What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2025-02-21 compared with 2024-02-16 · 141 added, 122 removed, 108 unchanged (71% of the section changed)

1 unchanged sentence

If any of the following risks develop into actual events, our business, financial condition or results of operations could be materially and adversely affected, and you may lose all or part of your investment.

Risks Related to Laws and Regulations

Our utility business is significantly impacted by government legislation, regulation and oversight - Our utility financial condition is influenced by how regulatory authorities, including the IUC, the PSCW and FERC, establish the rates we can charge our customers, our authorized rates of return and common equity levels, and the costs that may be recovered from customers.

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.

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, earnings above certain thresholds may be required to be refunded, recovery of capital expenditures, including those for electric distribution systems, above certain thresholds may be capped or not be allowed, rates may be temporarily frozen, such as IPL’s current retail electric rate base moratorium through September 2029, laws, rules or settlements 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 IUC, 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, the Midcontinent Independent System Operator, Inc.

(MISO) and the Department of Homeland Security Transportation Security Administration.

The impacts on our operations include:

our ability to site and construct new energy facilities, such as renewable energy, energy storage projects, or natural gas-fired electric generating units, and recover associated costs;

our ability to decommission generating facilities

Table of C o ntents

and recover related costs and the remaining carrying value of these facilities and related assets;

MISO’s resource adequacy process establishing seasonal capacity planning reserve margin and capacity accreditation requirements, as well as additional changes to capacity accreditation, such as the direct loss of load methodology, impact how and when existing and new generating facilities such as IPL’s and WPL’s additional solar generation are 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;

our ability to site, construct and recover costs for new natural gas pipelines;

our ability to recover costs to upgrade our electric and gas distribution systems;

the amount of certain sources of energy we must use, such as renewable sources;

our ability to purchase generating facilities and recover the costs associated therewith;

our ability to sell utility assets and any conditions placed upon the sale of such assets;

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

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 for our renewable energy projects;

accounting matters;

and transactions between affiliates.

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, 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.

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.

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.

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 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 current or future Presidential or Gubernatorial Administrations.

These laws and regulations have imposed, and proposed laws and regulations could impose in the future, additional costs on our utility operations and requirements that impact our ability to continue operating electric generating units.

We have incurred, and will continue to incur, capital and other expenditures to comply with these and other environmental laws and regulations.

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 environmental and social justice concerns related to renewable 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 - We have established voluntary GHG reduction goals and continue to review our strategy;

however, the ability to achieve our voluntary 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.

Research and development of technologies, innovations, and advancements may not evolve as anticipated in order to provide cost-effective alternatives to traditional energy sources.

We could suffer financial loss, reputational damage, litigation, or other negative repercussions if we are unable to meet our voluntary GHG reduction goals.

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.

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 GHGs.

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 investors may 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 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.

Table of C o ntents

Changing economic conditions and drivers to support significant load growth, including data centers, could influence electric demand.

This could affect the timing of retirement for our existing coal-fired electric generating units, and our need to add new fossil-fueled generation resources due to growing electric loads.

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 U.S.

Environmental Protection Agency’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 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 the construction of electric generating units 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.

This could result in rapid increased demand for alternative non-fossil fuel 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, which could have a material adverse impact on our financial condition and results of operations.

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 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.

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 eligible renewable tax credits to other taxpayers.

We have sold, and continue to plan to sell, a substantial amount of our eligible renewable tax credits.

The inability to sell renewable tax credits at reasonable terms, or the determination that renewable tax credits that we generate or sell are not eligible or are eligible at a different rate, could materially impact our tax credit carryforward position or result in liability to purchasers of the tax credits, which could subject us to significant litigation, liability and costs.

Repeal or amendment of the Inflation Reduction Act of 2022, or portions of the Inflation Reduction Act of 2022, could have an adverse impact on our financial condition and results of operations, including, but not limited to, a material increase in customer costs, a material decrease in cash flows from operating activities, which could impact metrics used by rating agencies, and a negative impact on the economics of future planned renewable and energy storage projects.

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, or we become subject to a corporate alternative minimum tax, 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.

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 utility business is developing energy 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.

If energy storage facilities are not completed in the anticipated timeframe or investment tax credits are not able to be generated or sold due to the repeal or amendment of the Inflation Reduction Act of 2022, we may experience adverse impacts on 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 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 Business Operations

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 economic conditions, proliferation of customer and third party-

Table of C o ntents

owned generation, technological advances that reduce the costs of renewable energy and energy 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, changes in customer usage due to rate design changes, such as time of use rates, 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.

