UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
or
☐ 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
ALLIANT ENERGY CORPORATION
(a Wisconsin Corporation)
4902 N. Biltmore Lane
Madison, Wisconsin 53718
Telephone (608) 458-3311
Commission File Number - 1-9894
IRS Employer Identification Number - 39-1380265
INTERSTATE POWER & LIGHT COMPANY
(an Iowa corporation)
Alliant Energy Tower
Cedar Rapids, Iowa 52401
Telephone (319) 786-4411
Commission File Number - 1-4117
IRS Employer Identification Number - 42-0331370
WISCONSIN POWER & LIGHT COMPANY
(a Wisconsin corporation)
4902 N. Biltmore Lane
Madison, Wisconsin 53718
Telephone (608) 458-3311
Commission File Number - 0-337
IRS Employer Identification Number - 39-0714890
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, Common Stock, $0.01 Par Value, Trading Symbol LNT, Nasdaq 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 - Yes ☒ No ☐
Interstate Power and Light Company - Yes ☒ No ☐
Wisconsin Power and Light Company - Yes ☒ 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 - Yes ☒ No ☐
Interstate Power and Light Company - Yes ☒ No ☐
Wisconsin Power and Light Company - Yes ☒ 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 - Large Accelerated Filer ☒ Accelerated Filer ☐ Non-accelerated Filer ☐ Smaller Reporting Company ☐ Emerging Growth Company ☐
Interstate Power and Light Company - Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☒ Smaller Reporting Company ☐ Emerging Growth Company ☐
Wisconsin Power and Light Company - Large Accelerated Filer ☐ Accelerated Filer ☐ Non-accelerated Filer ☒ Smaller Reporting Company ☐ Emerging Growth Company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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 ☐ No ☒
Interstate Power and Light Company - Yes ☐ No ☒
Wisconsin Power and Light Company - Yes ☐ 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, 251,021,830 shares outstanding
Interstate Power and Light Company, Common Stock, $2.50 par value, 13,370,788 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, 13,236,601 shares outstanding (all outstanding shares are owned beneficially and of record by Alliant Energy Corporation)
TABLE OF CONTENTS
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DEFINITIONS
The following abbreviations or acronyms used in this 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;
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•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
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.
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PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| For the Three Months | For the Nine Months | ||||||||||||||||||||||
| Ended September 30, | Ended September 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (in millions, except per share amounts) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Electric utility | $1,039 | $939 | $2,624 | $2,357 | |||||||||||||||||||
| Gas utility | 62 | 50 | 418 | 289 | |||||||||||||||||||
| Other utility | 11 | 13 | 35 | 36 | |||||||||||||||||||
| Non-utility | 23 | 22 | 70 | 60 | |||||||||||||||||||
| Total revenues | 1,135 | 1,024 | 3,147 | 2,742 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Electric production fuel and purchased power | 274 | 207 | 633 | 478 | |||||||||||||||||||
| Electric transmission service | 157 | 148 | 428 | 403 | |||||||||||||||||||
| Cost of gas sold | 26 | 18 | 242 | 149 | |||||||||||||||||||
| Other operation and maintenance | 172 | 171 | 492 | 477 | |||||||||||||||||||
| Depreciation and amortization | 169 | 165 | 501 | 494 | |||||||||||||||||||
| Taxes other than income taxes | 28 | 26 | 82 | 78 | |||||||||||||||||||
| Total operating expenses | 826 | 735 | 2,378 | 2,079 | |||||||||||||||||||
| Operating income | 309 | 289 | 769 | 663 | |||||||||||||||||||
| Other (income) and deductions: | |||||||||||||||||||||||
| Interest expense | 83 | 68 | 235 | 206 | |||||||||||||||||||
| Equity income from unconsolidated investments, net | (5) | (13) | (37) | (47) | |||||||||||||||||||
| Allowance for funds used during construction | (10) | (7) | (34) | (16) | |||||||||||||||||||
| Other | — | 3 | — | 7 | |||||||||||||||||||
| Total other (income) and deductions | 68 | 51 | 164 | 150 | |||||||||||||||||||
| Income before income taxes | 241 | 238 | 605 | 513 | |||||||||||||||||||
| Income tax expense (benefit) | 14 | (21) | 26 | (66) | |||||||||||||||||||
| Net income | 227 | 259 | 579 | 579 | |||||||||||||||||||
| Preferred dividend requirements of Interstate Power and Light Company | — | 3 | — | 8 | |||||||||||||||||||
| Net income attributable to Alliant Energy common shareowners | $227 | $256 | $579 | $571 | |||||||||||||||||||
| Weighted average number of common shares outstanding: | |||||||||||||||||||||||
| Basic | 251.0 | 250.3 | 250.8 | 250.2 | |||||||||||||||||||
| Diluted | 251.3 | 250.8 | 251.1 | 250.6 | |||||||||||||||||||
Earnings per weighted average common share attributable to Alliant Energy common shareowners (basic and diluted) | $0.90 | $1.02 | $2.31 | $2.28 | |||||||||||||||||||
Refer to accompanying Combined Notes to Condensed Consolidated Financial Statements.
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ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| September 30, 2022 | December 31, 2021 | ||||||||||
| (in millions, except per share and share amounts) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $344 | $39 | |||||||||
| Accounts receivable, less allowance for expected credit losses | 509 | 440 | |||||||||
| Production fuel, at weighted average cost | 49 | 51 | |||||||||
| Gas stored underground, at weighted average cost | 124 | 82 | |||||||||
| Materials and supplies, at weighted average cost | 126 | 113 | |||||||||
| Regulatory assets | 177 | 104 | |||||||||
| Other | 364 | 240 | |||||||||
| Total current assets | 1,693 | 1,069 | |||||||||
| Property, plant and equipment, net | 15,858 | 14,987 | |||||||||
| Investments: | |||||||||||
| ATC Holdings | 351 | 338 | |||||||||
| Other | 200 | 179 | |||||||||
| Total investments | 551 | 517 | |||||||||
| Other assets: | |||||||||||
| Regulatory assets | 1,864 | 1,836 | |||||||||
| Deferred charges and other | 239 | 144 | |||||||||
| Total other assets | 2,103 | 1,980 | |||||||||
| Total assets | $20,205 | $18,553 | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current maturities of long-term debt | $658 | $633 | |||||||||
| Commercial paper | 383 | 515 | |||||||||
| Accounts payable | 786 | 436 | |||||||||
| Accrued taxes | 86 | 58 | |||||||||
| Regulatory liabilities | 229 | 186 | |||||||||
| Other | 280 | 226 | |||||||||
| Total current liabilities | 2,422 | 2,054 | |||||||||
| Long-term debt, net (excluding current portion) | 7,570 | 6,735 | |||||||||
| Other liabilities: | |||||||||||
| Deferred tax liabilities | 1,919 | 1,927 | |||||||||
| Regulatory liabilities | 1,158 | 1,085 | |||||||||
| Pension and other benefit obligations | 349 | 374 | |||||||||
| Other | 522 | 388 | |||||||||
| Total other liabilities | 3,948 | 3,774 | |||||||||
| Equity: | |||||||||||
| Alliant Energy Corporation common equity: | |||||||||||
Common stock - $0.01 par value - 480,000,000 shares authorized; 251,021,830 and 250,474,529 shares outstanding | 3 | 3 | |||||||||
| Additional paid-in capital | 2,767 | 2,749 | |||||||||
| Retained earnings | 3,508 | 3,250 | |||||||||
Shares in deferred compensation trust - 395,224 and 383,532 shares at a weighted average cost of $32.23 and $30.59 per share | (13) | (12) | |||||||||
| Total Alliant Energy Corporation common equity | 6,265 | 5,990 | |||||||||
| Total liabilities and equity | $20,205 | $18,553 | |||||||||
Refer to accompanying Combined Notes to Condensed Consolidated Financial Statements.
