Alliant Energy Corporation ($LNT)

Hello. Thank you for holding, and welcome to Alliant Energy's First Quarter 2026 Earnings Conference Call. Today's conference call is being recorded. I would now like to turn the call over to your host, Susan Gille, Investor Relations Manager at Alliant Energy.

Good morning, and thank you for joining Alliant Energy's First Quarter 2026 Financial Results Conference Call. Joining me today are Lisa Barton, President and Chief Executive Officer; and Robert Durian, Executive Vice President and Chief Financial Officer. Following their prepared remarks, we will have time to take questions from the investment community. Last night, we issued a news release announcing our first quarter 2026 results and reaffirmed 2026 full year earnings guidance. That release, along with our earnings presentation, will be referenced during today's call and is available on the Investors section of our website at www.alliantenergy.com. Before we begin, please note that today's remarks and responses will include forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially. Those risks are described in last night's earnings release 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 ongoing earnings per share, which is a non-GAAP financial measure. Reconciliation to GAAP results are provided in the earnings release available on our website. At this point, I will turn the call over to Lisa.

Thank you, Sue. Good morning, everyone. I appreciate you joining us today. 2026 is off to an excellent start. First quarter ongoing earnings delivered approximately 25% of the midpoint of our full year guidance despite very mild temperatures across our service territory. We remain firmly on track to achieve our 2026 earnings targets while executing on our strategic priorities. At Alliant Energy, our focus is straightforward, unlocking the potential of our customers and communities, prioritizing affordability while delivering long-term value for investors. As I have shared previously, we remain committed to driving economic development and prosperity across the states we serve. Today, I am pleased to share our progress on our 2 to 4 gigawatts of large load opportunities. In April, we executed a new 370-megawatt electric service agreement with a hyperscale customer in Iowa with a full load ramp expected by the end of 2030. To support this growth, we've entered into an agreement with a high-quality counterparty to construct a simple cycle natural gas facility. Our third quarter update will include a refreshed Iowa resource plan, reflecting any incremental load beyond the 3 gigawatts already in our plan as well as the impact of updated MISO accreditation assumptions. We expect to finance these incremental investments with a balanced mix of equity and debt to maintain a resilient financial profile. We now have 5 fully executed data center agreements representing approximately 3.4 gigawatts of contracted demand with 3 of these projects under active construction. Importantly, we have secured the generation resources needed to reliably serve this load, which represents now more than a 60% increase in our current peak demand. And looking ahead, we continue to make strong products on the 2 to 4 gigawatts of future large load opportunities we first announced 6 months ago. Our commitment has remained consistent, creating wins for existing customers immunities, a win for new customers and a win for our investors. We are strategically positioning our company in the states we serve for sustainable long-term growth while keeping customer costs as low as possible. Our approach ensures we remain a trusted partner to customers and communities by delivering reliable, affordable energy solutions that support their long-term ambitions. Evidence of this strategy in action shown through last week when we joined the QTS leadership in Cedar Rapids to welcome U.S. Secretary of Energy, Chris Wright and Iowa legislators to tour the site. This $10 billion development, the largest economic investment in Iowa's history underscores our role in enabling innovation, job creation and long-term economic diversification in the communities we serve. This is the Alliant Energy advantage, a disciplined, solutions-oriented approach to growth. We guide data center customers to low-cost transmission ready sites in our service territories. And because our more recent electric service agreements are capacity only, the investments required to serve this load are primarily energy storage and natural gas combustion turbines. This approach creates strong alignment between capital investments and revenue growth while preserving flexibility to serve future energy needs as demand for capacity and energy continues to evolve. Economic growth drives job creation expands tax base and strengthens communities. It also benefits customers by increasing load, which helps us maintain cost competitiveness for all customers. As electricity sales grow, we can spread fixed system costs over more kilowatt hours. In Iowa, our regulatory framework enables us to keep base electric rates stable through at least the end of the decade. That is at least 4 more years of no retail electric base rate reviews in Iowa while earning our authorized return through retaining tax credits and energy margins from new generation investments. A foundational principle of utility regulation is cost responsibility. At Alliant Energy, our policy is clear customers driving large incremental demand are responsible for funding the infrastructure required to serve them through individual customer rates, large users, funds, transmission interconnections, system upgrades and incremental investments, protecting affordability for all customers. In closing, I want to thank our employees their dedication and solutions-oriented execution are the foundation of our operational excellence and the driving force behind the progress we continue to make. I would also like to recognize the outstanding efforts of our field teams in restoring service following recent storm activity across our service territory. Despite the heavy storm activity, we achieved strong reliability and safety statistics through the first part of 2026, which is a testament to the quality of the work by the field organization. I will now turn the call over to Robert for details on our financial results, financing plans and regulatory activity.

