(11) COMMITMENTS AND CONTINGENCIES

(a) Capital Purchase Obligations—Alliant Energy has entered into capital purchase obligations that contain minimum future commitments related to capital expenditures for its remaining wind project. The obligations are related to capital purchase obligations under a master supply agreement executed in 2008 with Vestas for the purchase of 500 MW of wind turbine generator sets and related equipment to support wind generation plans. At Sep. 30, 2011, Resources' minimum future commitments related to these capital expenditures were $19 million.

(b) Operating Expense Purchase Obligations—Alliant Energy, IPL and WPL have entered into various commodity supply, transportation and storage contracts to meet their obligations to deliver electricity and natural gas to IPL's and WPL's utility customers. Alliant Energy, IPL and WPL also enter into other operating expense purchase obligations with various vendors for other goods and services. At Sep. 30, 2011, Alliant Energy's, IPL's and WPL's minimum future commitments related to these operating expense purchase obligations were as follows (in millions):


	Alliant Energy		IPL		WPL
Purchased power (a):
DAEC (IPL)	$	453	$	453	$	—
Kewaunee Nuclear Power Plant (Kewaunee) (WPL)		165		—		165
Other		39		12		27

		657		465		192

Natural gas		368		175		193
Coal (b)		335		104		66
SO2 emission allowances (c)		34		34		—
Other (d)		90		12		20

	$	1,484	$	790	$	471

(a)	Includes payments required by purchased power agreements (PPAs) for capacity rights and minimum quantities of MWhs required to be purchased. Excludes contracts that are considered operating leases.

(b)	Corporate Services entered into system-wide coal contracts on behalf of IPL and WPL that include minimum future commitments of $165 million that have not been directly assigned to IPL and WPL since the specific needs of each utility were not yet known as of Sep. 30, 2011.

(c)	Refer to Note 1(b) for discussion of $34 million of charges recognized by Alliant Energy and IPL in the third quarter of 2011 for IPL's forward contracts to purchase SO2 emission allowances.

(d)	Includes individual commitments incurred during the normal course of business that exceeded $1 million at Sep. 30, 2011.

(c)

Legal Proceedings—

Air Permitting Violation Claims—In September 2010, Sierra Club filed in the U.S. District Court for the Western District of Wisconsin a complaint against WPL, as owner and operator of the Nelson Dewey Generating Station (Nelson Dewey) and the Columbia Energy Center (Columbia), based on allegations that modifications were made at the facilities without complying with the Prevention of Significant Deterioration (PSD) program requirements, Title V Operating Permit requirements of the Clean Air Act (CAA) and state regulatory counterparts contained within the Wisconsin state implementation plan (SIP) designed to implement the CAA. In October 2010, WPL responded to these claims related to Nelson Dewey and Columbia by filing with the U.S. District Court an answer denying the Columbia allegations and a motion to dismiss the Nelson Dewey allegations based on statute of limitations arguments. In November 2010, WPL filed a motion to dismiss the Nelson Dewey and Columbia allegations based on lack of jurisdiction. Sierra Club has responded to the motions. WPL and Sierra Club are currently exchanging and responding to discovery requests. The trial date has been scheduled for July 2012.

In September 2010, Sierra Club filed in the U.S. District Court for the Eastern District of Wisconsin a complaint against WPL, as owner and operator of the Edgewater Generating Station (Edgewater), which contained similar allegations regarding air permitting violations at Edgewater. In the Edgewater complaint, additional allegations were made regarding violations of emission limits for visible emissions. In February 2011, WPL responded to these claims related to Edgewater by filing with the U.S. District Court an answer denying the allegations and a motion to dismiss the allegations based on lack of jurisdiction. The court granted a stay and scheduled a status conference for Dec. 2, 2011. No trial date or scheduling order has yet been set in this case.

In December 2009, the EPA sent a Notice of Violation (NOV) to WPL as an owner and the operator of Edgewater, Nelson Dewey and Columbia. The NOV alleges that the owners failed to comply with appropriate pre-construction review and permitting requirements and as a result violated the PSD program requirements, Title V Operating Permit requirements of the CAA and the Wisconsin SIP.

