Fair Value Measurements

12 Months Ended

Dec. 31, 2012

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments - The carrying amounts of Alliant Energy’s, IPL’s and WPL’s current assets and current liabilities approximate fair value because of the short maturity of such financial instruments. Carrying amounts and the related estimated fair values of other financial instruments at December 31 were as follows (in millions):

	Alliant Energy				IPL				WPL
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
2012
Assets:
Derivative assets (Note 12)		$26.2		$26.2		$17.5		$17.5		$8.7		$8.7
Deferred proceeds (sales of receivables) (Note 4(a))	66.8		66.8		66.8		66.8		—		—
Capitalization and liabilities:
Long-term debt (including current maturities) (Note 9(b))	3,138.1		3,860.5		1,359.5		1,679.9		1,331.5		1,713.3
Cumulative preferred stock of subsidiaries (Note 8)	205.1		212.6		145.1		151.8		60.0		60.8
Derivative liabilities (Note 12)	40.4		40.4		16.1		16.1		24.3		24.3
2011
Assets:
Derivative assets (Note 12)	15.7		15.7		10.6		10.6		5.1		5.1
Deferred proceeds (sales of receivables) (Note 4(a))	53.7		53.7		53.7		53.7		—		—
Capitalization and liabilities:
Long-term debt (including current maturities) (Note 9(b))	2,704.5		3,325.3		1,309.0		1,560.4		1,082.2		1,439.0
Cumulative preferred stock of subsidiaries (Note 8)	205.1		222.5		145.1		164.3		60.0		58.2
Derivative liabilities (Note 12)	78.0		78.0		33.6		33.6		44.4		44.4

Valuation Hierarchy - Fair value measurement accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy and examples of each are as follows:

Level 1 - Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the reporting date. As of December 31, 2012, Level 1 items included IPL’s 8.375% cumulative preferred stock and WPL’s 4.50% cumulative preferred stock.

Level 2 - Pricing inputs are quoted prices for similar assets or liabilities in active markets or quoted prices for identicalor similar assets or liabilities in markets that are not active as of the reporting date. As of December 31, 2012 and 2011, Level 2 items included certain of IPL’s and WPL’s non-exchange traded commodity contracts. Level 2 items as of December 31, 2012 also included the remainder of WPL’s cumulative preferred stock and substantially all of the long-term debt instruments.

Level 3 - Pricing inputs are unobservable inputs for assets or liabilities for which little or no market data exist and require significant management judgment or estimation. As of December 31, 2012 and 2011, Level 3 items included IPL’s deferred proceeds, and IPL’s and WPL’s financial transmission rights (FTRs) and certain non-exchange traded commodity contracts.

The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. The lowest level input that is significant to a fair value measurement in its entirety determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.

Valuation Techniques -

Derivative assets and derivative liabilities - Alliant Energy, IPL and WPL periodically use derivative instruments for risk management purposes to mitigate exposures to fluctuations in certain commodity prices and transmission congestion costs, and maintain risk policies that govern the use of such derivative instruments. As of December 31, 2012 and 2011, Alliant Energy’s, IPL’s and WPL’s derivative instruments were not designated as hedging instruments and included the following:

Risk management purpose	Type of instrument
Mitigate pricing volatility for:
Electricity purchased to supply customers	Electric swap and physical purchase contracts (IPL and WPL)
Fuel used to supply natural gas-fired electric generating facilities	Natural gas swap and physical purchase contracts (IPL and WPL)
	Natural gas options (WPL)
Natural gas supplied to retail customers	Natural gas options and physical purchase contracts (IPL and WPL)
	Natural gas swap contracts (IPL)
Fuel used at coal-fired generating facilities	Coal physical purchase contract with volumetric optionality (WPL)
Optimize the value of natural gas pipeline capacity	Natural gas physical purchase and sale contracts (IPL and WPL)
	Natural gas swap contracts (IPL)
Manage transmission congestion costs	FTRs (IPL and WPL)

IPL’s and WPL’s swap, option and physical forward commodity contracts were non-exchange-based derivative instruments and were valued using indicative price quotations available through a pricing vendor that provides daily exchange forward price settlements, from broker or dealer quotations, from market publications or from on-line exchanges. The indicative price quotations reflected the average of the bid-ask mid-point prices and were obtained from sources believed to provide the most liquid market for the commodity. IPL and WPL corroborated a portion of these indicative price quotations using quoted prices for similar assets or liabilities in active markets and categorized derivative instruments based on such indicative price quotations as Level 2. IPL’s and WPL’s commodity contracts that were valued using indicative price quotations based on significant assumptions such as seasonal or monthly shaping and indicative price quotations that could not be readily corroborated were categorized as Level 3. IPL’s and WPL’s swap, option and physical forward commodity contracts were predominately at liquid trading points. IPL’s and WPL’s FTRs were valued using monthly or annual auction shadow prices from relevant auctions and were categorized as Level 3. Refer to Note 12 for additional details of derivative assets and derivative liabilities.

