Alliant Energy Corp (LNT) 2008 Q4 法說會逐字稿

Thank you for holding, ladies and gentlemen, and welcome to the Alliant Energy's year-end 2008 earnings conference call. As a reminder, today's conference is being recorded. At this time, all lines are in a listen-only mode.

I would now like to turn the call over to your host, Jamie Freeman, Manager of Investor Relations at Alliant Energy.

Good morning. I would like to thank all of you on the call and on the webcast for joining us today. We appreciate your participation.

With me here today are Bill Harvey, Chairman, President and Chief Executive Officer, and Pat Kampling, our Chief Financial Officer, as well as other members of the Senior Management team. Following prepared remarks by Bill and Pat, we will have time to take questions from the investment community.

We issued a news release this morning, announcing Alliant Energy's 2008 fourth quarter and full-year earnings. This release is available on the Investors page of our website at www.alliantenergy.com.

Before we begin, I need to remind you that the remarks we make on this call and our answers to your questions include forward-looking statements. These forward-looking statements are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters discussed in Alliant Energy's press release issued this morning and in our filings with the Security and Exchange Commission. We disclaim any obligation to update these forward-looking statements.

At this point, I'll turn the call over to Bill.

Thanks, Jamie. Good morning, everyone. My comments today will recap 2008 and detail our priorities for 2009. Later in the call, Pat will discuss various financial and regulatory matters.

First, however, in December, we indicated that we would be at the low end of, or slightly below, our guidance range. 2008 continuing operations results of $2.54 a share came in $0.11 below the low end of our range. The drivers of those lower results included a flood-related impairment charge at our Sixth Street generating station. A write-off of receivables from the bankruptcy of a large customer at IP&L and the resolution of contract disputes on two win projects at RMT.

Turning now to a review of the year, the biggest driver of 2008 utility results was restoration efforts associated with June's historic flooding, which caused significant damage and disruptions to the operations in Cedar Rapids, our largest load center. The combination of lost sales, clean-up and restoration costs, and facility impairments, reduced earnings by approximately $0.23 per share, net of insurance recoveries.

The flooding caused severe damage to two of our electric and steam generating stations, and I'm pleased to report that we are now producing steam for customers at our Prairie Creek facility, and expect to begin producing electricity by the end of this month. The $150 million in repairs at Prairie Creek are still ongoing, and the majority of the capacity of this 238 megawatt facility is anticipated to be online by this summer.

We continue to evaluate options for the other seriously damaged generation station, the Sixth Street generating facility. To date, restoration activities have not begun at this site.

A second driver for 2008 was Retail Electric sales. As we discussed throughout last year, sales profiles were quite different between our two utility subsidiaries. At IP&L, all retail classes were essentially flat versus 2007, despite the unfavorable impacts from the flooding and significantly cooler summer weather.

At WP&L, the cooler summer weather, plus economic factors, drove retail sales down 3%. Plant closures in the automotive and paper sectors, along with general weakness in manufacturing, resulted in a drop in industrial sales of 4% for the year.

Compared to the same periods in 2007, each quarter in 2008 produced a larger industrial sales decline, beginning with a 1% decrease in the first quarter and finishing with a 7% decrease in the fourth quarter. The industrial class makes up 45% of WP&L retail sales, and we anticipate continued softness throughout this year.

We did experience a slight rise in bad debt for 2008, but write-offs were just over four-tenths of a percent of retail revenue. This rate is less than half of the industry average.

In addition to the flood and lower sales, the foreseen impacts of the IP&L transmission sale also contributed to lower utility earnings. That said, we have begun to redeploy the transmission proceeds back into the utility business, as part of our capital expenditures on wind and environmental projects, and will see the associated earnings investments materialize over time.

Other positive earnings drivers included reduced purchased power capacity costs and a lower effective income tax rate as a result of income tax audit settlements. Our non-regulated operations exhibited strong performance in 2008.

We saw RMT's wind connect business emerge as a leader in wind energy development and increase their earnings by 50% versus 2007. The company was involved in the engineering and construction of 690 megawatts of wind energy facilities, and it's assisted with the siting and development of over 30 projects.

I'm particularly pleased that the wind connect team experienced only one loss time injury in over 1.6 million project hours worked. This result, in conjunction with our utilities earning the Occupational Excellence Achievement Award from the National Safety Council, demonstrates that our Company's commitment to safety is producing very positive results.

