Download - Powering What’s Next
Powering What’s NextBofA Power, Gas and Solar Leaders Conference
March 4, 2020
This presentation contains statements that may be considered forward looking statements, such as management’s expectations of financial objectives and projections, capital expenditures, earnings growth, plant retirements, rate base, and new generation plans. These statements speak of the Company’s plans, goals, beliefs, or expectations, refer to estimates or use similar terms. Actual results could differ materially, because the realization of those results is subject to many uncertainties including regulatory approvals and results, unanticipated construction costs or delays, economic conditions in our service territories, and other factors, some of which are discussed in more detail in the Company’s Form 10-K for the year ended December 31, 2019. All forward looking statements included in this presentation are based upon information presently available and the Company assumes no obligation to update any forward looking statements.
In addition, this presentation contains non-GAAP financial measures. The reconciliations between the non-GAAP and GAAP measures are provided in this presentation.
2
Safe harbor
3
5-7%EPS growth
through 2023(a)
~3%Dividend yield
with 5-7% CAGR(c)
~8-10%Total
Shareholder Return(b)
(a) Based on 2019 Non-GAAP temperature normalized EPS of $2.26(b) Total shareholder return proposition at a constant P/E ratio(c) Subject to approval by the Board of Directors
Constructive regulatory environments, customer-focused investments, virtually all earnings from regulated operations, strong balance sheet and liquidity
Investment considerations
Consistent performance
4
Adjusted earnings per sharefrom continuing operations(non-GAAP temperature normalized)
Dividends per common share
(a) Annual common stock dividend target. Payment of the quarterly dividends is subject to the actual dividend declaration by the Board of Directors.
Regulated utility profile
5
970,000Electric customers
420,000Gas customers
$9.4 B 13-month average 2019 rate base
$3.6 B 2019 operating revenues
3,600Employees
Interstate Power and Light (IPL)• 490,000 Electric customers• 225,000 Gas customers• $5.7 B Rate base 13-month avg.• $2.1 B Operating Revenues
Wisconsin Power and Light (WPL)• 480,000 Electric customers• 195,000 Gas customers• $3.7 B Rate base 13 month avg.• $1.5 B Operating Revenues
Iowa“IPL”
Wisconsin“WPL”
Our customer-focused strategyProvide affordableenergy solutions
6
Make customer-focused investments
Grow customer demand
SUPPORTEconomic development by certifying development-ready sites
EXPANDRenewable energy
IMPROVECustomer experience
ENABLECustomer growth and distributed energy
INCREASEOperational efficiency and resiliency
See website www.alliantenergy.com/poweringwhatsnext
Our core values
7
8
Act for tomorrowOur ESG profile
9
30% of our energy mix will be from renewables
40% targeted reduction of CO2 from 2005 levels
75% targeted reduction of water supply needs from fossil-fueled generation
Eliminate coal from our energy mix
80% targeted reduction of CO2 from 2005 levels
By 2030: By 2050:Our clean energy vision
Additional information can be found in our Corporate Sustainability Report:alliantenergy.com/sustainability
10
Our ESG profile: Environmental
-65% -75%
Water Supply Needs*
*preliminary estimate
• Permanently retired approximately 30% of our fossil-fueled generation capacity since 2005, including over 1,000 megawatts of retired coal-fired generation.
• Air quality control systems reduce emissions from our remaining coal-fired generation.
