What changed in this filing

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Item 1A. Risk Factors

2022-02-18 compared with 2021-02-19 · 62 added, 58 removed, 150 unchanged (44% of the section changed)

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Risks Related to Business Operations

The outbreak of the novel coronavirus (COVID-19) pandemic could adversely affect our business functions, financial condition, results of operations and cash flows - The continued spread of COVID-19 has resulted in widespread impacts on the economy and could lead to a prolonged reduction in economic activity, disruptions to supply chains and capital markets, and reduced labor availability and productivity.

The COVID-19 pandemic has impacted and may continue to impact the economic conditions in our service territories, which may adversely impact our sales and our customers’ abilities to pay their bills.

Travel and transportation restrictions and closures of commercial spaces and industrial facilities have been imposed in and across the U.S., including in the service territories in which we operate.

Governmental and regulatory responses to COVID-19 include suspending service disconnects, which may increase customer account arrears, possibly increasing our allowance for expected credit losses and decreasing our cash flows.

Closures of commercial spaces and industrial facilities may result in a reduction in demand of electricity and natural gas from commercial and industrial customers.

The negative impacts on the economy could adversely impact the market value of the assets that fund our pension plans, which could necessitate accelerated funding of the plans to meet minimum federal government requirements.

The negative impacts on the economy could also adversely impact the ability of counterparties to meet contractual payment obligations, including guarantees, or deliver contracted commodities and other goods or services at the contracted price, which could increase company expenses.

Our access to the capital markets could be adversely affected by COVID-19, which could cause us to need alternative sources of funding for our operations and for working capital, any of which could increase our cost of capital.

Travel bans and restrictions, quarantines, shelter in place orders and shutdowns may cause disruptions in supply chains or access to labor that may adversely impact our planned construction projects, our ability to satisfy compliance requirements, or our operations, including our ability to maintain reliable electric and gas service.

This may cause us to miss milestones on construction projects and experience operational delays, which, in the case of renewable energy projects, could delay our

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completion of such projects past the in-service dates required to qualify for the maximum general renewable tax credits for investments in such renewable energy projects.

We have modified certain business practices to be consistent with government restrictions and best practices encouraged by government and regulatory authorities and developed risk mitigation plans for critical items and services required to continue our operations.

The effects of these government restrictions could adversely impact implementation of our regulatory plans and our operations.

If our workforce contracts COVID-19, it could negatively impact our operations, including our ability to maintain reliable electric and gas service.

The degree to which COVID-19 may impact our business operations, financial condition and results of operations is unknown at this time and will depend on future developments, including the ultimate geographic spread of COVID-19, the severity of the disease, the duration of the outbreak, possible resurgence of the disease at a later date, emergence of variants, speed, efficacy and adoption rates of vaccines, and further actions that may be taken by governmental and regulatory authorities.

A cyber attack may disrupt our operations or lead to a loss or misuse of confidential and proprietary information or potential liability - We operate in an industry that requires the continuous use and operation of sophisticated information technology systems and network infrastructure.

We face threats from use of malicious code (such as malware, viruses and ransomware), employee theft or misuse, advanced persistent threats, and phishing attacks.

More of our workforce is working remotely due to the COVID-19 pandemic, which has increased the number of devices connected to the internet that impact our operations and therefore increase our exposure to a cyber attack.

We face threats from use of malicious code (such as malware, viruses and ransomware), employee theft or misuse, advanced persistent threats, vulnerabilities such as the log4j vulnerability, fraud attempts, and phishing attacks.

More of our workforce is working remotely due to the novel coronavirus (COVID-19) pandemic, which has increased the number of devices connected to the internet that impact our operations and therefore increase our cyber security risk.

Incidents of ransomware attacks have been increasing in frequency and magnitude, including the ransomware attack that resulted in the operator of the Colonial Pipeline paying millions of dollars in ransom to hackers as a result of a cyber attack disabling the pipeline for several days in May 2021.

