Regulatory Matters

12 Months Ended

Dec. 31, 2014

Regulatory Matters [Line Items]

Regulatory Matters

REGULATORY MATTERS

Regulatory Assets - At December 31, regulatory assets were comprised of the following items (in millions):

	Alliant Energy				IPL				WPL
	2014		2013		2014		2013		2014		2013
Tax-related		$955.3		$829.7		$928.0		$798.6		$27.3		$31.1
Pension and OPEB costs	570.2		355.3		287.9		174.2		282.3		181.1
AROs	73.7		65.7		41.4		36.7		32.3		29.0
Derivatives	46.9		21.1		28.0		5.9		18.9		15.2
Commodity cost recovery	31.1		2.0		0.4		0.7		30.7		1.3
Emission allowances	27.4		30.0		27.4		30.0		—		—
Debt redemption costs	16.1		17.9		10.9		12.2		5.2		5.7
Environmental-related costs	16.0		25.0		11.5		21.0		4.5		4.0
Other	47.0		66.5		22.4		34.2		24.6		32.3
		$1,783.7		$1,413.2		$1,357.9		$1,113.5		$425.8		$299.7

A portion of the regulatory assets in the above table are not earning a return. These regulatory assets are expected to be recovered from customers in future rates; however, the respective carrying costs of these assets are not expected to be recovered from customers in future rates. At December 31, 2014, IPL and WPL had $26 million and $10 million, respectively, of regulatory assets representing past expenditures that were not earning a return. IPL’s regulatory assets that were not earning a return consisted primarily of clean air compliance projects and debt redemption costs. WPL’s regulatory assets that were not earning a return consisted primarily of amounts related to the wholesale portion of under-collected fuel-related costs, which is discussed in Note 1(g), 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 include the impacts of qualifying deductions for repairs expenditures and 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 tax expense during the last 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.During 2014, Alliant Energy’s and IPL’s tax-related regulatory assets increased primarily due to property-related differences for qualifying repair expenditures, allocation of mixed service costs and tax accounting method changes in 2014 for cost of removal expenditures and repair expenditures for electric generation property at IPL. The increase related to the tax accounting method changes was offset by increased regulatory liabilities as discussed below in “IPL’s tax benefit riders.”

Pension and other postretirement benefits costs - The IUB and the PSCW have authorized IPL and WPL to record the retail portion of their respective previously unrecognized net actuarial gains and losses, and prior service costs and credits, as regulatory assets in lieu of AOCL on the balance sheets, as these amounts are expected to be recovered in future rates. IPL and WPL also recognize the wholesale portion of their previously unrecognized net actuarial gains and losses, and prior service costs and credits, as regulatory assets on the balance sheets because these costs are expected to be recovered in rates in future periods under the formula rate structure. 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. During 2014, Alliant Energy’s, IPL’s and WPL’s pension and OPEB costs regulatory assets increased due to an increase in unrecognized net actuarial losses caused by lower discount rates and a change in life expectancy assumptions used in the annual defined benefit plan measurement process as of December 31, 2014 compared to December 31, 2013.

Pension and OPEB costs are included within the recoverable cost of service component of rates charged to IPL’s and WPL’s customers. The recoverable costs included in customers’ rates are based upon pension and OPEB costs determined in accordance with GAAP and are calculated using different methods for the various regulatory jurisdictions in which IPL and WPL operate. The IUB authorized IPL in its 2009 test year Iowa retail electric rate case order to recover from its retail electric customers in Iowa an allocated portion of annual costs equal to a two-year simple average of actual costs incurred during its test year (2009) and an estimate of costs for its forward-looking post-test year (2010). The PSCW authorized WPL in its Wisconsin retail rate cases for the 2013/2014 and 2015/2016 test periods to recover from its electric and gas retail customers an estimated allocated portion of annual costs equal to the costs expected to be incurred during the respective test year periods. IPL and WPL are authorized to recover from their wholesale customers an allocated portion of actual pension costs incurred each year. In accordance with FERC-approved formula rates, any over- or under-collection of these pension costs each year are refunded to or recovered from customers through subsequent changes to wholesale customer rates. Refer to Note 12(a) for additional details regarding pension and OPEB costs.

AROs - Alliant Energy, IPL and WPL believe it is probable that any differences between expenses accrued for legal AROs related to their regulated operations and expenses recovered currently in rates will be recoverable in future rates, and are deferring the differences as regulatory assets. Refer to Note 13 for additional details of AROs.

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. Refer to Note 15 for additional details of derivative assets and derivative liabilities.

Commodity cost recovery - Refer to Note 1(g) for additional details of IPL’s and WPL’s cost recovery mechanisms, and “WPL’s Retail Fuel-related Rate Filing (2014 Test Year)” below for discussion of the increase in Alliant Energy’s and WPL’s commodity cost recovery regulatory assets in 2014.

Emission allowances - IPL entered into forward contracts in 2007 to purchase SO2 emission allowances with vintage years of 2014 through 2017 from various counterparties for $34 million to meet future CAIR emission reduction standards. Any SO2 emission allowances acquired under these forward contracts could be used to meet requirements under the existing Acid Rain program regulations or the more stringent CAIR emission reduction standards but are not eligible to be used for compliance requirements under CSAPR. In 2011, the EPA issued CSAPR to replace CAIR with an anticipated effective date in 2012. As a result of the issuance of CSAPR, Alliant Energy and IPL concluded in 2011 that the allowances to be acquired under these forward contracts would not be needed by IPL to comply with expected environmental regulations in the future. The value of these allowances was nominal, which was significantly below the $34 million contract price for these allowances. As a result, Alliant Energy and IPL recognized charges of $34 million for these forward contracts in 2011 with an offsetting obligation recorded in other liabilities. Alliant Energy and IPL concluded that $30 million of the charges are probable of recovery from IPL’s customers, and therefore, were recorded to regulatory assets in 2011. The current value of these allowances continues to be nominal and significantly below the $34 million contract price for these allowances. Alliant Energy and IPL believe the unamortized balance of this regulatory asset is probable of future recovery.

Debt redemption costs - For debt retired early with no subsequent re-issuance, IPL and WPL defer any debt repayment premiums and unamortized debt issuance costs and discounts as regulatory assets. These regulatory assets are amortized over the remaining original life of the debt retired early. Debt repayment premiums and other losses resulting from the refinancing of debt by IPL and WPL are deferred as regulatory assets and amortized over the life of the new debt issued.

Environmental-related costs - The IUB has permitted IPL to recover prudently incurred costs by allowing a representative level of MGP costs in the recoverable cost of service component of rates, as determined in its most recent retail gas rate case. Under the current rate-making treatment approved by the PSCW, the MGP expenditures of WPL are deferred and collected from retail gas customers over a five-year period after new rates are implemented. Regulatory assets recorded by IPL and WPL reflect the probable future rate recovery of MGP expenditures. Refer to Note 16(e) for additional details of environmental-related MGP costs.

Other - 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, 2014 in the above table 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 in the period in which future recovery ceases to be probable.

Based on the PSCW’s July 2012 order related to WPL’s 2013/2014 test period Wisconsin retail electric and gas rate case, WPL was authorized to recover previously incurred costs associated with the acquisition of a 25% ownership interest in Edgewater Unit 5 and proposed emission controls projects. As a result, Alliant Energy and WPL recorded a $5 million increase to regulatory assets, and a $5 million credit to “Utility - Other operation and maintenance” in their income statements in 2012.

Regulatory Liabilities - At December 31, regulatory liabilities were comprised of the following items (in millions):

	Alliant Energy				IPL				WPL
	2014		2013		2014		2013		2014		2013
Cost of removal obligations		$421.7		$418.9		$279.1		$277.7		$142.6		$141.2
IPL’s tax benefit riders	243.0		265.4		243.0		265.4		—		—
Energy efficiency cost recovery	64.3		52.7		—		9.3		64.3		43.4
IPL’s electric transmission cost recovery	19.4		14.6		19.4		14.6		—		—
Commodity cost recovery	15.4		7.5		15.1		5.5		0.3		2.0
IPL’s electric transmission assets sale	11.3		21.6		11.3		21.6		—		—
Other	46.1		40.8		15.6		20.8		30.5		20.0
		$821.2		$821.5		$583.5		$614.9		$237.7		$206.6

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

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 estimated amounts they have collected in rates for these future removal costs less amounts spent on removal activities.

