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Lisa Barton

Thank you, Sue. Good morning, everyone, and thank you for joining us.
2024 marked another year of solid financial and operational performance, during which we made considerable progress on our key strategic priorities. As we review our strong operational and financial performance for 2024, we'll look ahead to 2025, providing updates on our progress towards achieving key strategic objectives that enhance our ability to support our customers, communities, and importantly, drive shareholder growth now and for generations to come.
Reflecting on 2024, I'm extremely proud of the progress we made and the strong foundation we built, one that positions us well to drive sustainable growth and deliver meaningful value. Our ongoing 2024 EPS growth aligns with our long-term target of 5% to 7%. We increased our dividend, with 2024 marking the 21st straight year of dividend increases. We successfully commissioned 1.5 gigawatts of solar energy investments, adding to our 1.8-gigawatt wind generation fleet, reinforcing our leadership in regulated owned renewables.
Our approved electric rate review construct in Iowa stabilizes electric base rates for customers through the end of the decade and allows us to grow in tandem with our economic development success rate; positions the company to earn its authorized return on equity through the retention of new tax credits, energy margins, and capacity revenues, while we invest in energy resources to support growing energy demand; provides a framework to support economic development through an individual customer rate construct, enabling the company to capture meaningful economic development growth to benefit our communities.
By putting our newly IUC-approved construct into action, we reached a significant milestone in our economic development efforts, securing commitments with signed agreements of up to 1.9 gigawatts of data center load at our Big Cedar site in Cedar Rapids. Our individual customer rate or ICR construct in Iowa and Wisconsin are key tools for economic development and community growth.
We recently filed an ICR contract for one of two Iowa data centers, and we look forward to the IUC's review of this contract. We expect the second ICR contract to be filed in the first quarter. As we have highlighted in previous calls, we are committed to ensuring all ICRs benefit existing customers, new customers, and our shareholders, which will be demonstrated in these confidential filings.
Our team continues to advance our purpose-driven strategy and is taking measures today to enable the achievement of our financial and operational objectives over the long term. We operate in two states that have enacted legislation to fast track and support economic development, creating new opportunities for growth and investment. To complement legislation adopted last year to support mega projects, Iowa Governor Kim Reynolds recently introduced legislation to continue providing tools to accelerate economic development in the state.
Key provisions of the bill include non-contested integrated resource plan filings with the IUC and the requirement to file non-contested IRPs at least every five years, lowering the thresholds for advanced ratemaking to 40 megawatts and expanding eligibility requirements for advanced ratemaking to encourage all of the above energy solutions and technologies in Iowa.
In Wisconsin, the legislature enacted a sales and use tax exemption for data centers. This legislation is designed to increase investments and growth in the sector.
With that in mind, I'm excited to announce we have an agreement in principle with a data center customer that has purchased land in Beaver Dam, Wisconsin. As noted in previous calls, we have increased our focus on economic development, and this will continue to be our focus in the months and years ahead.
Expanding the competitive advantage of our service territory through our efforts to drive economic development in Iowa and Wisconsin is driving meaningful outcomes, attracting new investments, creating jobs, and supporting investments in the infrastructure needed to support long-term growth in the communities we serve.
Tying our economic development wins back to our CapEx plans, as you recall, in November 2024, we refreshed our capital expenditure plan to incorporate energy resource investments to meet the first phase or up to 1.1 gigawatts of our data center growth.
At this time, we also -- at that time, we also indicated that we had an additional 800 megawatts of data center load backed by fully executed land transmission and energy supply agreements where we were awaiting greater clarity on the timing of the load ramp. We now have that clarity. Given our confidence in our Wisconsin Beaver Dam location, we expect to add this new data center demand to our updated resource supply plan, capital expenditure plan, and financing plans, which will be provided as part of our Q1 2025 earnings release.
As noted on slide 5, we are taking a responsible approach to meeting these needs, using a combination of existing capacity, new generation, demand response, and capacity purchases. This allows us to accelerate our ability to serve the load while building length in our CapEx plan well into the future.
Our economic development efforts, including the addition of new data center loads are projected to increase energy sales. This increase in sales will help distribute fixed costs across a larger customer base, contributing to more stable and manageable rates for our customers.
We recognize speed to market is critical for meeting the needs of growing and new customers, whether they are large load industries or local expansions. Our reliable, balanced portfolio of existing resources, combined with our inventory of MISO queue positions to connect new energy resources, short-term market purchases, and our track record of successful execution gives us confidence in our ability to capture these opportunities.
Now let me briefly touch on the investment growth opportunities associated with our 16% interest in American Transmission Company. MISO transmission investments present a strategic opportunity for us to enhance regional grid stability.
Earlier this year, MISO announced capital investments for Tranche 2.1. ATC expects to be assigned approximately $2 billion of Tranche 2.1, with an additional opportunity through the right of first refusal or competitive bid process of up to $1.8 billion. We do not expect a material impact to our current capital expenditure plan since the majority of investments related to Tranche 2.1 would be post-2030.
At Alliant Energy, we are committed to strengthening the energy grid by reducing outages, improving recovery times, and expanding capacity with a balanced mix of cost-effective and proven technologies. At the same time, we continue investments in future innovations to meet growing demand while maintaining affordability for our customers.
Looking back on my first year as CEO, I'm proud of our team's relentless dedication and execution of our purpose-driven strategy. Their dedication not only strengthens our service to customers and communities, but also fuels sustainable long-term value creation for our shareholders.
As we celebrate National Engineers Week, I'm proud to recognize the exceptional contributions of our engineers, whose innovation and expertise continue to propel our industry forward. Equally important, I extend my deepest gratitude to our dedicated generation team, line crews, and extended team for their unwavering commitment to delivering reliable energy to our customers. Your hard work and dedication are the backbone of our operational success and the driving force behind our continued progress.
I will now turn the call over to Robert to provide our financial results, financing plans, and an update on regulatory matters.

