(12) DERIVATIVE INSTRUMENTS

Commodity and Foreign Exchange Derivatives -

Purpose - Alliant Energy, IPL and WPL periodically use derivative instruments for risk management purposes to mitigate exposures to fluctuations in certain commodity prices, transmission congestion costs and currency exchange rates. Alliant Energy's, IPL's and WPL's derivative instruments as of Dec. 31, 2011 and 2010 were not designated as hedging instruments. IPL's and WPL's derivative instruments as of Dec. 31, 2011 and 2010 included electric physical forward purchase contracts and swap contracts to mitigate pricing volatility for the electricity purchased to supply to their customers; electric physical forward sale contracts to offset long positions created by reductions in electricity demand forecasts; natural gas swap contracts to mitigate pricing volatility for the fuel used to supply to the natural gas-fired electric generating facilities they operate; natural gas options to mitigate price increases during periods of high demand or lack of supply; FTRs acquired to manage transmission congestion costs; natural gas physical forward purchase contracts to mitigate pricing volatility for natural gas supplied to their retail customers; natural gas physical forward purchase and sale contracts to optimize the value of natural gas pipeline capacity; and embedded foreign currency derivatives related to Euro-denominated payment terms included in the wind turbine supply contract with Vestas.

Notional Amounts - As of Dec. 31, 2011, Alliant Energy, IPL and WPL had notional amounts related to outstanding swap contracts, option contracts, physical forward contracts and FTRs that were accounted for as commodity derivative instruments as follows (units in thousands):


	2012		2013		2014		Total
Alliant Energy
Electricity (MWhs)		3,931		1,944		—		5,875
FTRs (MWs)		23		—		—		23
Natural gas (dekatherms (Dths))		48,295		9,716		1,125		59,136

IPL
Electricity (MWhs)		2,354		806		—		3,160
FTRs (MWs)		14		—		—		14
Natural gas (Dths)		30,864		5,554		675		37,093

WPL
Electricity (MWhs)		1,577		1,138		—		2,715
FTRs (MWs)		9		—		—		9
Natural gas (Dths)		17,276		4,162		450		21,888

The notional amounts in the above table were computed by aggregating the absolute value of purchase and sale positions within commodities for each year.

Financial Statement Presentation - Alliant Energy, IPL and WPL record derivative instruments at fair value each reporting date on the balance sheets as assets or liabilities. At Dec. 31, 2011 and 2010, the fair values of current derivative assets were included in "Prepayments and other," non-current derivative assets were included in "Deferred charges and other," current derivative liabilities were included in "Derivative liabilities" and non-current derivative liabilities were included in "Other long-term liabilities and deferred credits" on the Consolidated Balance Sheets as follows (in millions):


	Alliant Energy				IPL				WPL
	2011		2010		2011		2010		2011		2010
Current derivative assets
Commodity contracts	$	12.7	$	14.3	$	9.2	$	7.8	$	3.5	$	6.5
Foreign exchange contracts		—		4.8		—		4.8		—		—

	$	12.7	$	19.1	$	9.2	$	12.6	$	3.5	$	6.5

Non-current derivative assets
Commodity contracts	$	3.0	$	1.8	$	1.4	$	0.3	$	1.6	$	1.5

Current derivative liabilities
Commodity contracts	$	55.9	$	55.2	$	24.5	$	23.0	$	31.4	$	32.2
Foreign exchange contracts		—		0.1		—		—		—		0.1

	$	55.9	$	55.3	$	24.5	$	23.0	$	31.4	$	32.3

Non-current derivative liabilities
Commodity contracts	$	22.1	$	12.0	$	9.1	$	1.0	$	13.0	$	11.0

Alliant Energy, IPL and WPL generally record gains and losses from IPL's and WPL's derivative instruments with offsets to regulatory assets or regulatory liabilities, based on their fuel and natural gas cost recovery mechanisms, as well as other specific regulatory authorizations. Gains and losses from derivative instruments not designated as hedging instruments were recorded as follows (in millions):


		Gains (Losses)
	Location Recorded on Balance Sheets	Alliant Energy									IPL									WPL
	Location Recorded on Balance Sheets	2011			2010			2009			2011			2010			2009			2011			2010			2009
Commodity contracts	Regulatory assets	($	79.6	)	($	78.4	)	($	137.6	)	($	42.4	)	($	47.8	)	($	69.5	)	($	37.2	)	($	30.6	)	($	68.1	)
Commodity contracts	Regulatory liabilities		9.3			11.5			24.4			6.4			10.6			11.7			2.9			0.9			12.7
Foreign exchange contracts	Regulatory liabilities		—			3.8			(3.3	)		—			3.8			(2.9	)		—			—			(0.4	)

Losses from commodity contracts during 2011, 2010 and 2009 were primarily due to impacts of decreases in electricity and natural gas prices during such periods.