IPL’s tax benefit riders - IPL’s tax benefit riders utilize regulatory liabilities to credit bills of IPL’s Iowa retail electric and gas customers to help offset the impact of rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs expenditures, allocation of mixed service costs, allocation of insurance proceeds from floods in 2008, and cost of removal expenditures. In 2014, Alliant Energy’s and IPL’s “IPL’s tax benefit riders” regulatory liabilities decreased by ($22) million as follows (in millions):

Electric tax benefit rider credits		($85	)
Gas tax benefit rider credits	(12		)
Tax accounting method changes	75
		($22	)

In 2013, the U.S. Department of the Treasury issued tangible property regulations clarifying the tax treatment of costs incurred to acquire, maintain or improve tangible property and to retire and remove depreciable property. The regulations clarified the ability to deduct cost of removal expenditures on partial dispositions of assets. In 2014, the IRS issued implementation guidance related to these tangible property regulations, which allowed companies to file a tax accounting method change to deduct cost of removal expenditures on partial dispositions that were previously capitalized. In 2014, Alliant Energy, IPL and WPL implemented this tax accounting method change, which will result in the inclusion of additional tax deductions on Alliant Energy’s U.S. federal income tax return for the calendar year 2014. In 2013, the IRS also issued guidance that clarified acceptable units of property to be used when assessing whether costs incurred for electric generation projects may be deducted as repair expenditures or if they must be capitalized. After assessing the guidance, Alliant Energy, IPL and WPL decided in 2014 to implement the new units of property by filing a tax accounting method change as part of Alliant Energy’s U.S. federal income tax return for the calendar year 2013. IPL currently anticipates refunding its related current tax benefits from these two tax accounting method changes to its Iowa retail electric and gas customers in the future, and as a result, Alliant Energy and IPL recorded an increase of $75 million to IPL’s tax benefit riders regulatory liabilities and IPL’s tax-related regulatory assets in 2014.

Electric tax benefit rider - The IUB has approved an electric tax benefit rider proposed by IPL, which utilizes regulatory liabilities to credit bills of Iowa retail electric customers beginning in 2011 to help offset the impact of rate increases on such customers. Alliant Energy and IPL recognize an offsetting reduction to income tax expense for the after-tax amounts credited to IPL’s retail electric customers’ bills in Iowa, resulting in no impact to Alliant Energy’s and IPL’s net income from the electric tax benefit rider as follows (in millions):

	2014		2013		2012
Credit to IPL’s Iowa retail electric customers’ bills with reduction to electric revenues		$85		$79		$83
Income tax benefit resulting from decreased taxable income caused by credits	35		33		35
Income tax benefit representing tax benefits realized from electric tax benefit rider	50		46		48

In December 2014, the IUB issued an order authorizing $75 million of regulatory liabilities from tax benefits to be credited to IPL’s retail electric customers’ bills in Iowa during 2015 through the electric tax benefit rider.

In 2013, the IUB authorized IPL to reduce the electric tax benefit rider billing credits on customers’ bills in 2013 and 2014 to recognize the revenue requirement impact of the changes in tax accounting methods. The revenue requirement adjustment resulted in increases to electric revenues in Alliant Energy’s and IPL’s income statements and was recognized through the energy adjustment clause as a reduction of the credits on IPL’s Iowa retail electric customers’ bills from the electric tax benefit rider as follows (in millions):

	2014		2013
Revenue requirement adjustment		$15		$24

In December 2014, the IUB authorized IPL to reduce the $75 million of billing credits on customers’ bills by $15 million in 2015 to recognize the revenue requirement impact of the changes in tax accounting methods.

Gas tax benefit rider - The IUB has approved a gas tax benefit rider proposed by IPL, which utilizes approximately $12 million of regulatory liabilities annually to credit bills of Iowa retail gas customers beginning in January 2013 through December 2015 to help offset the impact of rate increases on such customers. Alliant Energy and IPL utilized gas tax benefit rider-related regulatory liabilities to credit IPL’s Iowa retail gas customers’ bills as follows (in millions):

	2014		2013
Credit to IPL’s Iowa retail gas customers’ bills with reduction to gas revenues		$12		$11
Income tax benefit resulting from decreased taxable income caused by credits	5		4
Income tax benefit representing tax benefits realized from gas tax benefit rider	7		7

Refer to Note 11 for additional details regarding IPL’s tax benefit riders.

Energy efficiency cost recovery - WPL and IPL collect revenues from their customers to offset certain expenditures incurred by WPL and IPL for energy efficiency programs, including state mandated programs and Shared Savings programs. Differences between forecasted costs used to set rates and actual costs for these programs are deferred as a regulatory asset or regulatory liability. The July 2012 PSCW order for WPL’s 2013/2014 test period electric and gas base rate case authorized higher energy efficiency cost recovery amortizations for 2014, which contributed to the increase in Alliant Energy’s and WPL’s “Energy efficiency cost recovery” regulatory liabilities.

IPL’s electric transmission cost recovery - Refer to Note 1(g) for additional details of IPL’s electric transmission service cost recovery mechanism.

Commodity cost recovery - Refer to Note 1(g) for additional details of IPL’s and WPL’s commodity cost recovery mechanisms.

IPL’s electric transmission assets sale - In 2007, IPL completed the sale of its electric transmission assets to ITC and recognized a gain based on the terms of the agreement. Upon closing of the sale, IPL established a regulatory liability pursuant to conditions established by the IUB when it allowed the transaction to proceed. The regulatory liability represented the present value of IPL’s obligation to refund to its customers payments beginning in the year IPL’s customers experience an increase in rates related to the transmission charges assessed by ITC. The regulatory liability accrues interest at the monthly average U.S. Treasury rate for three-year maturities.

In 2009, the IUB issued an order authorizing IPL to use a portion of this regulatory liability to reduce Iowa retail electric customers’ rates by $12 million for the period from July 2009 through February 2010 with billing credits included in the monthly energy adjustment clause. In 2010, the IUB issued an order authorizing IPL to use a portion of this regulatory liability to offset electric transmission service costs expected to be billed to IPL by ITC in 2010 related to ITC’s 2008 transmission revenue adjustment. IPL utilized $41 million of this regulatory liability over a five-year period ending December 2014 to offset the Iowa retail portion of transmission costs billed to IPL by ITC in 2010 related to ITC’s 2008 transmission revenue adjustment. As a result, IPL amortized $8 million of this regulatory liability annually, with an equal and offsetting amount of amortization for IPL’s regulatory asset related to electric transmission service costs.

Utility Rate Cases -

WPL’s Wisconsin Retail Electric and Gas Rate Case (2015/2016 Test Period) - In July 2014, WPL received an order from the PSCW authorizing WPL to maintain retail electric base rates at their current levels through the end of 2016. The retail electric base rate case included a return of and a return on costs for emission controls projects at Columbia Units 1 and 2 and Edgewater Unit 5, generation performance and reliability improvements at Columbia Units 1 and 2, other ongoing capital expenditures, and an increase in electric transmission service expense. The additional revenue requirement for these cost increases was offset by the impact of changes in the amortization of regulatory liabilities associated with energy efficiency cost recoveries and increased sales volumes. The order also authorizes WPL to implement a $5 million decrease in annual base rates for its retail gas customers effective January 1, 2015 followed by a freeze of such gas base rates through the end of 2016. The order included provisions that require WPL to defer a portion of its earnings if its annual regulatory return on common equity exceeds certain levels during 2015 or 2016 and allows WPL to request a change in retail base rates during this period if its annual regulatory return on common equity falls below a certain level.

WPL’s Wisconsin Retail Electric and Gas Rate Case (2013/2014 Test Period) - In July 2012, WPL received an order from the PSCW authorizing WPL to implement a decrease in annual retail gas base rates of $13 million effective January 1, 2013, followed by a freeze of such gas base rates through the end of 2014. The order also authorized WPL to maintain retail electric base rates at their current levels through the end of 2014. The order included a provision that required WPL to defer a portion of its earnings if its annual regulatory return on common equity exceeds certain levels during 2013 or 2014. As of December 31, 2014, Alliant Energy and WPL deferred $9 million of WPL’s 2013 and 2014 earnings for these provisions, which is included in “Other” in Alliant Energy’s and WPL’s regulatory liabilities tables above.

