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Robert Durian

Thank you, Lisa. Good morning, everyone. Yesterday, we announced first quarter 2025 earnings of $0.83 per share compared to $0.62 per share in the first quarter of 2024. Our earnings are ahead of plan despite the negative temperature impacts on electric and gas sales in the first quarter of 2025. Our quarter-over-quarter variances were mainly driven by the higher revenue requirements from capital investments at both IPL and WPL, temperature impacts on retail electric and gas sales and the timing of income tax expense, which will reverse later this year.
These positive drivers were partially offset by higher depreciation and financing expenses. Temperatures were warmer than normal in the first quarter of 2025, resulting in decreased electric and gas margins of $0.03 per share. In comparison, the winter temperatures in the first quarter of 2024 were some of the warmest on record, which decreased our electric and gas margins by approximately $0.08 per share. Excluding the impacts of mild temperatures, the margins from our retail electric sales were higher than the first quarter of 2024 due to growth in the number of customers and increased use per meter across all retail customer classes at our Wisconsin utility.
To assist you in modeling our quarterly earnings this year, I want to provide some additional context to the variance driver related to the timing of income tax expense. Income tax expenses recorded each quarter based on an estimated annual effective tax rate and the proportion of full year earnings generated each quarter.
As shown on slide 9 of our supplemental slides, this causes fluctuations in the amount of tax expenses quarter over quarter, but it will not have an impact on the full year earnings. With a solid first quarter behind us, we are reaffirming our 2025 earnings guidance range of $3.15 to $3.25 per share. Our ability to consistently deliver solid financial results is supported by our efforts to provide customer value, including extending the value of existing resources, making smart investments and controlling operating costs, all while receiving constructive regulatory outcomes.
I'm proud to share how our employees are continuing their steadfast focus on creating value for our customers while managing risk. The following are some recent examples of their success. Reiterating what Lisa shared, we have completed nearly all of our planned safe harbor activities with the intention of observing the qualification of tax credits for future energy storage and renewable projects expected to be placed into service through 2028. Our team has done a great job mitigating tariff exposure for our customers with minimal exposure to the batteries and our updated capital plan, as the batteries are either in our possession or in transit and the batteries in transit are expected to be subject to only a 20% tariff.
We estimate our total tariff exposure is approximately 1% to 2% and of our $11.5 billion updated capital expenditure plan prior to further mitigation by our team. Our team also successfully sold existing capacity length available at both our utilities into the recent MISO capacity auction, resulting in meaningful benefits for our customers. And lastly, we are utilizing our individual customer rate construct in both states, which allows us to capture growth from economic development activities occurring within our service territory, which will, in turn, absorb a portion of our fixed costs helping mitigate cost for all customers in the future.
Turning to financings. In conjunction with our updated capital expenditure plans, we have updated our 2025 through 2028 financing plans. The anticipated financing sources for our $11.5 billion capital expenditure plan are included on slide 10. Cash from operations and anticipated proceeds from tax credit monetization make up almost 50% of our financing plan. New debt financing, net of maturities, accounts for approximately 40% and while new common equity issuances account for approximately 12% of the total funding sources for the updated plan.
We plan to launch an at-the-market or ATM program this year and continue our shareowner direct plan both of which support the new common equity issuances assumed in our plan. While our updated financing plans assume raising the new common equity ratably in 2026 through 2028, we believe the ATM provides us flexibility on the timing as we continue to monitor and assess market conditions. With this updated financing plan, we are committed to maintaining our current investment-grade credit ratings.
Tax credit monetization through transferability continues to provide benefits by reducing customer costs and providing an alternative source of financing for a portion of our capital expenditure plans. Along with the rest of the utility industry, we continue to monitor developments with different legislative proposals and advocate for legislative provisions that would be beneficial for our customers. We are also taking prudent actions to protect the right to transfer tax trends through our safe harboring activities. We have disclosed the success of these activities on slide 10 of our supplemental sides which shows a substantial portion of the tax credits included in our updated financing plan through 2028 are from projects either already in service or safe harbor prior to 2025.
We also have optionality with alternative financing sources if transferability modify future legislation. Alternatives include incremental financing with a balanced mix of debt and equity as well as utilizing hybrid instruments. We would all evaluate aligning the timing of customer bill credits with expected utilization of credits from future projects as well as the potential use of tax equity arrangements, if beneficial for our customers.
Specific to our 2025 debt financing plans. During the first quarter, we extended the Alliant Energy Finance variable rate term loan agreement until 2026. The remaining debt financings are shown on slide 11, and include estimated issuances and Alliant Energy Finance or the parents and our two utilities. For all three segments, leased our financing needs, primarily to fund the increased 2025 investments in our updated capital plans and to increase financing flexibility and anticipated -- in anticipation of -- maturities in early 2026. Our IE utilities, some of the issuance will be used to refinance $300 million of debt turning in the third quarter this year.
Finally, I'll highlight our regulatory initiatives that have been filed as well as those regulatory filings we plan to initiate later this year. Starting in Wisconsin, WPL recently received approval from the PSCW for two customer-focused -- in our updated capital plan, including the -- Ripside enhancement project to support reliability and resiliency for Wisconsin and an entry wind refurbishment project expected to extend tax credits for the benefit of our customers.
Turning to our regulatory proceeding -- certainly in process. WPL recently filed an electric and gas rate review for test years 2026 and 2027. The filing includes recovery of several investments that support liability and resiliency while keeping customer value and positive rates top of mind. These investments include cost-effectively advancing responsible energy solutions, including solar and wind refurbishment projects, which provides zero fuel cost energy and tax benefits as well investing in new energy storage resources and capacity and efficiency upgrades for existing natural gas generation to provide additional energy resources to meet growing customer demand. Finally, it includes recovery of our planned continued investment in electric and gas distribution just to report liability for -- and safety for our customers.
Let's head in the rate review process included a discovery phase and audits by the PSCW staff and interveners over the next few months with the hearing anticipated in early fall and a final decision expected from the PSCW later this year. More details on the rate review, including key terms requested in this filing can be found on slide 12. WPL also recently requested approval of an individual customer rates for the data center plan to be built in Beaver Dam, Wisconsin. And less in WPL has four active dockets in progress before the PSCW involving request for certificates of authority for customer-focused investments. We also have four active filings in progress before the Iowa Utilities Commission including a request for an individual customer rate for one of the new data centers in -- Iowa, requests for approximately 225 megawatts of battery storage to be located at the retired landing coal generation site and next to the Golden Plains wind generating station and request for an approximate 100-megawatt -- river natural gas generating station, which will be located next to the existing site of the Prairie Creek Generation Station.
The expected timing of decisions from the PSCW and IE Utilities Commission on these pending dockets, provided on slide 13.
Finally, in conjunction with our updated capital expenditure plan, we also expect to make additional regulatory filings later this year in both Iowa and Wisconsin for renewables and dispatchable resources to enhance liability, further diversify our energy resources and meet growing customer energy demands. We thank you for your continued support and look forward to speaking with many of you in the coming months.
At this time, I'll turn the call back over to the operator to facilitate the question-and-answer session.