Robert Durian

Thank you, Lisa. Good morning, everyone. Yesterday, we announced 2024 ongoing earnings of $3.04 per share compared to ongoing earnings of $2.82 per share in 2023. These ongoing earnings contributed to a compounded annual earnings growth rate in excess of 6% over the last 10 years.
Our year-over-year ongoing earnings change was primarily due to higher revenue requirements from capital investments. This positive driver was partially offset by higher depreciation and financing expense and lower AFUDC associated with our customer-focused capital expenditure programs.
The remaining year-over-year earnings drivers largely related to the negative impacts of milder temperatures on electric and gas sales and our team's successful efforts to offset a significant portion of the negative 2024 temperature impacts, with actions taken to capture higher tax benefits and lower O&M expenses. We are extremely proud that our 2024 O&M expenses, excluding non-GAAP adjustments, were approximately $30 million less than in 2023, the result of our employees' efforts to manage our business to deliver long-term financial consistency.
We also completed restructuring activities in the fourth quarter of 2024, which resulted in a 5% reduction in our workforce, for individuals who chose a voluntary employee separation package, which will provide sustainable cost savings in the future.
The winter temperatures in 2024 were some of the warmest on record in our service territory and across the US. These temperature impacts on electric and gas margins decreased Alliant Energy's earnings by approximately $0.15 per share in 2024. In comparison, temperatures decreased Alliant Energy's earnings by $0.06 per share in 2023.
Excluding the impacts of mild temperatures, the margins from our electric sales were close to plan, with higher-than-expected sales to residential and commercial customers due to greater-than-forecasted meter growth, partially offset by lower sales to our lower-margin IPL industrial customers, primarily due to less demand from customers who operate their own generation.
In 2024, we continued our steadfast focus on keeping bills cost-effective for the customers we have the privilege to serve. On a revenue per kilowatt hour basis, average retail electric rates only increased by approximately 2% and 1% for IPL and WPL, respectively. Both changes were below the US rate of inflation in 2024. And our average retail natural gas rates on a cost per decatherm sold declined by approximately 10% when compared to 2023. These results were achieved despite both utilities implementing base rate increases in 2024.
We were also successful with many initiatives in 2024 to help create value for our customers in the future. We were awarded $80 million of grants to lower capital cost for customer-focused investments.
We secured $3 billion of conditional commitments for loan guarantees from the US Department of Energy's Loan Programs Office. And if finalized, those loans would help us cost effectively finance future clean energy generation and storage for both Iowa and Wisconsin customers.
We initiated safe harbor activities with the intention of preserving the qualification of tax credits for future energy storage and renewable projects. And as Lisa mentioned, we are utilizing our individual customer rate construct in both states, which allows us to capture growth from economic development activities occurring within our states, which will, in turn, absorb a portion of our fixed costs, helping reducing costs for all customers.
Our teams also had success with improving cash flows last year. 2024 cash flows from operations increased by approximately $300 million or 35% when compared to 2023. This substantial increase was primarily the result of the successful monetization of tax credits generated in 2024, improved recoveries of infrastructure investments with new base rates in both Iowa and Wisconsin, and successful efforts by our employees to reduce the working capital requirements of our core utility business.
I'm also pleased to report that our investing cash flows in 2024 aligned with our projected capital expenditures set at the beginning of the year due to our proactive procurement activities and our continued track record of successful execution of our key construction projects.