Cyber attacks targeting electronic control systems used at our generating facilities and for electric and gas distribution systems could result in a full or partial disruption of our electric and/or gas operations.

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In some cases, we outsource administration of certain functions to vendors that could be targets of cyber attacks.

For example, we outsource administration of our employee health insurance to Anthem, which was the target of a cyber attack in 2014.

For example, we outsource administration of our employee health insurance to Anthem, which was the target of a

cyber attack in 2014.

Any theft, loss and/or fraudulent use of customer, shareowner, employee or proprietary data as a result of a cyber attack could subject us to significant litigation, liability and costs, as well as adversely impact our reputation with customers and regulators, among others.

Demand for energy may decrease - Our results of operations are affected by the demand for energy in our service territories.

Energy demand may decrease due to many things, including proliferation of customer and third party-owned generation, technological advances that reduce the costs of renewable energy and storage solutions for our customers, loss of service territory or franchises, energy efficiency measures, technological advances that increase energy efficiency, third-party disrupters, loss of wholesale customers, the adverse impact of tariffs on our customers, and economic conditions.

Energy demand may decrease due to many things, including proliferation of customer and third party-owned generation, technological advances that reduce the costs of renewable energy and storage solutions for our customers, loss of service territory or franchises, energy efficiency measures, technological advances that improve energy efficiency, third-party disrupters, loss of wholesale customers, the adverse impact of tariffs on our customers, and economic conditions.

The loss of sales due to lower demand for energy may increase our rates for remaining customers, as our rates must cover our fixed costs.

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These risks include:

the inability to obtain necessary permits in a timely manner;

the inability to obtain necessary regulatory approvals and permits in a timely manner;

adverse interpretation or enforcement of permit conditions;

changes in applicable laws or regulations;

changes in costs of materials, equipment, commodities, fuel or labor;

changes in costs of materials, equipment, commodities, fuel or labor including due to tariffs, labor issues, or supply shortages;

delays caused by construction accidents or injuries;

shortages in materials, equipment and qualified labor;

shortages in materials, equipment, inflation and qualified labor;

changes to the scope or timing of the projects;

general contractors or subcontractors not performing as required under their contracts;

general contractors, subcontractors, or equipment not performing as required under their contracts;

the inability to agree to contract terms or disputes in contract terms;

the inability to successfully resolve warranty claims;

poor initial cost estimates;

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Demand for natural gas depends significantly upon temperature patterns in winter months due to heavy use in residential and commercial heating.

As a result, our overall

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operating results in the future may fluctuate substantially on a seasonal basis.

As a result, our overall operating results in the future may fluctuate substantially on a seasonal basis.

In addition, we have historically generated less revenues and income when temperatures are warmer in the winter and/or cooler in the summer.

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We face risks associated with operating electric and natural gas infrastructure - The operation of electric generation and distribution infrastructure involves many risks, including start-up risks, breakdown or failure of equipment, fires developing from our power lines, transformers or substations, dam failure at one of our hydroelectric facilities, the dependence on a specific fuel source, including the supply and transportation of fuel, the risk of performance below expected or contracted levels of output or efficiency, public and employee safety, operator error and ruptured oil and chemical tanks.

The operation of our natural gas transmission and distribution infrastructure also involves many risks, such as leaks, explosions, mechanical problems and employee and public safety.

Our electric and natural gas infrastructure is aging, which increases certain of these risks.

The operation of our natural gas transmission and distribution infrastructure also involves many risks, such as leaks, explosions, mechanical problems, members of the public and contractors coming into contact with our infrastructure, and employee and public safety.

In addition, the North American electric transmission grid is highly interconnected and, in extraordinary circumstances, disruptions at particular points within the grid could cause an extensive power outage in our service territories.

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The transmission constraints could result in an inability to deliver electricity from generating facilities, particularly wind generating facilities, to the national grid, or to access lower cost sources of electricity.