The remainder of our non-regulated operations met our expectations, while consuming limited capital. I'd like to highlight the performance of our transportation business that met its $0.07 per share earnings expectation, despite having both its operations and its markets severely impacted by the flooding in the Cedar Rapids and Iowa City corridors.

Given the pressures of the economy, weather and the floods, I'm proud of the results our team delivered in 2008. However, as we discussed last December, 2009 presents a host of new challenges. These challenges include declining retail sales and regulatory matters, which we expect will result in earnings below 2008 levels. We're disappointed with our 2009 outlook, and efforts are underway to put our utilities in a position to earn their authorized return sooner, rather than later.

The first step in this process is the filing of rate cases at both IP&L and WP&L in the coming months. Producing fair outcomes in these dockets is one of our top priorities for 2009. Pat will provide additional information on those anticipated regulatory filings in her remarks.

2008 marked the successful beginning of many important infrastructure projects, driven by our wind, energy efficiency, and environmental control plans. Continued progress and success on these and related projects remain high priorities for 2009.

Beginning with our wind generation plans, WP&L's Cedar Ridge project became our first owned wind farm when it began producing electricity in December. The 68 megawatt wind farm was completed on time and under budget at a cost of $156 million.

Construction has now begun on IP&L's Whispering Willow wind farm in Iowa, and we anticipate the first turbines to arrive from Vestas in April. This 200 megawatt project is expected to come online by the end of this year or early next year. As of the end of 2008, we had incurred $190 million of capital costs on the project. Under the rate-making principles approved by the Iowa Utilities Board, this $425 million investment will earn a return on equity of 11.7%.

The 200 megawatt Bent Tree wind farm, proposed by WP&L, continues its way through the regulatory approval process. Because the site is located in Minnesota, the project requires a Certificate of Need from the Minnesota Public Utilities Commission and a Certificate of Authority from the Public Service Commission of Wisconsin. Decisions in both dockets are expected this summer.

I should note that FP&L's NextEra subsidiary has intervened in the Wisconsin proceeding, and is asserting that a long-term purchase power agreement, from their recently-completed Merchant wind farm in Iowa, would be a better alternative for our customers. We know that our Bent Tree project is cost-competitive. Further, we do not intend to let others use our balance sheet to finance their investments.

Assuming a positive regulatory outcome, construction at Bent Tree would begin this summer. Turbines would arrive onsite early next year, and the project would be placed in service during the second half of 2010 at an estimated cost of $450 million.

2008 also provided another important first for our Company. In April, we began installing advanced metering infrastructure for electric and gas company customers in Wisconsin. To date, we have replaced or retrofitted 25% of the electric and gas meters. We expect to complete WP&L's deployment in 2010 at a cost of approximately $95 million. Deployment of AMI to our IP&L customers is scheduled to be completed in mid-2012 at an additional cost of about $110 million.

While the AMI system will produce immediate customer service benefits with respect to billing accuracy and enhanced outage management, we are anxious to exploit its full potential to serve as a platform for tomorrow's smart grid, which will empower customers to intelligently and effectively manage their own energy use.

Various funding and grant provisions proposed in the economic stimulus package being considered by Congress may also provide us with new opportunities to implement additional smart grid projects that leverage our AMI investments.

2008 also saw construction begin on our first large-scale environmental control project, which involves the installation of a selective catalytic reduction project and baghouse at IP&L's 270 megawatt Lansing Unit number 4. This $195 million project is expected to go into service in 2010.

In terms of other significant environment projects, WP&L has an application on file with the Public Service Commission of Wisconsin to install an SCR at one of the units at our Edgewater generating station in Sheboygan, Wisconsin, and will also file an application to install scrubbers at WP&L's Columbia generating station in Portage, Wisconsin later this quarter. These projects in Wisconsin will require an additional investment of approximately $400 million.

The final item I will discuss is yesterday's oral decision by the Iowa Utilities Board on the rate-making principles for our proposed new hybrid coal unit at Sutherland. The Board authorized a 10.1% return on equity and a $2,816 per kilowatt cost-cap, excluding AFUDC for the project. These outcomes compare to our requested return of 12.55% and a $3,483 per kilowatt cost-cap -- again, excluding AFUDC.

