Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes

(4) INCOME TAXES

Income Tax Rates—The provision for income taxes for earnings from continuing operations is based on an estimated annual effective tax rate that excludes the impact of significant unusual or infrequently occurring items, discontinued operations or extraordinary items. The effective tax rates for Alliant Energy, IPL and WPL differ from the federal statutory rate of 35% generally due to impacts of enacted tax legislation, effects of utility rate making, including the tax benefit rider, tax credits, state income taxes and certain non-deductible expenses. The income tax rates shown in the following table for the three and nine months ended Sep. 30 were computed by dividing income taxes by income from continuing operations before income taxes.

	Three Months						Nine Months
	2011			2010			2011			2010
Alliant Energy		21.3	%		29.2	%		15.1	%		32.2	%
IPL		(3.3	%)		25.8	%		(1.7	%)		27.8	%
WPL		34.4	%		37.3	%		33.0	%		37.7	%

Tax Benefit Rider - In January 2011, the IUB approved a tax benefit rider proposed by IPL, which utilizes tax-related regulatory liabilities to credit bills of Iowa retail electric customers beginning in February 2011 to help offset the impact of the recent rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs, mixed service costs and allocation of insurance proceeds from the floods in 2008. Alliant Energy's and IPL's effective tax rates for the three and nine months ended Sep. 30, 2011 include the impact of reducing income tax expense with offsetting reductions to regulatory liabilities as a result of implementing the tax benefit rider. The tax impacts of the tax benefit rider are currently expected to decrease Alliant Energy's and IPL's 2011 annual income tax rates for continuing operations by 8.7% and 25.4%, respectively.

Wisconsin Tax Legislation—In June 2011, the 2011 Wisconsin Act 32 (Act 32) was enacted. The most significant provision of Act 32 for Alliant Energy authorizes combined groups to share net operating loss carryforwards that were incurred by group members prior to Jan. 1, 2009 and utilize these shared net operating losses over 20 years beginning after Dec. 31, 2011. Based on this provision of Act 32, Alliant Energy now anticipates its Wisconsin combined group will be able to fully utilize $368 million of Wisconsin net operating losses incurred by Alliant Energy and Resources prior to Jan. 1, 2009 to offset future taxable income and therefore reversed previously recorded deferred tax asset valuation allowances related to state net operating loss carryforwards of $18.9 million in the second quarter of 2011. The income tax benefits recognized in the second quarter of 2011 from Act 32 decreased Alliant Energy's income tax rate for continuing operations by 6.2% for the nine months ended Sep. 30, 2011.

Federal Health Care Legislation—In March 2010, the Patient Protection and Affordable Care Act, and the Health Care and Education Reconciliation Act of 2010 (Federal Health Care Legislation) were enacted. One of the most significant provisions of the Federal Health Care Legislation for Alliant Energy, IPL and WPL requires a reduction in their tax deductions for retiree health care costs beginning in 2013, to the extent their drug expenses are reimbursed under the Medicare Part D retiree drug subsidy program. The reduction in the future deductibility of retiree health care costs accrued as of Dec. 31, 2009 required Alliant Energy, IPL and WPL to record deferred income tax expense of $7.1 million, $3.7 million and $3.1 million, respectively, in the first quarter of 2010. These income tax expenses recognized in the first quarter of 2010 increased Alliant Energy's, IPL's and WPL's income tax rates for continuing operations for the nine months ended Sep. 30, 2010 by 1.9%, 2.0% and 1.6%, respectively.