Moving to 2025, we are affirming our 2025 earnings guidance range of $3.15 to $3.25 per share. And we have based our long-term 5% to 7% earnings growth rate target of our 2024 ongoing earnings of $3.04. Our efforts to support customer value by making smart investments and controlling operating costs, all while receiving constructive regulatory outcomes, will support our ability to consistently deliver solid financial results.
Turning to 2025 financing, our current 2025 financing plans are included on slide 8. We anticipate updating our 2025 to 2028 financing plans in conjunction with our next capital expenditure update, which we expect to share on next quarter's earnings call.
Finally, I'll highlight our regulatory initiatives in progress, as well as those regulatory filings we plan to initiate later this year. We have four active dockets in progress before the Public Service Commission of Wisconsin, which involve requests for certificates of authority for customer-focused investments. These dockets relate to investments which will enhance the reliability and resiliency of the Riverside natural gas-generating facility, refurbish the Forward Wind and Bent Tree Wind Farms to extend production tax credits from the facilities for the benefit of our customers, and enable a new long-duration energy storage project called Energy Dome, which will be sited next to WPL's Columbia Energy Center. The expected timing of decisions from the Public Service Commission in Wisconsin on these dockets is provided on slide 9.
We also have two active filings in progress before the Iowa Utilities Commission, seeking approval for an individual customer rate for one of the new data centers in Cedar Rapids, Iowa, and an approximate 100-megawatt Cedar River natural gas generating station, which would be located on the existing side of the Prairie Creek Generating Station.
Finally, for our planned regulatory filings this year, we anticipate filing a Wisconsin retail electric and gas rate review for test years 2026 and 2027 at the end of this quarter. And in conjunction with our updated capital expenditure plan, we also expect to make regulatory filings later this year 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.
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 Lisa to provide closing remarks.

Lisa Barton

Thank you, Robert. I'd like to close by focusing on what you can expect from the Alliant Energy team. We are actively looking to expand our competitive advantage by driving sustainable growth and long-term value. Our tenets: driving affordability and delivering value, advancing growth at scale through economic development, adapting regulatory and advocating for legislative constructs to support growth and win-win outcomes, responsibly powering growth by growing at the pace of our customers and using capacity length, new resources, load response, and capacity purchases.
I'm extremely proud of the foundation we've established in 2024. We are well positioned to drive sustainable growth and create meaningful shareholder value. Thank you for your continued support.
At this time, I will turn the call back over to the operator to facilitate the question-and-answer session.

Question and Answer Session

Operator

(Operator Instructions) Shar Pourreza, Guggenheim Partners.

Shahriar Pourreza

So Lisa, the new data center -- so we've got a new data center in Wisconsin, the CapEx update is coming next quarter. Could we just get a little bit more color on where you could see yourself within that 5% to 7%, especially as we look out towards the end of the plan? Are we piercing the top end? Is this something you'll communicate on the 1Q, the CapEx revision update? Just a little bit more sense there.

Lisa Barton

Q1 will have a much better line of sight, Shar, with respect to where we'll be. What you will see in that will be the 1.9 gigawatts associated with Phase 1 and Phase 2 of the Cedar Rapids build-out, as well as the new Wisconsin facility.

Shahriar Pourreza

So let me -- so the --

Lisa Barton

I think it's too early right now to project out into the future.

