REGULATORY MATTERS

Regulatory Assets and Regulatory Liabilities -

Regulatory assets were comprised of the following items (in millions):



	Alliant Energy				IPL				WPL
	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Tax-related		$877		$818		$829		$777		$48		$41
Pension and OPEB costs	492		524		247		263		245		261
Assets retired early	118		134		79		88		39		46
Asset retirement obligations	115		112		79		76		36		36
IPL’s DAEC PPA amendment	110		108		110		108		—		—
Derivatives	20		39		8		18		12		21
Emission allowances	19		21		19		21		—		—
Other	85		89		47		49		38		40
		$1,836		$1,845		$1,418		$1,400		$418		$445

Regulatory liabilities were comprised of the following items (in millions):



	Alliant Energy				IPL				WPL
	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Tax-related		$746		$836		$334		$351		$412		$485
Cost of removal obligations	371		388		241		257		130		131
Electric transmission cost recovery	62		88		30		51		32		37
Derivatives	40		20		27		17		13		3
WPL’s West Riverside liquidated damages	36		—		—		—		36		—
Commodity cost recovery	22		24		19		9		3		15
WPL’s earnings sharing mechanism	22		22		—		—		22		22
Other	52		46		40		30		12		16
		$1,351		$1,424		$691		$715		$660		$709

Tax-related - Alliant Energy’s, IPL’s and WPL’s tax-related regulatory liabilities are primarily related to excess deferred tax benefits resulting from the remeasurement of accumulated deferred income taxes caused by Federal Tax Reform. During the nine months ended September 30, 2020, Alliant Energy’s, IPL’s and WPL’s tax-related regulatory liabilities decreased primarily from returning a portion of these excess deferred tax benefits back to customers.

IPL’s DAEC PPA amendment - In September 2020, IPL made a buyout payment of $110 million in exchange for shortening the term of its DAEC PPA by 5 years. The payment was recorded as a reduction to “Other current liabilities” on Alliant Energy’s and IPL’s balance sheets and was included in “DAEC PPA amendment buyout payment” in Alliant Energy’s and IPL’s cash flows used for operating activities for the nine months ended September 30, 2020. The buyout payment will be recovered from IPL’s retail and wholesale customers beginning in the fourth quarter of 2020 through the end of 2025.

Electric transmission cost recovery - In the second quarter of 2020, pursuant to a June 2020 IUB order, IPL issued $42 million of credits to its retail electric customers through its transmission cost rider for amounts previously collected in rates, which resulted in a corresponding reduction to “Electric transmission service” expense in Alliant Energy’s and IPL’s income statements for the nine months ended September 30, 2020.

Refer to Note 13(f) for discussion of refunds received by IPL and WPL in 2020 related to MISO transmission owner return on equity complaints.

WPL’s West Riverside liquidated damages - Pursuant to terms included in the related West Riverside construction procurement contracts, WPL reached agreement with the contractor on liquidated damages in the third quarter of 2020. A significant portion of the liquidated damages was settled by WPL offsetting amounts owed to the contractor that were previously withheld for payment, which were non-cash investing activities. The liquidated damages are expected to be returned to WPL’s customers as determined in future regulatory proceedings.

August 2020 Derecho Windstorm - In August 2020, a derecho windstorm caused considerable damage to IPL’s electric distribution system in its service territory, and over 250,000 of its customers lost power. IPL completed its initial restoration and rebuilding efforts in August 2020 and expects permanent repairs to the system to continue throughout 2020. IPL’s current estimate of the total cost of the windstorm is approximately $140 million, and as of September 30, 2020, approximately $130 million was recorded substantially to “Property, plant and equipment, net” on Alliant Energy’s and IPL’s balance sheets. Tax benefits and the incremental operation and maintenance expenses resulting from the windstorm were deferred and recorded

as a net regulatory liability of $7 million as of September 30, 2020, which is included in “Other” regulatory liabilities in the above table. In November 2020, IPL filed a request with the IUB for utilization of a regulatory account to track certain incremental costs and benefits incurred resulting from the windstorm until IPL’s next rate proceeding.

