Wisconsin Power and Light Company Files for Regulatory Approval and Fixed Financial Parameters for Baseload Power Plant

MADISON, Wis., Feb. 7 /PRNewswire-FirstCall/ -- Wisconsin Power and Light Company (WP&L), a subsidiary of Alliant Energy Corporation , today filed a Certificate of Public Convenience and Necessity (CPCN) application and an application for fixed financial parameters and advance rate-making principles with the Public Service Commission of Wisconsin (PSCW) for a proposed 300 megawatt (MW) generating station. In the CPCN filing, WP&L identified expansion at the existing Nelson Dewey site in Cassville, Wis. as the preferred site, and expansion at the existing Columbia Energy Center near Portage, Wis. as the alternative site.

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"Over the past several years, demand for electricity in our service territory has grown, on average, by more than 3 percent," said Barbara Swan, President of WP&L. "We believe that this proposed expansion, combined with electricity that will be generated at our proposed Cedar Ridge wind farm, will allow us to continue to meet our customers' needs in a reliable, environmentally responsible and cost effective manner for years to come."

The proposed additional unit at the Nelson Dewey site, expected to begin operation in 2012, would utilize circulating fluidized bed (CFB) technology, a commercially demonstrated clean-coal technology resulting from nearly $4 billion in combined government and private funding, and supported by the U.S. Department of Energy's Clean Coal Technology Program. By design, CFB technology reduces the amounts of sulfur dioxide and nitrogen oxides emitted to the air. Limestone is used to both fluidize the coal during combustion and capture sulfur. The limestone also lowers the operating temperatures resulting in reduced formation of nitrogen oxides. CFB technology is also able to utilize a wide variety of solid fuels, including biomass.

One reason WP&L identified Nelson Dewey as the preferred site was the expected significant increase in Wisconsin's import capability the new unit would allow. WP&L and other Wisconsin utilities are currently paying a premium for moving purchased power into the state due to transmission congestion. "Based on our extensive analysis of the sites, we were able to determine that the addition of a 300 MW unit at Nelson Dewey is expected to increase Wisconsin's import capability by approximately 625 megawatts -- a 25 percent increase from our state's import capability today," said Swan. The reduction of the transmission constraint resulting from the additional unit is expected to create a significant economic benefit to the state by addressing a major transmission issue for Wisconsin utility customers.

WP&L's application for fixed financing parameters and advance rate-making principles was filed in accordance with the provisions of the 2005 Wisconsin Act 7. Act 7 allows Wisconsin utilities to request that the PSCW establish, in advance, the principal financial terms and conditions that will apply irrevocably to a new electric generating facility. Fixing financial parameters reduces the uncertainty associated with paying for major investments, to the benefit of WP&L's customers and shareowners. The company requested a return on equity of 12.95 percent, and 50 percent common equity in the regulatory capital structure.

WP&L estimates the stand-alone costs of the additional unit will be approximately $717 million. WP&L also plans to add infrastructure that will be shared with the existing units at an estimated cost of $60 million, including expansion of existing barge transportation facilities and adding access to rail transportation. Both Dollar amounts are represented in current dollars, not including AFUDC.

As previously announced, WP&L is planning environmental retrofits of the existing units 1 and 2 near the end of the decade. The cost of those environmental improvements is currently estimated to be approximately $100 million. In summary, the total investment at the Nelson Dewey site is expected to be approximately $880 million in current year dollars, excluding AFUDC, if applicable.

More information on WP&L's plans for new generation can be found at http://www.alliantenergy.com/newgeneration .

Alliant Energy is an energy-services provider with subsidiaries serving approximately 1 million electric and over 420,000 natural gas customers. Providing its customers in the Midwest with regulated electric and natural gas service is the company's primary focus. Wisconsin Power and Light, the company's Wisconsin utility subsidiary, serves 453,000 electric and 179,000 natural gas customers. Alliant Energy, headquartered in Madison, Wis., is a Fortune 1000 company traded on the New York Stock Exchange under the symbol LNT. For more information, visit the company's Web site at http://www.alliantenergy.com/ .

This press release includes forward-looking statements. These forward- looking statements can be identified as such because the statements include words such as "expected," "estimates," "estimated," "believe," "proposed," or other words of similar import. Similarly, statements that describe future plans or strategies are also forward-looking statements. Such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Actual results could be affected by such factors as: state regulatory actions or local government actions which delay or prevent the new generation construction, including inability to obtain all necessary approvals and permits; unanticipated construction issues, delays or expenditures; changes to WP&L's access to capital markets; political conditions in WP&L's service territories; current or future litigation, regulatory investigations, proceedings or inquiries that could impede the implementation of WP&L's plans; failure of equipment and technology to perform as expected; and economic conditions in WP&L's service territory. These factors should be considered when evaluating the forward- looking statements and undue reliance should not be placed on such statements. The forward-looking statements included herein are made as of the date hereof and Alliant Energy and WP&L undertake no obligation to update publicly such statements to reflect subsequent events or circumstances.