UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No.     )

Filed by the Registrant  x

Filed by a Party other than the Registrant  ¨

Check the appropriate box:

Wisconsin Power and Light Company

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

Notes:

Reg. (S) 240.14a-101.

SEC 1913 (3-99)

YOUR VOTE IS IMPORTANT

Wisconsin

Power and Light

Company

NOTICEOF 2003 ANNUAL MEETING

PROXY STATEMENTAND

2002 ANNUAL REPORT

WISCONSIN POWER AND LIGHT COMPANY

ANNUAL MEETING OF SHAREOWNERS

SHAREOWNER INFORMATION NUMBERS

NOTICE OF ANNUAL MEETING AND PROXY STATEMENT

Dear Wisconsin Power and Light Company Shareowner:

On Thursday, June 5, 2003,Wednesday, May 25, 2005, Wisconsin Power and Light Company (the “Company”) will hold its 20032005 Annual Meeting of Shareowners at the officeoffices of Alliant Energy Corporation, 4902 North Biltmore Lane, SeineNile Meeting Room, Madison, Wis. The meeting will begin at 1:2:00 p.m. Central Daylight Savings Time.

Only the sole common stock shareowner, Alliant Energy Corporation, and preferred shareowners who owned stock at the close of business on April 15, 2003,5, 2005, may vote at this meeting. All shareowners are requested to be present at the meeting in person or by proxy so that a quorum may be ensured. At the meeting, the Company’s shareowners will:

The Board of Directors of the Company presently knows of no other business to come before the meeting.

Please sign and return the enclosed proxy card as soon as possible.

The Company’s 20022004 Annual Report appears as Appendix BA to this proxy statement. The proxy statement and Annual Report have been combined into a single document to improve the effectiveness of our financial communication and to reduce costs, although the Annual Report does not constitute a part of the proxy statement.

Any Wisconsin Power and Light Company preferred shareowner who desires to receive a copy of the Alliant Energy Corporation 20022004 Annual Report, to ShareownersNotice of Annual Meeting and Proxy Statement may do so by calling the Company’s Shareowner Services Department at the Shareowner Information Numbersshareowner information numbers shown at the front of this proxy statement or writing to the Company at the address shown above.

Dated and mailed on or about April 22, 200313, 2005.

TABLE OF CONTENTS

QUESTIONS AND ANSWERS

Attendance at the Annual Meeting will not cause your previously appointed proxy to be revoked unless you specifically so request in writing.

On June 12, 2002, the Board of Directors of the Company, upon the recommendation of the Audit Committee, dismissed Arthur Andersen LLP as the Company’s independent auditors and contracted with Deloitte & Touche LLP to serve as its independent auditors for 2002. Arthur Andersen’s reports on the Company’s consolidated financial statements for the years ended Dec. 31, 2002, and Dec. 31, 2000, did not contain an adverse opinion, disclaimer of opinion or qualification or modification as to uncertainty, audit scope or accounting principles. During the years ended Dec. 31, 2001, and Dec. 31, 2000, and the subsequent interim period, there were no disagreements between the Company and Arthur Andersen on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedures, which disagreements, if not resolved to the satisfaction of the accounting firm, would have caused it to make a reference to the subject matter of such disagreements in connection with its reports.

ELECTION OF DIRECTORS

Three DirectorsAt the Annual Meeting, three directors will be elected this year for terms expiring in 2006.2008. The nominees for election as recommended by the Nominating and Governance Committee ofand selected by the Company’s Board of Directors are: ErrollWilliam D. Harvey, Singleton B. Davis, Jr., Robert W. SchlutzMcAllister and Wayne H. Stoppelmoor.Anthony R. Weiler. Each of the nominees is currently serving as a Directordirector of the Company. Each person elected as Directora director will serve until the Annual Meeting of Shareowners of the Company in 20062008, or until his or her successor has been duly elected and qualified.

Directors will be elected by a plurality of the votes cast at the meeting (assuming a quorum is present). Consequently, any shares not voted at the meeting whether by abstentionor otherwise, will have no effect on the election of Directors.directors. The proxies solicited may be voted for a substitute nominee or nominees if any of the nominees are unable to serve, or for good reason will not serve, a contingency not now anticipated.

Brief biographies of the Directordirector nominees and continuing Directorsdirectors follow. These biographies include their ageages (as of Dec. 31, 2002)2004), an account of their business experience and the names of publicly held and certain other corporations of which they are also Directors.directors. Except as otherwise indicated, each nominee and continuing Directordirector has been engaged in his or her present occupation for at least the past five years.

NOMINEES

		ERROLL B. DAVIS, JR.WILLIAM D. HARVEY Age 55		Director Since 1984since 2005 Nominated term expires in 2008
		Age 58				Nominated Term Expires in 2006
	Mr. Davis joined the Company in 1978 and served as President of the Company from 1987 until 1998. He was elected Chief Executive Officer of the Company in 1988. Mr. Davis has been President and Chief Executive Officer of AEC since 1990. He was elected Chairman of the Board of the Company and AEC in 2000. Mr. Davis has also served as Chief Executive Officer of AER and IP&L (or predecessor companies) since 1998. He is a member of the Boards of Directors of BP p.l.c.; PPG Industries, Inc.; Electric Power Research Institute; and the Edison Electric Institute, where he also serves as Chairman. Mr. DavisHarvey has served as a Director of AEC since 1982, of AER since 1988 and of IP&L (or predecessor companies) since 1998.

The Board of Directors unanimously recommends a vote FOR all nominees for election as Directors.

CONTINUING DIRECTORS

		SINGLETON B. McALLISTERMCALLISTER Age 52		Director Sincesince 2001 Nominated term expires in 2008
		Age 50				Term Expires in 2005
		Ms. McAllister ishas been a partner within the public law and policy strategies group of the Washington, D.C. law firm office of Sonnenschein, Nath & Rosenthal, LLP since 2003. She was previously a partner at Patton Boggs LLP, a Washington, D.C.-basedD.C. law firm.firm, from 2001 to 2003. From 1996 until early 2001, Ms. McAllister was General Counsel for the United States Agency for International Development. She was also a partner at Reed, Smith, Shaw and McClay where she specialized in government relations and corporate law. She serves on the Board of Directors of United Rentals, Inc. Ms. McAllister has served as a Director of AEC, IP&L (or predecessor companies) and AER since 2001.

		ANTHONY R. WEILER Age 68		Director Sincesince 1998 Nominated term expires in 2008
		Age 66				Term Expires in 2005
	Mr. Weiler is Chairman and President of A. R. Weiler Co. LLC, a consultantconsulting firm for several home furnishings organizations. Prior to assuming his current position, Mr. Weiler had beenHe was previously a Senior Vice President forof Heilig-Meyers Company, a national furniture retailer headquartered in Richmond, Va. He is a Director of the Retail Home Furnishings Foundation. Mr. Weiler has served as a Director of IP&L (or predecessor companies) since 1979 and of AEC and AERResources since 1998. Mr. Weiler is Chairperson of the Nominating and Governance Committee.Committee and the Lead Independent Director.

The Board of Directors unanimously recommends a vote FOR all nominees for election as directors.

