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Alliant Energy Corporation (LNT)
Q2 2018 Earnings Conference Call
August 3, 2018 10:00 am ET
Susan Gille - IR
Pat Kampling - Chairman, President and Chief Executive Officer
Robert Durian - Vice President, Chief Financial Officer and Treasurer
John Larsen - President
Nicholas Campanella - Bank of America Merrill Lynch
Andrew Weisel - Scotia Howard Weil
Previous Statements by LNT
» Alliant Energy Corporation's (LNT) CEO Pat Kampling on Q1 2018 Results - Earnings Call Transcript
» Alliant Energy Corporation's (LNT) CEO Patricia Kampling on Q4 2017 Results - Earnings Call Transcript
» Alliant Energy Corporation's (LNT) CEO Pat Kampling on Q3 2017 Results - Earnings Call Transcript
I would now like to turn the call over to your host, Susan Gille, Manager of Investor Relations at Alliant Energy.
Good morning. I would like to thank 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 and Chief Executive Officer; John Larsen, President; and Robert Durian, Senior Vice President, CFO and Treasurer as well as other members of the senior management team. Following prepared remarks by Pat, John and Robert, we will have time to take questions from the investment community.
We issued a news release last night announcing Alliant Energy's second quarter financial results and reaffirmed the consolidated 2018 earnings guidance issued in November 2017. This release as well as supplemental slides that will be referenced during today's call are available on the Investor page of our Web site 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 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 references to non-GAAP financial measures. A reconciliation between non-GAAP and GAAP measures are provided in our quarterly report on Form 10-Q, which is available on our Web site at www.alliantenergy.com.
At this point, I'll turn the call over to Pat.
Thanks Lu, and good morning and thank you for joining us.
I'm first going to give you the headlines of the quarter and then discuss a few recent events. After my remarks John will provide updates on several of our key strategic priorities. And then, Robert will provide details on our financial results and highlights of our regulatory schedule.
So, for the headlines. First, we achieved another solid quarter of performance including benefits from weather. Second, we are reaffirming our earnings guidance range and based on our year-to-date results, we are trending towards the top half of the range. Third, we announced our financing plans for 2019, which includes issuing up to $400 million of new common equity. And fourth, things are really busy here, but everything is going well.
Let me now speak to some recent events. On Thursday, July 19, an AF-3 tornado tore through Marshalltown, Iowa causing catastrophic damage to the downtown business district and many homes and businesses around it. Needless to say that most of this town's 27,000 residents with damaged homes and businesses without electric and gas service. It was a true miracle that no one was killed or seriously injured.
We were so thankful that our Marshalltown generating station operations center and training center were not damaged. So our employees were able to immediately begin their restoration efforts. But, the sheer dedication and determination of our talented teams, they replace 200 poles, strove many miles of wires and restored power to over 10,000 electric customers and released 5000 homes in under a week.
The local support of our crews has been tremendous. We greatly appreciate the patience of our customers especially as they are dealing with their own damage. We are working closely with our customers and the various agencies in Marshalltown to help the area recover as soon as possible. The total cost of our restoration efforts will not have a material impact on our third quarter results.
And last week, we announced our agreement with NextEra Energy to shorten the term for the purchase power agreement for the Duane Arnold Energy Center by five years with the new expiration date at the end of 2020. Details of this agreement can be found on Slide 2. The savings will flow back to customers and they are significant.
Starting in 2021 customers will save approximately $40 million annually which translates to a $42 per year reduction in a typical residential customers' bill. This agreement not only allows us to pass these savings on to our Iowa customers, but it also includes four new PPAs from NextEra, increasing our wind energy in Iowa. It was important to us that we replace one emissions free resource with another.
Including this additional wind, we estimate renewables will make up over 40% of our Iowa energy mix in 2021. Alliant Energy did initiate a docket with the Iowa Utilities Board requesting recovery of the one-time $110 million buyout payment to NextEra. The request includes earning a return on the payment at our weighted average cost of capital. We expect approval before year-end and based on our resource planning forecast this agreement does not increase our generation resource needs.
And the last item I want to mention is that yesterday, we launched our 2018 corporate sustainability report on our Web site. This report reaffirms our commitment to provide economical energy in a sustainable manner and also shows our alignment with United Nations Sustainable Development Goals.