Credit Risk-related Contingent Features - Alliant Energy, IPL and WPL have entered into various agreements that contain credit risk-related contingent features including requirements for them to maintain certain credit ratings from each of the major credit rating agencies and limitations on their liability positions under the various agreements based upon their credit ratings. In the event of a downgrade in their credit ratings or if their liability positions exceed certain contractual limits, Alliant Energy, IPL or WPL may need to provide credit support in the form of letters of credit or cash collateral up to the amount of their exposure under the contracts, or may need to unwind the contracts and pay the underlying liability positions.

Certain of these agreements with credit risk-related contingency features are accounted for as derivative instruments. The aggregate fair value of all derivatives with credit risk-related contingent features that were in a net liability position on Dec. 31, 2011 was $78.0 million, $33.6 million and $44.4 million for Alliant Energy, IPL and WPL, respectively. At Dec. 31, 2011, Alliant Energy, IPL and WPL all had investment-grade credit ratings. However, IPL exceeded its liability position with one counterparty requiring it to post $2.0 million of cash collateral. If the most restrictive credit risk-related contingent features for derivative agreements in a net liability position were triggered on Dec. 31, 2011, Alliant Energy, IPL and WPL would be required to post an additional $76.0 million, $31.6 million and $44.4 million, respectively, of credit support to their counterparties.

Derivative Instruments

(12) DERIVATIVE INSTRUMENTS

Commodity and Foreign Exchange Derivatives -

Purpose - Alliant Energy, IPL and WPL periodically use derivative instruments for risk management purposes to mitigate exposures to fluctuations in certain commodity prices, transmission congestion costs and currency exchange rates. Alliant Energy's, IPL's and WPL's derivative instruments as of Dec. 31, 2011 and 2010 were not designated as hedging instruments. IPL's and WPL's derivative instruments as of Dec. 31, 2011 and 2010 included electric physical forward purchase contracts and swap contracts to mitigate pricing volatility for the electricity purchased to supply to their customers; electric physical forward sale contracts to offset long positions created by reductions in electricity demand forecasts; natural gas swap contracts to mitigate pricing volatility for the fuel used to supply to the natural gas-fired electric generating facilities they operate; natural gas options to mitigate price increases during periods of high demand or lack of supply; FTRs acquired to manage transmission congestion costs; natural gas physical forward purchase contracts to mitigate pricing volatility for natural gas supplied to their retail customers; natural gas physical forward purchase and sale contracts to optimize the value of natural gas pipeline capacity; and embedded foreign currency derivatives related to Euro-denominated payment terms included in the wind turbine supply contract with Vestas.

Notional Amounts - As of Dec. 31, 2011, Alliant Energy, IPL and WPL had notional amounts related to outstanding swap contracts, option contracts, physical forward contracts and FTRs that were accounted for as commodity derivative instruments as follows (units in thousands):


	2012		2013		2014		Total
Alliant Energy
Electricity (MWhs)		3,931		1,944		—		5,875
FTRs (MWs)		23		—		—		23
Natural gas (dekatherms (Dths))		48,295		9,716		1,125		59,136
IPL
Electricity (MWhs)		2,354		806		—		3,160
FTRs (MWs)		14		—		—		14
Natural gas (Dths)		30,864		5,554		675		37,093
WPL
Electricity (MWhs)		1,577		1,138		—		2,715
FTRs (MWs)		9		—		—		9
Natural gas (Dths)		17,276		4,162		450		21,888

The notional amounts in the above table were computed by aggregating the absolute value of purchase and sale positions within commodities for each year.

Financial Statement Presentation - Alliant Energy, IPL and WPL record derivative instruments at fair value each reporting date on the balance sheets as assets or liabilities. At Dec. 31, 2011 and 2010, the fair values of current derivative assets were included in "Prepayments and other," non-current derivative assets were included in "Deferred charges and other," current derivative liabilities were included in "Derivative liabilities" and non-current derivative liabilities were included in "Other long-term liabilities and deferred credits" on the Consolidated Balance Sheets as follows (in millions):


	Alliant Energy				IPL				WPL
	2011		2010		2011		2010		2011		2010
Current derivative assets
Commodity contracts	$	12.7	$	14.3	$	9.2	$	7.8	$	3.5	$	6.5
Foreign exchange contracts		—		4.8		—		4.8		—		—