Shahriar Pourreza

Okay. Got it. Got it. And then just on the CapEx update, Lisa, is it kind of -- will we see normal distribution spend pushed out? Or do you think it's purely additive to the 10% CAGR?

Lisa Barton

One of the things right now we're looking at is just what are the needs of our customers and communities, and we are leaning in a little bit more on the generation side right now and a little less so on the distribution.

Shahriar Pourreza

Okay. That is perfect. And then just one last one, if I may. Just obviously, a lot of focus around the Wisconsin opportunity. Maybe we can come back to Iowa for a sec. Any updated color on a potential Phase 2 Big Cedar and/or Prairie View? Just any timing of that announcement?

Lisa Barton

So what we have -- basically what is in our Phase 2 is reflected there right now. So we had 1.1 gigawatts was Phase 1, another 800 being the Phase 2, totaling the 1.9 that you see there, and that's with two different data center customers. One you probably saw the announcement on is QTS, the other one is not wanting us to release their name at this point in time. And we just want to always make sure that we're abiding by the wishes of our customers.

Shahriar Pourreza

Got it. Makes sense. Congrats on the execution. Appreciate it. See you soon.

Lisa Barton

Thank you. Goodbye.

Operator

Nicholas Campanella, Barclays.

Nicholas Campanella

I just wanted to ask, when we kind of think about financing, this incremental CapEx that's going to be coming, just in general across the plan, like if we were to add $1 of CapEx, like what's the associated equity needs with that going forward? And maybe you can kind of update us on where your FFO to debt is trending?

Robert Durian

Yes, Nick, this is Robert. So with your first question, as we think about kind of where we stand right now with our balance sheet, we feel like we've got a really strong balance sheet and improving cash flows, which I'll get into here in a little bit.
But as you think about the capital expenditure refresh that we plan on sharing with the first quarter call, think about roughly 45% to 50% of any new capital additions are expected to be financed through equity, and the remaining through what I would characterize as debt issuances.
And specifically on your cash flow question, as I shared with my prepared remarks, we made some pretty significant progress with improving our cash flows in 2024. We saw about a 35% increase or about $300 million of cash flows from operations relative to what we saw in 2023. That was largely because of the monetization of tax credits, the improvements that we saw as a result of the base rate increases that we implemented to recover infrastructure.
But probably one of the things I'm more proud of is the fact that we're doing a really good job with kind of optimizing our working capital. So we're looking forward to continuing that trend here in 2025, and actually seeing probably, if anything, an upside when it comes to additional tax credit monetization as we continue to build out more renewables and storage and generate more tax credits that are available for sale.

Nicholas Campanella

That's great. That's great. And then just with the Wisconsin opportunity still in focus, you're also going to be filing this Wisconsin rate review soon. Maybe you can just kind of talk about what's different in this case versus prior cases?

Robert Durian

I don't know if it's much different. I would kind of -- I would characterize kind of the key drivers for this rate review are predominantly related to rate base additions since the last case. Think about all of the solar that we completed over the last couple of years as well as we got new battery storage projects. So all of that stuff has been approved by the Public Service Commission Wisconsin.
We also have some advanced gas projects, which are intended to improve the capacity and efficiency of our Neenah and Sheboygan natural gas facilities that have been approved by the PSCW. So a large portion of what we're seeking for recovery or will be seeking for recovery is just rate base additions, partially offset by some of the fuel cost savings from those projects, as well as some of the tax benefits.
So as far as some of the key issues, you'll see the typical questions about return on equity, capital structure. But we feel like we're well positioned to have a good case in front of the commission here in a couple of months.

Operator

Julien Dumoulin-Smith, Jefferies.

Julien Dumoulin-Smith

Congratulations again, very nicely done here, team.

Lisa Barton

Thank you.

Julien Dumoulin-Smith

Absolutely. Maybe just a follow-up on a few things here. One item that stands out is just the backdrop of renewables and renewables execution and just the reliance on tax credits through the plan, specifically some of the dynamics through the plan out to '29, begs the question around how you think about safe harboring and to what extent you guys have, along with your partners, ensured access to the tax credit and/or any other avenues to ensure that the plan is intact. I just want to make sure that we've got the visibility on what's out there, including the wind repowering.

