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Alliant Energy (LNT) Set to Build 300MW Wind Farm in Iowa

Zacks Equity Research
Updated

Alliant Energy Corp.’s LNT Iowa Utility recently entered into an agreement with Apex Clean Energy for the construction of the 300-megawatt Upland Prairie Wind Farm, located in Clay and Dickinson counties, IA. The project is expected to power approximately 130,000 homes a year. The farm’s construction is anticipated to commence in the spring of 2018.

Other Details

Alliant Energy expects the wind farm to provide local tax benefits approximately worth $40 million over the life of the project. The company also forecasts to makelease payments of $45 million for the next 25 years to landowners, on account of this project.

Notably, the company had received approval to add up to 500 megawatts (MW) of wind energy in 2016. In 2017, it filed for expansion of another 500 MW wind energy from the Iowa Utilities Board, which in turn will add new wind generation of 1,000 MW in Iowa. Cumulatively, the wind energy thus generated will be sufficient to power up to 430,000 Iowa homes a year. The combined projects represent an investment worth $1.8 billion.

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Our View

We believe that the above deal is in line with Alliant Energy’s long-term plans to invest heavily in natural gas and renewable assets over the next 10 years. Evidently, it has plans to invest nearly $11.3 billion over the 2016-2025 time frame. The company is currently concluding major construction projects on time and at or below budget.

With the increasing demand for renewable energy resources, companies are adopting clean energy procurement as a strategic business decision to support their growth and business bottom line similar to Alliant Energy’s efforts to introduce cost-competitive wind energy for its customers. The latest project can be expected to boost up its future growth trajectory. Notably, such projects also enhance the company’s service reliability by adding more customers to its grid.

Further, its expectation to add more construction and jobs is a testament to the fact that the company is focused to achieve its desired long-term growth through economic development in service areas.

Price Movement

Alliant Energy’s shares rallied 5.1% in the last three months compared with 4.3% gain of the industry it belongs to.

The new electricity rates which were implemented during the month of April bolstered performance.

Zacks Rank & Stocksto Consider

Alliant Energy currently carries a Zacks Rank #3 (Hold). Investors can consider better-ranked stocks from the same space such as CenterPoint Energy, Inc. CNP, FirstEnergy Corporation FE and Pattern Energy Group Inc. PEGI, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

CenterPoint delivered an average earnings surprise of 10.3% in the trailing four quarters. Its 2017 estimates rose by 2 cents to $1.31 in the last 90 days.

FirstEnergy delivered an average surprise of 6.1% in the trailing four quarters. Its 2017 estimates rose by 2 cents to $2.83 per share in the last 90 days.

Pattern Energy delivered an average surprise of 59.2% in the trailing four quarters. Its 2017 estimates rose by 3 cents to 24 cents per share in the last 90 days.

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CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report
 
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