Federal Tax Audits—In September 2010, the Internal Revenue Service (IRS) completed the audits of Alliant Energy's U.S. federal income tax returns for calendar years 2005 through 2008. The net impact of the completion of these audits and reversal of reserves for uncertain tax positions related to those audits resulted in Alliant Energy and IPL recognizing net income tax benefits in the third quarter of 2010 of $6.5 million and $5.1 million, respectively. These net income tax benefits recognized in the third quarter of 2010 decreased Alliant Energy's and IPL's income tax rates for continuing operations for the three months ended Sep. 30, 2010 by 3.0% and 3.8%, respectively, and for the nine months ended Sep. 30, 2010 by 1.7% and 2.8%, respectively. The net impact of the completion of these audits and reversal of reserves for uncertain tax positions related to those audits did not have a material impact on WPL's income tax rates for the three and nine months ended Sep. 30, 2010.

Production Tax Credits—Alliant Energy has three wind projects that are currently generating production tax credits: WPL's 68 MW Cedar Ridge wind project, which began generating electricity in late 2008; IPL's 200 MW Whispering Willow - East wind project, which began generating electricity in late 2009; and WPL's 200 MW Bent Tree—Phase I wind project, which began generating electricity in late 2010. For the three and nine months ended Sep. 30, production tax credits (net of state tax impacts) resulting from these wind projects were as follows (in millions):

	Three Months				Nine Months
	2011		2010		2011		2010
Cedar Ridge (WPL)	$	0.6	$	0.4	$	3.2	$	2.4
Bent Tree—Phase I (WPL)		1.4		—		6.7		—
Subtotal (WPL)		2.0		0.4		9.9		2.4
Whispering Willow—East (IPL)		1.8		1.0		8.2		4.5
	$	3.8	$	1.4	$	18.1	$	6.9

Deferred Tax Assets and Liabilities—During the nine months ended Sep. 30, 2011, Alliant Energy's, IPL's and WPL's non-current deferred tax liabilities recognized in "Deferred income taxes" on their Condensed Consolidated Balance Sheets increased $127 million, $61 million and $84 million, respectively. The increases in deferred tax liabilities were primarily related to property-related temporary differences recorded during the nine months ended Sep. 30, 2011 from bonus depreciation deductions available in 2011 and a tax accounting method change for mixed service costs. These items were partially offset by increases in deferred tax assets recorded during the nine months ended Sep. 30, 2011 as a result of increasing federal and state net operating loss carryforwards primarily due to the tax accounting method change related to mixed service costs and bonus depreciation, and the reversal of $18.9 million of deferred tax asset valuation allowances related to state net operating loss carryforwards in the second quarter of 2011.

Bonus Depreciation Deductions—In 2010, the Small Business Jobs Act of 2010 (SBJA) and the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the Act) were enacted. The most significant provisions of the SBJA and the Act for Alliant Energy, IPL and WPL are related to the extension of bonus depreciation deductions for certain expenditures for property that are placed in service through Dec. 31, 2012. Based on capital projects expected to be placed into service in 2011, Alliant Energy currently estimates its total bonus depreciation deductions to be claimed in its 2011 federal income tax return will be approximately $580 million ($220 million for IPL and $360 million for WPL).

Mixed Service Costs Deductions—In 2010, Alliant Energy filed a request with the IRS for a change in its tax accounting method for mixed service costs. In March 2011, Alliant Energy received consent from the IRS to reflect this change as part of its 2010 federal income tax return. The change allows Alliant Energy to currently deduct a portion of its mixed service costs, which have historically been capitalized for tax purposes. This change was applied retroactively to mixed service costs incurred since 1989. Alliant Energy recently completed an assessment of its eligible mixed service costs for the period from 1989 through 2010 and included $247 million ($141 million for IPL and $106 million for WPL) of mixed service costs deductions for these years in its 2010 federal income tax return.

Carryforwards—At Sep. 30, 2011, Alliant Energy's net operating loss carryforwards and associated deferred tax assets were estimated as follows (in millions):

	Carryforward Amount		Deferred Tax Assets (a)
Federal net operating losses	$	860	$	295
State net operating losses		623		32

(a) The gross net operating losses are offset by uncertain tax positions that if lost, will be settled in a reduction of net operating losses and not with tax payments. Alliant Energy's, IPL's and WPL's deferred tax assets related to federal and state net operating losses, net of offsets, were $272 million, $108 million and $116 million, respectively.