I would remind you that under Wisconsin statutes, we must build the plant under the principles established by the Board or not build the plant at all. We need to evaluate the written order once it becomes available, and discuss the outcome with our cooperative and municipal partners before making a definitive decision on the future of the project. But suffice it to say, we are disappointed with the decision.

The principles outlined by the Board do not appear to adequately reflect either the real cost to build or the challenge of raising capital in the current state of the financial markets.

In closing, let me recap the priorities for 2009 that we will update you on throughout the year. First, we will work closely with our regulators and stakeholders to produce fair outcomes in the rate cases that will be filed in Iowa and Wisconsin.

Second, we will execute our wind, energy efficiency and environmental control programs, as part of an ongoing commitment to a greener future.

Third, we will evaluate the Iowa Utilities Board written order on the Sutherland rate-making principles to determine our next steps to meet Iowa's future energy needs.

Fourth, we will conclude our discussions with the Public Service Commission of Wisconsin, and announce our plans to meet WP&L's long-term energy needs as a result of last December's denial of the expansion at Nelson Dewey.

Fifth, we will sustain and grow RMT's wind connect position as a leader in the wind energy development market.

And finally, we will continue to focus on operational excellence in our core operations, with a zero injury philosophy.

We appreciate your continued support of our Company, and at this time, I'll turn the call over to Pat.

Thanks, Bill, and good morning to everyone. Since Bill covered our financial highlights, my remarks this morning will focus on providing updates on our financing plans, pension costs and contributions in rate case matters.

Before turning to those items, I should mention that we are affirming the 2009 earnings per share and capital expenditure guidance that was issued in December. The transcript and supplemental slides of those remarks are available on the Investor section of our website.

As we mentioned in that call, declining utility retail sales remain an area of concern, and we are carefully monitoring the economic conditions of our service territories, especially Wisconsin. Also, the biggest earnings driver of RMT wind connect is wind farm development. As you are all aware, the economic and financial downturn has begun to take a serious toll on new wind development, so new project activity remains uncertain. Our current outlook anticipates that RMT's earnings will remain flat.

Year-end 2008's liquidity was very strong, totaling $1.1 billion, comprised of almost $350 million of cash and marketable securities, and over $700 million available capacity under our credit facilities and IPL's Accounts Receivable sales program. We are well-positioned to execute on our 2009 planned capital expenditures totaling $1.3 billion. Please note that included in that total is $205 million associated with the Sutherland project.

Financing the utilities capital plan will involve a combination of internally generated funds, equity infusions from cash at the parent, and issuing debt. The debt will include increasing short-term levels, as well as issuing approximately $500 million of long-term debt. This is a modest maturity year, with only $135 million maturing in August. The timing of debt issuances will be influenced by market conditions, but we currently anticipate issuing long-term debt in the second half of the year.

Our 2009 financing plan also assumes we will make contributions to our pension plans totaling $55 million. We, like others, experienced a significant decline in our pension plan assets during 2008, resulting in funding levels decreasing from 101% at the end of 2007 to 63% at the end of 2008. As a result, pension costs are increasing significantly, up from $3 million in 2008 to $57 million in 2009.

The increase at IPL will be included as part of the rate case filing that I will discuss in a few minutes. WPL did receive PSEW approval to defer incremental pension at cost as part of the rate case settlement. So, while pension costs are up significantly, the impact to 2009 earnings compared to 2008 is less than $0.05 per share, which is reflected in our guidance.

We are preparing to have a very important and active year in the regulatory area. In addition to the ongoing dockets relating to the strategic initiatives Bill mentioned, there are three additional important proceedings.

First, IPL filed a FERC 206 complaint in November against ITC concerning the O&M and A&G components that are part of their 2009 formula rates. We are currently waiting for FERC to assign the case to either a settlement judge or a trial judge.

ITC has asked that the case be dismissed on the grounds that the asset sale agreement we entered barred IPL from challenging rate elements for a seven-year period. We maintained that our complaint does not take issue with the use of forward-looking rates, and instead centers on how they were implemented. FERC has yet to set a schedule for the docket, and we do not expect resolution until sometime in 2010.

Second, IPL will soon file its first Iowa electric rate case since 2004. Drivers for this filing include investments in reliability and emissions controls, wheeling and pension increases, and the capital deployed as a result of the 2007 ice storms and 2008 floods. Recall that Iowa uses a historic test year, but may consider nine months of known and measurable changes since the end of that test year.

