ITC to acquire transmission assets of Alliant Energy

ITC Holdings Corp. on January 19 announced that its newly formed subsidiary, ITC Midwest LLC, has signed a definitive agreement to acquire the transmission assets of Interstate Power and Light Company (IP&L), an Alliant Energy Corporation subsidiary, in a transaction valued at approximately $750 million.

"The acquisition of IP&L's transmission assets supports ITC Holdings' continued mission to rebuild and invest in the electric transmission infrastructure for the benefit of customers through improved reliability and enhanced access to the competitive energy marketplace," said Joseph L. Welch, president and CEO of ITC Holdings. "End-use consumers will be the true beneficiaries of this acquisition as we remain steadfast in our commitment to enhance electric reliability and further enable the development and growth of renewable energy resources."

IP&L's transmission assets currently consist of approximately 6,800 miles of transmission lines at voltages of 34.5 kilovolts and above and approximately 170 substations, predominantly located in Iowa with some assets in Minnesota and Illinois. ITC Holdings expects to finance the transaction through a combination of cash on hand and equity and debt financings.

This acquisition will allow ITC Holdings to lend its experience and resources toward rebuilding and strengthening the transmission grid in Iowa, Minnesota and Illinois, create a more competitive energy market for the benefit of customers and help support the growing region's increasing electricity demand.

In conjunction with the sale of IP&L's transmission assets, Alliant Energy also announced an overall plan entitled "Energy for a New Generation" that includes the construction of a new baseload clean-coal generation plant and development of renewable wind energy in Iowa.

"Combined with the sale of IP&L's transmission assets, the Energy for a New Generation plan will help provide customers with reliable, affordable and environmentally-friendly energy into the future," said Bill Harvey, chairman, president and CEO of Alliant Energy.

Since becoming an independent electric transmission company, ITC Holdings has grown from 38 employees to more than 230 employees and 400 highly skilled contract field staff to support its effort to improve electric transmission infrastructure and, in turn, customer reliability. ITC Holdings anticipates the creation of approximately 100 new jobs in Iowa and Michigan to support its continued growth, with up to an additional 200 contract field jobs in Iowa, Minnesota and Illinois in conjunction with anticipated capital and maintenance work on the system. Through its operating subsidiaries, ITC Holdings has invested more than $460 million in transmission property, plant and equipment and maintenance targeted at improving electric reliability, reducing system congestion and lowering the overall cost of delivered energy in Michigan.

"ITC Holdings expects that this transaction will be immediately accretive to GAAP earnings upon closing, resulting in an increase in EPS growth over the next five to seven years," said Edward M. Rahill, senior vice president and CFO of ITC Holdings.

The transaction is subject to customary closing conditions and regulatory approvals, including approval from the Federal Energy Regulatory Commission (FERC), the Iowa Utilities Board, the Minnesota Public Utilities Commission and the Illinois Commerce Commission as well as an antitrust review under the Hart-Scott-Rodino Act. The approval of ITC Holdings' shareholders is not required. ITC Holdings expects the transaction to close in the fourth quarter of 2007.