What changed in this filing

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Item 1A. Risk Factors

2024-02-16 compared with 2023-02-24 · 83 added, 79 removed, 147 unchanged (52% of the section changed)

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Risks Related to Business Operations

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, vulnerabilities such as the log4j vulnerability, fraud attempts, and phishing attacks.

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.

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 2021.

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 and MOVEit vulnerabilities), fraud attempts, and phishing attacks.

Incidents of ransomware attacks have been increasing in frequency and magnitude.

Emerging artificial intelligence technologies may be used to develop new hacking tools, exploit vulnerabilities, obscure malicious activities, and increase the difficulty detecting threats.

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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Any disruption of these operations could result in a loss of service to customers and a significant decrease in revenues, as well as significant expense to repair system damage and remedy security breaches.

Due to the evolving nature of cyber attacks and cyber security, our current safeguards to protect our operating systems and information technology assets may not always be effective.

Due to the evolving nature of cyber attacks and cybersecurity, our current safeguards to protect our operating systems and information technology assets may not always be effective.

We rely on third parties for software to protect against cyber attacks and we are at risk if such third parties are targets of cyber attacks.

Measures taken to avoid, detect, mitigate or recover from cybersecurity breaches or incidents may be insufficient or become ineffective, and there are no assurances that cybersecurity breaches or incidents will not impact our business, operations and financial condition.

If the technology systems were to fail or be breached by a cyber attack or a computer virus, and not be recovered in a timely fashion, we may be unable to fulfill critical business functions and confidential data could be compromised, adversely impacting our financial condition and results of operation.

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

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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.

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In addition, we use information technology systems to 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 have been or could be targets of cyber attacks.

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, 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.

Energy demand may decrease due to many things, including economic conditions, 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 (IRA Act), 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, loss of customers that pursue their own renewable projects to achieve specific sustainability goals, and the adverse impact of tariffs on our customers.

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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The loss of customers, the inability to replace those customers with new customers, and the decrease in demand for energy could negatively impact our financial condition and results of operations.

Our strategy includes large construction projects, which are subject to risks - Our strategy includes constructing renewable generating facilities and large-scale additions and upgrades to our electric and gas distribution systems.

Our strategy includes large construction projects, which are subject to risks - Our strategy includes constructing renewable generating facilities, energy storage facilities, natural gas-fired generating facilities and large-scale additions and upgrades to our electric and gas distribution systems and generating assets.

These construction projects are subject to various risks.

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and other adverse economic conditions.

We outsource certain business functions to third-party suppliers and service providers, and substandard performance by those third parties could harm our business, reputation and results of operations.

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.

For example, WPL has notified the PSCW that its solar generating facility developments have exceeded the approved costs.

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.

Inability to recover costs, or inability to complete projects or recover costs 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.

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Thus, mild winters and/or summers could have an adverse impact on our financial condition and results of operations.

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 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.

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, energy storage facilities, 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, members of the public or contractors coming into contact with our infrastructure, public and employee safety, operator error and ruptured oil and chemical tanks.

The operation of our natural gas distribution and transportation infrastructure also involves many risks, such as leaks, explosions, mechanical problems, members of the

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public or 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

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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 electricity from generating facilities, particularly wind and solar 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 Administration.

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

Lastly, we have obligations to provide electric and natural gas service to customers under regulatory requirements and contractual commitments.

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.

Failure to meet our service obligations, and failure of IPL’s solar generating facilities to achieve a certain level of output, 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, wildfires, 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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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, labor shortages, employee strikes, transportation issues, 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, 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.

Our counterparties to these contracts may not fulfill their obligations to provide natural gas, coal, financial settlements or collateral to us due to financial or operational problems caused by natural disasters, severe weather, economic conditions, labor shortages, employee strikes, transportation issues, 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, need to secure higher cost delivery of natural gas or coal, be forced to curtail the operation of our natural gas-fired or coal-fired generating facilities, be forced to purchase electricity from higher-cost generating resources in the Midcontinent Independent System Operator, Inc.

(MISO) energy market and/or be 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.

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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.

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.

Our utility business also operates wind and solar generating facilities that sell electricity in the MISO energy market.

If MISO energy market prices result in unfavorable pricing for wind or solar energy, this may reduce the energy market revenue produced by those facilities and result in higher electricity costs that would need to be recovered from customers.

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

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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 or not recovered in a timely manner, may adversely impact our financial condition and results of operations.

Energy industry changes could have a negative effect on our businesses - We operate in a highly regulated business environment.

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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 timely obtain rate adjustments to earn authorized rates of return depends upon timely regulatory action under applicable statutes and regulations, and cannot be guaranteed.

In future rate reviews, IPL and WPL may not receive an adequate amount of rate relief to recover all costs and earn their authorized rates of return, rates may be reduced, rate refunds may be required, rate adjustments may not be approved on a timely basis, costs may not be otherwise recovered through rates, future rates may be temporarily frozen, certain rate base items may not receive a full weighted average cost of capital, and authorized rates of return on capital may be reduced.

IPL and WPL may not receive an adequate amount of rate relief to recover all costs and earn their authorized rates of return, rates may be reduced, rate refunds may be required, rate adjustments may not be approved on a timely basis, costs may not be otherwise recovered through rates, future rates may be temporarily frozen, laws or rules may limit the ability to file rate adjustments or the period covered by a rate adjustment, regulatory decisions may limit the ability to defer recovery of and a return on prudently incurred costs in between rate reviews, certain rate base items may not receive a full weighted average cost of capital, and authorized rates of return on capital may be reduced.