Uncertain Tax Positions—It is reasonably possible that Alliant Energy, IPL and WPL could have material changes to their unrecognized tax benefits during the 12 months ending Sep. 30, 2012 if the IRS completes its audit of repairs expenditures during this period.

Regulatory Assets and Regulatory Liabilities—During the nine months ended Sep. 30, 2011, IPL recognized significant tax benefits as a result of a tax accounting method change for mixed service costs. IPL expects to refund tax benefits realized from expensing mixed service costs to its Iowa retail customers in the future through the tax benefit rider approved by the IUB. The tax benefits from the tax accounting method change for mixed service costs were recorded as increases to current and non-current regulatory liabilities of $21 million and $148 million, respectively, on Alliant Energy's and IPL's Condensed Consolidated Balance Sheets during the nine months ended Sep. 30, 2011. Alliant Energy and IPL also recorded an increase to their non-current regulatory assets of $169 million during the nine months ended Sep. 30, 2011 to reflect the benefit IPL expects to receive from its Iowa retail customers in the future as the temporary differences associated with the mixed service costs reverse into current tax expense.

IPL [Member]

Income Taxes

(4) INCOME TAXES

Income Tax Rates—The provision for income taxes for earnings from continuing operations is based on an estimated annual effective tax rate that excludes the impact of significant unusual or infrequently occurring items, discontinued operations or extraordinary items. The effective tax rates for Alliant Energy, IPL and WPL differ from the federal statutory rate of 35% generally due to impacts of enacted tax legislation, effects of utility rate making, including the tax benefit rider, tax credits, state income taxes and certain non-deductible expenses. The income tax rates shown in the following table for the three and nine months ended Sep. 30 were computed by dividing income taxes by income from continuing operations before income taxes.

	Three Months						Nine Months
	2011			2010			2011			2010
Alliant Energy		21.3	%		29.2	%		15.1	%		32.2	%
IPL		(3.3	%)		25.8	%		(1.7	%)		27.8	%
WPL		34.4	%		37.3	%		33.0	%		37.7	%

Tax Benefit Rider - In January 2011, the IUB approved a tax benefit rider proposed by IPL, which utilizes tax-related regulatory liabilities to credit bills of Iowa retail electric customers beginning in February 2011 to help offset the impact of the recent rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs, mixed service costs and allocation of insurance proceeds from the floods in 2008. Alliant Energy's and IPL's effective tax rates for the three and nine months ended Sep. 30, 2011 include the impact of reducing income tax expense with offsetting reductions to regulatory liabilities as a result of implementing the tax benefit rider. The tax impacts of the tax benefit rider are currently expected to decrease Alliant Energy's and IPL's 2011 annual income tax rates for continuing operations by 8.7% and 25.4%, respectively.

Wisconsin Tax Legislation—In June 2011, the 2011 Wisconsin Act 32 (Act 32) was enacted. The most significant provision of Act 32 for Alliant Energy authorizes combined groups to share net operating loss carryforwards that were incurred by group members prior to Jan. 1, 2009 and utilize these shared net operating losses over 20 years beginning after Dec. 31, 2011. Based on this provision of Act 32, Alliant Energy now anticipates its Wisconsin combined group will be able to fully utilize $368 million of Wisconsin net operating losses incurred by Alliant Energy and Resources prior to Jan. 1, 2009 to offset future taxable income and therefore reversed previously recorded deferred tax asset valuation allowances related to state net operating loss carryforwards of $18.9 million in the second quarter of 2011. The income tax benefits recognized in the second quarter of 2011 from Act 32 decreased Alliant Energy's income tax rate for continuing operations by 6.2% for the nine months ended Sep. 30, 2011.