The significant unobservable inputs (Level 3 inputs) used in the fair value measurement of IPL’s and WPL’s commodity contracts are forecasted electricity, natural gas and coal prices, and the expected volatility of such prices. Significant changes in any of those inputs would result in a significantly lower or higher fair value measurement. These commodity contracts were valued using a market approach technique that utilizes significant observable inputs to estimate forward commodity prices. Forward electric and coal prices are estimated using market information obtained from counterparties and brokers, including bids, offers, historical transactions (including historical price differences between locations with both observable and unobservable prices) and executed trades. Forward natural gas prices are estimated using the most recent quoted observable inputs applied to future months (including historical price differences between locations with both observable and unobservable prices). Observable inputs are obtained from third-party pricing data sources and include bids, offers, historical transactions and executed trades. Forward electric price commodity curves that extend beyond currently available observable inputs utilize market prices for the most recent period for which observable inputs are available. Observable inputs include bids, offers, historical transactions and executed trades.

Deferred proceeds (sales of receivables) - The fair value of IPL’s deferred proceeds related to its sales of receivables program was calculated each reporting date using the cost approach valuation technique. The fair value represents the carrying amount of receivables sold less the allowance for doubtful accounts associated with the receivables sold and cash proceeds received from the receivables sold due to the short-term nature of the collection period. These inputs were considered unobservable and deferred proceeds were categorized as Level 3. Deferred proceeds represent IPL’s maximum exposure to loss related to the receivables sold. Refer to Note 4(a) for additional information regarding deferred proceeds.

Long-term debt (including current maturities) - For long-term debt instruments that are actively traded, the fair value was based upon quoted market prices for similar liabilities on each reporting date. For long-term debt instruments that are not actively traded, the fair value was based on a discounted cash flow methodology and utilizes assumptions of current market pricing curves at each reporting date. Refer to Note 9(b) for additional information regarding long-term debt.

Cumulative preferred stock of subsidiaries - The fair value of IPL’s 8.375% cumulative preferred stock was based on its closing market price quoted by the New York Stock Exchange on each reporting date. The fair value of WPL’s 4.50% cumulative preferred stock was based on the closing market price quoted by the NYSE Amex LLC on each reporting date. The fair value of WPL’s remaining preferred stock was calculated based on the market yield of similar securities on each reporting date. Refer to Note 8 for additional information regarding cumulative preferred stock of subsidiaries.

Items subject to fair value measurement disclosure requirements were as follows (Not Applicable (N/A); in millions):

Alliant Energy	2012								2011
	Fair		Level		Level		Level		Fair		Level		Level		Level
	Value		1		2		3		Value		1		2		3
Assets:
Derivatives - commodity contracts		$26.2		$—		$4.8		$21.4		$15.7		$—		$3.4		$12.3
Deferred proceeds	66.8		—		—		66.8		53.7		—		—		53.7
Capitalization and liabilities:
Long-term debt (including current maturities)	3,860.5		—		3,860.0		0.5		N/A		N/A		N/A		N/A
Cumulative preferred stock of subsidiaries	212.6		162.3		50.3		—		N/A		N/A		N/A		N/A
Derivatives - commodity contracts	40.4		—		30.9		9.5		78.0		—		64.8		13.2

IPL	2012								2011
	Fair		Level		Level		Level		Fair		Level		Level		Level
	Value		1		2		3		Value		1		2		3
Assets:
Derivatives - commodity contracts		$17.5		$—		$3.1		$14.4		$10.6		$—		$1.3		$9.3
Deferred proceeds	66.8		—		—		66.8		53.7		—		—		53.7
Capitalization and liabilities:
Long-term debt (including current maturities)	1,679.9		—		1,679.9		—		N/A		N/A		N/A		N/A
Cumulative preferred stock	151.8		151.8		—		—		N/A		N/A		N/A		N/A
Derivatives - commodity contracts	16.1		—		14.2		1.9		33.6		—		28.6		5.0

WPL	2012								2011
	Fair		Level		Level		Level		Fair		Level		Level		Level
	Value		1		2		3		Value		1		2		3
Assets:
Derivatives - commodity contracts		$8.7		$—		$1.7		$7.0		$5.1		$—		$2.1		$3.0
Capitalization and liabilities:
Long-term debt (including current maturities)	1,713.3		—		1,713.3		—		N/A		N/A		N/A		N/A
Cumulative preferred stock	60.8		10.5		50.3		—		N/A		N/A		N/A		N/A
Derivatives - commodity contracts	24.3		—		16.7		7.6		44.4		—		36.2		8.2

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. Based on these recovery mechanisms, the changes in the fair value of derivative liabilities resulted in comparable changes to regulatory assets, and the changes in the fair value of derivative assets resulted in comparable changes to regulatory liabilities on the Consolidated Balance Sheets.

