**Exhibit 10.31**

 

**SUMMARY OF 2006 MANAGEMENT INCENTIVE COMPENSATION PLAN**

 

The Management Incentive Compensation Plan (MICP) provides eligible employees with a cash bonus if corporate and individual goals are met. This plan gives employees a personal stake in the company and the opportunity to share in its success.

 

The key principles of the 2006 MICP are:

| **•** | Corporate financial performance determines a total finite pool of dollars available to spend on incentives |
|------------|------------------------------------------------------------------------------------------------------------|

| **•** | Leader judgment and discretion are a major aspect of determining payout amounts |
|------------|---------------------------------------------------------------------------------|

| **•** | The company must differentiate pay by performance |
|------------|---------------------------------------------------|

| **•** | Individual performance will be evaluated both on results and how those results are achieved, through a performance appraisal process |
|------------|--------------------------------------------------------------------------------------------------------------------------------------|

| **•** | A bias toward individual rather than group accountability must be created |
|------------|---------------------------------------------------------------------------|

 

**Alliant Energy Corporate Performance****:**  Corporate performance is the foundation for incentive compensation. The table below outlines the 2006 goals against which corporate performance will be measured and the funding associated with each level of achievement.

 

**2006 CORPORATE PERFORMANCE MEASURES**

**For purposes of Determining the Short-Term Incentive Pool**

 

| (1)    | **Earnings Per Share (EPS)** |        | **Cash Flow**               |
|--------|------------------------------|-------------|-----------------------------|
|   | **Level**                    | **Funding** |                        | **Level** | **Funding** |
|   | Maximum                      | 150%        |                        | Maximum | 150% |
|   | Target                       | 100%        |                        | Target | 100% |
| (2)    | Threshold                    | 20%         |                        | Threshold | 20% |
|   |                         |        |                        |   |   |
|   | Weighting of EPS in          |        | Weighting of Cash Flow in   |
|   | final Corporate Performance  |        | final Corporate Performance |
|   | 85%                          | +           | 15%                         |

 

|   | (1) | Earnings per share (EPS) and cash flow amounts used for purposes of determining short-term incentive pool will be based on utility earnings only |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | If the Threshold EPS level is not met, there will be no payout for the 2006 plan year = TRIGGER |
|--------|-----|-------------------------------------------------------------------------------------------------|

 

**MICP Target Incentives****:**  Incentive rewards are considered “at risk” pay. The **target incentive percentage**assigned to participant groups is based on competitive market research and internal equity. Achievement of the target level goals and objectives may result in a payout of 100% of the incentive opportunity. However, a participant’s final award may range anywhere from 0 to 200% of that target. Incentive opportunity is expressed as a percentage of eligible earnings for the plan year.

 

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