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Energy
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10: EX-31.2 Certification of the CFO for Alliant Energy HTML 29K
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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 September 30, 2022:
Alliant Energy Corporation, Common Stock, $0.01 par value, i251,021,830shares 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
direct or indirect effects resulting from terrorist incidents, including physical attacks and cyber attacks, or responses to such incidents;
•the impact of penalties or third-party claims related to, or in connection with, a failure to maintain the security of personally identifiable information, including associated costs to notify affected persons and to mitigate their information security concerns;
•the impact of customer- and third party-owned generation, including alternative electric suppliers, in IPL’s and WPL’s service territories on system reliability, operating expenses and customers’ demand for electricity;
•the impact of energy efficiency, franchise retention and customer disconnects on sales volumes and margins;
•the
impact that price changes may have on IPL’s and WPL’s customers’ demand for electric, gas and steam services and their ability to pay their bills;
•inflation and higher interest rates;
•changes in the price of delivered natural gas, transmission, purchased electricity and coal, particularly during elevated market prices, and any resulting changes to counterparty credit risk, due to shifts in supply and demand caused by market conditions, regulations and MISO’s seasonal resource adequacy process;
•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;
•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;
•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, as well as the ability to transfer tax credits that may be generated in the future at adequate pricing;
•the impacts of changes in the tax code, including tax rates, minimum tax rates, and adjustments made to deferred tax assets and liabilities;
•employee workforce factors, including the ability to hire and retain employees with specialized skills, impacts from employee retirements, changes in key executives, ability to create desired corporate culture, collective bargaining agreements and negotiations, work stoppages or restructurings;
•disruptions in the supply and delivery of natural gas, purchased electricity and coal;
•changes to the creditworthiness of, or performance of obligations by, counterparties with which Alliant Energy, IPL and WPL have contractual arrangements, including 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;
•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;
•continued
access to the capital markets on competitive terms and rates, and the actions of credit rating agencies;
•the direct or indirect effects resulting from the ongoing novel coronavirus (COVID-19) pandemic and the spread of variant strains;
•issues associated with environmental remediation and environmental compliance, including compliance with all environmental and emissions permits, the 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;
•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 methodology, or procure capacity in the market whereby such costs might not be recovered in rates;
•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 changes in valuations of the assets held, as well as potential changes to ATC’s authorized return on equity;
•impacts of IPL’s future tax benefits from Iowa rate-making practices, including deductions for repairs expenditures, allocation of mixed service costs and state depreciation, and recoverability of the associated regulatory assets from customers, when the differences reverse in future periods;
•current or future litigation, regulatory investigations, proceedings or inquiries;
•reputational damage from negative
publicity, protests, fines, penalties and other negative consequences resulting in regulatory and/or legal actions;
•the effect of accounting standards issued periodically by standard-setting bodies;
•the ability to successfully complete tax audits and changes in tax accounting methods with no material impact on earnings and cash flows; and
•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.
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.
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 nine months ended September 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) Cash and Cash Equivalents - iiiAt
September 30, 2022, Alliant Energy’s, IPL’s and WPL’s cash and cash equivalents included $i334 million, $i39
million and $i295 million of money market fund investments, respectively, with weighted average interest rates of iii3//%.///
NOTE
1(c) Variable Interest Entities (VIEs) -iiIn 2022, WPL 2022 Solar Holdco, LLC was formed as a joint venture to own and operate project companies
responsible for the construction, ownership and operation of various solar generation assets. Members of the joint venture were a WPL subsidiary (the managing member) and a tax equity partner. In the second quarter of 2022, the WPL subsidiary and the tax equity partner contributed $i62 million and $i29
million, respectively, to WPL 2022 Solar Holdco, LLC in exchange for membership interests, and $i88 million of the contributed funds were paid to WPL in exchange for equity interests in the project companies. In the second quarter of 2022, Alliant Energy and WPL consolidated this joint venture as it was a VIE in which WPL held a variable interest, and WPL controlled decisions that were significant to the joint venture’s ongoing operations and economic results (i.e., WPL was the primary beneficiary).//
In
August 2022, the Inflation Reduction Act of 2022 was enacted. Following its enactment, WPL evaluated the provisions of the new legislation and determined that retaining full ownership of the solar projects is expected to result in lower costs for its customers. As a result, in the third quarter of 2022, WPL and the tax equity partner terminated the tax equity partnership, and WPL returned the $i29 million of initial funding to the tax equity partner. Alliant Energy and WPL no longer expect their solar generation project construction costs to be financed with
capital from tax equity partners, which would result in higher rate base amounts compared to those previously approved by the PSCW for WPL’s planned approximately i1,100 MW of solar generation. Alliant Energy and WPL concluded that no disallowance of anticipated higher rate base amounts was required as of September 30, 2022 given full ownership of WPL's planned solar generation is expected to result in lower costs for WPL's customers.
Refer to Note
6 for discussion of a noncontrolling interest that was initially associated with the joint venture prior to the termination of the tax equity partnership.
WPL’s
Western Wisconsin gas distribution expansion investments
i49
i52
—
—
i49
i52
Other
i120
i132
i64
i80
i56
i52
$i2,041
$i1,940
$i1,423
$i1,443
$i618
$i497
///
Tax-related
- Refer to Note 9 for discussion of Iowa Tax Reform, which resulted in a decrease in Alliant Energy’s and IPL’s tax-related regulatory assets in the third quarter of 2022.
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 nine months ended September 30, 2022, WPL’s actual fuel-related costs fell outside
these fuel monitoring ranges, resulting in a $i83 million deferral of higher than expected fuel-related costs as of September 30, 2022.
