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Regulatory Matters
 12 Months Ended
Dec. 31, 2020
Regulatory Matters [Line Items]  
Regulatory Matters REGULATORY MATTERSRegulatory Assets - Alliant Energy, IPL and WPL assess whether IPL’s and WPL’s regulatory assets are probable of future recovery by considering factors such as applicable regulations, recent orders by the applicable regulatory agencies, historical treatment of similar costs by the applicable regulatory agencies and regulatory environment changes. Based on these assessments, Alliant Energy, IPL and WPL believe the regulatory assets recognized as of December 31, 2020 are probable of future recovery. However, no assurance can be made that IPL and WPL will recover all of these regulatory assets in future rates. If future recovery of a regulatory asset ceases to be probable, the regulatory asset will be charged to expense. At December 31, regulatory assets were comprised of the following items (in millions):
Alliant EnergyIPLWPL
202020192020201920202019
Tax-related$890 $818 $843 $777 $47 $41 
Pension and OPEB costs580 524 291 263 289 261 
AROs119 112 81 76 38 36 
Assets retired early113 134 77 88 36 46 
IPL’s DAEC PPA amendment110 108 110 108 — — 
WPL’s Western Wisconsin gas distribution expansion investments55 — — — 55 — 
Derivatives26 39 13 18 13 21 
Other117 110 68 70 49 40 
$2,010 $1,845 $1,483 $1,400 $527 $445 

At December 31, 2020, IPL and WPL had $81 million and $11 million, respectively, of regulatory assets that were not earning a return. IPL’s regulatory assets that were not earning a return consisted primarily of retired analog electric meters, emission allowances, clean air compliance projects and debt redemption costs. WPL’s regulatory assets that were not earning a return consisted primarily of costs for future expansion projects and environmental-related costs. The other regulatory assets reported in the above table either earn a return or the cash has not yet been expended, in which case the assets are offset by liabilities that also do not incur a carrying cost.

Tax-related - IPL and WPL record regulatory assets for certain temporary differences (primarily related to utility property, plant and equipment at IPL) that result in a decrease in current rates charged to customers and an increase in future rates charged to customers based on the timing of income tax expense that is used to determine such rates. These temporary differences for IPL include the impacts of qualifying deductions for repairs expenditures, allocation of mixed service costs, and Iowa accelerated tax depreciation, which all contribute to lower current income tax expense during the first part of an asset’s useful life and higher current income tax expense during the latter part of an asset’s useful life. These regulatory assets will be recovered from customers in the future when these temporary differences reverse resulting in additional current income tax expense used to determine customers’ rates.

Pension and other postretirement benefits costs - The IUB, PSCW and FERC have authorized IPL and WPL to record the previously unrecognized net actuarial gains and losses, and prior service costs and credits, as regulatory assets in lieu of accumulated other comprehensive loss on the balance sheets, as these amounts are expected to be recovered in future rates. These regulatory assets will be increased or decreased as the net actuarial gains or losses, and prior service costs or credits, are subsequently amortized and recognized as a component of net periodic benefit costs. Regulatory assets are also increased or decreased as a result of the annual defined benefit plan measurement process. Pension and OPEB costs are included within the recoverable cost of service component of rates charged to IPL’s and WPL’s retail and wholesale customers, which are based upon pension and OPEB costs determined in accordance with GAAP and are calculated in accordance with IPL’s and WPL’s respective regulatory jurisdictions.

AROs - Alliant Energy, IPL and WPL believe it is probable that certain differences between expenses accrued for legal AROs related to their utility operations and expenses recovered currently in rates will be recoverable in future rates, and are deferring the differences as regulatory assets.

Assets retired early - IPL and WPL have retired various natural gas- and coal-fired EGUs, and IPL has retired certain analog electric meters. As a result, the remaining net book value of these assets was reclassified from property, plant and equipment to a regulatory asset on their respective balance sheets. Details regarding the recovery of the remaining net book value of these assets from IPL’s and WPL’s customers are as follows (dollars in millions):
EntityAssetRetirement DateRegulatory Asset Balance as of Dec. 31, 2020RecoveryRegulatory Approval
IPLSutherland Units 1 and 32017$23Return of and return on remaining net book value through 2027IUB and FERC
IPLM.L. Kapp Unit 2201821Return of and return on remaining net book value through 2029IUB and FERC
IPLAnalog electric meters201933Return of remaining net book value through 2028IUB and FERC
WPLNelson Dewey Units 1 and 2 and Edgewater Unit 3201513Return of and return on remaining net book value through 2022PSCW and FERC
WPLEdgewater Unit 4201823Return of and return on remaining net book value through 2028PSCW and FERC

IPL’s DAEC PPA Amendment - In September 2020, IPL made a buyout payment of $110 million in exchange for shortening the term of its DAEC PPA by 5 years. The payment was recorded as a reduction to “Other current liabilities” on Alliant Energy’s and IPL’s balance sheets and was included in “DAEC PPA amendment buyout payment” in Alliant Energy’s and IPL’s
cash flows used for operating activities in 2020. The buyout payment, including a return on, will be recovered from IPL’s retail and wholesale customers from 2021 through the end of 2025.