Public Utilities, General Disclosures [Line Items]

Regulatory Matters

REGULATORY MATTERS

Regulatory Assets and Regulatory Liabilities -

Regulatory assets were comprised of the following items (in millions):



	Alliant Energy				IPL				WPL
	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Tax-related		$877		$818		$829		$777		$48		$41
Pension and OPEB costs	492		524		247		263		245		261
Assets retired early	118		134		79		88		39		46
Asset retirement obligations	115		112		79		76		36		36
IPL’s DAEC PPA amendment	110		108		110		108		—		—
Derivatives	20		39		8		18		12		21
Emission allowances	19		21		19		21		—		—
Other	85		89		47		49		38		40
		$1,836		$1,845		$1,418		$1,400		$418		$445

Regulatory liabilities were comprised of the following items (in millions):



	Alliant Energy				IPL				WPL
	September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019		September 30, 2020		December 31, 2019
Tax-related		$746		$836		$334		$351		$412		$485
Cost of removal obligations	371		388		241		257		130		131
Electric transmission cost recovery	62		88		30		51		32		37
Derivatives	40		20		27		17		13		3
WPL’s West Riverside liquidated damages	36		—		—		—		36		—
Commodity cost recovery	22		24		19		9		3		15
WPL’s earnings sharing mechanism	22		22		—		—		22		22
Other	52		46		40		30		12		16
		$1,351		$1,424		$691		$715		$660		$709

Tax-related - Alliant Energy’s, IPL’s and WPL’s tax-related regulatory liabilities are primarily related to excess deferred tax benefits resulting from the remeasurement of accumulated deferred income taxes caused by Federal Tax Reform. During the nine months ended September 30, 2020, Alliant Energy’s, IPL’s and WPL’s tax-related regulatory liabilities decreased primarily from returning a portion of these excess deferred tax benefits back to customers.

IPL’s DAEC PPA amendment - In September 2020, IPL made a buyout payment of $110 million in exchange for shortening the term of its DAEC PPA by 5 years. The payment was recorded as a reduction to “Other current liabilities” on Alliant Energy’s and IPL’s balance sheets and was included in “DAEC PPA amendment buyout payment” in Alliant Energy’s and IPL’s cash flows used for operating activities for the nine months ended September 30, 2020. The buyout payment will be recovered from IPL’s retail and wholesale customers beginning in the fourth quarter of 2020 through the end of 2025.

Electric transmission cost recovery - In the second quarter of 2020, pursuant to a June 2020 IUB order, IPL issued $42 million of credits to its retail electric customers through its transmission cost rider for amounts previously collected in rates, which resulted in a corresponding reduction to “Electric transmission service” expense in Alliant Energy’s and IPL’s income statements for the nine months ended September 30, 2020.

Refer to Note 13(f) for discussion of refunds received by IPL and WPL in 2020 related to MISO transmission owner return on equity complaints.

WPL’s West Riverside liquidated damages - Pursuant to terms included in the related West Riverside construction procurement contracts, WPL reached agreement with the contractor on liquidated damages in the third quarter of 2020. A significant portion of the liquidated damages was settled by WPL offsetting amounts owed to the contractor that were previously withheld for payment, which were non-cash investing activities. The liquidated damages are expected to be returned to WPL’s customers as determined in future regulatory proceedings.

August 2020 Derecho Windstorm - In August 2020, a derecho windstorm caused considerable damage to IPL’s electric distribution system in its service territory, and over 250,000 of its customers lost power. IPL completed its initial restoration and rebuilding efforts in August 2020 and expects permanent repairs to the system to continue throughout 2020. IPL’s current estimate of the total cost of the windstorm is approximately $140 million, and as of September 30, 2020, approximately $130 million was recorded substantially to “Property, plant and equipment, net” on Alliant Energy’s and IPL’s balance sheets. Tax benefits and the incremental operation and maintenance expenses resulting from the windstorm were deferred and recorded

as a net regulatory liability of $7 million as of September 30, 2020, which is included in “Other” regulatory liabilities in the above table. In November 2020, IPL filed a request with the IUB for utilization of a regulatory account to track certain incremental costs and benefits incurred resulting from the windstorm until IPL’s next rate proceeding.