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3: EX-31.2 Certification of the CFO for Alliant Energy HTML 28K
4: EX-31.3 Certification of the CEO for Ipl HTML 28K
5: EX-31.4 Certification of the CFO for Ipl HTML 28K
6: EX-31.5 Certification of the CEO for Wpl HTML 28K
7: EX-31.6 Certification of the CFO for Wpl HTML 28K
8: EX-32.1 Written Statement of CEO and CFO Pursuant to 18 HTML 25K
U.S.C.1350 for Alliant Energy
9: EX-32.2 Written Statement of CEO and CFO Pursuant to 18 HTML 25K
U.S.C.1350 for Ipl
10: EX-32.3 Written Statement of CEO and CFO Pursuant to 18 HTML 25K
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i☐TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Name of Registrant, State of Incorporation, Address of Principal Executive Offices, Telephone Number, Commission File Number, IRS Employer Identification Number
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.
Securities registered pursuant to Section 12(b) of the Act:
Alliant Energy Corporation, iCommon Stock, $0.01 Par Value,
Trading Symbol iLNT, iNasdaq Global Select Market
Indicate by check mark whether the registrant (1) has 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 registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
Alliant Energy Corporation - iYes ☒ No ☐
Interstate Power and Light Company - iYes ☒ No ☐
Wisconsin Power and Light Company - iYes
☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Alliant Energy Corporation - iYes ☒ No ☐
Interstate Power and Light Company - iYes
☒ No ☐
Wisconsin Power and Light Company - iYes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,”“accelerated filer,”“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Alliant Energy Corporation - iLarge
Accelerated Filer ☒ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller Reporting Company i☐ Emerging Growth Company i☐
Interstate Power and Light Company - Large Accelerated Filer ☐ Accelerated Filer
☐ iNon-accelerated Filer ☒ Smaller Reporting Company i☐ Emerging Growth Company i☐
Wisconsin Power and Light Company - Large Accelerated Filer ☐ Accelerated Filer ☐ iNon-accelerated Filer ☒ Smaller Reporting Company i☐ Emerging Growth Company i☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Alliant Energy Corporation ☐
Interstate Power and Light Company ☐
Wisconsin Power and Light Company ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Alliant Energy Corporation - Yes i☐ No
☒
Interstate Power and Light Company - Yes i☐ No ☒
Wisconsin Power and Light Company - Yes i☐ No ☒
Number of shares outstanding of each class of common
stock as of June 30, 2022:
Alliant Energy Corporation, Common Stock, $0.01 par value, i250,926,232 shares outstanding
Interstate Power and Light Company, Common Stock, $2.50 par value, i13,370,788
shares outstanding (all outstanding shares are owned beneficially and of record by Alliant Energy Corporation)
Wisconsin Power and Light Company, Common Stock, $5 par value, i13,236,601 shares outstanding (all outstanding shares are owned beneficially and of record by Alliant Energy Corporation)
The following abbreviations or acronyms used in this report are defined below:
Abbreviation or Acronym
Definition
Abbreviation or Acronym
Definition
2021
Form 10-K
Combined Annual Report on Form 10-K filed by Alliant Energy, IPL and WPL for the year ended Dec. 31, 2021
IPL
Interstate Power and Light Company
AEF
Alliant Energy Finance, LLC
IUB
Iowa Utilities Board
AFUDC
Allowance for funds used during construction
MDA
Management’s Discussion and Analysis of Financial
Condition and Results of Operations
Alliant Energy
Alliant Energy Corporation
MISO
Midcontinent Independent System Operator, Inc.
ATC
American Transmission Company LLC
MW
Megawatt
ATC Holdings
Interest in American Transmission Company LLC and ATC Holdco LLC
MWh
Megawatt-hour
Corporate
Services
Alliant Energy Corporate Services, Inc.
N/A
Not applicable
DAEC
Duane Arnold Energy Center
Note(s)
Combined Notes to Condensed Consolidated Financial Statements
Dth
Dekatherm
OPEB
Other postretirement benefits
EGU
Electric generating unit
PPA
Purchased
power agreement
EPA
U.S. Environmental Protection Agency
PSCW
Public Service Commission of Wisconsin
EPS
Earnings per weighted average common share
SEC
Securities and Exchange Commission
FERC
Federal Energy Regulatory Commission
U.S.
United States of America
Financial
Statements
Condensed Consolidated Financial Statements
West Riverside
West Riverside Energy Center
FTR
Financial transmission right
Whiting Petroleum
Whiting Petroleum Corporation
GAAP
U.S. generally accepted accounting principles
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:
•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 terrorist incidents, including physical attacks and cyber attacks, or responses to such incidents;
•the impact of customer- and third party-owned generation, including alternative electric suppliers, in IPL’s and WPL’s service territories on system reliability, operating expenses and customers’ demand for electricity;
•the
impact of energy efficiency, franchise retention and customer disconnects on sales volumes and margins;
•the impact that price changes may have on IPL’s and WPL’s customers’ demand for electric, gas and steam services and their ability to pay their bills;
•IPL’s and WPL’s ability to obtain adequate and timely rate relief to allow for, among other things, the recovery of and/or the return on costs, including fuel costs, operating costs, transmission costs, deferred expenditures, deferred tax assets, tax expense, capital expenditures, and remaining costs related to EGUs that may be permanently closed and certain other retired assets, decreases in sales volumes, earning their authorized rates of return, and the payments to their parent of expected levels of dividends;
•federal
and state regulatory or governmental actions, including the impact of legislation, and regulatory agency orders;
•the ability to utilize tax credits and net operating losses generated to date, and those that may be generated in the future, before they expire;
•the impacts of changes in the tax code, including tax rates, minimum tax rates, and adjustments made to deferred tax assets and liabilities;
•the ability to complete construction of renewable generation and storage projects by planned in-service dates and within the cost targets set by regulators due to cost increases of and access to materials, equipment and commodities including due to tariffs, duties or other assessments, such as any additional tariffs resulting from U.S. Department of Commerce investigations into
the sourcing of solar project materials and equipment from certain countries, labor issues or supply shortages, the ability to successfully resolve warranty issues or contract disputes, the ability to achieve the expected level of tax benefits based on tax guidelines and project costs, and the ability to efficiently utilize the renewable generation and storage project tax benefits for the benefit of customers;
•employee workforce factors, including changes in key executives, ability to hire and retain employees with specialized skills, ability to create desired corporate culture, collective bargaining agreements and negotiations, work stoppages or restructurings;
•changes in the price of delivered natural gas, transmission, purchased electricity and coal, particularly during elevated market prices, and any resulting changes to counterparty credit risk, due to shifts in supply and demand caused by market conditions, regulations and MISO’s annual resource adequacy process;
•changes to the creditworthiness of, or performance of obligations by, counterparties with which Alliant Energy, IPL and WPL have contractual arrangements, including participants in the energy markets and fuel suppliers and transporters;
•any material post-closing
payments related to any past asset divestitures, including the sale of Whiting Petroleum, which could result from, among other things, indemnification agreements, warranties, guarantees or litigation;
•weather effects on results of utility operations;
•the direct or indirect effects resulting from the ongoing novel coronavirus (COVID-19) pandemic and the spread of variant strains, including any vaccine mandates and testing requirements, on sales volumes, margins, operations, employees, labor markets, contractors, vendors, the ability to complete construction projects, supply chains, customers’ inability to pay bills, suspension of disconnects, the market value of the assets that fund pension plans and the potential for additional funding requirements, the ability of counterparties to meet their obligations, compliance
with regulatory requirements, the ability to implement regulatory plans, economic conditions and access to capital markets;
•issues associated with environmental remediation and environmental compliance, including compliance with all environmental and emissions permits, the Coal Combustion Residuals Rule, future changes in environmental laws and regulations, including federal, state or local regulations for carbon dioxide emissions reductions from new and existing fossil-fueled EGUs, and litigation associated with environmental requirements;
•increased pressure from customers, investors and other stakeholders to more rapidly reduce carbon dioxide emissions;
•the ability to defend against environmental claims brought by state and federal agencies, such as the EPA, state