WPL’s Western Wisconsin gas distribution expansion investments - WPL made contributions in aid of construction to a third party for investments as part of its Western Wisconsin gas distribution expansion project. Pursuant to authorization by the PSCW, Alliant Energy and WPL have recorded a regulatory asset for these costs, and are authorized by the PSCW to recover these amounts from WPL’s retail gas customers in base rates beginning in 2021.

Derivatives - In accordance with IPL’s and WPL’s fuel and natural gas recovery mechanisms, prudently incurred costs from derivative instruments are recoverable from customers in the future after any losses are realized, and gains from derivative instruments are refundable to customers in the future after any gains are realized. Based on these recovery mechanisms, the changes in the fair value of derivative liabilities/assets resulted in comparable changes to regulatory assets/liabilities on the balance sheets.

Regulatory Liabilities - At December 31, regulatory liabilities were comprised of the following items (in millions):
Alliant EnergyIPLWPL
202020192020201920202019
Tax-related$732$836$331$351$401$485
Cost of removal obligations367388238257129131
Electric transmission cost recovery688839512937
WPL’s West Riverside liquidated damages38———38—
Derivatives2820251733
Other739243393053
$1,306$1,424$676$715$630$709

Tax-related regulatory liabilities reduce revenue requirement calculations utilized in IPL’s and WPL’s respective rate proceedings. Cost of removal obligations, to the extent expensed through depreciation rates, reduce rate base. A significant portion of the remaining regulatory liabilities is not used to adjust revenue requirement calculations.

Tax-related - Alliant Energy’s, IPL’s and WPL’s tax-related regulatory liabilities are primarily related to excess deferred tax benefits resulting from the remeasurement of accumulated deferred income taxes caused by Federal Tax Reform. The majority of these benefits related to accelerated depreciation are subject to tax normalization rules. These rules limit the rate at which these tax benefits are allowed to be passed on to customers.

Cost of removal obligations - Alliant Energy, IPL and WPL collect in rates future removal costs for many assets that do not have associated legal AROs. Alliant Energy, IPL and WPL record a regulatory liability for the amounts collected in rates for these future removal costs and reduce the regulatory liability for amounts spent on removal activities. Cash payments related to cost of removal obligations are included in “Other” in cash flows used for investing activities.

Electric transmission cost recovery - Refer to Note 1(g) for details of IPL’s and WPL’s electric transmission cost recovery mechanisms. In 2020, pursuant to a June 2020 IUB order, IPL issued $42 million of credits to its retail electric customers through its transmission cost rider for amounts previously collected in rates, which resulted in a reduction in regulatory liabilities and a corresponding reduction to “Electric transmission service” expense in Alliant Energy’s and IPL’s income statements during 2020.

Refer to Note 17(g) for discussion of refunds received by IPL and WPL in 2020 related to MISO transmission owner return on equity complaints, which were recorded to regulatory liabilities in 2020.

WPL’s West Riverside liquidated damages - Pursuant to terms included in the related West Riverside construction procurement contracts, WPL reached agreement with the contractor on liquidated damages in 2020. A significant portion of the liquidated damages was settled by WPL offsetting amounts owed to the contractor that were previously withheld for payment, which were non-cash investing activities. In December 2020, the PSCW authorized WPL to record the liquidated damages as a regulatory liability, which is expected to be returned to WPL’s customers as determined in future regulatory proceedings.

Derecho Windstorm - In August 2020, a derecho windstorm caused considerable damage to IPL’s electric distribution system in its service territory, and over 250,000 of its customers lost power. IPL completed its initial restoration and rebuilding efforts in August 2020 and permanent repairs to the system will continue into 2021. IPL’s current estimate of the total cost of the windstorm is approximately $140 million, and as of December 31, 2020, approximately $135 million was recorded substantially to “Property, plant and equipment, net” on Alliant Energy’s and IPL’s balance sheets. In December 2020, IPL received approval from the IUB for utilization of a regulatory account to track certain incremental costs and benefits incurred resulting from the windstorm until IPL’s next rate proceeding. Tax benefits and the incremental operation and maintenance expenses
resulting from the windstorm were deferred and recorded as a net regulatory liability of $7 million as of December 31, 2020, which is included in “Other” regulatory liabilities in the above table.