Information for fair value measurements using significant unobservable inputs (Level 3 inputs) was as follows (in millions):

Alliant Energy	Commodity Contract
	Derivative Assets and
	(Liabilities), net						Deferred Proceeds
	2012			2011			2012		2011
Beginning balance, January 1		($0.9	)		$2.8			$53.7		$152.9
Total net losses (realized/unrealized) included in changes in net assets (a)	(7.6		)	(7.3		)	—		—
Transfers into Level 3 (b)	(1.1		)	0.2			—		—
Transfers out of Level 3 (c)	8.3			—			—		—
Purchases	35.8			21.8			—		—
Settlements (d)	(22.6		)	(18.4		)	13.1		(99.2		)
Ending balance, December 31		$11.9			($0.9	)		$66.8		$53.7
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at December 31 (a)		($2.6	)		($7.3	)		$—		$—

IPL	Commodity Contract
	Derivative Assets and
	(Liabilities), net						Deferred Proceeds
	2012			2011			2012		2011
Beginning balance, January 1		$4.3			$4.3			$53.7		$152.9
Total net losses (realized/unrealized) included in changes in net assets (a)	(3.5		)	(3.1		)	—		—
Transfers into Level 3 (b)	(1.1		)	—			—		—
Transfers out of Level 3 (c)	2.4			—			—		—
Purchases	26.8			18.1			—		—
Settlements (d)	(16.4		)	(15.0		)	13.1		(99.2		)
Ending balance, December 31		$12.5			$4.3			$66.8		$53.7
The amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at December 31 (a)		$1.5			($3.1	)		$—		$—

WPL	Commodity Contract
	Derivative Assets and
	(Liabilities), net
	2012			2011
Beginning balance, January 1		($5.2	)		($1.5	)
Total net losses (realized/unrealized) included in changes in net assets (a)	(4.1		)	(4.2		)
Transfers into Level 3 (b)	—			0.2
Transfers out of Level 3 (c)	5.9			—
Purchases	9.0			3.7
Settlements	(6.2		)	(3.4		)
Ending balance, December 31		($0.6	)		($5.2	)
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at December 31 (a)		($4.1	)		($4.2	)

(a) Gains and losses related to derivative assets and derivative liabilities are generally recorded in “Regulatory assets” and “Regulatory liabilities” on the Consolidated Balance Sheets.

(b) Markets for similar assets and liabilities became inactive and observable market inputs became unavailable for transfers into Level 3. The transfers were valued as of the beginning of the period.

(c) Observable market inputs became available for certain commodity contracts previously classified as Level 3 for transfers out of Level 3. The transfers were valued as of the beginning of the period.

(d) Settlements related to deferred proceeds are due to the change in the carrying amount of receivables sold less the allowance for doubtful accounts associated with the receivables sold and cash proceeds received from the receivables sold.

Commodity Contracts - As of December 31, 2012, the fair values of Alliant Energy’s, IPL’s and WPL’s electric, natural gas and coal commodity contracts categorized as Level 3, excluding FTRs, were recognized as net derivative liabilities of $3.2 million, net derivative assets of $1.5 million and net derivative liabilities of $4.7 million, respectively.As of December 31, 2012, Alliant Energy’s, IPL’s and WPL’s FTRs categorized as Level 3 were recognized as net derivative assets of $15.1 million, $11.0 million and $4.1 million, respectively.

IPL [Member]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments - The carrying amounts of Alliant Energy’s, IPL’s and WPL’s current assets and current liabilities approximate fair value because of the short maturity of such financial instruments. Carrying amounts and the related estimated fair values of other financial instruments at December 31 were as follows (in millions):

	Alliant Energy				IPL				WPL
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
2012
Assets:
Derivative assets (Note 12)		$26.2		$26.2		$17.5		$17.5		$8.7		$8.7
Deferred proceeds (sales of receivables) (Note 4(a))	66.8		66.8		66.8		66.8		—		—
Capitalization and liabilities:
Long-term debt (including current maturities) (Note 9(b))	3,138.1		3,860.5		1,359.5		1,679.9		1,331.5		1,713.3
Cumulative preferred stock of subsidiaries (Note 8)	205.1		212.6		145.1		151.8		60.0		60.8
Derivative liabilities (Note 12)	40.4		40.4		16.1		16.1		24.3		24.3
2011
Assets:
Derivative assets (Note 12)	15.7		15.7		10.6		10.6		5.1		5.1
Deferred proceeds (sales of receivables) (Note 4(a))	53.7		53.7		53.7		53.7		—		—
Capitalization and liabilities:
Long-term debt (including current maturities) (Note 9(b))	2,704.5		3,325.3		1,309.0		1,560.4		1,082.2		1,439.0
Cumulative preferred stock of subsidiaries (Note 8)	205.1		222.5		145.1		164.3		60.0		58.2
Derivative liabilities (Note 12)	78.0		78.0		33.6		33.6		44.4		44.4

Valuation Hierarchy - Fair value measurement accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy and examples of each are as follows:

Level 1 - Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the reporting date. As of December 31, 2012, Level 1 items included IPL’s 8.375% cumulative preferred stock and WPL’s 4.50% cumulative preferred stock.