These risks could cause significant harm to employees and customers including loss of human life, significant damage to property, adverse impacts on the environment and impairment of our operations, all of which could result in substantial financial losses to us.

These risks could cause significant harm to employees, customers and the public including loss of human life, significant damage to property, adverse impacts on the environment and impairment of our operations, all of which could result in substantial financial losses to us.

We are also responsible for compliance with new and changing regulatory standards involving safety, reliability and environmental compliance, including regulations under the Pipeline and Hazardous Materials Safety Administration, the Occupational Health and Safety Administration, the North American Electric Reliability Corporation and Transportation Security Authority.

Failure to meet these regulatory standards could result in substantial fines.

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Failure to meet our service obligations could adversely impact our financial condition and results of operations.

Storms or other natural disasters may impact our operations in unpredictable ways - Storms and other natural disasters, including events such as floods, tornadoes, windstorms like the 2020 derecho in Iowa, blizzards, ice storms, extreme hot temperatures, extreme cold temperatures, fires, solar flares or pandemics may adversely impact our ability to generate, purchase or distribute electric energy and gas or obtain fuel or other critical supplies.

purchase or distribute electric energy and gas or obtain fuel or other critical supplies.

In addition, we could incur large costs to repair damage to our generating facilities and electric and gas infrastructure, or costs related to environmental remediation, due to storms or other natural disasters.

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Any of these items could adversely impact our financial condition and results of operations.

The COVID-19 pandemic and the spread of variant strains could adversely affect our business functions, financial condition, results of operations and cash flows - The ongoing COVID-19 pandemic and the spread of variant strains has resulted in widespread impacts on the economy, including disruptions to supply chains, and reduced labor availability and productivity.

The COVID-19 pandemic has impacted, and may continue to impact, the economic conditions in our service territories, which may adversely impact our sales and our customers’ abilities to pay their bills.

Travel and transportation restrictions and closures of commercial spaces and industrial facilities have been imposed in and across the U.S., including in the service territories in which we operate.

Governmental and regulatory responses to COVID-19 have included suspending service disconnects, which may increase customer account arrears, possibly increasing our allowance for expected credit losses and decreasing our cash flows.

Closures of commercial spaces and industrial facilities, stay-at-home trends, work-from-home trends, and business disruptions have impacted sales volumes.

These trends may result in a reduction in demand for electricity and natural gas from retail customers.

Negative impacts on the economy resulting from the continued pandemic could adversely impact the market value of the assets that fund our pension plans, which could necessitate accelerated funding of the plans to meet minimum federal government requirements.

The negative impacts on the economy, labor markets, and supply chains could also adversely impact the ability of counterparties to meet contractual payment obligations, including guarantees, or deliver contracted commodities and other goods or services at the contracted price, which could increase company expenses.

Travel bans and restrictions, quarantines, and vaccine mandates have caused, and may continue to cause, disruptions in supply chains or access to labor that may adversely impact our planned construction projects, our ability to satisfy compliance requirements, or our operations, including our ability to maintain reliable electric and gas service.

This may cause us to miss milestones on construction projects and experience operational delays, which, in the case of renewable energy projects, could delay our completion of such projects past the in-service dates required to qualify for the maximum general renewable tax credits for investments in such renewable energy projects.

The effects of these government restrictions could adversely impact implementation of our regulatory plans and our operations.

If our workforce contracts COVID-19, it could negatively impact our operations, including our ability to maintain reliable electric and gas service.

The degree to which COVID-19 and the spread of the variant strains may impact our business operations, financial condition and results of operations is unknown at this time and will depend on future developments, including the continued spread of COVID-19 and its variants, the severity of the disease, the duration of the pandemic, possible resurgence of the disease at a later date, emergence of variants, speed, efficacy and adoption rates of vaccines, and further actions that may be taken by governmental and regulatory authorities.