Rate Reviews -
IPL’s Retail Electric Rate Review (2020 Forward-looking Test Period) - In March 2019, IPL filed a request with the IUB to increase annual electric base rates for its Iowa retail electric customers based on a 2020 forward-looking Test Period. The key drivers for IPL’s request included recovery of capital projects, including new wind generation. IPL concurrently filed for interim retail electric rates based on 2018 historical data as adjusted for certain known and measurable changes occurring in the first quarter of 2019. An interim retail electric base rate increase of $90 million, on an annual basis, was implemented effective April 1, 2019. In October 2019, IPL reached a settlement agreement with certain intervenor groups for an annual retail electric base rate increase of $127 million. In January 2020, the IUB issued an order approving the settlement with final rates, which were effective February 26, 2020. The agreement includes both the recovery of and a return on IPL’s early retired EGUs, and the recovery of IPL’s retired analog electric meters. In addition, as discussed in Note 1(g), the net impact of certain costs and benefits resulting from IPL’s 1,000 MW expansion of wind generation in 2019 and 2020 is being recovered from its retail electric customers through the renewable energy rider. The agreement also includes IPL providing retail electric billing credits, which began in the third quarter of 2020 and will continue through June 2021, and in aggregate include $27 million of excess deferred tax benefits and $8 million from a partial refund of interim rates implemented in 2019.

IPL’s Retail Gas Rate Review (2020 Forward-looking Test Period) - In March 2019, IPL filed a request with the IUB to increase annual gas base rates for its Iowa retail gas customers based on a 2020 forward-looking Test Period. In October 2019, IPL reached a settlement agreement with intervenor groups for an annual retail gas base rate increase of $12 million. In December 2019, the IUB issued an order approving the settlement with final rates, which were effective January 10, 2020.

IPL’s Retail Electric Rate Review (2016 Test Year) - In April 2017, IPL filed a request with the IUB to increase annual electric base rates for its Iowa retail electric customers based on a 2016 historical Test Year. An interim retail electric base rate increase of $102 million, on an annual basis, was implemented effective April 13, 2017. In September 2017, IPL reached a partial, non-unanimous settlement agreement with intervenor groups for an annual retail electric base rate increase of $130 million. In February 2018, the IUB issued an order approving the settlement with final rates effective May 1, 2018.

WPL’s Retail Electric and Gas Rate Review (2019/2020 Forward-looking Test Period) - In December 2018, the PSCW issued an order approving WPL’s proposed settlement for its retail electric and gas rate review covering the 2019/2020 Test Period, which was based on a stipulated agreement between WPL and intervenor groups. Under the settlement, WPL retail electric and gas base rates did not change from then current levels through the end of 2020. In September 2020, pursuant to an August 2020 PSCW order, WPL refunded $12 million of 2019 fuel-related cost over-collections to its retail electric customers. In addition, WPL’s amortization of excess deferred taxes resulting from the remeasurement of accumulated deferred income taxes caused by Federal Tax Reform was used to offset increases in WPL’s 2020 increased revenue requirements.

WPL’s Retail Fuel-related Rate Filing (2020 Forward-looking Test Period) - In December 2019, WPL received an order from the PSCW authorizing an annual retail electric rate decrease of $29 million, or approximately 2%, effective January 1, 2020. The decrease primarily reflected a change in expected fuel-related costs in 2020.
IPL [Member]  
Regulatory Matters [Line Items]  
Regulatory Matters REGULATORY MATTERSRegulatory Assets - Alliant Energy, IPL and WPL assess whether IPL’s and WPL’s regulatory assets are probable of future recovery by considering factors such as applicable regulations, recent orders by the applicable regulatory agencies, historical treatment of similar costs by the applicable regulatory agencies and regulatory environment changes. Based on these assessments, Alliant Energy, IPL and WPL believe the regulatory assets recognized as of December 31, 2020 are probable of future recovery. However, no assurance can be made that IPL and WPL will recover all of these regulatory assets in future rates. If future recovery of a regulatory asset ceases to be probable, the regulatory asset will be charged to expense. At December 31, regulatory assets were comprised of the following items (in millions):
Alliant EnergyIPLWPL
202020192020201920202019
Tax-related$890 $818 $843 $777 $47 $41 
Pension and OPEB costs580 524 291 263 289 261 
AROs119 112 81 76 38 36 
Assets retired early113 134 77 88 36 46 
IPL’s DAEC PPA amendment110 108 110 108 — — 
WPL’s Western Wisconsin gas distribution expansion investments55 — — — 55 — 
Derivatives26 39 13 18 13 21 
Other117 110 68 70 49 40 
$2,010 $1,845 $1,483 $1,400 $527 $445 

At December 31, 2020, IPL and WPL had $81 million and $11 million, respectively, of regulatory assets that were not earning a return. IPL’s regulatory assets that were not earning a return consisted primarily of retired analog electric meters, emission allowances, clean air compliance projects and debt redemption costs. WPL’s regulatory assets that were not earning a return consisted primarily of costs for future expansion projects and environmental-related costs. The other regulatory assets reported in the above table either earn a return or the cash has not yet been expended, in which case the assets are offset by liabilities that also do not incur a carrying cost.