Derivatives - Refer to Note 11 for discussion of changes in Alliant Energy’s, IPL’s and WPL’s derivative liabilities/assets during the nine months ended September
30, 2022, which result in comparable changes to regulatory assets/liabilities on the balance sheets.
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.
NOTE 4. iiRECEIVABLES/
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 September 30, 2022, IPL had $i109 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 nine months ended September 30 were as follows (in millions):/
As
of September 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 nine months ended September 30 were as follows (in millions):/
Three Months
Nine
Months
2022
2021
2022
2021
Collections
$i670
$i607
$i1,731
$i1,589
Write-offs,
net of recoveries
i3
i4
i6
i7
NOTE
5. iINVESTMENTS
Unconsolidated Equity Investments -iAlliant Energy’s equity (income) loss from unconsolidated investments accounted
for under the equity method of accounting for the three and nine months ended September 30 was as follows (in millions):
Three Months
Nine Months
2022
2021
2022
2021
ATC
Holdings
($i7)
($i12)
($i29)
($i34)
Other
i2
(i1)
(i8)
(i13)
($i5)
($i13)
($i37)
($i47)
Refer
to Note 13(e) for discussion of a reduction in earnings recorded in the third quarter of 2022 related to a court decision, which is currently expected to reduce the base return on equity authorized for MISO transmission owners, including ATC.
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 a joint venture associated with certain WPL solar generation projects. The tax equity partner's contributions were represented as a noncontrolling interest within total equity on Alliant Energy’s and WPL’s balance sheets as of June 30, 2022. In the third quarter of 2022, WPL and the tax equity partner terminated the tax equity partnership and WPL returned the tax equity partner’s initial contributions, resulting in the reversal of the noncontrolling interest within total equity on Alliant Energy’s and WPL’s balance sheets as of September 30, 2022. Refer to Note 1(c)
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)
$i449
$i648
$i—
$i8
$i251
$i320
Average
amount outstanding (based on daily outstanding balances)
$i353
$i560
$i—
$i—
$i110
$i221
Weighted
average interest rates
i2.4%
i0.2%
i—%
i0.2%
i2.0%
i0.1%
Nine
Months Ended September 30
Maximum amount outstanding (based on daily outstanding balances)
$i577
$i648
$i—
$i19
$i252
$i320
Average
amount outstanding (based on daily outstanding balances)
$i377
$i479
$i—
$i—
$i160
$i196
Weighted
average interest rates
i1.2%
i0.2%
i—%
i0.2%
i0.9%
i0.1%
In
October 2022, Alliant Energy, IPL and WPL reallocated credit facility capacity amounts to $i500 million for Alliant Energy at the parent company level, $i200
million for IPL and $i300 million for WPL, within the $i1 billion total commitment.
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 (i3% as of September 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.
In August 2022, WPL issued $i600
million of i3.95% debentures due 2032. The debentures were issued as green bonds, and an amount equal to or in excess of the net proceeds will be disbursed for the development and acquisition of WPL’s solar EGUs.
In September 2022, Corporate Services retired its $i75
million, i3.45% senior notes due 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 September 30
2022
2021
2022
2021
2022
2021
Electric Utility:
Retail
- residential
$i376
$i348
$i222
$i207
$i154
$i141
Retail
- commercial
i243
i232
i165
i160
i78
i72
Retail
- industrial
i289
i265
i172
i158
i117
i107
Wholesale
i68
i55
i19
i18
i49
i37
Bulk
power and other
i63
i39
i18
i12
i45
i27
Total
Electric Utility
i1,039
i939
i596
i555
i443
i384
Gas
Utility:
Retail - residential
i28
i24
i14
i14
i14
i10
Retail
- commercial
i18
i13
i8
i8
i10
i5
Retail
- industrial
i4
i3
i3
i3
i1
i—
Transportation/other
i12
i10
i8
i6
i4
i4
Total
Gas Utility
i62
i50
i33
i31
i29
i19
Other
Utility:
Steam
i9
i9
i9
i9
—
—
Other
utility
i2
i4
i2
i4
i—
i—
Total
Other Utility
i11
i13
i11
i13
i—
i—
Non-Utility
and Other:
Travero and other
i23
i22
—
—
—
—
Total
Non-Utility and Other
i23
i22
—
—
—
—
Total
revenues
$i1,135
$i1,024
$i640
$i599
$i472
$i403
Alliant
Energy
IPL
WPL
Nine Months Ended September 30
2022
2021
2022
2021
2022
2021
Electric Utility:
Retail
- residential
$i956
$i868
$i529
$i488
$i427
$i380
Retail
- commercial
i628
i579
i411
i385
i217
i194
Retail
- industrial
i743
i677
i418
i386
i325
i291
Wholesale
i168
i142
i49
i44
i119
i98
Bulk
power and other
i129
i91
i31
i40
i98
i51
Total
Electric Utility
i2,624
i2,357
i1,438
i1,343
i1,186
i1,014
Gas
Utility:
Retail - residential
i237
i162
i127
i90
i110
i72
Retail
- commercial
i127
i85
i62
i47
i65
i38
Retail
- industrial
i15
i11
i10
i8
i5
i3
Transportation/other
i39
i31
i25
i20
i14
i11
Total
Gas Utility
i418
i289
i224
i165
i194
i124
Other
Utility:
Steam
i29
i27
i29
i27
—
—
Other
utility
i6
i9
i5
i8
i1
i1
Total
Other Utility
i35
i36
i34
i35
i1
i1
Non-Utility
and Other:
Travero and other
i70
i60
—
—
—
—
Total
Non-Utility and Other
i70
i60
—
—
—
—
Total
revenues
$i3,147
$i2,742
$i1,696
$i1,543
$i1,381
$i1,139
///
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 nine months ended September 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
Nine Months
Three Months
Nine Months
Three Months
Nine Months
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Overall
income tax rate
i6%
(i9%)
i4%
(i13%)
(i12%)
(i8%)
(i14%)
(i11%)
i15%
(i19%)
i17%
(i24%)
Deferred
Tax Assets and Liabilities -
Carryforwards - In the third quarter of 2022, Alliant Energy, IPL and WPL fully utilized their respective federal net operating losses carryforwards. iiiAt
September 30, 2022, the remaining carryforwards and expiration dates were estimated as follows (in millions)://
Range
of Expiration Dates
Alliant Energy
IPL
WPL
State net operating losses
2022-2042
$i500
$i9
$i2
Federal
tax credits
2022-2042
i655
i437
i208
Iowa
Tax Reform - In March 2022, Iowa tax reform was enacted. Annually, and by each November 1, the Iowa Department of Revenue will establish corporate income tax rates for the next tax year based on net corporate income tax receipts for the prior tax year, and reduce such rates if certain state income tax revenue triggers are satisfied. These corporate income tax rate reductions are currently expected to occur over a period of several years, with a target corporate income tax rate of i5.5%,