CONTINUING DIRECTORS

		ERROLL B. DAVIS, JR. Age 60		Director since 1984 Term expires in 2006
		Mr. Davis joined the Company in 1978 and served as President of the Company from 1987 until 1998. He was elected Chief Executive Officer of the Company in 1988. Mr. Davis has served as Chairman of the Board of the Company and AEC since 2000 and as Chief Executive Officer of AEC since 1990. He also served as President of AEC from 1990 through 2003. He has also served as Chief Executive Officer of Resources and IP&L (or predecessor companies) since 1998. He is a member of the Boards of Directors of BP p.l.c.; PPG Industries, Inc.; Union Pacific Corporation; Electric Power Research Institute; the Edison Electric Institute; and the U. S. Olympic Committee. Mr. Davis has served as a Director of AEC since 1982, of Resources since 1988 and of IP&L (or predecessor companies) since 1998.
		MICHAEL L. BENNETT Age 51		Director since 2003 Term expires in 2007
		Mr. Bennett has served as President and Chief Executive Officer of Terra Industries Inc., an international producer of nitrogen products and methanol ingredients headquartered in Sioux City, Iowa, since April 2001. From 1997 to 2001, he was Executive Vice President and Chief Operating Officer of Terra Industries Inc. He also serves as Chairman of the Board for Terra Nitrogen Corp., a subsidiary of Terra Industries Inc. Mr. Bennett has served as a Director of AEC, IP&L and Resources since 2003. Mr. Bennett is Chairperson of the Audit Committee.
		ANN K. NEWHALL Age 53		Director since 2003 Term expires in 2006
		Ms. Newhall is Executive Vice President, Chief Operating Officer, Secretary and a Director of Rural Cellular Corporation, a cellular communications corporation located in Alexandria, Minn. She has served as Executive Vice President and Chief Operating Officer since August 2000, as Secretary since February 2000 and as a Director since August 1999. Prior to assuming her current positions, she served as Senior Vice President and General Counsel from 1999 to 2000. She was previously a shareholder and President of the Moss & Barnett law firm in Minneapolis, Minn. Ms. Newhall has served as a Director of AEC, IP&L and Resources since 2003.
		DAVID A. PERDUE Age 55		Director since 2001 Term expires in 2007
		Mr. Perdue is Chairman of the Board and Chief Executive Officer of Dollar General Corporation, a sales organization headquartered in Goodlettsville, Tenn. He was named Chief Executive Officer and a Director in April 2003 and elected Chairman of the Board in June 2003. From July 2002 to March 2003, he was Chairman and Chief Executive Officer of Pillowtex Corporation, a textile manufacturing company located in Kannapolis, N.C. Pillowtex filed for bankruptcy in July 2003 after emerging from a previous bankruptcy in May 2002. From 1998 to 2002, he was employed by Reebok International Limited, where he served as President of the Reebok Brand from 2000 to 2002. Mr. Perdue has served as a Director of AEC, IP&L (or predecessor companies) and Resources since 2001.
		JUDITH D. PYLE Age 61		Director since 1994 Term expires in 2007
		Ms. Pyle is President of Judith Dion Pyle and Associates, a financial services company located in Middleton, Wis. Prior to assuming her current position in 2003, she served as Vice Chair of The Pyle Group, a financial services company located in Madison, Wis. She previously served as Vice Chair and Senior Vice President of Corporate Marketing of Rayovac Corporation, a battery and lighting products manufacturer located in Madison, Wis. In addition, Ms. Pyle is a Director of Uniek, Inc. Ms. Pyle has served as a Director of AEC and Resources since 1992 and of IP&L (or predecessor companies) since 1998.
		ROBERT W. SCHLUTZ Age 68		Director since 1998 Term expires in 2006
		Mr. Schlutz is President of Schlutz Enterprises, Inc., a diversified farming and retailing business in Columbus Junction, Iowa. Mr. Schlutz has served as a Director of IP&L (or predecessor companies) since 1989, and of AEC and Resources since 1998. Mr. Schlutz is Chairperson of the Environmental, Nuclear, Health and Safety Committee.

MEETINGS AND COMMITTEES OF THE BOARD

The full Board of Directors has standing Audit; Compensation and Personnel; Nominating and Governance; Environmental, Nuclear, Health and Safety; Nominating and Governance; and Capital Approval Committees. The Board of Directors has adopted formal written charters for each of the Audit, Compensation and Personnel, and Nominating and Governance Committees, which are available, free of charge, on AEC’s Web site atwww.alliantenergy.com/investors under the “Corporate Governance” caption or in print to any shareowner who requests them from the Company’s Corporate Secretary. The following is a description of each of these committees:

Audit Committee

The Audit Committee held fourseven joint meetings (the Company, AEC, IPLIP&L and AER)Resources) in 2002.2004. The Committee currently consists of J. B. EvansM. L. Bennett (Chair), A. B. Arends, K. C. Lyall, S. B. McAllister, A. K. Newhall and D. A. Perdue. Each of the members of the Committee is independent as defined by the New York Stock Exchange (“NYSE”) listing standards and SEC rules. The Board of Directors has determined that Mr. Bennett and one additional Audit Committee member qualify as “audit committee financial experts” as defined by SEC rules. The Audit Committee is responsible for assisting Board oversight of: (1) the integrity of the Company’s financial statements,statements; (2) the Company’s compliance with legal and regulatory requirements,requirements; (3) the independent auditors’ qualifications and independence,independence; and (4) the performance of the Company’s internal audit function and independent auditors. The Audit Committee is also directly responsible for the appointment, retention, termination, compensation and oversight of the Company’s independent auditors.

Compensation and Personnel Committee

The Compensation and Personnel Committee held sixfour joint meetings in 2002.2004. The Committee currently consists of S. B. McAllister (Chair), M. L. Bennett, D. A. Perdue and J. D. PylePyle. Each of the members of the Committee is independent as defined by the NYSE listing standards. This Committee reviews and approves corporate goals and objectives relevant to Chief Executive Officer (“CEO”) compensation, evaluates the CEO’s performance and determines and approves as a committee, or together with the other independent directors, the CEO’s compensation level based on the evaluation of the CEO’s performance. In addition, the Committee has responsibilities with respect to the Company’s executive compensation and incentive programs and management development programs.

Nominating and Governance Committee

The Nominating and Governance Committee held three joint meetings in 2004. The Committee currently consists of A. R. Weiler (Chair), K. C. Lyall, A. B. Arends, J. B. EvansK. Newhall and D. A. Perdue.R. W. Schlutz. Each of the members of the Committee is independent as defined by the NYSE listing standards. This Committee sets executive compensation policy, administersCommittee’s responsibilities are to: (1) identify individuals qualified to become Board members, consistent with the AEC Long-Term Incentive Program, reviewscriteria approved by the performance ofBoard, and approves salariesto recommend nominees for certain officersdirectorships to be filled by the Board or shareowners; (2) identify and certain other management personnel, reviewsrecommend Board members qualified to serve on Board committees; (3) develop and recommendsrecommend to the Board a set of corporate governance principles; (4) oversee the evaluation of the Board and the Company’s management; and (5) advise the Board with respect to other matters relating to corporate governance of the Company.

In making recommendations to the Company’s Board of Directors of nominees to serve as directors, the Nominating and Governance Committee will examine each director nominee on a case-by-case basis regardless of who recommended the nominee and take into account all factors it considers appropriate, which may include strength of character, mature judgment, career specialization, relevant technical skills or financial acumen, diversity of viewpoint and industry knowledge. However, the Committee believes that, to be recommended as a director nominee, each candidate must:

The Committee also believes the following qualities or skills are necessary for one or more directors to possess:

The Nominating and Governance Committee will consider nominees recommended by shareowners in accordance with the Company’s Nominating and Governance Committee Charter and the Corporate Governance Principles.

The Company and the Committee maintain a file of recommended potential director nominees which is reviewed at the time a search for a new or changed employee benefit plans, reviews majordirector needs to be performed. To assist the Committee in its identification of qualified director candidates, the Committee may engage an outside search firm.

Any shareowner wishing to make a recommendation should write to the Corporate Secretary of the Company and include appropriate biographical information concerning each proposed nominee. The Corporate Secretary will forward all recommendations to the Committee. The Company’s Bylaws also set forth certain requirements for shareowners wishing to nominate director candidates directly for consideration by shareowners. These provisions require such nominations to be made pursuant to timely notice (as specified in the Bylaws) in writing to the Corporate Secretary of negotiated employment contracts, and reviews human resource development programs.the Company.

Environmental, Nuclear, Health and Safety Committee

The Environmental, Nuclear, Health and Safety Committee held threetwo joint meetings in 2002.2004. The Committee currently consists of R. W. Schlutz (Chair), J. L. Hanes,K. C. Lyall, J. D. Pyle and A. R. Weiler. The Committee’s responsibilities are to review environmental policy and planning issues of interest to the Company, including matters involving the Company before environmental regulatory agencies and compliance with air, water and waste regulations. In addition, the Committee reviews policies and operating issues related to the Company’s nuclear generating station investments, including planning and funding for decommissioning of the plants. The Committee also reviews health and safety relatedsafety-related policies, activities and operational issues as they affect employees, customers and the general public.