natural resources agencies or third parties, such as the Sierra Club, and the impact on operating expenses of defending and resolving such claims;
•continued access to the capital markets on competitive terms and rates, and the actions of credit rating agencies;
•disruptions to ongoing operations and the supply of materials, services, equipment and commodities needed to construct solar generation, battery storage and electric and gas distribution projects, which may result from geopolitical issues, supplier manufacturing constraints, labor issues or transportation issues, as well as affect the ability to meet capacity requirements and result in increased capacity expense;
•possible changes to MISO’s methodology establishing capacity planning reserve margin and capacity
accreditation requirements that may impact how and when new generating facilities such as IPL’s and WPL’s additional solar generation may be accredited with energy capacity and may require IPL and WPL to adjust their current resource plans, the need to add resources to comply with MISO’s proposal, or procure capacity in the market whereby such costs might not be recovered in rates;
•disruptions in the supply and delivery of natural gas, purchased electricity and coal;
•the direct or indirect effects resulting from breakdown or failure of equipment in the operation of electric and gas distribution systems, such as mechanical problems and explosions or fires, and compliance with electric and gas transmission and distribution safety regulations, including regulations promulgated by the Pipeline and Hazardous Materials Safety Administration;
•issues
related to the availability and operations of EGUs, including start-up risks, breakdown or failure of equipment, availability of warranty coverage for equipment breakdowns or failures, performance below expected or contracted levels of output or efficiency, operator error, employee safety, transmission constraints, compliance with mandatory reliability standards and risks related to recovery of resulting incremental operating, fuel-related and capital costs through rates;
•impacts that excessive heat, excessive cold, storms or natural disasters may have on Alliant Energy’s, IPL’s and WPL’s operations and recovery of costs associated with restoration activities or on the operations of Alliant Energy’s investments;
•Alliant Energy’s ability to sustain its dividend payout ratio goal;
•changes
to costs of providing benefits and related funding requirements of pension and OPEB plans due to the market value of the assets that fund the plans, economic conditions, financial market performance, interest rates, timing and form of benefits payments, life expectancies and demographics;
•material changes in employee-related benefit and compensation costs, including settlement losses related to pension plans;
•risks associated with operation and ownership of non-utility holdings;
•changes in technology that alter the channels through which customers buy or utilize Alliant Energy’s, IPL’s or WPL’s products and services;
•impacts on equity income from unconsolidated investments from valuations and potential
changes to ATC’s authorized return on equity;
•impacts of IPL’s future tax benefits from Iowa rate-making practices, including deductions for repairs expenditures, allocation of mixed service costs and state depreciation, and recoverability of the associated regulatory assets from customers, when the differences reverse in future periods;
•current or future litigation, regulatory investigations, proceedings or inquiries;
•reputational damage from negative publicity, protests, fines, penalties and other negative consequences resulting in regulatory and/or legal actions;
•the effect of accounting standards issued periodically by standard-setting bodies;
•the
ability to successfully complete tax audits and changes in tax accounting methods with no material impact on earnings and cash flows; and
•other factors listed in MDA and Risk Factors in Item 1A in the 2021 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.
Common stock - $ii0.01/
par value - ii480,000,000/ shares authorized;
i250,926,232 and i250,474,529 shares outstanding
i3
i3
Additional
paid-in capital
i2,759
i2,749
Retained
earnings
i3,387
i3,250
Shares
in deferred compensation trust - i388,363 and i383,532 shares at a weighted average cost of $i31.72
and $i30.59 per share
(i12)
(i12)
Total
Alliant Energy Corporation common equity
i6,137
i5,990
Noncontrolling
interest
i29
i—
Total equity
i6,166
i5,990
Total
liabilities and equity
$i19,391
$i18,553
(a)As
of June 30, 2022, Alliant Energy’s assets of a consolidated VIE that may be used only to settle obligations of that VIE include $i1 million of current assets and $i428 million
of property, plant and equipment, net, and Alliant Energy’s liabilities of that VIE that creditors do not have recourse to include $i8 million of other liabilities. Refer to Note 1(b) for additional information.
Refer to accompanying Combined Notes to Condensed Consolidated Financial Statements.
Earnings
per share data is not disclosed given Alliant Energy Corporation is the sole shareowner of all shares of IPL’s common stock outstanding during the periods presented.
Refer to accompanying Combined Notes to Condensed Consolidated Financial Statements.
Earnings
per share data is not disclosed given Alliant Energy Corporation is the sole shareowner of all shares of WPL’s common stock outstanding during the periods presented.
Refer to accompanying Combined Notes to Condensed Consolidated Financial Statements.
Common stock - $ii5/
par value - ii18,000,000/ shares authorized;
ii13,236,601/ shares outstanding
i66
i66
Additional
paid-in capital
i1,968
i1,704
Retained
earnings
i1,120
i1,053
Total
Wisconsin Power and Light Company common equity
i3,154
i2,823
Noncontrolling
interest
i29
i—
Total equity
i3,183
i2,823
Total
liabilities and equity
$i8,118
$i7,518
(a)As
of June 30, 2022, WPL’s assets of a consolidated VIE that may be used only to settle obligations of that VIE include $i1 million of current assets and $i428 million
of property, plant and equipment, net, and WPL’s liabilities of that VIE that creditors do not have recourse to include $i8 million of other liabilities. Refer to Note 1(b) for additional information.
Refer to accompanying Combined Notes to Condensed Consolidated Financial Statements.
COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. iiiSUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES//
NOTE 1(a) General - iiiThe
interim unaudited Financial Statements included herein have been prepared pursuant to the rules and regulations of the SEC. 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 2021 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 six months ended June 30, 2022 are not necessarily indicative of results that may be expected for the year ending December 31, 2022.
iiiA
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.//iiiCertain
prior period amounts in the Financial Statements and Notes have been reclassified to conform to the current period presentation for comparative purposes.//
Note 1(b) Variable Interest Entities (VIEs) -iiA
portion of WPL’s solar generation projects is financed, and is expected to be financed, with capital from tax equity partners through joint ventures./
In 2022, WPL 2022 Solar Holdco, LLC was formed as a joint venture to own and operate project companies responsible for the construction, ownership and operation of various solar generation assets. Members of the joint venture are a WPL subsidiary (the managing member) and a tax equity partner. In June 2022, the WPL subsidiary and the tax equity partner contributed $i62
million and $i29 million, respectively, to WPL 2022 Solar Holdco, LLC in exchange for membership interests. In June 2022, $i88 million of the contributed
funds were paid to WPL in exchange for equity interests in the project companies. Once asset construction is complete, the WPL subsidiary and the tax equity partner will make additional cash contributions based on the fair value of the solar generation assets. Earnings, tax attributes, and cash flows from the joint venture will be allocated to both the WPL subsidiary and the tax equity partner in varying percentages over the life of the partnership. Once the tax equity partner has earned its negotiated rate of return and the agreed upon contractual date has been reached, WPL has the option to purchase the remaining interest in the joint venture from the tax equity partner at fair value.
Alliant Energy and WPL consolidate this joint venture as it is a VIE in which WPL holds a variable interest, and WPL controls decisions that are significant to the joint venture’s ongoing operations and economic results
(i.e., WPL is the primary beneficiary).
The joint venture is subject to profit sharing arrangements in which the allocation of the joint venture’s cash distributions and tax benefits to members is based on factors other than members' relative ownership percentages. As a result, WPL utilizes the Hypothetical Liquidation at Book Value (HLBV) method to allocate proceeds to each partner at the balance sheet date based on the liquidation provisions of the related joint venture's operating agreement and to adjust the amount of the VIE's net income attributable to Alliant Energy and WPL, as well as the noncontrolling interest during the period.