Federal Health Care Legislation—In March 2010, the Patient Protection and Affordable Care Act, and the Health Care and Education Reconciliation Act of 2010 (Federal Health Care Legislation) were enacted. One of the most significant provisions of the Federal Health Care Legislation for Alliant Energy, IPL and WPL requires a reduction in their tax deductions for retiree health care costs beginning in 2013, to the extent their drug expenses are reimbursed under the Medicare Part D retiree drug subsidy program. The reduction in the future deductibility of retiree health care costs accrued as of Dec. 31, 2009 required Alliant Energy, IPL and WPL to record deferred income tax expense of $7.1 million, $3.7 million and $3.1 million, respectively, in the first quarter of 2010. These income tax expenses recognized in the first quarter of 2010 increased Alliant Energy's, IPL's and WPL's income tax rates for continuing operations for the nine months ended Sep. 30, 2010 by 1.9%, 2.0% and 1.6%, respectively.

Federal Tax Audits—In September 2010, the Internal Revenue Service (IRS) completed the audits of Alliant Energy's U.S. federal income tax returns for calendar years 2005 through 2008. The net impact of the completion of these audits and reversal of reserves for uncertain tax positions related to those audits resulted in Alliant Energy and IPL recognizing net income tax benefits in the third quarter of 2010 of $6.5 million and $5.1 million, respectively. These net income tax benefits recognized in the third quarter of 2010 decreased Alliant Energy's and IPL's income tax rates for continuing operations for the three months ended Sep. 30, 2010 by 3.0% and 3.8%, respectively, and for the nine months ended Sep. 30, 2010 by 1.7% and 2.8%, respectively. The net impact of the completion of these audits and reversal of reserves for uncertain tax positions related to those audits did not have a material impact on WPL's income tax rates for the three and nine months ended Sep. 30, 2010.

Production Tax Credits—Alliant Energy has three wind projects that are currently generating production tax credits: WPL's 68 MW Cedar Ridge wind project, which began generating electricity in late 2008; IPL's 200 MW Whispering Willow - East wind project, which began generating electricity in late 2009; and WPL's 200 MW Bent Tree—Phase I wind project, which began generating electricity in late 2010. For the three and nine months ended Sep. 30, production tax credits (net of state tax impacts) resulting from these wind projects were as follows (in millions):

	Three Months				Nine Months
	2011		2010		2011		2010
Cedar Ridge (WPL)	$	0.6	$	0.4	$	3.2	$	2.4
Bent Tree—Phase I (WPL)		1.4		—		6.7		—
Subtotal (WPL)		2.0		0.4		9.9		2.4
Whispering Willow—East (IPL)		1.8		1.0		8.2		4.5
	$	3.8	$	1.4	$	18.1	$	6.9

Deferred Tax Assets and Liabilities—During the nine months ended Sep. 30, 2011, Alliant Energy's, IPL's and WPL's non-current deferred tax liabilities recognized in "Deferred income taxes" on their Condensed Consolidated Balance Sheets increased $127 million, $61 million and $84 million, respectively. The increases in deferred tax liabilities were primarily related to property-related temporary differences recorded during the nine months ended Sep. 30, 2011 from bonus depreciation deductions available in 2011 and a tax accounting method change for mixed service costs. These items were partially offset by increases in deferred tax assets recorded during the nine months ended Sep. 30, 2011 as a result of increasing federal and state net operating loss carryforwards primarily due to the tax accounting method change related to mixed service costs and bonus depreciation, and the reversal of $18.9 million of deferred tax asset valuation allowances related to state net operating loss carryforwards in the second quarter of 2011.

Bonus Depreciation Deductions—In 2010, the Small Business Jobs Act of 2010 (SBJA) and the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the Act) were enacted. The most significant provisions of the SBJA and the Act for Alliant Energy, IPL and WPL are related to the extension of bonus depreciation deductions for certain expenditures for property that are placed in service through Dec. 31, 2012. Based on capital projects expected to be placed into service in 2011, Alliant Energy currently estimates its total bonus depreciation deductions to be claimed in its 2011 federal income tax return will be approximately $580 million ($220 million for IPL and $360 million for WPL).

