Alliant Energy - Earnings Call - Q1 2025

Executive Summary

• Q1 2025 delivered GAAP EPS of $0.83, up 34% YoY, with results “ahead of plan” despite negative temperature impacts; ongoing FY25 EPS guidance reaffirmed at $3.15–$3.25.
• Revenue rose to $1.13B (+9.4% YoY) and operating income to $257M (+15.8% YoY); key drivers were higher revenue requirements from capital investments at IPL and WPL, tax timing, partially offset by higher depreciation and financing expense.
• Street consensus was exceeded: EPS $0.83 vs $0.71 and revenue $1.13B vs $1.095B; only one revenue estimate was available, but both were clear beats*.
• Capex plan for 2025–2028 was raised to $11.5B (from $11.0B), reflecting additional natural gas, renewables and storage to serve 2.1 GW of contracted data center load and derisking via safe harbor of 100% of renewables/storage through 2028.
• Financing update: launch of ATM program and plan for ~$1.4B new common equity in 2026–2028; post‐quarter debt actions included $600M IPL 2035 senior debentures and $500M parent 2028 convertibles, adding flexibility to fund elevated investments.

What Went Well and What Went Wrong

What Went Well

• Revenue and EPS beats driven by rate base growth and constructive outcomes; IPL/WPL rate orders contributed $0.21 EPS variance, with $0.15 from IPL and $0.06 from WPL.
• Strategic progress on data center growth: 3 ESAs totaling ~2.1 GW, accelerating load ramp via existing resources; “we now have 3 data center developments with fully executed ESAs totaling 2.1 gigawatts of demand”.
• Risk mitigation on tariffs and tax: 100% of renewables/storage capex safe‐harbored through 2028; tariff exposure ~1–2% of the $11.5B capex plan prior to further mitigation.

What Went Wrong

• Temperatures were warmer than normal, decreasing electric and gas margins by ~$0.03 EPS (vs ~$0.08 in Q1 2024); estimated operating income impact was –$9M in Q1 2025.
• Higher depreciation and financing expenses offset part of the rate base benefit; these were cited as negative variance drivers in Q1.
• Limited Street participation on revenue (one estimate) underscores visibility challenges amid evolving load/resource plans, necessitating careful consensus interpretation*.

Transcript

Operator (participant)

Thank you for holding, and welcome to Alliant Energy, First Quarter 2025 Earnings Conference Call. At this time, all answer and listen only mode. Today's conference call is being recorded, and I would now like to turn the call over to your host, Susan Gille, and Investor Relations Manager at Alliant Energy.

Susan Gille (Investor Relations Manager)

Good morning. I would like to thank all of you on the call and the webcast for joining us today. We appreciate your participation. With me here today are Lisa Barton, President and CEO, and Robert Durian, Executive Vice President and CFO. Following prepared remarks by Lisa and Robert, we will have time to take questions from the investment community. We issued a news release last night announcing Alliant Energy's first quarter financial results and reaffirmed our 2025 earnings guidance range. We also updated our capital expenditure and financing plans for years 2025 through 2028. This release, as well as earnings presentation, will be referenced during today's call and are available on the investor page of our website at www.alliantenergy.com. Before we begin, I need to remind you the remarks we make on this call and our answers to your questions include forward-looking statements.

These forward-looking statements are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters discussed in Alliant Energy's news release issued last night and in our filings with the U.S. Securities and Exchange Commission. We disclaim any obligation to update these forward-looking statements. At this point, I'll turn the call over to Lisa.

Lisa Barton (President and CEO)

Thank you, Sue. Good morning, everyone, and thank you for joining us. 2025 is off to a strong start. I'm pleased to share meaningful progress supporting both our near-term and long-term objectives, clear evidence of the strength, resilience, and adaptability of our strategy and business model. Our first quarter results delivered more than 25% of our earnings guidance midpoint, and we are positioned to achieve our 2025 earnings objectives while advancing our key strategic priorities, positioning us well for the year. Our commitment to our customers, communities, investors, and employees remains at the heart of everything we do. As I've mentioned in previous calls, we are relentlessly focused on supporting economic development and growth in our states. Today, I'm pleased to provide meaningful and exciting updates supporting our development milestones, first quarter achievements, and share details on our updated capital expenditure plans as we advance our growth strategy.