As a result, we may experience adverse impacts on our financial condition and results of operations.

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, MISO and the Transportation Security Administration.

The impacts on our operations include:

our ability to site and construct new generating facilities, such as renewable energy projects, and recover associated costs, including our ability to continue to use a renewable energy rider in Iowa;

our ability to site and construct new energy facilities, such as renewable energy or battery storage projects, and recover associated costs;

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

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;

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 seasonal resource adequacy process, or procure capacity 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 seasonal resource adequacy process;

IPL’s ability to achieve certain aggregate summer capacity factors under the consumer protection plan for its up to 400 MW of solar generation projects;

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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These regulatory authorities and organizations are also empowered to impose financial penalties and other sanctions, including requirements to implement new compliance programs.

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.

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, or may cause a delay in construction of such projects such that we are not able to meet new demand growth, 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.

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Provisions of the Wisconsin Utility Holding Company Act may limit our ability to invest in or grow our non-utility activities and may deter potential purchasers who might be willing to pay a premium for our stock.

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 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, 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.

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

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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 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.

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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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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 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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Changes in or new development of environmental restrictions may force us to incur significant expenses or expenses that may exceed our estimates.

Our future plans and existing operations may be impacted by changing expectations, including heightened emphasis on environmental and social justice concerns related to supporting an equitable transition to cleaner energy and a low-carbon economy.

There can be no assurance that we would be able to recover all or any increased environmental costs from our customers.

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 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 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.

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 GHGs.

Actions related to global climate change and reducing greenhouse gas (GHG) emissions could negatively impact us - We have established GHG reduction goals and continue to review our strategy and our role in supporting the transition to a low-carbon economy.

However, the ability to achieve our GHG reduction goals and implement our strategy is subject to uncertainties as to how climate change concerns will ultimately impact us and various factors that may be out of our control.

These uncertainties include transition risks related to laws and regulations, technology and business operations, or economic and market conditions.

In addition, there are physical risks associated with adapting to changing climate conditions and extreme weather events.

Further, assessment of the science to evaluate and limit global temperature rise continues to evolve.

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.

We could face additional pressures from customers, investors or other stakeholders to more rapidly reduce CO2 emissions on a voluntary-basis, including faster adoption of lower CO2 emitting technologies and management of excess renewable energy credits.

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 in the current Presidential Administration.

We could face additional pressures from customers, investors or other stakeholders to more rapidly reduce GHG emissions on a voluntary-basis, including faster adoption of lower GHG emitting technologies and management of excess renewable energy credits.

The pace and feasibility to fully achieve decarbonization is also contingent on the future development and full-scale deployment of emerging energy technologies and supporting infrastructure, as well as electrification of other economic sectors.

We may not be able to recover all costs for projects to reduce GHG emissions in rates if regulators determine that the pace of GHG emissions efforts or new technologies are not prudent.

The extent of the EPA’s proposed rules to regulate GHG emissions at fossil-fuel fired electric generating units and specific impacts, including state plans to implement the emissions reductions, remains uncertain.

There could also be changes by the current or future Presidential or Gubernatorial Administrations.

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

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.

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

Regulation or legislation mandating GHG 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.

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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.

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

These tax planning strategies and bonus depreciation deductions have reduced taxable income, which in turn has generated large tax credit carryforwards.

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

The IRA Act allows for the sale or transfer of eligible renewable tax credits to other taxpayers.

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

The inability to sell renewable tax credits at reasonable terms, or if renewable tax credits that we generate or sell are determined to not be eligible or eligible at a different rate, could materially impact our tax credit carryforward position or result in liability to purchasers of the tax credits.

Repeal or amendment of the IRA Act, or portions of the IRA Act, could have an adverse impact on our financial condition and results of operations.

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

If the federal or state tax rates are increased,

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we may experience adverse impacts to our financial condition and results of operations until those rates are reflected in our regulatory filings.

Our utility business currently operates wind and solar generating facilities, which generate production tax credits that are eligible to be used to reduce our federal tax obligations.

The amount of production tax credits we earn is dependent on the level of electricity output generated by our qualifying generating facilities and sold to an unrelated buyer, and the applicable tax credit rate.

Our utility business is developing battery storage facilities, which are expected to generate investment tax credits.

Investment tax credits are dependent on the tax capitalized costs of the qualifying generating facilities and the applicable tax credit rate.

If there is a disagreement on the qualifying costs or whether the facility qualifies for higher levels of investment tax credits, the amount of investment tax credits awarded may be significantly reduced, possibly adversely impacting our financial condition and results of operations.

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

Failure to meet these requirements on renewable projects that began construction after January 28, 2023 could result in a significant reduction in the amount of renewable tax credits, which could adversely impact 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 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.

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.

We have seen and anticipate a steady pace of retirements due to our aging workforce.

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 and not have enough time to adequately train employees to prepare for upcoming retirements.

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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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.

The impact of supply chain disruptions 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.

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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.

Further, increased costs due to inflation will directly and indirectly increase customer costs, which may decrease demand for energy or impact our customers’ ability to pay their bills, which could 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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Any required payments on retained liabilities, guarantees or indemnification obligations with respect to Whiting Petroleum or other past and future asset or business divestitures could adversely impact our financial condition and results of operations.

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We are dependent on the capital markets and could be negatively impacted by disruptions in the capital markets - Successful implementation of our strategy is dependent upon our ability to access the capital markets.

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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

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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.

UNRESOLVED STAFF COMMENTS

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.

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