compared to the current i9.8% Iowa corporate income tax rate. In September 2022, the Iowa Department of Revenue announced an Iowa corporate income tax rate of i8.4%,
effective January 1, 2023. Deferred tax assets and liabilities are measured at the enacted tax rate expected to be applied when temporary differences are to be realized or settled. Given the announcement of the new Iowa corporate income tax rate, Alliant Energy’s and IPL’s deferred tax liabilities were remeasured based upon the new rate effective January 1, 2023, which resulted in a $ii76/
million reduction of Alliant Energy’s and IPL’s tax-related regulatory assets and a decrease in their deferred tax liabilities in the third quarter of 2022. The reduction in tax-related regulatory assets is expected to provide cost benefits to IPL’s customers in the future. Alliant Energy parent company’s deferred tax assets were remeasured based upon the new rate effective January 1, 2023, which resulted in a charge of $i8 million recorded to income tax expense in Alliant Energy’s income statement and a decrease in deferred
income tax assets on Alliant Energy’s balance sheet in the third quarter of 2022. Alliant Energy is currently unable to predict with certainty the timing or amount of any future rate reductions.
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 nine months ended September 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.//
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 nine months ended September 30 was as follows (in millions)://
Alliant
Energy
IPL
WPL
Three Months
Nine Months
Three Months
Nine Months
Three Months
Nine Months
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Compensation
expense
$i3
$i4
$i9
$i9
$i2
$i2
$i5
$i5
$i1
$i2
$i4
$i4
Income
tax benefits
i1
i1
i3
i3
i—
i—
i1
i1
i—
i—
i1
i1
As
of September 30, 2022, Alliant Energy’s, IPL’s and WPL’s total unrecognized compensation cost related to share-based compensation awards was $i8 million, $i5
million and $i3 million, respectively, which is expected to be recognized over a weighted average period of between i1
year and i2 years.
iii
For
the nine months ended September 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
i74,106
$i54.45
Performance
restricted stock units
i84,670
i57.01
Restricted
stock units
i77,122
i56.88
///
As
of September 30, 2022, i285,909 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 September 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
i1,379
2022-2024
i14,454
2022-2023
i249,508
2022-2032
i1,566
2022-2023
i756
2022
IPL
i768
2022-2024
i6,165
2022-2023
i135,193
2022-2030
i669
2022-2023
i—
—
WPL
i611
2022-2023
i8,289
2022-2023
i114,315
2022-2032
i897
2022-2023
i756
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 nine months ended September 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 September 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. iiiHowever,
if the fair value amounts of derivative instruments by counterparty were netted, derivative assets and derivative liabilities related to commodity contracts would have been presented on the balance sheets as follows (in millions): //
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 September 30
2022
2021
2022
2021
Beginning balance, July 1
$i72
$i39
$i244
$i154
Total
net gains (losses) included in changes in net assets (realized/unrealized)
(i1)
i5
i—
i—
Transfers
out of Level 3
i—
(i8)
i—
i—
Settlements
(a)
(i26)
(i7)
i4
i10
Ending
balance, September 30
$i45
$i29
$i248
$i164
The
amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at September 30
Total
net gains (losses) included in changes in net assets (realized/unrealized)
(i17)
i6
i—
i—
Transfers
out of Level 3
i—
(i8)
i—
i—
Purchases
i79
i21
i—
i—
Settlements
(a)
(i46)
(i19)
i34
(i24)
Ending
balance, September 30
$i45
$i29
$i248
$i164
The
amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at September 30
($i17)
$i6
$i—
$i—
IPL
Commodity
Contract Derivative
Assets and (Liabilities), net
Deferred Proceeds
Three Months Ended September 30
2022
2021
2022
2021
Beginning balance, July 1
$i58
$i30
$i244
$i154
Total
net gains (losses) included in changes in net assets (realized/unrealized)
(i6)
i2
i—
i—
Transfers
out of Level 3
i—
(i8)
i—
i—
Settlements
(a)
(i19)
(i5)
i4
i10
Ending
balance, September 30
$i33
$i19
$i248
$i164
The
amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at September 30
($i6)
$i2
$i—
$i—
IPL
Commodity
Contract Derivative
Assets and (Liabilities), net
Deferred Proceeds
Nine Months Ended September 30
2022
2021
2022
2021
Beginning balance, January 1
$i18
$i26
$i214
$i188
Total
net losses included in changes in net assets (realized/unrealized)
(i13)
i—
i—
i—
Transfers
out of Level 3
i—
(i8)
i—
i—
Purchases
i58
i16
i—
i—
Settlements
(a)
(i30)
(i15)
i34
(i24)
Ending
balance, September 30
$i33
$i19
$i248
$i164
The
amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at September 30
($i14)
$i—
$i—
$i—
WPL
Commodity
Contract Derivative
Assets and (Liabilities), net
Three Months Ended September 30
2022
2021
Beginning balance, July 1
$i14
$i9
Total
net gains included in changes in net assets (realized/unrealized)
i5
i3
Settlements
(i7)
(i2)
Ending
balance, September 30
$i12
$i10
The
amount of total net gains for the period included in changes in net assets attributable to the change in unrealized gains relating to assets and liabilities held at September 30
Total
net gains (losses) included in changes in net assets (realized/unrealized)
(i4)
i6
Purchases
i21
i5
Settlements
(i16)
(i4)
Ending
balance, September 30
$i12
$i10
The
amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at September 30
($i3)
$i6
(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 September 30, 2022, Alliant Energy’s and WPL’s minimum future commitments for these projects were $i208
million and $i206 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
September 30, 2022, related minimum future commitments were as follows (in millions)://
Alliant Energy
IPL
WPL
Natural
gas
$i1,608
$i742
$i866
Coal
i197
i95
i102
Other
(a)
i126
i57
i28
$i1,931
$i894
$i996
(a)Includes
individual commitments incurred during the normal course of business that exceeded $iii1//
million at September 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 September 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 September 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 $i59
million as of September 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 September 30,
2022 and December 31, 2021.