Threats of terrorism and catastrophic events that could result from terrorism may impact our operations in unpredictable ways - We are subject to direct and indirect effects of terrorist threats and activities.

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(MISO) energy market.

We may be obligated to pay for coal deliveries under our contracts even if our coal-fired generating facilities do not operate enough to fully utilize the amounts of coal covered by the contracts.

We may be obligated to pay for coal deliveries under our contracts even if our coal-fired

generating facilities do not operate enough to fully utilize the amounts of coal covered by the contracts.

If, for natural gas delivery to our customers, we were unable to obtain our natural gas supply requirements under existing or future natural gas supply and transportation contracts, we could be required to purchase natural gas at higher prices from other sources.

Natural gas market prices have been volatile in the past and could be volatile in the future due to additional future regulations, periods of extremely cold temperatures or disruption in supply caused by major storms or pipeline explosions.

We may not be able to pass on all of the changes in costs to our customers, especially at WPL where we do not have an automatic retail electric fuel

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cost adjustment clause to timely recover such costs.

Natural gas market prices have been volatile in the past and could be volatile in the future due to additional future regulations, increased demand including due to increased liquified natural gas demand from foreign countries, periods of extremely cold temperatures or disruption in supply caused by major storms or pipeline explosions.

We may not be able to pass on all of the changes in costs to our customers, especially at WPL where we do not have an automatic retail electric fuel cost adjustment clause to timely recover such costs and where electric fuel cost recovery may be limited if WPL earns in excess of its authorized return on common equity.

Increases in prices and costs due to disruptions that are not recovered in rates fully, in a timely manner, may adversely impact our financial condition and results of operations.

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In addition, our operations are subject to extensive regulation primarily by the IUB, the PSCW and FERC.

We are also subject to oversight and monitoring by organizations such as the North American Electric Reliability Corporation, the Midwest Reliability Organization, the Pipeline and Hazardous Materials Safety Administration, and MISO.

The impacts on our operations include:

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our ability to decommission generating facilities and recover related costs and the remaining carrying value of these facilities and related assets;

possible changes to MISO’s methodology establishing capacity planning reserve margin requirements that may impact how and when new generating facilities such as IPL’s and WPL’s additional solar and wind generation may be accredited with energy capacity and may require IPL and WPL to adjust their current resource plans, the need to add additional resources to comply with MISO’s proposal, or procure capacity in the market whereby such costs might not be recovered in rates;

the impact of the lack of availability of existing and new generating facilities has on our accredited capacity for such facilities pursuant to MISO’s methodology for establishing capacity planning reserve margin requirements;

the rates paid to transmission operators and how those costs are recovered from customers, including our ability to continue to use a transmission rider in Iowa;

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our ability to enter into purchased power agreements and recover the costs associated therewith;

resource adequacy requirements, energy capacity standards, and when new facilities such as IPL’s and WPL’s planned additional solar generation may be fully accredited with energy capacity;

the allocation of expenditures by transmission companies on transmission network upgrades and our ability to recover costs associated therewith;

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In addition, our tax liability is determined by our taxable income multiplied by the current tax rates in effect.

If the tax rates are

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increased or a minimum corporate income tax is implemented, as has been proposed by the new Presidential Administration, we may experience adverse impacts to our financial condition and results of operations.

If the tax rates are increased or a minimum corporate income tax is implemented, as has been proposed by the current Presidential Administration, we may experience adverse impacts to our financial condition and results of operations.

Our utility business currently operates wind generating facilities, which generate production tax credits for us to use to reduce our federal tax obligations.

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Our strategic plan includes developing solar generating facilities, which are expected to generate investment tax credits.

Investment tax credits are dependent on the date the qualifying generating facilities begin construction and the costs of the qualifying generating facilities.

Investment tax credits are dependent on the date the qualifying generating facilities begin and end construction and the costs of the qualifying generating facilities.

If there is a disagreement on the dates construction began and ended or the qualifying costs, the amount of investment tax credits awarded may be significantly reduced, possibly adversely impacting our financial condition and results of operations.