In response to similar EPA CAA enforcement initiatives, certain utilities have elected to settle with the EPA, while others have elected to litigate. If the EPA and/or Sierra Club successfully prove their claims that projects completed in the past at Edgewater, Nelson Dewey and Columbia required either a state or federal CAA permit, WPL may, under the applicable statutes, be required to pay civil penalties in amounts of up to $37,500 per day for each violation and/or complete actions for injunctive relief. Payment of fines and/or injunctive relief could be included in a settlement outcome. Injunctive relief contained in settlements or court-ordered remedies for other utilities required the installation of pollution control technology, changed operating conditions including use of alternative fuels other than coal, caps for emissions and limitations on generation including retirement of generating units, and other beneficial environmental projects. If similar remedies are required for final resolution of these matters at Edgewater, Nelson Dewey and Columbia, Alliant Energy and WPL would incur additional capital and operating expenditures. Alliant Energy and WPL are currently reviewing the allegations and are unable to predict the impact of the allegations on their financial condition or results of operations, but believe that an adverse outcome could be significant. WPL and the other owners of Edgewater and Columbia are exploring settlement options while simultaneously defending against these allegations. Alliant Energy and WPL believe the projects at Edgewater, Nelson Dewey and Columbia were routine or not projected to increase emissions and therefore did not violate the permitting requirements of the CAA.

Alliant Energy and WPL are not able to estimate the possible loss or range of possible loss related to these air permit violation claims given the various litigation and settlement scenarios being pursued to resolve this contingency as well as uncertainty regarding which, if any, allegations will be determined to be violations and the nature and cost of any fines and injunctive relief that could be required to resolve any violations. Alliant Energy and WPL do not currently believe any losses from these air permitting violation claims are both probable and reasonably estimated, and therefore have not recognized any related loss contingency amounts as of Sep. 30, 2011.

Alliant Energy Cash Balance Pension Plan (Plan)—In February 2008, a class action lawsuit was filed against the Plan in the U.S. District Court for the Western District of Wisconsin (Court). The complaint alleges that certain Plan participants who received distributions prior to their normal retirement age did not receive the full benefit to which they were entitled in violation of ERISA because the Plan applied an improper interest crediting rate to project the cash balance account to their normal retirement age. These Plan participants are individuals who, prior to normal retirement age, received a cash balance lump sum or an annuity distribution, or received any form of distribution calculated under the Plan's prior formula after that benefit was determined to be more valuable than their benefit calculated under the Plan's cash balance formula. The Court certified two subclasses of plaintiffs that in aggregate include all persons vested or partially vested in the Plan who received these distributions from Jan. 1, 1998 to Aug. 17, 2006 including: 1) persons who received distributions from Jan. 1, 1998 through Feb. 28, 2002; and 2) persons who received distributions from March 1, 2002 to Aug. 17, 2006.

In June 2010, the Court issued an opinion and order that granted the plaintiffs' motion for summary judgment on liability in the lawsuit and decided with respect to damages that prejudgment interest on damages will be allowed. In December 2010, the Court issued an opinion and order that decided the interest crediting rate that the Plan used to project the cash balance accounts of the plaintiffs during the class period should have been 8.2% and that a pre-retirement mortality discount will not apply to the damages calculation. In March 2011, the Court issued an opinion and order that prejudgment interest on damages will be calculated using the average prime rate, compounded annually, from the date that the Plan failed to make the total required payment to a particular participant through the date of the final judgment (which has not yet been issued). In September 2011, plaintiffs filed a motion for leave to file a supplemental complaint to assert that the amendment made in the second quarter of 2011 to conform with the IRS determination letter (described below) was an additional ERISA violation. The Plan is opposing the leave to file this motion. The parties are currently in the process of calculating damages owed to class members, have presented additional evidence to the Court and have been engaging in additional briefing on damages. The Plan is contesting the Court's adverse decisions on the statute of limitations in a motion for reconsideration of a prior statute of limitations ruling, in light of a recent ruling by the Court of Appeals for the Seventh Circuit in a similar case. The Plan may appeal the final judgment to the Seventh Circuit Court of Appeals.

Based on opinions and orders issued by the Court to date, the likely outcome of motions pending before the Court, the $10.2 million of additional IRS-related offset benefits expected to be paid by the Plan in the second half of 2011, and the recent ruling by the Court of Appeals for the Seventh Circuit in a similar case, the Plan currently estimates that the final judgment of damages by the Court after offsetting the additional benefits paid to participants by the Plan, may be approximately $6 million, which does not include any award for plaintiffs' attorney's fees or costs. Alliant Energy, IPL and WPL have not recognized any potential liability for final judgment of damages from the lawsuit while this matter is being contested. Alliant Energy, IPL and WPL are currently unable to predict the final outcome of the class action lawsuit or the ultimate impact on their financial condition or results of operations but believe an adverse outcome could have a material effect on their retirement plan funding and expense.