NOTE 13(d) Environmental Matters -
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
September 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 September 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) MISO Transmission Owner Return on Equity Complaints - A group of stakeholders, including MISO cooperative and municipal utilities, previously filed complaints with FERC requesting a reduction to the base return on equity authorized for MISO transmission owners, including ITC Midwest LLC and ATC. In 2019, FERC issued an order on the previously filed complaints and reduced the base return on equity authorized for the MISO transmission owners to i9.88%
for November 12, 2013 through February 11, 2015, and subsequent to September 28, 2016. In 2020, FERC issued orders in response to various rehearing requests and increased the base return on equity authorized for the MISO transmission owners from i9.88% to i10.02%
for November 12, 2013 through February 11, 2015, and subsequent to September 28, 2016. In August 2022, the U.S. Court of Appeals for the District of Columbia Circuit vacated FERC’s prior orders that established the base return on equity authorized for the MISO transmission owners and remanded the cases to FERC for further proceedings, which may result in additional changes to the base return on equity authorized for the MISO transmission owners. As a result of the August 2022 court decision, Alliant Energy recorded a $ii5/
million reduction in “Equity income from unconsolidated investments” in its income statement for the three and nine months ended September 30, 2022 to reflect the anticipated reduction in the base return on equity authorized for the MISO transmission owners. Any further changes in FERC’s decisions may have an impact on Alliant Energy’s share of ATC’s future earnings and customer costs.
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 nine months ended September 30 were as follows (in millions)://
IPL
WPL
Three
Months
Nine Months
Three Months
Nine Months
2022
2021
2022
2021
2022
2021
2022
2021
Corporate
Services billings
$i45
$i50
$i136
$i138
$i39
$i37
$i117
$i113
Sales
credited
i11
i4
i11
i9
i31
i16
i62
i23
Purchases
billed
i119
i105
i342
i347
i42
i24
i103
i71
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 nine months ended September 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.
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. In September 2022, IPL provided the IUB with a summary of the Inflation Reduction Act of 2022, as well as an economic analysis indicating full ownership for its planned solar and battery storage projects is currently expected to result in lower costs for its customers compared to previous plans to utilize tax equity financing. IPL currently expects a decision from the IUB on its filing by the
end of 2022.
•In August 2022, FERC approved MISO’s proposal to change its methodology for procuring capacity in the energy market effective with the 2023/2024 MISO Planning Year, as a result of changes in the overall generation resource mix due to the shift to renewable generation and the retirement of certain fossil-fueled generation. The capacity construct will change from the current Summer-based annual construct to four distinct seasons to help ensure the continued reliability of the electric transmission grid. FERC’s approval also includes establishing planning reserve margin requirements for all market participants on a seasonal basis and determining a seasonal accredited capacity value for certain classes of generating resources, including higher accredited capacity for wind generation during the Spring, Fall and Winter seasons and lower accredited capacity for solar generation during the Winter
season. Alliant Energy, IPL and WPL are currently unable to predict with certainty the future outcome or impact of these matters, but anticipate additional generating resources will be needed to comply with the requirements of the new capacity construct. Refer to “Liquidity and Capital Resources” for discussion of proposed changes to IPL’s and WPL’s current resource plans resulting from these matters.
•In September 2022, WPL filed a request with the PSCW for approval to construct, own and operate 175 MW of battery storage, with 100 MW and 75 MW at the Grant County and Wood County solar projects, respectively. Estimated capital expenditures for these planned projects for 2023 through 2025 are included in the “Renewables and battery storage” line in the
construction and acquisition table in “Liquidity and Capital Resources.”
•In September 2022, after the enactment of the Inflation Reduction Act of 2022, WPL informed the PSCW of its decision to retain full ownership of its planned solar projects instead of financing a portion of the projects with tax equity partners, which is currently expected to result in lower costs for its customers compared to previous plans to utilize tax equity financing.
•In September 2022, WPL completed the construction of the Bear Creek Solar Garden in Richland County, Wisconsin (50 MW).
•In October 2022, WPL completed the construction of the North
Rock Solar Garden in Rock County, Wisconsin (50 MW).