In each reporting period, the application of HLBV to WPL’s consolidated VIE results in a difference between the amount of profit from the consolidated joint venture and the amount included in WPL’s regulated rates. WPL
is subject to GAAP provisions for regulated operations and recognizes a regulatory liability or regulatory asset for amounts representing the timing difference between WPL’s profit earned from the joint venture and the amount included in regulated rates for recovery of its solar generation projects. The amounts recorded in income will ultimately reflect the amount allowed in regulated rates to recover WPL’s investments over the useful life of the solar projects.
Refer to Note 6 for discussion of a noncontrolling interest associated with the joint venture.
WPL’s
Western Wisconsin gas distribution expansion investments
i50
i52
—
—
i50
i52
Other
i113
i132
i58
i80
i55
i52
$i2,051
$i1,940
$i1,490
$i1,443
$i561
$i497
///
Derivatives
- Refer to Note 11 for discussion of changes in Alliant Energy’s, IPL’s and WPL’s derivative liabilities/assets during the three and six months ended June 30, 2022, which result in comparable changes to regulatory assets/liabilities on the balance sheets.
Commodity cost recovery - The cost recovery mechanism for WPL’s retail electric customers is based on forecasts of certain fuel-related costs expected to be incurred during forward-looking test periods and fuel monitoring ranges determined by the PSCW during each retail electric rate proceeding or in a separate fuel cost plan approval
proceeding. During the six months ended June 30, 2022, WPL’s actual fuel-related costs fell outside these fuel monitoring ranges, resulting in a $i40 million deferral of higher than expected fuel-related costs as of June 30, 2022.
iii
Regulatory
liabilities were comprised of the following items (in millions):
In June 2022, WPL announced revised expected timing for the retirements of its remaining coal-fired EGUs in order to help manage regional capacity and changing generation requirements across the MISO region. WPL currently expects to retire the Edgewater Generating Station (i414 MW)
by June 1, 2025, and Columbia Units 1 and 2 by June 1, 2026 (i595 MW in aggregate). In addition, IPL currently expects to retire the coal-fired Lansing Generating Station (i275 MW) in the first half of
2023. Alliant Energy, IPL and WPL are working with MISO, state regulatory commissions and other regulatory agencies, as required, to determine the timing of these actions, which are subject to change depending on operational, regulatory, market and other factors.
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. The transfers of receivables meet the criteria for sale accounting established by the transfer of financial assets accounting rules. As of June 30, 2022, IPL had $i95 million
of available capacity under its sales of accounts receivable program. iiIPL’s
maximum and average outstanding cash proceeds (based on daily outstanding balances) related to the sales of accounts receivable program for the three and six months ended June 30 were as follows (in millions):/
Three
Months
Six Months
2022
2021
2022
2021
Maximum outstanding aggregate cash proceeds
$i66
$i110
$i66
$i110
Average
outstanding aggregate cash proceeds
i18
i61
i11
i46
ii
The
attributes of IPL’s receivables sold under the Receivables Agreement were as follows (in millions):
As
of June 30, 2022, outstanding receivables past due under the Receivables Agreement were $i20 million. iiAdditional
attributes of IPL’s receivables sold under the Receivables Agreement for the three and six months ended June 30 were as follows (in millions):/
Three Months
Six
Months
2022
2021
2022
2021
Collections
$i500
$i453
$i1,061
$i982
Write-offs,
net of recoveries
i1
i1
i3
i3
NOTE
5. iINVESTMENTS
Unconsolidated Equity Investments -iAlliant Energy’s equity (income) loss from unconsolidated investments accounted
for under the equity method of accounting for the three and six months ended June 30 was as follows (in millions):
Three Months
Six Months
2022
2021
2022
2021
ATC
Holdings
($i11)
($i11)
($i23)
($i22)
Other
(i5)
(i8)
(i9)
(i12)
($i16)
($i19)
($i32)
($i34)
NOTE
6. iiiCOMMON
EQUITY//
Common Share Activity - iA summary of Alliant Energy’s common stock activity was as follows:
Noncontrolling
Interest - In the second quarter of 2022, WPL and the tax equity partner contributed to the joint venture associated with certain WPL solar generation projects. Earnings, tax attributes and cash flows from the joint venture will be allocated to both the WPL subsidiary and the tax equity partner in varying percentages by category and over the life of the partnership. The tax equity partner's contributions, net of these allocations, is represented as a noncontrolling interest within total equity on Alliant Energy’s and WPL’s balance sheets. Refer to Note 1(b) for additional information.
NOTE
7(a) Short-term Debt - iiiInformation
regarding Alliant Energy’s, IPL’s and WPL’s commercial paper classified as short-term debt was as follows (dollars in millions)://
Maximum amount outstanding (based on daily outstanding balances)
$i441
$i571
$i—
$i19
$i222
$i232
Average
amount outstanding (based on daily outstanding balances)
$i337
$i452
$i—
$i1
$i166
$i177
Weighted
average interest rates
i1.0%
i0.2%
i—%
i0.2%
i0.9%
i0.1%
Six
Months Ended June 30
Maximum amount outstanding (based on daily outstanding balances)
$i577
$i578
$i—
$i19
$i252
$i275
Average
amount outstanding (based on daily outstanding balances)
$i390
$i438
$i—
$i—
$i185
$i183
Weighted
average interest rates
i0.6%
i0.2%
i—%
i0.2%
i0.5%
i0.1%
NOTE
7(b) Long-term Debt - In February 2022, AEF issued $i350 million of i3.6% senior notes due 2032. The net proceeds from the issuance were used to reduce Alliant
Energy’s outstanding commercial paper and for general corporate purposes. In March 2022, AEF entered into a $i300 million variable rate (i2% as of June 30,
2022) term loan credit agreement (with Alliant Energy as guarantor), which expires in March 2024, and used the borrowings under this agreement to retire its $i300 million variable rate term loan credit agreement that expired in March 2022.
Disaggregation
of revenues from contracts with customers, which correlates to revenues for each reportable segment, was as follows (in millions):
Alliant Energy
IPL
WPL
Three
Months Ended June 30
2022
2021
2022
2021
2022
2021
Electric Utility:
Retail
- residential
$i289
$i258
$i158
$i142
$i131
$i116
Retail
- commercial
i196
i175
i127
i115
i69
i60
Retail
- industrial
i244
i210
i136
i116
i108
i94
Wholesale
i54
i47
i16
i15
i38
i32
Bulk
power and other
i29
i27
i5
i14
i24
i13
Total
Electric Utility
i812
i717
i442
i402
i370
i315
Gas
Utility:
Retail - residential
i51
i39
i28
i24
i23
i15
Retail
- commercial
i27
i19
i14
i12
i13
i7
Retail
- industrial
i3
i3
i2
i2
i1
i1
Transportation/other
i13
i8
i8
i5
i5
i3
Total
Gas Utility
i94
i69
i52
i43
i42
i26
Other
Utility:
Steam
i11
i9
i11
i9
—
—
Other
utility
i2
i1
i1
i1
i1
i—
Total
Other Utility
i13
i10
i12
i10
i1
i—
Non-Utility
and Other:
Travero and other
i24
i21
—
—
—
—
Total
Non-Utility and Other
i24
i21
—
—
—
—
Total
revenues
$i943
$i817
$i506
$i455
$i413
$i341
Alliant
Energy
IPL
WPL
Six Months Ended June 30
2022
2021
2022
2021
2022
2021
Electric Utility:
Retail
- residential
$i581
$i520
$i308
$i281
$i273
$i239
Retail
- commercial
i386
i347
i246
i225
i140
i122
Retail
- industrial
i453
i412
i246
i228
i207
i184
Wholesale
i101
i87
i31
i26
i70
i61
Bulk
power and other
i65
i52
i12
i28
i53
i24
Total
Electric Utility
i1,586
i1,418
i843
i788
i743
i630
Gas
Utility:
Retail - residential
i210
i138
i113
i76
i97
i62
Retail
- commercial
i109
i72
i54
i39
i55
i33
Retail
- industrial
i11
i8
i7
i5
i4
i3
Transportation/other
i26
i21
i17
i14
i9
i7
Total
Gas Utility
i356
i239
i191
i134
i165
i105
Other
Utility:
Steam
i20
i18
i20
i18
—
—
Other
utility
i3
i5
i2
i4
i1
i1
Total
Other Utility
i23
i23
i22
i22
i1
i1
Non-Utility
and Other:
Travero and other
i47
i38
—
—
—
—
Total
Non-Utility and Other
i47
i38
—
—
—
—
Total
revenues
$i2,012
$i1,718
$i1,056
$i944
$i909
$i736
///
NOTE
9. iiiINCOME
TAXES//
Income Tax Rates - iiiOverall
effective income tax rates, which were computed by dividing income tax expense (benefit) by income before income taxes, were as follows. The effective income tax rates were different than the federal statutory rate primarily due to state income taxes, production tax credits, amortization of excess deferred taxes and the effect of rate-making on property-related differences. The increases in Alliant Energy’s and WPL’s overall effective income tax rates for the three //
and six months ended June 30, 2022 compared to the same periods in 2021 were primarily due to decreased amortization of excess deferred taxes primarily at WPL.