Nominating and Governance Committee

The Nominating and Governance Committee held two joint meetings in 2002. The Committee currently consists of A. R. Weiler (Chair), J. L. Hanes, K. C. Lyall, S. B. McAllister and R. W. Schlutz. This Committee’s responsibilities include recommending and nominating new members of the Board, recommending committee assignments and committee chairpersons, evaluating overall Board effectiveness and compensation, preparing an annual report on Chief Executive Officer effectiveness, and considering and developing recommendations to the Board of Directors on other corporate governance issues. In nominating persons for election to the Board, the Nominating and Governance Committee will consider nominees recommended by shareowners. Any shareowner wishing to make a recommendation should write to the Corporate Secretary of the Company, who will forward all recommendations to the Committee. The Company’s Bylaws also permit shareowner nominations of candidates for election as Directors. These provisions require such nominations to be made pursuant to timely notice (as specified in the Bylaws) in writing to the Corporate Secretary of the Company.

Capital Approval Committee

The Capital Approval Committee held no meetings in 2002.2004. The Committee currently consists of J. B. Evans, J.M. L. Bennett, D. PyleA. Perdue and A. R. Weiler. Mr. Davis is the Chair and a non-voting member of this Committee. The purpose of this Committee is the evaluation ofto evaluate certain investment proposals where (a)(1) an iterative bidding process is required, and/or (b)(2) the required timelines for such a proposal would not permit the proposal to be brought before a regular meeting of the Board of Directors and/or a special meeting of the full Board of Directors is not practical or merited.

The Board of Directors held seven joint meetings during 2002.2004. Each Directordirector attended at least 85%75% of the aggregate number of meetings of the Board and Board committees on which he or she served.

The Board and each Board committee conductsconduct performance evaluations annually to determine itstheir effectiveness and suggestssuggest improvements for consideration and implementation. In addition, the Compensation and Personnel Committee evaluates Mr. Davis’ performance as CEO on an annual basis.

Board members are not expected to attend the Company’s Annual Meeting. In 2004, none of the Board members were present for the Company’s Annual Meeting.

CORPORATE GOVERNANCE

Corporate Governance Principles

The Board of Directors has adopted Corporate Governance Principles that, in conjunction with the Board committee charters, establish processes and procedures to help ensure effective and responsive governance by the Board. The Corporate Governance Principles are available, free of charge, on AEC’s Web site atwww.alliantenergy.com/investors under the “Corporate Governance” caption or in print to any shareowner who requests them from the Company’s Corporate Secretary.

The Board of Directors has adopted certain categorical standards of independence to assist it in making determinations of director independence under the NYSE listing standards. Under these categorical standards, the following relationships that currently exist or that have existed, including during the preceding three years, willnot be considered to be material relationships that would impair a director’s independence:

In addition, any relationship that a director (or an “immediate family member” of the director) previously had that constituted an automatic bar to independence under NYSE listing standards will not be considered to be a material relationship that would impair a director’s independence three years after the end of such relationship in accordance with NYSE listing standards.

Based on these standards, the Board of Directors has affirmatively determined by resolution that each of the Company’s directors (other than Mr. Davis, the Company’s Chairman and CEO, and Mr. Harvey, the Company’s Chief Operating Officer (“COO”)) has no material relationship with the Company and, therefore, is independent in accordance with the NYSE listing standards. The Board of Directors will regularly review the continuing independence of the directors.

The Corporate Governance Principles provide that at least 75% of the members of the Board of Directors must be independent directors under the NYSE listing standards. The Audit, Compensation and Personnel, and Nominating and Governance Committees must consist of all independent directors.

Lead Independent Director; Executive Sessions

The Corporate Governance Principles provide that the chairperson of the Nominating and Governance Committee shall be the designated “Lead Independent Director” and will preside as the chair at meetings or executive sessions of the independent directors. As the Chairperson of the Nominating and Governance Committee, Mr. Weiler is currently designated as the Lead Independent Director. At every regular in-person meeting of the Board of Directors, the independent directors meet in executive session with no member of Company management present.

Communication with Directors

Shareowners and other interested parties may communicate with the full Board, evaluate Mr. Davis’ performancenon-management directors as a group or individual directors, including the Lead Independent Director, by providing such communication in writing to the Company’s Corporate Secretary, who will post such communications directly to the Company’s Board of Directors’ Web site.

Ethical and Legal Compliance Policy

The Company has adopted a Code of Ethics that applies to all employees, including its CEO, COO, Chief ExecutiveFinancial Officer and Chief Accounting Officer, as well as its Board of Directors. The Company makes its Code of Ethics available, free of charge, on an annual basis.

COMPENSATION OF DIRECTORS

No retainer fees are paid to Mr. Davis or Mr. Harvey for histheir service on the Company’s Board of Directors. In 2002,2004, all other Directorsdirectors (the “non-employee Directors”directors”), each of whom served on the Boards of the Company, AEC, IP&L and AER,Resources, received an annual retainer for service on all four Boards consisting of $30,000$70,000 in cash. Also, in 2004, the Chairperson of the Audit Committee received an additional $7,500 cash retainer and 1,000the Chairpersons of the Compensation and Personnel, Nominating and Governance, and Environmental, Nuclear, Health, and Safety Committees received an additional $5,000 cash retainer. Travel expenses incurred by the Directors are paid for each meeting attended.

In 2005, the non-employee directors will each receive a cash retainer of $85,000. In 2005, the Chairperson of the Audit Committee will receive an additional $10,000 cash retainer; the Chairpersons of the Compensation and Personnel, Nominating and Governance, and Environmental, Nuclear, Health, and Safety Committees will each receive an additional $5,000 cash retainer; other members of the Audit Committee will each receive an additional $3,500 cash retainer; and the Lead Independent Director will receive an additional $15,000 cash retainer.

Each director is encouraged to voluntarily elect to use not less than 50% of his or her cash retainer to purchase shares of AEC common stock pursuant to AEC’s Shareowner Direct Plan or to defer such amount through the AEC stock account in the AEC Director’s Deferred Compensation Plan. Travel expenses are paid for each meeting day attended.

Director’s Deferred Compensation Plan

Under the AEC Director’s Deferred Compensation Plan, Directorsdirectors may elect to defer all or part of their retainer fee. Amounts deposited to a Deferred Compensation Interest Account receive an annual return based on the A-Utility Bond Rate with a minimum return no less than the prime interest rate published inThe Wall Street Journal.Journal, provided that the return may not be greater than 12% or less than 6%. Amounts deposited to anthe AEC Stock Account whether the cash portion or the stock portion of the Director’s compensation, are treated as though invested in the common stock of AEC and will be credited with dividends, which will be treated as if reinvested. Annually, the DirectorThe director may elect that the AEC Deferred Compensation Account will be paid in a lump sum or in annual installments for up to 10 years beginning in the year of or one, two or three tax yearyears after retirement or resignation from the Board.Board of Directors of AEC.

Director’s Charitable Award Program

AEC maintains a Director’s Charitable Award Program for thecertain members of its Board of Directors beginning after three years of service. The participants in this Program currently are E. B. Davis, K. C. Lyall, D. A. Perdue, J. D. Pyle and A. R. Weiler. S. B. McAllister has enrolled in the Program and is expected to become a participant. The purpose of the Program is to recognize the interest of the Company and its Directorsdirectors in supporting worthy institutions, and to enhance the Company’s Director benefit program so that the Company is able to continue to attract and retain Directors of the highest caliber.institutions. Under the Program, when a Directordirector dies, the Company and/or AEC will donate a total of $500,000 to one qualified charitable organization or divide that amount among a maximum of fourfive qualified charitable organizations selected by the individual Director.director. The individual Directordirector derives no financial benefit from the Program. All deductions for charitable contributions are taken by the Company and/or AEC, and the donations are funded by the Company or AEC through life insurance policies on the Directors.directors. Over the life of the Program, all costs of donations and premiums on the life insurancepolicies,insurance policies, including a return of the Company’s or AEC’s cost of funds, will be recovered through life insurance proceeds on the Directors.directors. The Program, over its life, will not result in any material cost to the Company or AEC. The Board of Directors of AEC has terminated this Program for all new directors who join the Board after Jan. 1, 2005.