Robert Durian

Great question, Julien. So I'm extremely proud of the activities of the team in the fourth quarter and here into the first quarter of 2025 to really position us well to, I would say, safe harbor a significant majority of the renewables and battery stories that we have in our current plan. We've taken actions to put down payments on certain projects. We've initiated construction activities for other projects. And so we feel well positioned with safe harboring, which I would characterize as a substantial majority of all of the projects that go through the next four years related to the renewables, including win in solar, as well as the battery storage projects that we got in our plan right now.

Julien Dumoulin-Smith

Right. And that is inclusive of ongoing permitting activities, you feel comfortable?

Robert Durian

Yeah, we don't have any concerns currently with permitting. We don't tend to put our wind projects on public lands and so don't face that kind of risk. And we've been pretty proactive, as you probably know from some of our previous discussions about getting ahead on MISO queue positions and other things that have positioned us well to be able to navigate what is kind of a choppy period right now with some of these activities.

Lisa Barton

And just to highlight, Julien, we've gone through the safe harboring before, so we're very experienced with this. So we're feeling very comfortable about how we've positioned ourselves for the future.

Julien Dumoulin-Smith

I would expect nothing less, Lisa. Thank you. I appreciate it. (laughter) Knowing you and your team.
Just with respect to the data center opportunity real quickly, can you elaborate a little bit more on the opportunity piece, right, in the slides, right? For as much as the slide shows something like 2.1 gigawatts to be delineated by the first quarter plan, can you talk a little bit on the timeline here to get up to that full, I don't know, 2.9-ish, that the slide seems to indicate here? Given that they all seem to be coming online in that '28 time period, I imagine it will be pretty swift to get further clarity on that upside opportunity bucket?

Lisa Barton

So think of it this way, that upside light blue of the opportunities, those are companies where we're having active discussions and so forth. That's why what you'll see is very much a balanced approach in terms of our resources. It will be new, it will be extensions. As you know, we extended and intended to convert Edgewater. We're evaluating Columbia -- in Columbia.
So we're really using an all-of-the-above approach when it comes to positioning ourselves. We want to make sure that we're as competitive as possible so that when data centers come knocking, Alliant is the first place that they'll go, so that's the approach that we're taking. And we'll have a lot more information for you in Q1. All will be revealed in Q1.

Julien Dumoulin-Smith

Including the upside opportunities. Excellent. Thank you.

Operator

Andrew Weisel, Scotiabank.

Andrew Weisel

Just to clarify, first question, to be clear, is Big Cedar essentially fully booked up at this point?

Lisa Barton

It is.

Andrew Weisel

Okay. Great. And then you have a new customer at Beaver Dam, then you have the additional sites. I guess my question is, how confident do you feel that you've got ample opportunity, should you have the good problem where a lot of customers come knocking at your door? In other words, do you feel confident that you'll be able to serve a strong number of potential data center customers over time?

Lisa Barton

We really want to position ourselves to attract as much economic development for our communities as possible. And so that's why we're -- we've made some of the decisions that we've made. Our economic development team is acutely focused on figuring out how to attract these customers and to make sure that it's a win-win-win. I can't emphasize that enough. It needs to be a win for not only new customers, but existing customers, as well as shareholders as well.
The one thing to keep in mind is that while the growth that we've had is tied to some of the land that we have, it's not necessary. It's been a great accelerator for some of these opportunities, but just like you've seen in other jurisdictions, these types of customers are really looking for transmission capacity and having sufficient generation available to meet their needs. We will -- we have a very flexible resource planning process, and that allows us to be pretty adaptive, I think, compared to a number of our peers.

Andrew Weisel

Okay. Great. That's very helpful and actually ties in very neatly into my next question. The proposed legislation in Iowa about integrated resource planning, how do you think about that in terms of flexibility or lack thereof? I mean on the one hand, it helps with long-term generation planning. On the other hand, you're going to have to be very flexible to work with these fast-moving hyperscalers and data centers. So how do you think about that in terms of adding or limiting your flexibility?

