What changed in this filing

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Item 1A. Risk Factors

2023-02-24 compared with 2022-02-18 · 67 added, 53 removed, 159 unchanged (43% of the section changed)

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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.

More of our workforce is working remotely, which increases the number of devices connected to the internet that impact our operations and increases our cyber security risk.

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 addition, we may collect and retain sensitive information, including personal information about our customers, shareowners and employees.

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.

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

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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 improve 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, government policies, such as the Inflation Reduction Act of 2022, which incentivize customer and third party-owned generation, 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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changes in applicable laws or regulations;

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

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

delays caused by construction accidents or injuries;

shortages in materials, equipment, inflation and qualified labor;

shortages in materials, equipment, or qualified labor;

changes to the scope or timing of the projects;

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unforeseen engineering or technology issues;

limited access to capital or other proposed financing arrangements such as tax equity financing;

limited access to capital or other financing arrangements;

and other adverse economic conditions.

We may not be able to recover all costs for the projects in rates and face increased risk of potential impairment of our project investment if a construction project is not completed or is delayed, or final costs exceed expectations or the costs approved by our regulators.

We may not be able to meet capacity requirements to comply with electric demand planning reserve margins if a construction project is not completed or is delayed.

Inability to recover costs, or inability to complete projects in a timely manner, could adversely impact our financial condition and results of operations.

Supply chain disruptions could negatively impact our operations and implementation of our strategy - Our operations and strategy depend on the global supply chain to procure the equipment, materials and other resources necessary to provide services in a safe and reliable manner and construct new utility infrastructure.

The global supply chain has experienced, and is expected to continue to experience, disruptions due to a multitude of factors, such as geopolitical issues, supplier manufacturing constraints, labor issues, transportation issues, resource availability, long lead times, tariffs, tighter credit markets, inflation, the COVID-19 pandemic and weather.

These disruptions have impacted, and are expected to continue to impact, our ability to receive critical materials, supplies and services in a timely and economic manner.

This could have an adverse impact by increasing costs and delaying the construction, maintenance or repair of items that are needed to support normal operations or are necessary to our construction projects to implement our strategy.

Inability to recover higher costs, or inability to complete projects in a timely manner, could adversely impact our financial condition and results of operations.

Our utility business is seasonal and may be adversely affected by the impacts of weather - Electric and gas utility businesses are seasonal businesses.

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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, members of the public and contractors coming into contact with our infrastructure, and employee and public safety.

The operation of our natural gas distribution and transportation 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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Further, the electric transmission system in our utilities’ service territories can experience constraints, limiting the ability to transmit electricity within our service territories.

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.

The transmission constraints could result in an inability to deliver

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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, 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.

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.

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, 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.

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 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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We also have transportation and supply agreements in place to facilitate delivery of natural gas to our customers.

Our counterparties to these contracts may not fulfill their obligations to provide natural gas or coal to us due to financial or operational problems caused by natural disasters, severe weather, economic conditions, pandemics, physical attacks or cyber attacks.

If we were unable to obtain enough natural gas or coal for our electric generating facilities under our existing contracts, or to obtain electricity under existing or future purchased power agreements, we could be required to purchase natural gas or coal at higher prices or forced to purchase electricity from higher-cost generating resources in the Midcontinent Independent System Operator, Inc.

(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.

If we were unable to obtain enough natural gas or coal for our electric generating facilities under our existing contracts, or to obtain electricity under existing or future purchased power agreements, we could be required to purchase natural gas or coal at higher prices, forced to purchase electricity from higher-cost generating resources in the Midcontinent Independent System Operator, Inc.

(MISO) energy market and/or required to purchase replacement capacity to comply with electric demand planning reserve margins.

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, 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.

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, limited global suppliers of natural gas, 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.

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Further, competitors may not be subject to the same operating, regulatory and financial requirements that we are, potentially causing a substantial competitive disadvantage for us.

Changes in public policy that could be the result of a new Presidential Administration, such as new tax incentives that we cannot take advantage of or efforts to deregulate the utility industry, could provide an advantage to competitors.

Changes in technology could also alter the channels through which electric customers buy or utilize power, which could reduce the revenues or increase the expenses of our utility companies.

Changes in public policy, such as new tax incentives that we cannot take advantage of or efforts to deregulate the utility industry, could provide an advantage to competitors.

Changes in technology could also alter the channels through which electric customers produce, store, buy or utilize power, which could reduce the revenues or increase the expenses of our utility companies.

Increased competition in our primary retail electric service territories may have an adverse impact on our financial condition and results of operations.

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We face risks related to non-utility operations - We rely on our non-utility operations for a portion of our earnings.

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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;

changes to MISO’s resource adequacy process establishing seasonal capacity planning reserve margin and capacity accreditation requirements that may impact how and when new generating facilities such as IPL’s and WPL’s additional solar generation may be accredited with energy capacity, and may require IPL and WPL to adjust their current resource plans, to add resources to meet the requirements of MISO’s new process, 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 new seasonal resource adequacy process;

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

the issuance of securities and ability to use other financing arrangements, such as tax equity financing to finance renewable energy projects;

the issuance of securities and ability to use other financing arrangements for our renewable energy projects;

accounting matters;

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Failure to obtain approvals for any of these matters in a timely manner, or receipt of approvals with uneconomical conditions, may cause us not to pursue the construction of such projects or to record an impairment of our assets and may have a material adverse impact on our financial condition and results of operations.