Thank you, Lisa. Good morning, everyone. Yesterday, we announced solid first quarter 2026 GAAP and ongoing earnings of $0.87 and $0.82, respectively. As shown on Slide 5, our ongoing earnings year-over-year change was primarily due to higher revenue requirements and AFUDC from capital investments at our Iowa and Wisconsin utilities. These positive drivers were offset by higher operations and maintenance expenses related to new energy resources and planned maintenance at existing generating facilities as well as higher depreciation and financing costs. Temperatures in the first quarter of 2026 reduced electric and gas margins by approximately $0.04 per share compared to a reduction of $0.03 in the prior year. Excluding the impacts of temperatures, electric sales in the first quarter were essentially even year-over-year. First quarter ongoing earnings exclude a $0.05 benefit from the remeasurement of deferred tax assets, reflecting updated state income tax apportionment assumptions, driven by higher projected electric utility revenues from commercial and industrial customers, including data centers. We are reaffirming our 2026 earnings guidance with Slide 6 reflecting several of our key 2026 assumptions. Our longer-term earnings outlook remains intact. And based on our current plan, we expect our compound annual earnings growth rate across 2027 through 2029 to be 7% plus. We will continue to assess our long-term earnings growth potential as we execute our data center expansion and update our capital expenditure plans later this year. Turning to financing. As shown on Slide 7, during the first quarter of 2026, we had parent level and align energy finance maturities of $1.1 billion, and we retired these maturities with available cash and new debt issuances, including a $400 million term loan. Our remaining 2026 debt financing plans include up to $800 million of long-term issuances consisting of up to $300 million at WPL and up to $500 million at IPL. We are continuously working to capture low-cost capital for new infrastructure investments to help lower costs for our customers and have 2 positive developments at IPL in the first quarter. First, we increased the capacity of our sales of receivable program at IPL from $110 million to $180 million; and second, Senador Poor's upgraded credit rating from BBB+ to A-. As a reminder, our 4-year capital plan is funded through a balanced mix of cash from operations, including proceeds from ongoing tax credit monetization and new financings, including debt, pipe instruments, and common equity. As shown on Slide 8 of the approximately $2.4 billion of expected common equity needs over the next 4 years, we have already raised approximately $1.3 billion through forward equity agreement. These forward equity agreements take care of planned equity needs through 2027. This leaves approximately $1 billion of remaining equity to be raised through 2029, excluding equity expected to be raised under our share direct plan. A new $1 billion at-the-market program was filed during the first quarter to enable issuance of this remaining equity. Our financing plan and proactive execution to date provides flexibility to support the efficient implementation of our strategy. Turning to our regulatory matters. Our 2026 regulatory agenda remains closely aligned with our capital investment plans and individual rate applications for new large load customers as we have no active rate reviews planned in 2026, reducing regulatory uncertainty. As shown on Slide 9, we recently received 2 constructive regulatory decisions for new wind projects at our utilities. In Iowa, the Iowa Utility Commission approved the settlement for advanced ratemaking principles for up to 1 gigawatt of new wind generation at a current blended ROE of 9.8%, which will be updated each year through IPL's base rate stabilization period in Iowa. And in Wisconsin, we received approval from the Public Service Commission of Wisconsin for the 153-megawatt Ventre North wind project. We expect these wind investments will allow our utility customers to avoid significant fuel costs and generate tax credits while supporting investment in cost-effective, responsible energy resources. Looking ahead, we currently have one active Iowa docket for a 720-megawatt natural gas combustion turbine project, which was filed earlier this week and 5 active Wisconsin dockets, including the individual customer rate filing for the Meta data center in Beaver Dam and Construction Authority filings for LNG storage, additional wind and increased capacity at Riverside. We expect decisions on these matters over the next 12 months. We expect to make additional filings throughout the year to support planned customer investments. In addition, we anticipate filing individual customer rate applications with the Iowa Utility Commission related to the second QTS data center and the recent 370-megawatt of center electric supply agreement. I will now turn the call over to Lisa to provide closing remarks.

Thank you, Robert. Alliance Energy's consistent financial performance reflects our strategy to unlock the potential of customers and communities. This is what sets us apart and defines the Alliance Energy advantage, being solutions-oriented, supporting growth, driving affordability for all customers and delivering lasting value to our shareholders. Thank you for continued trust. We look forward to connecting with many of you at upcoming investor conferences. I will now turn the call back to the operator to open the line for questions.

