Alliant Energy Q3 2024 Earnings Report

Alliant Energy EPS Results

• Actual EPS: $1.15
• Consensus EPS: $1.10
• Beat/Miss: Beat by +$0.05
• One Year Ago EPS: $1.05

Alliant Energy Revenue Results

• Actual Revenue: $1.08 billion
• Expected Revenue: $1.08 billion
• Beat/Miss: Beat by +$4.87 million
• YoY Revenue Growth: +0.40%

Alliant Energy Announcement Details

• Quarter: Q3 2024
• Date: 10/31/2024
• Time: After Market Closes
• Conference Call Date: Friday, November 1, 2024
• Conference Call Time: 10:00AM ET

Alliant Energy (NASDAQ:LNT) (NASDAQ: LNT) is a publicly traded energy holding company headquartered in Madison, Wisconsin, that provides regulated electric and natural gas utility services in the American Midwest. The company serves customers primarily in Wisconsin and Iowa through its regulated utility subsidiaries and operates as an integrated provider responsible for generation, transmission and distribution of energy to residential, commercial and industrial customers.

Alliant Energy’s core activities include operating and maintaining electric generation assets, managing the regional transmission and distribution network, and delivering natural gas service to its franchise territories. The company has invested in a mix of generation resources and in recent years has expanded development of renewable energy projects and grid modernization efforts aimed at improving reliability and integrating higher levels of wind and solar capacity. In addition to traditional utility operations, Alliant offers customer programs for energy efficiency, demand response and other services that support system planning and customer needs.

As a regulated utility holding company, Alliant Energy is governed by a corporate management team and board of directors and works with state regulators in its service areas on rates, planning and infrastructure projects. The company’s business strategy emphasizes reliable service delivery, investment in infrastructure upgrades and evolving its generation mix in response to market and regulatory trends. Alliant’s operations are positioned around long-standing utility franchises in the Midwest and the company focuses on balancing customer service, regulatory compliance and investments in cleaner energy and grid resilience.

Alliant Energy Q3 2024 Earnings Call Transcript

Key Takeaways

• Q3 ongoing EPS of $1.15 versus $1.05 a year ago, driven by higher revenue requirements from capital investments and successful cost-offset initiatives despite mild weather headwinds.
• Narrowed 2024 ongoing EPS guidance to $2.99–$3.06, reaffirmed a long-term EPS growth target of 5%–7%, and set 2025 guidance with a 6% EPS increase at the midpoint and a 6% dividend boost to $2.03 per share.
• Executed fully backed agreements to bring 1.1 GW of data center load in Phase 1 at Cedar Rapids’ Big Cedar Industrial Center, projecting nearly a 20% increase in peak demand by year-end 2028.
• Raised the 2025–2028 CapEx plan by $1.8 billion (to approximately $11 billion), allocating over 40% to regulated wind, solar, and energy storage to advance its clean energy transition and diversify the generation mix.
• Secured Iowa Utilities Commission approval of its Individual Customer Rate construct to stabilize base rates through 2030 and filed multiple Wisconsin dockets for grid resilience investments, wind farm refurbishment, and long-duration energy storage projects.

Presentation

[Susan Gille, Investor Relations Manager at Alliant Energy]

Good morning. I would like to thank all of you on the call and the webcast for joining us today. We appreciate your participation. With me here today are Lisa Barton, President and CEO, and Robert Durian, Executive Vice President and CFO. Following prepared remarks by Lisa and Robert, we will have time to take questions from the investment community.

[Susan Gille, Investor Relations Manager at Alliant Energy]

We issued a news release last night announcing Alliant Energy's third quarter and year-to-date financial results, narrowed our 2024 earnings guidance range, provided 2025 earnings and dividend guidance, and provided our updated capital expenditure plans through 2028. This release, as well as earnings presentation, will be referenced during today's call, are available on the investor page of our website at www.alliantenergy.com. Before we begin, I need to remind you the remarks we make on this call and our answers to your questions include forward-looking statements.

[Susan Gille, Investor Relations Manager at Alliant Energy]

These forward-looking statements are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters discussed in Alliant Energy's news release issued last night and in our filings with the Securities and Exchange Commission. We disclaim any obligation to update these forward-looking statements. In addition, this presentation contains references to ongoing earnings per share, which is a non-GAAP financial measure.

[Susan Gille, Investor Relations Manager at Alliant Energy]

References to ongoing earnings exclude material charges or income that are not normally associated with ongoing operations. The reconciliation between ongoing and GAAP measures is provided in the earnings release, which is available on our website. At this point, I will turn the call over to Lisa.

[Lisa Barton, President and CEO at Alliant Energy]

Thank you, Susan. Good morning, everyone, and thank you for joining our third quarter earnings call. Today, we're pleased to share our third quarter results, another quarter where we delivered solid financial performance while advancing our key strategic priorities. We'll take you through the details of our performance, share our outlook for the remainder of the year, provide insights into our strategic initiatives, and discuss how we're positioned for continued success and growth over the longer term.