I will then turn the call over to Robert to provide additional details related to our quarterly financial performance, risk management efforts, as well as our updated financing plans and regulatory matters. Achieving scalable growth in today's complex environment is akin to solving a Rubik's Cube. It demands precision, agility, and a clear understanding of how every move influences the bigger picture. We are simultaneously solving all sides of our own Rubik's Cube, addressing customer needs, supporting economic development and growth in our states, collaborating with key stakeholders, and delivering sustainable investor returns. Let me recap our investment growth timeline over the past six months. In November, we announced two energy supply agreements with data center companies locating in the Big Cedar Industrial Center in Cedar Rapids, Iowa, adding an initial 1.1 GW of data center demand for what we refer to as the first phase at Big Cedar.

The corresponding capital plans released last November represented a 20% increase from the prior year and included the additional capacity resources needed to serve the first phase at Big Cedar and to adapt to MISO accreditation changes. We have continued our strong momentum in support of our economic development efforts this quarter by solidifying the resources needed for a second phase for one of our data center customers at Big Cedar, which is an additional 800 MW of demand, executing a new energy supply agreement with a data center customer in Beaver Dam, Wisconsin, and reaching an agreement with one of our Iowa data center customers to use existing capacity to serve them earlier, increasing our forecasted peak load in 2026 and 2027.

The Alliant Energy advantage is our commitment to help grow the economies of Iowa and Wisconsin and meet the needs of our customers by being as creative and adaptive as possible to align with their desired timelines. To summarize our recent success on this front, we now have three major data center developments with fully executed ESAs totaling 2.1 GW of demand, which represents a greater than 30% increase in our peak demand. We're accelerating our load ramp for one of the two data centers at Big Cedar using existing resources. We're pursuing additional growth opportunities, positioning ourselves and our states for meaningful and sustainable long-term growth. On slide four, we provide our updated demand projections used to develop our capital expenditure plan.

If actual demand exceeds the current estimated demand in our plan, or if we sign additional energy supply agreements, we would serve any incremental load through a combination of existing or new resources, short-term market purchases, and/or load response. To help investors and stakeholders navigate the complexity of growth announcements, we focus our reporting exclusively on customer loads supported by fully executed electric service agreements backed by substantial customer commitments to ensure our growth is highly credible and sustained. These advancements in economic development and growth have led to our CapEx update reflecting a nearly 26% increase from where we were 18 months ago, as shown on slide five. This translates into a 2024 to 2028 forecasted investment CAGR of nearly 11%, with significant energy resource investment opportunities extending beyond 2028, as profiled on slide six.

In aggregate, our four-year CapEx plan for 2025, excuse me, through 2028, increased by approximately $600 million from our November 2024 update. The updated resource plan behind the CapEx plan strikes the right balance in optimizing existing resources and extending value at existing sites, supporting reliability and affordability, utilizing short-term capacity agreements and load response to accelerate economic development, and adding new generation to grow alongside our customers in a responsible manner, allowing us to confidently scale new energy resources. Our efforts to drive community development and enhance our growth trajectory encompass data centers as well as current and prospective commercial and industrial customers. I am pleased to report that there continues to be strong interest in locating and growing in our service areas, both in Iowa and Wisconsin. Through disciplined planning and proactive execution, we have positioned our company, customers, and investors for success in an uncertain macroeconomic environment.

The capital plan update reflects proactive planning and flexibility, allowing us to lean into new natural gas investments, invest in our existing generation and distribution systems to support resiliency, reliability, and reduce risks in the face of policy uncertainty. New natural gas resources provide reliable and dispatchable capacity resources that complement our robust renewable fleet. Investments in our existing generation resources, such as our advanced gas projects in WPL and WPL's extension of the use of Edgewater and Columbia Generating Stations until the end of the decade, provide the additional reliability to meet growing demand and are responsive to the evolving MISO resource adequacy requirements. Lastly, extending the timing of some of our renewable and battery investments allows us to reduce risks related to tariff and tax policy uncertainty while also lengthening our capital expenditure plan into the future, strengthening our position to deliver financial consistency over the long term.

