LEASES

(a) Operating Leases - Alliant Energy, IPL and WPL have entered into various agreements related to property, plant and equipment rights that are accounted for as operating leases. Historically, Alliant Energy’s and WPL’s most significant operating lease related to the Riverside PPA, which contained fixed rental payments related to capacity and contingent rental payments related to the energy portion (actual MWhs) of the PPA. Costs associated with the Riverside PPA were included in “Electric production fuel and energy purchases” and “Purchased electric capacity” in Alliant Energy’s and WPL’s Consolidated Statements of Income based on monthly payments for the Riverside PPA. In December 2012, WPL purchased Riverside, thereby terminating the Riverside PPA. Rental expenses associated with operating leases were as follows (in millions):



	Alliant Energy						IPL						WPL
	2013		2012		2011		2013		2012		2011		2013		2012		2011
Operating lease rental expenses (excluding contingent rentals)		$9		$69		$70		$4		$4		$4		$5		$64		$63
Contingent rentals (primarily related to Riverside PPA)	—		6		5		—		—		1		—		5		4
		$9		$75		$75		$4		$4		$5		$5		$69		$67

At December 31, 2013, future minimum operating lease payments, excluding contingent rentals, were as follows (in millions):



	2014		2015		2016		2017		2018		Thereafter		Total
Alliant Energy		$10		$9		$3		$3		$2		$22		$49
IPL	4		3		2		2		1		15		27
WPL	6		5		1		1		—		—		13

Leases

LEASES

(a) Operating Leases - Alliant Energy, IPL and WPL have entered into various agreements related to property, plant and equipment rights that are accounted for as operating leases. Historically, Alliant Energy’s and WPL’s most significant operating lease related to the Riverside PPA, which contained fixed rental payments related to capacity and contingent rental payments related to the energy portion (actual MWhs) of the PPA. Costs associated with the Riverside PPA were included in “Electric production fuel and energy purchases” and “Purchased electric capacity” in Alliant Energy’s and WPL’s Consolidated Statements of Income based on monthly payments for the Riverside PPA. In December 2012, WPL purchased Riverside, thereby terminating the Riverside PPA. Rental expenses associated with operating leases were as follows (in millions):



	Alliant Energy						IPL						WPL
	2013		2012		2011		2013		2012		2011		2013		2012		2011
Operating lease rental expenses (excluding contingent rentals)		$9		$69		$70		$4		$4		$4		$5		$64		$63
Contingent rentals (primarily related to Riverside PPA)	—		6		5		—		—		1		—		5		4
		$9		$75		$75		$4		$4		$5		$5		$69		$67

At December 31, 2013, future minimum operating lease payments, excluding contingent rentals, were as follows (in millions):



	2014		2015		2016		2017		2018		Thereafter		Total
Alliant Energy		$10		$9		$3		$3		$2		$22		$49
IPL	4		3		2		2		1		15		27
WPL	6		5		1		1		—		—		13

Leases

LEASES

(a) Operating Leases - Alliant Energy, IPL and WPL have entered into various agreements related to property, plant and equipment rights that are accounted for as operating leases. Historically, Alliant Energy’s and WPL’s most significant operating lease related to the Riverside PPA, which contained fixed rental payments related to capacity and contingent rental payments related to the energy portion (actual MWhs) of the PPA. Costs associated with the Riverside PPA were included in “Electric production fuel and energy purchases” and “Purchased electric capacity” in Alliant Energy’s and WPL’s Consolidated Statements of Income based on monthly payments for the Riverside PPA. In December 2012, WPL purchased Riverside, thereby terminating the Riverside PPA. Rental expenses associated with operating leases were as follows (in millions):



	Alliant Energy						IPL						WPL
	2013		2012		2011		2013		2012		2011		2013		2012		2011
Operating lease rental expenses (excluding contingent rentals)		$9		$69		$70		$4		$4		$4		$5		$64		$63
Contingent rentals (primarily related to Riverside PPA)	—		6		5		—		—		1		—		5		4
		$9		$75		$75		$4		$4		$5		$5		$69		$67

At December 31, 2013, future minimum operating lease payments, excluding contingent rentals, were as follows (in millions):



	2014		2015		2016		2017		2018		Thereafter		Total
Alliant Energy		$10		$9		$3		$3		$2		$22		$49
IPL	4		3		2		2		1		15		27
WPL	6		5		1		1		—		—		13

(b) Capital Leases -

WPL - In 2005, WPL entered into a 20-year agreement with Resources’ Non-regulated Generation business to lease Sheboygan Falls, with an option for two lease renewal periods thereafter. The lease became effective in 2005 when Sheboygan Falls began commercial operation. WPL is responsible for the operation of Sheboygan Falls and has exclusive rights to its output. In 2005, the PSCW approved this affiliated lease agreement with initial monthly lease payments of approximately $1.3 million. The lease payments were based on a 50% debt to capital ratio, a return on equity of 10.9%, a cost of debt based on the cost of senior notes issued by Resources’ Non-regulated Generation business in 2005 and certain costs incurred to construct the facility. In accordance with its order approving the lease agreement, the PSCW reserved the right to review the capital structure, return on equity and cost of debt every five years from the date of the order. No revisions to the lease have been made since its inception. The capital lease asset is amortized using the straight-line method over the 20-year lease term. Since the inception of the lease in 2005, WPL’s retail and wholesale rates have included recovery of the monthly Sheboygan Falls lease payments. Sheboygan Falls lease expenses were included in WPL’s Consolidated Statements of Income as follows (in millions):



	2013		2012		2011
Interest expense		$10.9		$11.3		$11.7
Depreciation and amortization	6.2		6.2		6.2
		$17.1		$17.5		$17.9

At December 31, 2013, WPL’s estimated future minimum capital lease payments for Sheboygan Falls were as follows (in millions):



	2014	2015	2016	2017	2018	Thereafter	Total	Less: amount representing interest	Present value of minimum capital lease payments
Sheboygan Falls	$15	$15	$15	$15	$15	$98	$173	$74	$99