4 | ||||||||
ALLIANT ENERGY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| For the Nine Months | |||||||||||
| Ended September 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| (in millions) | |||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $579 | $579 | |||||||||
| Adjustments to reconcile net income to net cash flows from operating activities: | |||||||||||
Depreciation and amortization | 501 | 494 | |||||||||
| Deferred tax expense (benefit) and tax credits | 8 | (69) | |||||||||
| Other | (8) | 7 | |||||||||
| Other changes in assets and liabilities: | |||||||||||
| Accounts receivable | (425) | (397) | |||||||||
| Derivative assets | (184) | (202) | |||||||||
| Regulatory assets | (102) | (21) | |||||||||
| Accounts payable | 90 | — | |||||||||
| Derivative liabilities | 89 | (21) | |||||||||
| Regulatory liabilities | 89 | 25 | |||||||||
| Deferred income taxes | (15) | 160 | |||||||||
| Pension and other benefit obligations | (25) | (59) | |||||||||
| Other | (112) | (19) | |||||||||
| Net cash flows from operating activities | 485 | 477 | |||||||||
| Cash flows used for investing activities: | |||||||||||
| Construction and acquisition expenditures: | |||||||||||
| Utility business | (873) | (772) | |||||||||
| Other | (69) | (60) | |||||||||
| Cash receipts on sold receivables | 358 | 423 | |||||||||
| Other | (15) | (43) | |||||||||
| Net cash flows used for investing activities | (599) | (452) | |||||||||
| Cash flows from (used for) financing activities: | |||||||||||
| Common stock dividends | (322) | (304) | |||||||||
| Proceeds from issuance of long-term debt | 1,238 | 300 | |||||||||
| Payments to retire long-term debt | (379) | (4) | |||||||||
| Net change in commercial paper | (132) | (73) | |||||||||
| Contributions from noncontrolling interest | 29 | — | |||||||||
| Distributions to noncontrolling interest | (29) | — | |||||||||
| Other | 16 | 24 | |||||||||
| Net cash flows from (used for) financing activities | 421 | (57) | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 307 | (32) | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 40 | 56 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $347 | $24 | |||||||||
| Supplemental cash flows information: | |||||||||||
| Cash paid during the period for: | |||||||||||
| Interest | ($220) | ($197) | |||||||||
| Income taxes, net | ($7) | ($1) | |||||||||
| Significant non-cash investing and financing activities: | |||||||||||
| Accrued capital expenditures | $403 | $91 | |||||||||
| Beneficial interest obtained in exchange for securitized accounts receivable | $248 | $164 | |||||||||
Refer to accompanying Combined Notes to Condensed Consolidated Financial Statements.
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INTERSTATE POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| For the Three Months | For the Nine Months | ||||||||||||||||||||||
| Ended September 30, | Ended September 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Electric utility | $596 | $555 | $1,438 | $1,343 | |||||||||||||||||||
| Gas utility | 33 | 31 | 224 | 165 | |||||||||||||||||||
| Steam and other | 11 | 13 | 34 | 35 | |||||||||||||||||||
| Total revenues | 640 | 599 | 1,696 | 1,543 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Electric production fuel and purchased power | 140 | 101 | 290 | 215 | |||||||||||||||||||
| Electric transmission service | 115 | 103 | 303 | 274 | |||||||||||||||||||
| Cost of gas sold | 14 | 12 | 126 | 84 | |||||||||||||||||||
| Other operation and maintenance | 90 | 95 | 260 | 253 | |||||||||||||||||||
| Depreciation and amortization | 95 | 94 | 285 | 281 | |||||||||||||||||||
| Taxes other than income taxes | 15 | 14 | 43 | 42 | |||||||||||||||||||
| Total operating expenses | 469 | 419 | 1,307 | 1,149 | |||||||||||||||||||
| Operating income | 171 | 180 | 389 | 394 | |||||||||||||||||||
| Other (income) and deductions: | |||||||||||||||||||||||
| Interest expense | 37 | 34 | 111 | 103 | |||||||||||||||||||
| Allowance for funds used during construction | (3) | (2) | (8) | (7) | |||||||||||||||||||
| Other | (1) | — | (2) | 2 | |||||||||||||||||||
| Total other (income) and deductions | 33 | 32 | 101 | 98 | |||||||||||||||||||
| Income before income taxes | 138 | 148 | 288 | 296 | |||||||||||||||||||
| Income tax benefit | (16) | (12) | (39) | (34) | |||||||||||||||||||
| Net income | 154 | 160 | 327 | 330 | |||||||||||||||||||
| Preferred dividend requirements | — | 3 | — | 8 | |||||||||||||||||||
| Net income available for common stock | $154 | $157 | $327 | $322 | |||||||||||||||||||
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.
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INTERSTATE POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| September 30, 2022 | December 31, 2021 | ||||||||||
| (in millions, except per share and share amounts) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $45 | $34 | |||||||||
| Accounts receivable, less allowance for expected credit losses | 286 | 241 | |||||||||
| Income tax refunds receivable | 1 | 8 | |||||||||
| Production fuel, at weighted average cost | 31 | 29 | |||||||||
| Gas stored underground, at weighted average cost | 66 | 40 | |||||||||
| Materials and supplies, at weighted average cost | 77 | 70 | |||||||||
| Regulatory assets | 108 | 73 | |||||||||
| Other | 134 | 69 | |||||||||
| Total current assets | 748 | 564 | |||||||||
| Property, plant and equipment, net | 8,013 | 7,983 | |||||||||
| Other assets: | |||||||||||
| Regulatory assets | 1,315 | 1,370 | |||||||||
| Deferred charges and other | 132 | 79 | |||||||||
| Total other assets | 1,447 | 1,449 | |||||||||
| Total assets | $10,208 | $9,996 | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $232 | $173 | |||||||||
| Accounts payable to associated companies | 37 | 39 | |||||||||
| Regulatory liabilities | 105 | 84 | |||||||||
| Accrued taxes | 69 | 56 | |||||||||
| Accrued interest | 35 | 36 | |||||||||
| Other | 112 | 67 | |||||||||
| Total current liabilities | 590 | 455 | |||||||||
| Long-term debt, net | 3,645 | 3,643 | |||||||||
| Other liabilities: | |||||||||||
| Deferred tax liabilities | 1,029 | 1,083 | |||||||||
| Regulatory liabilities | 656 | 607 | |||||||||
| Pension and other benefit obligations | 118 | 127 | |||||||||
| Other | 314 | 312 | |||||||||
| Total other liabilities | 2,117 | 2,129 | |||||||||
| Equity: | |||||||||||
| Interstate Power and Light Company common equity: | |||||||||||
Common stock - $2.50 par value - 24,000,000 shares authorized; 13,370,788 shares outstanding | 33 | 33 | |||||||||
| Additional paid-in capital | 2,807 | 2,807 | |||||||||
| Retained earnings | 1,016 | 929 | |||||||||
| Total Interstate Power and Light Company common equity | 3,856 | 3,769 | |||||||||
| Total liabilities and equity | $10,208 | $9,996 | |||||||||
Refer to accompanying Combined Notes to Condensed Consolidated Financial Statements.
7 | ||||||||
INTERSTATE POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| For the Nine Months | |||||||||||
| Ended September 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| (in millions) | |||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $327 | $330 | |||||||||
| Adjustments to reconcile net income to net cash flows from operating activities: | |||||||||||
| Depreciation and amortization | 285 | 281 | |||||||||
| Deferred tax benefit and tax credits | (24) | (13) | |||||||||
| Other | (8) | (1) | |||||||||
| Other changes in assets and liabilities: | |||||||||||
| Accounts receivable | (397) | (412) | |||||||||
| Derivative assets | (118) | (86) | |||||||||
| Regulatory assets | 18 | (33) | |||||||||
| Accounts payable | 71 | 5 | |||||||||
| Derivative liabilities | 62 | (9) | |||||||||
| Regulatory liabilities | 61 | 30 | |||||||||
| Deferred income taxes | (30) | 56 | |||||||||
| Pension and other benefit obligations | (9) | (25) | |||||||||
| Other | (72) | (28) | |||||||||
| Net cash flows from operating activities | 166 | 95 | |||||||||
| Cash flows from investing activities: | |||||||||||
| Construction and acquisition expenditures | (269) | (285) | |||||||||
| Cash receipts on sold receivables | 358 | 423 | |||||||||
| Other | (5) | (16) | |||||||||
| Net cash flows from investing activities | 84 | 122 | |||||||||
| Cash flows used for financing activities: | |||||||||||
| Common stock dividends | (240) | (301) | |||||||||
| Capital contributions from parent | — | 50 | |||||||||
| Other | 1 | (3) | |||||||||
| Net cash flows used for financing activities | (239) | (254) | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 11 | (37) | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 34 | 50 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $45 | $13 | |||||||||
| Supplemental cash flows information: | |||||||||||
| Cash (paid) refunded during the period for: | |||||||||||
| Interest | ($111) | ($106) | |||||||||
| Income taxes, net | $33 | $28 | |||||||||
| Significant non-cash investing and financing activities: | |||||||||||
| Accrued capital expenditures | $43 | $30 | |||||||||
| Beneficial interest obtained in exchange for securitized accounts receivable | $248 | $164 | |||||||||
Refer to accompanying Combined Notes to Condensed Consolidated Financial Statements.
