Alliant Energy’s Wisconsin Power and Light and Interstate Power and Light subsidiaries have arranged separate, DOE-backed loan facilities with the Federal Financing Bank, with maximum borrowing amounts of about $1.63 billion and $3.5 billion, respectively. The facilities are intended to reimburse the utilities for a portion of eligible project costs, rather than provide the full cost of any project.
The agreements create access to long-term financing, but do not mean the utilities have borrowed the full amounts. Borrowings will be made in stages, subject to project eligibility and other conditions, and will be obligations of the respective subsidiaries—not Alliant Energy itself.
Key details
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Maximum facility sizes: Wisconsin Power and Light may borrow up to $1.626 billion; Interstate Power and Light may borrow up to $3.5 billion. The combined maximum is about $5.13 billion.
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Use of proceeds: Each utility can use advances to reimburse up to 80% of eligible project costs. Eligible projects may include power generation, transmission lines and substations, energy storage, and other infrastructure aimed at improving energy supply, grid reliability, resilience or security.
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Draws are staged: Each utility may request an advance no more than once per calendar quarter, or four times a year. The facilities allow multiple advances rather than requiring a single upfront borrowing.
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Availability period: Advances may be requested until the earliest of Sept. 15, 2033, reaching the applicable borrowing cap, or the end of funding availability following a default or termination of the relevant guarantee agreement. If a utility has not taken its first advance within 18 months of its guarantee agreement’s effective date, the DOE may terminate that agreement after giving at least 10 business days’ notice.
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Conditions to borrowing: Advances are subject to customary program requirements, including environmental review of eligible projects, applicable state regulatory approvals, payment of fees, compliance with covenants and confirmation of investment-grade credit ratings.
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Borrower responsibility: The loans are full-recourse, senior unsecured obligations of the borrowing utility. Alliant Energy has no direct obligations under the agreements, and neither subsidiary is responsible for the other subsidiary’s facility.
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Interest and repayment: Each advance will carry a rate set when it is made, equal to the applicable U.S. Treasury rate plus 0.375 percentage point. Interest is payable twice a year, on May 15 and Nov. 15. Borrowers may choose an interim rate-reset date; the Treasury rate can then reset, while scheduled principal payments remain due.
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Long maturities: All advances mature by May 15, 2056. Wisconsin Power and Light’s principal is scheduled to be paid in four equal annual installments from 2053 through 2056. Interstate Power and Light’s principal is scheduled to be paid in five installments from November 2052 through May 2056.
Plain-English implications
The arrangements give the two utilities access to substantial, long-dated financing for qualifying infrastructure costs, with the DOE guarantee supporting the facilities. The stated caps are borrowing limits, not amounts already drawn, and repayment responsibility sits with each utility separately rather than with Alliant Energy directly.