With the energy supply agreements executed for our three data center customers, our attention is now focused on obtaining regulatory approval of the individual customer rates, or ICRs. The IUC is currently reviewing an ICR contract filed earlier in the year for one of our data center customers in Iowa. The second Iowa ICR contract will be filed this quarter, reflecting an accelerated load ramp. Late last month, we filed an ICR for the Beaver Dam data center in Wisconsin. As we've highlighted in previous calls, we are committed to ensuring all ICRs achieve a win-win-win for existing customers, for new customers, and our share owners, which will be demonstrated in these confidential filings. New data center loads are expected to boost energy sales.

This increase in sales will help distribute fixed costs and transmission expenses across a larger customer base, contributing to more stable and manageable rates for the customers we have the privilege to serve. Alliant Energy operates in business-friendly states that are well-positioned for regional growth and economic development, and we are proud to partner with our communities to turn growth potential into real long-term impacts. Our collaborative partnership with regulators, policymakers, and local communities enables us to deliver successful outcomes. I'm proud of our team's proactive and impactful engagement, which serves as the cornerstone of our success, delivering meaningful outcomes and greater value for all our stakeholders. Alliant Energy is here to support not only the customers we currently serve, but also to ensure we are supporting the needs of future customers and enabling community growth across our service territory.

Before I turn the call over to Robert, I would like to tackle head-on questions regarding our strategy in the event the Inflation Reduction Act, or IRA, is repealed or if tax credits are scaled back. Renewable generation and energy storage tax credits have fueled economic growth and onshoring, eliminating the tax credits would unfortunately and unnecessarily increase costs for customers. Our delegations understand how valuable tax credits and transferability are to Alliant and our customers, and we believe they will advocate for a balanced, careful approach to any legislative changes. Iowa's wind resources are among the best in the country, and our customers are benefiting from those investments. We will continue to take an all-of-the-above approach in new generation resources, which includes a mix of wind, batteries, and natural gas to ensure we maintain a balanced and diverse energy resource mix.

Active management of our CapEx and resource plans means we have taken the prudent and proactive approach of safe harboring wind and energy storage projects. As a result, 100% of the renewable and energy storage CapEx in our plan is currently safe harbored through 2028. As we continue to execute our strategy, we'll continue to proactively de-risk our strategy and remain well-positioned to quickly adapt to a dynamic environment. In closing, I would like to extend my deepest gratitude to our dedicated team of employees and for their unwavering commitment to our purpose of serving customers and building stronger communities. Your hard work and dedication are the backbone of our operational success and the driving force behind our strategic progress. I will now turn the call over to Robert.

Robert Durian (Executive VP and CFO)

Thank you, Lisa. Good morning, everyone.

Yesterday, we announced first quarter 2025 earnings of $0.83 per share compared to $0.62 per share in the first quarter of 2024. Our earnings are ahead of plan despite the negative temperature impacts on electric and gas sales in the first quarter of 2025. Our quarter-over-quarter variances were mainly driven by the higher revenue requirements from capital investments at both IPL and WPL, temperature impacts on retail electric and gas sales, and the timing of income tax expense, which we'll reverse later this year. These positive drivers were partially offset by higher depreciation and financing expenses. Temperatures were warmer than normal in the first quarter of 2025, resulting in decreased electric and gas margins of $0.03 per share. In comparison, the winter temperatures in the first quarter of 2024 were some of the warmest on record, which decreased our electric and gas margins by approximately $0.08 per share.

Excluding the impacts of mild temperatures, the margins from our retail electric sales were higher than the first quarter of 2024 due to growth in the number of customers and increased use per meter across all retail customer classes at our Wisconsin utility. To assist you in modeling our quarterly earnings this year, I want to provide some additional context to the variance driver related to the timing of income tax expense. Income tax expenses are recorded each quarter based on an estimated annual effective tax rate and the proportion of full-year earnings generated each quarter. As shown on slide nine of our supplemental slides, this causes fluctuations in the amount of tax expenses quarter over quarter, but it will not have an impact on the full-year earnings. With a solid first quarter behind us, we are reaffirming our 2025 earnings guidance range of $3.15-$3.25 per share.

