the Chairman and CEO for WPL |
31.6 | | Certification of the Senior Vice President and CFO for WPL |
32.1 | | Written Statement of the CEO and CFO Pursuant to 18 U.S.C.§1350 for Alliant Energy |
32.2 | | Written Statement of the CEO and CFO Pursuant to 18 U.S.C.§1350 for IPL |
32.3 | | Written Statement of the CEO and CFO Pursuant to 18 U.S.C.§1350 for WPL |
101.INS* | | XBRL Instance Document |
101.SCH* | | XBRL Taxonomy Extension Schema Document |
101.CAL* | | XBRL Taxonomy Extension Calculation Linkbase Document |
101.LAB* | | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* | | XBRL Taxonomy Extension Presentation Linkbase Document |
101.DEF* | | XBRL Taxonomy Extension Definition Linkbase Document |
* 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 and nine months ended September 30, 2016 and 2015; (ii) Alliant Energy’s, IPL’s and WPL’s Condensed Consolidated Balance Sheets as of September 30, 2016 and December 31, 2015; (iii) Alliant Energy’s, IPL’s and WPL’s Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015; and (iv) the Combined Notes to Condensed Consolidated Financial Statements.