[Lisa Barton, President and CEO at Alliant Energy]

We are narrowing our 2024 ongoing earnings guidance range based on our confidence in our ability to offset a majority of the negative impacts of temperatures, and we are reaffirming our long-term earnings growth target of 5% to 7%. Looking ahead, I'm pleased to share our 2025 earnings guidance and dividend targets.

[Lisa Barton, President and CEO at Alliant Energy]

Our 2025 earnings guidance midpoint represents a 6% increase to our midpoint of our forecasted 2024 ongoing earnings, and our 2025 annual common stock dividend target is $2.03 per share, a 6% increase from this year's dividends. While we are sharing our third quarter 2024 results today, our team is acutely focused on the future and building a strong pipeline of investment opportunities while concurrently solving for affordability.

[Lisa Barton, President and CEO at Alliant Energy]

Our relentless focus on delivering consistent, predictable results with a steadfast commitment to customer centricity, affordability, reliability, and sustainability serves as the foundation of our strategy. In a rapidly evolving energy landscape, four key strengths set us apart and underpin our success in supporting growth of long-term shareholder returns: an economic development focus. We drive growth in the communities we serve, creating shared prosperity and building robust local economies. Use of a dynamic resource planning model.

[Lisa Barton, President and CEO at Alliant Energy]

Our flexible approach to resource planning ensures our ability to scale generation quickly with a non-litigated resource plan to meet evolving customer and community needs. Forward-thinking regulatory alignment. We work proactively with our regulators and intervenors to shape frameworks that solve for affordability and growth, strengthening our ability to provide win-win outcomes. Strategic capacity positioning. Leveraging existing resources along with strategic generation queue positions enables us to adapt our generation portfolio as customer needs evolve.

[Lisa Barton, President and CEO at Alliant Energy]

These differentiators enable us to pivot as needed to grow with our customers. With that in mind, I'm excited to announce we are preparing to bring two prestigious data center companies to our Big Cedar Industrial Center in Cedar Rapids, Iowa. We expect these data centers to add 1.1 gigawatts in phase one, which is anticipated to come online by year-end 2028.

[Lisa Barton, President and CEO at Alliant Energy]

This first phase of new data center demand is projected to boost our peak demand by nearly 20% over the next five years, with the potential for a second phase by the end of the decade. We are confident in the timing and the magnitude of the 1.1 gigawatts, all of which is backed by fully executed land transmission and energy supply agreements. We will continue to provide updates on future loads and new customers as we gain greater clarity on the size and timing of the forecasted load.

[Lisa Barton, President and CEO at Alliant Energy]

Our recently approved individual customer rate, or ICR, in Iowa is enabling Alliant Energy to adapt and align with the needs of both future and existing customers while ensuring meaningful long-term growth for our investors. We appreciate the Iowa Utilities Commission's recent decision supporting our rate review settlement and use of the ICR construct.

[Lisa Barton, President and CEO at Alliant Energy]

This order stabilizes base rates for Iowa customers through the end of the decade, providing predictability for current and future customers. The ICR also serves as a tool for economic development and community growth in Iowa. We look forward to the Iowa Utilities Commission review of our ICR contracts for these new customers. As we have mentioned in the past, we are committed to ensuring all such arrangements are beneficial for existing customers, new customers, and our shareholders.

[Lisa Barton, President and CEO at Alliant Energy]

This year, we are refreshing our Clean Energy Blueprint, which serves as our resource planning process and roadmap. This unique, dynamic, and non-litigated resource planning process provides for meaningful stakeholder engagement. It is a disciplined and thoughtful approach that proactively adapts to MISO accreditation changes and aligns our energy resources with growing demand.

[Lisa Barton, President and CEO at Alliant Energy]

By evaluating our needs to support low, mid, and high load growth scenarios, we have the ability to flex our resource plan as necessary. The 2025 to 2028 capital expenditure plan incorporates a mid-growth scenario, or phase one, of anticipated economic growth at Big Cedar. We recognize supporting reliability, resiliency, and the clean energy transition requires continued robust planning, a strong transmission network, and a mix of flexible, controllable resources such as natural gas, energy storage, and advanced grid technologies to ensure grid reliability.

[Lisa Barton, President and CEO at Alliant Energy]

Our CapEx plan includes investments in strengthening and improving the performance of our existing natural gas investments, additional energy storage, additional highly efficient natural gas assets to further diversify our energy mix. And finally, as we have done in the past, we will continue to evaluate extending the operation of existing fossil facilities and repowering opportunities.

[Lisa Barton, President and CEO at Alliant Energy]

These investments in energy resources will enhance energy security, create local jobs, and provide valuable tax revenues for the communities we serve, all while maintaining affordable rates for our customers across Iowa and Wisconsin. In both Iowa and Wisconsin, the regulatory environment is collaborative, constructive, and fosters growth. Collectively, it's a win for all stakeholders and critical to our success in meeting the evolving needs of our customers and the communities we serve.

[Lisa Barton, President and CEO at Alliant Energy]

I want to underscore our unwavering commitment to continue providing top-tier reliability and achieving our long-term sustainability goals outlined in the corporate responsibility report published this week. We are extremely proud of our efforts to enhance our portfolio of zero-fuel cost clean energy resources. Alliant Energy continues to be a leader in the clean energy transition with 1.8 gigawatts of regulated wind and, by the end of this year, 1.5 gigawatts of regulated solar resources.