The rate increase is granted in two phases, with interim rates becoming effective approximately 10 days after filing, followed by final rates approximately nine months later. Items included in interim rates will be higher wheeling and pension cost, and significant known low changes. The primary items that will not be captured until final rates is post-test year rate-based additions. In addition, IPL will encrust an automatic adjustment cost for FERC-regulated ITC wheeling charges as part of this case.

And finally, we are preparing for a WPL 2010 test year retail electric and gas case to be filed in April. New rates are expected to become effective at the beginning of 2010. The first objective of this case is to receive revenues adequate to meet our cost of service and appropriate return on investment, using a sales forecast reflective of our current economy.

A second objective of the case is to address various policy initiatives, just as electric and gas decoupling for residential and small commercial electric customers, expanded energy efficiency initiatives, and incentive mechanisms for managing gas commodity costs.

In our December guidance call, we discussed that WPL's 2009 projected electric sales are expected to be about 6% below the levels assumed in retail customer rates. While using a forward-looking test year for rate-making purposes has many benefits, the sudden and dramatic sales decline that WPL is experiencing will make it difficult, if not impossible, to earn close to its authorized return in 2009. As a result, we are continuing to analyze the possible filing request for emergency relief to address declining retail sales in Wisconsin.

It is understandable that our customers find it frustrating that the economic hardships many of them are experiencing could in term compel us to increase their electric bills. While the public headwinds make such a case challenging, the fact remains the unique nature of the regulatory compact requires us to serve.

We have taken strong actions in 2009 to reduce costs by freezing salaries at all levels of the Company, reducing travel, and continuing to apply lean Six Sigma to produce efficiencies in our day-to-day operations. We cannot and will not cut essential investments or programs that impact reliability and safety, and yet we need to remain financially strong to attract the capital in order to provide those very services. A decision on whether or not we will pursue this alternative will be made by the end of this month.

In closing, we are in the process of finalizing our 2009 Investor Relations plan, and I look forward to the opportunity to meet with many of you throughout the course of the year.

At this time, I will turn the call back over to our Operator, Joseph, to facilitate the question-and-answer session.

Thank you, Ms. Kampling. At this time, the Company will open up the call to questions from members of the investment community. Alliant Energy's management will take as many questions as they can within the one hour timeframe for this morning's call. If you are a member of the investment community and do have a question, (Operator Instructions).

We'll take our first question from Danielle Seitz, Seitz Research.

I just was wondering, how do you see the Sutherland issue being discussed and what sort of timing would you anticipate? And how do you anticipate this to be trickling down into your CapEx? Or when will you make the final decision?

Danielle, this is Bill. Thank you for the question. We have some very valued partners in connection with the Sutherland 4 project. We obviously just heard the IUB's oral decision yesterday morning. So it's really too early for me to be able to answer that question specifically, but the process that we will go through is obviously to see the written order once it comes out, and then evaluate the order and its implications for the project with our valued partners.

And I would expect that that process with our partners will take a month or so after we have the written order in hand, but we will certainly move through that collaborative decision-making process as quickly as we can, once we actually see the Board's decision. So I would expect, over the course of the next quarter, our course of action will be clear.

Okay. And in terms of your sales assumptions, does the range of estimates that you have for this year have -- I mean, is that the main factor that will make the range being if your sales were worse than expected or better than expected?

I would say you're right. The $0.30 spread in our guidance for the total Company is certainly predominately impacted by the economy by what sorts of outcome we experience in what timeframe, relating to rate relief requests. And to a far lesser extent, but nevertheless a relevant extent, what happens with the wind energy development business in the country. But those are certainly the three biggest variables that drive the breadth in the guidance range.

Steven Gambuzza, Longbow Capital.

I just wanted to understand what your flexibility is to not build the plant, if you determine that the combination of a cap on costs coupled with a relatively low ROE relative to your actual cost of capital, is just an unacceptable combination for shareholders. What are you obligated to do? You have an obligation to serve. What are your options?

Well, the way House File 577 works, as we said in the script, is with respect to this plant, if it is to be built, it must be built under the provisions of the rate-making principles that the Board has prescribed. We are not obligated to build the plant, but if we and our partners elect to do so, that's the regulatory compact under which we would do it.