Alliant
Energy
IPL
WPL
Three Months
Six Months
Three Months
Six Months
Three Months
Six Months
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Overall
income tax rate
i2%
(i13%)
i3%
(i16%)
(i16%)
(i13%)
(i15%)
(i15%)
i18%
(i23%)
i18%
(i27%)
Deferred
Tax Assets and Liabilities -
Carryforwards - iiiAt
June 30, 2022, carryforwards and expiration dates were estimated as follows (in millions)://
Range
of Expiration Dates
Alliant Energy
IPL
WPL
Federal net operating losses
2037
$i41
$i38
$i—
State
net operating losses
2022-2042
i556
i10
i2
Federal
tax credits
2022-2042
i620
i396
i201
Iowa
Tax Reform - In March 2022, Iowa tax reform was enacted, which would reduce the current i9.8% Iowa corporate income tax rate beginning in 2023 if certain state income tax revenue triggers are satisfied. Annually, and by each November 1, the Iowa Department of Revenue will establish corporate income tax rates for the next tax year based on net corporate income tax receipts for the prior tax year. These corporate income tax rate reductions are currently expected to occur over a period
of several years, with a target corporate income tax rate of i5.5%. Alliant Energy is currently unable to predict with certainty the timing or amount of any rate reductions. The majority of any reduction in income tax expense as a result of the lower Iowa corporate income tax rate is currently expected to reduce rates for IPL’s customers. In addition, after the 2023 corporate income tax rate is known in the fourth quarter of 2022, Alliant Energy currently expects to record a charge related to the remeasurement of accumulated
deferred income tax assets at its non-utility businesses.
NOTE 10. iiiBENEFIT
PLANS//
NOTE 10(a) Pension and OPEB Plans -
Net Periodic Benefit Costs - iiiThe
components of net periodic benefit costs for sponsored defined benefit pension and OPEB plans for the three and six months ended June 30 are included below (in millions). For IPL and WPL, amounts are for their plan participants covered under plans they sponsor, as well as amounts directly assigned to them related to certain participants in the Alliant Energy and Corporate Services sponsored plans.//
Defined
Benefit Pension Plans
OPEB Plans
Three Months
Six Months
Three Months
Six Months
Alliant Energy
2022
2021
2022
2021
2022
2021
2022
2021
Service
cost
$i2
$i3
$i4
$i6
$i1
$i1
$i2
$i2
Interest
cost
i9
i9
i18
i17
i2
i1
i3
i2
Expected
return on plan assets
(i17)
(i17)
(i34)
(i34)
(i2)
(i1)
(i3)
(i2)
Amortization
of actuarial loss
i8
i9
i16
i19
i—
i1
i1
i2
$i2
$i4
$i4
$i8
$i1
$i2
$i3
$i4
Defined
Benefit Pension Plans
OPEB Plans
Three Months
Six Months
Three Months
Six Months
IPL
2022
2021
2022
2021
2022
2021
2022
2021
Service
cost
$i1
$i2
$i3
$i4
$i1
$i1
$i1
$i1
Interest
cost
i4
i4
i8
i8
i—
i—
i1
i1
Expected
return on plan assets
(i8)
(i8)
(i16)
(i16)
(i1)
(i1)
(i2)
(i2)
Amortization
of actuarial loss
i4
i4
i7
i8
i—
i1
i—
i1
$i1
$i2
$i2
$i4
$i—
$i1
$i—
$i1
Defined
Benefit Pension Plans
OPEB Plans
Three Months
Six Months
Three Months
Six Months
WPL
2022
2021
2022
2021
2022
2021
2022
2021
Service
cost
$i1
$i1
$i2
$i2
$i—
$i—
$i—
$i—
Interest
cost
i4
i4
i8
i8
i—
i1
i1
i1
Expected
return on plan assets
(i8)
(i7)
(i16)
(i15)
i—
i—
i—
i—
Amortization
of actuarial loss
i4
i4
i8
i9
i1
i—
i1
i1
$i1
$i2
$i2
$i4
$i1
$i1
$i2
$i2
NOTE
10(b) Equity-based Compensation Plans - iiiA
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 six months ended June 30 was as follows (in millions)://
As
of June 30, 2022, Alliant Energy’s, IPL’s and WPL’s total unrecognized compensation cost related to share-based compensation awards was $i11 million, $i6
million and $i5 million, respectively, which is expected to be recognized over a weighted average period of between i1
year and i2 years.
iii
For
the six months ended June 30, 2022, performance shares, performance restricted stock units and restricted stock units were granted to key employees under existing plans as follows. These shares and units will be paid out in shares of common stock, and are therefore accounted for as equity awards.
Weighted Average
Grants
Grant Date Fair Value
Performance
shares
i73,762
$i54.45
Performance
restricted stock units
i84,277
i56.97
Restricted
stock units
i76,876
i56.86
///
As
of June 30, 2022, i261,301 shares were included in the calculation of diluted EPS related to the nonvested equity awards.
NOTE 11. iiiDERIVATIVE
INSTRUMENTS//
Commodity Derivatives -
Notional Amounts - iiiAs
of June 30, 2022, gross notional amounts and settlement/delivery years related to outstanding swap contracts, option contracts, physical forward contracts and FTRs 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
i818
2022,2024
i20,382
2022-2023
i234,755
2022-2030
i2,216
2022-2023
i1,512
2022
IPL
i495
2022,2024
i8,100
2022-2023
i132,019
2022-2030
i900
2022-2023
i—
—
WPL
i323
2022
i12,282
2022-2023
i102,736
2022-2030
i1,316
2022-2023
i1,512
2022
Financial
Statement Presentation - iiiDerivative
instruments are recorded at fair value each reporting date on the balance sheets as assets or liabilities as follows (in millions)://
During
the six months ended June 30, 2022, Alliant Energy’s, IPL’s and WPL’s derivative assets increased primarily due to the annual FTR auction operated by MISO and as a result of higher natural gas prices. Alliant Energy’s, IPL’s and WPL’s derivative liabilities increased primarily due to new natural gas contracts entered into in the second quarter of 2022. Based on IPL’s and WPL’s cost recovery mechanisms, the changes in the fair value of derivative liabilities/assets resulted in comparable changes to regulatory assets/liabilities on the balance sheets.