IPL’s Iowa Retail Gas Rate Case (2011 Test Year) - In May 2012, IPL filed a request with the IUB to increase annual rates for its Iowa retail gas customers based on a 2011 historical test year as adjusted for certain known and measurable changes occurring up to 12 months after the commencement of the proceeding. IPL’s request included a proposal to utilize regulatory liabilities to credit bills of Iowa retail gas customers to help mitigate the impact of the proposed final rate increase on such customers. IPL proposed to reduce customer bills utilizing a gas tax benefit rider over a three-year period by approximately $36 million in aggregate. In conjunction with the filing, IPL implemented an interim retail gas rate increase of $9 million, or approximately 3%, on an annual basis, effective June 4, 2012, without regulatory review and subject to refund pending determination of final rates from the request. In 2012, Alliant Energy and IPL recorded $5 million in gas revenues from IPL’s Iowa retail gas customers related to the interim retail gas rate increase. In November 2012, the IUB approved a settlement agreement related to IPL’s request, resulting in a final increase in annual rates for IPL’s Iowa retail gas customers of $11 million, or approximately 4%, effective January 10, 2013. The parties to the settlement agreement and the IUB also agreed to IPL’s proposed gas tax benefit rider. Refer to “Regulatory Liabilities” above for additional details on IPL’s gas tax benefit rider.

IPL’s Iowa Retail Electric Rate Settlement Agreement - In September 2014, the IUB approved a settlement agreement related to rates charged to IPL’s Iowa retail electric customers. The settlement agreement extends IPL’s Iowa retail electric base rates authorized in its 2009 test year rate case through 2016 and provides targeted retail electric customer billing credits of $105 million in aggregate, beginning May 2014 as follows (in millions):

	2014		2015		2016
Billing credits to reduce retail electric customers’ bills		$70		$25		$10

In 2014, IPL recorded $72 million of such retail electric customer billing credits. IPL will make adjustments to future billing credits to provide aggregate retail electric customer billing credits of $105 million in aggregate.

WPL’s Retail Fuel-related Rate Filing (2015 Test Year) - In December 2014, WPL received an order from the PSCW authorizing an annual retail electric rate increase of $39 million, or approximately 4%, effective January 1, 2015. The increase includes $39 million of anticipated increases in retail electric fuel-related costs in 2015 attributable to $25 million for higher retail electric fuel-related costs per MWh anticipated in 2015 and $14 million from the impact of increased sales volumes approved in the retail electric base rate case for 2015. WPL’s 2015 fuel-related costs will be subject to deferral if they fall outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Deferral of under-collections are reduced to the extent WPL’s actual return on common equity exceeds the most recently authorized return on common equity.

WPL’s Retail Fuel-related Rate Filing (2014 Test Year) - In 2013, WPL received an order from the PSCW authorizing an annual retail electric rate increase of $19 million, or approximately 2%, effective January 1, 2014 to reflect anticipated increases in retail electric fuel-related costs in 2014 compared to the fuel-related cost estimates used to determine rates for 2013. WPL’s 2014 fuel-related costs were subject to deferral if they fell outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Retail fuel-related costs incurred by WPL through December 31, 2014 were higher than fuel-related costs used to determine rates for such period resulting in an under-collection of fuel-related costs for 2014 of $33 million (including $28 million outside the approved range for 2014). As of December 31, 2014, Alliant Energy and WPL recorded $28 million in “Regulatory assets” on their balance sheets for the fuel-related costs incurred in 2014 that fell outside the PSCW approved bandwidth. The $28 million of deferred fuel-related costs is included in “Commodity cost recovery” in Alliant Energy’s and WPL’s regulatory assets tables above. Beginning in 2015, the regulatory asset will accrue interest at WPL’s PSCW authorized short-term debt rate. WPL currently expects to file a fuel reconciliation application with the PSCW in the first quarter of 2015 to seek recovery of these deferred fuel-related costs.

WPL’s Retail Fuel-related Rate Filing (2013 Test Year) - In 2012, WPL received an order from the PSCW authorizing an annual retail electric rate decrease of $29 million, or approximately 3%, effective January 1, 2013 to reflect anticipated decreases in retail electric fuel-related costs in 2013 compared to the fuel-related cost estimates used to determine rates for 2012. WPL’s 2013 fuel-related costs were subject to deferral if they fell outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Retail fuel-related costs incurred by WPL for 2013 did not fall outside of the bandwidth.

WPL’s Retail Fuel-related Rate Filing (2012 Test Year) - In 2011, WPL received an order from the PSCW authorizing an annual retail electric rate increase of $4 million, effective January 1, 2012 to reflect anticipated increases in retail fuel-related costs in 2012 compared to the fuel-related cost estimates used to determine rates for 2011. The 2012 fuel-related costs were subject to deferral if they fell outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Retail fuel-related costs incurred by WPL in 2012 were lower than retail fuel-related costs used to determine rates for such period resulting in an over-collection of fuel-related costs for 2012 of approximately $17 million (including $11 million outside the approved range for 2012). In 2013, WPL received an order from the PSCW to refund $12 million, including interest, to its retail electric customers for these over-collections, which WPL completed in 2013.

IPL [Member]

Regulatory Matters [Line Items]

Regulatory Matters

REGULATORY MATTERS

Regulatory Assets - At December 31, regulatory assets were comprised of the following items (in millions):

	Alliant Energy				IPL				WPL
	2014		2013		2014		2013		2014		2013
Tax-related		$955.3		$829.7		$928.0		$798.6		$27.3		$31.1
Pension and OPEB costs	570.2		355.3		287.9		174.2		282.3		181.1
AROs	73.7		65.7		41.4		36.7		32.3		29.0
Derivatives	46.9		21.1		28.0		5.9		18.9		15.2
Commodity cost recovery	31.1		2.0		0.4		0.7		30.7		1.3
Emission allowances	27.4		30.0		27.4		30.0		—		—
Debt redemption costs	16.1		17.9		10.9		12.2		5.2		5.7
Environmental-related costs	16.0		25.0		11.5		21.0		4.5		4.0
Other	47.0		66.5		22.4		34.2		24.6		32.3
		$1,783.7		$1,413.2		$1,357.9		$1,113.5		$425.8		$299.7

A portion of the regulatory assets in the above table are not earning a return. These regulatory assets are expected to be recovered from customers in future rates; however, the respective carrying costs of these assets are not expected to be recovered from customers in future rates. At December 31, 2014, IPL and WPL had $26 million and $10 million, respectively, of regulatory assets representing past expenditures that were not earning a return. IPL’s regulatory assets that were not earning a return consisted primarily of clean air compliance projects and debt redemption costs. WPL’s regulatory assets that were not earning a return consisted primarily of amounts related to the wholesale portion of under-collected fuel-related costs, which is discussed in Note 1(g), 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 include the impacts of qualifying deductions for repairs expenditures and 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 tax expense during the last 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.During 2014, Alliant Energy’s and IPL’s tax-related regulatory assets increased primarily due to property-related differences for qualifying repair expenditures, allocation of mixed service costs and tax accounting method changes in 2014 for cost of removal expenditures and repair expenditures for electric generation property at IPL. The increase related to the tax accounting method changes was offset by increased regulatory liabilities as discussed below in “IPL’s tax benefit riders.”

Pension and other postretirement benefits costs - The IUB and the PSCW have authorized IPL and WPL to record the retail portion of their respective previously unrecognized net actuarial gains and losses, and prior service costs and credits, as regulatory assets in lieu of AOCL on the balance sheets, as these amounts are expected to be recovered in future rates. IPL and WPL also recognize the wholesale portion of their previously unrecognized net actuarial gains and losses, and prior service costs and credits, as regulatory assets on the balance sheets because these costs are expected to be recovered in rates in future periods under the formula rate structure. 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. During 2014, Alliant Energy’s, IPL’s and WPL’s pension and OPEB costs regulatory assets increased due to an increase in unrecognized net actuarial losses caused by lower discount rates and a change in life expectancy assumptions used in the annual defined benefit plan measurement process as of December 31, 2014 compared to December 31, 2013.