If we elect not to proceed with the plant, obviously, we will have to bring forward new proposals for meeting the energy needs of IP&L's customers. What that would be is something that we have not yet developed finally and certainly haven't talked about publicly.

Okay. Has there been -- it was surprising, given you had such a -- what was kind of a -- at the time, a very constructive ROE on the wind farm of 11.7% on something that was kind of above generally granted ROEs on utility investments at the time, for an investment with relatively low construction risk. And now there's -- the cost of capital has risen precipitously. This is a much higher risk project and the authorized return is so much lower. Has there been some change in the Commission since that time?

Well, obviously a change in their minds; but it is the same three Board members that -- the same three Board members that made the 11.7% ROE decision with respect to wind. Approximately a year ago, made the 10.1% decision with respect to a hybrid coal plant yesterday. We understand the mechanics that they use in making those decisions, but mechanics are just that. What drove them to that dramatic decline in ROEs is something we'll understand better once we see the written order.

And could you please repeat the timing? I think you mentioned that you were going to file for a general rate case in Wisconsin. There was a potential for an emergency rate case, but then you were also planning on filing this year for a general rate case for 2010, is that correct?

Yes, Steve, this is Pat. Yes, the general rate case, the 2010 test year for Wisconsin, will be filed in April. We will decide by the end of this month if we go ahead and file an emergency rate case for 2009.

Okay. And the 2010 rate case, that will be off-cycle, just because sales are declining so fast?

Yes. It will take us out of our every-other-year cycle for base rate cases.

Okay. And you said you'd intend to pursue residential decoupling in that case?

Yes, we will. Residential and small commercial decoupling.

Okay. And then on RMT, you clearly had a very strong year in 2008 and participated in the very strong growth that the wind market had to offer in 2008. It seems like the data points that are coming out of a variety of different sources suggest that 2009 is going to be rather -- down rather dramatically, in terms of installed megawatts this year, just given financing challenges and other issues. And I'm just curious what level of visibility you have to sustain the record performance of 2008 to 2009? If you could just comment on kind of backlog and the pipeline of activity.

Yes. We've got pretty decent visibility at least two quarters out, but the reality is, Steve, during our last call, if you will, the popular consensus was that wind energy development was likely to be flat year-over-year in the country. And that certainly has changed over the course of the last -- literally, over the course of the last two months, where we're seeing a pretty substantial fall-off in terms of project interest and development in the latter part of next year. So, that's really the best that I can say.

Our outlook, which we reaffirmed today, anticipates that RMT will be flat year-over-year. That could change for the worse modestly, but we're, frankly, more hopeful that it's going to change for the better, because at some point in time, there is going to be linkage between political rhetoric and capital investment. That hasn't happened yet, but we continue to believe that it will.

Hasan Doza, Luminus Management.

I just had a good question on WP&L. You guys talked about the load growth for '09 in going forward. Can you give us color as to what is the load forecast you have assumed for residential, commercial and industrial in your '09 outlook for WP&L?

We're getting that for you.

Yes, and this was part of the supplemental slides that we posted back in December, if you want to refer back to our Investor website. But right now for residential, sales growth from '08 to '09 from WPL, we're looking at 0.4% increase -- but a decline in commercial and industrial.

Do you have the magnitude in terms of percentages decreases you're assuming for commercial and industrial?

Sure. And again, and that's on that supplemental slide, if you want to pull it up when you get a minute. But for commercial, we're assuming a decline of 0.2%; for industrial, 2.8%, for an overall decline of 1.2%. And that's where they're normalized.

Okay. And just one last question on industrial -- what is the customer or end market breakdown for your industrial customers?

Don't understand the question.

Who are your customers serving the industrial load? Are these, like, mining companies? Are these paper mills? Can you give color on the actual customers on the industrial load?

We have quite a mix. We had a -- obviously had -- a substantial participation by the automobile manufacturing industry. We have substantial participation by the paper industry; the chemicals industry; food and food processing. It's actually quite diverse. The biggest and most dramatic shifts that we've seen, of course, are associated with the automobile industry and the closure of the GM plant in Janesville, Wisconsin and the collateral implications of that.

Thank you. That's very helpful. Thank you again.

Jeff Coviello, Duquesne Capital.