[Operator Instructions] Your first question comes from Shar Perusa with Wells Fargo.

Hey guys, good morning. Just on the 370 megawatts ESA that was signed -- I mean, obviously, you're calling out, it provides upside to the current plan. These opportunities are starting to accrete, you have this 2 to 4 gigs out there that's very mature. It sounds like we'll get more disclosures. Are we thinking EPS disclosure, some sensitivities around the opportunities? And Lisa, do we ever get to a point where we could see a more definable EPS guidance range given that you're already at the higher end of that 7%. And visibility is improving for you?

Yes. Great question, Shahriar. So we're going to do similar to what we've said in the past is every time we have an ESA, we will be announcing that on a quarterly basis. And our third quarter earnings call and EEI, we will be providing that full update of our resource plan, which would include providing the generation necessary to support the 370 megawatts, an update on our EPS growth trajectory. So looking forward to that call.

Got it. Got it. Okay. Perfect. And then obviously, there's been a lot of noise in Wisconsin between sort of local pushback and more trims on new data center developments. Can you just talk a little bit about where your conversations are directed with potential hyperscalers? Are they still looking at Wisconsin? Or are they more focused on Iowa? I know you called out you had this a lot of role and in that is zoned industrial in Iowa, so that's attractive for a data center. Just want to get a temperature gauge on where the conversations are going between the two states.

Sure. So I mean Iowa does, we have more land mass. If you think about it in terms of our service territory, it's about twice the physical territory in Iowa and very strong transmission interconnections. We still have very strong transmission interconnections and opportunities in Wisconsin as well. But as I think we've mentioned in the past, Iowa's got almost about 75% of the communities that we touch there versus 40% in Wisconsin. We are very much looking forward and awaiting a decision by the Wisconsin Public Utilities Commission with respect to our Dam facility. And there's rhetoric that's out there that I think is spillover, quite frankly, from PJM. We are actively addressing countering that as we mentioned in our remarks, we have our customer pledge, making sure that everybody knows that they are not paying for data centers, the cost of supporting data centers. So stay tuned on all of that, but conversations do continue in Wisconsin.

Got it. Perfect. I appreciate it, Lisa. Congrats on the execution.

Your next question comes from Nicholas Campanella with Barclays.

Thanks for the update. Good morning. So it just sounds like you're going to do a 370-megawatt simple cycle for this build for the ESA that you just signed. So just what's the right kind of dollar per kilowatt cost that you're seeing for those types of investments right now?

Sure. So as we mentioned, we've entered into an agreement with a high-quality counterparty there to build it. We will be updating on the size of that. That unit will be sized according to our resource plan. And similar to what we've done in the past in Iowa, we're using a low, medium and high low growth trajectory. Obviously, we continue to have discussions with hyperscalers and we'll be refreshing all of that at EEI. We cannot disclose the cost due to confidentiality agreements, but you can expect those to be in line with what you're seeing in the marketplace today.

Okay. Okay. And then it seems like you're definitely having success in working with the current customer base, and you have visibility on the 2 to 4 gigs. You signed another 370 today. You mentioned that each time you have an ESA, you'll announce those on a quarter basis. So is this just kind of like the run rate that we should kind of expect as we get to the second quarter? And maybe you could kind of talk a little bit about like the 2 to 4 gigs, how many customers are in there? Like could we see a 1 gigawatt deal when you do the next one, for instance? Or should we continue to kind of see you put up these 300 to 500-megawatt call a deal?

Yes. SP1 So there really is no one specific answer to any of that. These represent conversations with all different size entities. What I can say about the 2% to 4% is, remember, we hold ourselves to a very high standard. These are mature opportunities where we have a higher level of confidence than maybe out there. We have made sure that they've got land control. They are in active discussions with our team. The transmission studies are either ongoing or complete. We make sure that we have a firm understanding of the load ramp and that they have a firm understanding of the load and that we've got the line of sight with respect to the timing of the transmission upgrades and the generation. So that can take a little bit of time, but they really come in small meeting and large, quite frankly, sizes.

Can I just ask one follow-up just on the 370. Is that something as it ramps into 2030 that could be increased and you can -- would that customer and do more of? And does that represent part of this 2 to 4. I'm just trying to -- or is the 370 largely just locked and loaded today and that's it.

Well, we're not going to talk really specifically about the 370. As you know, we have confidentiality agreements in place for all of this. I would just point you back to we've got these mature opportunities with a higher level of confidence in these. And the 2 to 4 is in essence made up of new entities as well as entities that might want to further expand.