8 | ||||||||
WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
| For the Three Months | For the Nine Months | ||||||||||||||||||||||
| Ended September 30, | Ended September 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Electric utility | $443 | $384 | $1,186 | $1,014 | |||||||||||||||||||
| Gas utility | 29 | 19 | 194 | 124 | |||||||||||||||||||
| Other | — | — | 1 | 1 | |||||||||||||||||||
| Total revenues | 472 | 403 | 1,381 | 1,139 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Electric production fuel and purchased power | 134 | 105 | 343 | 263 | |||||||||||||||||||
| Electric transmission service | 42 | 44 | 125 | 128 | |||||||||||||||||||
| Cost of gas sold | 13 | 6 | 117 | 65 | |||||||||||||||||||
| Other operation and maintenance | 70 | 66 | 193 | 194 | |||||||||||||||||||
| Depreciation and amortization | 71 | 70 | 211 | 209 | |||||||||||||||||||
| Taxes other than income taxes | 11 | 12 | 35 | 35 | |||||||||||||||||||
| Total operating expenses | 341 | 303 | 1,024 | 894 | |||||||||||||||||||
| Operating income | 131 | 100 | 357 | 245 | |||||||||||||||||||
| Other (income) and deductions: | |||||||||||||||||||||||
| Interest expense | 31 | 25 | 86 | 77 | |||||||||||||||||||
| Allowance for funds used during construction | (7) | (5) | (26) | (9) | |||||||||||||||||||
| Other | — | 2 | — | 3 | |||||||||||||||||||
| Total other (income) and deductions | 24 | 22 | 60 | 71 | |||||||||||||||||||
| Income before income taxes | 107 | 78 | 297 | 174 | |||||||||||||||||||
| Income tax expense (benefit) | 16 | (15) | 50 | (41) | |||||||||||||||||||
| Net income | $91 | $93 | $247 | $215 | |||||||||||||||||||
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.
9 | ||||||||
WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
| September 30, 2022 | December 31, 2021 | ||||||||||
| (in millions, except per share and share amounts) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $299 | $2 | |||||||||
| Accounts receivable, less allowance for expected credit losses | 211 | 188 | |||||||||
| Production fuel, at weighted average cost | 18 | 23 | |||||||||
| Gas stored underground, at weighted average cost | 58 | 42 | |||||||||
| Materials and supplies, at weighted average cost | 47 | 41 | |||||||||
| Regulatory assets | 69 | 31 | |||||||||
| Prepaid gross receipts tax | 31 | 40 | |||||||||
| Other | 130 | 86 | |||||||||
| Total current assets | 863 | 453 | |||||||||
| Property, plant and equipment, net | 7,371 | 6,538 | |||||||||
| Other assets: | |||||||||||
| Regulatory assets | 549 | 466 | |||||||||
| Deferred charges and other | 115 | 61 | |||||||||
| Total other assets | 664 | 527 | |||||||||
| Total assets | $8,898 | $7,518 | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Current maturities of long-term debt | $250 | $250 | |||||||||
| Commercial paper | — | 236 | |||||||||
| Accounts payable | 470 | 190 | |||||||||
| Accounts payable to associated companies | 51 | 39 | |||||||||
| Regulatory liabilities | 124 | 102 | |||||||||
| Other | 93 | 73 | |||||||||
| Total current liabilities | 988 | 890 | |||||||||
| Long-term debt, net (excluding current portion) | 2,769 | 2,179 | |||||||||
| Other liabilities: | |||||||||||
Deferred tax liabilities | 783 | 753 | |||||||||
| Regulatory liabilities | 502 | 478 | |||||||||
| Pension and other benefit obligations | 148 | 159 | |||||||||
| Other | 352 | 236 | |||||||||
| Total other liabilities | 1,785 | 1,626 | |||||||||
| Equity: | |||||||||||
| Wisconsin Power and Light Company common equity: | |||||||||||
Common stock - $5 par value - 18,000,000 shares authorized; 13,236,601 shares outstanding | 66 | 66 | |||||||||
| Additional paid-in capital | 2,123 | 1,704 | |||||||||
| Retained earnings | 1,167 | 1,053 | |||||||||
| Total Wisconsin Power and Light Company common equity | 3,356 | 2,823 | |||||||||
| Total liabilities and equity | $8,898 | $7,518 | |||||||||
Refer to accompanying Combined Notes to Condensed Consolidated Financial Statements.
10 | ||||||||
WISCONSIN POWER AND LIGHT COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
| For the Nine Months | |||||||||||
| Ended September 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| (in millions) | |||||||||||
| Cash flows from operating activities: | |||||||||||
| Net income | $247 | $215 | |||||||||
| Adjustments to reconcile net income to net cash flows from operating activities: | |||||||||||
| Depreciation and amortization | 211 | 209 | |||||||||
| Deferred tax expense (benefit) and tax credits | 11 | (63) | |||||||||
| Other | (7) | 12 | |||||||||
| Other changes in assets and liabilities: | |||||||||||
| Derivative assets | (66) | (116) | |||||||||
| Regulatory assets | (120) | 11 | |||||||||
| Deferred income taxes | 20 | 108 | |||||||||
| Other | (17) | (27) | |||||||||
| Net cash flows from operating activities | 279 | 349 | |||||||||
| Cash flows used for investing activities: | |||||||||||
| Construction and acquisition expenditures | (604) | (487) | |||||||||
| Other | (8) | (23) | |||||||||
| Net cash flows used for investing activities | (612) | (510) | |||||||||
| Cash flows from financing activities: | |||||||||||
| Common stock dividends | (133) | (126) | |||||||||
| Capital contributions from parent | 420 | 245 | |||||||||
| Proceeds from issuance of long-term debt | 588 | 300 | |||||||||
| Net change in commercial paper | (236) | (254) | |||||||||
| Contributions from noncontrolling interest | 29 | — | |||||||||
| Distributions to noncontrolling interest | (29) | — | |||||||||
| Other | (9) | (3) | |||||||||
| Net cash flows from financing activities | 630 | 162 | |||||||||
| Net increase in cash, cash equivalents and restricted cash | 297 | 1 | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 2 | 3 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $299 | $4 | |||||||||
| Supplemental cash flows information: | |||||||||||
| Cash paid during the period for: | |||||||||||
| Interest | ($78) | ($72) | |||||||||
| Income taxes, net | ($51) | ($24) | |||||||||
| Significant non-cash investing and financing activities: | |||||||||||
| Accrued capital expenditures | $355 | $59 | |||||||||
Refer to accompanying Combined Notes to Condensed Consolidated Financial Statements.
11 | ||||||||
ALLIANT ENERGY CORPORATION
INTERSTATE POWER AND LIGHT COMPANY
WISCONSIN POWER AND LIGHT COMPANY
COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTE 1(a) General - The interim unaudited Financial Statements included herein have been prepared pursuant to the rules and regulations of the 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.
A change in management’s estimates or assumptions could have a material impact on financial condition and results of operations during the period in which such change occurred. Certain prior period amounts in the Financial Statements and Notes have been reclassified to conform to the current period presentation for comparative purposes.
NOTE 1(b) Cash and Cash Equivalents - At September 30, 2022, Alliant Energy’s, IPL’s and WPL’s cash and cash equivalents included $334 million, $39 million and $295 million of money market fund investments, respectively, with weighted average interest rates of 3%.
NOTE 1(c) Variable Interest Entities (VIEs) - 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 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 $62 million and $29 million, respectively, to WPL 2022 Solar Holdco, LLC in exchange for membership interests, and $88 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 $29 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 1,100 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.
12 | ||||||||
NOTE 2. REGULATORY MATTERS
Regulatory Assets and Regulatory Liabilities -
Regulatory assets were comprised of the following items (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| September 30, 2022 | December 31, 2021 | September 30, 2022 | December 31, 2021 | September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||
| Tax-related | $913 | $934 | $842 | $884 | $71 | $50 | |||||||||||||||||||||||||||||
| Pension and OPEB costs | 436 | 462 | 216 | 228 | 220 | 234 | |||||||||||||||||||||||||||||
| Asset retirement obligations | 145 | 128 | 104 | 89 | 41 | 39 | |||||||||||||||||||||||||||||
| Commodity cost recovery | 129 | 42 | 2 | 2 | 127 | 40 | |||||||||||||||||||||||||||||
| Derivatives | 102 | 8 | 67 | 4 | 35 | 4 | |||||||||||||||||||||||||||||
| Assets retired early | 75 | 92 | 56 | 66 | 19 | 26 | |||||||||||||||||||||||||||||
| IPL’s DAEC PPA amendment | 72 | 90 | 72 | 90 | — | — | |||||||||||||||||||||||||||||
| WPL’s Western Wisconsin gas distribution expansion investments | 49 | 52 | — | — | 49 | 52 | |||||||||||||||||||||||||||||
| Other | 120 | 132 | 64 | 80 | 56 | 52 | |||||||||||||||||||||||||||||
| $2,041 | $1,940 | $1,423 | $1,443 | $618 | $497 | ||||||||||||||||||||||||||||||
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 $83 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.