Tax-related - IPL and WPL record regulatory assets for certain temporary differences (primarily related to utility property, plant and equipment at IPL) that result in a decrease in current rates charged to customers and an increase in future rates charged to customers based on the timing of income tax expense that is used to determine such rates. These temporary differences for IPL include the impacts of qualifying deductions for repairs expenditures, allocation of mixed service costs, and Iowa accelerated tax depreciation, which all contribute to lower current income tax expense during the first part of an asset’s useful life and higher current income tax expense during the latter part of an asset’s useful life. These regulatory assets will be recovered from customers in the future when these temporary differences reverse resulting in additional current income tax expense used to determine customers’ rates.

Pension and other postretirement benefits costs - The IUB, PSCW and FERC have authorized IPL and WPL to record the previously unrecognized net actuarial gains and losses, and prior service costs and credits, as regulatory assets in lieu of accumulated other comprehensive loss on the balance sheets, as these amounts are expected to be recovered in future rates. These regulatory assets will be increased or decreased as the net actuarial gains or losses, and prior service costs or credits, are subsequently amortized and recognized as a component of net periodic benefit costs. Regulatory assets are also increased or decreased as a result of the annual defined benefit plan measurement process. Pension and OPEB costs are included within the recoverable cost of service component of rates charged to IPL’s and WPL’s retail and wholesale customers, which are based upon pension and OPEB costs determined in accordance with GAAP and are calculated in accordance with IPL’s and WPL’s respective regulatory jurisdictions.

AROs - Alliant Energy, IPL and WPL believe it is probable that certain differences between expenses accrued for legal AROs related to their utility operations and expenses recovered currently in rates will be recoverable in future rates, and are deferring the differences as regulatory assets.

Assets retired early - IPL and WPL have retired various natural gas- and coal-fired EGUs, and IPL has retired certain analog electric meters. As a result, the remaining net book value of these assets was reclassified from property, plant and equipment to a regulatory asset on their respective balance sheets. Details regarding the recovery of the remaining net book value of these assets from IPL’s and WPL’s customers are as follows (dollars in millions):
EntityAssetRetirement DateRegulatory Asset Balance as of Dec. 31, 2020RecoveryRegulatory Approval
IPLSutherland Units 1 and 32017$23Return of and return on remaining net book value through 2027IUB and FERC
IPLM.L. Kapp Unit 2201821Return of and return on remaining net book value through 2029IUB and FERC
IPLAnalog electric meters201933Return of remaining net book value through 2028IUB and FERC
WPLNelson Dewey Units 1 and 2 and Edgewater Unit 3201513Return of and return on remaining net book value through 2022PSCW and FERC
WPLEdgewater Unit 4201823Return of and return on remaining net book value through 2028PSCW and FERC

IPL’s DAEC PPA Amendment - In September 2020, IPL made a buyout payment of $110 million in exchange for shortening the term of its DAEC PPA by 5 years. The payment was recorded as a reduction to “Other current liabilities” on Alliant Energy’s and IPL’s balance sheets and was included in “DAEC PPA amendment buyout payment” in Alliant Energy’s and IPL’s
cash flows used for operating activities in 2020. The buyout payment, including a return on, will be recovered from IPL’s retail and wholesale customers from 2021 through the end of 2025.

WPL’s Western Wisconsin gas distribution expansion investments - WPL made contributions in aid of construction to a third party for investments as part of its Western Wisconsin gas distribution expansion project. Pursuant to authorization by the PSCW, Alliant Energy and WPL have recorded a regulatory asset for these costs, and are authorized by the PSCW to recover these amounts from WPL’s retail gas customers in base rates beginning in 2021.

Derivatives - In accordance with IPL’s and WPL’s fuel and natural gas recovery mechanisms, prudently incurred costs from derivative instruments are recoverable from customers in the future after any losses are realized, and gains from derivative instruments are refundable to customers in the future after any gains are realized. Based on these recovery mechanisms, the changes in the fair value of derivative liabilities/assets resulted in comparable changes to regulatory assets/liabilities on the balance sheets.

Regulatory Liabilities - At December 31, regulatory liabilities were comprised of the following items (in millions):
Alliant EnergyIPLWPL
202020192020201920202019
Tax-related$732$836$331$351$401$485
Cost of removal obligations367388238257129131
Electric transmission cost recovery688839512937
WPL’s West Riverside liquidated damages38———38—
Derivatives2820251733
Other739243393053
$1,306$1,424$676$715$630$709

Tax-related regulatory liabilities reduce revenue requirement calculations utilized in IPL’s and WPL’s respective rate proceedings. Cost of removal obligations, to the extent expensed through depreciation rates, reduce rate base. A significant portion of the remaining regulatory liabilities is not used to adjust revenue requirement calculations.