Increased customer rates may cause decreased demand for energy as customers move to customer and third party-owned generation and implement energy efficiency measures to reduce costs.

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

Demand for electricity is greater in the summer months associated with higher air conditioning needs and winter months associated with higher heating needs.

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 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.

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

Demand for energy from high usage customers may impact our business - The ability to serve significant new commercial or industrial customers on contract rates, including data centers, may require certain regulatory approvals, and the activities and costs related to the construction, acquisition or contracts for additional generation capacity and transmission required to meet the high demands of such customers could be significant.

The inability or delays in obtaining regulatory approvals or securing additional capacity or transmission, due to supply chain risk, operational risk, or other factors, may impact our ability, or the cost, to provide energy to new customers, the contract rates may not fully recover the costs, the contracts may increase counterparty credit risk, and the costs to provide service may be higher than expected.

The contract rates for high usage customers are subject to regulatory approvals and our regulatory authorities may change the rates we can charge and the costs that can be recovered.

A high usage customer may decide not to take energy, take less energy than anticipated, or not take service on the anticipated schedule, due to changes in business needs, construction delays, technological advances that improve energy efficiency, or other factors, which may result in lower demand for energy than anticipated.

The addition of high usage customers may increase the concentration of sales, and increase revenue and earnings volatility.

These factors could negatively impact our financial condition and results of 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 information and telecommunications systems.

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.

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

This includes threats from nation-state actors (such as VOLT TYPHOON and SALT TYPHOON), which have demonstrated an increased focus on targeting critical industries, including telecommunications and energy.

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

7 unchanged sentences

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.

Table of C o ntents

In addition, we use information technology systems to collect and retain sensitive information, including personal information about our customers, shareowners and employees.

In addition, we use information technology systems to collect and retain sensitive information, including personal information about our customers, shareowners and employees, which is subject to privacy laws and regulations.

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 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.

Increased customer rates may cause decreased demand for energy as customers move to customer and third party-owned generation and implement energy efficiency measures to reduce costs.

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, 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.

These construction and upgrade projects are subject to various risks.

These risks include:

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

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

Table of C o ntents

adverse interpretation or enforcement of permit conditions;

changes in applicable laws or regulations;

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

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

delays caused by construction accidents or injuries;

15 unchanged sentences

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.

We may not be able to meet capacity requirements, including new demand from high usage customers, 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 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, pandemics and weather.

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, tariffs, changes in laws, executive orders, resource availability, long lead times, tighter credit markets, inflation, pandemics 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.

1 unchanged sentence

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.

Demand for electricity is greater in the summer months associated with higher air conditioning needs and winter months associated with higher heating needs.

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 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.

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, 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

Table of C o ntents

public or 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 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.

Increased utilization of customer- and third party-owned generation technologies could also disrupt the reliability and balance of the electricity grid.

Further, the electric transmission system in our utilities’ service territories can experience constraints, limiting the ability to transmit electricity within our service territories.

Further, the electric transmission system in our utilities’ service territories can experience constraints, limiting our ability to transmit 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.

3 unchanged sentences

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, 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.

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, 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.

1 unchanged sentence

The restoration costs may not be fully covered by insurance policies and may not be fully recovered in rates, or recovery in rates may be delayed.

Storms and natural disasters may impact our customers and the resulting reduced demand for energy could cause lower sales and revenues, which may not be replaced or recovered in rates, or rate recovery may be delayed.

Insurance coverage may not continue to be available at all, or at rates or terms similar to those presently available to us.

In addition, our insurance may not be sufficient or effective under all circumstances and against all hazards or liabilities to which we may be subject.

Any losses for which we are not fully insured or that are not covered by insurance at all could materially adversely affect our results of operations and financial position.

Storms and natural disasters may impact our customers and the resulting reduced demand for energy could cause

Table of C o ntents

lower sales and revenues, which may not be replaced or recovered in rates, or rate recovery may be delayed.

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

8 unchanged sentences

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.

If we were unable to obtain enough natural gas or coal for our electric generating units 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 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.

3 unchanged sentences

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

Table of C o ntents

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.

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

7 unchanged sentences

If our non-utility holdings do not perform at expected levels, we could experience an adverse impact on our financial condition and results of operations.

Risks Related to Laws and Regulations

Our utility business is significantly impacted by government legislation, regulation and oversight - Our utility financial condition is influenced by how regulatory authorities, including the IUB, the PSCW and FERC, establish the rates we can charge our customers, our authorized rates of return and common equity levels, and the costs that may be recovered from customers.

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.

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.

The impacts on our operations include:

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 seasonal resource adequacy process, or procure capacity whereby such costs might not be recovered in rates;