Pension and OPEB costs are included within the recoverable cost of service component of rates charged to IPL’s and WPL’s customers. The recoverable costs included in customers’ rates are based upon pension and OPEB costs determined in accordance with GAAP and are calculated using different methods for the various regulatory jurisdictions in which IPL and WPL operate. The IUB authorized IPL in its 2009 test year Iowa retail electric rate case order to recover from its retail electric customers in Iowa an allocated portion of annual costs equal to a two-year simple average of actual costs incurred during its test year (2009) and an estimate of costs for its forward-looking post-test year (2010). The PSCW authorized WPL in its Wisconsin retail rate cases for the 2013/2014 and 2015/2016 test periods to recover from its electric and gas retail customers an estimated allocated portion of annual costs equal to the costs expected to be incurred during the respective test year periods. IPL and WPL are authorized to recover from their wholesale customers an allocated portion of actual pension costs incurred each year. In accordance with FERC-approved formula rates, any over- or under-collection of these pension costs each year are refunded to or recovered from customers through subsequent changes to wholesale customer rates. Refer to Note 12(a) for additional details regarding pension and OPEB costs.

AROs - Alliant Energy, IPL and WPL believe it is probable that any differences between expenses accrued for legal AROs related to their regulated operations and expenses recovered currently in rates will be recoverable in future rates, and are deferring the differences as regulatory assets. Refer to Note 13 for additional details of AROs.

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. Refer to Note 15 for additional details of derivative assets and derivative liabilities.

Commodity cost recovery - Refer to Note 1(g) for additional details of IPL’s and WPL’s cost recovery mechanisms, and “WPL’s Retail Fuel-related Rate Filing (2014 Test Year)” below for discussion of the increase in Alliant Energy’s and WPL’s commodity cost recovery regulatory assets in 2014.

Emission allowances - IPL entered into forward contracts in 2007 to purchase SO2 emission allowances with vintage years of 2014 through 2017 from various counterparties for $34 million to meet future CAIR emission reduction standards. Any SO2 emission allowances acquired under these forward contracts could be used to meet requirements under the existing Acid Rain program regulations or the more stringent CAIR emission reduction standards but are not eligible to be used for compliance requirements under CSAPR. In 2011, the EPA issued CSAPR to replace CAIR with an anticipated effective date in 2012. As a result of the issuance of CSAPR, Alliant Energy and IPL concluded in 2011 that the allowances to be acquired under these forward contracts would not be needed by IPL to comply with expected environmental regulations in the future. The value of these allowances was nominal, which was significantly below the $34 million contract price for these allowances. As a result, Alliant Energy and IPL recognized charges of $34 million for these forward contracts in 2011 with an offsetting obligation recorded in other liabilities. Alliant Energy and IPL concluded that $30 million of the charges are probable of recovery from IPL’s customers, and therefore, were recorded to regulatory assets in 2011. The current value of these allowances continues to be nominal and significantly below the $34 million contract price for these allowances. Alliant Energy and IPL believe the unamortized balance of this regulatory asset is probable of future recovery.

Debt redemption costs - For debt retired early with no subsequent re-issuance, IPL and WPL defer any debt repayment premiums and unamortized debt issuance costs and discounts as regulatory assets. These regulatory assets are amortized over the remaining original life of the debt retired early. Debt repayment premiums and other losses resulting from the refinancing of debt by IPL and WPL are deferred as regulatory assets and amortized over the life of the new debt issued.

Environmental-related costs - The IUB has permitted IPL to recover prudently incurred costs by allowing a representative level of MGP costs in the recoverable cost of service component of rates, as determined in its most recent retail gas rate case. Under the current rate-making treatment approved by the PSCW, the MGP expenditures of WPL are deferred and collected from retail gas customers over a five-year period after new rates are implemented. Regulatory assets recorded by IPL and WPL reflect the probable future rate recovery of MGP expenditures. Refer to Note 16(e) for additional details of environmental-related MGP costs.

Other - 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, 2014 in the above table 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 in the period in which future recovery ceases to be probable.

Based on the PSCW’s July 2012 order related to WPL’s 2013/2014 test period Wisconsin retail electric and gas rate case, WPL was authorized to recover previously incurred costs associated with the acquisition of a 25% ownership interest in Edgewater Unit 5 and proposed emission controls projects. As a result, Alliant Energy and WPL recorded a $5 million increase to regulatory assets, and a $5 million credit to “Utility - Other operation and maintenance” in their income statements in 2012.

Regulatory Liabilities - At December 31, regulatory liabilities were comprised of the following items (in millions):

	Alliant Energy				IPL				WPL
	2014		2013		2014		2013		2014		2013
Cost of removal obligations		$421.7		$418.9		$279.1		$277.7		$142.6		$141.2
IPL’s tax benefit riders	243.0		265.4		243.0		265.4		—		—
Energy efficiency cost recovery	64.3		52.7		—		9.3		64.3		43.4
IPL’s electric transmission cost recovery	19.4		14.6		19.4		14.6		—		—
Commodity cost recovery	15.4		7.5		15.1		5.5		0.3		2.0
IPL’s electric transmission assets sale	11.3		21.6		11.3		21.6		—		—
Other	46.1		40.8		15.6		20.8		30.5		20.0
		$821.2		$821.5		$583.5		$614.9		$237.7		$206.6

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

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 estimated amounts they have collected in rates for these future removal costs less amounts spent on removal activities.

IPL’s tax benefit riders - IPL’s tax benefit riders utilize regulatory liabilities to credit bills of IPL’s Iowa retail electric and gas customers to help offset the impact of rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs expenditures, allocation of mixed service costs, allocation of insurance proceeds from floods in 2008, and cost of removal expenditures. In 2014, Alliant Energy’s and IPL’s “IPL’s tax benefit riders” regulatory liabilities decreased by ($22) million as follows (in millions):

Electric tax benefit rider credits		($85	)
Gas tax benefit rider credits	(12		)
Tax accounting method changes	75
		($22	)

In 2013, the U.S. Department of the Treasury issued tangible property regulations clarifying the tax treatment of costs incurred to acquire, maintain or improve tangible property and to retire and remove depreciable property. The regulations clarified the ability to deduct cost of removal expenditures on partial dispositions of assets. In 2014, the IRS issued implementation guidance related to these tangible property regulations, which allowed companies to file a tax accounting method change to deduct cost of removal expenditures on partial dispositions that were previously capitalized. In 2014, Alliant Energy, IPL and WPL implemented this tax accounting method change, which will result in the inclusion of additional tax deductions on Alliant Energy’s U.S. federal income tax return for the calendar year 2014. In 2013, the IRS also issued guidance that clarified acceptable units of property to be used when assessing whether costs incurred for electric generation projects may be deducted as repair expenditures or if they must be capitalized. After assessing the guidance, Alliant Energy, IPL and WPL decided in 2014 to implement the new units of property by filing a tax accounting method change as part of Alliant Energy’s U.S. federal income tax return for the calendar year 2013. IPL currently anticipates refunding its related current tax benefits from these two tax accounting method changes to its Iowa retail electric and gas customers in the future, and as a result, Alliant Energy and IPL recorded an increase of $75 million to IPL’s tax benefit riders regulatory liabilities and IPL’s tax-related regulatory assets in 2014.

Electric tax benefit rider - The IUB has approved an electric tax benefit rider proposed by IPL, which utilizes regulatory liabilities to credit bills of Iowa retail electric customers beginning in 2011 to help offset the impact of rate increases on such customers. Alliant Energy and IPL recognize an offsetting reduction to income tax expense for the after-tax amounts credited to IPL’s retail electric customers’ bills in Iowa, resulting in no impact to Alliant Energy’s and IPL’s net income from the electric tax benefit rider as follows (in millions):

	2014		2013		2012
Credit to IPL’s Iowa retail electric customers’ bills with reduction to electric revenues		$85		$79		$83
Income tax benefit resulting from decreased taxable income caused by credits	35		33		35
Income tax benefit representing tax benefits realized from electric tax benefit rider	50		46		48

In December 2014, the IUB issued an order authorizing $75 million of regulatory liabilities from tax benefits to be credited to IPL’s retail electric customers’ bills in Iowa during 2015 through the electric tax benefit rider.