•Refer to Note 3 for discussion of revised expected timing for the retirements of various IPL and WPL coal-fired EGUs.
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. WPL currently expects a decision from the PSCW on its request by the end of 2022.
•In
August 2022, the PSCW authorized WPL to collect $37 million in 2023 from its retail electric customers, plus interest, for an under-collection of fuel-related costs incurred by WPL in 2021 that were higher than fuel-related costs used to determine rates for such period. In addition, in November 2022, WPL filed updated fuel-related cost information for 2023 with the PSCW, which reflects an increase in annual retail electric rates of approximately $63 million in 2023 compared to WPL’s approved 2022 fuel-related costs. WPL currently expects a decision from the PSCW on its request by the end of 2022.
•WPL currently expects to file a retail electric and gas rate review with the PSCW in the second quarter of 2023 for the 2024/2025 forward-looking Test Period. The key drivers for the anticipated filing include revenue requirement impacts of increasing electric and gas rate base, including investments in solar generation and battery storage. Any rate changes granted from this pending request are expected to be effective on January 1, 2024, with a decision from the PSCW expected by the end of 2023.
•IPL currently expects to file a retail electric and gas rate review with the IUB by
the first half of 2024. The key drivers for the anticipated filing include revenue requirement impacts of increasing electric and gas rate base, including investments in solar generation and battery storage.
Legislative Matters:
•Refer to Note 9 for discussion of Iowa tax reform enacted in March 2022.
•In August 2022, the Inflation Reduction Act of 2022 was enacted. The most significant provisions of the new legislation for Alliant Energy, IPL and WPL relate to a 10-year extension of tax credits for clean energy projects, a new production tax
credit eligible for solar projects, a new stand-alone investment tax credit for battery storage projects and the right to transfer future renewable credits to other corporate taxpayers. The new legislation also includes a requirement for corporations with income over $1 billion to pay a 15% minimum tax; however, Alliant Energy is currently below this income level. Alliant Energy, IPL and WPL currently expect to utilize various provisions of the new legislation to enhance the tax benefits expected from their announced approximately 1,500 MW of solar and 250 MW of battery storage projects, including transferring the future tax credits from such projects to other corporate taxpayers and opting to retain full ownership of such projects instead of financing a portion of the projects with tax equity partners. Compared to previous plans to utilize tax equity financing, the impact of these changes is expected to result in lower costs for IPL's and WPL's customers, higher
rate base amounts, additional financing needs expected to be satisfied with additional long-term debt and common stock issuances, and improvements in long-term cash flows over the life of the solar and battery storage projects.
Financings and Common Stock Dividends:
•Refer to “Results of Operations” for discussion of expected future issuances of common stock and common stock dividends, and expected future issuances and retirements of long-term debt, by the end of 2023.
RESULTS
OF OPERATIONS
Results of operations include financial information prepared in accordance with GAAP as well as utility electric margins and utility gas margins, which are not measures of financial performance under GAAP. Utility electric margins are defined as electric revenues less electric production fuel, purchased power and electric transmission service expenses. Utility gas margins are defined as gas revenues less cost of gas sold. Utility electric margins and utility gas margins are non-GAAP financial measures because they exclude other utility and non-utility revenues, other operation and maintenance expenses, depreciation and amortization expenses, and taxes other than income tax expense.
Management believes that utility electric and gas margins provide a meaningful basis for evaluating and managing utility operations since electric production
fuel, purchased power and electric transmission service expenses and cost of gas sold are generally passed through to customers, and therefore, result in changes to electric and gas revenues that are comparable to changes in such expenses. The presentation of utility electric and gas margins herein is intended to provide supplemental information for investors regarding operating performance. These utility electric and gas margins may not be comparable to how other entities define utility electric and gas margin. Furthermore, these measures are not intended to replace operating income as determined in accordance with GAAP as an indicator of operating performance.
Additionally, the table below includes EPS for Utilities and Corporate Services, ATC Holdings, and Non-utility and Parent, which are non-GAAP financial measures. Alliant Energy believes these non-GAAP financial measures are useful to investors
because they facilitate an understanding of segment performance and trends, and provide additional information about Alliant Energy’s operations on a basis consistent with the measures that management uses to manage its operations and evaluate its performance.
Financial Results Overview - Alliant Energy’s net income and EPS attributable to Alliant Energy common shareowners for the three months ended September 30 were as follows (dollars in millions, except per share amounts):
2022
2021
Income
(Loss)
EPS
Income (Loss)
EPS
Utilities and Corporate Services
$249
$0.99
$254
$1.01
ATC
Holdings
5
0.02
8
0.03
Non-utility and Parent
(27)
(0.11)
(6)
(0.02)
Alliant
Energy Consolidated
$227
$0.90
$256
$1.02
Alliant Energy’s Utilities and Corporate Services net income decreased by $5 million for the three-month period, primarily due to higher interest expense and the timing of income taxes.
Alliant Energy’s Non-utility and Parent net income decreased by $21 million for the three-month period, primarily due to higher interest expense, the timing of income taxes and the impact of the Iowa corporate income tax rate change.
