The U.S. Commerce Department's investigation into whether to apply tariffs to more solar energy imports could affect the timing and cost of some of Midwestern utility Alliant Energy Corp.'s solar power projects.
Those impacts are mainly expected for projects Alliant has scheduled to come online in the second half of 2023, but the company is confident that its 2022 solar additions will progress as expected, CFO Robert Durian said during an April 29 call to discuss first-quarter results.
"While I acknowledge this investigation could impact our 2023 plan projects, we are focused on mitigating such impacts and continuing our long track record of delivering on our 5% to 7% growth target [for EPS] throughout the planning period," Durian said.
In Wisconsin, Alliant has 325 MW of new solar capacity set to enter service in 2022 and 764 MW expected in 2023. Alliant will seek approval soon to build another 300 MW of solar energy in Wisconsin to meet growing customer demand and has a proceeding underway in Iowa to build 400 MW of solar power along with 75 MW of battery storage.
Of the solar energy set to enter service in 2023, Durian said about 250 MW worth of panels has already been sourced and imported or is set to come from vendors that are not subject to the potential new tariffs. That leaves about 500 MW for the latter half of 2023 "that we haven't identified the sourcing for yet [and] don't [know] for sure if we're going to have any impact from the tariffs," the CFO said.
Most of that capacity is targeted to cost about $1,600/kW without consideration of potential new tariffs, according to Durian. That range is higher than costs of about $1,400/kW for Alliant's 2022 solar projects but "still very attractive for us when we think about alternatives ... to provide resources for our customers' demand growth," Durian said.
"We still feel very committed to doing these [projects] and moving forward with them," the executive said. "We're just trying to figure out the exact timing of when we may be able to get those in service based on this Department of Commerce investigation."
In late March, the Commerce Department granted a request from California-based solar manufacturer Auxin Solar Inc. to investigate whether China-based solar-component makers were circumventing antidumping and countervailing duties by assembling products in other countries before shipping them to the U.S. If the Commerce Department sides with Auxin and imposes tariffs on more imports, domestic solar project installers worry that their costs will jump, imperiling the expansion of solar energy in the U.S.
Several other utilities have disclosed plans during earnings calls to potentially delay certain solar projects as a result of the federal investigation, including NextEra Energy Inc. and Xcel Energy Inc.
In the first quarter, Alliant's net income attributable to shareholders rose to $192 million, or 77 cents per share, from $171 million, or 68 cents per share, in the same period of 2021.
Earnings climbed on an increase in the rate base for Alliant's Wisconsin utility, Wisconsin Power and Light Co., as well as returns on the company's solar portfolio expansion and higher electric and gas sales, among other factors. The S&P Capital IQ GAAP EPS estimate for Alliant in the first quarter was 72 cents.
For full year 2022, Alliant reaffirmed earnings guidance of $2.67 to $2.81 per share, the midpoint of which would be a 6% increase from 2021 adjusted EPS of $2.58.
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