	$	12.7	$	19.1	$	9.2	$	12.6	$	3.5	$	6.5

Non-current derivative assets
Commodity contracts	$	3.0	$	1.8	$	1.4	$	0.3	$	1.6	$	1.5
Current derivative liabilities
Commodity contracts	$	55.9	$	55.2	$	24.5	$	23.0	$	31.4	$	32.2
Foreign exchange contracts		—		0.1		—		—		—		0.1

	$	55.9	$	55.3	$	24.5	$	23.0	$	31.4	$	32.3

Non-current derivative liabilities
Commodity contracts	$	22.1	$	12.0	$	9.1	$	1.0	$	13.0	$	11.0

Alliant Energy, IPL and WPL generally record gains and losses from IPL's and WPL's derivative instruments with offsets to regulatory assets or regulatory liabilities, based on their fuel and natural gas cost recovery mechanisms, as well as other specific regulatory authorizations. Gains and losses from derivative instruments not designated as hedging instruments were recorded as follows (in millions):


		Gains (Losses)
	Location Recorded	Alliant Energy									IPL									WPL
	on Balance Sheets	2011			2010			2009			2011			2010			2009			2011			2010			2009
Commodity contracts	Regulatory assets	($	79.6	)	($	78.4	)	($	137.6	)	($	42.4	)	($	47.8	)	($	69.5	)	($	37.2	)	($	30.6	)	($	68.1	)
Commodity contracts	Regulatory liabilities		9.3			11.5			24.4			6.4			10.6			11.7			2.9			0.9			12.7
Foreign exchange contracts	Regulatory liabilities		—			3.8			(3.3	)		—			3.8			(2.9	)		—			—			(0.4	)

Losses from commodity contracts during 2011, 2010 and 2009 were primarily due to impacts of decreases in electricity and natural gas prices during such periods.

Credit Risk-related Contingent Features - Alliant Energy, IPL and WPL have entered into various agreements that contain credit risk-related contingent features including requirements for them to maintain certain credit ratings from each of the major credit rating agencies and limitations on their liability positions under the various agreements based upon their credit ratings. In the event of a downgrade in their credit ratings or if their liability positions exceed certain contractual limits, Alliant Energy, IPL or WPL may need to provide credit support in the form of letters of credit or cash collateral up to the amount of their exposure under the contracts, or may need to unwind the contracts and pay the underlying liability positions.

Certain of these agreements with credit risk-related contingency features are accounted for as derivative instruments. The aggregate fair value of all derivatives with credit risk-related contingent features that were in a net liability position on Dec. 31, 2011 was $78.0 million, $33.6 million and $44.4 million for Alliant Energy, IPL and WPL, respectively. At Dec. 31, 2011, Alliant Energy, IPL and WPL all had investment-grade credit ratings. However, IPL exceeded its liability position with one counterparty requiring it to post $2.0 million of cash collateral. If the most restrictive credit risk-related contingent features for derivative agreements in a net liability position were triggered on Dec. 31, 2011, Alliant Energy, IPL and WPL would be required to post an additional $76.0 million, $31.6 million and $44.4 million, respectively, of credit support to their counterparties.

Derivative Instruments

(12) DERIVATIVE INSTRUMENTS

Commodity and Foreign Exchange Derivatives -

Purpose - Alliant Energy, IPL and WPL periodically use derivative instruments for risk management purposes to mitigate exposures to fluctuations in certain commodity prices, transmission congestion costs and currency exchange rates. Alliant Energy's, IPL's and WPL's derivative instruments as of Dec. 31, 2011 and 2010 were not designated as hedging instruments. IPL's and WPL's derivative instruments as of Dec. 31, 2011 and 2010 included electric physical forward purchase contracts and swap contracts to mitigate pricing volatility for the electricity purchased to supply to their customers; electric physical forward sale contracts to offset long positions created by reductions in electricity demand forecasts; natural gas swap contracts to mitigate pricing volatility for the fuel used to supply to the natural gas-fired electric generating facilities they operate; natural gas options to mitigate price increases during periods of high demand or lack of supply; FTRs acquired to manage transmission congestion costs; natural gas physical forward purchase contracts to mitigate pricing volatility for natural gas supplied to their retail customers; natural gas physical forward purchase and sale contracts to optimize the value of natural gas pipeline capacity; and embedded foreign currency derivatives related to Euro-denominated payment terms included in the wind turbine supply contract with Vestas.