For the three and nine months ended September 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
$309
$289
$171
$180
$131
$100
Electric
utility revenues
$1,039
$939
$596
$555
$443
$384
Electric production fuel and purchased power expenses
(274)
(207)
(140)
(101)
(134)
(105)
Electric
transmission service expense
(157)
(148)
(115)
(103)
(42)
(44)
Utility Electric Margin (non-GAAP)
608
584
341
351
267
235
Gas
utility revenues
62
50
33
31
29
19
Cost of gas sold
(26)
(18)
(14)
(12)
(13)
(6)
Utility
Gas Margin (non-GAAP)
36
32
19
19
16
13
Other utility revenues
11
13
11
13
—
—
Non-utility
revenues
23
22
—
—
—
—
Other operation and maintenance expenses
(172)
(171)
(90)
(95)
(70)
(66)
Depreciation
and amortization expenses
(169)
(165)
(95)
(94)
(71)
(70)
Taxes other than income tax expense
(28)
(26)
(15)
(14)
(11)
(12)
Operating
income
$309
$289
$171
$180
$131
$100
Alliant
Energy
IPL
WPL
Nine Months
2022
2021
2022
2021
2022
2021
Operating income
$769
$663
$389
$394
$357
$245
Electric
utility revenues
$2,624
$2,357
$1,438
$1,343
$1,186
$1,014
Electric production fuel and purchased power expenses
(633)
(478)
(290)
(215)
(343)
(263)
Electric
transmission service expense
(428)
(403)
(303)
(274)
(125)
(128)
Utility Electric Margin (non-GAAP)
1,563
1,476
845
854
718
623
Gas
utility revenues
418
289
224
165
194
124
Cost of gas sold
(242)
(149)
(126)
(84)
(117)
(65)
Utility
Gas Margin (non-GAAP)
176
140
98
81
77
59
Other utility revenues
35
36
34
35
1
1
Non-utility
revenues
70
60
—
—
—
—
Other operation and maintenance expenses
(492)
(477)
(260)
(253)
(193)
(194)
Depreciation
and amortization expenses
(501)
(494)
(285)
(281)
(211)
(209)
Taxes other than income tax expense
(82)
(78)
(43)
(42)
(35)
(35)
Operating
income
$769
$663
$389
$394
$357
$245
Operating Income Variances - Variances between periods in operating income for the three and nine months ended September 30, 2022 compared to the same periods in 2021 were as follows (in millions):
Three
Months
Nine Months
Alliant Energy
IPL
WPL
Alliant Energy
IPL
WPL
Total higher (lower) utility electric margin variance (Refer to details below)
$24
($10)
$32
$87
($9)
$95
Total
higher utility gas margin variance (Refer to details below)
4
—
3
36
17
18
Total (higher) lower other operation and maintenance expenses variance (Refer to details below)
(1)
5
(4)
(15)
(7)
1
Total
higher depreciation and amortization expense
Electric and Gas Revenues and Sales Summary - Electric and gas revenues (in millions), and MWh and Dth sales (in thousands), for the three and nine months ended September 30 were as follows:
Alliant
Energy
Electric
Gas
Revenues
MWhs Sold
Revenues
Dths Sold
2022
2021
2022
2021
2022
2021
2022
2021
Three
Months
Retail
$908
$845
6,788
7,031
$50
$40
3,584
3,264
Sales
for resale
115
78
1,759
1,853
N/A
N/A
N/A
N/A
Transportation/Other
16
16
16
18
12
10
30,982
26,365
$1,039
$939
8,563
8,902
$62
$50
34,566
29,629
Nine
Months
Retail
$2,327
$2,124
19,304
19,262
$379
$258
37,284
33,299
Sales
for resale
251
181
5,161
4,411
N/A
N/A
N/A
N/A
Transportation/Other
46
52
46
53
39
31
83,241
74,111
$2,624
$2,357
24,511
23,726
$418
$289
120,525
107,410
IPL
Electric
Gas
Revenues
MWhs
Sold
Revenues
Dths Sold
2022
2021
2022
2021
2022
2021
2022
2021
Three Months
Retail
$559
$525
3,736
3,914
$25
$25
1,739
1,702
Sales
for resale
28
21
581
487
N/A
N/A
N/A
N/A
Transportation/Other
9
9
9
9
8
6
9,743
9,308
$596
$555
4,326
4,410
$33
$31
11,482
11,010
Nine
Months
Retail
$1,358
$1,259
10,821
10,810
$199
$145
19,118
17,268
Sales
for resale
53
49
1,600
1,160
N/A
N/A
N/A
N/A
Transportation/Other
27
35
25
26
25
20
31,917
29,727
$1,438
$1,343
12,446
11,996
$224
$165
51,035
46,995
WPL
Electric
Gas
Revenues
MWhs
Sold
Revenues
Dths Sold
2022
2021
2022
2021
2022
2021
2022
2021
Three Months
Retail
$349
$320
3,052
3,117
$25
$15
1,845
1,562
Sales
for resale
87
57
1,178
1,366
N/A
N/A
N/A
N/A
Transportation/Other
7
7
7
9
4
4
21,239
17,057
$443
$384
4,237
4,492
$29
$19
23,084
18,619
Nine
Months
Retail
$969
$865
8,483
8,452
$180
$113
18,166
16,031
Sales
for resale
198
132
3,561
3,251
N/A
N/A
N/A
N/A
Transportation/Other
19
17
21
27
14
11
51,324
44,384
$1,186
$1,014
12,065
11,730
$194
$124
69,490
60,415
Sales
Trends and Temperatures - Alliant Energy’s retail electric sales volumes decreased 3% and were unchanged for the three and nine months ended September 30, 2022 compared to the same periods in 2021, respectively, primarily due to changes in sales volumes of commercial and industrial customers due to standby service customers that can use other generation, as well as maintenance outages at certain large customers. Alliant Energy’s retail gas sales volumes increased 10% and 12% for the three and nine months ended September 30, 2022 compared to the same periods in 2021, respectively, primarily due to changes in temperatures 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 nine months ended September 30 were as follows (in millions):
Electric
Margins
Gas Margins
Three Months
Nine Months
Three Months
Nine Months
2022
2021
Change
2022
2021
Change
2022
2021
Change
2022
2021
Change
IPL
$4
$5
($1)
$15
$16
($1)
$—
($1)
$1
$4
$1
$3
WPL
—
—
—
10
9
1
—
—
—
2
—
2
Total
Alliant Energy
$4
$5
($1)
$25
$25
$—
$—
($1)
$1
$6
$1
$5
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 nine months ended September 30, 2022 compared to the same periods in 2021 as follows (in millions):
Three
Months
Nine Months
Alliant Energy
IPL
WPL
Alliant Energy
IPL
WPL
Higher revenue requirements at WPL due to increasing rate base (a)
$32
$—
$32
$85
$—
$85
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)
—
—
—
11
11
—
Lower