[Lisa Barton, President and CEO at Alliant Energy]

We plan to continue investing in renewable generation and energy storage. In fact, over 40% of our 2025 to 2028 capital expenditure plan includes investments in wind, solar, and energy storage. These investments result in our company having one of the cleanest fleets in the country. Our focus on customers and building stronger communities is at the heart of everything we do. With our strong track record of exceptional project execution, we are confident in our ability to continue meeting customer, community, and investor expectations.

[Lisa Barton, President and CEO at Alliant Energy]

Speaking of communities, I would like to extend my gratitude to the many business partners, vendors, and providers who collaborated with our foundation to help raise more than $500,000 this year to support programs that combat hunger and food insecurity across our service territory.

[Lisa Barton, President and CEO at Alliant Energy]

Before we dive into our financial results, I want to take a moment to express my deepest gratitude to our dedicated team members who go above and beyond to help communities in need. In support of the industry's mutual assistance efforts, our team lent their expertise to restore power to communities impacted by Hurricane Helene.

[Lisa Barton, President and CEO at Alliant Energy]

The team's dedication and willingness to lend a hand exemplifies the strength and unity of our industry. Thank you for your incredible work and commitment. I will now turn the call over to Robert to provide our financial results, earnings and dividend guidance, financing plans, and an update on regulatory matters.

[Robert Durian, EVP and CFO at Alliant Energy]

Thank you, Lisa. Good morning, everyone. Yesterday, we announced third quarter earnings of $1.15 per share compared to non-GAAP earnings of $1.05 per share in the third quarter of 2023. Our quarterly ongoing earnings change year over year was primarily due to higher revenue requirements from capital investments at our Wisconsin utility and the timing of income tax expense. These positive drivers were partially offset by higher depreciation and finance expense.

[Robert Durian, EVP and CFO at Alliant Energy]

The remaining earnings drivers for the year largely relate to negative impacts of milder temperatures on electric and gas sales and our team's successful efforts to reduce O&M, interest, and tax expenses to offset a majority of our temperature impacts. Through September of this year, net temperature impacts on electric and gas margins have decreased Alliant Energy's earnings by approximately $0.10 per share.

[Robert Durian, EVP and CFO at Alliant Energy]

In comparison, net temperatures decreased Alliant Energy's earnings for the first three quarters of 2023 by $0.02 per share. While temperatures have had a material impact on earnings in 2024, margins from our temperature normalized electric sales have been close to plan, with higher than expected sales to residential and commercial customers partially offset by lower sales to our low margin IPL industrial customers, primarily due to less customer-owned generation maintenance in 2024.

[Robert Durian, EVP and CFO at Alliant Energy]

Turning to our full year 2024 earnings forecast, as a result of our solid earnings through September, our successful efforts to offset a majority of the losses due to mild temperature impacts and our projected four-quarter results, we have narrowed our 2024 earnings guidance to a range of $2.99 to 3.06 per share. As Lisa mentioned, we also announced our projected 2025 earnings guidance range and dividend target yesterday.

[Robert Durian, EVP and CFO at Alliant Energy]

The 2025 earnings growth is driven by higher earnings from capital investments in both Iowa and Wisconsin, partially offset by higher depreciation and financing expenses. Our 2025 earnings and dividend guidance continue our consistent track record of achieving our long-term growth targets of 5% to 7%. Our team has continued to advance our purpose-driven strategy to ensure we not only accomplish our current year goals but also enable the achievement of our financial and operational objectives over the long term.

[Robert Durian, EVP and CFO at Alliant Energy]

These long-term objectives include a strong focus on customer value while planning and investing for the future. We are well positioned to provide competitive rates for our customers over the long term as a result of our economic development efforts, our continued focus on cost controls, and our pursuit of federal program benefits.

[Robert Durian, EVP and CFO at Alliant Energy]

Our economic development efforts, including new data center loads, are expected to increase energy sales over the long term, which spreads fixed costs across more units sold, thereby driving affordability for our customers and communities. Through our continued focus on operational excellence and cost management efforts to offset inflationary pressures, we are targeting sustainable cost controls across various expense categories to support customer affordability. As part of these efforts, we are restructuring our workforce.

[Robert Durian, EVP and CFO at Alliant Energy]

We have initiated a voluntary employee separation program in the fourth quarter, which is expected to reduce our current workforce by approximately 5%. In addition, we continue to drive reductions across other expense categories to deliver on investor and customer expectations. One area where we see this happening is with our generation transition.

[Robert Durian, EVP and CFO at Alliant Energy]

As we continue to move to more renewables and energy storage, while preparing to fuel switch or retire our fossil fuel generation resources, we will continue to reduce our operating costs. Also, with the implementation of our planned additional renewable and energy storage projects and the repowering of our wind facilities.

[Robert Durian, EVP and CFO at Alliant Energy]

We anticipate the tax credits and reduced fuel expenses will help offset the impact of increased renewable rate base, rendering these new investments highly cost-effective for our customers. This commitment will result in long-term benefits for our customers and long-term value for our shareholders.