Regulatory liabilities were comprised of the following items (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| September 30, 2022 | December 31, 2021 | September 30, 2022 | December 31, 2021 | September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||
| Tax-related | $582 | $585 | $304 | $312 | $278 | $273 | |||||||||||||||||||||||||||||
| Cost of removal obligations | 398 | 384 | 258 | 252 | 140 | 132 | |||||||||||||||||||||||||||||
| Derivatives | 312 | 166 | 164 | 77 | 148 | 89 | |||||||||||||||||||||||||||||
| WPL’s West Riverside liquidated damages | 33 | 36 | — | — | 33 | 36 | |||||||||||||||||||||||||||||
| Electric transmission cost recovery | 16 | 51 | 4 | 27 | 12 | 24 | |||||||||||||||||||||||||||||
| Other | 46 | 49 | 31 | 23 | 15 | 26 | |||||||||||||||||||||||||||||
| $1,387 | $1,271 | $761 | $691 | $626 | $580 | ||||||||||||||||||||||||||||||
NOTE 3. PROPERTY, PLANT AND EQUIPMENT
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 (414 MW) by June 1, 2025, and Columbia Units 1 and 2 by June 1, 2026 (595 MW in aggregate). In addition, IPL currently expects to retire the coal-fired Lansing Generating Station (275 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. RECEIVABLES
Sales of Accounts Receivable - IPL maintains a Receivables Purchase and Sale Agreement (Receivables Agreement) whereby it may sell its customer accounts receivables, unbilled revenues and certain other accounts receivables to a third party through wholly-owned and consolidated special purpose entities. 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 $109 million of available capacity under its sales of accounts receivable program. IPL’s maximum and average outstanding cash proceeds (based on daily outstanding balances) related to the sales of accounts receivable program for the three and nine months ended September 30 were as follows (in millions):
13 | ||||||||
| Three Months | Nine Months | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Maximum outstanding aggregate cash proceeds | $36 | $110 | $66 | $110 | |||||||||||||||||||
| Average outstanding aggregate cash proceeds | 3 | 65 | 8 | 52 | |||||||||||||||||||
The attributes of IPL’s receivables sold under the Receivables Agreement were as follows (in millions):
| September 30, 2022 | December 31, 2021 | ||||||||||
| Customer accounts receivable | $169 | $125 | |||||||||
| Unbilled utility revenues | 92 | 104 | |||||||||
| Receivables sold to third party | 261 | 229 | |||||||||
| Less: cash proceeds | 1 | 1 | |||||||||
| Deferred proceeds | 260 | 228 | |||||||||
| Less: allowance for expected credit losses | 12 | 14 | |||||||||
| Fair value of deferred proceeds | $248 | $214 | |||||||||
As of September 30, 2022, outstanding receivables past due under the Receivables Agreement were $20 million. Additional attributes of IPL’s receivables sold under the Receivables Agreement for the three and nine months ended September 30 were as follows (in millions):
| Three Months | Nine Months | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| Collections | $670 | $607 | $1,731 | $1,589 | |||||||||||||||||||
| Write-offs, net of recoveries | 3 | 4 | 6 | 7 | |||||||||||||||||||
NOTE 5. INVESTMENTS
Unconsolidated Equity Investments - Alliant 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 | ($7) | ($12) | ($29) | ($34) | |||||||||||||||||||
| Other | 2 | (1) | (8) | (13) | |||||||||||||||||||
| ($5) | ($13) | ($37) | ($47) | ||||||||||||||||||||
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. COMMON EQUITY
Common Share Activity - A summary of Alliant Energy’s common stock activity was as follows:
Shares outstanding, January 1, 2022 | 250,474,529 | ||||
| Shareowner Direct Plan | 324,533 | ||||
| Equity-based compensation plans | 222,768 | ||||
Shares outstanding, September 30, 2022 | 251,021,830 | ||||
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.
14 | ||||||||
Changes in Shareowners’ Equity - A summary of changes in shareowners’ equity was as follows (in millions):
| Alliant Energy | Total Alliant Energy Common Equity | ||||||||||||||||||||||||||||||||||||||||
| Accumulated | Shares in | ||||||||||||||||||||||||||||||||||||||||
| Additional | Other | Deferred | |||||||||||||||||||||||||||||||||||||||
| Common | Paid-In | Retained | Comprehensive | Compensation | Noncontrolling | Total | |||||||||||||||||||||||||||||||||||
| Stock | Capital | Earnings | Loss | Trust | Interest | Equity | |||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
Beginning balance, June 30, 2022 | $3 | $2,759 | $3,387 | $— | ($12) | $29 | $6,166 | ||||||||||||||||||||||||||||||||||
| Net income attributable to Alliant Energy common shareowners | 227 | 227 | |||||||||||||||||||||||||||||||||||||||
Common stock dividends ($0.4275 per share) | (106) | (106) | |||||||||||||||||||||||||||||||||||||||
| Shareowner Direct Plan issuances | 6 | 6 | |||||||||||||||||||||||||||||||||||||||
| Equity-based compensation plans and other | 2 | (1) | 1 | ||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest | (29) | (29) | |||||||||||||||||||||||||||||||||||||||
Ending balance, September 30, 2022 | $3 | $2,767 | $3,508 | $— | ($13) | $— | $6,265 | ||||||||||||||||||||||||||||||||||
| Alliant Energy | Total Alliant Energy Common Equity | ||||||||||||||||||||||||||||||||||||||||
| Accumulated | Shares in | Cumulative | |||||||||||||||||||||||||||||||||||||||
| Additional | Other | Deferred | Preferred | ||||||||||||||||||||||||||||||||||||||
| Common | Paid-In | Retained | Comprehensive | Compensation | Stock | Total | |||||||||||||||||||||||||||||||||||
| Stock | Capital | Earnings | Loss | Trust | of IPL | Equity | |||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
Beginning balance, June 30, 2021 | $3 | $2,722 | $3,106 | ($1) | ($11) | $200 | $6,019 | ||||||||||||||||||||||||||||||||||
| Net income attributable to Alliant Energy common shareowners | 256 | 256 | |||||||||||||||||||||||||||||||||||||||
Common stock dividends ($0.4025 per share) | (101) | (101) | |||||||||||||||||||||||||||||||||||||||
| Shareowner Direct Plan issuances | 6 | 6 | |||||||||||||||||||||||||||||||||||||||
| Equity-based compensation plans and other | 5 | 5 | |||||||||||||||||||||||||||||||||||||||
Ending balance, September 30, 2021 | $3 | $2,733 | $3,261 | ($1) | ($11) | $200 | $6,185 | ||||||||||||||||||||||||||||||||||
| Alliant Energy | Total Alliant Energy Common Equity | ||||||||||||||||||||||||||||||||||||||||
| Accumulated | Shares in | ||||||||||||||||||||||||||||||||||||||||
| Additional | Other | Deferred | |||||||||||||||||||||||||||||||||||||||
| Common | Paid-In | Retained | Comprehensive | Compensation | Noncontrolling | Total | |||||||||||||||||||||||||||||||||||
| Stock | Capital | Earnings | Loss | Trust | Interest | Equity | |||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||
Beginning balance, December 31, 2021 | $3 | $2,749 | $3,250 | $— | ($12) | $— | $5,990 | ||||||||||||||||||||||||||||||||||
| Net income attributable to Alliant Energy common shareowners | 579 | 579 | |||||||||||||||||||||||||||||||||||||||
Common stock dividends ($1.2825 per share) | (322) | (322) | |||||||||||||||||||||||||||||||||||||||
| Shareowner Direct Plan issuances | 19 | 19 | |||||||||||||||||||||||||||||||||||||||
| Equity-based compensation plans and other | (1) | 1 | (1) | (1) | |||||||||||||||||||||||||||||||||||||
| Contributions from noncontrolling interest | 29 | 29 | |||||||||||||||||||||||||||||||||||||||
| Distributions to noncontrolling interest | (29) | (29) | |||||||||||||||||||||||||||||||||||||||
Ending balance, September 30, 2022 | $3 | $2,767 | $3,508 | $— | ($13) | $— | $6,265 | ||||||||||||||||||||||||||||||||||
| Alliant Energy | Total Alliant Energy Common Equity | ||||||||||||||||||||||||||||||||||||||||
| Accumulated | Shares in | Cumulative | |||||||||||||||||||||||||||||||||||||||
| Additional | Other | Deferred | Preferred | ||||||||||||||||||||||||||||||||||||||