Lisa Barton

I think it's actually relatively neutral, with respect to that, because we can file a plan at any time. What the legislation is really intended to do is to not have people go beyond five years. We -- in order to adapt to the needs of our customers and communities, we'd be filing more often. And as you may recall, the last resource plan exercise that we went through, we basically had low, medium, and high low cases. And that allowed us to have a considerable amount of flexibility in terms of determining what resources that we need. So I mean, quite frankly, if we wanted to go in tomorrow, we can go in tomorrow and file another resource plan. So we feel that it's very supportive of what we need to advance economic development.

Andrew Weisel

Okay. Great. And one last one, maybe -- sorry, go ahead.

Lisa Barton

Just -- I do have one correction to what I said earlier, which is we do have a little bit of room, still, at Big Cedar, so my apologies.

Andrew Weisel

Okay. Great. More options is always a good thing. One last one. The advanced ratemaking has been a little bit of a moving target, if I can describe it that way, maybe in the past. Can you talk about the proposed legislation and how it maybe might clarify things going forward? Or maybe just a little bit more detail on what's in that proposal and how you think it might play out?

Robert Durian

That's a great question, Andrew. So historically, we have taken the opportunity to utilize advanced ratemaking principles for largely our renewable expansion program in some of our larger natural gas facilities. More recently, with some recent legislation that was already passed, it expanded it to include battery storage as well as nuclear. Now they've taken even more of a, I call it an all-of-the-above approach, where they've lowered the gas requirement down to 40 megawatts. And so we really see this as a great opportunity to use all kinds of different resources to be able to meet the demands that we see coming from new customers, so there's a lot of flexibility with it.
I think it's just kind of a demonstration of the willingness of the state of Iowa to drive economic development to make sure we've got the ability with flexibility to be able to meet it with different resources. So we're looking forward to seeing that go through the legislation process and hopefully, we'll utilize that here in the near future.

Andrew Weisel

Flexibility seems to be a theme. Thank you very much, guys. I appreciate the help.

Operator

(Operator Instructions) Paul Fremont, Ladenburg.

Paul Fremont

Congratulations on the good quarter. Can you -- would you potentially look to put into place a similar regulatory structure as what you have in Iowa and Wisconsin, especially for like large data centers?

Lisa Barton

Yeah, it's a great question. I mean Wisconsin and Iowa had very different constructs where in Iowa, we'd go in, maybe say, every four years, so it became -- it could be a challenge in terms of growing at the pace of our customers. In Wisconsin, we really don't have that because we're in every two years with a forward-looking construct, so no plans.

Paul Fremont

Okay. Can you discuss -- I guess, in one of your slides, you mentioned a flexible rate structure as part of what's being considered in legislation in Iowa. How -- what -- can you describe what those contract changes might look like?

Lisa Barton

Oh, so the individual customer rate?

Paul Fremont

Yes.

Lisa Barton

I think that's what you're referring to, yes. So the individual customer rate construct that we have is associated with the settlement that we worked through last year. And what that allows us to do is to customize the contracts for the needs of a particular customer, and then it is submitted confidentially to the IUC for their approval. They have to act within 90 days or it's otherwise approved.

Paul Fremont

Right. But in other words, the slide is sort of proposed legislation in Iowa, so how would that change? What changes are they talking about in terms of establishing a flexible rate tool to help electric utility companies attract new large energy user customers? What changes would that mean in terms of Iowa?

Robert Durian

Yes, Paul, this is Robert. If you're thinking about the legislation and what's being proposed at this point in time, think of it as just a further expansion. There are certain, I would say, parameters that the individual customer rate that was approved in the rate order allow you to do. This would expand it even further, so it gives us even more flexibility or opportunity to offer those types of rates to even more customers beyond the data centers that we currently are pursuing with the individual customer rate in the last rate order.

Paul Fremont

Great. And then last question, in terms of the additional generation that you're looking to add, should we think of all of that as being renewable? Or is some of that due to gas?

Lisa Barton

Yeah, some of it will be gas. It's all of the above.

Operator

Ashar Khan, Verition.

Ashar Khan

Thank you. My questions have been answered. I appreciate it.

Operator

Thank you. Ms. Gille, there are no further questions at this time.

Susan Gille

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

Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending. And at this time, we ask that you please disconnect your lines. Enjoy the rest of your day.