[Robert Durian, EVP and CFO at Alliant Energy]

With our success thus far in advancing and executing on our capital projects, we expect to continue capturing additional federal benefits by applying for grant and loan funding, maximizing tax benefits from renewables and energy storage projects, and leveraging opportunities to monetize tax credits, which materially improve our cash flows and credit metrics, as well as reduce future financing needs.

[Robert Durian, EVP and CFO at Alliant Energy]

The U.S. Department of Energy's recent announcement that we were selected for a $50 million grant to advance electric grid reliability, visibility, and control in rural Wisconsin is a great example of our team's successful efforts to capture such federal benefits for our customers. Yesterday, we announced an updated capital expenditure plan through 2028. The updates to our plan were largely related to increased capital expenditures for additional generation and energy storage projects necessary to meet growing demand from our customers in the future.

[Robert Durian, EVP and CFO at Alliant Energy]

Our customer-focused investment plan continues to diversify our generation resources while transitioning our fleet to more renewable and energy storage resources. We have increased our four-year capital expenditure plan by approximately $1.8 billion and now have a compounded annual growth rate of 10% for rate base plus construction work in progress, extending our confidence in meeting the long-term growth objectives shared with our investors.

[Robert Durian, EVP and CFO at Alliant Energy]

Moving to our financing plans, in September, we successfully completed $650 million of debt issuances at IPL, which has finalized our planned debt issuances for 2024. We plan to use the proceeds from these debt issuances to retire maturing debt in December and finance the 400 megawatts of Iowa solar projects, which we expect to be in service by the end of the year.

[Robert Durian, EVP and CFO at Alliant Energy]

As we look to future financings and with the increase in our capital expenditure plan, we have provided updated financing plan indications through 2028 on slide seven of our supplemental slides. Of note, our capital expenditures will primarily be financed with a combination of cash flows from operations, including significant proceeds expected from the continuation of tax credit monetization, and new debt and common equity issuances to maintain regulatory capital structures and a desired parent capital structure of approximately 40%.

[Robert Durian, EVP and CFO at Alliant Energy]

More near-term, our 2025 financing plans include up to $1.2 billion of long-term debt issuances, including up to $600 million at each of IPL and Alliant Energy Finance and/or at the parent. Our 2025 financing plans also include approximately $25 million of new common equity through our Shareholder Direct Plan.

[Robert Durian, EVP and CFO at Alliant Energy]

Finally, I'll highlight our regulatory initiatives in progress, as well as those regulatory filings we plan to initiate in the future. We have three active dockets currently in progress before the Public Service Commission of Wisconsin, which involve requests for certificates of authority for customer-focused investments.

[Robert Durian, EVP and CFO at Alliant Energy]

These dockets relate to investments which will enhance the reliability and resiliency of the Riverside Generating Facility, refurbish the Bent Tree Wind Farm to extend production tax credits from the facility for the benefit of our customers, and enable a new long-duration energy storage project called Energy Dome, which would be sited next to the Columbia Energy Center.

[Robert Durian, EVP and CFO at Alliant Energy]

We expect decisions from the Public Service Commission of Wisconsin on these dockets in 2025. Turning to our planned regulatory filings in the future, we anticipate filing the Wisconsin Retail Electric and Gas Rate Review for test years 2026 and 2027 by early second quarter of 2025.

[Robert Durian, EVP and CFO at Alliant Energy]

In conjunction with our updated capital expenditure plan, we also expect to make regulatory filings in both Iowa and Wisconsin for additional renewables and dispatchable resources to enhance reliability, further diversify our energy resources, and meet growing customer energy needs. I'll now turn the call back over to Lisa to provide closing remarks.

[Lisa Barton, President and CEO at Alliant Energy]

Thank you, Robert. It's an exciting time to be in the utility industry, and more importantly, it's an exciting time to be at Alliant Energy. In closing, I want to reiterate the elements that set Alliant Energy apart. It's our ability to continually solve the Rubik's Cube of balancing reliability, sustainability, affordability, and long-term growth. Our unwavering commitment to building stronger communities and advancing economic development is the driving force behind our long-term growth opportunities.

[Lisa Barton, President and CEO at Alliant Energy]

Our ability to grow in tandem with our customers and communities is underpinned by our flexible, timely, and adaptable resource planning process, which enables us to identify and advance the generation resources needed to support growth. Having access to near-term generation resources allows us to meet our customers' desired timelines, while our investments in future generation queue positions ensure we are well positioned to adapt and grow at the pace of our customers and communities.

[Lisa Barton, President and CEO at Alliant Energy]

As we all know, location matters. We are in a strong RTO, operating as a vertically integrated company with the right and obligation to build, own, and operate generation to serve our customers in states with regulatory frameworks that align with our ability to support continued growth. As we move forward, we remain focused on aligning and adapting to meeting the evolving energy needs of those we serve and those we have the privilege to serve. We remain confident in our team's ability to execute on our strategic and operational priorities to drive sustainable growth.

[Lisa Barton, President and CEO at Alliant Energy]

Thank you for your continued support. We look forward to speaking with many of you at the EEI Financial Conference and plan to post updated materials on our website next week. At this time, I'll turn the call back over to the operator to facilitate the question-and-answer section.