revenues at IPL due to changes in the renewable energy rider (mostly offset by changes in income tax)
(4)
(4)
—
(23)
(23)
—
Other
(4)
(6)
—
14
3
10
$24
($10)
$32
$87
($9)
$95
(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 nine months ended September 30, 2022 compared to the same periods in 2021 as follows (in millions):
Three
Months
Nine 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)
$1
$1
$—
$12
$12
$—
Higher
revenue requirements at WPL due to increasing rate base (refer to (a) above)
Other Operation and Maintenance Expenses Variances - The following items contributed to (increased) decreased other operation and maintenance expenses for the three and nine months ended September 30, 2022 compared to the same periods in 2021 as follows (in millions):
Three
Months
Nine 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)
(2)
—
—
(9)
—
—
Other
1
5
(4)
2
1
1
($1)
$5
($4)
($15)
($7)
$1
Other
Income and Deductions Variances - The following items contributed to (increased) decreased other income and deductions for the three and nine months ended September 30, 2022 compared to the same periods in 2021 as follows (in millions):
Three
Months
Nine 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
($15)
($3)
($6)
($29)
($8)
($9)
(Lower)
higher equity income from unconsolidated investments, net (refer to Note 5 for details)
(8)
—
—
(10)
—
1
Higher AFUDC primarily due to changes in construction work in progress balances related to WPL’s solar generation
3
1
2
18
1
17
Other
3
1
2
7
4
2
($17)
($1)
($2)
($14)
($3)
$11
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 nine months ended September 30, 2022 compared to the same periods in 2021 due to the redemption of IPL’s 5.1% cumulative preferred stock in December 2021.
Other Future Considerations - In addition to items discussed in this report, the following key items could impact Alliant Energy’s,
IPL’s and WPL’s future financial condition or results of operations:
•Financing Plans - Alliant Energy currently expects to issue up to $250 million of common stock in 2023 through one or more offerings and its Shareowner Direct Plan. IPL, WPL (subject to regulatory approval) and AEF currently expect to issue up to $300 million, $300 million, and $450 million of long-term debt, respectively, by the end of 2023. WPL and AEF have $250 million and $400 million of long-term debt maturing in 2022 and 2023, respectively.
•Common Stock Dividends - Alliant Energy announced a 6% increase in its targeted 2023 annual common stock dividend to $1.81 per share, which is equivalent to a quarterly rate of $0.4525 per share, beginning with the February 2023 dividend payment. The timing and amount of future
dividends is subject to an approved dividend declaration from Alliant Energy’s Board of Directors, and is dependent upon earnings expectations, capital requirements, and general financial business conditions, among other factors.
•Higher Earnings on Increasing Rate Base - Alliant Energy and WPL currently expect an increase in earnings in 2023 compared to 2022 due to impacts from increasing revenue requirements related to investments in the utility business, including WPL’s solar investments.
•Other Operation and Maintenance Expenses - Alliant Energy, IPL and WPL currently expect a decrease in other operation and maintenance expenses in 2023 compared to 2022 largely due to cost reductions resulting from operating efficiencies.
•Interest
Expense - Alliant Energy, IPL and WPL currently expect an increase in interest expense in 2023 compared to 2022 due to financings completed in 2022 and planned by the end of 2023 as discussed above, as well as expected higher interest rates.
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
September 30, 2022, Alliant Energy had $344 million of cash and cash equivalents, $617 million ($67 million at the parent company, $250 million at IPL and $300 million at WPL) of available capacity under the single revolving credit facility and $109 million of available capacity at IPL under its sales of accounts receivable program.
Capital Structure - Capital structures at September 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
485
477
166
95
279
349
Investing activities
(599)
(452)
84
122
(612)
(510)
Financing
activities
421
(57)
(239)
(254)
630
162
Net increase (decrease)
307
(32)
11
(37)
297
1
Cash,
cash equivalents and restricted cash, September 30
$347
$24
$45
$13
$299
$4
Operating Activities - The following items contributed to increased (decreased) operating activity cash flows for the nine months ended September 30, 2022 compared to the same period in 2021 (in millions):
Alliant
Energy
IPL
WPL
Higher collections from WPL’s retail electric and gas base rate increases
$95
$—
$95
Lower contributions to qualified defined benefit pension plans
37
17
18
Natural gas cost payments
from extreme temperatures in February 2021 resulting in under-recovered natural gas costs at IPL in 2021
15
15
—
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
14
14
—
Timing
of WPL’s fuel-related cost recoveries from customers
(71)
—
(71)
Changes in levels of gas stored underground and prepaid gas costs
(35)
(13)
(22)
Changes in interest payments
(23)
(5)
(6)
Changes
in income taxes paid/refunded
(6)
5
(27)
Other (primarily due to other changes in working capital)
(18)
38
(57)
$8
$71
($70)
As
discussed in “2022 Highlights,” the Inflation Reduction Act of 2022 provides the right to transfer future renewable tax credits to other corporate taxpayers, which is expected to result in future cash flows from operating activities for Alliant Energy, IPL and WPL.