Director’s Life Insurance Program

AEC maintains a split-dollar Director’s Life Insurance Program for non-employee Directors, beginning after three years of service, whichdirectors. The participants in this Program currently include K. C. Lyle, J. D. Pyle and A. R. Weiler. The Program provides a maximum death benefit of $500,000 to each eligible Director.director. Under the split-dollar arrangement, Directorsdirectors are provided a death benefit only and do not have any interest in the cash value of the policies. The Life Insurance Program is structured to pay a portion of the total death benefit to AEC to reimburse AEC for all costs of the program,Program, including a return on its funds. The Life Insurance Program, over its life, will not result in any material cost to AEC. The imputed income allocations reported for each Directordirector in 20022004 under the Director’s Life Insurancethis Program were as follows: A. B. Arends—$50, J. L. Hanes—$50, K. C. Lyall—$448,Lyall — $528, J. D. Pyle—$20, W. H. Stoppelmoor—$948Pyle — $29, and A. R. Weiler—$50.Weiler — $50. In November 2003, the Board of Directors of AEC terminated this insurance benefit for any director not already having the required vesting period of three years of service and for all new directors.

Pension Arrangements

Prior to April 1998, Mr. Lee Liu, a Director who will be retiring at AEC’s Annual Meeting on May 28, 2003, participated in the IES Industries Inc. retirement plan, which has been transferred to Alliant Energy Corporate Services. Mr. Liu’s benefits under the plan have been “grandfathered” to reflect the benefit plan formula in effect in April 1998. See “Retirement and Employee Benefit Plans—IES Industries Pension Plan.”

Alliant Energy Corporate Services also maintains a non-qualified Supplemental Retirement Plan (“SRP”) for eligible former officers of IES Industries Inc. Mr. Liu participates in the SRP. The SRP generally provides for payment of supplemental retirement benefits equal to 75% of the officer’s base salary in effect at the date of retirement, reduced by benefits receivable under the qualified retirement plan, for a period not to exceed 15 years following the date of retirement. The SRP also provides for certain death benefits to be paid to the officer’s designated beneficiary and benefits if an officer becomes disabled under the terms of the qualified retirement plan.

OWNERSHIP OF VOTING SECURITIES

All of the common stock of the Company is held by AEC. None of the directors or officers of the Company own any shares of the Company’s preferred stock. Listed in the following table are the number of shares of AEC’s common stock beneficially owned by (1) the executive officers listed in the Summary Compensation Table, and(2) all director nominees and Directorsdirectors of AEC and the Company, as well as the number of shares owned by Directorsand (3) all director nominees, directors and executive officers of AEC and the Company as a group as of Feb. 28,2003.28, 2005. The Directorsdirectors and executive officers of AEC and the Company as a group owned 1.8%1.4% of the outstanding shares of AEC common stock on that date. No individual Directordirector or officer owned more than 1% of the outstanding shares of AEC common stock on that date. To the Company’s knowledge, no shareowner beneficially owned 5% or more of AEC’s outstanding common stock as of Dec. 31, 2002.

None of the Directors or officers of the Company own any shares of the Company’s preferred stock. To the Company’s knowledge, no shareowner beneficially owned5%owned 5% or more of any class of the Company’s preferred stock as of Dec. 31, 2002.2004. The following table sets forth information, as of Dec. 31, 2004 regarding beneficial ownership by the only persons known to AEC to own more than 5% of AEC’s common stock. The beneficial ownership set forth below has been reported on Schedule 13G filings with the SEC by the beneficial owners.

Amount and Nature of Beneficial Ownership

COMPENSATION OF EXECUTIVE OFFICERS

The following Summary Compensation Table sets forth the total compensation paid by the Company, AEC and AEC’s other subsidiaries to the Chief Executive Officer and the fourcertain other most highly compensated executive officers of the Company for all services rendered during 2002, 20012004, 2003 and 2000.2002.

SUMMARY COMPENSATION TABLE

STOCK OPTIONS

The following table sets forth certain information concerning options to purchase shares of AEC common stock options granted during 20022004 to the executives named below:

STOCK OPTION GRANTS IN 20022004

The following table provides information for the executives named below regarding options exercised in 2004 and the number and value of exercisable and unexercisedunexercisable options. None of the executives exercised options in fiscal year 2002.

AGGREGATE OPTION EXERCISES IN 2004 AND OPTION VALUES AT DEC. 31, 20022004

LONG-TERM INCENTIVE AWARDS

The following table provides information concerning long-term incentive awards made to the executives named below in 2002.2004.

LONG-TERM INCENTIVE AWARDS IN 20022004

CERTAIN AGREEMENTS

Mr. Davis currently has an employment agreement with AEC, pursuant to which he will serve as the Chairman President and Chief Executive Officer of AEC until the expiration of the current term of the agreement on April 21, 2004. Thereafter,the date of AEC’s 2006 Annual Meeting, but no later than May 30, 2006. In addition, he will serve as the Chief Executive Officer of AEC during the term of the agreement will automatically renew for successive one-year terms, unless either Mr. Davis or AEC gives prior written noticeotherwise determined by the Board of his or its intent to terminate the agreement.Directors. Mr. Davis will also serve as the Chief Executive Officer of AEC and a Director of each subsidiary of AEC, including the Company, duringas long as he holds the term of his employment agreement.same position for AEC. Pursuant to Mr. Davis’the employment agreement, he isMr. Davis will be paid an annual base salary of not less than $450,000. Mr. Davis’ current salary under his employment agreement is $685,000.$750,000. Mr. Davis also haswill have the opportunity to earn short-term and long-term incentive compensation (including stock options, restricted stock and other long-term incentive compensation) at least equal to other executive officers and receive supplemental retirement benefits (including continued participation in the Company’sAEC Executive Tenure Compensation Plan) and life insurance providing a death benefit of three times his annual salary. For purposes of AEC’s Supplemental Executive Retirement Plan described in detail under “Retirement and Employee Benefit Plans,” (i) Mr. Davis will be deemed to have been paid an annual bonus for 2003 of $595,539 (the amount that he would have received had he been eligible for such a bonus for such year); (ii) if Mr. Davis ceases to be the Chief Executive Officer while remaining the Chairman in 2005 and if the annual bonus for 2005 payable in 2006 is less than the target award for Mr. Davis for 2005, Mr. Davis will be deemed to have earned the target award; (iii) a special calculation will apply to protect the dollar amount that Mr. Davis could have been paid on May 1, 2003 if he had retired on April 30, 2003; and (iv) upon termination of employment Mr. Davis generally will be deemed to be a retiree not subject to the early commencement reduction factors that would otherwise apply. For purposes of AEC’s Executive Tenure Compensation Plan, the Board of Directors has determined to treat Mr. Davis as an eligible retiree at his future termination of employment, regardless of the circumstances other than death. If, prior to the end of the term of the agreement, the employment of Mr. Davis is terminated by AEC without cause (as defined in the employment agreement), or if Mr. Davis terminates his employment for good reason (as defined in the employment agreement), or if the employment of Mr. Davis is terminated as a result of the mutual agreement of Mr. Davis and the Board of Directors of AEC, AEC or its affiliates will continue to provide the compensation and benefits called for by the employment agreement through the later of the end of the term of the agreement or one year after such termination of employment agreement (with incentive compensation based on the maximum potential awards and with any stock compensation paid in cash), and all unvested stock compensation will vest immediately. If Mr. Davis dies or becomes disabled, or terminates his employment without good reason duringprior to the end of the term of his respective employmentthe agreement, AEC or its affiliates will pay to Mr. Davis or his beneficiaries or estate all compensation earned through the date of death disability or such termination (including previously deferred compensation and pro rata incentive compensation based upon the maximum potential awards). If Mr. Davis’ employment is terminated by reason of his disability, he will be entitled to such benefits as may be provided by AEC’s current disability program. If Mr. Davis is terminated for cause, AEC or its affiliates will pay his base salary through the date

of termination plus any previously deferred compensation. In any such case, Mr. Davis shall also be eligible for the benefits he has accrued under the applicable retirement plans, including the benefits under the Supplemental Executive Retirement Plan and the Executive Tenure Compensation Plan. Under Mr. Davis’the employment agreement, if any payments thereunder constitute an excess parachute payment under the Internal Revenue Code (the “Code”(“Code”), then AEC will pay to Mr. Davis the amount necessary to offset the excise tax and any applicable taxes on this additional payment.