[Operator]

Thank you, Ms. Barton. At this time, the company will open up the call to questions from members of the investment community. If you would like to ask a question, please press star one, and if you find your question has been addressed, you may remove yourself from the queue by pressing star two. Once again, that's star one for questions. We'll go first this morning to Nicholas Campanella of Barclays.

[Nathan Richardson, Assistant VP of Equity Research at Barclays]

Hey, everybody.

[Lisa Barton, President and CEO at Alliant Energy]

Hi.

[Nathan Richardson, Assistant VP of Equity Research at Barclays]

Back to Nathan Richardson on for Nick.

[Lisa Barton, President and CEO at Alliant Energy]

Hi, Nathan.

[Nathan Richardson, Assistant VP of Equity Research at Barclays]

Hi. Happy Friday. Just a couple of questions for you. So, should you shift into the high case for load growth, how could that affect where you end up in the 5% to 7% long-term EPS growth guidance?

[Lisa Barton, President and CEO at Alliant Energy]

So the way of really looking at that long-term growth is think of it as upside potential. What we're really doing is extending our 5% to 7% growth opportunities. We anticipate that phase two growth would likely be in those later years.

[Nathan Richardson, Assistant VP of Equity Research at Barclays]

Got it. Okay. That makes sense. Thank you. And then one more on the equity. You're currently guiding to roughly 10% funding of overall CapEx, but only $25 million of issuance. How can we think about contributions in 2026 and beyond? Would that be ratable, and would that be covered under the ATM?

[Robert Durian, EVP and CFO at Alliant Energy]

Yeah. Great question, Nathan, as Robert. Yeah, as we updated our capital expenditure plan and looked at the additional roughly $2 billion of investment, we do see a need for roughly about $1 billion of new common equity through 2028 to be able to maintain the strong balance sheet that we have and the equity ratios at the parent company of around 40%. And so when you look at our capital expenditure plan over the four years, it is more heavily weighted towards the back half of the plan. So 2026, 2027, and 2028 have higher levels of growth and CapEx.

[Robert Durian, EVP and CFO at Alliant Energy]

And so, consider that's the appropriate timing where we're going to need that equity. As far as kind of the volume of it, I do think it's probably going to be fairly gradually over that 2026 to 2028 time period. And so, with those levels, roughly around $300 to 350 million a year in that time frame, there is an opportunity for us to use ATMs at that level. So, we'll continue to evaluate that. There could be opportunities for us to reconsider that in the future, but that's what our current plan looks like.

[Nathan Richardson, Assistant VP of Equity Research at Barclays]

Awesome. Thank you so much. Have a great day, everybody.

[Operator]

Thank you. We'll go next now to Julien Dumoulin-Smith at Jefferies.

[Julien Dumoulin-Smith, Managing Director and Research Analyst at Jefferies]

Hey, good morning, team. Thank you guys very much. Nicely done here, I must say. Kudos. A couple of quick clarifications, if I can, on the last one here. I mean, you talk about phase two. Obviously, it's through 2028 here on phase one. To what extent is there still kind of a tailwind here as you think about rolling forward into 2029 and 2030?

[Julien Dumoulin-Smith, Managing Director and Research Analyst at Jefferies]

I mean, whether it's the phase two contribution or whether there's just a further true-up on some of the CapEx making its way into earnings and rate base as you think about run rate 2029, if you want to think about it that way. Again, I don't want to try to get too far ahead of your current plan here but just try to think about some of the residual benefits here as you think over the subsequent two years.

[Lisa Barton, President and CEO at Alliant Energy]

Thanks, Julien, and great question. As we mentioned, we are acutely focused on economic development. What we're always trying to do is make sure that with respect to the information we're giving investors, we are giving you information where we have a clear line of sight and confidence in the numbers and so forth. So, we're going to continue to evaluate that, and once we have a better line of sight with respect to the timing and certainty of that load growth, we'll be providing updates on that.

[Julien Dumoulin-Smith, Managing Director and Research Analyst at Jefferies]

Excellent. Okay. Fair enough.

[Lisa Barton, President and CEO at Alliant Energy]

If anything is up for debate.

[Julien Dumoulin-Smith, Managing Director and Research Analyst at Jefferies]

[Inaudible] Yeah. No, indeed. I think that's the way we'll view it. And then related here, I know you mentioned a few different times in your remarks about the ICR and just working on the appropriate tariff structure. And then in tandem here, obviously, there's various sharing bands, etc. How would you interpret what we're seeing here today on the midpoint or the mid-range case against where you're targeting in terms of earned return scenarios here?

[Julien Dumoulin-Smith, Managing Director and Research Analyst at Jefferies]

Again, I get that there's a few different permutations, but how would you think about level setting here, especially in the back end of that plan, given the ICR tariff and the contributions from these new data centers?

[Robert Durian, EVP and CFO at Alliant Energy]

Yeah, that's another great question, Julien. Yeah, as we think about the time frame when we see this data center load ramping up starting in 2027, 2028, and beyond, the higher the level of load growth, it will likely push us into some of those earnings-sharing mechanisms. But think of that as much later in our plan, kind of the back half in that 2028 and 2029 time periods, as we continue to grow the business. And as Lisa indicated, as we think about future phases beyond this initial phase that we see at the Big Cedar Industrial site, that's when you would likely see that triggering those earnings-sharing mechanisms.