Question and Answer Session

Operator

(Operator Instructions) Shar Purreza, Guggenheim Partners.

James Kennedy

It's actually James on for sure. Starting off, I think, with slide 4, is there a general timeline you could share for converting the mature opportunities to contracts and then secondly, could you just put maybe like a finer point on the breakdown of how you could serve those mature opportunities between existing and new gen? Like what's the headroom left on your system?

Lisa Barton

Yes. Thank you for the question. So how we have been talking about all of our economic development opportunities is that once we have signed ESAs. We're putting that information out there. In terms of the -- what we do not yet have signed ESAs for, those are ones that we have a fairly high confidence level.
We have had a number of discussions and negotiations with those folks. So we have a high level of confidence, and that's why we're sharing that. However, we are making that differentiation between those that have executed ESAs and those that don't. One of the things that we've certainly shared in the past, we have length. We have near-term length, and we're using that to be able to accelerate load growth in our territory, that's what we're doing with one of the customers in the Big Cedar facility, and we have had interest in others, well, so we're very bullish on that.
But as you know, it's going to be an all of the above solution. We have short-term PPAs in the plan. We'll have new developments, we'll constantly look at evaluating our existing generation in the portfolio that we currently have and looking to see if there are opportunities to get more capacity out of the exit facilities that we have.