Our ability to consistently deliver solid financial results is supported by our efforts to provide customer value, including extending the value of existing resources, making smart investments, and controlling operating costs, all while receiving constructive regulatory outcomes. I'm proud to share how our employees are continuing their steadfast focus on creating value for our customers while managing risk. The following are some recent examples of their success. Reiterating what Lisa shared, we have completed nearly all of our planned safe harbor activities with the intention of preserving the qualification of tax credits for future energy storage and renewable projects expected to be placed into service through 2028. Our team has done a great job mitigating tariff exposure for our customers.

With minimal exposure to the batteries in our updated capital plan, as the batteries are either in our possession or in transit, and the batteries in transit are expected to be subject to only a 20% tariff. We estimate our total tariff exposure is approximately 1-2% of our $11.5 billion updated capital expenditure plan prior to further mitigation by our team. Our team also successfully sold existing capacity length available at both our utilities into the recent MISO capacity auction, resulting in meaningful benefits for our customers. We are utilizing our individual customer rate construct in both states, which allows us to capture growth from economic development activities occurring within our service territory, which will in turn absorb a portion of our fixed costs, helping mitigate costs for all customers in the future.

Turning to financing, in conjunction with our updated capital expenditure plans, we have updated our 2025 through 2028 financing plans. The anticipated financing sources for our $11.5 billion capital expenditure plan are included on slide 10. Cash from operations and anticipated proceeds from tax credit monetization make up almost 50% of our financing plan. New debt financing, net of maturities, accounts for approximately 40%, while new common equity issuances account for approximately 12% of the total funding sources for the updated plan. We plan to launch an at-the-market or ATM program this year and continue our shareholder direct plan, both of which support the new common equity issuances assumed in our plan. While our updated financing plans assume raising the new common equity radically in 2026 through 2028, we believe the ATM provides us flexibility on the timing as we continue to monitor and assess market conditions.

With this updated financing plan, we are committed to maintaining our current investment-grade credit ratings. Tax credit monetization through transferability continues to provide benefits by reducing customer costs and providing an alternative source of financing for a portion of our capital expenditure plans. Along with the rest of the utility industry, we continue to monitor developments with different legislative proposals and advocate for legislative provisions that would be beneficial for our customers. We are also taking prudent actions to protect the right to transfer tax credits through our safe harboring activities. We have disclosed the success of these activities on slide 10 of our supplemental slides, which shows a substantial portion of the tax credits included in our updated financing plan through 2028 are from projects either already in service or safe harbored prior to 2025.

We also have optionality with alternative financing sources if transferability is modified under future legislation. Alternatives include incremental financing with a balanced mix of debt and equity, as well as utilizing hybrid instruments. We would also evaluate aligning the timing of customer bill credits with the expected utilization of credits from future projects, as well as the potential use of tax equity arrangements if beneficial for our customers. Specific to our 2025 debt financing plans, during the first quarter, we extended the Alliant Energy Finance variable rate term loan agreement until 2026. The remaining debt financings are shown on slide 11 and include estimated issuances at Alliant Energy Finance or the parent and our two utilities. For all three segments, we've increased our financing needs, primarily to fund the increased 2025 investments in our updated capital plans and to increase financing flexibility in anticipation of upcoming maturities in early 2026.

At our Iowa utilities, some of the issuance will be used to refinance $300 million of debt maturing in the third quarter of this year. Finally, I'll highlight our regulatory initiatives that have been filed, as well as those regulatory filings we plan to initiate later this year. Starting in Wisconsin, WPL recently received approval from the PSCW for two customer-focused investments in our updated capital plan, including the Riverside Enhancement Project to support reliability and resiliency for Wisconsin and the Bentry Wind Refurbishment Project expected to extend tax credits for the benefit of our customers. Turning to our regulatory proceedings currently in process, WPL recently filed an electric and gas rate review for test years 2026 and 2027. The filing includes recovery of several investments that support reliability and resiliency while keeping customer value and competitive rates top of mind.