Level 2 - Pricing inputs are quoted prices for similar assets or liabilities in active markets or quoted prices for identicalor similar assets or liabilities in markets that are not active as of the reporting date. As of December 31, 2012 and 2011, Level 2 items included certain of IPL’s and WPL’s non-exchange traded commodity contracts. Level 2 items as of December 31, 2012 also included the remainder of WPL’s cumulative preferred stock and substantially all of the long-term debt instruments.

Level 3 - Pricing inputs are unobservable inputs for assets or liabilities for which little or no market data exist and require significant management judgment or estimation. As of December 31, 2012 and 2011, Level 3 items included IPL’s deferred proceeds, and IPL’s and WPL’s financial transmission rights (FTRs) and certain non-exchange traded commodity contracts.

The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. The lowest level input that is significant to a fair value measurement in its entirety determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.

Valuation Techniques -

Derivative assets and derivative liabilities - Alliant Energy, IPL and WPL periodically use derivative instruments for risk management purposes to mitigate exposures to fluctuations in certain commodity prices and transmission congestion costs, and maintain risk policies that govern the use of such derivative instruments. As of December 31, 2012 and 2011, Alliant Energy’s, IPL’s and WPL’s derivative instruments were not designated as hedging instruments and included the following:

Risk management purpose	Type of instrument
Mitigate pricing volatility for:
Electricity purchased to supply customers	Electric swap and physical purchase contracts (IPL and WPL)
Fuel used to supply natural gas-fired electric generating facilities	Natural gas swap and physical purchase contracts (IPL and WPL)
	Natural gas options (WPL)
Natural gas supplied to retail customers	Natural gas options and physical purchase contracts (IPL and WPL)
	Natural gas swap contracts (IPL)
Fuel used at coal-fired generating facilities	Coal physical purchase contract with volumetric optionality (WPL)
Optimize the value of natural gas pipeline capacity	Natural gas physical purchase and sale contracts (IPL and WPL)
	Natural gas swap contracts (IPL)
Manage transmission congestion costs	FTRs (IPL and WPL)

IPL’s and WPL’s swap, option and physical forward commodity contracts were non-exchange-based derivative instruments and were valued using indicative price quotations available through a pricing vendor that provides daily exchange forward price settlements, from broker or dealer quotations, from market publications or from on-line exchanges. The indicative price quotations reflected the average of the bid-ask mid-point prices and were obtained from sources believed to provide the most liquid market for the commodity. IPL and WPL corroborated a portion of these indicative price quotations using quoted prices for similar assets or liabilities in active markets and categorized derivative instruments based on such indicative price quotations as Level 2. IPL’s and WPL’s commodity contracts that were valued using indicative price quotations based on significant assumptions such as seasonal or monthly shaping and indicative price quotations that could not be readily corroborated were categorized as Level 3. IPL’s and WPL’s swap, option and physical forward commodity contracts were predominately at liquid trading points. IPL’s and WPL’s FTRs were valued using monthly or annual auction shadow prices from relevant auctions and were categorized as Level 3. Refer to Note 12 for additional details of derivative assets and derivative liabilities.

The significant unobservable inputs (Level 3 inputs) used in the fair value measurement of IPL’s and WPL’s commodity contracts are forecasted electricity, natural gas and coal prices, and the expected volatility of such prices. Significant changes in any of those inputs would result in a significantly lower or higher fair value measurement. These commodity contracts were valued using a market approach technique that utilizes significant observable inputs to estimate forward commodity prices. Forward electric and coal prices are estimated using market information obtained from counterparties and brokers, including bids, offers, historical transactions (including historical price differences between locations with both observable and unobservable prices) and executed trades. Forward natural gas prices are estimated using the most recent quoted observable inputs applied to future months (including historical price differences between locations with both observable and unobservable prices). Observable inputs are obtained from third-party pricing data sources and include bids, offers, historical transactions and executed trades. Forward electric price commodity curves that extend beyond currently available observable inputs utilize market prices for the most recent period for which observable inputs are available. Observable inputs include bids, offers, historical transactions and executed trades.

Deferred proceeds (sales of receivables) - The fair value of IPL’s deferred proceeds related to its sales of receivables program was calculated each reporting date using the cost approach valuation technique. The fair value represents the carrying amount of receivables sold less the allowance for doubtful accounts associated with the receivables sold and cash proceeds received from the receivables sold due to the short-term nature of the collection period. These inputs were considered unobservable and deferred proceeds were categorized as Level 3. Deferred proceeds represent IPL’s maximum exposure to loss related to the receivables sold. Refer to Note 4(a) for additional information regarding deferred proceeds.

Long-term debt (including current maturities) - For long-term debt instruments that are actively traded, the fair value was based upon quoted market prices for similar liabilities on each reporting date. For long-term debt instruments that are not actively traded, the fair value was based on a discounted cash flow methodology and utilizes assumptions of current market pricing curves at each reporting date. Refer to Note 9(b) for additional information regarding long-term debt.

