Alliant Energy has closed a $5.1 billion loan package from the U.S. Department of Energy (DOE) Office of Energy Dominance Financing (EDF) to help pay for new natural gas generation, energy storage and upgrades to existing plants in Iowa and Wisconsin, the department and the utility said on October 28.

According to DOE, the investments will add more than 2.6 gigawatts (GW) of new or upgraded generation capacity, enough electricity to power nearly 2 million homes, and deliver more than $1 billion in electricity cost savings across the two states. The department said the projects will create hundreds of construction-related jobs.

Alliant’s own release adds detail on terms. It describes the financing as 30-year, lower-interest loans and projects up to $1.2 billion in cumulative customer savings over the life of the loans, along with more than 1,600 local jobs during construction. The company said the federal commitment gives it access to up to $5.1 billion of lower-cost capital, subject to project advancement, qualification and financing terms.

What the money could build

Alliant listed the projects it may pursue with the financing, among others:

  • 1.6 GW of new natural gas generation;
  • 240 megawatts (MW) of added capacity at existing natural gas facilities;
  • 1 GW of energy storage; and
  • 2 billion cubic feet (BCF) of liquefied natural gas (LNG) storage.

Neither release names specific plants or sites, gives in-service dates or says how the $5.1 billion will be split between Alliant’s two utility subsidiaries, Interstate Power and Light Company and Wisconsin Power and Light Company. Alliant said all projects will go through a transparent regulatory process. The company serves more than 1 million electric and 435,000 natural gas customers in Iowa and Wisconsin.

One LNG project is already moving through regulators. In September, Alliant said the Public Service Commission of Wisconsin had given unanimous verbal approval to an LNG facility in Rock County, Wisconsin, near its Riverside Energy Center campus. The company said the facility would add reliability for gas customers during extreme cold and let it buy and store gas when prices are lower. The loan announcements do not say whether that facility is among the projects to be financed.

Lisa Barton, Alliant’s president and CEO, said the company is “focused on meeting growth responsibly, maintaining affordability and creating lasting value for customers.” Energy Secretary Chris Wright said the investments “will drive down energy costs for families and businesses in Iowa and Wisconsin.” EDF Director Gregory A. Beard said that “by bringing new, dependable power online, we are strengthening our nation’s energy security.”

Part of a wider federal program

DOE said the loan advances the executive order “Strengthening the Reliability and Security of the United States Electric Grid.” It described the Alliant package as the administration’s tenth financial close and the sixth and seventh utility financings completed through the Energy Dominance Financing Program.

A day earlier, on October 27, DOE announced a conditional commitment for a loan of up to $5 billion to Constellation Energy to finance nuclear uprates and modernization at eight plants: Braidwood, Byron, Clinton, Dresden, LaSalle and Quad Cities in Illinois, Calvert Cliffs in Maryland and Limerick in Pennsylvania. The department said those projects would add nearly 1.1 GW. Unlike the Alliant package, that loan has not closed; Constellation must meet technical, legal, environmental and financial conditions before DOE enters into definitive financing documents and funds it.

Why it matters

For Alliant’s customers in Iowa and Wisconsin, the company says the federally backed financing lowers the cost of building new generation and energy infrastructure, and it expects those savings to reach customers over the 30-year life of the loans. The mix it outlined, with new gas-fired generation alongside 1 GW of storage, is aimed at what Alliant describes as grid resiliency and reliability at a lower cost.

For the wider utility sector, the back-to-back announcements show DOE’s financing office backing gas-fired generation and storage at Alliant and nuclear uprates across Constellation’s fleet in the same week. EDF says it finances energy and manufacturing projects that contribute to energy security, grid reliability and lower costs.

The caveats

The savings figures are projections, and the two releases differ: DOE cites more than $1 billion in electricity cost savings, while Alliant projects up to $1.2 billion in cumulative customer savings. Neither release states the interest rate or explains how the savings were calculated. Alliant describes its project list as projects it may pursue, so the final mix could change as individual projects go through regulatory review.