These investments include cost-effectively advancing responsible energy solutions, including solar and wind refurbishment projects, which provide zero fuel-cost energy and tax benefits, as well as investing in new energy storage resources and capacity and efficiency upgrades for existing natural gas generation to provide additional energy resources to meet growing customer demand. Finally, it includes recovery of our planned continued investments in electric and gas distribution just to support reliability and safety for our customers. Next steps in the rate review process include a discovery phase and audit by the PSCW staff and intervenors over the next few months, with a hearing anticipated in early fall and a final decision expected from the PSCW later this year. More details on the rate review, including key terms requested in this filing, can be found on slide 12.

WPL also recently requested approval of an individual customer rate for the data center plan to be built in Beaver Dam, Wisconsin. Lastly, WPL has four active dockets in progress before the PSCW involving requests for certificates of authority for customer-focused investments. We also have four active filings in progress before the Iowa Utilities Commission, including a request for an individual customer rate for one of the new data centers in Cedar Rapids, Iowa, a request for approximately 225 MW of battery storage to be located at the retired Lansing Coal Generation site and next to the Golden Plains Wind Generating Station, and a request for an approximate 100 MW Cedar River natural gas generating station, which would be located next to the existing site of the Prairie Creek Generation Station.

The expected timing of decisions from the PSCW and Iowa Utilities Commission on these pending dockets is provided on slide 13. Finally, in conjunction with our updated capital expenditure plan, we also expect to make additional regulatory filings later this year in both Iowa and Wisconsin for renewables and dispatchable resources to enhance reliability, further diversify our energy resources, and meet growing customer energy demands. We thank you for your continued support and look forward to speaking with many of you in the coming months. At this time, I'll turn the call back over to the operator to facilitate the question-and-answer session.

Operator (participant)

Thank you, Mr. Durian. At this time, the company will open up the call to questions for members of the investment community. Should you have a question, please press star followed by the number one on your touchstone phone.

You will hear a prompt that your hand has been raised. Should you risk the decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please make sure to lift your handset before pressing any keys. Your first question comes from the line of Shar Pourreza from Guggenheim Partners. Please ask your question.

Hey, guys. Good morning. It is actually James on for Shar. Starting off, I think, with slide four, is there a general timeline you could share for converting the mature opportunities to contracts? Secondly, could you just put maybe a finer point on the breakdown of how you could serve those mature opportunities between existing and new gen? What is the headroom left on your system? Thanks. Yeah.

Lisa Barton (President and CEO)

Thank you for the question.

How we have been talking about all of our economic development opportunities is that once we have signed ESAs, we're putting that information out there. In terms of what we do not yet have signed ESAs for, those are ones that we have a fairly high confidence level. We have had a number of discussions and negotiations with those folks, so we have a high level of confidence, and that's why we're sharing that. However, we are making that differentiation between those that have executed ESAs and those that do not. One of the things that we've certainly shared in the past, we have length. We have near-term length, and we're using that to be able to accelerate load growth in our territory. That's what we're doing with one of the customers in the Big Cedar facility, and we have had interest in others as well.

We're very bullish on that. As you know, it's going to be an all of the above solution. We have short-term PPAs in the plan. We'll have new developments. We'll constantly look at evaluating our existing generation in the portfolio that we currently have and looking to see if there are opportunities to get more capacity out of the existing facilities that we have.

Okay. Perfect. Then just on the tax side, I know you had a clause in the Iowa stay-out that you could go back in if policy changed significantly. Does the safe harboring work you guys laid out today mean that that's off the table right now? Thanks.

Robert Durian (Executive VP and CFO)

Yeah. Great question, James. Yeah.

As we think, for those that may not be familiar, as we entered into the rate settlement last year that provides the rate moratorium for the next five years, we did have a provision within it that allowed us to go back in for a rate case if for some reason there were any changes to any major legislation. With that said, we're really focused right now on activities to avoid the need to go back in. We're advocating for kind of provisions within the legislation that would be beneficial to our customers. As we noted, we're making great progress with the safe harbor activities. Lastly, we're really trying to accelerate the load growth we see with some of our data center customers and other customers that would help prevent the need to do that.

Our focus right now is, regardless of the outcome of the legislation, to really position us to be able to meet all of our stakeholder expectations, including shareholders, without the need to go back in.

Excellent.