Cumulative preferred stock of subsidiaries - The fair value of IPL’s 8.375% cumulative preferred stock was based on its closing market price quoted by the New York Stock Exchange on each reporting date. The fair value of WPL’s 4.50% cumulative preferred stock was based on the closing market price quoted by the NYSE Amex LLC on each reporting date. The fair value of WPL’s remaining preferred stock was calculated based on the market yield of similar securities on each reporting date. Refer to Note 8 for additional information regarding cumulative preferred stock of subsidiaries.

Items subject to fair value measurement disclosure requirements were as follows (Not Applicable (N/A); in millions):

Alliant Energy	2012								2011
	Fair		Level		Level		Level		Fair		Level		Level		Level
	Value		1		2		3		Value		1		2		3
Assets:
Derivatives - commodity contracts		$26.2		$—		$4.8		$21.4		$15.7		$—		$3.4		$12.3
Deferred proceeds	66.8		—		—		66.8		53.7		—		—		53.7
Capitalization and liabilities:
Long-term debt (including current maturities)	3,860.5		—		3,860.0		0.5		N/A		N/A		N/A		N/A
Cumulative preferred stock of subsidiaries	212.6		162.3		50.3		—		N/A		N/A		N/A		N/A
Derivatives - commodity contracts	40.4		—		30.9		9.5		78.0		—		64.8		13.2

IPL	2012								2011
	Fair		Level		Level		Level		Fair		Level		Level		Level
	Value		1		2		3		Value		1		2		3
Assets:
Derivatives - commodity contracts		$17.5		$—		$3.1		$14.4		$10.6		$—		$1.3		$9.3
Deferred proceeds	66.8		—		—		66.8		53.7		—		—		53.7
Capitalization and liabilities:
Long-term debt (including current maturities)	1,679.9		—		1,679.9		—		N/A		N/A		N/A		N/A
Cumulative preferred stock	151.8		151.8		—		—		N/A		N/A		N/A		N/A
Derivatives - commodity contracts	16.1		—		14.2		1.9		33.6		—		28.6		5.0

WPL	2012								2011
	Fair		Level		Level		Level		Fair		Level		Level		Level
	Value		1		2		3		Value		1		2		3
Assets:
Derivatives - commodity contracts		$8.7		$—		$1.7		$7.0		$5.1		$—		$2.1		$3.0
Capitalization and liabilities:
Long-term debt (including current maturities)	1,713.3		—		1,713.3		—		N/A		N/A		N/A		N/A
Cumulative preferred stock	60.8		10.5		50.3		—		N/A		N/A		N/A		N/A
Derivatives - commodity contracts	24.3		—		16.7		7.6		44.4		—		36.2		8.2

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. Based on these recovery mechanisms, the changes in the fair value of derivative liabilities resulted in comparable changes to regulatory assets, and the changes in the fair value of derivative assets resulted in comparable changes to regulatory liabilities on the Consolidated Balance Sheets.

Information for fair value measurements using significant unobservable inputs (Level 3 inputs) was as follows (in millions):

Alliant Energy	Commodity Contract
	Derivative Assets and
	(Liabilities), net						Deferred Proceeds
	2012			2011			2012		2011
Beginning balance, January 1		($0.9	)		$2.8			$53.7		$152.9
Total net losses (realized/unrealized) included in changes in net assets (a)	(7.6		)	(7.3		)	—		—
Transfers into Level 3 (b)	(1.1		)	0.2			—		—
Transfers out of Level 3 (c)	8.3			—			—		—
Purchases	35.8			21.8			—		—
Settlements (d)	(22.6		)	(18.4		)	13.1		(99.2		)
Ending balance, December 31		$11.9			($0.9	)		$66.8		$53.7
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at December 31 (a)		($2.6	)		($7.3	)		$—		$—

IPL	Commodity Contract
	Derivative Assets and
	(Liabilities), net						Deferred Proceeds
	2012			2011			2012		2011
Beginning balance, January 1		$4.3			$4.3			$53.7		$152.9
Total net losses (realized/unrealized) included in changes in net assets (a)	(3.5		)	(3.1		)	—		—
Transfers into Level 3 (b)	(1.1		)	—			—		—
Transfers out of Level 3 (c)	2.4			—			—		—
Purchases	26.8			18.1			—		—
Settlements (d)	(16.4		)	(15.0		)	13.1		(99.2		)
Ending balance, December 31		$12.5			$4.3			$66.8		$53.7
The amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at December 31 (a)		$1.5			($3.1	)		$—		$—

WPL	Commodity Contract
	Derivative Assets and
	(Liabilities), net
	2012			2011
Beginning balance, January 1		($5.2	)		($1.5	)
Total net losses (realized/unrealized) included in changes in net assets (a)	(4.1		)	(4.2		)
Transfers into Level 3 (b)	—			0.2
Transfers out of Level 3 (c)	5.9			—
Purchases	9.0			3.7
Settlements	(6.2		)	(3.4		)
Ending balance, December 31		($0.6	)		($5.2	)
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at December 31 (a)		($4.1	)		($4.2	)

(a) Gains and losses related to derivative assets and derivative liabilities are generally recorded in “Regulatory assets” and “Regulatory liabilities” on the Consolidated Balance Sheets.