Achieved SO2, NOx and Hg reduction targets one year early
Great progress toward achieving 2030 reduction targets
11
Our ESG profile: EnvironmentalTransitioning toward a cleaner energy mix
Gas34%
Nuclear-PPA12%
Other9%
Renewables18%
Coal27%
Balanced portfolio2019
730 MW of gas tocomplement renewablesin 2020
680 MW of wind investments in 2020
Up to 1,000 MW of solar investments by end of 2023
Additional renewables and gas2020-2023
12
19%
YE 2018$8.3B
14%
Our ESG profile: EnvironmentalCoal is a declining percentage of our rate base (proxy for % of revenue from coal)
YE 2020$11.7B
Our ESG profile: SocialWorkforce Community
Economic Development• 16 Alliant Energy Growth Sites to
promote economic development in our communities
• 2,632 jobs created in 2019
• Renewable investments provide lease and tax payments to landowners and communities
Community Giving
• Community giving of over $7 million in 2019
• Drive Out Hunger initiative has raised funds for nearly 15 million meals
• Over 92,000 annual employee volunteer hours in 2019
Safety
• Severity rate much lower than EEI benchmark
• Targeted injury reduction plans in 2020 to reduce injuries
• Board oversight of safety program
• “Good catches” and “near misses” program are leading indicators
• Community natural gas and electric public safety presentations
Cyber and Physical Security
• Board oversight of programs
• Annual employee awareness training, company wide on-going phishing training and testing
• Protocols drilled routinely
• 54% of employees covered under collective bargaining in 2019
• Perfect score on Corporate Equality Index 2017, 2018, and 2019
• Health and wellness program for employees and their families
• 6 active employee resource groups
• Support re-deployment of workforce thru apprenticeship, job shadowing and career days
• On-site, online and webinar-based training, and tuition reimbursement
• College internship program
• Pre-apprenticeship and apprenticeship programs
• Business Roundtable and CEO Action for Diversity and Inclusion commitment
13
14
Board of Directors • Lead independent director with clearly defined
and robust responsibilities
• Executive sessions of independent directors held at each board meeting
• Annual board and committee self-assessments
• Average age = 58; Average tenure = 7.4
Women40%
20%Under 55, 20%
55‐59, 40%
60‐65, 20%
Over 65, 20%
Over 7 years, 40%
7 years or less, 60%
Tenure diversity
70%
15%
7.5%7.5%
Earnings per Share
Customer experience
2020 Performance pay
Environmental
Diversity
Annualmetrics
Ethnic diversity Age diversityGender diversity
Executive Compensation• Strong linkage of compensation to achievement
of financial, customer focused and ESG-related goals
• Substantial portion of performance-based at-risk compensation
Our ESG profile: Governance
15
Generation and distribution transformation drives growth
Transitioning to cleaner energy resources
16
Based on approximate capacity in megawatts As of December 2019
**Does not include Wisconsin Clean Energy Blueprint solar of 1,000 MW to be in-service by end of 2023
17
Wind Solar Hydro Total
Owned MW in-service 1,410(a) 11 41 1,462
Owned MW under construction 480 5 -- 485
Purchased power agreements MW (b) 1,060 4 18 1,082
Owned MW under development -- 1,000 -- 1,000
Total MW 2,950 1,020 59 4,029(a) Includes both utility and non-utility owned wind(b) Purchased power agreements in place for 2020
A growing portfolio of renewable assets
18
Project* Owner Size (MW) NCF ** In-service
Cedar Ridge WPL 68 MW 30% 2008
Forward Energy WPL 59 MW (of 129) 27% 2008
Whispering Willow East IPL 299 MW 34%
2009
Franklin County 2012
Bent Tree WPL 201 MW 29% 2011
Upland Prairie IPL 300 MW 38%*** 2019
English Farms IPL 170 MW 36%*** 2019
Whispering Willow Expansion IPL 201 MW 47% - 49% 2020
Golden Plains IPL ~200 MW 46% - 48% 2020
Richland IPL ~130 MW 44% - 46% 2020
Kossuth WPL ~150 MW 45% - 47% 2020
* All projects have received regulatory approval**NCF = Net Capacity Factor for 2019 for developed sites***Partial year, placed in service end of Q1 2019
2008 2009 2011 2012 2018 2019 2020
Over 1,700 MW
Growing wind generation investments
19
Accelerating solar generation investmentsProject* Owner Size (MW DC) CAP** In-service
Wisconsin Clean Energy Blueprint WPL Up to 1,000 MW 2021-2023
South Fond du Lac Community Solar WPL ~1.0 MW 2020
West Riverside WPL ~4.0 MW 2020
Marshalltown IPL 2.6 MW 2020
Downtown DubuqueIPL 6.1 MW ~15%
2017
West Dubuque 2017
Indian Creek Nature Center IPL 0.1 MW ~13% 2016
Rock River PPA 2.2 MW ~16% 2016
Madison G.O. demonstration project WPL 0.3 ~13% 2016
**CAP = Annual CAP Factor for 2019
Wisconsin Clean Energy BlueprintRegulatory Approval – Plan to file first certificate of authority(CA) in the first half of 2020Investment Tax Credits (ITC): 2019 investment to qualify a portion for 30% ITC, rely on qualifying equipment acquisition to qualify the entire planPartnership: Maximize customer benefits from investment tax creditsInvestments in Capital Expenditure Plan: ~$780 millionSiting: 200 MW self-developed sites; ~500 MW under exclusivity agreements with developers, actively working to secure the remaining sites for the plan