AEC currently has in effect key executive employment and severance agreements (the “KEESAs”) with certain executive officers and key employees of AEC (including Messrs. Davis, Harvey, Protsch Walkerand Aller and Ms. Wegner)Swan). The KEESAs provide that each executive officer who is a party thereto is entitled to benefits if, within a period of up to three years (depending on which executive is involved) after a change in control of AEC (as defined in the KEESAs) (the “Employment Period”), the officer’s employment is ended through (a) termination by AEC, other than by reason of death or disability or for cause (as defined in the KEESAs); or (b) termination by the officer due to a breach of the agreement by AEC or a significant change in the officer’s responsibilities; or (c) in the case of Mr. Davis’ agreement, termination by Mr. Davis following the first anniversary of the change of control. The benefits provided are (a) a cash termination payment of up to three times (depending on which executive is involved) the sum of the officer’s annual salary and his or her average annual bonus during the three years before the termination; and (b) continuation for up to the end of the Employment Period of equivalent hospital, medical, dental, accident and life insurance coverage as in effect at the time of termination. Each KEESA for executive officers below the level of Executive Vice President of AEC provides that if any portion of the benefits under the KEESA or under any other agreement for the officer would constitute an excess parachute payment for purposes of the Code, benefits will be reduced so that the officer will be entitled to receive $1 less than the maximum amount which he or she could receive without becoming subject to the 20% excise tax imposed by the Code on certain excess parachute payments, or which AEC may pay without loss of deduction under the Code. The KEESAs for the Chief Executive Officer, President, Senior Executive Vice President and the Executive Vice Presidents of AEC (including Messrs. Davis, Harvey, Protsch Walkerand Aller and Ms. Wegner)Swan) provide that if any payments thereunder or otherwise constitute an excess parachute payment, AEC will pay to the appropriate officer the amount necessary to offset the excise tax and any additional taxes on this additional payment. Mr. Davis’ employment agreement as described above limits benefits paid thereunder to the extent that duplicate payments would be provided to him under his KEESA.

RETIREMENT AND EMPLOYEE BENEFIT PLANS

Alliant Energy Cash Balance Pension Plan

Salaried employees (including officers) of the Company are eligible to participate in the Alliant Energy Cash Balance Pension Plan (the “Pension Plan”) maintained by Alliant Energy Corporate Services. The Pension Plan bases a participant’s defined benefit pension on the value of a hypothetical account balance. For individuals participating in the Pension Plan as of Aug. 1, 1998, a starting account balance was created equal to the present value of the benefit accrued as of Dec. 31, 1997, under the applicable prior benefit formula. In addition, such individuals received a special one-time transition credit amount equal to a specified percentage varying with age multiplied by credited service and pay. For 1998 and thereafter, a participant receives annual credits to the account equal to 5% of base pay (including certain incentive payments, pre-tax deferrals and other items), plus an interest credit on all prior accruals equal to 4%, plus a potential share of the gain on the investment return on assets in the trust investment for the year.

The life annuity payable under the Pension Plan is determined by converting the hypothetical account balance credits into annuity form. Individuals who were participants in the Pension Plan on Aug. 1, 1998, are in no event to receive any less than what would have been provided under the prior formula that was applicable to them, had it continued, if they terminate on or beforeAug.before Aug. 1, 2008, and do not elect to commence benefits before the age of 55.

All of the individuals listed in the Summary Compensation Table participate in the Pension Plan and are “grandfathered” under the applicable prior plan benefit formula. Because their estimated benefits under the applicable prior plan benefit formula are expected to be higher than under the Pension Plan formula, utilizing current assumptions, their benefits would currently be determined by the applicable prior plan benefit formula. The following tables illustrate the estimated annual benefits payable upon retirement at age 65 under the applicable prior plan formula based on average annual compensation and years of service. To the extent benefits under the Pension Plan are limited by tax law, any excess will be paid under the Unfunded Excess Plan described below.

Company Plan A Prior Formula.

One of the applicable prior plan formulas provided retirement income based on years of credited service and final average compensation for the 36 highest consecutive months, with a reduction for Social Security

offset. The individuals listed in the Summary Compensation Table covered by this formula are Messrs. Davis, Harvey and Protsch and Ms. Wegner.Swan. The benefits would be as follows:

Company Plan A Prior Plan Formula Table

For purposes of the Pension Plan, compensation means payment for services rendered, including vacation and sick pay, and is substantially equivalent to the salary amounts reported in the Summary Compensation Table. PensionPlanPension Plan benefits depend upon length of Pension Plan service (up to a maximum of 30 years), age at retirement and amount of compensation (determined in accordance with the Pension Plan) and are reduced by up to 50% of Social

Security benefits. The estimated benefits in the table above do not reflect the Social Security offset. The estimated benefits are computed on a straight-life annuity basis. Benefits will be adjusted if the employee receives one of the optional forms of payment. Credited years of service under the Pension Plan for covered persons named in the Summary Compensation Table are as follows: Erroll B. Davis, Jr., 2325 years; William D. Harvey, 1517 years; Eliot G. Protsch, 2325 years; and PamelaBarbara J. Wegner, 8Swan, 16 years.

IES Industries Pension Plan Prior Formula.

Another of the The other applicable prior plan formulasformula provided retirement income based on years of service and final average compensation for the highest consecutive 36 months out of the last 10 years of employment. TheMr. Aller is the only individual listed in the Summary Compensation Table covered by this formula is Mr. Walker.formula. The benefits would be as follows:

IES Industries Pension Plan Prior Formula Table

For purposes of the Pension Plan, compensation means payment for services rendered, including vacation and sick pay, and is substantially equivalent to the salary amounts reported in the Summary Compensation Table. Pension Plan benefits depend upon length of Pension Plan service (up to a maximum of 35 years), age at retirement and amount of compensation (determined in accordance with the Pension Plan). The estimated benefits are computed on a straight-life annuity basis. Benefits will be adjusted if the employee receives one of the optional forms of payment. Mr. WalkerAller has six11 credited years of credited service under the Pension Plan.

Unfunded Excess Plan—Alliant Energy

Corporate Services maintains an Unfunded Excess Plan that provides funds for payment of retirement benefits above the limitations on payments from qualified pension plans in those cases where an employee’s retirement benefits exceed the qualified plan limits. The Unfunded Excess Plan provides an amount equal to the difference between the actual pension benefit payable under the Pension Plan and what such pension benefit would be if calculated without regard to any limitation imposed by the Code on pension benefits or covered compensation.

Unfunded Executive Tenure Compensation Plan—Alliant Energy

Corporate Services maintains an Unfunded Executive Tenure Compensation Plan to provide incentive for selected key executives to remain in the service of AEC by providing additional compensation that is payable only if the executive

remains with AEC until retirement (orother termination if approved by the Board of Directors). In the caseDirectors of the Chief Executive Officer only, in the event that the Chief Executive Officer (a) is terminated under his employment agreement with AEC as described above other than for cause, death or disability (as those terms are defined in the employment agreement); (b) terminates his employment under the employment agreement for good reason (as such term is defined in the employment agreement); or (c) is terminated as a result of a failure of the employment agreement to be renewed automatically pursuant to its terms (regardless of the reason for such non-renewal), then for purposes of the Plan, the Chief Executive Officer shall be deemed to have retired at age 65 and shall be entitled to benefits under the Plan.AEC). Any participant in the Plan must be approved by the Board of Directors.Directors of AEC. Mr. Davis was the only active participant in the Plan as of Dec. 31, 2002.2004. The Plan provides for monthly payments to a participant after retirement (at or after age 65, or with Board approval, prior to age 65) for 120 months. The payments will be equal to 25% of the participant’s highest average salary for any consecutive 36-month period. If a participant dies prior to retirement or before 120 payments have been made, the participant’s beneficiary will receive monthly payments equal to 50% of such amount for 120 months in the case of death before retirement or, if the participant dies after retirement, 50% of such amount for the balance of the 120 months. Annual benefits of $171,250$187,500 would be payable to Mr. Davis upon retirement, assuming he continues in Alliant Energy Corporate Services’the service of AEC until retirement at the same salary as was in effect on Dec. 31, 2002.2004.