Tax-related - Alliant Energy’s, IPL’s and WPL’s tax-related regulatory liabilities are primarily related to excess deferred tax benefits resulting from the remeasurement of accumulated deferred income taxes caused by Federal Tax Reform. The majority of these benefits related to accelerated depreciation are subject to tax normalization rules. These rules limit the rate at which these tax benefits are allowed to be passed on to customers.

Cost of removal obligations - Alliant Energy, IPL and WPL collect in rates future removal costs for many assets that do not have associated legal AROs. Alliant Energy, IPL and WPL record a regulatory liability for the amounts collected in rates for these future removal costs and reduce the regulatory liability for amounts spent on removal activities. Cash payments related to cost of removal obligations are included in “Other” in cash flows used for investing activities.

Electric transmission cost recovery - Refer to Note 1(g) for details of IPL’s and WPL’s electric transmission cost recovery mechanisms. In 2020, pursuant to a June 2020 IUB order, IPL issued $42 million of credits to its retail electric customers through its transmission cost rider for amounts previously collected in rates, which resulted in a reduction in regulatory liabilities and a corresponding reduction to “Electric transmission service” expense in Alliant Energy’s and IPL’s income statements during 2020.

Refer to Note 17(g) for discussion of refunds received by IPL and WPL in 2020 related to MISO transmission owner return on equity complaints, which were recorded to regulatory liabilities in 2020.

WPL’s West Riverside liquidated damages - Pursuant to terms included in the related West Riverside construction procurement contracts, WPL reached agreement with the contractor on liquidated damages in 2020. A significant portion of the liquidated damages was settled by WPL offsetting amounts owed to the contractor that were previously withheld for payment, which were non-cash investing activities. In December 2020, the PSCW authorized WPL to record the liquidated damages as a regulatory liability, which is expected to be returned to WPL’s customers as determined in future regulatory proceedings.

Derecho Windstorm - In August 2020, a derecho windstorm caused considerable damage to IPL’s electric distribution system in its service territory, and over 250,000 of its customers lost power. IPL completed its initial restoration and rebuilding efforts in August 2020 and permanent repairs to the system will continue into 2021. IPL’s current estimate of the total cost of the windstorm is approximately $140 million, and as of December 31, 2020, approximately $135 million was recorded substantially to “Property, plant and equipment, net” on Alliant Energy’s and IPL’s balance sheets. In December 2020, IPL received approval from the IUB for utilization of a regulatory account to track certain incremental costs and benefits incurred resulting from the windstorm until IPL’s next rate proceeding. Tax benefits and the incremental operation and maintenance expenses
resulting from the windstorm were deferred and recorded as a net regulatory liability of $7 million as of December 31, 2020, which is included in “Other” regulatory liabilities in the above table.

Rate Reviews -
IPL’s Retail Electric Rate Review (2020 Forward-looking Test Period) - In March 2019, IPL filed a request with the IUB to increase annual electric base rates for its Iowa retail electric customers based on a 2020 forward-looking Test Period. The key drivers for IPL’s request included recovery of capital projects, including new wind generation. IPL concurrently filed for interim retail electric rates based on 2018 historical data as adjusted for certain known and measurable changes occurring in the first quarter of 2019. An interim retail electric base rate increase of $90 million, on an annual basis, was implemented effective April 1, 2019. In October 2019, IPL reached a settlement agreement with certain intervenor groups for an annual retail electric base rate increase of $127 million. In January 2020, the IUB issued an order approving the settlement with final rates, which were effective February 26, 2020. The agreement includes both the recovery of and a return on IPL’s early retired EGUs, and the recovery of IPL’s retired analog electric meters. In addition, as discussed in Note 1(g), the net impact of certain costs and benefits resulting from IPL’s 1,000 MW expansion of wind generation in 2019 and 2020 is being recovered from its retail electric customers through the renewable energy rider. The agreement also includes IPL providing retail electric billing credits, which began in the third quarter of 2020 and will continue through June 2021, and in aggregate include $27 million of excess deferred tax benefits and $8 million from a partial refund of interim rates implemented in 2019.

IPL’s Retail Gas Rate Review (2020 Forward-looking Test Period) - In March 2019, IPL filed a request with the IUB to increase annual gas base rates for its Iowa retail gas customers based on a 2020 forward-looking Test Period. In October 2019, IPL reached a settlement agreement with intervenor groups for an annual retail gas base rate increase of $12 million. In December 2019, the IUB issued an order approving the settlement with final rates, which were effective January 10, 2020.