• Supports capacity need resulting from planned coal and gas retirements
• Cost-effective source of energy with low natural gas prices and highly efficient heat rate
• 50% less CO2 emissions and 75% less water used than retiring coal plants
• Ramp rate 80 MW per minute
20
Utilities and electric cooperatives Purchase option amount
Option timing
Adams-Columbia Electric CooperativeRock Energy CooperativeCentral Wisconsin Electric Cooperative
~60 megawattsOptions
exercised January 2018
Wisconsin Public Service Corporation up to 200 megawatts 2020 – 2024Madison Gas and Electric Company up to 50 megawatts 2020 - 2025
WPL’s West Riverside Energy Center
Size: 730 MW combined-cycle natural gas facilityContractor: AECOM selected as EPC contractorMajor equipment: GE Frame 7FA.05 combustion turbinesEfficiency: Heat rate is expected to be just under 6,500 btu/kwhCost: WPL’s share of estimated cost is $600 million for facility, excluding transmission network upgrades and AFUDCConstruction timing: Expected to be placed into service in Q2 2020
Joint owners: Book-value purchase for partial ownership of the facility
Gas generation complements renewables
21
Advancing a clean energy future25 kV – Design standard
Undergrounding – Resiliency improvements
Smart devices –
• AMI - meter reading, remote connect/disconnect
• Fault detection
• Self healing
Communications – Fiber
Battery storage – 650kW self-contained installation
22
Economic Development• WPL is developing a project to expand natural gas
capacity by 20% in its western Wisconsin corridor
Reliability and Affordability• Automating meter reading• Increasing remote monitoring • Remote connect/disconnect• Fault detection without rolling trucks
Safety• Modifying existing pipes for enhanced inspection and verification requirements• Replacing and modifying aging gas transmission lines• Replacing distribution line made of certain material through the Integrity Management program
Gas distribution for economic growth
23
(In b
illion
s)
Other
Gasdistribution
Electricdistribution
Othergeneration
Renewableprojects
Customer-focused investments drive rate base growth
2020 2021 2022 2023
$1.4
$1.2(b)Future annual capital expenditures forecasted to be between $1.2 billion and $1.4 billion.(a)
(a) Balancing customer affordability with customer focused investment opportunities.(b) Includes $1.1 billion capital expenditures and $0.1 billion for impacts of DAEC PPA termination
$1.3 $1.4
Our economic development efforts
24
Hydroponic tomato growing facilityMason City, IA
Expand bean product lineFort Madison, IA
Probiotic solutions facilityDe Forest, WI
Beaver Dam Commerce Park520 contiguous acresOne of the largest available business properties in WI
Big Cedar Industrial Center1,391 contiguous acresFirst certified Mega Site in IA
In 2019…
16Growth Sites
44New industrial, warehouse
and office projects
$1.2 BCorporate facility investment
2,632Jobs Created
CWPCo - Consolidated Water Power Company new WPL customer starting in 2021
25
Financing and Regulatory matters
26
2020 Financing plansLong-Term Debt
IPL WPL AEF
(in millions) Amount Coupon Amount Coupon Amount Coupon
Issuances up to $300 up to $350 up to $300Maturities ($200) 3.65% ($150) 4.60% ($300) ~2.20%
Common Equity
Issuance Methodup to $225 Forward Sale Agreements of 4.3 million shares initially priced at $52.235 per share
~$25 Shareowner Direct Plan
27
Key regulatory initiativesInterstate Power and Light Company Estimated dates
Iowa Utilities Board• Decision regarding IPL Retail Base Rate Review (historical test year 2018 for electric and a future forecasted 2020 test
period for electric (RPU-2019-0001) and gas (RPU-2019-0002))
Federal Energy Regulatory Commission (FERC)• Rehearing request decision regarding authorized return on equity (ROE) amounts for MISO transmission owners (ITC) H2 2020
Wisconsin Power and Light Company Estimated datesPublic Service Commission of Wisconsin
• Decision regarding 2020 WPL retail electric fuel only rate review
• File certificate of authority request for solar generation H1 2020
• File retail electric and gas 2021-2022 Test Period Rate Review Q2 2020
• Decision regarding construction authority for Western WI Pipeline (6680-CG-168) H1 2020
FERC• Rehearing request decision regarding authorized ROE amounts for MISO transmission owners (ATC) H2 2020
28
Appendix
29
Reconciliation between GAAP and non-GAAP EPS2015 2016 2017 2018 2019
GAAP EPS from continuing operations $1.69 $1.65 $1.99 $2.19 $2.33
• Temperature impacts 0.04 0.06 (0.06) (0.05)
Non-GAAP Adjustments:
• Losses from sales of Minnesota distribution assets 0.04
• Voluntary employee separation charges 0.02
• Valuation charge related to the Franklin County Wind Farm 0.23
• Tax reform (0.08) (0.02)
• Net write-down of regulatory assets due to IPL electric rate review settlement 0.02
• American Transmission Company Holdings return on equity reserve adjustment (0.02)
Non-GAAP temperature normalized EPS from continuing operations $1.79 $1.88 $1.99 $2.11 $2.26