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 up to the amount of exposure under the contracts, or the contracts may need to be unwound and underlying liability positions paid. At June 30, 2022 and December 31, 2021, 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
June 30, 2022 and December 31, 2021. 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 12. iiiFAIR
VALUE MEASUREMENTS//
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. iiiCarrying
amounts and related estimated fair values of other financial instruments were as follows (in millions)://
Information
for fair value measurements using significant unobservable inputs (Level 3 inputs) was as follows (in millions):
Alliant Energy
Commodity Contract Derivative
Assets and (Liabilities), net
Deferred
Proceeds
Three Months Ended June 30
2022
2021
2022
2021
Beginning balance, April 1
$i10
$i15
$i227
$i107
Total
net gains (losses) included in changes in net assets (realized/unrealized)
(i10)
i8
i—
i—
Purchases
i79
i21
i—
i—
Settlements
(a)
(i7)
(i5)
i17
i47
Ending
balance, June 30
$i72
$i39
$i244
$i154
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 June 30
Total
net gains (losses) included in changes in net assets (realized/unrealized)
(i16)
i1
i—
i—
Purchases
i79
i21
i—
i—
Settlements
(a)
(i20)
(i12)
i30
(i34)
Ending
balance, June 30
$i72
$i39
$i244
$i154
The
amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at June 30
($i16)
$i1
$i—
$i—
IPL
Commodity
Contract Derivative
Assets and (Liabilities), net
Deferred Proceeds
Three Months Ended June 30
2022
2021
2022
2021
Beginning balance, April 1
$i7
$i14
$i227
$i107
Total
net gains (losses) included in changes in net assets (realized/unrealized)
(i3)
i4
i—
i—
Purchases
i58
i16
i—
i—
Settlements
(a)
(i4)
(i4)
i17
i47
Ending
balance, June 30
$i58
$i30
$i244
$i154
The
amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at June 30
($i3)
$i4
$i—
$i—
IPL
Commodity
Contract Derivative
Assets and (Liabilities), net
Deferred Proceeds
Six Months Ended June 30
2022
2021
2022
2021
Beginning balance, January 1
$i18
$i26
$i214
$i188
Total
net losses included in changes in net assets (realized/unrealized)
(i7)
(i2)
i—
i—
Purchases
i58
i16
i—
i—
Settlements
(a)
(i11)
(i10)
i30
(i34)
Ending
balance, June 30
$i58
$i30
$i244
$i154
The
amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at June 30
($i8)
($i2)
$i—
$i—
WPL
Commodity
Contract Derivative
Assets and (Liabilities), net
Three Months Ended June 30
2022
2021
Beginning balance, April 1
$i3
$i1
Total
net gains (losses) included in changes in net assets (realized/unrealized)
(i7)
i4
Purchases
i21
i5
Settlements
(i3)
(i1)
Ending
balance, June 30
$i14
$i9
The
amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at June 30
($i7)
$i4
WPL
Commodity
Contract Derivative
Assets and (Liabilities), net
Six Months Ended June 30
2022
2021
Beginning balance, January 1
$i11
$i3
Total
net gains (losses) included in changes in net assets (realized/unrealized)
(i9)
i3
Purchases
i21
i5
Settlements
(i9)
(i2)
Ending
balance, June 30
$i14
$i9
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 June 30
(a)Settlements related to deferred proceeds are due to the change in the carrying amount of receivables sold less the allowance for expected credit losses associated with the receivables sold and cash amounts received from the receivables sold.
Commodity Contracts - iiiThe
fair value of FTR and natural gas commodity contracts categorized as Level 3 was recognized as net derivative assets (liabilities) as follows (in millions)://
NOTE 13(a) Capital Purchase Commitments - Various contractual obligations contain minimum future commitments related to capital expenditures for certain construction projects, including WPL’s expansion of solar generation. At June 30, 2022, Alliant Energy’s and WPL’s minimum future commitments for these projects were $i332
million and $i330 million, respectively.
NOTE 13(b) Other Purchase Commitments - Various commodity supply, transportation and storage contracts help meet obligations to provide electricity and natural gas to utility customers. In addition, there are various purchase commitments associated with other goods and services. iiiAt
June 30, 2022, related minimum future commitments were as follows (in millions)://
Alliant Energy
IPL
WPL
Natural
gas
$i1,396
$i691
$i705
Coal
i148
i72
i76
Other
(a)
i114
i57
i28
$i1,658
$i820
$i809
(a)Includes
individual commitments incurred during the normal course of business that exceeded $iii1//
million at June 30, 2022.
NOTE 13(c) Guarantees and Indemnifications -
Whiting Petroleum - Whiting Petroleum is an independent oil and gas company. In 2004, Alliant Energy sold its remaining interest in Whiting Petroleum. 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 multiple general partnership agreements in the oil and gas industry. The guarantees do not include a maximum limit. Based on information made available to Alliant Energy by Whiting Petroleum, the Whiting Petroleum affiliate holds an approximate i6%
share in the partnerships, and currently known obligations include costs associated with the future abandonment of certain facilities owned by the partnerships. The general partnerships were formed under California law, and Alliant Energy Resources, LLC may need to perform under the guarantees if the affiliate of Whiting Petroleum is unable to meet its partnership obligations.
As of June 30, 2022, the currently known partnership obligations for the abandonment obligations are estimated at $i58
million, which represents Alliant Energy’s currently estimated maximum exposure under the guarantees. Alliant Energy estimates its expected loss to be a portion of the $i58 million of known partnership abandonment obligations of the Whiting Petroleum affiliate and the other partners. Alliant Energy is not aware of any material liabilities related to these guarantees that it is probable that it will be obligated to pay; however, as of both June 30, 2022 and December 31,
2021, a liability of $i5 million is recorded in “Other liabilities” on Alliant Energy’s balance sheets for expected credit losses related to the contingent obligations that are in the scope of these guarantees.
Whiting Petroleum completed a business combination with Oasis Petroleum Inc. in July 2022. The combined operations are now known as Chord Energy Corporation. The business combination is not expected to affect the scope of the Whiting Petroleum affiliate’s obligations to Alliant
Energy or Alliant Energy’s related guarantees.
Non-utility Wind Farm in Oklahoma - In 2017, a wholly-owned subsidiary of AEF acquired a cash equity ownership interest in a non-utility wind farm located in Oklahoma. The wind farm provides electricity to a third party under a long-term PPA. Alliant Energy provided a parent guarantee of its subsidiary’s indemnification obligations under the related operating agreement and PPA. Alliant Energy’s obligations under the operating agreement were $i67
million as of June 30, 2022 and will reduce annually until expiring in July 2047. Alliant Energy’s obligations under the PPA are subject to a maximum limit of $i17 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 June 30,
2022 and December 31, 2021.
Manufactured
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. iiAt
June 30, 2022, 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, which are not discounted, were as follows (in millions). At June 30, 2022, such amounts for WPL were not material./
Alliant
Energy
IPL
Range of estimated future costs
$i9
-
$i25
$i6
-
$i19
Current
and non-current environmental liabilities
$i12
$i8
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 Clean Air Act 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 fuel switching or retiring Prairie Creek Units 1 and 3 by December 31, 2025. Alliant Energy and IPL currently expect to recover material costs incurred by IPL related to compliance with the terms of the Consent Decree from IPL’s electric customers.
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 and electric and gas distribution systems to comply with certain of these rules could be significant. Specific current, proposed or potential environmental matters include, among others: Effluent Limitation Guidelines, Coal Combustion Residuals Rule, and various legislation and EPA regulations to monitor and regulate the emission of greenhouse gases, including the Clean Air Act.
NOTE 13(e) Collective Bargaining Agreements - In May 2022, WPL’s collective
bargaining agreement with International Brotherhood of Electrical Workers Local 965 expired and a new agreement was reached, which expires May 31, 2026.
NOTE 14. iiiSEGMENTS
OF BUSINESS//
iii
Certain
financial information relating to Alliant Energy’s, IPL’s and WPL’s business segments is as follows. Intersegment revenues were not material to their respective operations.