(b) Markets for similar assets and liabilities became inactive and observable market inputs became unavailable for transfers into Level 3. The transfers were valued as of the beginning of the period.

(c) Observable market inputs became available for certain commodity contracts previously classified as Level 3 for transfers out of Level 3. The transfers were valued as of the beginning of the period.

(d) Settlements related to deferred proceeds are due to the change in the carrying amount of receivables sold less the allowance for doubtful accounts associated with the receivables sold and cash proceeds received from the receivables sold.

Commodity Contracts - As of December 31, 2012, the fair values of Alliant Energy’s, IPL’s and WPL’s electric, natural gas and coal commodity contracts categorized as Level 3, excluding FTRs, were recognized as net derivative liabilities of $3.2 million, net derivative assets of $1.5 million and net derivative liabilities of $4.7 million, respectively.As of December 31, 2012, Alliant Energy’s, IPL’s and WPL’s FTRs categorized as Level 3 were recognized as net derivative assets of $15.1 million, $11.0 million and $4.1 million, respectively.

WPL [Member]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments - The carrying amounts of Alliant Energy’s, IPL’s and WPL’s current assets and current liabilities approximate fair value because of the short maturity of such financial instruments. Carrying amounts and the related estimated fair values of other financial instruments at December 31 were as follows (in millions):

	Alliant Energy				IPL				WPL
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Carrying Amount		Fair Value
2012
Assets:
Derivative assets (Note 12)		$26.2		$26.2		$17.5		$17.5		$8.7		$8.7
Deferred proceeds (sales of receivables) (Note 4(a))	66.8		66.8		66.8		66.8		—		—
Capitalization and liabilities:
Long-term debt (including current maturities) (Note 9(b))	3,138.1		3,860.5		1,359.5		1,679.9		1,331.5		1,713.3
Cumulative preferred stock of subsidiaries (Note 8)	205.1		212.6		145.1		151.8		60.0		60.8
Derivative liabilities (Note 12)	40.4		40.4		16.1		16.1		24.3		24.3
2011
Assets:
Derivative assets (Note 12)	15.7		15.7		10.6		10.6		5.1		5.1
Deferred proceeds (sales of receivables) (Note 4(a))	53.7		53.7		53.7		53.7		—		—
Capitalization and liabilities:
Long-term debt (including current maturities) (Note 9(b))	2,704.5		3,325.3		1,309.0		1,560.4		1,082.2		1,439.0
Cumulative preferred stock of subsidiaries (Note 8)	205.1		222.5		145.1		164.3		60.0		58.2
Derivative liabilities (Note 12)	78.0		78.0		33.6		33.6		44.4		44.4

Valuation Hierarchy - Fair value measurement accounting establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy and examples of each are as follows:

Level 1 - Pricing inputs are quoted prices available in active markets for identical assets or liabilities as of the reporting date. As of December 31, 2012, Level 1 items included IPL’s 8.375% cumulative preferred stock and WPL’s 4.50% cumulative preferred stock.

Level 2 - Pricing inputs are quoted prices for similar assets or liabilities in active markets or quoted prices for identicalor similar assets or liabilities in markets that are not active as of the reporting date. As of December 31, 2012 and 2011, Level 2 items included certain of IPL’s and WPL’s non-exchange traded commodity contracts. Level 2 items as of December 31, 2012 also included the remainder of WPL’s cumulative preferred stock and substantially all of the long-term debt instruments.

Level 3 - Pricing inputs are unobservable inputs for assets or liabilities for which little or no market data exist and require significant management judgment or estimation. As of December 31, 2012 and 2011, Level 3 items included IPL’s deferred proceeds, and IPL’s and WPL’s financial transmission rights (FTRs) and certain non-exchange traded commodity contracts.

The fair value hierarchy gives the highest priority to quoted prices in active markets (Level 1) and the lowest priority to unobservable data (Level 3). In some cases, the inputs used to measure fair value might fall in different levels of the fair value hierarchy. The lowest level input that is significant to a fair value measurement in its entirety determines the applicable level in the fair value hierarchy. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.