Supplemental Executive Retirement Plan

AEC maintains an unfunded Supplemental Executive Retirement Plan (“SERP”) to provide incentive for key executives to remain in the service of AEC by providing additional compensation that is payable only if the executive remains with AEC until retirement, disability or death. While the SERP provides different levels of benefits depending on the executive covered, this summary reflects the terms applicable to all of the individuals listed in the Summary Compensation Table. Participants in the SERP must be approved by the Compensation and Personnel Committee of the Board.Board of Directors of AEC. The SERP provides for payments of 60% of the participant’s average annual earnings (base salary and bonus) for the highest paid three years out of the last 10 years of the participant’s employment reduced by the sum of benefits payable to the officer from the officer’s defined benefit plan and the Unfunded Excess Plan. The normal retirement date under the SERP is age 62 with at least 10 years of service and early retirement is at age 55 with at least ten10 years of service. If a participant retires prior to age 62, the 60% payment under the SERP isreducedis reduced by 3% per year for each year the participant’s retirement date precedes his or his/her normal retirement date. The actuarial reduction factor will be waived for participants who have attained age 55 and have a minimum of 10 years of service in a senior executive position with AEC after April 21, 1998. At the timely election of the participant, benefits under the SERP will be made in a lump sum, in installments over a period of up to 10 years, or for the lifetime of the participant. If the lifetime benefit is selected and the participant dies prior to receiving 12 years of payments, payments continue to any surviving spouse or dependent children of a deceased participant who dies while still employed by AEC, payable for a maximum of 12 years. A post-retirement death benefit of one times the participant’s final average earnings at the time of retirement will be paid to the designated beneficiary. Messrs. Davis, Harvey, Protsch Walkerand Aller and Ms. WegnerSwan are participants in the SERP. The following table shows the amount of retirement payments under the SERP, assuming a minimum of 10 years of service at retirement age and payment in the annuity form.

Supplemental Executive Retirement Plan Table

*Reduced by the sum of the benefit payable from the applicable defined benefit pension plan and the Unfunded Excess Plan.

Key Employee Deferred Compensation Plan—

AEC maintains an unfundeda Key Employee Deferred Compensation Plan under which participants may defer up to 100% of base salary and incentive compensation and eligible SERP payments.compensation. Participants who have made the maximum allowed contribution to the AEC-sponsored 401(k) Savings Plan may receive an additional credit to the Deferred Compensation Plan. The credit will be equal to 50% of the lesser of (a) the amount contributed to the 401(k) Savings Plan plus the amount deferred under this Plan; or (b) 6% of base salary, reduced by the amount of any matching contributions in the 401(k) Savings Plan. The employee may elect to have his or her deferrals credited to an Interest Account or an AEC Stock Account. Deferrals and matching contributions to the Interest Account receive an annualreturn based on the A-Utility Bond Rate with a minimum return no less than the prime

interest rate published inThe Wall Street Journal, provided that the return may not be greater than 12% or less than 6%. Deferrals and matching contributions credited to the AEC Stock Account are treated as though invested in AEC common stock and will be credited with dividends, which will be treated as if reinvested. The shares of common stock identified as obligations under the Plan are held in a rabbi trust. Payments from the Plan may be made in a lump sum or in annual installments for up to 10 years at the election of the participant. Participants are selected by the Chief Executive Officer of Alliant Energy Corporate Services. Messrs. Davis, Harvey, Protsch Walkerand Aller and Ms. WegnerSwan are participants in the Plan.

REPORT OF THE COMPENSATION AND PERSONNEL

COMMITTEE ON EXECUTIVE COMPENSATION

To Our Shareowners:

The Compensation and Personnel Committee (the “Committee”) of the Board of Directors of the Company is currently comprisedcomposed of four non-employee Directorsindependent directors (the same Directorsdirectors that comprise the AEC Compensation and Personnel Committee.)Committee). The following is a report prepared by these Directorsdirectors with respect to compensation paid by AEC, the Company and AEC’s other subsidiaries.

The Committee assesses the effectiveness and competitiveness of, approves the design of, and administers executive compensation programs within a consistent total compensation framework for the Company. The Committee also reviews and approves all salary arrangements and other remuneration for executives,executive officers, evaluates executive officer performance, and considers related matters. It also makes recommendations to the Nominating and Governance Committee regarding Director compensation. To support it in carrying out its mission, the Committee engages an independent consultant (which is retained by the Committee rather than Company executives).

The Committee Charter was amended in January 2004 to provide assistance.enhance corporate governance through the adoption of recommended and required modifications detailing the role and functions of the Committee in compliance with the NYSE listing standards.

The Committee is committed to implementing an overall compensation program for executivesexecutive officers that furthers the Company’s mission. Therefore, the Committee adheres to the following compensation policies, which are intended to facilitate the achievement of the Company’s business strategies:

Components of Compensation

The major elements of theAEC’s executive compensation program are base salary, short-term (annual) incentives, and long-term (equity) incentives.incentives and other benefits. These elements are addressed separately below.in this report. In setting the level for each major component of compensation, the Committee considers all elements of an executive’sexecutive officer’s total compensation package, including employee benefit and perquisite programs. The Committee’s goal is to provide an overall compensation package for each executive officer that is competitive to the packages offered otherto similarly situated executives. Theexecutive officers at companies of similar size within the industry.

For 2004, the Committee has determined that total executive compensation at target levels including that for Mr. Davis, is in line with competitive compensation of the comparison group ofcomparative companies.

To ensure the Committee has adequate time to consider executive officers’ total compensation for the coming year, Committee members are provided detailed compensation information in advance of the second to last Committee meeting of the previous year, which is then presented and analyzed at that Committee meeting. Committee members then have time between meetings to raise questions and ask for additional information. The Committee then makes final decisions regarding compensation at the last Committee meeting of the previous year.

Base Salaries

The Committee annually reviews each executive’sexecutive officer’s base salary. Base salaries are targeted at a competitive market range (i.e., at the median level) when comparing both utility and non-utility (general industry) data from similarly-sized companies, with utility-specific positions based exclusively on energy industry data. The industry peer group the Committee used for assessing compensation is the S&P Midcap 400 Utilities Index. The Committee annually adjusts base salaries to recognize changes in the market, AEC performance, varying levels of responsibility, and executive officers’ prior experience and breadth of knowledge. Increases to base salaries are driven primarily by market adjustments for a particular salary level, which generally limits across-the-board increases. Theincreases, though the Committee does not consideralso considers individual performance factors in setting base salaries. The Committee reviewedreviews executive salaries for market comparability using utility and general industry data contained in published compensation surveys published by Edison Electric Institute, American Gas Association and several compensation consulting firms. Based on the foregoing and market conditions, the Committee established the annual salary for Mr. Davis at $685,000 for the 2002 fiscal year.surveys.

In consideration of industry conditionsBased on this data and corporate performance,consultation with the independent executive compensation consultant, the Committee determined that the Chief Executive Officer and the Executive Vice Presidents would not receive aapproved base salary increaseincreases for 2003.executive officers in 2004.

Short-Term Incentives

TheAEC’s short-term (annual) incentive program promotes the Committee’s pay-for-performance philosophy by providing executivesexecutive officers with direct financial incentives in the form of annual cash bonuses tied to the achievement of corporate,AEC, subsidiary and business unit and individual performance goals. Annual bonus opportunities allow the Committee to communicate specific goals that are of primary importance during the coming year and motivate executivesexecutive officers to achieve these goals. The Committee onOn an annual basis, the Committee reviews and approves the program’s performance goals, the relative weight assigned to each goal and the targeted and maximum award levels. A description of the short-term incentive programsprogram available during 20022004 to executive officers follows.

Alliant Energy Corporation Management Incentive Compensation Plan –—In 2002,2004, the Alliant Energy Corporation Management Incentive Compensation Plan (the “MICP”) covered executivesexecutive officers and was based on achieving annual targets infor AEC and business unit performance. AEC corporate performance that includedwas gauged on earnings per share (“EPS”),from continuing operations, total cash flow from continuing operations, Lean Six Sigma savings, environmental, health and safety assessment closure rates, and diversity initiatives. Business unit performance was gauged on those goals and environmental targets forother operational measures specific to the utility businesses, and business unit and individual performance goals.unit. Target and maximum bonus awards under the MICP in 20022004 were set at the median of the utility and general industry market levels. The Committee considered these targets to be achievable, but to require above-average performance from each of the executives.substantially challenging. The level of performance achieved in each category determines actual payment of bonuses as a percentage of annual salary. Weighting factors are applied to the percentage achievement under each category to determine overall performance. If a pre-determined EPSearnings per share from continuing operations target is not met, there is no bonus payment associated with the MICP. If the threshold performance for any other performance target is not reached, there is no bonus payment associated with that particular category. Once the designated maximum performance is reached, there is no additional payment for performance above the maximum level. The actual percentage of salary paid as a bonus, within the allowable range, is equal to the weighted average percent achievement for all the performance categories. Potential MICP awardstargets range from 0% to 100%

80% of annualbase salary for eligible executives other than Mr. Davis.