Service Agreements - Pursuant to service agreements, IPL and WPL receive various administrative and general 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. iiiThe
amounts billed for services provided, sales credited and purchases for the three and six months ended June 30 were as follows (in millions)://
IPL
WPL
Three
Months
Six Months
Three Months
Six Months
2022
2021
2022
2021
2022
2021
2022
2021
Corporate
Services billings
$i51
$i48
$i91
$i88
$i42
$i41
$i78
$i76
Sales
credited
i—
i4
i—
i5
i13
i6
i31
i7
Purchases
billed
i129
i99
i223
i242
i39
i21
i61
i47
iii
Net
intercompany payables to Corporate Services were as follows (in millions):
ATC
- Pursuant to various agreements, WPL receives a range of transmission services from ATC. WPL provides operation, maintenance, and construction services to ATC. WPL and ATC also bill each other for use of shared facilities owned by each party. iiThe
related amounts billed between the parties for the three and six months ended June 30 were as follows (in millions):/
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This MDA includes information relating to Alliant Energy, and IPL and WPL (collectively, the Utilities), as well as ATC Holdings, 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 2021 Form 10-K. Unless otherwise noted, all “per share” references in MDA refer to earnings per diluted share.
2022 HIGHLIGHTS
Key highlights since the filing of the 2021 Form 10-K include the following:
Customer
Investments:
•In response to a petition from a U.S.-based solar panel assembler, in March 2022, the U.S. Department of Commerce initiated an investigation into whether the sourcing of solar project materials and equipment from certain Southeast Asian countries circumvent tariffs and duties imposed on such materials and equipment imported from China. In June 2022, a presidential executive order postponed through 2024 any additional tariffs on solar project materials and equipment while the U.S. Department of Commerce completes its investigation. Alliant Energy, IPL and WPL are currently unable to predict with certainty the future outcome or impact of these matters, including from any related legal challenges; however, this could result in delays and/or higher costs for IPL’s and WPL’s planned development and acquisition of additional renewable energy, and impact Alliant Energy’s, IPL’s and WPL’s anticipated
future construction and acquisition expenditures.
•In June 2022, the PSCW issued an order approving WPL’s second certificate of authority to acquire, construct, own, and operate up to 414 MW of new solar generation in the following Wisconsin counties: Dodge (150 MW), Waushara (99 MW), Rock (65 MW), Grant (50 MW) and Green (50 MW).
•In June 2022, IPL filed for a revised fixed cost cap of $1,934/kilowatt with the IUB related to IPL’s November 2021 advance rate-making principles filing for up to 400 MW of solar generation with in-service dates in 2023 and 2024 and approximately 75 MW of battery storage in 2024, which reflects higher materials, labor and shipping costs. The revised fixed cost cap includes allowance for funds used during construction and transmission upgrade costs among other costs, and excludes estimated tax equity partner contributions. IPL currently expects a decision from the IUB on its filing by the end of 2022.
•Refer to Note
3 for discussion of revised expected timing for the retirements of various IPL and WPL coal-fired EGUs.
•Refer to Notes 1(b) and 6 for discussion of contributions to the joint venture associated with certain WPL solar generation projects made in the second quarter of 2022 by WPL and the tax equity partner.
Rate Matters:
•In June 2022, WPL filed a limited reopener request with the PSCW to increase annual retail gas rates for the 2023 forward-looking Test Period by approximately
$10 million, which reflects changes in weighted average cost of capital, updated depreciation rates and modifications to certain regulatory asset and regulatory liability amortizations. In July 2022, WPL filed a request with the PSCW to decrease annual retail electric rates by approximately $37 million effective January 1, 2023, which reflects a change in expected fuel-related costs in 2023. WPL currently expects decisions from the PSCW on its requests by the end of 2022.
Legislative Matters:
•Refer to Note 9 for discussion of Iowa tax reform enacted in March
2022.
RESULTS OF OPERATIONS
Results of operations include financial information prepared in accordance with GAAP as well as utility electric margins and utility gas margins, which are not measures of financial performance under GAAP. Utility electric margins are defined as electric revenues less electric production fuel, purchased power and electric transmission service expenses. Utility gas margins are defined as gas revenues less cost of gas sold. Utility electric margins and utility gas margins are non-GAAP financial measures because they exclude other utility and non-utility revenues, other operation and maintenance expenses, depreciation and amortization expenses, and taxes other than income tax expense.
Management
believes that utility electric and gas margins provide a meaningful basis for evaluating and managing utility operations since electric production fuel, purchased power and electric transmission service expenses and cost of gas sold are generally passed through to customers, and therefore, result in changes to electric and gas revenues that are comparable to changes in such expenses. The presentation of utility electric and gas margins herein is intended to provide supplemental information for investors regarding operating performance. These utility electric and gas margins may not be comparable to how other entities define utility electric and gas margin. Furthermore, these measures are not intended to replace operating income as determined in accordance with GAAP as an indicator of operating performance.
Additionally, the table below includes EPS for Utilities and Corporate Services, ATC Holdings, and
Non-utility and Parent, which are non-GAAP financial measures. Alliant Energy believes these non-GAAP financial measures are useful to investors because they facilitate an understanding of segment performance and trends, and provide additional information about Alliant Energy’s operations on a basis consistent with the measures that management uses to manage its operations and evaluate its performance.
Financial Results Overview - Alliant Energy’s net income (loss) and EPS attributable to Alliant Energy common shareowners for the three months ended June 30 were as follows (dollars in millions, except per share amounts):
2022
2021
Income
(Loss)
EPS
Income
EPS
Utilities and Corporate Services
$154
$0.61
$128
$0.51
ATC
Holdings
8
0.03
8
0.03
Non-utility and Parent
(3)
(0.01)
8
0.03
Alliant
Energy Consolidated
$159
$0.63
$144
$0.57
Alliant Energy’s Utilities and Corporate Services net income increased by $26 million for the three-month period, primarily due to higher AFUDC, timing of income tax expense and higher temperature-normalized sales. These items were partially offset by higher interest expense.
Alliant Energy’s Non-utility and Parent net income decreased by $11 million for the three-month period primarily due to the timing of income taxes.