The interest crediting rate used to project the cash balance account to participants' normal retirement age has also been considered by the IRS as part of its review of Alliant Energy's request for a favorable determination letter with respect to the tax-qualified status of the Plan. Alliant Energy reached an agreement with the IRS, which resulted in a favorable determination letter for the Plan during the first quarter of 2011. The agreement with the IRS required Alliant Energy to amend the Plan in the second quarter of 2011 resulting in $10.2 million of aggregate additional benefits expected to be paid to certain former participants in the Plan in the second half of 2011. The $10.2 million of aggregate payments are an offset against any final judgment of damages by the Court in the case discussed above, in whole or in part, depending on the scope of the final judgment. Refer to Note 5(a) for discussion of the additional benefits costs recognized by Alliant Energy, IPL and WPL during the three and nine months ended Sep. 30, 2011 related to the $10.2 million of benefit payments.

RMT Contract Dispute—In September 2011, RMT filed a lawsuit in the U.S. District Court for the Western District of Wisconsin alleging, among other things, breach of contract against Cable System Installation (CSI), a subcontractor to RMT on several solar projects in New Jersey. The complaint alleges that CSI breached its contract with RMT by failing to complete the work, by failing to complete the work in a timely manner, by failing to perform work according to the contract, for abandonment of work, and for other related claims. RMT incurred, and continues to incur, additional costs to replace CSI and to complete CSI's work with alternative subcontractors, may incur liquidated damages assessed by the project owners due to project delays, and had liens filed and may have additional liens filed by CSI's subcontractors that CSI has not paid. Due to the increased costs RMT has incurred and expects to incur related to these solar projects, RMT recorded $20 million of additional charges in "Non-regulated operation and maintenance" in Alliant Energy's Condensed Consolidated Statements of Income in the third quarter of 2011. The lawsuit seeks to recover all costs incurred by RMT as a result of the breaches of contract by CSI. RMT currently expects to engage CSI in mediation. RMT has posted bonds of $7 million to discharge the liens filed by CSI's subcontractors against the project sites. Alliant Energy is currently unable to predict the ultimate outcome of this lawsuit and related matters; however, it is not anticipated to have a material impact on its financial condition. Alliant Energy has not recognized any potential benefits from the lawsuit as of Sep. 30, 2011.

(d) Guarantees and Indemnifications—Alliant Energy provided indemnifications associated with various sales of its non-regulated businesses/assets for losses resulting from potential breach of the representations and warranties made by Alliant Energy on the sale dates and for the breach of its obligations under the sale agreements. Alliant Energy believes the likelihood of having to make any material cash payments under these indemnifications is remote. Alliant Energy recorded liabilities of $1 million related to these indemnifications as of Sep. 30, 2011. The terms of the indemnifications provided by Alliant Energy at Sep. 30, 2011 for the various sales were generally as follows (in millions):


Businesses/Assets Sold	Disposal Date	Maximum Limit			Expiration Date

New Zealand	Fourth quarter of 2006	$	159	(a)	March 2012

Mexico	Second quarter of 2007		20		June 2012

(a)	Based on exchange rate at Sep. 30, 2011

Alliant Energy also continues to guarantee the abandonment obligations of Whiting Petroleum Corporation under the Point Arguello partnership agreements. The guarantee does not include a maximum limit. As of Sep. 30, 2011, the present value of the abandonment obligations is estimated at $32 million. Alliant Energy believes that no payments will be made under this guarantee.

(e) Environmental Matters—

Manufactured gas plant (MGP) Sites—IPL and WPL have current or previous ownership interests in 40 and 14 sites, respectively, previously associated with the production of gas for which they may be liable for investigation, remediation and monitoring costs. IPL and WPL have received letters from state environmental agencies requiring no further remedial action at ten and nine of these sites, respectively. Additionally, IPL has met state environmental agency expectations at three additional sites requiring no further action for soil remediation. IPL and WPL are working pursuant to the requirements of various federal and state agencies to investigate, mitigate, prevent and remediate, where necessary, the environmental impacts to property, including natural resources, at and around the sites in order to protect public health and the environment.

Alliant Energy, IPL and WPL record environmental liabilities related to these MGP sites based upon periodic studies. Such amounts are based on the best current estimate of the remaining amount to be incurred for investigation, remediation and monitoring costs for those sites where the investigation process has been or is substantially completed, and the minimum of the estimated cost range for those sites where the investigation is in its earlier stages. There are inherent uncertainties associated with the estimated remaining costs for MGP projects primarily due to unknown site conditions and potential changes in regulatory agency requirements. It is possible that future cost estimates will be greater than current estimates as the investigation process proceeds and as additional facts become known. The amounts recognized as liabilities are reduced for expenditures incurred and are adjusted as further information develops or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted to their fair value. Management currently estimates the range of remaining costs to be incurred for the investigation, remediation and monitoring of Alliant Energy's sites to be $20 million ($16 million for IPL and $4 million for WPL) to $45 million ($40 million for IPL and $5 million for WPL). At Sep. 30, 2011, Alliant Energy, IPL and WPL recorded $34 million, $29 million and $5 million, respectively, in current and non-current environmental liabilities for their remaining costs to be incurred for these MGP sites.

