Alliant Energy Corporation (LNT)

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Alliant Energy Corporation. (LNT)

Q1 2017 Earnings Conference Call

May 4, 2017 10:00 am ET


Susan Gille - Investor Relations

Pat Kampling - Chairman, President and Chief Executive Officer

Robert Durian - Vice President, CFO and Treasurer


Nick Campanella - UBS



Thank you for holding. Ladies and gentlemen, welcome to the Alliant Energy First Quarter 2017 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded. I would now like to turn the conference over to your host, Susan Gille, Manager of Investor Relations at Alliant Energy.

Susan Gille

Good morning. I would like to thank you all of you on the call and on the webcast for joining us today. We appreciate your participation. With me here today are Pat Kampling, Chairman, President and Chief Executive Officer; and Robert Durian, Vice President, CFO and Treasurer; as well as other members of the senior management team. Following prepared remarks by Pat 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 2017 earnings. This release as well as supplemental slides that will be referenced during today's call are available on the Investor page of our website at www.alliantenergy.com.

Before we begin, I need to remind you that 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 press release issued last night and in our filings with the Securities and Exchange Commission. We disclaim any obligation to update these forward-looking statements.

In addition, this presentation contains non-GAAP financial measures. A reconciliation between the non-GAAP and GAAP measures are provided in our first quarter 2017 and year end 2016 earnings release, which are available on our website at www.alliantenergy.com.

At this point, I'll turn the call over to Pat.

Pat Kampling

Good morning, and thank you for joining us. Today, I'm pleased to share with you our first quarter 2017 results and I will also share several major milestones that occurred in April. Next, Robert will provide the details on our results as well as review our regulatory schedule.

Like other utilities in the region we enjoyed a mild winter, but it did lower our first quarter results by $0.04 per share. This winter was even warmer than last year, in which we realized $0.02 per share lower earnings when compared to normal temperatures. Therefore, mild temperatures led to a negative first quarter variance from last year of $0.02 per share.

Despite the mild temperatures, we achieved solid earnings this quarter of $0.43 per share, which was the same as the first quarter of 2016. With the exception of the mild weather these results were in line with our expectations. Robert will provide more details regarding the quarter's results a bit later. And with these financial results, we reaffirm our 2017 earnings guidance range of $1.92 to $2.06 per share. Earnings growth objective remains at 5% to 7% annually through 2020 based on non-GAAP 2016 earnings per share of $1.88.

This long-term growth objective continues to be supported by the utilities' robust capital expenditure plans, modest sales growth and constructive regulatory outcomes. We achieved several milestones and advanced our strategy in early April. First, Marshalltown Generating Station began commercial operations on April 1. Second, the Franklin County Wind Farm was transferred to IPL also on April 1. And third, IPL filed an electric rate review on April 3, and interim rates went into effect on April 13.

Marshalltown was completed on time and below budget, with a full load testing heat rate of 6,610 Btu per kilowatt hour, better than the contractual guarantee, and makes it one of the most efficient units in the world. Marshalltown's ability's to quickly ramp up or ramp down energy production complements Iowa's vast wind resources and is a great addition to our energy mix. Marshalltown is expected to have 60% less carbon emissions and 90% less water withdrawals when compared to the 2005 levels of the generating units it is replacing.

Now that Marshalltown is in service and customers are realizing its benefits, its cost recovery was included in interim rates that went into effect on April 13, earning the authorized 11% ROE. Marshalltown's final costs, including AFUDC and transmission, came in at approximately $750 million, well below the approved cost cap of $920 million.

Last week, the Institute for Sustainable Infrastructure awarded IPL the Envision Platinum Award for its work on Marshalltown. This is the first Envision Platinum Award for any company in Iowa. The award recognized IPL's focus on sustainable performance and infrastructure resilience. The award was issued after a peer review process that assessed Marshalltown on 60 sustainability factors addressing a wide range of important criteria. We are very proud that our sustainability efforts were recognized by this distinguished group.

I do want to take a moment and recognize the Alliant Energy team and all the contractors that brought this project to a successful completion. It was truly a team effort. And I'm not only proud of the excellent construction and performance, but most importantly, safety performance on this project was world-class. Thank you.

In Wisconsin, we are making good progress on the foundation and underground piping for the Riverside expansion, which we are now calling the West Riverside Energy Center. We expect that West Riverside will supply energy to our customers by early 2020. Its output will be approximately 730 megawatts, and our share of the total anticipated project cost is approximately $640 million, excluding AFUDC and transmission.

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