Lisa Barton (President and CEO)

We do have a number of batteries that are in the plan for next year, and we're very well positioned with respect to those batteries.

Understood. Thank you.

Operator (participant)

Your next question is from the line of Nicholas Campaniello from Barclays. Please ask your question.

Lisa Barton (President and CEO)

Hi, Nick.

Nicholas Campaniello (Analyst)

Hey. Good morning, everyone. Thanks for taking my questions and thanks for all the updates. Hey, I just wanted to ask, you guys gave a lot of good disclosure. Rate base is moving higher. You're adding a little bit of equity.

Do you still see this as a 5-7% long-term EPS CAGR and any kind of comments on how you're trending in that plan now?

Robert Durian (Executive VP and CFO)

Yeah. Great question, Nick. Yeah. Right now, we continue on our long track record of consistent and predictable growth. Really, we're focused on enhancing the sustainability and longevity of those growth rates. Think of this as we're focused on cascading the growth over time really to strengthen and lengthen that growth rate. This quarter updates really demonstrate that with the increase of the investment CAGR up to 11%, while we're still retaining the ability to grow beyond the announced CapEx plan through 2028. I think we're really set up well for strong load growth and investments with elevated CapEx starting in that 2027 timeframe.

I think I'd be disappointed if we're not towards the top end of our currently stated growth rate starting in 2027.

Lisa Barton (President and CEO)

Nick, one of the things that I just want to highlight, and I talked about it briefly in the script, is what we see is the Alliant Energy Advantage. We are actively focused on building cascading waves of growth. We see ourselves as the backbone of our communities, and we are committed to fueling their success and allowing our communities to reach their economic development aspirations. We remain focused on growing at the pace of our customers. We have the regulatory constructs that we need in both jurisdictions to do that, both with the one in Iowa, with the way that is set up, as well as the cadence that we have in Wisconsin.

It really allows us to grow at the pace of our customers. Also, the fact that we do not have litigated resource planning processes, they are highly flexible. We can go in at any time to our states. That is a huge differentiator, I believe, between us and a lot of other entities out there. We also have that robust length in our queue positions, as well as near-term length, which allows us to accelerate just as we have in our Big Cedar facility in Iowa. Wrapping a bow around that, that is the Alliant Energy Advantage that we are focusing on over the long term.

Nicholas Campaniello (Analyst)

Hey, I really appreciate all those comments. That was helpful. One quick one on the transferability and tax commentary. I know you kind of talked about you would use a mix of debt equity hybrids. You could go look at using traditional tax equity.

Maybe just if you lost a dollar of transferability, how much equity do you think you'd actually have to do?

Robert Durian (Executive VP and CFO)

Yeah. I guess it's a robbery. So yeah, it's dependent upon the terms within any proposed legislation. I'd say we're cautiously optimistic as we've heard different versions of the potential legislative provisions that there's probably going to be some type of phase-out is how we would characterize it. As we think about our plan, we feel really well protected for the next few years thanks to our safe harbor activities. As I indicated in some of my prepared remarks, if you look at the amount of tax credits that we plan to monetize in the next four years, a significant majority, better than 95% of it, comes from projects that are already in service or projects that we safe harbor prior to 2025.

With that, we would not expect to need much additional financing over the next four years. If we were to need some additional financing, I would say that we would continue down our path of maintaining a really strong balance sheet. Think of that as somewhere between probably 40%-50% of any new financing needs would come through the form of equity to maintain that strong balance sheet.

Lisa Barton (President and CEO)

One thing I will draw your attention to as well. Yeah. Hi, Lisa here. Just want to draw your attention to the May letter that was put out by 12 House Republicans. Basically, in that letter that was issued yesterday, it was strongly supporting the IRA and its provisions. I will note there was very strong support from our Iowa delegation there as well.

Nicholas Campaniello (Analyst)

Certainly noted. Thank you for that.

Just on the comments on the balance sheet, I guess you kind of highlighted 13-14% at S&P, 14-15% at Moody's. Kind of where do you see yourself today against those metrics?

Robert Durian (Executive VP and CFO)

Yeah. We're in a great position right now, Nick, for 2025, for both of those towards the upper end of the S&P and squarely kind of in the middle of the Moody's range right now.