Our regulators or legislatures could change regulations or laws to permit third parties to provide renewable energy directly to our customers without being treated as a utility, potentially causing a competitive disadvantage for us.

Changes to these regulations could materially increase our costs or cause us to reconsider our strategy, which could have a material adverse impact on our financial condition and results of operations.

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Changes to certain tax elections, tax regulations and future taxable income could negatively impact our financial condition and results of operations - We have significantly reduced our federal and state income tax obligations through tax planning strategies and the utilization of bonus depreciation deductions for certain expenditures for property.

These tax planning strategies and bonus depreciation deductions have generated large taxable losses and tax credits that have resulted in significant federal and state net operating losses and tax credit carryforwards.

We plan to utilize substantially all of these net operating losses and tax credit carryforwards in the future to reduce our income tax obligations.

If we cannot generate enough taxable income in the future to utilize all of the net operating losses and tax credit carryforwards before they expire due to lower than expected financial performance or changes to tax regulations, we may incur material charges to earnings.

These tax planning strategies and bonus depreciation deductions have generated large tax credit carryforwards.

We plan to utilize all of these tax credit carryforwards in the future to reduce our income tax obligations.

If we cannot generate enough taxable income in the future to utilize all of the tax credit carryforwards before they expire due to lower than expected financial performance or changes to tax regulations, we may incur material charges to earnings.

The Inflation Reduction Act of 2022 allows for the sale or transfer of renewable tax credits to other taxpayers.

We plan to sell a substantial amount of our eligible renewable tax credits in future years.

This is a new market that will require regulations and guidance from taxing authorities.

It is unclear what terms and pricing the sale of renewable tax credits will require.

If we are unable to sell renewable tax credits at reasonable terms, that could materially impact our tax credit carryforward position.

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

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.

The amount of production tax credits we earn is dependent on the date the qualifying generating facilities are placed in service, the level of electricity output generated by our qualifying generating facilities and the applicable tax credit rate.

If the tax rates are increased, we may experience adverse impacts to our financial condition and results of operations.

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

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sold to an unrelated buyer, and the applicable tax credit rate.

If there is a disagreement on the in-service date, the amount of production tax credits that we can generate may be significantly reduced.

A variety of operating and economic parameters, including transmission constraints, the imbalance of supply and demand of wind energy resulting in unfavorable pricing for wind energy, adverse weather conditions and breakdown or failure of equipment, could significantly reduce the production tax credits generated by our wind farms resulting in a material adverse impact on our financial condition and results of operations.

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

A variety of operating and economic parameters, including transmission constraints, the imbalance of supply and demand of energy resulting in unfavorable pricing for wind or solar energy, adverse weather conditions and breakdown or failure of equipment, could significantly reduce the production tax credits generated by our wind or solar facilities resulting in a material adverse impact on our financial condition and results of operations.

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

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.

The Inflation Reduction Act of 2022 introduced new labor requirements that are required to qualify for the full value of renewable tax credits.

Failure to meet these requirements on future renewable projects could result in a significant reduction in the amount of renewable tax credits, which could adversely impact 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.

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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.

We are focused on executing a long-term strategy to deliver safe, 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.

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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.

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.

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.

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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 workforce 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

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in the future in order to successfully implement our strategy.

We have seen an increase in retirements due to our aging workforce and the recent impact of rising interest rates on pension plan benefits.

The labor market for our employees is very competitive, increasing the likelihood that we may lose critical employees or have difficulty hiring qualified employees for critical roles.

Critical employees are being hired at a higher cost.

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.

The competitive employment market also increases the amounts we pay our employees in critical positions.

We are also subject to collective bargaining agreements covering approximately 1,700 employees.

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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.

We are subject to risks related to inflation - We have recently experienced a significant increase in inflation.

The impact of supply chain disruptions, COVID-19 and other factors continue to create uncertainty in near-term economic conditions, including whether inflation will continue and at what rate.

Increases in inflation raise our costs for labor, materials and services.

Inflation may also cause interest rates to increase, increasing our cost of capital.

Failure to timely recover these increased costs in rates may adversely impact our financial condition and results of operations.

Further, increased costs due to inflation will directly and indirectly increase customer costs, which may decrease demand for energy and adversely impact our financial condition and results of operations.

We may incur material post-closing adjustments related to past asset and business divestitures - We have sold certain non-utility subsidiaries such as Whiting Petroleum Corporation (Whiting Petroleum).

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debt limit and budget debates, including government shutdowns, European and worldwide sovereign debt concerns, other global or geopolitical events, or other factors.

Increases in interest rates may cause the price of our equity securities to decline.

Increases in interest rates will cause the cost of capital to increase and may cause the price of our equity securities to decline.

Any disruptions in capital markets could adversely impact our ability to implement our strategy.

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Poor investment returns or lower interest rates may necessitate

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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.

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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