Your next question comes from Paul Zimbardo with Jefferies.

Good morning, team. And just a follow-up quick on my friend, Nick's question. Just for the 370 megawatts, is there a land and kind of zoning capability for that customer to expand if they so choose to in the future? Or is that more a constrained site?

So any of that information is really theirs to share rather than ours to share. But what I can say is we are talking about Iowa. What we have mentioned in the past, I mean, we've got great access to transmission. We are not in -- other than Cedar Rapids, really large population areas. So you can make your assumptions as you wish.

Okay. Okay. And just going more generically even kind of for a demand of that size kind of with the reserve margin and kind of accreditation, just how much resources in terms of megawatts would you need to support that?

Well, that's why we're so thrilled to have that really flexible resource planning process that we have in both states, and we really see that as a strategic advantage to Alliance Energy. So what we will be doing is -- later on this year, basically filing a resource plan, it will take into account what we need in terms of reserve margins. It will take into account any capacity that we need with respect to changes in the MISO accreditation process. It will also take into account any generation needed to support additional ESAs that we may announce between now and the end of the year. So it really puts us in a very good position to be flexible and to grow at the pace of our customers because, quite frankly, that's what we have said from the very beginning. We need to make sure we've got a win-win-win, win for new customers, win for existing customers, win for investors. And that's foundational to our ability to grow at their pace.

Absolutely. That makes a lot of sense. And if I could sneak in one unrelated. Just checking, is there any update on the time line for the FERC policy for those self-funded network interconnection upgrades. And I just assume the opportunity set for yourself will be larger, assuming that goes in one direction, just given how much new generations have been at it. But just curious on the time line there, if you have one.

We are anxiously waiting as are you, but no -- no line of sight on that.

Your next question comes from Bill Appicelli with UBS.

You've mentioned a couple of times that the MISO accreditation assumption impact. I know that they're shifting to this direct loss of load framework over time here. But how does that maybe differ from what your base plan assumes? Or I would assume that -- there's sort of -- the net capacity value of the installed base would be somewhat less and so does that require more generation? Or maybe you can just sort of speak through what the potential implications are of the accreditation assumptions?

Sure. So we take this into account in terms of all of our modeling. We're certainly in a dynamic time where there's a lot of growth. So our modeling assumptions are going to have basically our load assumptions, how that's changing, what we need from a reliability standpoint, what do we need to serve other customers, any environmental changes and so forth. MISO is still working on some of that. And so we'll have a cleaner line of sight as we get closer to Q3.

And then, the other question here is just on the generation, you sort of -- I know we're getting and kind of get in front of what you're going to update in Q3. But the resource mix that you see -- I mean, is it really a sort of a full boat of capacity fixes in terms of storage and peakers? Or is it going to be -- is that going to include baseload potentially as well? Or is it more around shaving the peaks and having the capacity resources there to satisfy the MISO requirements?

Yes, that's primarily batteries and peakers. So recall that we have focused on simple cycles that allows us to basically invest later in these facilities should we need the energy resources. As you may recall, Iowa, in particular, is very steep and wind resources that provides a lot of energy. And what we like about this solution is both batteries and your simple cycles allow us to really capture that speed to market. Very fortunate to be in this region where we've got so many wind resources. That's very location specific. Not everybody can do that.

Right. And then just lastly, the CT you referenced today, what's the size of that? Is that roughly the size of the load? Or would I assume there would be some reserve margin to that?

Yes. So when -- it's basically 1.1 gigawatts.

Okay. So the CT you're talking about today is 1,100 megawatts?

Upto.

Your next question comes from Paul Fremont with Ladenberg.

Great. Congratulations on a great quarter. In terms of the 2 to 4 gigawatts. Can you give us a sense of how many potential developers are represented in that 2 to 4?

No. All we can say really is that they are very high-quality counterparties. Remember, the threshold that we have when we talk about the 2 to 4 is that we have active negotiations in place. We've got transmission studies that are either completed or ongoing and land control. So think of it as a combination of hyperscalers as well as developers.

Great. And is all of the 2 to 4 in Iowa?

No, it's not.

And can you give us like any type of a distributional breakout of what would be Wisconsin versus Iowa?

It's really fluid, Paul. So we can't. It's one of these things where it's always a moving target.

Great. And then you've given us sort of aggregate rate base. Is it fair to think about year-end '25 rate base as being sort of $6 billion Wisconsin and $11 billion Iowa?

Yes. We provided that information in the slides that we've disclosed publicly, Paul. So you should be able to see that information.