Other Environmental Contingencies—In addition to the environmental liabilities discussed above, Alliant Energy, IPL and WPL are also monitoring various environmental regulations and requirements that may have a significant impact on their future operations. Given uncertainties regarding the outcome, timing and compliance plans for these environmental matters, Alliant Energy, IPL and WPL are currently unable to determine the complete financial impact of these matters but do believe that future capital investments and/or modifications to their electric generating facilities to comply with these matters could be significant. Specific current, proposed or potential environmental matters that may require significant future expenditures by Alliant Energy, IPL and WPL include, among others: CSAPR, Clean Air Visibility Rule, Utility Maximum Achievable Control Technology (MACT) Rule, Wisconsin State Mercury Rule, Wisconsin RACT Rule, Ozone National Ambient Air Quality Standards (NAAQS) Rule, Fine Particle NAAQS Rule, Nitrogen Dioxide NAAQS Rule, SO2 NAAQS Rule, Industrial Boiler and Process Heater MACT Rule, Federal Clean Water Act including Section 316(b), Wisconsin State Thermal Rule, Hydroelectric Fish Passage Devices, Coal Combustion Residuals, Polychlorinated Biphenyls, and various legislation and EPA regulations to monitor and regulate the emission of greenhouse gas (GHG) including the EPA New Source Performance Standard for GHG Emissions from Electric Utilities and the EPA GHG Tailoring Rule.

Air Quality—

CSAPR (formerly known as the Clear Air Transport Rule (CATR)) requires SO2 and NOx emissions reductions from IPL's and WPL's fossil-fueled EGUs with greater than 25 MW of capacity located in Iowa, Minnesota and Wisconsin. Existing CAIR compliance requirements remain effective through 2011, and then are replaced with CSAPR compliance requirements beginning in 2012.

Ozone NAAQS Rule is expected to reduce the primary standard to a level of 0.75 parts per million (ppm). In October 2011, the EPA withdrew its January 2010 ozone NAAQS proposal to reduce the primary standard for eight-hour ozone to a level within the range of 0.06 to 0.07 ppm from further rulemaking review until 2013. The schedule for compliance with the Ozone NAAQS Rule has not yet been established.

Commitments And Contingencies

(11) COMMITMENTS AND CONTINGENCIES

(a) Capital Purchase Obligations—Alliant Energy has entered into capital purchase obligations that contain minimum future commitments related to capital expenditures for its remaining wind project. The obligations are related to capital purchase obligations under a master supply agreement executed in 2008 with Vestas for the purchase of 500 MW of wind turbine generator sets and related equipment to support wind generation plans. At Sep. 30, 2011, Resources' minimum future commitments related to these capital expenditures were $19 million.

(b) Operating Expense Purchase Obligations—Alliant Energy, IPL and WPL have entered into various commodity supply, transportation and storage contracts to meet their obligations to deliver electricity and natural gas to IPL's and WPL's utility customers. Alliant Energy, IPL and WPL also enter into other operating expense purchase obligations with various vendors for other goods and services. At Sep. 30, 2011, Alliant Energy's, IPL's and WPL's minimum future commitments related to these operating expense purchase obligations were as follows (in millions):


	Alliant Energy		IPL		WPL
Purchased power (a):
DAEC (IPL)	$	453	$	453	$	—
Kewaunee Nuclear Power Plant (Kewaunee) (WPL)		165		—		165
Other		39		12		27

		657		465		192

Natural gas		368		175		193
Coal (b)		335		104		66
SO2 emission allowances (c)		34		34		—
Other (d)		90		12		20

	$	1,484	$	790	$	471

(a)	Includes payments required by purchased power agreements (PPAs) for capacity rights and minimum quantities of MWhs required to be purchased. Excludes contracts that are considered operating leases.

(b)	Corporate Services entered into system-wide coal contracts on behalf of IPL and WPL that include minimum future commitments of $165 million that have not been directly assigned to IPL and WPL since the specific needs of each utility were not yet known as of Sep. 30, 2011.

(c)	Refer to Note 1(b) for discussion of $34 million of charges recognized by Alliant Energy and IPL in the third quarter of 2011 for IPL's forward contracts to purchase SO2 emission allowances.

(d)	Includes individual commitments incurred during the normal course of business that exceeded $1 million at Sep. 30, 2011.