| Common | Paid-In | Retained | Comprehensive | Compensation | Stock | Total | |||||||||||||||||||||||||||||||||||
| Stock | Capital | Earnings | Loss | Trust | of IPL | Equity | |||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||||||||
Beginning balance, December 31, 2020 | $2 | $2,704 | $2,994 | ($1) | ($11) | $200 | $5,888 | ||||||||||||||||||||||||||||||||||
| Net income attributable to Alliant Energy common shareowners | 571 | 571 | |||||||||||||||||||||||||||||||||||||||
Common stock dividends ($1.2075 per share) | (304) | (304) | |||||||||||||||||||||||||||||||||||||||
| Shareowner Direct Plan issuances | 1 | 21 | 22 | ||||||||||||||||||||||||||||||||||||||
| Equity-based compensation plans and other | 8 | 8 | |||||||||||||||||||||||||||||||||||||||
Ending balance, September 30, 2021 | $3 | $2,733 | $3,261 | ($1) | ($11) | $200 | $6,185 | ||||||||||||||||||||||||||||||||||
15 | ||||||||
| IPL | Total IPL Common Equity | ||||||||||||||||||||||||||||
| Additional | Cumulative | ||||||||||||||||||||||||||||
| Common | Paid-In | Retained | Preferred | Total | |||||||||||||||||||||||||
| Stock | Capital | Earnings | Stock | Equity | |||||||||||||||||||||||||
| Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||
Beginning balance, June 30, 2022 | $33 | $2,807 | $942 | $— | $3,782 | ||||||||||||||||||||||||
| Net income available for common stock | 154 | 154 | |||||||||||||||||||||||||||
| Common stock dividends | (80) | (80) | |||||||||||||||||||||||||||
Ending balance, September 30, 2022 | $33 | $2,807 | $1,016 | $— | $3,856 | ||||||||||||||||||||||||
| Three Months Ended September 30, 2021 | |||||||||||||||||||||||||||||
Beginning balance, June 30, 2021 | $33 | $2,802 | $944 | $200 | $3,979 | ||||||||||||||||||||||||
| Net income available for common stock | 157 | 157 | |||||||||||||||||||||||||||
| Common stock dividends | (101) | (101) | |||||||||||||||||||||||||||
Ending balance, September 30, 2021 | $33 | $2,802 | $1,000 | $200 | $4,035 | ||||||||||||||||||||||||
| IPL | Total IPL Common Equity | ||||||||||||||||||||||||||||
| Additional | Cumulative | ||||||||||||||||||||||||||||
| Common | Paid-In | Retained | Preferred | Total | |||||||||||||||||||||||||
| Stock | Capital | Earnings | Stock | Equity | |||||||||||||||||||||||||
| Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||
Beginning balance, December 31, 2021 | $33 | $2,807 | $929 | $— | $3,769 | ||||||||||||||||||||||||
| Net income available for common stock | 327 | 327 | |||||||||||||||||||||||||||
| Common stock dividends | (240) | (240) | |||||||||||||||||||||||||||
Ending balance, September 30, 2022 | $33 | $2,807 | $1,016 | $— | $3,856 | ||||||||||||||||||||||||
| Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||
Beginning balance, December 31, 2020 | $33 | $2,752 | $979 | $200 | $3,964 | ||||||||||||||||||||||||
| Net income available for common stock | 322 | 322 | |||||||||||||||||||||||||||
| Common stock dividends | (301) | (301) | |||||||||||||||||||||||||||
| Capital contributions from parent | 50 | 50 | |||||||||||||||||||||||||||
Ending balance, September 30, 2021 | $33 | $2,802 | $1,000 | $200 | $4,035 | ||||||||||||||||||||||||
| WPL | Total WPL Common Equity | ||||||||||||||||||||||||||||
| Additional | |||||||||||||||||||||||||||||
| Common | Paid-In | Retained | Noncontrolling | Total | |||||||||||||||||||||||||
| Stock | Capital | Earnings | Interest | Equity | |||||||||||||||||||||||||
| Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||
Beginning balance, June 30, 2022 | $66 | $1,968 | $1,120 | $29 | $3,183 | ||||||||||||||||||||||||
| Net income | 91 | 91 | |||||||||||||||||||||||||||
| Common stock dividends | (44) | (44) | |||||||||||||||||||||||||||
| Capital contributions from parent | 155 | 155 | |||||||||||||||||||||||||||
| Distributions to noncontrolling interest | (29) | (29) | |||||||||||||||||||||||||||
Ending balance, September 30, 2022 | $66 | $2,123 | $1,167 | $— | $3,356 | ||||||||||||||||||||||||
| Three Months Ended September 30, 2021 | |||||||||||||||||||||||||||||
Beginning balance, June 30, 2021 | $66 | $1,669 | $990 | $— | $2,725 | ||||||||||||||||||||||||
| Net income | 93 | 93 | |||||||||||||||||||||||||||
| Common stock dividends | (41) | (41) | |||||||||||||||||||||||||||
| Capital contributions from parent | 35 | 35 | |||||||||||||||||||||||||||
Ending balance, September 30, 2021 | $66 | $1,704 | $1,042 | $— | $2,812 | ||||||||||||||||||||||||
16 | ||||||||
| WPL | Total WPL Common Equity | ||||||||||||||||||||||||||||
| Additional | |||||||||||||||||||||||||||||
| Common | Paid-In | Retained | Noncontrolling | Total | |||||||||||||||||||||||||
| Stock | Capital | Earnings | Interest | Equity | |||||||||||||||||||||||||
| Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||
Beginning balance, December 31, 2021 | $66 | $1,704 | $1,053 | $— | $2,823 | ||||||||||||||||||||||||
| Net income | 247 | 247 | |||||||||||||||||||||||||||
| Common stock dividends | (133) | (133) | |||||||||||||||||||||||||||
| Capital contributions from parent | 420 | 420 | |||||||||||||||||||||||||||
| Contributions from noncontrolling interest | 29 | 29 | |||||||||||||||||||||||||||
| Distributions to noncontrolling interest | (29) | (29) | |||||||||||||||||||||||||||
| Other | (1) | (1) | |||||||||||||||||||||||||||
Ending balance, September 30, 2022 | $66 | $2,123 | $1,167 | $— | $3,356 | ||||||||||||||||||||||||
| Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||
Beginning balance, December 31, 2020 | $66 | $1,459 | $953 | $— | $2,478 | ||||||||||||||||||||||||
| Net income | 215 | 215 | |||||||||||||||||||||||||||
| Common stock dividends | (126) | (126) | |||||||||||||||||||||||||||
| Capital contributions from parent | 245 | 245 | |||||||||||||||||||||||||||
Ending balance, September 30, 2021 | $66 | $1,704 | $1,042 | $— | $2,812 | ||||||||||||||||||||||||
NOTE 7. DEBT
NOTE 7(a) Short-term Debt - Information regarding Alliant Energy’s, IPL’s and WPL’s commercial paper classified as short-term debt was as follows (dollars in millions):
| September 30, 2022 | Alliant Energy | IPL | WPL | ||||||||||||||
| Amount outstanding | $383 | $— | $— | ||||||||||||||
| Weighted average interest rates | 3.4% | N/A | N/A | ||||||||||||||
| Available credit facility capacity | $617 | $250 | $300 | ||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| Three Months Ended September 30 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||
| Maximum amount outstanding (based on daily outstanding balances) | $449 | $648 | $— | $8 | $251 | $320 | |||||||||||||||||||||||||||||
| Average amount outstanding (based on daily outstanding balances) | $353 | $560 | $— | $— | $110 | $221 | |||||||||||||||||||||||||||||
| Weighted average interest rates | 2.4% | 0.2% | —% | 0.2% | 2.0% | 0.1% | |||||||||||||||||||||||||||||
| Nine Months Ended September 30 | |||||||||||||||||||||||||||||||||||
| Maximum amount outstanding (based on daily outstanding balances) | $577 | $648 | $— | $19 | $252 | $320 | |||||||||||||||||||||||||||||
| Average amount outstanding (based on daily outstanding balances) | $377 | $479 | $— | $— | $160 | $196 | |||||||||||||||||||||||||||||
| Weighted average interest rates | 1.2% | 0.2% | —% | 0.2% | 0.9% | 0.1% | |||||||||||||||||||||||||||||
In October 2022, Alliant Energy, IPL and WPL reallocated credit facility capacity amounts to $500 million for Alliant Energy at the parent company level, $200 million for IPL and $300 million for WPL, within the $1 billion total commitment.
NOTE 7(b) Long-term Debt - In February 2022, AEF issued $350 million of 3.6% 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 $300 million variable rate (3% 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 $300 million variable rate term loan credit agreement that expired in March 2022.
In August 2022, WPL issued $600 million of 3.95% 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 $75 million, 3.45% senior notes due 2022.