[Julien Dumoulin-Smith, Managing Director and Research Analyst at Jefferies]

Right. So, 2028 really is kind of the first big year that we would anticipate that kicking in, really.

[Robert Durian, EVP and CFO at Alliant Energy]

Yeah, most likely. There could be opportunities as we continue to talk to several different other interested parties, data centers across our service territory. Big Cedar is just one of the industrial sites where we have these opportunities to scale transmission and mirror that up or combine that up with the resource capacities that we're bringing online for generation to be able to meet these data center loads as we see other opportunities across the service territory at other industrial sites.

[Robert Durian, EVP and CFO at Alliant Energy]

The pace of that is largely going to be contingent upon kind of the ability for us to get these other agreements locked up with data centers. And so right now, we see visibility to that happening in that 2028 to 2029 time frame, but it could actually be a little bit quicker than that if we're successful in getting some of these other data center contracts completed more, more timely.

[Julien Dumoulin-Smith, Managing Director and Research Analyst at Jefferies]

Excellent. So not just load growth upside, it's also sharing band upside depending on how soon you can get this done. Excellent. Thank you, guys.

[Operator]

Thank you. We go next now to Andrew Weisel at Scotiabank.

[Andrew Weisel, Managing Director at Scotiabank]

Hi. Thank you for joining, everybody.

[Lisa Barton, President and CEO at Alliant Energy]

Hi, Andrew.

[Andrew Weisel, Managing Director at Scotiabank]

Hi. Excuse me. First, just a quick one on the 2024 guidance reduction. Was it just that you were unable to fully offset the weather headwinds from earlier this year, or are there other challenges since then?

[Robert Durian, EVP and CFO at Alliant Energy]

Yeah. I think of it largely related to the temperature impacts. So, what we've seen through the first nine months of the year is about $0.10 of negative temperature impacts. We've also had a fairly warm October to start the fourth quarter, but we feel like we have a good line of sight to be able to offset about 75% of all the negative temperature impacts thanks to the successful efforts by the team focused on reducing O&M, interest expense, financing expense. And so, with that confidence, we are going to stay within our range.

[Robert Durian, EVP and CFO at Alliant Energy]

And it's about a $0.03 decrease from the midpoint that we started the year. But like I said, we've been able to offset at least about 75% of the temperature impacts. So that's how we factored into what we used for the updated guidance for 2024.

[Andrew Weisel, Managing Director at Scotiabank]

Okay. Very good. Then on the CapEx side, I think you said the update includes phase one spending. Do you also have assumptions around other economic development deals, or are you conservatively excluding anything else until you get contracts signed? And same thing with the 3% to 5% load growth. Trying to see if there's upside should additional customers show up.

[Robert Durian, EVP and CFO at Alliant Energy]

Yeah. As we think about future economic development activities more broadly, including data centers, that would all be upside to our plan. So that would increase not only the capital expenditure plan that we've put in front of the investor group here today, but also sales, which obviously is a key contributor to helping us with customer affordability. So the more of these data centers that we're successful landing into our service territory beyond this initial phase that we feel confident with, think of that as all upside to our plan.

[Andrew Weisel, Managing Director at Scotiabank]

Okay. Then my last question. I want to push you a little bit more and go back to one of the earlier questions here. Longer term, particularly the latter half of your plan here, I want to talk about upside here. You've talked about accelerating load growth based on what you've already got. You've got a 20% pickup in the peak load, 20% increase in the CapEx plan, potential for additional customers. And I know the limiting factor is always affordability, but you just talked about how these new customers help with that affordability side. And you've got the ICR and other customer protections.

[Andrew Weisel, Managing Director at Scotiabank]

You talked about earnings-sharing in the 2027, 2028, and beyond. Help me understand here. Why are we still talking about 6% and not something faster? What's limiting the potential to not at least say the high end of the 5% to 7% range? What are some factors keeping us from getting 7% growth or maybe even better than that in the outer years? Or is it just conservatism?

[Lisa Barton, President and CEO at Alliant Energy]

Andrew, just a great question. So this is all about timing. We really want to make sure that we have accurately forecasted in terms of when this load is coming online. That's something that you will continue to hear from us on a going-forward basis as any updates with respect to the timing of that load. Anything, Robert, that you'd like to add?

[Robert Durian, EVP and CFO at Alliant Energy]

As well, as long as we've known each other, we tend to be more conservative than most. And so we're not going to get out in front of our story. And so we'll be sure to share all the information once it's available, but we are going to stay conservative with data center loads until we have those locked up, and then we'll share more information. So expect future updates in the future as we finalize additional agreements.

[Andrew Weisel, Managing Director at Scotiabank]

Okay. Thank you very much. We'll see you soon.

[Operator]

Thank you. We go next now to Paul Fremont of Ladenburg.

[Paul Fremont, Managing Director at Ladenburg]

Hey, thank you very much, and congrats on a great update. First question on slide five, just to clarify, you're already at the mid with the 1.1 gigawatts, right? So I'm not sure I'm understanding sort of the low flat area.