Okay. Because I mean you also provide like an aggregate 12% growth rate in rate base, but the level of investment is obviously heavily skewed to Iowa. So, is it possible to get a sense of how fast rate base is going in Iowa stand-alone and Wisconsin stand-alone?

We've also provided additional information in some of our supplemental information that we shared publicly that's got the details. We'll have Susan follow up with you to share that information and point you to the right direction there.

Great. And then last question for me. The 5% to 7% EPS growth, what should we use as the base for that -- 7% plus?

Yes, we update it every year once we complete the year. So you can use the '25 final number that we accomplished there, and then we'll just keep on updating that each year we complete the year.

It's '25 actual?

Yes.

The next question comes from Andrew Weisel with Scotiabank. Andrew?

Hi, good morning. Different question on the new CP. Are you able to share the service date? Would it be online by the end of 2030 to map the new ESA?

[indiscernible].

Okay. Great. And then while 1.1 gigawatts for new CT seems quite large. You also reminded us that you had the 720-megawatt CP going through the approval process. My question is, help us understand the thinking behind pursuing simple cycles as opposed to bigger baseload GPs with higher onetimes, especially you've had such fast growth in demand, and you've got the 2 to 4 gigawatts that are potentially coming next. Is it a question of speed or cost? And then longer term for these assets, could they be converted to CCGT if demand justifies it? And with the hyperscalers pay for those upgrades?

Yes, great question. So we are always very focused on certainly customer affordability and flexibility and making sure that we can move at the pace of our customers. And so what we have found is that these data center or customers, these hyperscalers are very much interested in speed to market. And because of the very wind-rich area, in which we operate. Just kind of that reminder, in Iowa, there's about 6 gigawatts worth of load today between Mid-American and Alliant and about 15 gigawatts of wind. So it pretty much means your energy is coming from wind, and so that's something that we can take advantage of. That's by batteries and simple cycles work really well for us. And what it also does is it allows us to -- when that energy market changes, when these data centers are interested in having that provided by us, we can also add basically the steam turbine to have the simple cycle converted into combined cycles. One data point that I just want to mention on the 1.1, basically, we've entered into a contract for up to the 1.1 that allows us to be very flexible. You're going to see all of those details in the third quarter earnings call, where it reflects everything in our resource plan. Remember that, very flexible resource planning process allows us to take into consideration a lot of different moving parts. We have a slice system approach. So we're not building one plant for a data center. It's a slice system. And so we're thinking about all of the needs that we have from an investment point.

If the 2 to 4 gigawatts were to come to fruition, should we expect more CTs for capacity and that would be more likely than CCGTs?

Yes. Yes. CTs, batteries. I mean, we've always had an all of the above approach with respect to generation. That's all a part of that resource planning process. And again, as I mentioned earlier, we're basically tying it with low, medium and high, low growth opportunities, right? So that allows us to basically be very flexible in our process.

All of the above except CCGT -- sorry, using just myself. Thank you very much. I appreciate the help there.

[Operator Instructions] Your next question comes from Steve Debris with RBC Capital Markets.

I just had a quick one. When I look at Slide 4 and it talks about the 2 to 4 gigawatts of upside load and the 370 megawatts that you just added in. Can you talk a little bit about what that does in Iowa for your ability to potentially stay out longer than the 5 years you've agreed to? Because when we look at our numbers, we think it just even in the base plan [indiscernible] before adding these 370 megawatts, you were probably pretty able to keep rates flat and potentially provide benefits to customers. And so just want to hear how that kind of continues to shape up as you add more load when we go into the middle of next decade?

Incrementally, it's going to be beneficial. When we go through the process of contracting these data center loads as well as the new generation need to support it. We're always focused on ensuring that we capture some level of margin such that we'll be able to share back with the rest of the customers, the differential between the revenue stream from those data centers and cost related to the generation. And so think of it as incrementally better, but we're not in a position right now to give you any kind of definitive time frame as far as what they might do to the current stay out.

Steve, the one thing that I would add is that this is where the load ramp is also very critical in our ability to navigate that. Again, why we're really focusing on how do we position ourselves to make sure we can move as quickly as possible.

Okay. That makes sense. And then just on the CTs or the potential CP, you talked about '31 and you talked about speed to construction. Can you just give a flavor if like a CCGT takes 4 years to build, like what's a typical CT build time?

It's about 3 to 4 years?

Your next question comes from -- my apologies, Ms. Gille, there are no further questions at this time.

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.

That concludes today's conference call. Thank you for joining. You may now disconnect.