For the three and six months ended June 30, operating income and a reconciliation of utility electric and gas margins to the most directly comparable GAAP measure, operating income, was as follows (in millions):
Alliant
Energy
IPL
WPL
Three Months
2022
2021
2022
2021
2022
2021
Operating income
$212
$176
$109
$111
$95
$55
Electric
utility revenues
$812
$717
$442
$402
$370
$315
Electric production fuel and purchased power expenses
(191)
(138)
(83)
(55)
(108)
(84)
Electric
transmission service expense
(133)
(121)
(91)
(79)
(41)
(42)
Utility Electric Margin (non-GAAP)
488
458
268
268
221
189
Gas
utility revenues
94
69
52
43
42
26
Cost of gas sold
(48)
(31)
(27)
(22)
(21)
(9)
Utility
Gas Margin (non-GAAP)
46
38
25
21
21
17
Other utility revenues
13
10
12
10
1
—
Non-utility
revenues
24
21
—
—
—
—
Other operation and maintenance expenses
(166)
(160)
(87)
(81)
(67)
(69)
Depreciation
and amortization expenses
(166)
(165)
(95)
(93)
(69)
(70)
Taxes other than income tax expense
(27)
(26)
(14)
(14)
(12)
(12)
Operating
income
$212
$176
$109
$111
$95
$55
Alliant
Energy
IPL
WPL
Six Months
2022
2021
2022
2021
2022
2021
Operating income
$460
$374
$218
$214
$227
$145
Electric
utility revenues
$1,586
$1,418
$843
$788
$743
$630
Electric production fuel and purchased power expenses
(359)
(271)
(150)
(114)
(209)
(158)
Electric
transmission service expense
(271)
(255)
(188)
(171)
(83)
(84)
Utility Electric Margin (non-GAAP)
956
892
505
503
451
388
Gas
utility revenues
356
239
191
134
165
105
Cost of gas sold
(216)
(131)
(112)
(72)
(104)
(59)
Utility
Gas Margin (non-GAAP)
140
108
79
62
61
46
Other utility revenues
23
23
22
22
1
1
Non-utility
revenues
47
38
—
—
—
—
Other operation and maintenance expenses
(320)
(306)
(171)
(158)
(123)
(128)
Depreciation
and amortization expenses
(332)
(329)
(189)
(187)
(139)
(139)
Taxes other than income tax expense
(54)
(52)
(28)
(28)
(24)
(23)
Operating
income
$460
$374
$218
$214
$227
$145
Operating Income Variances - Variances between periods in operating income for the three and six months ended June 30, 2022 compared to the same periods in 2021 were as follows (in millions):
Three
Months
Six Months
Alliant Energy
IPL
WPL
Alliant Energy
IPL
WPL
Total higher utility electric margin variance (Refer to details below)
$30
$—
$32
$64
$2
$63
Total
higher utility gas margin variance (Refer to details below)
8
4
4
32
17
15
Total (higher) lower other operation and maintenance expenses variance (Refer to details below)
Electric and Gas Revenues and Sales Summary - Electric and gas revenues (in millions), and MWh and Dth sales (in thousands), for the three and six months ended June 30 were as follows:
Alliant
Energy
Electric
Gas
Revenues
MWhs Sold
Revenues
Dths Sold
2022
2021
2022
2021
2022
2021
2022
2021
Three
Months
Retail
$729
$643
6,127
5,959
$81
$61
7,605
6,604
Sales
for resale
69
58
1,456
1,487
N/A
N/A
N/A
N/A
Transportation/Other
14
16
15
16
13
8
22,382
23,056
$812
$717
7,598
7,462
$94
$69
29,987
29,660
Six
Months
Retail
$1,420
$1,279
12,516
12,231
$330
$218
33,701
30,035
Sales
for resale
137
103
3,402
2,558
N/A
N/A
N/A
N/A
Transportation/Other
29
36
31
35
26
21
52,260
47,746
$1,586
$1,418
15,949
14,824
$356
$239
85,961
77,781
IPL
Electric
Gas
Revenues
MWhs
Sold
Revenues
Dths Sold
2022
2021
2022
2021
2022
2021
2022
2021
Three Months
Retail
$421
$373
3,434
3,314
$44
$38
3,778
3,428
Sales
for resale
13
17
422
386
N/A
N/A
N/A
N/A
Transportation/Other
8
12
8
7
8
5
10,154
9,241
$442
$402
3,864
3,707
$52
$43
13,932
12,669
Six
Months
Retail
$800
$734
7,085
6,896
$174
$120
17,380
15,566
Sales
for resale
26
28
1,019
673
N/A
N/A
N/A
N/A
Transportation/Other
17
26
16
17
17
14
22,174
20,419
$843
$788
8,120
7,586
$191
$134
39,554
35,985
WPL
Electric
Gas
Revenues
MWhs
Sold
Revenues
Dths Sold
2022
2021
2022
2021
2022
2021
2022
2021
Three Months
Retail
$308
$270
2,693
2,645
$37
$23
3,827
3,176
Sales
for resale
56
41
1,034
1,101
N/A
N/A
N/A
N/A
Transportation/Other
6
4
7
9
5
3
12,228
13,815
$370
$315
3,734
3,755
$42
$26
16,055
16,991
Six
Months
Retail
$620
$545
5,431
5,335
$156
$98
16,321
14,469
Sales
for resale
111
75
2,383
1,885
N/A
N/A
N/A
N/A
Transportation/Other
12
10
15
18
9
7
30,086
27,327
$743
$630
7,829
7,238
$165
$105
46,407
41,796
Sales
Trends and Temperatures - Alliant Energy’s retail electric and gas sales volumes increased 3% and 15%, respectively, for the three months ended June 30, 2022 compared to the same period in 2021, primarily due to COVID-19 impacts in 2021 and increases in the number of retail customers. Alliant Energy’s retail electric and gas sales volumes increased 2% and 12%, respectively, for the six months ended June 30, 2022 compared to the same period in 2021, primarily due to changes in temperatures, COVID-19 impacts in 2021 and increases in the number of retail customers.
Estimated increases (decreases) to electric and gas margins from the impacts of temperatures for the three and six months ended June 30 were as follows (in millions):
Electric Sales for Resale - Electric sales for resale volume changes were largely due to changes in sales in the wholesale energy markets operated by MISO. These changes are impacted by several factors, including the availability and dispatch of Alliant Energy’s EGUs and electricity demand within these wholesale energy markets. Changes in sales for resale revenues were largely offset by changes in fuel-related costs, and therefore, did not have a significant impact on electric margins.
Gas Transportation/Other - Gas transportation/other sales volume
changes were largely due to changes in the gas volumes supplied to Alliant Energy’s natural gas-fired EGUs caused by the availability and dispatch of such EGUs. Changes in these transportation/other revenues did not have a significant impact on gas margins.
Utility Electric Margin Variances - The following items contributed to increased (decreased) utility electric margins for the three and six months ended June 30, 2022 compared to the same periods in 2021 as follows (in millions):
Three
Months
Six Months
Alliant Energy
IPL
WPL
Alliant Energy
IPL
WPL
Higher revenue requirements at WPL due to increasing rate base (a)
$26
$—
$26
$53
$—
$53
Higher
revenues at IPL due to changes in credits on customers’ bills related to excess deferred income tax benefits amortization through the tax benefit rider (offset by changes in income tax)
5
5
—
11
11
—
Lower
revenues at IPL due to changes in the renewable energy rider (mostly offset by changes in income tax)
(6)
(6)
—
(18)
(18)
—
Other
(includes higher temperature-normalized sales in 2022)
5
1
6
18
9
10
$30
$—
$32
$64
$2
$63
(a)In
December 2021, the PSCW issued an order authorizing annual base rate increases of $114 million and $15 million for WPL’s retail electric and gas customers, respectively, covering the 2022/2023 forward-looking Test Period, which was based on a stipulated agreement between WPL and certain stakeholders. The key drivers for the annual base rate increases include higher retail fuel-related costs in 2022, lower excess deferred income tax benefits in 2022 and 2023 compared to 2021, and revenue requirement impacts of increasing electric and gas rate base, including investments in solar generation. Retail electric rate changes were effective on January 1, 2022 and extend through the end of 2023. Retail gas rate changes were effective on January 1, 2022 and extend through the end of 2022. The higher fuel expense costs are recognized in electric margin and the lower amount of
excess deferred income tax benefits is recognized as a reduction in income tax.
Utility Gas Margin Variances - The following items contributed to increased (decreased) utility gas margins for the three and six months ended June 30, 2022 compared to the same periods in 2021 as follows (in millions):
Three
Months
Six Months
Alliant Energy
IPL
WPL
Alliant Energy
IPL
WPL
Higher revenues at IPL related to changes in recovery amounts for energy efficiency costs through the energy efficiency rider (mostly offset by changes in energy efficiency expense)
$2
$2
$—
$11
$11
$—
Higher
revenue requirements at WPL due to increasing rate base (refer to (a) above)
2
—
2
9
—
9
Other
(includes higher temperature-normalized sales in 2022)
4
2
2
12
6
6
$8
$4
$4
$32
$17
$15
Other
Operation and Maintenance Expenses Variances - The following items contributed to (increased) decreased other operation and maintenance expenses for the three and six months ended June 30, 2022 compared to the same periods in 2021 as follows (in millions):
Three
Months
Six Months
Alliant Energy
IPL
WPL
Alliant Energy
IPL
WPL
Higher energy efficiency expense at IPL (mostly offset by higher revenues)
$—
$—
$—
($8)
($8)
$—
Non-utility
Travero (mostly offset by higher revenues)
Other Income and Deductions Variances - The following items contributed to (increased) decreased other income and deductions for the three and six months ended June 30, 2022 compared to the same periods in 2021 as follows (in millions):
Three
Months
Six Months
Alliant Energy
IPL
WPL
Alliant Energy
IPL
WPL
Higher interest expense primarily due to financings completed in 2022 and 2021 and higher interest rates
($9)
($3)
($2)
($14)
($5)
($3)
Higher
AFUDC primarily due to changes in construction work in progress balances related to WPL’s solar generation
8
—
8
15
—
14
Other
(1)
2
—
1
3
1
($2)
($1)
$6
$2
($2)
$12
Income
Taxes - Refer to Note 9 for details of effective income tax rates.