In 2013, the IUB authorized IPL to reduce the electric tax benefit rider billing credits on customers’ bills in 2013 and 2014 to recognize the revenue requirement impact of the changes in tax accounting methods. The revenue requirement adjustment resulted in increases to electric revenues in Alliant Energy’s and IPL’s income statements and was recognized through the energy adjustment clause as a reduction of the credits on IPL’s Iowa retail electric customers’ bills from the electric tax benefit rider as follows (in millions):

	2014		2013
Revenue requirement adjustment		$15		$24

In December 2014, the IUB authorized IPL to reduce the $75 million of billing credits on customers’ bills by $15 million in 2015 to recognize the revenue requirement impact of the changes in tax accounting methods.

Gas tax benefit rider - The IUB has approved a gas tax benefit rider proposed by IPL, which utilizes approximately $12 million of regulatory liabilities annually to credit bills of Iowa retail gas customers beginning in January 2013 through December 2015 to help offset the impact of rate increases on such customers. Alliant Energy and IPL utilized gas tax benefit rider-related regulatory liabilities to credit IPL’s Iowa retail gas customers’ bills as follows (in millions):

	2014		2013
Credit to IPL’s Iowa retail gas customers’ bills with reduction to gas revenues		$12		$11
Income tax benefit resulting from decreased taxable income caused by credits	5		4
Income tax benefit representing tax benefits realized from gas tax benefit rider	7		7

Refer to Note 11 for additional details regarding IPL’s tax benefit riders.

Energy efficiency cost recovery - WPL and IPL collect revenues from their customers to offset certain expenditures incurred by WPL and IPL for energy efficiency programs, including state mandated programs and Shared Savings programs. Differences between forecasted costs used to set rates and actual costs for these programs are deferred as a regulatory asset or regulatory liability. The July 2012 PSCW order for WPL’s 2013/2014 test period electric and gas base rate case authorized higher energy efficiency cost recovery amortizations for 2014, which contributed to the increase in Alliant Energy’s and WPL’s “Energy efficiency cost recovery” regulatory liabilities.

IPL’s electric transmission cost recovery - Refer to Note 1(g) for additional details of IPL’s electric transmission service cost recovery mechanism.

Commodity cost recovery - Refer to Note 1(g) for additional details of IPL’s and WPL’s commodity cost recovery mechanisms.

IPL’s electric transmission assets sale - In 2007, IPL completed the sale of its electric transmission assets to ITC and recognized a gain based on the terms of the agreement. Upon closing of the sale, IPL established a regulatory liability pursuant to conditions established by the IUB when it allowed the transaction to proceed. The regulatory liability represented the present value of IPL’s obligation to refund to its customers payments beginning in the year IPL’s customers experience an increase in rates related to the transmission charges assessed by ITC. The regulatory liability accrues interest at the monthly average U.S. Treasury rate for three-year maturities.

In 2009, the IUB issued an order authorizing IPL to use a portion of this regulatory liability to reduce Iowa retail electric customers’ rates by $12 million for the period from July 2009 through February 2010 with billing credits included in the monthly energy adjustment clause. In 2010, the IUB issued an order authorizing IPL to use a portion of this regulatory liability to offset electric transmission service costs expected to be billed to IPL by ITC in 2010 related to ITC’s 2008 transmission revenue adjustment. IPL utilized $41 million of this regulatory liability over a five-year period ending December 2014 to offset the Iowa retail portion of transmission costs billed to IPL by ITC in 2010 related to ITC’s 2008 transmission revenue adjustment. As a result, IPL amortized $8 million of this regulatory liability annually, with an equal and offsetting amount of amortization for IPL’s regulatory asset related to electric transmission service costs.

Utility Rate Cases -

WPL’s Wisconsin Retail Electric and Gas Rate Case (2015/2016 Test Period) - In July 2014, WPL received an order from the PSCW authorizing WPL to maintain retail electric base rates at their current levels through the end of 2016. The retail electric base rate case included a return of and a return on costs for emission controls projects at Columbia Units 1 and 2 and Edgewater Unit 5, generation performance and reliability improvements at Columbia Units 1 and 2, other ongoing capital expenditures, and an increase in electric transmission service expense. The additional revenue requirement for these cost increases was offset by the impact of changes in the amortization of regulatory liabilities associated with energy efficiency cost recoveries and increased sales volumes. The order also authorizes WPL to implement a $5 million decrease in annual base rates for its retail gas customers effective January 1, 2015 followed by a freeze of such gas base rates through the end of 2016. The order included provisions that require WPL to defer a portion of its earnings if its annual regulatory return on common equity exceeds certain levels during 2015 or 2016 and allows WPL to request a change in retail base rates during this period if its annual regulatory return on common equity falls below a certain level.

WPL’s Wisconsin Retail Electric and Gas Rate Case (2013/2014 Test Period) - In July 2012, WPL received an order from the PSCW authorizing WPL to implement a decrease in annual retail gas base rates of $13 million effective January 1, 2013, followed by a freeze of such gas base rates through the end of 2014. The order also authorized WPL to maintain retail electric base rates at their current levels through the end of 2014. The order included a provision that required WPL to defer a portion of its earnings if its annual regulatory return on common equity exceeds certain levels during 2013 or 2014. As of December 31, 2014, Alliant Energy and WPL deferred $9 million of WPL’s 2013 and 2014 earnings for these provisions, which is included in “Other” in Alliant Energy’s and WPL’s regulatory liabilities tables above.

IPL’s Iowa Retail Gas Rate Case (2011 Test Year) - In May 2012, IPL filed a request with the IUB to increase annual rates for its Iowa retail gas customers based on a 2011 historical test year as adjusted for certain known and measurable changes occurring up to 12 months after the commencement of the proceeding. IPL’s request included a proposal to utilize regulatory liabilities to credit bills of Iowa retail gas customers to help mitigate the impact of the proposed final rate increase on such customers. IPL proposed to reduce customer bills utilizing a gas tax benefit rider over a three-year period by approximately $36 million in aggregate. In conjunction with the filing, IPL implemented an interim retail gas rate increase of $9 million, or approximately 3%, on an annual basis, effective June 4, 2012, without regulatory review and subject to refund pending determination of final rates from the request. In 2012, Alliant Energy and IPL recorded $5 million in gas revenues from IPL’s Iowa retail gas customers related to the interim retail gas rate increase. In November 2012, the IUB approved a settlement agreement related to IPL’s request, resulting in a final increase in annual rates for IPL’s Iowa retail gas customers of $11 million, or approximately 4%, effective January 10, 2013. The parties to the settlement agreement and the IUB also agreed to IPL’s proposed gas tax benefit rider. Refer to “Regulatory Liabilities” above for additional details on IPL’s gas tax benefit rider.

IPL’s Iowa Retail Electric Rate Settlement Agreement - In September 2014, the IUB approved a settlement agreement related to rates charged to IPL’s Iowa retail electric customers. The settlement agreement extends IPL’s Iowa retail electric base rates authorized in its 2009 test year rate case through 2016 and provides targeted retail electric customer billing credits of $105 million in aggregate, beginning May 2014 as follows (in millions):

	2014		2015		2016
Billing credits to reduce retail electric customers’ bills		$70		$25		$10

In 2014, IPL recorded $72 million of such retail electric customer billing credits. IPL will make adjustments to future billing credits to provide aggregate retail electric customer billing credits of $105 million in aggregate.

WPL’s Retail Fuel-related Rate Filing (2015 Test Year) - In December 2014, WPL received an order from the PSCW authorizing an annual retail electric rate increase of $39 million, or approximately 4%, effective January 1, 2015. The increase includes $39 million of anticipated increases in retail electric fuel-related costs in 2015 attributable to $25 million for higher retail electric fuel-related costs per MWh anticipated in 2015 and $14 million from the impact of increased sales volumes approved in the retail electric base rate case for 2015. WPL’s 2015 fuel-related costs will be subject to deferral if they fall outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Deferral of under-collections are reduced to the extent WPL’s actual return on common equity exceeds the most recently authorized return on common equity.