Mixed Service Costs Deductions—In 2010, Alliant Energy filed a request with the IRS for a change in its tax accounting method for mixed service costs. In March 2011, Alliant Energy received consent from the IRS to reflect this change as part of its 2010 federal income tax return. The change allows Alliant Energy to currently deduct a portion of its mixed service costs, which have historically been capitalized for tax purposes. This change was applied retroactively to mixed service costs incurred since 1989. Alliant Energy recently completed an assessment of its eligible mixed service costs for the period from 1989 through 2010 and included $247 million ($141 million for IPL and $106 million for WPL) of mixed service costs deductions for these years in its 2010 federal income tax return.

Carryforwards—At Sep. 30, 2011, Alliant Energy's net operating loss carryforwards and associated deferred tax assets were estimated as follows (in millions):

	Carryforward Amount		Deferred Tax Assets (a)
Federal net operating losses	$	860	$	295
State net operating losses		623		32

(a) The gross net operating losses are offset by uncertain tax positions that if lost, will be settled in a reduction of net operating losses and not with tax payments. Alliant Energy's, IPL's and WPL's deferred tax assets related to federal and state net operating losses, net of offsets, were $272 million, $108 million and $116 million, respectively.

Uncertain Tax Positions—It is reasonably possible that Alliant Energy, IPL and WPL could have material changes to their unrecognized tax benefits during the 12 months ending Sep. 30, 2012 if the IRS completes its audit of repairs expenditures during this period.

Regulatory Assets and Regulatory Liabilities—During the nine months ended Sep. 30, 2011, IPL recognized significant tax benefits as a result of a tax accounting method change for mixed service costs. IPL expects to refund tax benefits realized from expensing mixed service costs to its Iowa retail customers in the future through the tax benefit rider approved by the IUB. The tax benefits from the tax accounting method change for mixed service costs were recorded as increases to current and non-current regulatory liabilities of $21 million and $148 million, respectively, on Alliant Energy's and IPL's Condensed Consolidated Balance Sheets during the nine months ended Sep. 30, 2011. Alliant Energy and IPL also recorded an increase to their non-current regulatory assets of $169 million during the nine months ended Sep. 30, 2011 to reflect the benefit IPL expects to receive from its Iowa retail customers in the future as the temporary differences associated with the mixed service costs reverse into current tax expense.

WPL [Member]

Income Taxes

(4) INCOME TAXES

Income Tax Rates—The provision for income taxes for earnings from continuing operations is based on an estimated annual effective tax rate that excludes the impact of significant unusual or infrequently occurring items, discontinued operations or extraordinary items. The effective tax rates for Alliant Energy, IPL and WPL differ from the federal statutory rate of 35% generally due to impacts of enacted tax legislation, effects of utility rate making, including the tax benefit rider, tax credits, state income taxes and certain non-deductible expenses. The income tax rates shown in the following table for the three and nine months ended Sep. 30 were computed by dividing income taxes by income from continuing operations before income taxes.

	Three Months						Nine Months
	2011			2010			2011			2010
Alliant Energy		21.3	%		29.2	%		15.1	%		32.2	%
IPL		(3.3	%)		25.8	%		(1.7	%)		27.8	%
WPL		34.4	%		37.3	%		33.0	%		37.7	%

Tax Benefit Rider - In January 2011, the IUB approved a tax benefit rider proposed by IPL, which utilizes tax-related regulatory liabilities to credit bills of Iowa retail electric customers beginning in February 2011 to help offset the impact of the recent rate increases on such customers. These regulatory liabilities are related to tax benefits from tax accounting method changes for repairs, mixed service costs and allocation of insurance proceeds from the floods in 2008. Alliant Energy's and IPL's effective tax rates for the three and nine months ended Sep. 30, 2011 include the impact of reducing income tax expense with offsetting reductions to regulatory liabilities as a result of implementing the tax benefit rider. The tax impacts of the tax benefit rider are currently expected to decrease Alliant Energy's and IPL's 2011 annual income tax rates for continuing operations by 8.7% and 25.4%, respectively.