James Kennedy

Okay. Perfect. And then just on the tax side, I know you had a clause in the Iowa stay out that you could go back in if policy changed significantly. Does the safe harboring work you guys laid out today, I mean that's off the table right now?

Robert Durian

Yes, great question, James. Yes, as we think -- for those of you who may not be familiar as we entered into the rate settlement last year that provides the rate moratorium for the next five years. We did have a provision within it that allowed us to go back in for a rate case. If for some reason there was any changes to any major legislation. With that said, we're really focused right now on activities to avoid the need to go back in we're advocating for kind of provisions within the legislation that would be beneficial to our customers.
As we noted, we're making great progress with the safe harbor activities. And lastly, we're really trying to accelerate the load growth we see with some of our data center customers and other customers that would help prevent the need to do that. So our focus right now is regardless of the outcome of the legislation is to really position us to be able to meet all of our stakeholder expectations, including shareholders without the need to go back in.

Lisa Barton

We do have a number of batteries that are in the plan for next year, and we're very well positioned with respect to those batteries.

Operator

Nicholas Campanella, Barclays.

Nicholas Campanella

Thanks for all the updates. I just wanted to ask, you guys gave a lot of good disclosure, rate bases moving higher, you're adding a little bit of equity. Do you still see this as a 5% to 7% long-term EPS CAGR? And any kind of comments on how you're trending in that plan now?

Robert Durian

Yes. Great question, Nick. Yes, right now, we continue on our long track record of consistent and predictable growth. Really, we're focused on enhancing the sustainability and longevity of those growth rates. Think of this as we're focused on cascading the growth over time, really to strengthen and lengthen that growth rate.
this quarter updates really demonstrate that with the increase of the investment CAGR up to 11%. While we're still retaining the ability to grow beyond the announced CapEx plan through 2028. So I think we're really set up well for strong load growth and investments with elevated CapEx starting in that 2027 timeframe. So really, I think I'd be disappointed if we're not towards the top end of our stated -- currently stated growth rate starting in 2027.

Lisa Barton

And Nick, one of the things that I just want to highlight, and I talked about it briefly in the script is what we see is the Alliant Energy Advantage. We are actively focused on building cascading waves of growth. We see ourselves as the backbone of our communities, and we are committed to fueling their success and allowing our communities to reach their economic development aspirations. So we remain focused on growing at the pace of our customers. We have the regulatory constructs that we need in both jurisdictions to do that.
Both with one in Iowa with the way that is set up as well as the cadence that we have in Wisconsin. It really allows us to grow at the pace of our customers. Also the fact that we don't have litigated resource planning processes, they're highly flexible. We can go in at any time to our states. That is a huge differentiator I believe, between us and a lot of other entities out there.
We also have that robust length in our Q positions as well as near-term length, which allows us to accelerate just as we have in our Big Cedar facility in Iowa. So wrapping the ball around that, that's the Alliant Energy advantage that we are focusing on over the long term.

Nicholas Campanella

Yes. I really appreciate all those comments. That was helpful. And then just one quick one with the transferability and tax commentary. I know you kind of talked about you used a mix of debt, equity, hybrids, you could go look at using traditional tax equity.
Maybe just if you lost one of transferability, like how much equity do you think you'd actually have to do?