WPL’s Retail Fuel-related Rate Filing (2014 Test Year) - In 2013, WPL received an order from the PSCW authorizing an annual retail electric rate increase of $19 million, or approximately 2%, effective January 1, 2014 to reflect anticipated increases in retail electric fuel-related costs in 2014 compared to the fuel-related cost estimates used to determine rates for 2013. WPL’s 2014 fuel-related costs were subject to deferral if they fell outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Retail fuel-related costs incurred by WPL through December 31, 2014 were higher than fuel-related costs used to determine rates for such period resulting in an under-collection of fuel-related costs for 2014 of $33 million (including $28 million outside the approved range for 2014). As of December 31, 2014, Alliant Energy and WPL recorded $28 million in “Regulatory assets” on their balance sheets for the fuel-related costs incurred in 2014 that fell outside the PSCW approved bandwidth. The $28 million of deferred fuel-related costs is included in “Commodity cost recovery” in Alliant Energy’s and WPL’s regulatory assets tables above. Beginning in 2015, the regulatory asset will accrue interest at WPL’s PSCW authorized short-term debt rate. WPL currently expects to file a fuel reconciliation application with the PSCW in the first quarter of 2015 to seek recovery of these deferred fuel-related costs.

WPL’s Retail Fuel-related Rate Filing (2013 Test Year) - In 2012, WPL received an order from the PSCW authorizing an annual retail electric rate decrease of $29 million, or approximately 3%, effective January 1, 2013 to reflect anticipated decreases in retail electric fuel-related costs in 2013 compared to the fuel-related cost estimates used to determine rates for 2012. WPL’s 2013 fuel-related costs were subject to deferral if they fell outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Retail fuel-related costs incurred by WPL for 2013 did not fall outside of the bandwidth.

WPL’s Retail Fuel-related Rate Filing (2012 Test Year) - In 2011, WPL received an order from the PSCW authorizing an annual retail electric rate increase of $4 million, effective January 1, 2012 to reflect anticipated increases in retail fuel-related costs in 2012 compared to the fuel-related cost estimates used to determine rates for 2011. The 2012 fuel-related costs were subject to deferral if they fell outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Retail fuel-related costs incurred by WPL in 2012 were lower than retail fuel-related costs used to determine rates for such period resulting in an over-collection of fuel-related costs for 2012 of approximately $17 million (including $11 million outside the approved range for 2012). In 2013, WPL received an order from the PSCW to refund $12 million, including interest, to its retail electric customers for these over-collections, which WPL completed in 2013.

WPL [Member]

Regulatory Matters [Line Items]

Regulatory Matters

REGULATORY MATTERS

Regulatory Assets - At December 31, regulatory assets were comprised of the following items (in millions):

	Alliant Energy				IPL				WPL
	2014		2013		2014		2013		2014		2013
Tax-related		$955.3		$829.7		$928.0		$798.6		$27.3		$31.1
Pension and OPEB costs	570.2		355.3		287.9		174.2		282.3		181.1
AROs	73.7		65.7		41.4		36.7		32.3		29.0
Derivatives	46.9		21.1		28.0		5.9		18.9		15.2
Commodity cost recovery	31.1		2.0		0.4		0.7		30.7		1.3
Emission allowances	27.4		30.0		27.4		30.0		—		—
Debt redemption costs	16.1		17.9		10.9		12.2		5.2		5.7
Environmental-related costs	16.0		25.0		11.5		21.0		4.5		4.0
Other	47.0		66.5		22.4		34.2		24.6		32.3
		$1,783.7		$1,413.2		$1,357.9		$1,113.5		$425.8		$299.7

A portion of the regulatory assets in the above table are not earning a return. These regulatory assets are expected to be recovered from customers in future rates; however, the respective carrying costs of these assets are not expected to be recovered from customers in future rates. At December 31, 2014, IPL and WPL had $26 million and $10 million, respectively, of regulatory assets representing past expenditures that were not earning a return. IPL’s regulatory assets that were not earning a return consisted primarily of clean air compliance projects and debt redemption costs. WPL’s regulatory assets that were not earning a return consisted primarily of amounts related to the wholesale portion of under-collected fuel-related costs, which is discussed in Note 1(g), 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 include the impacts of qualifying deductions for repairs expenditures and 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 tax expense during the last 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.During 2014, Alliant Energy’s and IPL’s tax-related regulatory assets increased primarily due to property-related differences for qualifying repair expenditures, allocation of mixed service costs and tax accounting method changes in 2014 for cost of removal expenditures and repair expenditures for electric generation property at IPL. The increase related to the tax accounting method changes was offset by increased regulatory liabilities as discussed below in “IPL’s tax benefit riders.”

Pension and other postretirement benefits costs - The IUB and the PSCW have authorized IPL and WPL to record the retail portion of their respective previously unrecognized net actuarial gains and losses, and prior service costs and credits, as regulatory assets in lieu of AOCL on the balance sheets, as these amounts are expected to be recovered in future rates. IPL and WPL also recognize the wholesale portion of their previously unrecognized net actuarial gains and losses, and prior service costs and credits, as regulatory assets on the balance sheets because these costs are expected to be recovered in rates in future periods under the formula rate structure. 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. During 2014, Alliant Energy’s, IPL’s and WPL’s pension and OPEB costs regulatory assets increased due to an increase in unrecognized net actuarial losses caused by lower discount rates and a change in life expectancy assumptions used in the annual defined benefit plan measurement process as of December 31, 2014 compared to December 31, 2013.

Pension and OPEB costs are included within the recoverable cost of service component of rates charged to IPL’s and WPL’s customers. The recoverable costs included in customers’ rates are based upon pension and OPEB costs determined in accordance with GAAP and are calculated using different methods for the various regulatory jurisdictions in which IPL and WPL operate. The IUB authorized IPL in its 2009 test year Iowa retail electric rate case order to recover from its retail electric customers in Iowa an allocated portion of annual costs equal to a two-year simple average of actual costs incurred during its test year (2009) and an estimate of costs for its forward-looking post-test year (2010). The PSCW authorized WPL in its Wisconsin retail rate cases for the 2013/2014 and 2015/2016 test periods to recover from its electric and gas retail customers an estimated allocated portion of annual costs equal to the costs expected to be incurred during the respective test year periods. IPL and WPL are authorized to recover from their wholesale customers an allocated portion of actual pension costs incurred each year. In accordance with FERC-approved formula rates, any over- or under-collection of these pension costs each year are refunded to or recovered from customers through subsequent changes to wholesale customer rates. Refer to Note 12(a) for additional details regarding pension and OPEB costs.

AROs - Alliant Energy, IPL and WPL believe it is probable that any differences between expenses accrued for legal AROs related to their regulated operations and expenses recovered currently in rates will be recoverable in future rates, and are deferring the differences as regulatory assets. Refer to Note 13 for additional details of AROs.

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. Refer to Note 15 for additional details of derivative assets and derivative liabilities.

Commodity cost recovery - Refer to Note 1(g) for additional details of IPL’s and WPL’s cost recovery mechanisms, and “WPL’s Retail Fuel-related Rate Filing (2014 Test Year)” below for discussion of the increase in Alliant Energy’s and WPL’s commodity cost recovery regulatory assets in 2014.

Emission allowances - IPL entered into forward contracts in 2007 to purchase SO2 emission allowances with vintage years of 2014 through 2017 from various counterparties for $34 million to meet future CAIR emission reduction standards. Any SO2 emission allowances acquired under these forward contracts could be used to meet requirements under the existing Acid Rain program regulations or the more stringent CAIR emission reduction standards but are not eligible to be used for compliance requirements under CSAPR. In 2011, the EPA issued CSAPR to replace CAIR with an anticipated effective date in 2012. As a result of the issuance of CSAPR, Alliant Energy and IPL concluded in 2011 that the allowances to be acquired under these forward contracts would not be needed by IPL to comply with expected environmental regulations in the future. The value of these allowances was nominal, which was significantly below the $34 million contract price for these allowances. As a result, Alliant Energy and IPL recognized charges of $34 million for these forward contracts in 2011 with an offsetting obligation recorded in other liabilities. Alliant Energy and IPL concluded that $30 million of the charges are probable of recovery from IPL’s customers, and therefore, were recorded to regulatory assets in 2011. The current value of these allowances continues to be nominal and significantly below the $34 million contract price for these allowances. Alliant Energy and IPL believe the unamortized balance of this regulatory asset is probable of future recovery.