[Lisa Barton, President and CEO at Alliant Energy]

Say the last part, Paul, of your question.

[Paul Fremont, Managing Director at Ladenburg]

I'm assuming that you've already hit the mid, roughly 1 gigawatt.

[Lisa Barton, President and CEO at Alliant Energy]

Yes, 1.1 gigawatt.

[Paul Fremont, Managing Director at Ladenburg]

So that would rule out the low flat scenario, right, just for clarification?

[Lisa Barton, President and CEO at Alliant Energy]

Yes. Yes.

[Paul Fremont, Managing Director at Ladenburg]

Okay. And then in terms of discussions or talks, where do you currently stand? Do you think you're closed on any other potential announcements, or would you say that that's a ways off?

[Lisa Barton, President and CEO at Alliant Energy]

Paul, as we've indicated, we continue to talk to data centers. We continue to reiterate the fact that we're going to be conservative with respect to talking about prospects. We want to make sure that if they're on our land, we've got the land agreements executed, the transmission capacity agreements executed, as well as the energy service agreements executed.

[Lisa Barton, President and CEO at Alliant Energy]

And even with that, what we're looking for is to have that very clean line of sight with respect to the timing of that load growth and the magnitude of that load growth. We certainly understand that these are very large customers, and we want to make sure we've got that timing right so you can reflect it accurately in your models.

[Paul Fremont, Managing Director at Ladenburg]

And then when you file in Wisconsin next year, would you consider filing something similar in terms of regulatory plan as what you filed in Iowa?

[Lisa Barton, President and CEO at Alliant Energy]

You know what works? We'll continue to evaluate what we put together there in Wisconsin. The Iowa solution is probably likely somewhat unique to Iowa. But you know what we're always going to do is look to our jurisdictions and figure out what's the best solution for existing customers, new customers, and shareholders. Remember, in Wisconsin, we have the ability to go in every two years. We didn't have that ability in Iowa, so that resulted in the need for a different construct there.

[Paul Fremont, Managing Director at Ladenburg]

And then last question. In terms of equity, would you consider using junior subordinated debt issuances to achieve some of your equity contribution?

[Robert Durian, EVP and CFO at Alliant Energy]

Yeah. Great question, Paul. Yeah, I would consider that as an option for us in the future. We're going to continue to evaluate all the different financing opportunities for us. Fortunately, we don't see a need for, I'll say, equity content financing instruments in 2025, given where we're positioned. But think of that maybe towards the latter half of next year. We'll consider some different options for us and provide some more information to the investment community once we make that decision.

[Paul Fremont, Managing Director at Ladenburg]

Okay. So what you're saying is that the junior subordinated could constitute some of that billion of equity need that you've identified?

[Robert Durian, EVP and CFO at Alliant Energy]

We'll evaluate that, like I said, when we get to kind of the latter half of 2025, and we'll share some updated information at that time.

[Paul Fremont, Managing Director at Ladenburg]

Great. Thank you so much.

[Robert Durian, EVP and CFO at Alliant Energy]

Thanks, Paul.

[Operator]

Thank you. We go next now to Aditya Gandhi at Wolfe Research.

[Aditya Gandhi, Senior Associate at Wolfe Research]

Hi. Good morning. Thank you for taking my questions. On your long-term EPS growth rate, could you clarify whether the base for that is now the revised 2024 guidance midpoint or asked differently? Have you sort of rebased lower as it relates to your long-term earnings growth trajectory?

[Robert Durian, EVP and CFO at Alliant Energy]

Yeah. Historically, and we're going to continue with this method, we use the current year information. And so with the 2024 updated earnings guidance, the midpoint is roughly around $3.03. And so that's what you should use for your long-term base going forward.

[Aditya Gandhi, Senior Associate at Wolfe Research]

Got it. Sorry. Just to clarify there, should we think of that as the lower base implying lower longer-term earnings or not? Is the point I'm getting to?

[Robert Durian, EVP and CFO at Alliant Energy]

Yeah. No, think of us. We're still committed to the long-term, a solid 6% growth rate. You will see 2024 was a lower year for us to start with, but we do see higher levels of growth in our kind of range over the longer term.

[Aditya Gandhi, Senior Associate at Wolfe Research]

Got it. Thank you for clarifying that. And then just moving to your financing plan, Robert, could you just give us some insights into the level of tax credits that you're baking into your plan and then what credit metrics you're targeting?

[Robert Durian, EVP and CFO at Alliant Energy]

Yeah, so we look over the next four years through 2028. We did provide some information in one of the supplemental slides that indicates how we're going to finance the roughly $11 billion of capital expenditure plans, so like we talked about in my prepared remarks, the majority of that's going to come from cash flow from operations, including tax credit monetization. We're targeting roughly about $1.6 to 1.7 billion of tax credit monetization over that time period with the strong renewables that we have in place now and the additions we're making with new renewables as well as energy storage.

[Robert Durian, EVP and CFO at Alliant Energy]

We are going to average probably somewhere in the neighborhood of $300 million to almost $400 million a year in tax credits, and with the success that we've had with monetizing those to date, we feel very confident with being able to do that in the future. That'll roughly be, like I said, about $1.6 to 1.7 billion over that five-year time period.