IPL’s Retail Electric Rate Review (2016 Test Year) - In April 2017, IPL filed a request with the IUB to increase annual electric base rates for its Iowa retail electric customers based on a 2016 historical Test Year. An interim retail electric base rate increase of $102 million, on an annual basis, was implemented effective April 13, 2017. In September 2017, IPL reached a partial, non-unanimous settlement agreement with intervenor groups for an annual retail electric base rate increase of $130 million. In February 2018, the IUB issued an order approving the settlement with final rates effective May 1, 2018.

WPL’s Retail Electric and Gas Rate Review (2019/2020 Forward-looking Test Period) - In December 2018, the PSCW issued an order approving WPL’s proposed settlement for its retail electric and gas rate review covering the 2019/2020 Test Period, which was based on a stipulated agreement between WPL and intervenor groups. Under the settlement, WPL retail electric and gas base rates did not change from then current levels through the end of 2020. In September 2020, pursuant to an August 2020 PSCW order, WPL refunded $12 million of 2019 fuel-related cost over-collections to its retail electric customers. In addition, WPL’s amortization of excess deferred taxes resulting from the remeasurement of accumulated deferred income taxes caused by Federal Tax Reform was used to offset increases in WPL’s 2020 increased revenue requirements.

WPL’s Retail Fuel-related Rate Filing (2020 Forward-looking Test Period) - In December 2019, WPL received an order from the PSCW authorizing an annual retail electric rate decrease of $29 million, or approximately 2%, effective January 1, 2020. The decrease primarily reflected a change in expected fuel-related costs in 2020.
WPL [Member]  
Regulatory Matters [Line Items]  
Regulatory Matters REGULATORY MATTERSRegulatory Assets - Alliant Energy, IPL and WPL assess whether IPL’s and WPL’s regulatory assets are probable of future recovery by considering factors such as applicable regulations, recent orders by the applicable regulatory agencies, historical treatment of similar costs by the applicable regulatory agencies and regulatory environment changes. Based on these assessments, Alliant Energy, IPL and WPL believe the regulatory assets recognized as of December 31, 2020 are probable of future recovery. However, no assurance can be made that IPL and WPL will recover all of these regulatory assets in future rates. If future recovery of a regulatory asset ceases to be probable, the regulatory asset will be charged to expense. At December 31, regulatory assets were comprised of the following items (in millions):
Alliant EnergyIPLWPL
202020192020201920202019
Tax-related$890 $818 $843 $777 $47 $41 
Pension and OPEB costs580 524 291 263 289 261 
AROs119 112 81 76 38 36 
Assets retired early113 134 77 88 36 46 
IPL’s DAEC PPA amendment110 108 110 108 — — 
WPL’s Western Wisconsin gas distribution expansion investments55 — — — 55 — 
Derivatives26 39 13 18 13 21 
Other117 110 68 70 49 40 
$2,010 $1,845 $1,483 $1,400 $527 $445 

At December 31, 2020, IPL and WPL had $81 million and $11 million, respectively, of regulatory assets that were not earning a return. IPL’s regulatory assets that were not earning a return consisted primarily of retired analog electric meters, emission allowances, clean air compliance projects and debt redemption costs. WPL’s regulatory assets that were not earning a return consisted primarily of costs for future expansion projects and environmental-related costs. The other regulatory assets reported in the above table either earn a return or the cash has not yet been expended, in which case the assets are offset by liabilities that also do not incur a carrying cost.

Tax-related - IPL and WPL record regulatory assets for certain temporary differences (primarily related to utility property, plant and equipment at IPL) that result in a decrease in current rates charged to customers and an increase in future rates charged to customers based on the timing of income tax expense that is used to determine such rates. These temporary differences for IPL include the impacts of qualifying deductions for repairs expenditures, allocation of mixed service costs, and Iowa accelerated tax depreciation, which all contribute to lower current income tax expense during the first part of an asset’s useful life and higher current income tax expense during the latter part of an asset’s useful life. These regulatory assets will be recovered from customers in the future when these temporary differences reverse resulting in additional current income tax expense used to determine customers’ rates.

Pension and other postretirement benefits costs - The IUB, PSCW and FERC have authorized IPL and WPL to record the previously unrecognized net actuarial gains and losses, and prior service costs and credits, as regulatory assets in lieu of accumulated other comprehensive loss on the balance sheets, as these amounts are expected to be recovered in future rates. These regulatory assets will be increased or decreased as the net actuarial gains or losses, and prior service costs or credits, are subsequently amortized and recognized as a component of net periodic benefit costs. Regulatory assets are also increased or decreased as a result of the annual defined benefit plan measurement process. Pension and OPEB costs are included within the recoverable cost of service component of rates charged to IPL’s and WPL’s retail and wholesale customers, which are based upon pension and OPEB costs determined in accordance with GAAP and are calculated in accordance with IPL’s and WPL’s respective regulatory jurisdictions.