Debt redemption costs - For debt retired early with no subsequent re-issuance, IPL and WPL defer any debt repayment premiums and unamortized debt issuance costs and discounts as regulatory assets. These regulatory assets are amortized over the remaining original life of the debt retired early. Debt repayment premiums and other losses resulting from the refinancing of debt by IPL and WPL are deferred as regulatory assets and amortized over the life of the new debt issued.

Environmental-related costs - The IUB has permitted IPL to recover prudently incurred costs by allowing a representative level of MGP costs in the recoverable cost of service component of rates, as determined in its most recent retail gas rate case. Under the current rate-making treatment approved by the PSCW, the MGP expenditures of WPL are deferred and collected from retail gas customers over a five-year period after new rates are implemented. Regulatory assets recorded by IPL and WPL reflect the probable future rate recovery of MGP expenditures. Refer to Note 16(e) for additional details of environmental-related MGP costs.

Other - 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, 2014 in the above table 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 in the period in which future recovery ceases to be probable.

Based on the PSCW’s July 2012 order related to WPL’s 2013/2014 test period Wisconsin retail electric and gas rate case, WPL was authorized to recover previously incurred costs associated with the acquisition of a 25% ownership interest in Edgewater Unit 5 and proposed emission controls projects. As a result, Alliant Energy and WPL recorded a $5 million increase to regulatory assets, and a $5 million credit to “Utility - Other operation and maintenance” in their income statements in 2012.

Regulatory Liabilities - At December 31, regulatory liabilities were comprised of the following items (in millions):

	Alliant Energy				IPL				WPL
	2014		2013		2014		2013		2014		2013
Cost of removal obligations		$421.7		$418.9		$279.1		$277.7		$142.6		$141.2
IPL’s tax benefit riders	243.0		265.4		243.0		265.4		—		—
Energy efficiency cost recovery	64.3		52.7		—		9.3		64.3		43.4
IPL’s electric transmission cost recovery	19.4		14.6		19.4		14.6		—		—
Commodity cost recovery	15.4		7.5		15.1		5.5		0.3		2.0
IPL’s electric transmission assets sale	11.3		21.6		11.3		21.6		—		—
Other	46.1		40.8		15.6		20.8		30.5		20.0
		$821.2		$821.5		$583.5		$614.9		$237.7		$206.6

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

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 estimated amounts they have collected in rates for these future removal costs less amounts spent on removal activities.

IPL’s tax benefit riders - IPL’s tax benefit riders utilize regulatory liabilities to credit bills of IPL’s Iowa retail electric and gas customers to help offset the impact of rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs expenditures, allocation of mixed service costs, allocation of insurance proceeds from floods in 2008, and cost of removal expenditures. In 2014, Alliant Energy’s and IPL’s “IPL’s tax benefit riders” regulatory liabilities decreased by ($22) million as follows (in millions):

Electric tax benefit rider credits		($85	)
Gas tax benefit rider credits	(12		)
Tax accounting method changes	75
		($22	)

In 2013, the U.S. Department of the Treasury issued tangible property regulations clarifying the tax treatment of costs incurred to acquire, maintain or improve tangible property and to retire and remove depreciable property. The regulations clarified the ability to deduct cost of removal expenditures on partial dispositions of assets. In 2014, the IRS issued implementation guidance related to these tangible property regulations, which allowed companies to file a tax accounting method change to deduct cost of removal expenditures on partial dispositions that were previously capitalized. In 2014, Alliant Energy, IPL and WPL implemented this tax accounting method change, which will result in the inclusion of additional tax deductions on Alliant Energy’s U.S. federal income tax return for the calendar year 2014. In 2013, the IRS also issued guidance that clarified acceptable units of property to be used when assessing whether costs incurred for electric generation projects may be deducted as repair expenditures or if they must be capitalized. After assessing the guidance, Alliant Energy, IPL and WPL decided in 2014 to implement the new units of property by filing a tax accounting method change as part of Alliant Energy’s U.S. federal income tax return for the calendar year 2013. IPL currently anticipates refunding its related current tax benefits from these two tax accounting method changes to its Iowa retail electric and gas customers in the future, and as a result, Alliant Energy and IPL recorded an increase of $75 million to IPL’s tax benefit riders regulatory liabilities and IPL’s tax-related regulatory assets in 2014.

Electric tax benefit rider - The IUB has approved an electric tax benefit rider proposed by IPL, which utilizes regulatory liabilities to credit bills of Iowa retail electric customers beginning in 2011 to help offset the impact of rate increases on such customers. Alliant Energy and IPL recognize an offsetting reduction to income tax expense for the after-tax amounts credited to IPL’s retail electric customers’ bills in Iowa, resulting in no impact to Alliant Energy’s and IPL’s net income from the electric tax benefit rider as follows (in millions):

	2014		2013		2012
Credit to IPL’s Iowa retail electric customers’ bills with reduction to electric revenues		$85		$79		$83
Income tax benefit resulting from decreased taxable income caused by credits	35		33		35
Income tax benefit representing tax benefits realized from electric tax benefit rider	50		46		48

In December 2014, the IUB issued an order authorizing $75 million of regulatory liabilities from tax benefits to be credited to IPL’s retail electric customers’ bills in Iowa during 2015 through the electric tax benefit rider.

In 2013, the IUB authorized IPL to reduce the electric tax benefit rider billing credits on customers’ bills in 2013 and 2014 to recognize the revenue requirement impact of the changes in tax accounting methods. The revenue requirement adjustment resulted in increases to electric revenues in Alliant Energy’s and IPL’s income statements and was recognized through the energy adjustment clause as a reduction of the credits on IPL’s Iowa retail electric customers’ bills from the electric tax benefit rider as follows (in millions):

	2014		2013
Revenue requirement adjustment		$15		$24

In December 2014, the IUB authorized IPL to reduce the $75 million of billing credits on customers’ bills by $15 million in 2015 to recognize the revenue requirement impact of the changes in tax accounting methods.

Gas tax benefit rider - The IUB has approved a gas tax benefit rider proposed by IPL, which utilizes approximately $12 million of regulatory liabilities annually to credit bills of Iowa retail gas customers beginning in January 2013 through December 2015 to help offset the impact of rate increases on such customers. Alliant Energy and IPL utilized gas tax benefit rider-related regulatory liabilities to credit IPL’s Iowa retail gas customers’ bills as follows (in millions):

	2014		2013
Credit to IPL’s Iowa retail gas customers’ bills with reduction to gas revenues		$12		$11
Income tax benefit resulting from decreased taxable income caused by credits	5		4
Income tax benefit representing tax benefits realized from gas tax benefit rider	7		7

Refer to Note 11 for additional details regarding IPL’s tax benefit riders.

Energy efficiency cost recovery - WPL and IPL collect revenues from their customers to offset certain expenditures incurred by WPL and IPL for energy efficiency programs, including state mandated programs and Shared Savings programs. Differences between forecasted costs used to set rates and actual costs for these programs are deferred as a regulatory asset or regulatory liability. The July 2012 PSCW order for WPL’s 2013/2014 test period electric and gas base rate case authorized higher energy efficiency cost recovery amortizations for 2014, which contributed to the increase in Alliant Energy’s and WPL’s “Energy efficiency cost recovery” regulatory liabilities.

IPL’s electric transmission cost recovery - Refer to Note 1(g) for additional details of IPL’s electric transmission service cost recovery mechanism.

Commodity cost recovery - Refer to Note 1(g) for additional details of IPL’s and WPL’s commodity cost recovery mechanisms.