17 | ||||||||
NOTE 8. REVENUES
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 | $376 | $348 | $222 | $207 | $154 | $141 | |||||||||||||||||||||||||||||
| Retail - commercial | 243 | 232 | 165 | 160 | 78 | 72 | |||||||||||||||||||||||||||||
| Retail - industrial | 289 | 265 | 172 | 158 | 117 | 107 | |||||||||||||||||||||||||||||
| Wholesale | 68 | 55 | 19 | 18 | 49 | 37 | |||||||||||||||||||||||||||||
| Bulk power and other | 63 | 39 | 18 | 12 | 45 | 27 | |||||||||||||||||||||||||||||
| Total Electric Utility | 1,039 | 939 | 596 | 555 | 443 | 384 | |||||||||||||||||||||||||||||
| Gas Utility: | |||||||||||||||||||||||||||||||||||
| Retail - residential | 28 | 24 | 14 | 14 | 14 | 10 | |||||||||||||||||||||||||||||
| Retail - commercial | 18 | 13 | 8 | 8 | 10 | 5 | |||||||||||||||||||||||||||||
| Retail - industrial | 4 | 3 | 3 | 3 | 1 | — | |||||||||||||||||||||||||||||
| Transportation/other | 12 | 10 | 8 | 6 | 4 | 4 | |||||||||||||||||||||||||||||
| Total Gas Utility | 62 | 50 | 33 | 31 | 29 | 19 | |||||||||||||||||||||||||||||
| Other Utility: | |||||||||||||||||||||||||||||||||||
| Steam | 9 | 9 | 9 | 9 | — | — | |||||||||||||||||||||||||||||
| Other utility | 2 | 4 | 2 | 4 | — | — | |||||||||||||||||||||||||||||
| Total Other Utility | 11 | 13 | 11 | 13 | — | — | |||||||||||||||||||||||||||||
| Non-Utility and Other: | |||||||||||||||||||||||||||||||||||
| Travero and other | 23 | 22 | — | — | — | — | |||||||||||||||||||||||||||||
| Total Non-Utility and Other | 23 | 22 | — | — | — | — | |||||||||||||||||||||||||||||
| Total revenues | $1,135 | $1,024 | $640 | $599 | $472 | $403 | |||||||||||||||||||||||||||||
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| Nine Months Ended September 30 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||
| Electric Utility: | |||||||||||||||||||||||||||||||||||
| Retail - residential | $956 | $868 | $529 | $488 | $427 | $380 | |||||||||||||||||||||||||||||
| Retail - commercial | 628 | 579 | 411 | 385 | 217 | 194 | |||||||||||||||||||||||||||||
| Retail - industrial | 743 | 677 | 418 | 386 | 325 | 291 | |||||||||||||||||||||||||||||
| Wholesale | 168 | 142 | 49 | 44 | 119 | 98 | |||||||||||||||||||||||||||||
| Bulk power and other | 129 | 91 | 31 | 40 | 98 | 51 | |||||||||||||||||||||||||||||
| Total Electric Utility | 2,624 | 2,357 | 1,438 | 1,343 | 1,186 | 1,014 | |||||||||||||||||||||||||||||
| Gas Utility: | |||||||||||||||||||||||||||||||||||
| Retail - residential | 237 | 162 | 127 | 90 | 110 | 72 | |||||||||||||||||||||||||||||
| Retail - commercial | 127 | 85 | 62 | 47 | 65 | 38 | |||||||||||||||||||||||||||||
| Retail - industrial | 15 | 11 | 10 | 8 | 5 | 3 | |||||||||||||||||||||||||||||
| Transportation/other | 39 | 31 | 25 | 20 | 14 | 11 | |||||||||||||||||||||||||||||
| Total Gas Utility | 418 | 289 | 224 | 165 | 194 | 124 | |||||||||||||||||||||||||||||
| Other Utility: | |||||||||||||||||||||||||||||||||||
| Steam | 29 | 27 | 29 | 27 | — | — | |||||||||||||||||||||||||||||
| Other utility | 6 | 9 | 5 | 8 | 1 | 1 | |||||||||||||||||||||||||||||
| Total Other Utility | 35 | 36 | 34 | 35 | 1 | 1 | |||||||||||||||||||||||||||||
| Non-Utility and Other: | |||||||||||||||||||||||||||||||||||
| Travero and other | 70 | 60 | — | — | — | — | |||||||||||||||||||||||||||||
| Total Non-Utility and Other | 70 | 60 | — | — | — | — | |||||||||||||||||||||||||||||
| Total revenues | $3,147 | $2,742 | $1,696 | $1,543 | $1,381 | $1,139 | |||||||||||||||||||||||||||||
NOTE 9. INCOME TAXES
Income Tax Rates - Overall 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
18 | ||||||||
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 | 6% | (9%) | 4% | (13%) | (12%) | (8%) | (14%) | (11%) | 15% | (19%) | 17% | (24%) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. At 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 | $500 | $9 | $2 | |||||||||||||||||||
| Federal tax credits | 2022-2042 | 655 | 437 | 208 | |||||||||||||||||||
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 5.5%, compared to the current 9.8% Iowa corporate income tax rate. In September 2022, the Iowa Department of Revenue announced an Iowa corporate income tax rate of 8.4%, 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 $76 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 $8 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. BENEFIT PLANS
NOTE 10(a) Pension and OPEB Plans -
Net Periodic Benefit Costs - The 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.
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||||||||||||||||||||||||||||||||||
| Three Months | Nine Months | Three Months | Nine Months | ||||||||||||||||||||||||||||||||||||||||||||
| Alliant Energy | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Service cost | $3 | $2 | $7 | $8 | $— | $1 | $2 | $3 | |||||||||||||||||||||||||||||||||||||||
| Interest cost | 9 | 9 | 27 | 26 | 1 | 1 | 4 | 3 | |||||||||||||||||||||||||||||||||||||||
| Expected return on plan assets | (18) | (17) | (52) | (51) | — | (1) | (3) | (3) | |||||||||||||||||||||||||||||||||||||||
| Amortization of prior service credit | — | (1) | — | (1) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Amortization of actuarial loss | 8 | 10 | 24 | 29 | 1 | 1 | 2 | 3 | |||||||||||||||||||||||||||||||||||||||
| $2 | $3 | $6 | $11 | $2 | $2 | $5 | $6 | ||||||||||||||||||||||||||||||||||||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||||||||||||||||||||||||||||||||||
| Three Months | Nine Months | Three Months | Nine Months | ||||||||||||||||||||||||||||||||||||||||||||
| IPL | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Service cost | $1 | $1 | $4 | $5 | $— | $— | $1 | $1 | |||||||||||||||||||||||||||||||||||||||
| Interest cost | 4 | 4 | 12 | 12 | 1 | 1 | 2 | 2 | |||||||||||||||||||||||||||||||||||||||
| Expected return on plan assets | (7) | (8) | (23) | (24) | (1) | (1) | (3) | (3) | |||||||||||||||||||||||||||||||||||||||
| Amortization of actuarial loss | 3 | 5 | 10 | 13 | — | — | — | 1 | |||||||||||||||||||||||||||||||||||||||
| $1 | $2 | $3 | $6 | $— | $— | $— | $1 | ||||||||||||||||||||||||||||||||||||||||
19 | ||||||||
| Defined Benefit Pension Plans | OPEB Plans | ||||||||||||||||||||||||||||||||||||||||||||||
| Three Months | Nine Months | Three Months | Nine Months | ||||||||||||||||||||||||||||||||||||||||||||
| WPL | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||||||||||
| Service cost | $— | $1 | $2 | $3 | $— | $1 | $— | $1 | |||||||||||||||||||||||||||||||||||||||
| Interest cost | 4 | 3 | 12 | 11 | 1 | — | 2 | 1 | |||||||||||||||||||||||||||||||||||||||
| Expected return on plan assets | (7) | (8) | (23) | (23) | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Amortization of actuarial loss | 4 | 5 | 12 | 14 | — | 1 | 1 | 2 | |||||||||||||||||||||||||||||||||||||||
| $1 | $1 | $3 | $5 | $1 | $2 | $3 | $4 | ||||||||||||||||||||||||||||||||||||||||
NOTE 10(b) Equity-based Compensation Plans - A summary of compensation expense, including amounts allocated to IPL and WPL, and the related income tax benefits recognized for share-based compensation awards for the three and nine months ended September 30 was as follows (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 | $3 | $4 | $9 | $9 | $2 | $2 | $5 | $5 | $1 | $2 | $4 | $4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax benefits | 1 | 1 | 3 | 3 | — | — | 1 | 1 | — | — | 1 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
As of September 30, 2022, Alliant Energy’s, IPL’s and WPL’s total unrecognized compensation cost related to share-based compensation awards was $8 million, $5 million and $3 million, respectively, which is expected to be recognized over a weighted average period of between 1 year and 2 years.
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 | 74,106 | $54.45 | |||||||||
| Performance restricted stock units | 84,670 | 57.01 | |||||||||
| Restricted stock units | 77,122 | 56.88 | |||||||||
As of September 30, 2022, 285,909 shares were included in the calculation of diluted EPS related to the nonvested equity awards.