[Aditya Gandhi, Senior Associate at Wolfe Research]

That's very helpful. Thank you. And one last quick question. As you're speaking to additional customers about future load growth opportunities, should we expect another sort of revision before third quarter of next year? Is that something you'd consider, or is it just going to be this consistent cadence of third quarter CapEx updates?

[Lisa Barton, President and CEO at Alliant Energy]

Yeah. We're going to be looking and aligning with some of these new data center loads. So expect a revision possibly the first half of next year.

[Aditya Gandhi, Senior Associate at Wolfe Research]

That's helpful. Thank you for taking my questions.

[Operator]

Ladies and gentlemen, just a quick reminder, star one please for questions today. We'll go next now to Bill Appicelli at UBS.

[Lisa Barton, President and CEO at Alliant Energy]

Hi, Bill.

[Bill Appicelli, Director at UBS]

Hi. Good morning. Just going back to the question on the 2025 guidance, so I guess what is the full impact that year-to-date for weather on 2024? If it was a more normal weather, would you have been more at the 3.06 or at the midpoint of the original guidance?

[Robert Durian, EVP and CFO at Alliant Energy]

Yeah. Like I think in my remarks, Bill, so weather so far through the first three months is about a $0.10 drag on earnings in 2024. We do expect October to add to that, given it's been pretty warm here in the upper Midwest.

[Robert Durian, EVP and CFO at Alliant Energy]

And so, in total, it's probably closer to maybe $0.12 for the full year. We've been successful, like I indicated before, of being able to offset a majority of that, roughly about 75% of that, through a series of what I would characterize as non-sustainable offsets, tax benefits, some portion of our O&M savings this year, as well as we're going to benefit from the reversal of an ATC are reserve as a result of the recent FERC decision. And so, think of that offsetting is really kind of to position us, get back to that 303 that we've indicated as the midpoint of our guidance for 2024.

[Bill Appicelli, Director at UBS]

Right. Okay. And then so we should assume that that reverts back to normal next year, right? So in terms of the growth year over year, right, you're going to get the weather back, presumably, or that's what you're assuming normal weather in the guide for 2025, right? So are there any other factors in terms of timing on costs or other things that are impacting the growth year over year we should think about? You talked about higher financing costs and depreciation. Any other color there?

[Robert Durian, EVP and CFO at Alliant Energy]

Yeah. Yeah. So think of, like I indicated, a majority of the offsets that we've incurred in 2024 to that temperature I would consider as non-sustainable. So we will get back to normal weather in 2025, but we won't have some of those non-sustainable offsets in 2024. So it neutrals out and kind of gets us back to a position of having a normal run rate of a 6% growth off of that $3.03 in 2025 with the earnings guidance.

[Lisa Barton, President and CEO at Alliant Energy]

Bill, one of the things that I would add is that we are going to continue to focus on looking at ways and identifying ways of using technology and so forth to drive costs out of the business, as well as we're going to continue our focus on economic development efforts, and the more we can do with respect to economic development and bringing some of those loads on earlier are just an acute focus of ours.

[Bill Appicelli, Director at UBS]

Okay. Great. And then just what is the more near-term load growth assumption, say, for 2025 or 2026? I appreciate it's going to be ramping as the load develops and the economic initiatives take hold. But maybe when we think about the sort of next year or two on the front end of that, is it at the 3%, or is it something a little bit below that? How should we think about the near-term load growth?

[Robert Durian, EVP and CFO at Alliant Energy]

Yeah. When you think about the load growth for us, the data centers that we're referring to, including the initial phase of the data centers that are coming into our Big Cedar Industrial Center, think of those as starting up on a larger scale in the 2027 timeframe. So, in the next year or two, we're expecting fairly consistent load growth to what we've seen historically. Think of that as maybe in that 0.5% to 1% range.

[Bill Appicelli, Director at UBS]

Okay. All right. Great. Thank you.

[Operator]

And ladies and gentlemen, it appears we have no further questions this morning. Ms. Gille, I'd like to turn things back to you for any closing comments.

[Susan Gille, Investor Relations Manager at Alliant Energy]

With no more questions, this concludes our call. A replay will be available on our investor website. Thank you for your continued support of Alliant Energy, and feel free to contact me with any follow-up questions.

[Operator]

Thank you, Ms. Gille. Again, ladies and gentlemen, that will conclude the Alliant Energy's third quarter 2024 earnings call. Again, thanks so much for joining us, everyone, and we wish you all a great day. Goodbye.

Participants

Executives

• Susan Gille, Investor Relations Manager
• Lisa Barton, President and CEO
• Robert Durian, EVP and CFO

Analysts

• Paul Fremont, Managing Director at Ladenburg
• Nathan Richardson, Assistant VP of Equity Research at Barclays
• Julien Dumoulin-Smith, Managing Director and Research Analyst at Jefferies
• Aditya Gandhi, Senior Associate at Wolfe Research
• Andrew Weisel, Managing Director at Scotiabank
• Bill Appicelli, Director at UBS