Nicholas Campaniello (Analyst)

Thank you. Have a good one. We'll see you at AGI.

Robert Durian (Executive VP and CFO)

Thanks, Nick.

Operator (participant)

Your next question is from the line of Paul Freeman from Ladenburg. Please ask your question.

Thank you very much, and congratulations on a really great quarter.

Lisa Barton (President and CEO)

Thanks, guys.

Does the ICR structure provide you with an opportunity to provide a similar type of stay-out in Wisconsin as you've achieved in Iowa?

Robert Durian (Executive VP and CFO)

Yeah.

We do not characterize our WPL kind of regulatory construct as they ask us to come in every two years for a rates case. It does not mean you have to ask for an increase when you do that. We are really working on trying to grow load, trying to reduce costs so that if we were to come in every two years, like I said, we would try and minimize the customer cost impact. I think you get a similar result as we continue to grow the business and the sales and try and reduce costs. You could still achieve what we call base rates being flat for the next five years, similar to what we are targeting in Iowa.

Great. In terms of your equity need, would you consider using junior subordinated debt in order to meet your equity requirement?

Yeah.

We're taking kind of all different options into consideration. The great thing about our financing plan is we have a lot of flexibility. As I indicated in my prepared remarks, we are launching an ATM program here in the near future. That'll provide us some flexibility as to the timing of any equity issuance. We also have flexibility when it comes to hybrids as we consider all different types of options in the future. I feel like we're really set up well for that. Yeah, junior subordinates are in the discussion. We haven't made any commitments at this point, and we'll continue to provide more updates throughout the years to kind of our thinking on that in the future.

You sort of in your regulatory discussion talk about filings in Iowa and Wisconsin for additional generation resources.

Can you give a sense in terms of in megawatts how much in each of those states you're looking to add?

Yeah. Paul, I point you to this. There's a slide within our supplemental slides that lays out what would be considered our new resource plan when it comes to natural gas, batteries, and wind. You can get a sense of the magnitude of the volume of each one of those different categories. The stuff towards the kind of earlier years of our plan expect us to be filing here in the near future. The later part of the plan would probably be maybe a couple of years down the road. We haven't identified specific megawatts, but that should give you some indication of the volumes that we're interested in.

And then last question for me, the enhancement at Riverside, what exactly does that entail?

Yeah.

Think of that as a black start facility. It helps with resiliency and reliability for the entire system in the state of Wisconsin. Those would be, call them, diesel generators, gas generators that would be effective at being able to restart the system in case of any type of blackout.

Great. Thank you so much. That's it for me.

Operator (participant)

Your next question comes from the line of Andrew Weisel from Scotiabank. Please ask your question.

Andrew Weisel (Managing Director)

Hey. Good morning, everybody.

Lisa Barton (President and CEO)

Hey, Andrew. Good morning.

Andrew Weisel (Managing Director)

If I could first elaborate on the equity question a little bit. First, would the ATM presumably be large enough to satisfy the $1.4 billion over years? Would you consider a forward or a block, perhaps? In terms of timing, would I be correct to think it might be more back-end loaded, or would you think it might be ratable 2026 through 2028?

Robert Durian (Executive VP and CFO)

Yeah. We have announced as part of our updated financing plan that we foresee the need for about $1.4 billion of new common equity through 2028. We normally raise about $25 million a year through our shareholder direct plans. That would be roughly about $100 million of that total. The remaining $1.3 billion could be in the form of an ATM over time or could be some type of forward transaction. We have a lot of flexibility with that and we will continue to evaluate different market conditions over time to determine what we best want to do there. Regarding the timing question, right now, the financing plan assumes that $1.3 billion would come in ratably from 2026 through 2028. Like I said, we have a lot of flexibility with that.

We would consider market conditions and then potentially think about modifications of the timing of that if we saw the right opportunity.

Andrew Weisel (Managing Director)

Okay. Great. That's helpful. Forgive me if I missed it, but what exactly was added to the CapEx plan? It obviously went up by $600 million, give or take. Was that more generation or wires? If it was generation, can you tell us what was the technology or technologies and the timing?