Valuation Techniques -

Derivative assets and derivative liabilities - Alliant Energy, IPL and WPL periodically use derivative instruments for risk management purposes to mitigate exposures to fluctuations in certain commodity prices and transmission congestion costs, and maintain risk policies that govern the use of such derivative instruments. As of December 31, 2012 and 2011, Alliant Energy’s, IPL’s and WPL’s derivative instruments were not designated as hedging instruments and included the following:

Risk management purpose	Type of instrument
Mitigate pricing volatility for:
Electricity purchased to supply customers	Electric swap and physical purchase contracts (IPL and WPL)
Fuel used to supply natural gas-fired electric generating facilities	Natural gas swap and physical purchase contracts (IPL and WPL)
	Natural gas options (WPL)
Natural gas supplied to retail customers	Natural gas options and physical purchase contracts (IPL and WPL)
	Natural gas swap contracts (IPL)
Fuel used at coal-fired generating facilities	Coal physical purchase contract with volumetric optionality (WPL)
Optimize the value of natural gas pipeline capacity	Natural gas physical purchase and sale contracts (IPL and WPL)
	Natural gas swap contracts (IPL)
Manage transmission congestion costs	FTRs (IPL and WPL)

IPL’s and WPL’s swap, option and physical forward commodity contracts were non-exchange-based derivative instruments and were valued using indicative price quotations available through a pricing vendor that provides daily exchange forward price settlements, from broker or dealer quotations, from market publications or from on-line exchanges. The indicative price quotations reflected the average of the bid-ask mid-point prices and were obtained from sources believed to provide the most liquid market for the commodity. IPL and WPL corroborated a portion of these indicative price quotations using quoted prices for similar assets or liabilities in active markets and categorized derivative instruments based on such indicative price quotations as Level 2. IPL’s and WPL’s commodity contracts that were valued using indicative price quotations based on significant assumptions such as seasonal or monthly shaping and indicative price quotations that could not be readily corroborated were categorized as Level 3. IPL’s and WPL’s swap, option and physical forward commodity contracts were predominately at liquid trading points. IPL’s and WPL’s FTRs were valued using monthly or annual auction shadow prices from relevant auctions and were categorized as Level 3. Refer to Note 12 for additional details of derivative assets and derivative liabilities.

The significant unobservable inputs (Level 3 inputs) used in the fair value measurement of IPL’s and WPL’s commodity contracts are forecasted electricity, natural gas and coal prices, and the expected volatility of such prices. Significant changes in any of those inputs would result in a significantly lower or higher fair value measurement. These commodity contracts were valued using a market approach technique that utilizes significant observable inputs to estimate forward commodity prices. Forward electric and coal prices are estimated using market information obtained from counterparties and brokers, including bids, offers, historical transactions (including historical price differences between locations with both observable and unobservable prices) and executed trades. Forward natural gas prices are estimated using the most recent quoted observable inputs applied to future months (including historical price differences between locations with both observable and unobservable prices). Observable inputs are obtained from third-party pricing data sources and include bids, offers, historical transactions and executed trades. Forward electric price commodity curves that extend beyond currently available observable inputs utilize market prices for the most recent period for which observable inputs are available. Observable inputs include bids, offers, historical transactions and executed trades.

Deferred proceeds (sales of receivables) - The fair value of IPL’s deferred proceeds related to its sales of receivables program was calculated each reporting date using the cost approach valuation technique. The fair value represents the carrying amount of receivables sold less the allowance for doubtful accounts associated with the receivables sold and cash proceeds received from the receivables sold due to the short-term nature of the collection period. These inputs were considered unobservable and deferred proceeds were categorized as Level 3. Deferred proceeds represent IPL’s maximum exposure to loss related to the receivables sold. Refer to Note 4(a) for additional information regarding deferred proceeds.

Long-term debt (including current maturities) - For long-term debt instruments that are actively traded, the fair value was based upon quoted market prices for similar liabilities on each reporting date. For long-term debt instruments that are not actively traded, the fair value was based on a discounted cash flow methodology and utilizes assumptions of current market pricing curves at each reporting date. Refer to Note 9(b) for additional information regarding long-term debt.

Cumulative preferred stock of subsidiaries - The fair value of IPL’s 8.375% cumulative preferred stock was based on its closing market price quoted by the New York Stock Exchange on each reporting date. The fair value of WPL’s 4.50% cumulative preferred stock was based on the closing market price quoted by the NYSE Amex LLC on each reporting date. The fair value of WPL’s remaining preferred stock was calculated based on the market yield of similar securities on each reporting date. Refer to Note 8 for additional information regarding cumulative preferred stock of subsidiaries.

Items subject to fair value measurement disclosure requirements were as follows (Not Applicable (N/A); in millions):

Alliant Energy	2012								2011
	Fair		Level		Level		Level		Fair		Level		Level		Level
	Value		1		2		3		Value		1		2		3
Assets:
Derivatives - commodity contracts		$26.2		$—		$4.8		$21.4		$15.7		$—		$3.4		$12.3
Deferred proceeds	66.8		—		—		66.8		53.7		—		—		53.7
Capitalization and liabilities:
Long-term debt (including current maturities)	3,860.5		—		3,860.0		0.5		N/A		N/A		N/A		N/A
Cumulative preferred stock of subsidiaries	212.6		162.3		50.3		—		N/A		N/A		N/A		N/A
Derivatives - commodity contracts	40.4		—		30.9		9.5		78.0		—		64.8		13.2