NOTE 11. DERIVATIVE INSTRUMENTS
Commodity Derivatives -
Notional Amounts - As 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 | 1,379 | 2022-2024 | 14,454 | 2022-2023 | 249,508 | 2022-2032 | 1,566 | 2022-2023 | 756 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
| IPL | 768 | 2022-2024 | 6,165 | 2022-2023 | 135,193 | 2022-2030 | 669 | 2022-2023 | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||
| WPL | 611 | 2022-2023 | 8,289 | 2022-2023 | 114,315 | 2022-2032 | 897 | 2022-2023 | 756 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
Financial Statement Presentation - Derivative instruments are recorded at fair value each reporting date on the balance sheets as assets or liabilities as follows (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| September 30, 2022 | December 31, 2021 | September 30, 2022 | December 31, 2021 | September 30, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||
| Current derivative assets | $200 | $113 | $117 | $48 | $83 | $65 | |||||||||||||||||||||||||||||
| Non-current derivative assets | 160 | 63 | 85 | 36 | 75 | 27 | |||||||||||||||||||||||||||||
| Current derivative liabilities | 71 | 8 | 54 | 4 | 17 | 4 | |||||||||||||||||||||||||||||
| Non-current derivative liabilities | 27 | 1 | 12 | — | 15 | 1 | |||||||||||||||||||||||||||||
20 | ||||||||
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. However, 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):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| Gross | Gross | Gross | |||||||||||||||||||||||||||||||||
| (as reported) | Net | (as reported) | Net | (as reported) | Net | ||||||||||||||||||||||||||||||
| September 30, 2022 | |||||||||||||||||||||||||||||||||||
| Derivative assets | $360 | $308 | $202 | $165 | $158 | $143 | |||||||||||||||||||||||||||||
| Derivative liabilities | 98 | 46 | 66 | 29 | 32 | 17 | |||||||||||||||||||||||||||||
| December 31, 2021 | |||||||||||||||||||||||||||||||||||
| Derivative assets | 176 | 171 | 84 | 83 | 92 | 88 | |||||||||||||||||||||||||||||
| Derivative liabilities | 9 | 4 | 4 | 3 | 5 | 1 | |||||||||||||||||||||||||||||
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. FAIR 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. Carrying amounts and related estimated fair values of other financial instruments were as follows (in millions):
| Alliant Energy | September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carrying | Level | Level | Level | Carrying | Level | Level | Level | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amount | 1 | 2 | 3 | Total | Amount | 1 | 2 | 3 | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Money market fund investments | $334 | $334 | $— | $— | $334 | $32 | $32 | $— | $— | $32 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives | 360 | — | 295 | 65 | 360 | 176 | — | 146 | 30 | 176 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred proceeds | 248 | — | — | 248 | 248 | 214 | — | — | 214 | 214 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives | 98 | — | 78 | 20 | 98 | 9 | — | 8 | 1 | 9 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Long-term debt (incl. current maturities) | 8,228 | — | 7,473 | 1 | 7,474 | 7,368 | — | 8,329 | 1 | 8,330 | |||||||||||||||||||||||||||||||||||||||||||||||||
21 | ||||||||
| IPL | September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carrying | Level | Level | Level | Carrying | Level | Level | Level | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amount | 1 | 2 | 3 | Total | Amount | 1 | 2 | 3 | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Money market fund investments | $39 | $39 | $— | $— | $39 | $32 | $32 | $— | $— | $32 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives | 202 | — | 150 | 52 | 202 | 84 | — | 65 | 19 | 84 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Deferred proceeds | 248 | — | — | 248 | 248 | 214 | — | — | 214 | 214 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives | 66 | — | 47 | 19 | 66 | 4 | — | 3 | 1 | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Long-term debt | 3,645 | — | 3,228 | — | 3,228 | 3,643 | — | 4,124 | — | 4,124 | |||||||||||||||||||||||||||||||||||||||||||||||||
| WPL | September 30, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value | Fair Value | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Carrying | Level | Level | Level | Carrying | Level | Level | Level | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amount | 1 | 2 | 3 | Total | Amount | 1 | 2 | 3 | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Money market fund investments | $295 | $295 | $— | $— | $295 | $— | $— | $— | $— | $— | |||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives | 158 | — | 145 | 13 | 158 | 92 | — | 81 | 11 | 92 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivatives | 32 | — | 31 | 1 | 32 | 5 | — | 5 | — | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Long-term debt (incl. current maturities) | 3,019 | — | 2,778 | — | 2,778 | 2,429 | — | 2,862 | — | 2,862 | |||||||||||||||||||||||||||||||||||||||||||||||||
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 | $72 | $39 | $244 | $154 | |||||||||||||||||||
| Total net gains (losses) included in changes in net assets (realized/unrealized) | (1) | 5 | — | — | |||||||||||||||||||
| Transfers out of Level 3 | — | (8) | — | — | |||||||||||||||||||
| Settlements (a) | (26) | (7) | 4 | 10 | |||||||||||||||||||
Ending balance, September 30 | $45 | $29 | $248 | $164 | |||||||||||||||||||
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 | ($1) | $5 | $— | $— | |||||||||||||||||||
22 | ||||||||
| Alliant Energy | Commodity Contract Derivative | ||||||||||||||||||||||
| Assets and (Liabilities), net | Deferred Proceeds | ||||||||||||||||||||||
| Nine Months Ended September 30 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Beginning balance, January 1 | $29 | $29 | $214 | $188 | |||||||||||||||||||
Total net gains (losses) included in changes in net assets (realized/unrealized) | (17) | 6 | — | — | |||||||||||||||||||
| Transfers out of Level 3 | — | (8) | — | — | |||||||||||||||||||
| Purchases | 79 | 21 | — | — | |||||||||||||||||||
| Settlements (a) | (46) | (19) | 34 | (24) | |||||||||||||||||||
Ending balance, September 30 | $45 | $29 | $248 | $164 | |||||||||||||||||||
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 | ($17) | $6 | $— | $— | |||||||||||||||||||
| IPL | Commodity Contract Derivative | ||||||||||||||||||||||
| Assets and (Liabilities), net | Deferred Proceeds | ||||||||||||||||||||||
| Three Months Ended September 30 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Beginning balance, July 1 | $58 | $30 | $244 | $154 | |||||||||||||||||||
Total net gains (losses) included in changes in net assets (realized/unrealized) | (6) | 2 | — | — | |||||||||||||||||||
| Transfers out of Level 3 | — | (8) | — | — | |||||||||||||||||||
| Settlements (a) | (19) | (5) | 4 | 10 | |||||||||||||||||||
Ending balance, September 30 | $33 | $19 | $248 | $164 | |||||||||||||||||||
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 | ($6) | $2 | $— | $— | |||||||||||||||||||
| IPL | Commodity Contract Derivative | ||||||||||||||||||||||
| Assets and (Liabilities), net | Deferred Proceeds | ||||||||||||||||||||||
| Nine Months Ended September 30 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Beginning balance, January 1 | $18 | $26 | $214 | $188 | |||||||||||||||||||
Total net losses included in changes in net assets (realized/unrealized) | (13) | — | — | — | |||||||||||||||||||
| Transfers out of Level 3 | — | (8) | — | — | |||||||||||||||||||
| Purchases | 58 | 16 | — | — | |||||||||||||||||||
| Settlements (a) | (30) | (15) | 34 | (24) | |||||||||||||||||||
Ending balance, September 30 | $33 | $19 | $248 | $164 | |||||||||||||||||||
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 | ($14) | $— | $— | $— | |||||||||||||||||||
| WPL | Commodity Contract Derivative | ||||||||||
| Assets and (Liabilities), net | |||||||||||
| Three Months Ended September 30 | 2022 | 2021 | |||||||||
| Beginning balance, July 1 | $14 | $9 | |||||||||
Total net gains included in changes in net assets (realized/unrealized) | 5 | 3 | |||||||||
| Settlements | (7) | (2) | |||||||||
Ending balance, September 30 | $12 | $10 | |||||||||
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 | $5 | $3 | |||||||||
23 | ||||||||
| WPL | Commodity Contract Derivative | ||||||||||
| Assets and (Liabilities), net | |||||||||||
| Nine Months Ended September 30 | 2022 | 2021 | |||||||||
| Beginning balance, January 1 | $11 | $3 | |||||||||
| Total net gains (losses) included in changes in net assets (realized/unrealized) | (4) | 6 | |||||||||
| Purchases | 21 | 5 | |||||||||
| Settlements | (16) | (4) | |||||||||
Ending balance, September 30 | $12 | $10 | |||||||||
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 | ($3) | $6 | |||||||||
(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 - The fair value of FTR and natural gas commodity contracts categorized as Level 3 was recognized as net derivative assets (liabilities) as follows (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||||||||||||||||||||
| Excluding FTRs | FTRs | Excluding FTRs | FTRs | Excluding FTRs | FTRs | ||||||||||||||||||||||||||||||
| September 30, 2022 | ($14) | $59 | ($15) | $48 | $1 | $11 | |||||||||||||||||||||||||||||
| December 31, 2021 | 9 | 20 | 8 | 10 | 1 | 10 | |||||||||||||||||||||||||||||
NOTE 13. COMMITMENTS AND CONTINGENCIES
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 $208 million and $206 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. At September 30, 2022, related minimum future commitments were as follows (in millions):
| Alliant Energy | IPL | WPL | |||||||||||||||
| Natural gas | $1,608 | $742 | $866 | ||||||||||||||
| Coal | 197 | 95 | 102 | ||||||||||||||
| Other (a) | 126 | 57 | 28 | ||||||||||||||
| $1,931 | $894 | $996 | |||||||||||||||
(a)Includes individual commitments incurred during the normal course of business that exceeded $1 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 6% 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 $58 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 $58 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 $5 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.