Okay. I just wanted to see if you could give us a little color on where realized ROEs were at the Iowa utility and the Wisconsin Utility, and maybe full-year '08, if it's possible, to give sort of where you think '09 is going to shape up, based on the guidance.

The -- approximately, the authorized return on equities were earned at IP&L. And approximately, slightly below, the authorized returns on equity were realized at WP&L, including the impacts of the earnings at ATC.

And that's in '08?

Yes, sir.

Right. And then '09, it's obviously going to be -- okay, I see -- a bunch lower. How much growth is there at ATC per year? What's the right way to think about the growth rate of that entity?

Well, it's -- the capital expenditure growth year-over-year is not going to be dramatic. The equity income growth is expected to rise about 10%, '09 versus '08.

Okay. Great. And is that, as far as over the next few years, is that -- do you believe that that equity income trend will continue, given the number of projects they have in the backlog, roughly?

I don't think you will see it vary dramatically from that rate.

Okay, great. Okay, that's really helpful. Thank you very much.

(Operator Instructions). Dave Parker, Robert W. Baird.

A quick question and then a follow-up after that. Given the last two, I guess I'd characterize them as disappointing orders -- a plant proposed in Iowa and then Wisconsin, what is the timing that we could potentially see for a Plan B in each one of those states to be presented? And potentially, what would be the regulatory timing to deal with Plan B, assuming that the needs that have been approved by all those Commissions really haven't changed much, as far as renew megawatt adds? And then I've got a follow-up after that.

Sure. Staging-wise, you will see it in Wisconsin before you see it in Iowa. What you see in Wisconsin -- which is not finalized yet, but has been the subject of considerable discussion, both internally and with the Commission staff -- is likely to be, as the Commission's Nelson Dewey decision foresaw the conversion of a simple cycle gas project to combine cycle configuration, perhaps the proposal to build one or more biomass fueled facilities, relatively small in size. Considerably more wind generation is a real possibility, as well as increased investments in energy efficiency.

I expect that that will become visible certainly in the next quarter. The regulatory approvals would be required to implement much of that Plan B -- if you will, obviously, regulatory approvals to build new generating facilities, regulatory approvals are required to move forward with the Bent Tree wind project for WP&L and any additional wind projects we might move forward. But I think we will expect to see that activity begin to pick up in the latter part of the second quarter into the third quarter of this year.

And then a final (multiple speakers) -- yes, a final regulatory approval from Wisconsin, say, early next year, Bill, or is that -- or maybe the end of this year?

That's always a difficult thing to predict. It obviously depends on how complex and controversial the proposal proves to be. That's very difficult for me to judge at this point in time. But I would expect, given the Commission's conclusion that we do have a need for new base-load energy facilities in Wisconsin, that they will move forward efficiently and expeditiously in their review of whatever it is that we proposed.

Surely that will be impacted by their evaluation of what's going on in the economy, but I would hope that we can get proposals in front of the Commission in Wisconsin during the third quarter of this year, and would be hopeful that their review processes would certainly be more expeditious than what we experienced with respect to Nelson Dewey.

IP&L, Plan B will be developed if there is a requirement to develop a Plan B. And you're familiar with the regulatory approval processes in Iowa, which do tend to move somewhat more expeditiously than those in Wisconsin. But it will lag what transpires in Wisconsin in terms of the development and the announcement of Plan B.

And maybe a similar comment, Bill, for Iowa, that since they established that there's a need, that maybe this moves a little bit quicker and now it's just a discussion around technology? Is that fair to assume?

Well, assuming, David -- which you are, I know -- assuming that Sutherland 4 does not move forward, there obviously will have to be new proposals fashioned by us to meet with the Iowa Utility Board, like the Wisconsin Commission has agreed, that there is a need for us to do something at IP&L.

But the choices are pretty obvious, in terms of if Sutherland 4 does not move forward, what would you do? And I would think the nature of the choices are very similar to those faced by WP&L, with the exception that there would not be a simple cycle to combine cycle conversion in that plan, but quite likely combine cycle proposals.

Okay. And I'm sorry I'm taking so much time here. One, maybe last important question. Given, I guess, in my view, that you may be a little heavy on equity here and you've shown that you don't mind buybacks, do you maybe do some share buybacks in the near-term here, given CapEx may be slid out here a couple of years?

We haven't announced any plans or intention to do that, David. But if we develop them, we'll let you know.