Investing Activities - The following items contributed to increased (decreased) investing activity cash flows for the nine months ended September 30, 2022 compared to the same period in 2021 (in millions):
Alliant
Energy
IPL
WPL
(Higher) lower utility construction and acquisition expenditures (a)
($101)
$16
($117)
Changes in the amount of cash receipts on sold receivables
(65)
(65)
—
Other
19
11
15
($147)
($38)
($102)
(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 - Construction and acquisition expenditures and financing plans are reviewed, approved and updated as part of the strategic planning process. Changes may result from a number of reasons, including regulatory requirements, changing legislation, not obtaining favorable and acceptable regulatory approval on certain projects, improvements in technology, and improvements to ensure reliability of the electric and gas distribution systems. Construction and acquisition expenditures for 2022 through 2026 are currently anticipated as follows (in millions), which are focused on the transition to cleaner energy and strengthening the resiliency and reliability of IPL’s and WPL’s electric grid. Cost estimates represent Alliant Energy’s, IPL’s and WPL’s portion of construction expenditures and exclude AFUDC and capitalized interest, if applicable.
Alliant
Energy
IPL
WPL
2022
2023
2024
2025
2026
2022
2023
2024
2025
2026
2022
2023
2024
2025
2026
Generation:
Renewables
and battery storage
$775
$900
$1,205
$725
$1,060
$40
$325
$625
$260
$670
$735
$575
$580
$465
$390
Other
80
100
315
490
335
40
55
55
70
100
40
45
260
420
235
Distribution:
Electric
systems
465
550
595
545
535
250
320
360
300
280
215
230
235
245
255
Gas
systems
75
80
85
85
85
35
35
40
40
40
40
45
45
45
45
Other
145
220
210
175
180
25
45
40
45
45
20
35
30
30
30
$1,540
$1,850
$2,410
$2,020
$2,195
$390
$780
$1,120
$715
$1,135
$1,050
$930
$1,150
$1,205
$955
New
MISO Seasonal Capacity Construct - As discussed in “2022 Highlights,” in August 2022, FERC approved MISO’s proposal to change its methodology for procuring capacity in the energy market effective with the 2023/2024 MISO Planning Year. IPL and WPL currently plan to construct and/or acquire additional renewable, battery and natural gas resources to comply with the requirements of this new methodology and have reflected the estimated capital expenditures for these projects in the "Renewables and battery storage" and "Other” Generation lines in the construction and acquisition table above.
Renewables and Battery Storage - Alliant Energy, IPL and WPL continue to evaluate 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 and regulatory filings with the IUB and PSCW related to future renewable and battery storage projects, including recent filings by IPL and WPL announcing plans to shift away from tax equity partnerships to traditional ownership for future renewable and battery storage projects following the enactment of the Inflation Reduction Act of 2022.
Financing
Activities - The following items contributed to increased (decreased) financing activity cash flows for the nine months ended September 30, 2022 compared to the same period in 2021 (in millions):
Alliant Energy
IPL
WPL
Higher
net proceeds from issuance of long-term debt
$938
$—
$288
Capital contributions from noncontrolling interest
29
—
29
Higher payments to retire long-term debt
(375)
—
—
Net
changes in the amount of commercial paper outstanding
(59)
—
18
Distributions to noncontrolling interest
(29)
—
(29)
(Higher) lower common stock dividends
(18)
61
(7)
Higher
(lower) capital contributions from IPL’s and WPL’s parent company, Alliant Energy
—
(50)
175
Other
(8)
4
(6)
$478
$15
$468
IPL and WPL Solar
Project Tax Equity Financing - As discussed in Note 1(c) and “2022 Highlights,” with the August 2022 enactment of the Inflation Reduction Act of 2022, IPL and WPL currently expect to retain full ownership of their planned solar generation projects instead of financing a portion of the construction costs with capital from tax equity partners.
Common Stock Issuances and Common Stock Dividends
- Refer to Note 6 for discussion of common stock issuances by Alliant Energy in 2022. Refer to “Results of Operations” for discussion of expected issuances of common stock and common stock dividends in 2023.
Long-term Debt - Refer to Note 7(b)
for discussion of AEF’s and WPL’s issuance of long-term debt and Corporate Services’ retirement 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. Refer to “Results of Operations” for discussion of expected future issuances and retirements of long-term debt by the end of 2023.
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 September 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 September 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 September 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 September 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)
July 1 through July 31
4,429
$57.92
—
N/A
August 1 through August 31
2,668
63.83
—
N/A
September
1 through September 30
61
58.18
—
N/A
7,158
60.12
—
(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.
ITEM 5. OTHER INFORMATION
On November 4, 2022, the Board of Directors of Alliant Energy Corporation (the “Company”) approved an amendment and restatement of the Amended and Restated Bylaws of the Company, effective November 8, 2022. The amendments update Section 3.14 related to notice of shareowner business and nomination of directors by conforming the bylaw provision to
universal proxy rules promulgated by the SEC, requiring additional information be provided by shareowners utilizing the bylaw provision, and amending the deadline to submit proposals or nominees under the bylaws to not later than the close of business on the 90th day nor earlier than the close of business on the 120th day prior to the first anniversary of the preceding year’s annual meeting except in certain circumstances. The amendments also include certain technical and clarifying changes to the bylaws.
The foregoing summary is qualified in its entirety by reference to the copy of the Amended and Restated Bylaws of Alliant Energy filed as Exhibit
3.1 to this Quarterly Report on Form 10-Q and is incorporated by reference herein. A blackline of the Amended and Restated Bylaws against the prior version of the bylaws is filed herewith as Exhibit 3.2.
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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 8th day of November 2022.