Robert Durian

Yes. Nick, this is Robert. So yes, it's dependent upon the terms within any proposed legislation. I'd say we're cautiously optimistic as we've heard different versions of the potential legislative provisions that there's probably going to be some type of phase out is how we would characterize it. And so as we think about our plan, we feel really well protected for the next few years, thanks to our safe harbor activities.
as I indicated in some of my prepared remarks, if you look at the amount of tax credits that we plan to monetize in the next four years, a significant majority, better than 95% of it comes from projects that are already in service or projects that we save harbor prior to 2025. And with that, we wouldn't expect to need much additional financing over the next four years.
But if we were to need some additional financing, I would say that we would continue down our path of maintaining a really strong balance sheet. So think of that as somewhere between probably 40% and 50%, if any new financing needs would come to the form of equity to maintain that strong balance sheet.

Lisa Barton

One thing I'll draw your attention to as well -- Lisa here. Just want to draw your attention to the May letter that was put out by 12 House Republicans and basically, in that letter that was issued yesterday, it was strongly supporting the IRA and its provisions. And I will note there was very strong support from our Iowa delegation there as well.

Nicholas Campanella

Certainly noted. And just on the comments on the balance sheet, just I guess you kind of highlighted 13% to 14% at S&P, 14% to 15% at Moody's. Kind of where do you kind of see yourself today against those metrics?

Robert Durian

Yes, we're in a great position right now, Nick, for 2025 for both of those towards the upper end of the S&P and squarely middle of the -- range right now.

Operator

Paul Fremont, Ladenburg.

Paul Fremont

Congratulations on a really great quarter. Does the ICR structure provide you with an opportunity to provide a similar type of stay out in Wisconsin as you've achieved in Iowa?

Robert Durian

Yes. I would characterize our WPL kind of regulatory construct is they asked us to come in every two years for our rates case. It doesn't mean you have to ask for an increase when you do that. And so we're really working on trying to grow load, trying to reduce costs so that if we were to come in every two years, like I said, we would try and minimize the customer cost impact. So I think you get a similar result as we continue to grow the business and the sales and try and reduce cost, you could still achieve what we call base rates being flat for the next five years, similar to what we are targeting in Iowa.

Paul Fremont

Right. And then in terms of your equity need, would you consider using junior subordinated debt as -- in order to meet your equity requirement?

Robert Durian

Yes, we're taking kind of all different options into consideration. The great thing about our financing plan is we have a lot of flexibility as I indicated in my prepared remarks, we are launching an ATM program here in the near future. That will provide us some flexibility as to the timing of any equity issuance. And we also have flexibility when it comes to hybrids as we consider all different types of options in the future. I feel like we're really set up well for that.
And so yes, junior subordinates are in the discussion. We haven't made any commitments at this point. And we'll continue to provide more updates throughout the years to kind of our thinking on that in the future.

Paul Fremont

And then you sort of in your regulatory discussion, talk about filings in Iowa and Wisconsin for additional generation resources. Can you give a sense in terms of in megawatts, how much in each of those states you're looking to add?

Robert Durian

Yes, Paul, I'd point you to this. There's a slide within our supplemental slides and lays out would be considered our new resource plan when it comes to natural gas, batteries and wind. You can get a sense of the magnitude of the volume of each one of those different categories the stuff towards the kind of earlier years of our plan, and expect us to be filing here in the near future. The later part of the plan would probably be maybe a couple of years down the road. We have an identified specific megawatts, but that should give you some indication of the volumes that we're interested in.

Paul Fremont

And then last question for me, the enhancement at Riverside, what exactly does that entail?

Robert Durian

Yes. Think of that as a Black Start facility, so it helps with resiliency and reliability for the entire system in the state of Wisconsin. And so those would be call them diesel generators, gas generators that would be effective at been able to restart the system in case of any type of blackout.

Operator

Andrew Weisel, Scotiabank.

Andrew Weisel

Good morning, everybody. If I could first elaborate on the equity question a little bit. First, would the ATM presumably be large enough to satisfy the $1.4 billion over years, would you consider a forward or a block perhaps? And in terms of timing, would I be correct to think it might be more back-end loaded? Or would you think it might be ratable '26 to '28?