24 | ||||||||
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 $59 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 $17 million and expire in December 2031, subject to potential extension. Alliant Energy is not aware of any material liabilities related to this guarantee that it is probable that it will be obligated to pay and therefore has not recognized any material liabilities related to this guarantee as of September 30, 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. At 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 | $9 | - | $25 | $6 | - | $19 | |||||||||||||||||
| Current and non-current environmental liabilities | $12 | $8 | |||||||||||||||||||||
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 9.88% 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 9.88% to 10.02% 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 $5 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.
25 | ||||||||
NOTE 14. SEGMENTS OF BUSINESS
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.
| Alliant Energy | ATC Holdings, | Alliant | |||||||||||||||||||||||||||||||||
| Utility | Non-Utility, | Energy | |||||||||||||||||||||||||||||||||
| Electric | Gas | Other | Total | Parent and Other | Consolidated | ||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||
| Revenues | $1,039 | $62 | $11 | $1,112 | $23 | $1,135 | |||||||||||||||||||||||||||||
| Operating income (loss) | 304 | (3) | 1 | 302 | 7 | 309 | |||||||||||||||||||||||||||||
| Net income (loss) attributable to Alliant Energy common shareowners | 245 | (18) | 227 | ||||||||||||||||||||||||||||||||
| Three Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||
| Revenues | $939 | $50 | $13 | $1,002 | $22 | $1,024 | |||||||||||||||||||||||||||||
| Operating income (loss) | 290 | (5) | (5) | 280 | 9 | 289 | |||||||||||||||||||||||||||||
| Net income attributable to Alliant Energy common shareowners | 250 | 6 | 256 | ||||||||||||||||||||||||||||||||
| Alliant Energy | ATC Holdings, | Alliant | |||||||||||||||||||||||||||||||||
| Utility | Non-Utility, | Energy | |||||||||||||||||||||||||||||||||
| Electric | Gas | Other | Total | Parent and Other | Consolidated | ||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||
| Revenues | $2,624 | $418 | $35 | $3,077 | $70 | $3,147 | |||||||||||||||||||||||||||||
| Operating income | 680 | 62 | 4 | 746 | 23 | 769 | |||||||||||||||||||||||||||||
| Net income attributable to Alliant Energy common shareowners | 574 | 5 | 579 | ||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2021 | |||||||||||||||||||||||||||||||||||
| Revenues | $2,357 | $289 | $36 | $2,682 | $60 | $2,742 | |||||||||||||||||||||||||||||
| Operating income (loss) | 601 | 42 | (4) | 639 | 24 | 663 | |||||||||||||||||||||||||||||
| Net income attributable to Alliant Energy common shareowners | 537 | 34 | 571 | ||||||||||||||||||||||||||||||||
| IPL | Electric | Gas | Other | Total | |||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Three Months Ended September 30, 2022 | |||||||||||||||||||||||
| Revenues | $596 | $33 | $11 | $640 | |||||||||||||||||||
| Operating income (loss) | 174 | (3) | — | 171 | |||||||||||||||||||
| Net income available for common stock | 154 | ||||||||||||||||||||||
| Three Months Ended September 30, 2021 | |||||||||||||||||||||||
| Revenues | $555 | $31 | $13 | $599 | |||||||||||||||||||
| Operating income (loss) | 186 | (3) | (3) | 180 | |||||||||||||||||||
| Net income available for common stock | 157 | ||||||||||||||||||||||
| Nine Months Ended September 30, 2022 | |||||||||||||||||||||||
| Revenues | $1,438 | $224 | $34 | $1,696 | |||||||||||||||||||
| Operating income | 353 | 33 | 3 | 389 | |||||||||||||||||||
| Net income available for common stock | 327 | ||||||||||||||||||||||
| Nine Months Ended September 30, 2021 | |||||||||||||||||||||||
| Revenues | $1,343 | $165 | $35 | $1,543 | |||||||||||||||||||
| Operating income (loss) | 365 | 30 | (1) | 394 | |||||||||||||||||||
| Net income available for common stock | 322 | ||||||||||||||||||||||
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| WPL | Electric | Gas | Other | Total | |||||||||||||||||||
| (in millions) | |||||||||||||||||||||||
| Three Months Ended September 30, 2022 | |||||||||||||||||||||||
| Revenues | $443 | $29 | $— | $472 | |||||||||||||||||||
| Operating income | 130 | — | 1 | 131 | |||||||||||||||||||
| Net income | 91 | ||||||||||||||||||||||
| Three Months Ended September 30, 2021 | |||||||||||||||||||||||
| Revenues | $384 | $19 | $— | $403 | |||||||||||||||||||
| Operating income (loss) | 104 | (2) | (2) | 100 | |||||||||||||||||||
| Net income | 93 | ||||||||||||||||||||||
| Nine Months Ended September 30, 2022 | |||||||||||||||||||||||
| Revenues | $1,186 | $194 | $1 | $1,381 | |||||||||||||||||||
| Operating income | 327 | 29 | 1 | 357 | |||||||||||||||||||
| Net income | 247 | ||||||||||||||||||||||
| Nine Months Ended September 30, 2021 | |||||||||||||||||||||||
| Revenues | $1,014 | $124 | $1 | $1,139 | |||||||||||||||||||
| Operating income (loss) | 236 | 12 | (3) | 245 | |||||||||||||||||||
| Net income | 215 | ||||||||||||||||||||||
NOTE 15. RELATED PARTIES
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. The amounts billed for services provided, sales credited and purchases for the three and nine months ended September 30 were as follows (in millions):
| IPL | WPL | ||||||||||||||||||||||||||||||||||||||||||||||
| Three Months | Nine Months | Three Months | Nine Months | ||||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||
| Corporate Services billings | $45 | $50 | $136 | $138 | $39 | $37 | $117 | $113 | |||||||||||||||||||||||||||||||||||||||
| Sales credited | 11 | 4 | 11 | 9 | 31 | 16 | 62 | 23 | |||||||||||||||||||||||||||||||||||||||
| Purchases billed | 119 | 105 | 342 | 347 | 42 | 24 | 103 | 71 | |||||||||||||||||||||||||||||||||||||||
Net intercompany payables to Corporate Services were as follows (in millions):
| IPL | WPL | ||||||||||||||||||||||
| September 30, 2022 | December 31, 2021 | September 30, 2022 | December 31, 2021 | ||||||||||||||||||||
| Net payables to Corporate Services | $113 | $110 | $88 | $83 | |||||||||||||||||||
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. The related amounts billed between the parties for the three and nine months ended September 30 were as follows (in millions):
| Three Months | Nine Months | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| ATC billings to WPL | $38 | $29 | $107 | $91 | |||||||||||||||||||
| WPL billings to ATC | 6 | 4 | 14 | 13 | |||||||||||||||||||
WPL owed ATC net amounts of $9 million as of September 30, 2022 and $10 million as of December 31, 2021.
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.
27 | ||||||||
2022 HIGHLIGHTS
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.
28 | ||||||||
•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:
•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.
29 | ||||||||
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):
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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.
31 | ||||||||
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):
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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) | |||||||||||||||||||||||||||||
| (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 | ||||||||||||||||||||||||||||||
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.
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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.
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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.
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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
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
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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.
ITEM 6. EXHIBITS
The following Exhibits are filed herewith or incorporated herein by reference.
| Exhibit Number | Description | ||||
| 3.1 | |||||
| 3.2 | |||||
| 4.1 | |||||
| 31.1 | |||||
| 31.2 | |||||
| 31.3 | |||||
| 31.4 | |||||
| 31.5 | |||||
| 31.6 | |||||
| 32.1 | |||||
| 32.2 | |||||
| 32.3 | |||||
| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | ||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Alliant Energy Corporation, Interstate Power and Light Company and Wisconsin Power and Light Company have each duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized on the 8th day of November 2022.
| ALLIANT ENERGY CORPORATION | |||||
| Registrant | |||||
| By: /s/ Benjamin M. Bilitz | Chief Accounting Officer and Controller | ||||
| Benjamin M. Bilitz | (Principal Accounting Officer and Authorized Signatory) | ||||
| INTERSTATE POWER AND LIGHT COMPANY | |||||
| Registrant | |||||
| By: /s/ Benjamin M. Bilitz | Chief Accounting Officer and Controller | ||||
| Benjamin M. Bilitz | (Principal Accounting Officer and Authorized Signatory) | ||||
| WISCONSIN POWER AND LIGHT COMPANY | |||||
| Registrant | |||||
| By: /s/ Benjamin M. Bilitz | Chief Accounting Officer and Controller | ||||
| Benjamin M. Bilitz | (Principal Accounting Officer and Authorized Signatory) | ||||
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