The Alliant Energy Resources LLC subsidiary of Alliant Energy (NYSE: LNT) is looking at selling or contracting out the capacity of the 99-MW Franklin County wind farm in Franklin County, Iowa, that was placed in service in 2012.
Alliant Energy said in its Feb. 24 annual Form 10-K report that Alliant Energy Resources is currently selling the electricity output from the wind farm into the Midcontinent ISO market as a merchant generator, and is considering various options for this wind farm. Those options include: entering into a power purchase agreeement with an independent third party, or with Alliant’s Interstate Power and Light or Wisconsin Power and Light regulated utility subsidiaries; selling the project to IPL or WPL; or continuing to sell the output into the MISO market as a merchant generator.
The Form 10-K noted: “In 2015, declines in forward electricity prices suggested that there may be an impairment indicator for the Franklin County wind farm as a result of exposure to market prices. Alliant Energy performed an impairment test, which included an evaluation of key assumptions, including forward electricity prices, expected output of the wind farm, status of transmission upgrades expected to be completed, the expected life of the wind farm, and likelihood of the sale of the wind farm. Alliant Energy concluded that the estimated undiscounted future cash flows exceeded the carrying value of the Franklin County wind farm as of December 31, 2015, resulting in no impairment. However a further decline in average forward electricity prices of $2 to $3 per MWh over the remaining life of the wind farm could result in an impairment charge that would be material and would likely exceed half of the $130 million carrying value at December 31, 2015.”