Alliant Energy Corp. closed a $5.1 billion loan package backed by the U.S. Energy Department, giving its two utilities access to cheap, long-dated federal financing for a wave of new power plants as data centers drive up electricity demand in Iowa and Wisconsin.
The package consists of two loans from the Federal Financing Bank, guaranteed by the department’s Office of Energy Dominance Financing. Interstate Power and Light, the Iowa utility, can borrow up to $3.5 billion, and Wisconsin Power and Light up to $1.626 billion. Each utility is solely responsible for its own borrowings; the parent company has no direct obligation. The loans are senior unsecured and run until May 2056.
Treasury-plus pricing
Each draw carries an interest rate equal to the comparable Treasury yield plus 0.375 percentage point, far below what a utility would typically pay in the bond market. The Energy Department estimated the financing could cut annual interest expense by more than $46 million, and Alliant projects up to $1.2 billion of customer savings over the 30-year life of the loans.
The money comes on a reimbursement basis. Each utility can request one advance per quarter covering up to 80% of eligible costs already spent, subject to environmental reviews, state regulatory approval and keeping investment-grade credit ratings. Draws are available through Sept. 15, 2033. If state regulators later allow recovery of less than 95% of the funded costs, the utility must repay the difference.
Built for data centers
The financing will support more than 2.6 gigawatts of new or upgraded capacity, including new natural-gas plants, about 1,000 megawatts of batteries and two billion cubic feet of liquefied natural gas storage. Alliant expects electricity demand on its system to rise about 60% by 2031 under signed agreements with large customers, including data center campuses in Cedar Rapids, Iowa, and Beaver Dam, Wis. The loans substantially expand the roughly $3 billion of conditional commitments Alliant had disclosed earlier, and they form part of a construction and acquisition program of about $13.4 billion for 2026 through 2029.