Robert Durian (Executive VP and CFO)

Yeah. The biggest component of that was on the generation side, specifically natural gas generation. Think of that as we continue to build out more load from these data center opportunities. We need capacity resources to be able to meet the peak demand of those customers. Again, back to the supplemental slide seven, we've identified 1.5 GW of new natural gas facility load through 2030.

The biggest component of that CapEx increase was associated with that natural gas generation.

Andrew Weisel (Managing Director)

Okay. Very good. Thanks so much.

Operator (participant)

Your next question is from the line of Ross Fowler from Bank of America. Please ask your question.

Good morning, guys. It's actually Renee here for Ross. I just had a quick question about the MISO capacity auction. I guess, how do you guys see that impacting consumer bills in the regulatory landscape?

Robert Durian (Executive VP and CFO)

Yeah. We're actually very well positioned. It's a great question. Given kind of the results of that auction, specifically the summer capacity prices being more elevated, we're taking advantage of that length right now and selling that excess capacity into the market. We use those proceeds to actually help our customer bills.

Unfortunately, I think some other folks may be on the other side of that where they may be short and suffering some more challenges when it comes to customer bills. We are very well positioned there. We are going to continue to try and be well positioned as we think that is a more longer-term trajectory as far as seeing higher elevated prices in the capacity market, which really supports our desire to want to continue to build new generation to support our customer demand.

Okay. Makes sense. Then just secondly, how do you guys view potential ROFR legislation in Wisconsin? I guess, what effect would that have on CapEx?

Lisa Barton (President and CEO)

Good morning. In both states, there is actually ROFR legislation. As we look at it from a Wisconsin standpoint and what ATC's investment opportunities are, they are likely stronger with a ROFR.

However, ATC, like all other transmission providers, will position itself to be competitive should a ROFR not be supported in the state. None of that is reflected in our CapEx plan, even though tranche 2.2 is outside of the window that you see here. There are a lot of projects that have been allocated to ATC that are still not in our CapEx plan because they go into those outer years. Lots of great upside.

Okay. Makes sense. All right. Thank you, guys.

Operator (participant)

Your last question is from the line of Paul Zimbardo from Jefferies. Please go ahead.

Paul Zimbardo (Managing Director)

Hi. Good morning. Thank you, team.

Lisa Barton (President and CEO)

Hi, Paul.

Paul Zimbardo (Managing Director)

Hi. First, I wanted to clarify on Nick's question a little bit on the EPS cadre and pointing to the top or near the top.

Is it correct that's reflecting kind of the current capital plan and any of the incremental opportunities that you've discussed a lot, like the mature opportunities, etc.? That would be incremental to that? Or were you thinking this is a little bit of a preview of what you could be contemplating as well?

Robert Durian (Executive VP and CFO)

Yeah. I would characterize that statement as far as being disappointed if we're not towards the top end of that range by 2027. Based on our current plan, we're going to continue to try and work on identifying further opportunities with further data center load growth and other economic development activities, which would be upside to our plan going forward.

Paul Zimbardo (Managing Director)

Okay. Excellent. That's what I thought. If I could ask a little bit more color on the tariff commentary.

I believe you said 20% tariffs on the batteries, and most of them are secured or in transit. Just could you give a little detail? Did you change the sourcing strategy? Was this kind of offsets embedded contracts? Because it is a fairly lower number than I think a lot of your peers in industry have been discussing. Good to hear.

Lisa Barton (President and CEO)

Yeah. We have worked really hard to get ahead of that. One of the things to note is still with that 20% tariff that would be imposed on those batteries, that is still the lowest cost in terms of those batteries from China are still lower cost than domestically produced. We are feeling very comfortable with where we are and our in-service states here this year.

Paul Zimbardo (Managing Director)

Okay. You said those are Chinese batteries for that 20% tariff? They are. Okay. Thank you very much, team.

Operator (participant)

Ms. Gille, if you have no further questions at this time.

Susan Gille (Investor Relations Manager)

With no more questions, this concludes our call. A replay will be available on our investor website. We thank you for your continued support of Alliant Energy, and feel free to contact me with any follow-up questions.

Operator (participant)

This concludes today's conference call. Thank you very much for your participation. You may now disconnect.