Alliant Energy Partners to build combined-cycle plant in Michigan

MADISON, Wis., Oct. 4, 2001 – Alliant Energy Corp. today announced an agreement with Panda Energy International to develop and operate a 1,100-megawatt natural gas combined-cycle power plant in western Michigan. The facility is expected to become operational in 2004.

Total cost estimates for the project are approximately $600 million. It is anticipated that at least 55% of the project costs will be financed through non-recourse debt at the joint venture level, with the remaining portion to be provided by Alliant Energy. Alliant Energy and Panda intend to sell a significant portion of the plant’s output under long term contracts. Alliant Energy will manage power sales from the facility not subject to such contracts. The project, currently in its early development phase, is due to begin its 2-year construction period during the first quarter of 2002. The project is subject to customary conditions prior to commencement of construction.

The state-of-the-art facility will use combined-cycle technology and clean-burning natural gas to create electricity. This technology uses less fuel than traditional power plants and results in lower costs, reduced air emissions and greater energy efficiency. The new plant is also expected to provide much-needed new supply and electric reliability to the 36 million people in the nine east-central states that comprises the East Central Area Reliability region (ECAR.)

William D. Harvey, Alliant Energy’s Executive Vice President in charge of generation stated, “Our partnership with Panda and development of this project are consistent with our corporate strategy of ‘invest, connect and grow’, as we have committed to investing in our core utility operations, new generation and other energy-related opportunities while connecting with our current and potential customers to grow our earnings.” Harvey continued, “This new investment is one more example of how Alliant Energy is realizing its strategic vision for the future.”

“Through the construction of this project, Alliant Energy affirms its core commitment to reliability and the environment,” says Harvey. “This plant will help provide additional fuel diversity and a cleaner environmental profile to the heavily coal dependent ECAR region of the country.”

“Meeting increasing demand, particularly during extended heat waves, continues to be a challenge in Michigan and throughout the ECAR region,” said Harvey. “We expect this plant to increase reliability for businesses and consumers in the area while driving enhanced value for Alliant Energy’s shareowners.”

This project marks Alliant Energy’s entry into the state of Michigan and also domestic non-regulated generation. The project was selected after a number of other generation opportunities in the same region were carefully evaluated, but failed to meet the company’s requirements.

Panda will provide development services for the new project, while Alliant Energy Resources, a wholly-owned and non-regulated subsidiary of Alliant Energy, will maintain and operate the plant. The long lead-time equipment, including the turbines, are on order or under purchase option agreements, with delivery schedules consistent with the commercial operation date.

Thomas M. Walker, Alliant Energy’s Chief Financial Officer, stated “The project is anticipated to be earnings neutral during construction but contribute positively to Alliant Energy’s earnings per share in 2004, the plant’s projected first year of operations. Returns on investment over the life of the project are expected to be between 15 – 20 percent.” Alliant Energy affirmed its previous earnings guidance of $2.40 – $2.55 per share from continuing operations for 2001 and its targeted goal to achieve 7-10% annual earnings growth. According to Walker, “Projects such as the Michigan generation facility that provide competitive returns will enhance shareowner value and are consistent with Alliant Energy’s financial objectives, including protecting its credit quality, maintaining its dividend policy and growing earnings aggressively.”

Alliant Energy, (, headquartered in Madison, Wis., is an energy-services provider engaged primarily in regulated utility operations in the Midwest, with other domestic and international operations.

Headquartered in Dallas, Texas, Panda Energy International, Inc. is a privately held, non-regulated electric generation company whose primary focus is the development, ownership and operation of state-of-the-art, environmentally clean, low-cost power plants.

Additional information on Panda Energy International, Inc. can be found at


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