Robert Durian

Yes. So we've announced as part of our updated finance that we foresee the need for $1.4 billion of new common equity through 2028. We normally raised about $25 million a year through our share of direct plans so that would be roughly about $100 million of that total. And the remaining $1.3 billion could be in the form of an ATM over time or it could be some type of forward transaction. We have a lot of flexibility with that, that we'll continue to evaluate different market conditions over time, determine what we best want to do there.
Regarding the timing question, right now, the financing plan assumes that, that $1.3 billion would come in ratably from '26 to 2028. But like I said, we have a lot of flexibility with that. So we would consider market conditions and then potentially think about modifications of the timing of that if we saw the right opportunity.

Andrew Weisel

Okay. Great. That's helpful. And then forgive me if I missed it, but what exactly was added to the CapEx plan? It obviously went up by $600 million, give or take.
Was that more generation or wires? And if it was generation, can you tell us what was the technology or technologies and the timing?

Robert Durian

Yes. The biggest component of that was on the generation side, specifically natural gas generation. And think of that as we continue to build out more load from these data center opportunities, we need capacity resources to be able to meet the peak demand of those customers. And back to the supplemental slide 7, we've identified 1.5 gigawatts of new -- facility load through 2030. And the biggest component of that CapEx increase was associated with that natural gas generation.

Operator

Ross Fowler, Bank of America.

It's actually Ranier for Ross. I just had a question about the MISO capacity auction. And I guess, how do you guys see that impacting consumer bills in the regulatory landscape?

Robert Durian

Yes, we're actually very well positioned. It's a good question, given the kind of the results of that option, specifically the summer capacity prices being more elevated, we're taking advantage of that length right now in selling that excess capacity to the market, and we use those proceeds to actually help our customer bills. Unfortunately, I think some other folks may be another side of that where they may be short and seen some more challenges when it comes to customer bills, but we're very well positioned there, and we're going to continue to try and be well positioned as we think that's more longer term. trajectory as far as seeing higher elevated prices in the capacity market, which really supports our desire to continue to build new generation to support our customer demand.

Okay. Makes sense. And then just secondly, how do you guys view potential ROFR legislation in Wisconsin? And I guess, what effect would that have on CapEx?

Lisa Barton

In terms of, in both states, there's actually a rotor legislation. As we look at it from a Wisconsin standpoint and what's ATC's investment opportunities are. They'd be likely stronger with a ROFR wherever ATC, like all other transmission providers will position itself to be competitive, should Eurofer not be supported in the state. But none of that is reflected in our CapEx plan, even though tranche 2.2 is outside of the window that you see here. There's a lot of projects that have been allocated to ATC that are still not in our CapEx plan because they go into those outer years of some great upside.

Operator

Paul Zimbardo, Jefferies.

Paul Zimbardo

First, I wanted to clarify on Nick's question a little bit on the EPS CAGR and ending to the top or near the top. Is it correct? That's reflecting the current capital plan and any of the incremental opportunities that you've discussed a lot, like the mature opportunities that would be incremental to that? Or kind of where are you thinking like this is a little bit of a preview of what you could be contemplating as well?

Robert Durian

Yes. I would characterize that state as far as being disappointed if we're not towards the top end of that range by 2027 based on our current plan. We're going to continue to try and work on identifying further opportunities with further data center load growth and other economic development activities, which would be upside to our plan going forward.

Paul Zimbardo

Okay. Excellent. That's what I thought. And then if I could ask a little bit more color on the tariff commentary. I believe you said 20% tariffs on the batteries and most of them are secured or in transit.
Just could you give a little detail? Did you change the sourcing strategy? Was this offset embedded contracts because it's a favorably lower number than like a lot of your peers in the industry have been discussing, so good to hear.

Lisa Barton

We have worked really hard to get ahead of that. And one of the things to note is still with that 20% tariffs that would be imposed on those batteries. that's still the lowest cost in terms of those batteries from China are still lower cost than domestically produced. So we're feeling very comfortable with where we are. and our in-service dates here this year.

Paul Zimbardo

Okay. And so you said those are Chinese batteries for that 20% tariff?

Lisa Barton

They are.

Operator

We have no further questions at this time.

Lisa Barton

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

Operator

This concludes today's conference call. Thank you very much for your participation. You may now disconnect.