IPL’s electric transmission assets sale - In 2007, IPL completed the sale of its electric transmission assets to ITC and recognized a gain based on the terms of the agreement. Upon closing of the sale, IPL established a regulatory liability pursuant to conditions established by the IUB when it allowed the transaction to proceed. The regulatory liability represented the present value of IPL’s obligation to refund to its customers payments beginning in the year IPL’s customers experience an increase in rates related to the transmission charges assessed by ITC. The regulatory liability accrues interest at the monthly average U.S. Treasury rate for three-year maturities.

In 2009, the IUB issued an order authorizing IPL to use a portion of this regulatory liability to reduce Iowa retail electric customers’ rates by $12 million for the period from July 2009 through February 2010 with billing credits included in the monthly energy adjustment clause. In 2010, the IUB issued an order authorizing IPL to use a portion of this regulatory liability to offset electric transmission service costs expected to be billed to IPL by ITC in 2010 related to ITC’s 2008 transmission revenue adjustment. IPL utilized $41 million of this regulatory liability over a five-year period ending December 2014 to offset the Iowa retail portion of transmission costs billed to IPL by ITC in 2010 related to ITC’s 2008 transmission revenue adjustment. As a result, IPL amortized $8 million of this regulatory liability annually, with an equal and offsetting amount of amortization for IPL’s regulatory asset related to electric transmission service costs.

Utility Rate Cases -

WPL’s Wisconsin Retail Electric and Gas Rate Case (2015/2016 Test Period) - In July 2014, WPL received an order from the PSCW authorizing WPL to maintain retail electric base rates at their current levels through the end of 2016. The retail electric base rate case included a return of and a return on costs for emission controls projects at Columbia Units 1 and 2 and Edgewater Unit 5, generation performance and reliability improvements at Columbia Units 1 and 2, other ongoing capital expenditures, and an increase in electric transmission service expense. The additional revenue requirement for these cost increases was offset by the impact of changes in the amortization of regulatory liabilities associated with energy efficiency cost recoveries and increased sales volumes. The order also authorizes WPL to implement a $5 million decrease in annual base rates for its retail gas customers effective January 1, 2015 followed by a freeze of such gas base rates through the end of 2016. The order included provisions that require WPL to defer a portion of its earnings if its annual regulatory return on common equity exceeds certain levels during 2015 or 2016 and allows WPL to request a change in retail base rates during this period if its annual regulatory return on common equity falls below a certain level.

WPL’s Wisconsin Retail Electric and Gas Rate Case (2013/2014 Test Period) - In July 2012, WPL received an order from the PSCW authorizing WPL to implement a decrease in annual retail gas base rates of $13 million effective January 1, 2013, followed by a freeze of such gas base rates through the end of 2014. The order also authorized WPL to maintain retail electric base rates at their current levels through the end of 2014. The order included a provision that required WPL to defer a portion of its earnings if its annual regulatory return on common equity exceeds certain levels during 2013 or 2014. As of December 31, 2014, Alliant Energy and WPL deferred $9 million of WPL’s 2013 and 2014 earnings for these provisions, which is included in “Other” in Alliant Energy’s and WPL’s regulatory liabilities tables above.

IPL’s Iowa Retail Gas Rate Case (2011 Test Year) - In May 2012, IPL filed a request with the IUB to increase annual rates for its Iowa retail gas customers based on a 2011 historical test year as adjusted for certain known and measurable changes occurring up to 12 months after the commencement of the proceeding. IPL’s request included a proposal to utilize regulatory liabilities to credit bills of Iowa retail gas customers to help mitigate the impact of the proposed final rate increase on such customers. IPL proposed to reduce customer bills utilizing a gas tax benefit rider over a three-year period by approximately $36 million in aggregate. In conjunction with the filing, IPL implemented an interim retail gas rate increase of $9 million, or approximately 3%, on an annual basis, effective June 4, 2012, without regulatory review and subject to refund pending determination of final rates from the request. In 2012, Alliant Energy and IPL recorded $5 million in gas revenues from IPL’s Iowa retail gas customers related to the interim retail gas rate increase. In November 2012, the IUB approved a settlement agreement related to IPL’s request, resulting in a final increase in annual rates for IPL’s Iowa retail gas customers of $11 million, or approximately 4%, effective January 10, 2013. The parties to the settlement agreement and the IUB also agreed to IPL’s proposed gas tax benefit rider. Refer to “Regulatory Liabilities” above for additional details on IPL’s gas tax benefit rider.

IPL’s Iowa Retail Electric Rate Settlement Agreement - In September 2014, the IUB approved a settlement agreement related to rates charged to IPL’s Iowa retail electric customers. The settlement agreement extends IPL’s Iowa retail electric base rates authorized in its 2009 test year rate case through 2016 and provides targeted retail electric customer billing credits of $105 million in aggregate, beginning May 2014 as follows (in millions):

	2014		2015		2016
Billing credits to reduce retail electric customers’ bills		$70		$25		$10

In 2014, IPL recorded $72 million of such retail electric customer billing credits. IPL will make adjustments to future billing credits to provide aggregate retail electric customer billing credits of $105 million in aggregate.

WPL’s Retail Fuel-related Rate Filing (2015 Test Year) - In December 2014, WPL received an order from the PSCW authorizing an annual retail electric rate increase of $39 million, or approximately 4%, effective January 1, 2015. The increase includes $39 million of anticipated increases in retail electric fuel-related costs in 2015 attributable to $25 million for higher retail electric fuel-related costs per MWh anticipated in 2015 and $14 million from the impact of increased sales volumes approved in the retail electric base rate case for 2015. WPL’s 2015 fuel-related costs will be subject to deferral if they fall outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Deferral of under-collections are reduced to the extent WPL’s actual return on common equity exceeds the most recently authorized return on common equity.

WPL’s Retail Fuel-related Rate Filing (2014 Test Year) - In 2013, WPL received an order from the PSCW authorizing an annual retail electric rate increase of $19 million, or approximately 2%, effective January 1, 2014 to reflect anticipated increases in retail electric fuel-related costs in 2014 compared to the fuel-related cost estimates used to determine rates for 2013. WPL’s 2014 fuel-related costs were subject to deferral if they fell outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Retail fuel-related costs incurred by WPL through December 31, 2014 were higher than fuel-related costs used to determine rates for such period resulting in an under-collection of fuel-related costs for 2014 of $33 million (including $28 million outside the approved range for 2014). As of December 31, 2014, Alliant Energy and WPL recorded $28 million in “Regulatory assets” on their balance sheets for the fuel-related costs incurred in 2014 that fell outside the PSCW approved bandwidth. The $28 million of deferred fuel-related costs is included in “Commodity cost recovery” in Alliant Energy’s and WPL’s regulatory assets tables above. Beginning in 2015, the regulatory asset will accrue interest at WPL’s PSCW authorized short-term debt rate. WPL currently expects to file a fuel reconciliation application with the PSCW in the first quarter of 2015 to seek recovery of these deferred fuel-related costs.

WPL’s Retail Fuel-related Rate Filing (2013 Test Year) - In 2012, WPL received an order from the PSCW authorizing an annual retail electric rate decrease of $29 million, or approximately 3%, effective January 1, 2013 to reflect anticipated decreases in retail electric fuel-related costs in 2013 compared to the fuel-related cost estimates used to determine rates for 2012. WPL’s 2013 fuel-related costs were subject to deferral if they fell outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Retail fuel-related costs incurred by WPL for 2013 did not fall outside of the bandwidth.

WPL’s Retail Fuel-related Rate Filing (2012 Test Year) - In 2011, WPL received an order from the PSCW authorizing an annual retail electric rate increase of $4 million, effective January 1, 2012 to reflect anticipated increases in retail fuel-related costs in 2012 compared to the fuel-related cost estimates used to determine rates for 2011. The 2012 fuel-related costs were subject to deferral if they fell outside an annual bandwidth of plus or minus 2% of the approved annual forecasted fuel-related costs. Retail fuel-related costs incurred by WPL in 2012 were lower than retail fuel-related costs used to determine rates for such period resulting in an over-collection of fuel-related costs for 2012 of approximately $17 million (including $11 million outside the approved range for 2012). In 2013, WPL received an order from the PSCW to refund $12 million, including interest, to its retail electric customers for these over-collections, which WPL completed in 2013.