AROs - Alliant Energy, IPL and WPL believe it is probable that certain differences between expenses accrued for legal AROs related to their utility operations and expenses recovered currently in rates will be recoverable in future rates, and are deferring the differences as regulatory assets.

Assets retired early - IPL and WPL have retired various natural gas- and coal-fired EGUs, and IPL has retired certain analog electric meters. As a result, the remaining net book value of these assets was reclassified from property, plant and equipment to a regulatory asset on their respective balance sheets. Details regarding the recovery of the remaining net book value of these assets from IPL’s and WPL’s customers are as follows (dollars in millions):
EntityAssetRetirement DateRegulatory Asset Balance as of Dec. 31, 2020RecoveryRegulatory Approval
IPLSutherland Units 1 and 32017$23Return of and return on remaining net book value through 2027IUB and FERC
IPLM.L. Kapp Unit 2201821Return of and return on remaining net book value through 2029IUB and FERC
IPLAnalog electric meters201933Return of remaining net book value through 2028IUB and FERC
WPLNelson Dewey Units 1 and 2 and Edgewater Unit 3201513Return of and return on remaining net book value through 2022PSCW and FERC
WPLEdgewater Unit 4201823Return of and return on remaining net book value through 2028PSCW and FERC

IPL’s DAEC PPA Amendment - In September 2020, IPL made a buyout payment of $110 million in exchange for shortening the term of its DAEC PPA by 5 years. The payment was recorded as a reduction to “Other current liabilities” on Alliant Energy’s and IPL’s balance sheets and was included in “DAEC PPA amendment buyout payment” in Alliant Energy’s and IPL’s
cash flows used for operating activities in 2020. The buyout payment, including a return on, will be recovered from IPL’s retail and wholesale customers from 2021 through the end of 2025.

WPL’s Western Wisconsin gas distribution expansion investments - WPL made contributions in aid of construction to a third party for investments as part of its Western Wisconsin gas distribution expansion project. Pursuant to authorization by the PSCW, Alliant Energy and WPL have recorded a regulatory asset for these costs, and are authorized by the PSCW to recover these amounts from WPL’s retail gas customers in base rates beginning in 2021.

Derivatives - In accordance with IPL’s and WPL’s fuel and natural gas recovery mechanisms, prudently incurred costs from derivative instruments are recoverable from customers in the future after any losses are realized, and gains from derivative instruments are refundable to customers in the future after any gains are realized. Based on these recovery mechanisms, the changes in the fair value of derivative liabilities/assets resulted in comparable changes to regulatory assets/liabilities on the balance sheets.

Regulatory Liabilities - At December 31, regulatory liabilities were comprised of the following items (in millions):
Alliant EnergyIPLWPL
202020192020201920202019
Tax-related$732$836$331$351$401$485
Cost of removal obligations367388238257129131
Electric transmission cost recovery688839512937
WPL’s West Riverside liquidated damages38———38—
Derivatives2820251733
Other739243393053
$1,306$1,424$676$715$630$709

Tax-related regulatory liabilities reduce revenue requirement calculations utilized in IPL’s and WPL’s respective rate proceedings. Cost of removal obligations, to the extent expensed through depreciation rates, reduce rate base. A significant portion of the remaining regulatory liabilities is not used to adjust revenue requirement calculations.

Tax-related - Alliant Energy’s, IPL’s and WPL’s tax-related regulatory liabilities are primarily related to excess deferred tax benefits resulting from the remeasurement of accumulated deferred income taxes caused by Federal Tax Reform. The majority of these benefits related to accelerated depreciation are subject to tax normalization rules. These rules limit the rate at which these tax benefits are allowed to be passed on to customers.

Cost of removal obligations - Alliant Energy, IPL and WPL collect in rates future removal costs for many assets that do not have associated legal AROs. Alliant Energy, IPL and WPL record a regulatory liability for the amounts collected in rates for these future removal costs and reduce the regulatory liability for amounts spent on removal activities. Cash payments related to cost of removal obligations are included in “Other” in cash flows used for investing activities.

Electric transmission cost recovery - Refer to Note 1(g) for details of IPL’s and WPL’s electric transmission cost recovery mechanisms. In 2020, pursuant to a June 2020 IUB order, IPL issued $42 million of credits to its retail electric customers through its transmission cost rider for amounts previously collected in rates, which resulted in a reduction in regulatory liabilities and a corresponding reduction to “Electric transmission service” expense in Alliant Energy’s and IPL’s income statements during 2020.

Refer to Note 17(g) for discussion of refunds received by IPL and WPL in 2020 related to MISO transmission owner return on equity complaints, which were recorded to regulatory liabilities in 2020.