Wisconsin Tax Legislation—In June 2011, the 2011 Wisconsin Act 32 (Act 32) was enacted. The most significant provision of Act 32 for Alliant Energy authorizes combined groups to share net operating loss carryforwards that were incurred by group members prior to Jan. 1, 2009 and utilize these shared net operating losses over 20 years beginning after Dec. 31, 2011. Based on this provision of Act 32, Alliant Energy now anticipates its Wisconsin combined group will be able to fully utilize $368 million of Wisconsin net operating losses incurred by Alliant Energy and Resources prior to Jan. 1, 2009 to offset future taxable income and therefore reversed previously recorded deferred tax asset valuation allowances related to state net operating loss carryforwards of $18.9 million in the second quarter of 2011. The income tax benefits recognized in the second quarter of 2011 from Act 32 decreased Alliant Energy's income tax rate for continuing operations by 6.2% for the nine months ended Sep. 30, 2011.

Federal Health Care Legislation—In March 2010, the Patient Protection and Affordable Care Act, and the Health Care and Education Reconciliation Act of 2010 (Federal Health Care Legislation) were enacted. One of the most significant provisions of the Federal Health Care Legislation for Alliant Energy, IPL and WPL requires a reduction in their tax deductions for retiree health care costs beginning in 2013, to the extent their drug expenses are reimbursed under the Medicare Part D retiree drug subsidy program. The reduction in the future deductibility of retiree health care costs accrued as of Dec. 31, 2009 required Alliant Energy, IPL and WPL to record deferred income tax expense of $7.1 million, $3.7 million and $3.1 million, respectively, in the first quarter of 2010. These income tax expenses recognized in the first quarter of 2010 increased Alliant Energy's, IPL's and WPL's income tax rates for continuing operations for the nine months ended Sep. 30, 2010 by 1.9%, 2.0% and 1.6%, respectively.

Federal Tax Audits—In September 2010, the Internal Revenue Service (IRS) completed the audits of Alliant Energy's U.S. federal income tax returns for calendar years 2005 through 2008. The net impact of the completion of these audits and reversal of reserves for uncertain tax positions related to those audits resulted in Alliant Energy and IPL recognizing net income tax benefits in the third quarter of 2010 of $6.5 million and $5.1 million, respectively. These net income tax benefits recognized in the third quarter of 2010 decreased Alliant Energy's and IPL's income tax rates for continuing operations for the three months ended Sep. 30, 2010 by 3.0% and 3.8%, respectively, and for the nine months ended Sep. 30, 2010 by 1.7% and 2.8%, respectively. The net impact of the completion of these audits and reversal of reserves for uncertain tax positions related to those audits did not have a material impact on WPL's income tax rates for the three and nine months ended Sep. 30, 2010.

Production Tax Credits—Alliant Energy has three wind projects that are currently generating production tax credits: WPL's 68 MW Cedar Ridge wind project, which began generating electricity in late 2008; IPL's 200 MW Whispering Willow - East wind project, which began generating electricity in late 2009; and WPL's 200 MW Bent Tree—Phase I wind project, which began generating electricity in late 2010. For the three and nine months ended Sep. 30, production tax credits (net of state tax impacts) resulting from these wind projects were as follows (in millions):

	Three Months				Nine Months
	2011		2010		2011		2010
Cedar Ridge (WPL)	$	0.6	$	0.4	$	3.2	$	2.4
Bent Tree—Phase I (WPL)		1.4		—		6.7		—
Subtotal (WPL)		2.0		0.4		9.9		2.4
Whispering Willow—East (IPL)		1.8		1.0		8.2		4.5
	$	3.8	$	1.4	$	18.1	$	6.9