IPL	2012								2011
	Fair		Level		Level		Level		Fair		Level		Level		Level
	Value		1		2		3		Value		1		2		3
Assets:
Derivatives - commodity contracts		$17.5		$—		$3.1		$14.4		$10.6		$—		$1.3		$9.3
Deferred proceeds	66.8		—		—		66.8		53.7		—		—		53.7
Capitalization and liabilities:
Long-term debt (including current maturities)	1,679.9		—		1,679.9		—		N/A		N/A		N/A		N/A
Cumulative preferred stock	151.8		151.8		—		—		N/A		N/A		N/A		N/A
Derivatives - commodity contracts	16.1		—		14.2		1.9		33.6		—		28.6		5.0

WPL	2012								2011
	Fair		Level		Level		Level		Fair		Level		Level		Level
	Value		1		2		3		Value		1		2		3
Assets:
Derivatives - commodity contracts		$8.7		$—		$1.7		$7.0		$5.1		$—		$2.1		$3.0
Capitalization and liabilities:
Long-term debt (including current maturities)	1,713.3		—		1,713.3		—		N/A		N/A		N/A		N/A
Cumulative preferred stock	60.8		10.5		50.3		—		N/A		N/A		N/A		N/A
Derivatives - commodity contracts	24.3		—		16.7		7.6		44.4		—		36.2		8.2

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. Based on these recovery mechanisms, the changes in the fair value of derivative liabilities resulted in comparable changes to regulatory assets, and the changes in the fair value of derivative assets resulted in comparable changes to regulatory liabilities on the Consolidated Balance Sheets.

Information for fair value measurements using significant unobservable inputs (Level 3 inputs) was as follows (in millions):

Alliant Energy	Commodity Contract
	Derivative Assets and
	(Liabilities), net						Deferred Proceeds
	2012			2011			2012		2011
Beginning balance, January 1		($0.9	)		$2.8			$53.7		$152.9
Total net losses (realized/unrealized) included in changes in net assets (a)	(7.6		)	(7.3		)	—		—
Transfers into Level 3 (b)	(1.1		)	0.2			—		—
Transfers out of Level 3 (c)	8.3			—			—		—
Purchases	35.8			21.8			—		—
Settlements (d)	(22.6		)	(18.4		)	13.1		(99.2		)
Ending balance, December 31		$11.9			($0.9	)		$66.8		$53.7
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at December 31 (a)		($2.6	)		($7.3	)		$—		$—

IPL	Commodity Contract
	Derivative Assets and
	(Liabilities), net						Deferred Proceeds
	2012			2011			2012		2011
Beginning balance, January 1		$4.3			$4.3			$53.7		$152.9
Total net losses (realized/unrealized) included in changes in net assets (a)	(3.5		)	(3.1		)	—		—
Transfers into Level 3 (b)	(1.1		)	—			—		—
Transfers out of Level 3 (c)	2.4			—			—		—
Purchases	26.8			18.1			—		—
Settlements (d)	(16.4		)	(15.0		)	13.1		(99.2		)
Ending balance, December 31		$12.5			$4.3			$66.8		$53.7
The amount of total net gains (losses) for the period included in changes in net assets attributable to the change in unrealized gains (losses) relating to assets and liabilities held at December 31 (a)		$1.5			($3.1	)		$—		$—

WPL	Commodity Contract
	Derivative Assets and
	(Liabilities), net
	2012			2011
Beginning balance, January 1		($5.2	)		($1.5	)
Total net losses (realized/unrealized) included in changes in net assets (a)	(4.1		)	(4.2		)
Transfers into Level 3 (b)	—			0.2
Transfers out of Level 3 (c)	5.9			—
Purchases	9.0			3.7
Settlements	(6.2		)	(3.4		)
Ending balance, December 31		($0.6	)		($5.2	)
The amount of total net losses for the period included in changes in net assets attributable to the change in unrealized losses relating to assets and liabilities held at December 31 (a)		($4.1	)		($4.2	)

(a) Gains and losses related to derivative assets and derivative liabilities are generally recorded in “Regulatory assets” and “Regulatory liabilities” on the Consolidated Balance Sheets.

(b) Markets for similar assets and liabilities became inactive and observable market inputs became unavailable for transfers into Level 3. The transfers were valued as of the beginning of the period.

(c) Observable market inputs became available for certain commodity contracts previously classified as Level 3 for transfers out of Level 3. The transfers were valued as of the beginning of the period.

(d) Settlements related to deferred proceeds are due to the change in the carrying amount of receivables sold less the allowance for doubtful accounts associated with the receivables sold and cash proceeds received from the receivables sold.

Commodity Contracts - As of December 31, 2012, the fair values of Alliant Energy’s, IPL’s and WPL’s electric, natural gas and coal commodity contracts categorized as Level 3, excluding FTRs, were recognized as net derivative liabilities of $3.2 million, net derivative assets of $1.5 million and net derivative liabilities of $4.7 million, respectively.As of December 31, 2012, Alliant Energy’s, IPL’s and WPL’s FTRs categorized as Level 3 were recognized as net derivative assets of $15.1 million, $11.0 million and $4.1 million, respectively.