WPL’s West Riverside liquidated damages - Pursuant to terms included in the related West Riverside construction procurement contracts, WPL reached agreement with the contractor on liquidated damages in 2020. A significant portion of the liquidated damages was settled by WPL offsetting amounts owed to the contractor that were previously withheld for payment, which were non-cash investing activities. In December 2020, the PSCW authorized WPL to record the liquidated damages as a regulatory liability, which is expected to be returned to WPL’s customers as determined in future regulatory proceedings.

Derecho Windstorm - In August 2020, a derecho windstorm caused considerable damage to IPL’s electric distribution system in its service territory, and over 250,000 of its customers lost power. IPL completed its initial restoration and rebuilding efforts in August 2020 and permanent repairs to the system will continue into 2021. IPL’s current estimate of the total cost of the windstorm is approximately $140 million, and as of December 31, 2020, approximately $135 million was recorded substantially to “Property, plant and equipment, net” on Alliant Energy’s and IPL’s balance sheets. In December 2020, IPL received approval from the IUB for utilization of a regulatory account to track certain incremental costs and benefits incurred resulting from the windstorm until IPL’s next rate proceeding. Tax benefits and the incremental operation and maintenance expenses
resulting from the windstorm were deferred and recorded as a net regulatory liability of $7 million as of December 31, 2020, which is included in “Other” regulatory liabilities in the above table.

Rate Reviews -
IPL’s Retail Electric Rate Review (2020 Forward-looking Test Period) - In March 2019, IPL filed a request with the IUB to increase annual electric base rates for its Iowa retail electric customers based on a 2020 forward-looking Test Period. The key drivers for IPL’s request included recovery of capital projects, including new wind generation. IPL concurrently filed for interim retail electric rates based on 2018 historical data as adjusted for certain known and measurable changes occurring in the first quarter of 2019. An interim retail electric base rate increase of $90 million, on an annual basis, was implemented effective April 1, 2019. In October 2019, IPL reached a settlement agreement with certain intervenor groups for an annual retail electric base rate increase of $127 million. In January 2020, the IUB issued an order approving the settlement with final rates, which were effective February 26, 2020. The agreement includes both the recovery of and a return on IPL’s early retired EGUs, and the recovery of IPL’s retired analog electric meters. In addition, as discussed in Note 1(g), the net impact of certain costs and benefits resulting from IPL’s 1,000 MW expansion of wind generation in 2019 and 2020 is being recovered from its retail electric customers through the renewable energy rider. The agreement also includes IPL providing retail electric billing credits, which began in the third quarter of 2020 and will continue through June 2021, and in aggregate include $27 million of excess deferred tax benefits and $8 million from a partial refund of interim rates implemented in 2019.

IPL’s Retail Gas Rate Review (2020 Forward-looking Test Period) - In March 2019, IPL filed a request with the IUB to increase annual gas base rates for its Iowa retail gas customers based on a 2020 forward-looking Test Period. In October 2019, IPL reached a settlement agreement with intervenor groups for an annual retail gas base rate increase of $12 million. In December 2019, the IUB issued an order approving the settlement with final rates, which were effective January 10, 2020.

IPL’s Retail Electric Rate Review (2016 Test Year) - In April 2017, IPL filed a request with the IUB to increase annual electric base rates for its Iowa retail electric customers based on a 2016 historical Test Year. An interim retail electric base rate increase of $102 million, on an annual basis, was implemented effective April 13, 2017. In September 2017, IPL reached a partial, non-unanimous settlement agreement with intervenor groups for an annual retail electric base rate increase of $130 million. In February 2018, the IUB issued an order approving the settlement with final rates effective May 1, 2018.

WPL’s Retail Electric and Gas Rate Review (2019/2020 Forward-looking Test Period) - In December 2018, the PSCW issued an order approving WPL’s proposed settlement for its retail electric and gas rate review covering the 2019/2020 Test Period, which was based on a stipulated agreement between WPL and intervenor groups. Under the settlement, WPL retail electric and gas base rates did not change from then current levels through the end of 2020. In September 2020, pursuant to an August 2020 PSCW order, WPL refunded $12 million of 2019 fuel-related cost over-collections to its retail electric customers. In addition, WPL’s amortization of excess deferred taxes resulting from the remeasurement of accumulated deferred income taxes caused by Federal Tax Reform was used to offset increases in WPL’s 2020 increased revenue requirements.

WPL’s Retail Fuel-related Rate Filing (2020 Forward-looking Test Period) - In December 2019, WPL received an order from the PSCW authorizing an annual retail electric rate decrease of $29 million, or approximately 2%, effective January 1, 2020. The decrease primarily reflected a change in expected fuel-related costs in 2020.