Deferred Tax Assets and Liabilities—During the nine months ended Sep. 30, 2011, Alliant Energy's, IPL's and WPL's non-current deferred tax liabilities recognized in "Deferred income taxes" on their Condensed Consolidated Balance Sheets increased $127 million, $61 million and $84 million, respectively. The increases in deferred tax liabilities were primarily related to property-related temporary differences recorded during the nine months ended Sep. 30, 2011 from bonus depreciation deductions available in 2011 and a tax accounting method change for mixed service costs. These items were partially offset by increases in deferred tax assets recorded during the nine months ended Sep. 30, 2011 as a result of increasing federal and state net operating loss carryforwards primarily due to the tax accounting method change related to mixed service costs and bonus depreciation, and the reversal of $18.9 million of deferred tax asset valuation allowances related to state net operating loss carryforwards in the second quarter of 2011.

Bonus Depreciation Deductions—In 2010, the Small Business Jobs Act of 2010 (SBJA) and the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the Act) were enacted. The most significant provisions of the SBJA and the Act for Alliant Energy, IPL and WPL are related to the extension of bonus depreciation deductions for certain expenditures for property that are placed in service through Dec. 31, 2012. Based on capital projects expected to be placed into service in 2011, Alliant Energy currently estimates its total bonus depreciation deductions to be claimed in its 2011 federal income tax return will be approximately $580 million ($220 million for IPL and $360 million for WPL).

Mixed Service Costs Deductions—In 2010, Alliant Energy filed a request with the IRS for a change in its tax accounting method for mixed service costs. In March 2011, Alliant Energy received consent from the IRS to reflect this change as part of its 2010 federal income tax return. The change allows Alliant Energy to currently deduct a portion of its mixed service costs, which have historically been capitalized for tax purposes. This change was applied retroactively to mixed service costs incurred since 1989. Alliant Energy recently completed an assessment of its eligible mixed service costs for the period from 1989 through 2010 and included $247 million ($141 million for IPL and $106 million for WPL) of mixed service costs deductions for these years in its 2010 federal income tax return.

Carryforwards—At Sep. 30, 2011, Alliant Energy's net operating loss carryforwards and associated deferred tax assets were estimated as follows (in millions):

	Carryforward Amount		Deferred Tax Assets (a)
Federal net operating losses	$	860	$	295
State net operating losses		623		32

(a) The gross net operating losses are offset by uncertain tax positions that if lost, will be settled in a reduction of net operating losses and not with tax payments. Alliant Energy's, IPL's and WPL's deferred tax assets related to federal and state net operating losses, net of offsets, were $272 million, $108 million and $116 million, respectively.

Uncertain Tax Positions—It is reasonably possible that Alliant Energy, IPL and WPL could have material changes to their unrecognized tax benefits during the 12 months ending Sep. 30, 2012 if the IRS completes its audit of repairs expenditures during this period.

Regulatory Assets and Regulatory Liabilities—During the nine months ended Sep. 30, 2011, IPL recognized significant tax benefits as a result of a tax accounting method change for mixed service costs. IPL expects to refund tax benefits realized from expensing mixed service costs to its Iowa retail customers in the future through the tax benefit rider approved by the IUB. The tax benefits from the tax accounting method change for mixed service costs were recorded as increases to current and non-current regulatory liabilities of $21 million and $148 million, respectively, on Alliant Energy's and IPL's Condensed Consolidated Balance Sheets during the nine months ended Sep. 30, 2011. Alliant Energy and IPL also recorded an increase to their non-current regulatory assets of $169 million during the nine months ended Sep. 30, 2011 to reflect the benefit IPL expects to receive from its Iowa retail customers in the future as the temporary differences associated with the mixed service costs reverse into current tax expense.