Fair enough?

I guess that was an answer to my question. All right, great. Thank you.

Eric McCarthy, Praesidis Asset Management.

Most of my questions have been answered and I don't want to be redundant. But one last question -- if you could help me get a sense of what has already been spent on Sutherland and what the impact would be if you choose to not go forward with that, and if there's any write-off to come, if that would be recoverable.

Yes. To date, we have incurred our share, about $30 million of costs on the development and design and engineering related to Sutherland 4, as well as the prosecution of the regulatory proceeding. It's our expectation, certainly given the Board's conclusion that this is a reasonable proposal for us to have brought forward, that we will be able to recover those expenses in future rate cases.

Okay. I think that's about it. I guess one last question. Is there any exposure to ethanol producers in Iowa that you've seen a dramatic drop-off from?

By exposure, do you mean do they owe us money?

Owe money or is there a significant portion of load in Iowa dedicated to producers?

There is a substantial portion of ethanol load, which we serve in the state of Iowa. It's on the order of 200 megawatts, if I recall correctly. If that's really wrong, Jamie will follow-up with you. But I think it is on the order of 200 megawatts. So it is a substantial part of our industrial load in the state of Iowa.

There is little, if any, new ethanol development going on in the state of Iowa, but obviously, substantial contribution to revenues and margins from the existing ethanol business, which seems to be doing reasonably well.

(Operator Instructions). Reza Hatefi, Decade Capital.

Could you remind us again what time of the year the IPL interim rates go effective?

Sure, this is Pat. We're expecting to file that case in March, probably mid to late March. And rates will go into effect approximately 10 days after filing.

Okay. And just -- I know you've already discussed the potential WPL emergency rate case, but could you give a little more color? I'm sorry if I missed it in the beginning, but on what items could be captured in that case? And could that become a full-blown rate case?

Sure. Again, we are separately filing a 2010 base-year case in Wisconsin, so keep that in mind. And those rates will be in affect beginning of 2010. The issue for the emergency rate relief request in Wisconsin would be solely based upon the sales forecast that was used to develop the rates that went into effect the beginning of '09.

Oh, okay, I'm sorry, I missed it. So, you officially have decided to file the full-blown rate case?

Yes. For rates to go into affect in 2010.

Okay, okay.

And the emergency would deal with 2009.

Okay. And just a follow-up on the discussion on the wind. Do you think wind programs are being cut back also because of power prices being down and difficult to justify long-term contracts above market, which could be required to achieve the reasonable IRR's for these wind projects? Is that one of the reasons, besides financing issues?

You know, I would have to say, based upon our access to RMT's very keen insight into that market, that is not a major driver. It is a capital markets issue.

Okay, okay. Thank you very much.

(multiple speakers) [That's been] our perspective, for what it's worth.

Sure. Thank you very much.

Clifford Fisher, Delaware Investment.

Just to go back to the earliest statements at the beginning of the call, you had mentioned WPL being down usage-wise, but you also mentioned that IPL was flat, even with the floods. I just want that -- were you surprised to see that kind of result?

And also, you had mentioned, with another questioner, about what you expect WPL to be in 2009 in terms of residential, commercial, and industrial. Do you have the same numbers for IPL, as well?

Yes, hi, this is Pat. Again, if you went back to the supplemental slides that we posted in December, we do have IPL's retail sales also posted there. And from '08 to '09, we are projecting an IPL decline of 2.4%; but a large chunk of that is due to losing a large industrial customer, ADM, that is going to be going cogen. We expect small commercial to increase at IPL and residential to be down 1.1%.

Okay. But you said '07, '08, IPL was flat?

You're talking about '07 and '08 -- yes, it was, including the floods.

Okay. And that's including the flood?

Yes.

Okay. Thank you very much.

And Mr. Freeman, there are no further questions at this time.

With no more questions, this concludes our call. A replay will be available through February 12, 2009 at 888-203-1112 for US and Canada, or 719-457-0820 for international. Callers should reference conference ID 8244179.

In addition, an archive of the conference call and a script of the prepared remarks made on the call will be available on the Investor section of the Company's website later today. Thank you for your continued support of Alliant Energy, and feel free to contact me with any follow-up questions.

Once again, ladies and gentlemen, thank you for your participation. This does conclude today's conference call. Have a great day.