In 2002, Mr. Davis was covered by the MICP. Awards for Mr. Davis, under the MICP in 2002 were based onto 30-65% of base salary for other executive officers, with a maximum possible payout for all of two times their target percentage.

After assessing corporate and strategic goal achievement in relation to predetermined goals. For each plan year, the Committee determines thebusiness unit performance apportionment for Mr. Davis. In 2002, that apportionment was 80% for corporate performance and 20% for strategic goal performance. Corporate performance is measured based on corporate-wide EPS, environmental, diversity and safety targetsagainst established at the beginning of the year. Strategic goals, are measured based on the achievement of certain specific goals, which included strategy development and implementation, established for Mr. Davis by the Committee. The 2002 MICP award range for Mr. Davis was from 0% to 150% of annual salary.

Because the corporate EPS goal was not achieved, there was no payout from the MICP for performance for the year ended Dec. 31, 2002.

Due to industry and market conditions and overall corporate performance, the Committee determined that the Chief Executive Officer and Executive Vice Presidents will participate in the MICP, but will notexecutive officers were eligible to receive MICP awards if earned, for 20032004 plan year performance.

Long-Term Incentives

The Committee strongly believes compensation for executivesexecutive officers should include long-term, at-risk pay to strengthen the alignment of the interests of the shareowners and management. In this regard, the Alliant Energy Corporation Long-Term Equity Incentive Plan and the Alliant Energy Corporation 2002 Equity Incentive Plan each permitsAEC maintains plans that permit grants of stock options, restricted stock and performance units/shares with respect to AEC’s common stock. The Committee believes that the incentive plans balance the Company’s annual compensation programs by emphasizing compensation based on the long-term, successful performance of the Company from the perspective of AEC’s shareowners.

In determining actual award levels under the Alliant Energy Corporation Long-Term Incentive Program, the Committee sought to provide competitive total compensation opportunities to executive officers while also taking performance factors into account. As such, award levels for 2004 were based on a competitive analysis of similarly sized utility and general industry companies that took into consideration the market level of long-term incentives, the competitiveness of the total compensation package and AEC performance. Award levels were targeted to the median of the range of such awards paid by comparable companies. A description of the long-term incentive programs available during 2002 to executive officers under the Alliant Energy Corporation Long-Term Equity Incentive Plan and the Alliant Energy Corporation 2002 Equity Incentive Plan is set forth below.during 2004 follows.

Alliant Energy Corporation Long-Term Incentive Program—Program – The Alliant Energy Corporation Long-Term Incentive Program covered executivesall executive officers and consisted of the following components in 2002:2004: non-qualified stock options and performance shares. Select executive officers were also awarded grants of restricted stock for retention purposes.

Non-qualified stock options provide a reward that is directly tied to the benefit shareowners receive from increases in the price of AEC’s common stock. The payout from thePayout of performance shares granted in 2002 is based on two equally-weighted performance components: AEC’s three-year total shareowner return to shareowners(“TSR”) relative to an investor-owned utility peer group, (TSR), and on AEC’s three-year annualized EPS growth versus internally setearnings per share growth. Payout of performance hurdles containedshares granted in 2003 and 2004 is based solely on AEC’s three-year TSR relative to the Alliant Energy Strategic Plan.peer group. Thus, the Committee believes the two components of the Long-Term Incentive Program (i.e., stock options and performance shares) provide incentives for management to produce superior shareowner returns on

both an absolute and relative basis. During 2002,2004, the Committee made a grantgrants of stock options and performance shares to various executive officers, including Messrs. Davis, Harvey, Protsch Walkerand Aller and Ms. Wegner.Swan. All option grants had a per share exercise pricesprice equal to the fair market value of a share of AEC common stock on the day following the date the grants were approved. Options vest on a one-third basis at the beginning of each calendar year after grant and have a 10-year term from the date of the grant. Executives in the Alliant Energy Corporation Long-Term Incentive ProgramThe performance share grants, with final awards that range from zero to 200% of target, were also granted performance shares. Performance shares will be paid out in a combination of AEC common stock and cash. The award will be modified by a performance multiplier, which ranges from 0 to 2.00 based on corporate performance.performance against the criteria described above.

Due to AEC’s three-year annualized earnings per share growth and TSR goals not being achieved, there was no performance share payout for the 2002 grant which had a three-year cycle ending in December 2004.

In addition to stock options and performance shares, executive officers, including Mr. Davis, received grants of AEC restricted stock in 2004. The AEC restricted stock vests 100% two or three years after the date of grant, as the case may be (with immediate vesting in case of death, disability or retirement). These grants of AEC restricted stock were made for the purpose of recognizing and retaining these key individuals.

Following an extensive review of AEC’s long-term incentive programs, the Committee determined that, commencing in 2005, performance-contingent AEC restricted stock would replace stock options as a component of an executive officer’s long-term incentive grant. Thus, performance shares and performance-contingent restricted stock will comprise the total target award for 2005.

Other Benefits

Basic benefit programs that are made available to all other salaried employees are also made available to executive officers, including AEC’s 401(k) Savings Plan and the Cash Balance Pension Plan. In addition, executive officers are eligible to participate in AEC’s Excess Plan, Supplemental Executive Retirement Plan and Key Employee Deferred Compensation Plan – all as described in the Retirement and Benefit Plans section of this proxy statement. Executive officers are also eligible for a separate Executive Health Care Plan (medical and dental) and flexible perquisites.

Certain executive officers receive individually owned life insurance policies. Premiums paid by AEC for this insurance were taxed as bonuses to the individual officers beginning in 2004.

Compensation of the Chairman and Chief Executive Officer

When determining actualthe compensation package of the Chairman and CEO, the Committee follows the same general policies that guide compensation decisions for other executive officers. Thus, the Committee based Mr. Davis’ award levels under the Alliant Energy Corporation Long-Term Incentive Program, the Committee was primarily concerned with providing a competitive total compensation opportunity level to officers. As such, award levels (including awards made to Mr. Davis) were based on a competitivean analysis of similarly sized utility and general industry companies that took into consideration the market level of long-term incentives, as well as the competitiveness of the total compensation package.package, as well as AEC corporate performance.

As was the case for other executive officers, Mr. Davis received a base salary increase in 2004 to $750,000 from his previous level of $685,000, which had been in effect for both 2002 and 2003. The Committee then established award ranges and individual award levelsapproved the salary increase based on responsibility levelits evaluation of Mr. Davis’ performance and market competitiveness. Noon a review of competitive data.

For 2004, Mr. Davis’ short-term incentive payout was based solely on AEC’s performance on the corporate or individual performance measures were reviewed in connectiongoals described above. The Committee approved a final 2004 incentive payout for Mr. Davis of $375,197 based on achievement of these pre-established goals.

For 2004, Mr. Davis’ target long-term incentive percentage was 200% of base salary, with the awards of options and performance shares. Award levels were targeted to the median of the range of such awards paid by comparable companies. The Committee did not consider the amounts of options andtotal award comprising performance shares already outstanding or previously granted when making awardsand stock options. In addition to these grants, the Committee also approved a grant of AEC restricted stock for 2002.recognition and retention purposes. All of Mr. Davis’ 2004 awards in 2002 under the Long-Term Incentive Programlong-term incentive program are shown in the tables under “Stock Option Grants in 2002”2004” and “Long-Term Incentive Awards in 2002.2004.”