Notional Amounts - As of Dec. 31, 2011, Alliant Energy, IPL and WPL had notional amounts related to outstanding swap contracts, option contracts, physical forward contracts and FTRs that were accounted for as commodity derivative instruments as follows (units in thousands):


	2012		2013		2014		Total
Alliant Energy
Electricity (MWhs)		3,931		1,944		—		5,875
FTRs (MWs)		23		—		—		23
Natural gas (dekatherms (Dths))		48,295		9,716		1,125		59,136
IPL
Electricity (MWhs)		2,354		806		—		3,160
FTRs (MWs)		14		—		—		14
Natural gas (Dths)		30,864		5,554		675		37,093
WPL
Electricity (MWhs)		1,577		1,138		—		2,715
FTRs (MWs)		9		—		—		9
Natural gas (Dths)		17,276		4,162		450		21,888

The notional amounts in the above table were computed by aggregating the absolute value of purchase and sale positions within commodities for each year.

Financial Statement Presentation - Alliant Energy, IPL and WPL record derivative instruments at fair value each reporting date on the balance sheets as assets or liabilities. At Dec. 31, 2011 and 2010, the fair values of current derivative assets were included in "Prepayments and other," non-current derivative assets were included in "Deferred charges and other," current derivative liabilities were included in "Derivative liabilities" and non-current derivative liabilities were included in "Other long-term liabilities and deferred credits" on the Consolidated Balance Sheets as follows (in millions):


	Alliant Energy				IPL				WPL
	2011		2010		2011		2010		2011		2010
Current derivative assets
Commodity contracts	$	12.7	$	14.3	$	9.2	$	7.8	$	3.5	$	6.5
Foreign exchange contracts		—		4.8		—		4.8		—		—

	$	12.7	$	19.1	$	9.2	$	12.6	$	3.5	$	6.5

Non-current derivative assets
Commodity contracts	$	3.0	$	1.8	$	1.4	$	0.3	$	1.6	$	1.5
Current derivative liabilities
Commodity contracts	$	55.9	$	55.2	$	24.5	$	23.0	$	31.4	$	32.2
Foreign exchange contracts		—		0.1		—		—		—		0.1

	$	55.9	$	55.3	$	24.5	$	23.0	$	31.4	$	32.3

Non-current derivative liabilities
Commodity contracts	$	22.1	$	12.0	$	9.1	$	1.0	$	13.0	$	11.0

Alliant Energy, IPL and WPL generally record gains and losses from IPL's and WPL's derivative instruments with offsets to regulatory assets or regulatory liabilities, based on their fuel and natural gas cost recovery mechanisms, as well as other specific regulatory authorizations. Gains and losses from derivative instruments not designated as hedging instruments were recorded as follows (in millions):


		Gains (Losses)
	Location Recorded	Alliant Energy									IPL									WPL
	on Balance Sheets	2011			2010			2009			2011			2010			2009			2011			2010			2009
Commodity contracts	Regulatory assets	($	79.6	)	($	78.4	)	($	137.6	)	($	42.4	)	($	47.8	)	($	69.5	)	($	37.2	)	($	30.6	)	($	68.1	)
Commodity contracts	Regulatory liabilities		9.3			11.5			24.4			6.4			10.6			11.7			2.9			0.9			12.7
Foreign exchange contracts	Regulatory liabilities		—			3.8			(3.3	)		—			3.8			(2.9	)		—			—			(0.4	)

Losses from commodity contracts during 2011, 2010 and 2009 were primarily due to impacts of decreases in electricity and natural gas prices during such periods.

Credit Risk-related Contingent Features - Alliant Energy, IPL and WPL have entered into various agreements that contain credit risk-related contingent features including requirements for them to maintain certain credit ratings from each of the major credit rating agencies and limitations on their liability positions under the various agreements based upon their credit ratings. In the event of a downgrade in their credit ratings or if their liability positions exceed certain contractual limits, Alliant Energy, IPL or WPL may need to provide credit support in the form of letters of credit or cash collateral up to the amount of their exposure under the contracts, or may need to unwind the contracts and pay the underlying liability positions.

Certain of these agreements with credit risk-related contingency features are accounted for as derivative instruments. The aggregate fair value of all derivatives with credit risk-related contingent features that were in a net liability position on Dec. 31, 2011 was $78.0 million, $33.6 million and $44.4 million for Alliant Energy, IPL and WPL, respectively. At Dec. 31, 2011, Alliant Energy, IPL and WPL all had investment-grade credit ratings. However, IPL exceeded its liability position with one counterparty requiring it to post $2.0 million of cash collateral. If the most restrictive credit risk-related contingent features for derivative agreements in a net liability position were triggered on Dec. 31, 2011, Alliant Energy, IPL and WPL would be required to post an additional $76.0 million, $31.6 million and $44.4 million, respectively, of credit support to their counterparties.