Preferred Dividend Requirements of IPL - Alliant Energy’s and IPL’s preferred dividend requirements decreased for the three and six months ended June 30, 2022 compared to the same periods in 2021 due to the redemption of IPL’s 5.1% cumulative preferred stock in December 2021.
LIQUIDITY AND CAPITAL RESOURCES
The
liquidity and capital resources summary included in the 2021 Form 10-K has not changed materially, except as described below.
Liquidity Position - At June 30, 2022, Alliant Energy had $19 million of cash and cash equivalents, $601 million ($273 million at the parent company, $250 million at IPL and $78 million at WPL) of available capacity under the single revolving credit facility and $95 million of available capacity at IPL under its sales of accounts receivable program.
Capital Structure - Capital structures at June 30,
2022 were as follows (Long-term Debt (including current maturities) (LD); Short-term Debt (SD); Common Equity (CE)):
Cash Flows - Selected information from the cash flows statements was as follows (in millions):
Alliant
Energy
IPL
WPL
2022
2021
2022
2021
2022
2021
Cash, cash equivalents and restricted cash, January 1
$40
$56
$34
$50
$2
$3
Cash
flows from (used for):
Operating activities
300
207
83
18
198
200
Investing
activities
(370)
(190)
60
98
(384)
(253)
Financing activities
50
(57)
(164)
(155)
188
53
Net
increase (decrease)
(20)
(40)
(21)
(39)
2
—
Cash, cash equivalents and restricted cash, June 30
Operating Activities - The following items contributed to increased (decreased) operating activity cash flows for the six months ended June 30, 2022 compared to the same period in 2021 (in millions):
Alliant
Energy
IPL
WPL
Higher collections from WPL’s increasing base rate
$62
$—
$62
Lower contributions to qualified defined benefit pension plans
19
9
9
Natural gas cost payments from extreme temperatures
in February 2021 resulting in under-recovered natural gas costs at IPL in 2021
14
14
—
Credits issued to IPL’s retail electric customers in 2021 through its transmission cost rider for refunds received in 2020 for MISO transmission owner return on equity complaints
12
12
—
Timing
of WPL’s fuel-related cost recoveries from customers
(37)
—
(37)
Timing
of intercompany payments and receipts
—
(1)
(10)
Other (primarily due to other changes in working capital)
23
31
(26)
$93
$65
($2)
Investing
Activities - The following items contributed to increased (decreased) investing activity cash flows for the six months ended June 30, 2022 compared to the same period in 2021 (in millions):
Alliant Energy
IPL
WPL
(Higher)
lower utility construction and acquisition expenditures (a)
($124)
$19
($143)
Changes in the amount of cash receipts on sold receivables
(62)
(62)
—
Other
6
5
12
($180)
($38)
($131)
(a)Largely
due to higher expenditures for WPL’s solar generation, partially offset by lower expenditures for IPL’s and WPL’s electric and gas distribution systems.
Construction and Acquisition Expenditures - Alliant Energy, IPL and WPL are currently evaluating potential impacts from cost pressures prevalent in the solar generation and battery storage markets and the pending U.S. Department of Commerce investigation on the timing and estimated costs for IPL’s and WPL’s planned development and acquisition of additional renewable energy, which could impact their anticipated future construction and acquisition expenditures. Refer to “2022 Highlights” for further discussion of the U.S. Department of Commerce investigation, as well as information on IPL’s revised
fixed cost cap filing with the IUB in June 2022 for up to 400 MW of solar generation and approximately 75 MW of battery storage.
Financing Activities - The following items contributed to increased (decreased) financing activity cash flows for the six months ended June 30, 2022 compared to the same period in 2021 (in millions):
Alliant Energy
IPL
WPL
Higher
net proceeds from issuance of long-term debt
$650
$—
$—
Capital contributions from noncontrolling interest
29
—
29
Higher payments to retire long-term debt
(300)
—
—
Net
changes in the amount of commercial paper outstanding
(262)
—
51
(Higher) lower common stock dividends
(12)
40
(4)
Higher (lower) capital contributions from IPL’s and WPL’s parent company, Alliant Energy
—
(50)
55
Other
2
1
4
$107
($9)
$135
IPL and WPL Solar Project Tax Equity Financing - Alliant Energy, IPL and WPL are currently evaluating potential impacts from cost pressures prevalent in the solar generation and battery storage markets, as well as the U.S. Department of Commerce investigation discussed in “2022
Highlights,” on the timing and estimated costs for IPL’s and WPL’s planned development and acquisition of additional renewable energy, which could result in changes to their proposed solar project tax equity financing.
Common Stock Issuances - Refer to Note 6 for discussion of common stock issuances by Alliant Energy in 2022.
Long-term Debt - Refer to Note 7(b)
for discussion of AEF’s issuance of long-term debt in 2022. AEF’s current term loan credit agreement that expires in March 2024 includes an option to increase the amount outstanding up to $400 million in aggregate with the same maturity, subject to bank approval, and includes substantially the same financial covenants that are included in Alliant Energy’s credit facility agreement.
Impact of Credit Ratings on Liquidity and Collateral Obligations -
Ratings Triggers - In June 2022, Standard & Poor’s Ratings Services changed WPL’s outlook from stable to negative. This outlook change is not expected to have a material impact on Alliant Energy and WPL’s liquidity or collateral obligations.
Off-Balance Sheet Arrangements and Certain Financial Commitments - A summary of Alliant Energy’s and IPL’s off-balance sheet arrangements and Alliant Energy’s, IPL’s and WPL’s contractual obligations is included in the 2021 Form 10-K and has not changed materially from the items reported in the 2021 Form 10-K,
except for the items described in Notes 4, 7 and 13.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Quantitative and Qualitative Disclosures About Market Risk are reported in the 2021 Form
10-K and have not changed materially.
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 Chief 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 amended) as of June 30, 2022 pursuant to the requirements of the Securities Exchange Act of 1934, as amended. Based on their evaluation, the Chief Executive Officer and the Chief Financial Officer
concluded that Alliant Energy’s, IPL’s and WPL’s disclosure controls and procedures were effective as of the quarter ended June 30, 2022.
There was no change in Alliant Energy’s, IPL’s and WPL’s internal control over financial reporting that occurred during the quarter ended June 30, 2022 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
1. LEGAL PROCEEDINGS
None. SEC regulations require Alliant Energy, IPL and WPL to disclose information about certain proceedings arising under federal, state or local environmental provisions when a governmental authority is a party to the proceedings and such proceedings involve potential monetary sanctions that Alliant Energy, IPL and WPL reasonably believe will exceed a specified threshold. Pursuant to the SEC regulations, Alliant Energy, IPL and WPL use a threshold of $1 million for purposes of determining whether disclosure of any such proceedings is required. Applying this threshold, there are no environmental matters to disclose for this period.
ITEM 1A. RISK FACTORS
The
risk factors described in Item 1A in the 2021 Form 10-K have not changed materially.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
A summary of Alliant Energy common stock repurchases for the quarter ended June 30, 2022 was as follows:
Total
Number
Average Price
Total Number of Shares
Maximum Number (or Approximate
of Shares
Paid Per
Purchased as Part of
Dollar Value) of Shares That May
Period
Purchased (a)
Share
Publicly
Announced Plan
Yet Be Purchased Under the Plan (a)
April 1 through April 30
4,080
$63.56
—
N/A
May 1 through May 31
2,849
58.90
—
N/A
June
1 through June 30
52
58.30
—
N/A
6,981
61.62
—
(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.
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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 5th day of August 2022.