DueShare Ownership Guidelines

AEC has established share ownership guidelines for executive officers as a way to better align the corporate EPS and TSR goals not being achieved, there was no payoutfinancial interests of its officers with those of its shareowners. Under these guidelines, the requisite ownership numbers are 85,000 shares for the performance share portionChief Executive Officer, 36,000 shares for Executive Vice Presidents and 12,000 shares for Vice Presidents. These executive officers are expected to make continuing progress toward compliance with these guidelines. Individuals at the participating levels are asked to achieve the recommended ownership multiple within a 5-year period from the effective date of becoming an officer. The Chief Executive Officer retains the Long-Term Incentive Program’s three-year cycle that ended in Dec. 2002.right to grant special dispensation for hardship, promotions or new hires.

Policy with Respect to the $1 Million Deduction Limit

Section 162(m) of the Code generally limits the corporate deduction for compensation paid to executive officers named in the proxy statement to $1 million, unless such compensation is based upon performance objectives meeting certain regulatory criteria or is otherwise excluded from the limitation. Based on the Committee’s commitment to link compensation with performance as described in this report, the Committee intends to qualify future compensation paid to the Company’s executive officers for deductibility by the Company under Section 162(m) except in limited appropriate circumstances. All taxable income for 2004 of the executive officers of the Company qualified under Section 162(m) as deductible by the Company.

Conclusion

The Committee believes the existing executive compensation policies and programs provide an appropriate level of competitive compensation for the Company’s executives.executive officers. In addition, the Committee believes that the long- and short-term performance incentives effectively align the interests of executivesexecutive officers and shareowners toward a successful future for the Company.

COMPENSATION AND PERSONNEL COMMITTEE

Judith D. PyleSingleton B. McAllister (Chairperson)

Alan B. Arends

Jack B. EvansMichael L. Bennett

David A. Perdue

Judith D. Pyle

REPORT OF THE AUDIT COMMITTEE

To Our Shareowners:

The Audit Committee (the “Committee”) of the Board of Directors of the Company is composed of five independent Directors,four directors, each of whom is independent as defined inunder the New York Stock Exchange’sNYSE listing standards.standards and SEC rules. The Committee operates under a written charter adopted by the Board of Directors. The Audit Committee Charter of the Company as amended by the Board of Directors on March 19, 2003, is attached as Appendix A to this proxy statement. Under the Charter, among other things, the Committee is responsible for the appointment, compensation and oversight of the Company’s independent auditors.

The Company’s management (“management”) is responsible for the Company’s internal controls and the financial reporting process, including the system of internal controls. The independent auditors are responsible for expressing an opinion on the conformity of the Company’s audited consolidated financial statements with accounting principles generally accepted accounting principles.in the United States of America. The Committee has reviewed and discussed the audited consolidated financial statements with management and the independent auditors. The Committee has discussed with the independent auditors matters required to be discussed by Statement on Auditing Standards No. 61 (Communication With Audit Committees).

The Company’s independent auditors have provided to the Committee the written disclosures required by Independence Standards Board Standard No. 1 (Independence Discussions with Audit Committees), and the Committee discussed with the independent auditors their independence.

The Committee pre-approveshas adopted a policy that requires advance approval of all audit, audit-related, tax and other permitted services performed by the independent auditor. The policy provides for pre-approval by the Committee of specifically defined audit and non-audit services after the Committee is provided with the appropriate level of details regarding the specific services to be provided. The policy does not permit delegation of the Committee’s authority to management. In the event the need for specific services arises between Committee meetings, the Committee has delegated to the Chairperson of the Committee authority to approve permitted services provided bythat the independent auditors.Chairperson reports any decisions to the Committee at its next scheduled meeting.

The principal accounting fees that were billed to the Company and AEC paid toby its independent auditors for 2001 and 2002 forwork performed on behalf of the Company and AECits subsidiaries for 2003 and 2004 were as follows:

⁽¹⁾The Audit Fees for 2004 included additional fees required by Section 404 of the Sarbanes-Oxley Act related to AEC’s internal controls for financial reporting that were not required in 2003.

Audit-Related Fees consisted of the fees billed for employee benefits plan audits and attest services not required by statute or regulations for both 2003 and 2004, and Sarbanes-Oxley Section 404 planning for 2004.

Tax Fees consisted of the fees billed for professional services rendered for tax compliance, tax advice and tax planning, including all services performed by the professional staff in the independent auditors’ tax division, except those rendered in connection with the audit.

All Other Fees consisted of license fees for tax and accounting research software products.

The Audit Committee does not consider the provision of non-audit services by the independent auditors described above to be incompatible with maintaining auditor independence.

The Committee discussed with the Company’s internal and independent auditors the overall scopes and plans for their respective audits. The Committee meets with the internal and independent auditors, with and without management present, to discuss the results of their examinations, the evaluation of the Company’s internal controls and overall quality of the Company’s financial reporting.

Based on the Committee’s reviews and discussions with management, the internal auditors and the independent auditors referred to above, the Committee recommended to the Board of Directors that the audited consolidated financial statements be included in the Company’s Annual Report on Form 10-K for the year ended Dec. 31, 2002,2004 for filing with the SEC.

AUDIT COMMITTEE

Jack B. EvansMichael L. Bennett (Chairperson)

Alan B. Arends

Katharine C. Lyall

Singleton B. McAllister

Ann K. Newhall

David A. Perdue

SECTION 16(a) BENEFICIAL OWNERSHIP

REPORTING COMPLIANCE

TheSection 16(a) of the Securities Exchange Act of 1934 requires the Company’s Directors, its executive officersdirectors and certain other officers are required to report theirfile reports of ownership and changes in ownership of the Company’s Preferredpreferred stock and any changes in that ownership towith the SEC and the New York Stock Exchange. To the bestNYSE. As a matter of practice, the Company’s knowledge, all requiredfilingsShareowner Services Department assists the Company’s reporting persons in 2002 were properly madepreparing initial reports of ownership and reports of changes in a timely fashion. In makingownership and files those reports on their behalf. The Company is required to disclose in this proxy statement the above statements,failure of reporting persons to file these reports when due. Based on the Company has relied on thewritten representations of the reporting persons involved and on copies of theirthe reports filed with the SEC.SEC, the Company believes that all reporting persons of the Company satisfied these filing requirements.

By Order of the Board of Directors,

/s/ F. J. Buri

F. J. Buri

Corporate Secretary

APPENDIX A – AUDIT COMMITTEE CHARTER

Purposes and Role of Committee

The purposes of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of Alliant Energy Corporation (the “Company”) are to: (1) assist Board oversight of (a) the integrity of the Company’s financial statements, (b) the Company’s compliance with legal and regulatory requirements, (c) the independent auditors’ qualifications and independence, and (d) the performance of the Company’s internal audit function and independent auditors; and (2) prepare the report that Securities and Exchange Commission (“Commission”) rules require to be included in the Company’s annual proxy statement.

The role of the Committee is oversight. Management and the internal auditing department are responsible for maintaining and evaluating appropriate accounting and financial reporting principles and policies and internal controls and procedures designed to ensure compliance with accounting standards and applicable laws and regulations. The independent auditors are responsible for auditing the financial statements and assessing the Company’s internal controls.

Committee Membership

The Committee shall consist of three or more members of the Board, each of whom satisfies the requirements for independence and experience under Section 10A(m)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”), Commission rules and the listing standards of the New York Stock Exchange (the “NYSE”). The Board will endeavor to ensure that at least one Committee member shall qualify as an “audit committee financial expert” as defined by SEC rules. Committee members may not serve on audit committees of more than two other public companies. Committee members shall serve at the pleasure of the Board and for such term or terms as the Board may determine.

Committee Structure and Operations

The Board shall designate one member of the Committee as its Chair. The Committee shall meet in formal session at least three times each year and, in addition, hold quarterly meetings with the independent auditors and management to discuss the annual audited financial statements and the quarterly earnings releases. Additional meetings shall be held when deemed necessary or desirable by a majority of the Committee or its Chair. The Committee will meet periodically in executive session without management present.

A majority of the Committee members currently holding office constitutes a quorum for the transaction of business. The Committee may take action only upon the affirmative vote of a majority of the Committee members present at a duly held meeting. The Committee may meet in person or telephonically, and may act by unanimous written consent. The Committee may invite such members of management to its meetings as it deems desirable or appropriate.

Committee Duties

The duties of the Committee are to:

the independent auditors on accounting procedures and systems of control. Recommend to the Board the acceptance of such audits that are accompanied by certification.