Our utility businesses are subject to numerous environmental laws and regulations - Our utilities are subject to numerous federal, regional, state and local environmental laws, regulations, court orders, and international treaties.

These laws, regulations and court orders generally concern emissions into the air, discharges into water, use of water, wetlands preservation, remediation of contamination, waste disposal, disposal of coal combustion residuals, hazardous waste disposal, threatened and endangered species, and noise regulation, among others.

These laws, regulations and court orders generally concern emissions into the air, discharges into water, use of water, wetlands preservation, remediation of contamination, waste disposal and containment, disposal of coal combustion residuals, hazardous waste disposal, threatened and endangered species, and noise regulation, among others.

Failure to comply with such laws, regulations and court orders, or to obtain or comply with any necessary environmental permits pursuant to such laws and regulations, could result in injunctions, fines or other sanctions.

Environmental laws and regulations affecting power generation and electric and gas distribution are complex and subject to continued uncertainty and could be changed by the new Presidential Administration.

Environmental laws and regulations affecting power generation and electric and gas distribution are complex and subject to continued uncertainty and could be changed by the current Presidential Administration.

These laws and regulations have imposed, and proposed laws and regulations could impose in the future, additional costs on our utility operations.

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Failure to comply with the laws, regulations and court orders, changes in the laws and regulations and failure to recover costs of compliance may adversely impact our financial condition and results of operations.

Actions related to global climate change and reducing greenhouse gases (GHG) emissions could negatively impact us - Regulators, customers and investors continue to raise concerns about climate change and GHG emissions.

National regulatory action is in flux and international regulatory actions continue to evolve.

Actions related to global climate change and reducing greenhouse gas (GHG) emissions could negatively impact us - Regulators, customers and investors continue to raise concerns about climate change and GHG emissions.

National regulatory action and international regulatory actions continue to evolve.

We are focused on executing a long-term strategy to deliver reliable and affordable energy with lower carbon dioxide (CO2) emissions independent of changing policies and political landscape.

However, it is unclear how these climate change concerns will ultimately impact us.

We could incur costs or other obligations to comply with future GHG regulations, and could become the target of legal claims or challenges, because generating electricity using fossil fuels emits CO2 and other GHG.

Further, investors may determine that we are too reliant on fossil fuels, reducing demand for our stock, which may cause our stock price to decrease, or not buy our debt securities, which may cause our cost of capital to increase.

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The timing and pace to fully achieve decarbonization is also contingent on the future development of technologies to reliably store and manage electricity, as well as electrification of other economic sectors.

The EPA’s approach and timing for implementing rules to regulate CO2 emissions at fossil-fuel fired electric generating units remains undecided and subject to litigation and could change based on the new Presidential Administration.

Various legislative and regulatory proposals to address climate change at the national, state and local levels continue to be introduced.

Regulation or legislation mandating CO2 emissions reductions or other clean energy standards could materially increase costs, causing some electric generating units to be uneconomical to operate or maintain.

Potential future requirements to reduce CO2, methane and other GHGs from the energy and manufacturing sectors could affect our operations in various ways.

Regulation or legislation mandating CO2 emissions reductions or other clean energy standards affecting utility companies could materially increase costs, causing some electric generating units to be uneconomical to operate or maintain.

We are vulnerable to potential risks associated with transition to a lower-carbon economy that may extend to our supply chain and natural gas operations.

Furthermore, acute and chronic physical risks could disrupt our operations or affect our property.

We cannot provide any assurance regarding the potential impacts of climate change policy or GHG regulations on our operations and these could have a material adverse impact on our financial condition and results of operations.

Regulation of oil and gas production

could affect our upstream supply of natural gas for electricity generation and to provide directly to our residential and business customers from our local distribution company.

This could result in rapid increased demand for alternative non-fossil energy sources and economy-wide electrification.

Changes to regional and local climate trends such as the frequency, seasonality, and severity of weather conditions could directly and indirectly impact our company.

Acute and chronic physical risks could disrupt our operations or affect our property.

Furthermore, it could affect the timing of peak demand and overall energy consumption of our customers.

We cannot provide any assurance regarding the potential impacts of climate change or related policies and regulations to reduce GHG emissions on our operations and these could have a material adverse impact on our financial condition and results of operations.

Risks Related to Economic, Financial and Labor Market Conditions

We are subject to employee workforce factors that could affect our businesses - We operate in an industry that requires specialized technical skills.

Further, we must build a work force that is innovative, customer-focused and competitive to thrive in the future in order to successfully implement our strategy.

Further, we must build a workforce that is innovative, customer-focused and competitive to thrive in the future in order to successfully implement our strategy.

It may be difficult to hire and retain such a skilled workforce due to labor market conditions, such as low unemployment rates in our service territories, the length of time employees need to acquire the skills, and general competition for talent.

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Any work stoppage experienced in connection with negotiations of collective bargaining agreements could adversely affect our financial condition and results of operations as well as our ability to implement our strategy.

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We are subject to limitations on our ability to pay dividends - Alliant Energy is a holding company with no significant operations of its own.

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The ability of our subsidiaries to pay dividends or make distributions to Alliant Energy and, accordingly, our ability to pay dividends on Alliant Energy common stock will depend on regulatory limitations, earnings, cash flows, capital requirements and general financial condition of our subsidiaries.

Our utilities have dividend payment restrictions based on the terms of any outstanding preferred stock and regulatory limitations applicable to them.

Our utilities have dividend payment restrictions based on the terms of regulatory limitations applicable to them.

If we do not receive adequate dividends and distributions from our subsidiaries, then we may not be able to make, or may have to reduce, dividend payments on Alliant Energy common stock.

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Disruption, uncertainty or volatility in the capital markets could increase our cost of capital or limit our ability to raise funds needed to operate our businesses.

Disruptions could be caused by Federal Reserve policies and actions, currency concerns, economic downturn or uncertainty, monetary policies, a negative view of the utility industry or our company, failures of financial institutions, U.S.

Disruptions could be caused by Federal Reserve policies and actions, currency concerns, inflation, economic downturn or uncertainty, monetary policies, a negative view of the utility industry or our company, failures of financial institutions, U.S.

debt management concerns, U.S.

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If our credit ratings are downgraded for any reason, such as worsening credit metric impacts, negative changes to our regulatory environment, or general negative outlook for the utility industry, we could pay higher interest rates in future financings, the pool of potential lenders could be reduced, borrowing costs under existing credit facilities could increase, our access to the commercial paper market could be limited, or we could be required to provide additional credit assurance, including cash collateral, to contract counterparties.

If our access to capital were to become significantly constrained or costs of capital increased significantly due to lowered credit ratings, prevailing industry conditions, regulatory constraints, volatility of the capital markets or other factors, our financial condition and results of operations could be adversely affected.

If our access to capital were to become significantly constrained or costs of capital increased significantly due to lowered credit ratings, prevailing industry conditions, regulatory constraints, volatility of the capital markets, inflation or other factors, our financial condition and results of operations could be adversely affected.

Our pension and other postretirement benefits plans are subject to investment and interest rate risk that could negatively impact our financial condition - We have pension and other postretirement benefits plans that provide benefits to many of our employees and retirees.

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Recessions and volatility in the domestic and international financial markets have negatively affected the asset values of our pension plans at various times in the past.

Poor investment returns or lower interest rates may necessitate accelerated funding of the plans to meet minimum federal government requirements, which could have an adverse impact on our financial condition and results of operations.

Poor investment returns or lower interest rates may necessitate

accelerated funding of the plans to meet minimum federal government requirements, which could have an adverse impact on our financial condition and results of operations.

UNRESOLVED STAFF COMMENTS

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors