WISCONSIN POWER & LIGHT CO, 10-Q, 1995-10-30

WISCONSIN POWER & LIGHT CO
10-Q, 1995-10-30
ELECTRIC & OTHER SERVICES COMBINED

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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
X THE SECURITIES EXCHANGE ACT OF 1934
------
For the quarterly period ended September 30, 1995

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
------ THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ____________

Commission file number 0-337

WISCONSIN POWER AND LIGHT COMPANY
(Exact name of registrant as specified in its charter)

Wisconsin 39-0714890
(State or other jurisdiction (I.R.S. Employer Identification
of incorporation or organization) No.)

222 West Washington Avenue, Madison, Wisconsin 53703
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code 608-252-3311

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

YES X NO
-------- --------

Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

Common Stock Outstanding at September 30, 1995: 13,236,601 shares

<PAGE>
CONTENTS

PAGE
PART I. Financial Information:

Consolidated Financial Statements of Wisconsin Power and Light
Co.

Consolidated Balance Sheets as of September 30, 1995 and
1994 and December 31, 1994 . . . . . . . . . . . . . . . . . . 2

Consolidated Statements of Income for the Three and Nine
Months Ended September 30, 1995 and 1994 . . . . . . . . . . . 4

Consolidated Statements of Cash Flows - Nine Months Ended
September 30, 1995 and 1994 . . . . . . . . . . . . . . . . . 5

Notes to Consolidated Financial Statements . . . . . . . . . . 6

Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . 7

PART II. Other Information . . . . . . . . . . . . . . . . . . . . . . 13

Signatures. . . . . . . . . . . . . . . . . . . . . . . . . . 14

Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . . 15

<PAGE>
WISCONSIN POWER AND LIGHT COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets

September 30, September 30, December 31,
1995 1994 1994
(Thousands of Dollars)
ASSETS

UTILITY PLANT:
Plant in service--
Electric . . . . . . $1,663,194 $1,583,959 $1,611,351
Gas . . . . . . . . . 212,475 200,241 204,514
Water . . . . . . . . 22,192 21,397 22,070
Common . . . . . . . 130,954 112,541 123,255
---------- ---------- ----------
2,028,815 1,918,138 1,961,190
Dedicated
decommissioning funds 66,559 51,903 51,791
--------- ---------- ----------
2,095,374 1,970,041 2,012,981

Less: Accumulated
provision for
depreciation . . . . 869,343 808,046 808,853
---------- ----------- ----------
1,226,031 1,161,995 1,204,128
Construction work in
progress . . . . . . 34,758 40,216 42,731
Nuclear fuel, net . . . 15,209 13,912 19,396
---------- ---------- ------------
Total utility plant . 1,275,998 1,216,123 1,266,255
---------- ---------- ----------

OTHER PROPERTY AND
EQUIPMENT, net . . . . . 19,047 4,620 9,133
---------- ---------- -----------

INVESTMENTS . . . . . . . 12,316 12,076 12,228
---------- ---------- -----------
CURRENT ASSETS:
Cash and equivalents . 855 4,298 2,234

Net accounts receivable
and unbilled revenue,
less allowance for
doubtful accounts of
$209, $159, and $209,
respectively . . . . . 9,886 13,333 21,689
Coal, at average cost . 17,106 14,819 15,824
Materials and supplies,
at average cost . . . 20,481 21,695 20,835
Gas in storage, at
average cost . . . . . 8,244 10,409 7,975
Prepayments and other . 23,744 20,415 22,310
---------- --------- ---------
Total current assets 80,316 84,969 90,867
----------- ---------- ----------
DEFERRED CHARGES:
Regulatory assets . 144,503 144,673 144,476
Other . . . . . . . 60,685 56,644 62,165
---------- ----------- -----------

Total deferred
charges . . . 205,188 201,317 206,641
---------- ----------- -----------
TOTAL ASSETS . . . . . . $1,592,865 $1,519,105 $1,585,124
========== ========== ==========

The accompanying notes are an integral part of the consolidated financial
statements.

WISCONSIN POWER AND LIGHT COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets

September 30, September 30, December 31,

1995 1994 1994
(Thousands of Dollars)
CAPITALIZATION AND LIABILITIES

COMMON SHAREOWNER'S INVESTMENT:
Common stock, $5 par value,
authorized--18,000,000
shares; issued and
outstanding--13,236,601
shares . . . . . . . . . . $66,183 $66,183 $66,183
Premium on capital stock and
capital surplus . . . . . . 199,170 198,987 199,170
Reinvested earnings . . . . . 287,392 279,762 279,153
----------- ---------- -------
552,745 544,932 544,506

PREFERRED STOCK WITHOUT
MANDATORY REDEMPTION:
Cumulative, without par value,
authorized 3,750,000 shares
maximum aggregate stated
value $150,000,000;
Cumulative, without par
value, $100 stated value,
449,765 shares
outstanding . . . . . . 44,977 44,977 44,977
Cumulative, without par
value, $25 stated value,
599,460 shares
outstanding . . . . . . 14,986 14,986 14,986
----------- ------------ --------
Total preferred stock . 59,963 59,963 59,963
FIRST MORTGAGE BONDS, NET . . . 318,585 336,523 336,538
----------- ------------ -------
Total capitalization . . . 931,293 941,418 941,007
----------- ----------- -------

CURRENT LIABILITIES:
Variable rate demand bonds . 56,975 56,975 56,975
Short-term debt . . . . . . . 54,500 32,000 50,500
Accounts payable . . . . . . 69,112 50,415 67,518
Accrued payroll and vacation 12,151 12,199 12,624
Accrued taxes . . . . . . . . 9,681 6,106 7,299
Accrued interest . . . . . . 5,246 5,760 7,669
Other . . . . . . . . . . . . 17,831 9,834 12,456
------------ ------------ -------
Total current liabilities . 225,496 173,289 215,041
------------ ------------ -------

OTHER CREDITS:
Accumulated deferred income
taxes . . . . . . . . . . . 229,994 207,100 222,373
Accumulated deferred
investment tax credits . . 39,321 41,239 40,758
Accrued environmental
remediation costs . . . . . 78,454 79,311 79,280
Other . . . . . . . . . . . . 88,307 76,748 86,665
----------- ----------- -------
Total other credits . . . . 436,076 404,398 429,076
----------- ----------- -------

TOTAL CAPITALIZATION AND
LIABILITIES . . . . . . . . . $1,592,865 $1,519,105 $1,585,124
=========== =========== ==========

The accompanying notes are an integral part of the consolidated financial
statements.

WISCONSIN POWER AND LIGHT COMPANY AND SUBSIDIARIES
Consolidated Statements of Income

Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
(Thousands of Dollars)

OPERATING REVENUES:
Electric . . . . . $150,708 $137,873 $407,952 $400,341
Gas . . . . . . . . 13,601 22,629 91,258 112,334
Water . . . . . . . 1,172 1,118 3,170 3,119
--------- -------- --------- ----------
165,481 161,620 502,380 515,794
--------- --------- --------- ---------

OPERATING EXPENSES:
Electric production
fuels . . . . . . 30,660 29,385 88,271 94,317
Purchased power . . 14,516 12,793 31,898 30,720
Purchased gas . . . 8,108 15,134 54,349 74,180
Other operation . . 32,489 33,990 103,290 103,430
Maintenance . . . . 9,793 9,406 32,841 31,165
Depreciation . . . 20,329 18,482 59,737 55,497
Taxes --
Current federal
income . . . . . 7,962 6,401 22,461 21,742
Deferred income
taxes . . . . . 3,910 4,278 8,456 8,841
Investment tax
credit (restored) (479) (482) (1,437) (1,445)
Current state
income . . . . . 2,223 1,127 5,547 4,662
Property, payroll
& other . . . . 6,908 6,636 21,212 20,692
--------- ----------- ---------- ----------
136,419 137,150 426,625 443,801
--------- ----------- ---------- ----------

NET OPERATING INCOME 29,062 24,470 75,755 71,993
--------- --------- --------- ---------
OTHER INCOME AND
(DEDUCTIONS):
Allowance for equity
funds used during
construction . . . 454 661 1,176 1,791
Other, net . . . . 511 610 974 10,025
Current income tax. (188) (274) (276) (2,065)
Deferred income tax 15 (23) 36 (1,889)
--------- ---------- ---------- ----------
792 974 1,910 7,862
--------- ---------- ---------- ----------

INCOME BEFORE INTEREST
EXPENSE . . . . . . 29,854 25,444 77,665 79,855
---------- ---------- ---------- ----------

INTEREST EXPENSE:

Interest on bonds . 6,798 7,323 21,863 21,639
Allowance for
borrowed funds used
during construction
(credit) . . . . . (152) (285) (393) (719)
Other . . . . . . . 1,256 651 2,843 1,660
---------- ---------- --------- --------
7,902 7,689 24,313 22,580
---------- ---------- --------- --------
NET INCOME . . . . . 21,952 17,755 53,352 57,275
PREFERRED STOCK
DIVIDENDS . . . . . 828 828 2,483 2,483
---------- ---------- ---------- --------
NET INCOME AFTER
PREFERRED STOCK
DIVIDENDS . . . . . $21,124 $16,927 $50,869 $54,792
======== ========== ========== ========

The accompanying notes are an integral part of the consolidated financial
statements.

WISCONSIN POWER AND LIGHT COMPANY
CONSOLIDATED STATEMENT OF CASH FLOWS

Nine Months Ended
September 30,
1995 1994
(Thousands of Dollars)
Cash flows from (used for) operating
activities:

Net income . . . . . . . . . . . $53,352 $57,274
Adjustments to reconcile net
income to net cash from operating
activities:
Depreciation . . . . . . . . . 59,737 55,650
Amortization of nuclear fuel . 5,569 4,738
Deferred income tax . . . . . . 8,420 10,730
Investment tax credit restored (1,437) (1,445)
Allowance for equity funds used
during construction . . . . . (1,176) (1,791)
Changes in assets and liabilities:
Net accounts receivable and
unbilled revenues . . . . . . 11,803 24,690
Coal . . . . . . . . . . . . . (1,282) 1,223
Materials and supplies . . . . 354 (16)
Gas in storage . . . . . . . . (269) (1,655)
Prepayments and other . . . . . (1,434) 1,262
Accounts payable and accruals . (1,302) (22,014)
Accrued taxes . . . . . . . . . 2,382 5,301
Other, net . . . . . . . . . . 10,383 (15,395)
--------- ---------
Net cash generated from
operating activities . . . . 145,100 118,552
--------- ---------
Cash flows from (used for)
financing activities:

Common stock cash dividends . . . (42,630) (41,910)
Preferred stock dividends . . . . (2,483) (2,483)
Net change in short term debt . . 4,000 (27,000)
Retirement of first mortgage bonds (17,990) -
Equity contribution from parent . - 9,467
-------- ---------
Net cash (used for) financing (59,103) (61,926)
activities . . . . . . . . .

Cash flows from (used for) investing
activities:

Additions to utility plant,
excluding AFUDC . . . . . . . . (57,945) (54,699)
Allowance for borrowed funds used
during construction . . . . . . (393) (719)
Dedicated decommissioning funds . (14,768) (2,100)
Other, net . . . . . . . . . . . (14,270) (740)
---------- ----------

Net cash (used for) investing
activities . . . . . . . . . (87,376) (58,258)
---------- ----------
Net increase in cash and equivalents (1,379) (1,632)
Cash and equivalents at beginning of
period . . . . . . . . . . . . . . 2,234 5,930
---------- ----------
Cash and equivalents at end of
period . . . . . . . . . . . . . . $855 $4,298
========== ==========

Supplemental disclosures of cash
flow information:
Cash paid during the period for:
Interest - debt . . . . . . . . $23,971 $23,452
Income taxes . . . . . . . . . $18,486 $25,969

The accompanying notes are an integral part of the consolidated financial
statements.

<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. The consolidated financial statements included herein have been
prepared by Wisconsin Power and Light Company (the "Company" or
"WPL"), without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain information
and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles
have been condensed or omitted. The consolidated financial statements
include the Company and its wholly-owned consolidated subsidiaries.
The Company is a subsidiary of WPL Holdings, Inc. These financial
statements should be read in conjunction with the financial statements
and the notes thereto included in the Company's latest annual report
on Form 10-K.

In the opinion of the Company, the consolidated interim financial
statements reflect all adjustments necessary to fairly state the
results of operations for the interim periods presented. However,
because of the seasonal nature of the Company's operations, the
results shown for portions of a year are not indicative of annual
results.

2. On September 14, 1995, the Company received an order from the Public
Service Commission of Wisconsin (PSCW) authorizing the sale of up to
$60 million of long-term debt securities. It is currently anticipated
that the Company will make an offering of the long-term debt
securities late in 1995 or early in 1996. The Company intends to use
the net proceeds from the sale of these securities first to repay
short-term debt which was incurred in June 1995 to repurchase in
private transactions $18 million aggregate principal amount of the
Company's 9.30% first mortgage bonds, Series V, due December 1, 2025.
The remainder of the net proceeds will be used to repay other short-
term debt incurred by the Company to finance utility construction
expenditures and for general corporate purposes.

3. In March 1995, the Financial Accounting Standards Board ("FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 121,
"Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to be Disposed Of." This statement imposes stricter criteria
for regulatory assets by requiring that such assets be probable of
future recovery at each balance sheet date. The Company anticipates
adopting this standard on January 1, 1996 and does not expect that
adoption will have a material impact on the financial position or
results of operations of the Company based on the current regulatory
structure in which the Company operates. This conclusion may change
in the future as competitive factors influence wholesale and retail
pricing in this industry.

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 1995 VS. SEPTEMBER 30, 1994:

OVERVIEW

The Company reported consolidated third quarter net income of $22.0
million compared to $17.8 million for the same period in 1994. Weather-
driven electric sales growth and reduced electric production fuel costs
per kWh increased electric margins by $5.9 million after-tax compared to
third quarter 1994. In addition, operation expense declined for the
third quarter 1995 compared to 1994 as a result of the Company's
reengineering programs.

Partially offsetting the higher electric margin was a $1.2 million
after-tax reduction in gas margin and $1.1 million after-tax additional
depreciation expense attributable to greater investment in utility plant.
Income taxes also increased between third quarters, primarily due to
higher taxable income.

<TABLE>
Electric Operations
<CAPTION>
Revenues and
Revenues and kWhs Sold, Generated Costs Per kWh
Costs % and Purchased % Sold Generated Customers at
(In Thousands) Change (In Thousands) Change and Purchased End of Quarter
1995 1994 1995 1994 1995 1994 1995 1994

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Residential
and Farm $55,870 $48,549 15% 843,617 704,441 20% 0.066 0.069 330,229 323,499
Industrial 36,497 35,764 2% 1,001,149 949,739 5% 0.036 0.038 791 765
Commercial 28,704 27,086 6% 502,534 458,223 10% 0.057 0.059 44,575 43,570
Wholesale
and Class A 29,374 24,656 19% 831,530 659,203 26% 0.035 0.037 81 81
Other 263 1,818 -86% 12,065 12,242 -1% 0.022 0.149 1,503 1,468
---- ------ ----- ------- ------- ----- ----- ------ ------ -------
Total $150,708 $137,873 9% 3,190,895 2,783,848 15% 0.047 0.050 377,179 369,383
======== ======== ===== ========= ========= ===== ===== ===== ======= =======
Electric
production
fuels $30,660 $29,385 4% 2,567,704 2,282,831 12% 0.012 0.013
========= ========= ==== ===== =====
Purchased
Power $14,516 $12,793 13% 670,267 636,345 5% 0.022 0.020
------- ------- ---- ======= ======= ==== ====== =====

Margin $105,532 $95,695 10%
======== ======= =====
</TABLE>

Electric margin increased 10% in the third quarter of 1995 compared to
the third quarter of 1994 primarily from higher sales resulting from
favorable summer weather coupled with reduced electric production fuels
cost per kWh. Additionally, growth among all customer classes remained
strong due to favorable economic conditions in the Company's service
territory. Partially offsetting the increased sales was a 2.8% decrease
in retail electric rates effective January 1, 1995.

Electric production fuels per kWh were reduced through lower coal
costs. Purchased power costs per kWh were greater in third quarter 1995
as a result of competitive pricing of energy during the periods of
high demand.

<TABLE>
Gas Operations
<CAPTION>
Revenues and
Revenues and Therms Sold and Costs per Therms
Costs (In % Purchased % Sold and Customers at
Thousands) Change (In Thousands) Change Purchased End of Quarter
1995 1994 1995 1994 1995 1994 1995 1994

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Residential $5,177 $6,643 -22% 7,761 7,127 9% 0.667 0.932 127,428 123,075
Firm 3,474 4,917 -29% 7,433 7,024 6% 0.467 0.700 15,698 15,313
Interruptible 357 1,873 -81% 1,134 5,292 -79% 0.315 0.354 226 262
Transport. 2,223 2,946 -25% 19,857 17,767 12% 0.112 0.166 176 109
Other 2,370 6,250 -62% 16,462 20,603 -20% 0.144 0.303 79 90
------- ------- ------- ------ ------ ------ ----- ----- ------- -------
Total $13,601 $22,629 -40% 52,647 57,813 -9% 0.258 0.391 143,607 138,849
======= ======= ===== ====== ======= ===== ===== ===== ======= =======
Purchased Gas $8,108 $15,134 -46% 47,389 57,645 -18% 0.171 0.250
------- ------- ------ ====== ======= ===== ===== =====
Margin $5,493 $7,495 -27%
======= ====== =====
</TABLE>

Gas margin decreased 27% during the third quarter of 1995 compared to
the third quarter of 1994. The decline in purchased gas cost per therm was
passed on to customers causing a reduction in gas revenues for the period.
Customer growth continued from the solid economic conditions in WPL's
service territory.

Other Operation Expense

The decrease in other operation expense reflects the reduction in work
force and related salary expense resulting from the Company's reegineering
efforts.

Depreciation

Depreciation expense increased primarily reflecting increased property
additions.

Income Taxes

Income taxes increased between third quarters primarily resulting from
higher taxable income.

NINE MONTHS ENDED SEPTEMBER 30, 1995 VS. SEPTEMBER 30, 1994:

OVERVIEW

The Company reported consolidated net income of $53.4 million for the
nine months ended September 30, 1995 compared to $57.3 million for the
same period in 1994. Year to date 1995 net income was lower than 1994
primarily due to a $4.9 million after-tax 1994 reversal of a reserve
which represented a penalty assessment by the PSCW relating to the
administration of a coal contract. Year to date 1994 operations expense
included $1.5 million after-tax for severance and early retirement
programs.

Operational factors reducing comparative net income included a slight
decline in gas margin and higher expenses for depreciation, interest and
maintenance in 1995. Partially offsetting these declines was an $7.5
million after-tax increase in electric margin resulting from favorable
summer weather and economic growth in all customer classes.

<TABLE>
Electric Operations
<CAPTION>
Revenues and
kWhs Sold, Generated Costs Per kWh
Revenues and Costs % and Purchased % Sold Generated Customers at
(In Thousands) Change (In Thousands) Change and Purchased End of Quarter
1995 1994 1995 1994 1995 1994 1995 1994

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Residential
and Farm $151,007 $145,905 3% 2,235,479 2,094,068 7% 0.068 0.070 330,229 323,499
Industrial 104,133 103,753 0% 2,875,918 2,772,563 4% 0.036 0.037 791 765
Commercial 77,161 76,691 1% 1,335,877 1,279,703 4% 0.058 0.060 44,575 43,570
Wholesale and
Class A 71,432 67,895 5% 2,145,450 1,971,574 9% 0.033 0.034 81 81
Other 4,219 6,097 -31% 40,169 41,228 -3% 0.105 0.148 1,503 1,468
------- -------- ----- --------- --------- ----- ----- ----- ------- -------
Total $407,952 $400,341 2% 8,632,893 8,159,136 6% 0.047 0.049 377,179 369,383
======== ======== ===== ========= ========= ==== ===== ===== ======= =======
Electric
production
fuels $88,271 $94,317 -6% 7,417,592 7,095,482 5% 0.012 0.013
========= ========= ==== ===== =====
Purchased
Power $31,898 $30,720 4% 1,568,208 1,404,289 12% 0.020 0.022
------- ------- ----- ========= ========= ==== ===== =====

Margin $287,783 $275,304 5%
======== ======== =====
</TABLE>

Electric margin increased 5% for the nine months ended September 30,
1995 compared to the same period in 1994. Kilowatthour sales increased 6%
due to favorable weather conditions and growth among all customer classes.
Partially offsetting the increased sales was a 2.8% decrease in retail
electric rates effective January 1, 1995.

Lower electric fuel costs and purchased power costs per kWh resulting
from successful procurement strategies improved the overall margin.

<TABLE>
Gas Operations
<CAPTION>
Revenues and
Therms Sold and Costs per Therms
Revenues and Costs % Purchased % Sold and Customers at
(In Thousands) Change (In Thousands) Change Purchased End of Quarter
1995 1994 1995 1994 1995 1994 1995 1994

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Residential $44,740 $51,733 -14% 81,555 85,526 -5% 0.549 0.605 127,428 123,075
Firm 25,090 30,977 -19% 59,332 64,113 -7% 0.423 0.483 15,698 15,313
Interruptible 2,134 6,181 -65% 7,235 17,054 -58% 0.295 0.362 226 262
Transport. 10,574 11,292 -6% 74,114 60,701 22% 0.143 0.186 176 109
Other 8,720 12,151 -28% 56,358 51,641 9% 0.155 0.235 79 90
------ ------- ------ ------- ------- ---- ------ ----- ------- -------
Total $91,258 $112,334 -19% 278,594 279,035 0% 0.328 0.403 143,607 138,849
======= ======== ===== ======= ======= ==== ====== ===== ======= =======
Purchased Gas $54,349 $74,180 -27% 254,742 280,202 -9% 0.213 0.265
-------- ------- ---- ======= ======= ==== ===== =====
Margin $36,909 $38,154 -3%
======= ====== ====
</TABLE>

Gas margin decreased 3% for the nine months ended September 30, 1995
compared to the same period in 1994. Less favorable weather conditions
and a decline in purchased gas cost per therm which was passed on to
customers caused a 19% reduction in gas revenues for the period. Customer
growth remained strong due to favorable economic conditions in the
Company's service territory.

Other Operations

Other operations expense for 1994 included $1.5 million after-tax for
severance and early retirement programs related to the Company's
reengineering efforts.

Maintenance

Maintenance expense increased for the year to date compared to last year
due to more extensive refueling and maintenance overhaul at the Kewaunee
Nuclear Plant ("Kewaunee"). (Also, see: Liquidity and Capital Resources,
page 12, "Other")

Depreciation

Depreciation expense increased primarily reflecting increased property
additions.

Income Taxes

Income taxes increased for the nine month period ended September 30,
1995 as a result of higher taxable income.

Other Income and Deductions - Other, Net

Other, net decreased for the nine months ended September 30, 1995
primarily due to the reversal in 1994 of a $4.9 million after-tax reserve
which represented a penalty assessment by the PSCW relating to the
administration of a coal contract.

LIQUIDITY AND CAPITAL RESOURCES

Financing and Capital Structure

The level of short-term borrowing fluctuates based primarily on seasonal
corporate needs, the timing of long-term financing and capital market
conditions. To maintain flexibility in its capital structure and to take
advantage of favorable short-term rates, the Company also uses proceeds
from the sales of accounts receivable and unbilled revenues to finance a
portion of its long-term cash needs.

The Company's capitalization at September 30, 1995, including the
current maturities of long-term debt, variable rate demand bonds and
short-term debt, consisted of 53 percent common equity, 6 percent
preferred stock and 41 percent long-term debt.

Capital Expenditures

The Company's liquidity is primarily determined by the level of cash
generated from operations and the funding requirements of WPL's ongoing
construction and maintenance programs. Cash flows from operating
activities, after dividends paid, provided approximately $100 million and
$74 million for the nine months ended September 30, 1995 and 1994,
respectively. The Company finances its construction expenditures through
internally generated funds supplemented, when required, by outside
financing. (Also see: Note 2 in the "Notes to Financial Statements,"
page 6.)

Construction expenditures for the nine months ended September 30, 1995
were $87 million. The estimated construction expenditures for the
remainder of 1995 are $52 million.

The expenditures for the decommissioning of Kewaunee are estimated to
begin in 2014. It is anticipated that expenditures related to the actual
decommissioning of the plant will occur between 2014 and 2021 of which
WPL's share, in terms of future dollars, approximates $581 million. An
additional $435 million related to the storage of spent nuclear fuel on
site and other maintenance of the site will likely occur from 2022 to
2050. WPL currently expects to have the cost collected through electric
rates and funded in an external trust by 2013. Therefore, such
expenditures are not expected to have a direct impact on the Company's
liquidity or the availability of capital resources.

Industry Outlook

The PSCW has recently opened a formal docket initiating an inquiry into
the goals of Wisconsin utility regulation and identification of
alternative forms of regulation.

WPL has submitted its views which, in summary form, call for open access
to transmission and distribution systems and a competitive power
generation marketplace. It is not possible at this time to predict the
outcome of these proceedings.

The Federal Energy Regulatory Commission (FERC) is developing regulation
which will begin to provide open access to utility's transmission
facilities for wholesale customers subject to certain approved FERC
tariffs. WPL believes its existing open access tariffs position it well
to compete under such market conditions.

Other

The Company's Form 10-Q for the quarter ended March 31, 1995, at Part I,
"Other", Page 10, reported the shutdown of Kewaunee on April 1, 1995 for
scheduled maintenance and refueling and related steam generator matters.
Wisconsin Public Service Corporation is the operator and 41.2% owner of
Kewaunee which is owned jointly with WPL and Madison Gas and Electric
Company who own 41% and 17.8%, respectively.

During the shutdown, inspection of the steam generators revealed higher
levels of tube degradation than was anticipated. Continued use of
degraded tubes raises concerns regarding primary-to-secondary leakage of
reactor coolant. Thus, the degraded tubes were removed from service by
plugging. Tube plugging and the build-up of deposits on the tubes affect
the heat-transfer capability of the steam generators to the point where
eventually full-power operation is affected. Prior to the recent
shutdown, the equivalent of approximately 12% of the tubes in the steam
generators were plugged with no loss of capacity. When the plant was
returned to service on May 18, 1995, 21% of the tubes were plugged,
resulting in a capacity reduction of 3.8% during the plant's current
operating cycle which extends into the fall of 1996. Thus, net plant
output has been reduced from 525 megawatts to approximately 510 megawatts.
Although preliminary estimates indicated slightly increased maintenance
and purchased power expenses as reported in the Company's Form 10-Q for
the quarter ended March 31, 1995, revised estimates indicate that during
1995 additional expenses related to recent steam generator plugging likely
will be offset by reduced nuclear expenses in other areas and, therefore,
should not affect earnings significantly. WPL with its joint partners
continue the study of tube repair alternatives.

See Part I, Item 1. Business - Electric Operations - Kewaunee Nuclear
Power Plant in the WPL Form 10-K for the year ended December 31, 1994 for
additional background on this matter.

PART II--OTHER INFORMATION

Item 1. Legal Proceedings

1. On July 20, 1995 the City of Beloit ("Beloit") filed a suit against
WPL in the Circuit Court of Rock County, Wisconsin alleging that based on
negligence, nuisance and trespass WPL caused damage to Beloit through the
contamination of property owned by Beloit as a result of the historical
operation of manufactured gas plants on the property prior to Beloit's
acquisition of the property. The suit seeks damages equal to the cost of
cleaning up the property, for decrease in the value of the property and to
compensate Beloit for lost development opportunities for the property as
well as consequential damages and costs of the action.

Beloit and WPL entered into a Stipulation upon which the Court issued an
Order staying further proceedings in the action pending further
environmental investigation of the property and pending WPL's
determination of the extent of liability insurance coverage for the
claims.

The probability is remote that this will have a material adverse impact
on the Company's financial condition.

Item 6. Exhibits and Reports on Form 8-K

1. Exhibits:

3A Amendments to By-Laws of the Company

3B By-Laws of the Company as revised June 22, 1995

27 Financial Data Schedule

2. Reports on Form 8-K: None

<PAGE>

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Wisconsin Power and Light Company

October 26, 1995 /s/ Daniel A. Doyle
Daniel A. Doyle, Vice President - Finance,
Controller and Treasurer (principal
accounting officer and officer authorized to
sign on behalf of the registrant)

<PAGE>
EXHIBIT INDEX

Exhibit
No. Description

3A Amendments to By-Laws of the Company

3B By-Laws of the Company as revised June 22, 1995

27 Financial Data Schedule

Amendments to the By-Laws of
Wisconsin Power and Light Company
(Effective June 22, 1995)

1. Section 1 of Article IV was amended in its entirety to
provide as follows:

Section 1 - The number of Directors constituting the Board of
Directors shall be a minimum of nine (9) and a maximum of thirteen (13).
Whenever a vacancy(ies) occurs on the Board of Directors such that there
are less than nine (9) Directors remaining, the remaining Directors shall
constitute the Board of Directors until the vacancy(ies) are filled by a
vote of the majority of the Directors remaining in office, even if less
than a quorum, said vacancy(ies) to be filled as soon as reasonably
possible. When there are nine (9) or more Directors and a vacancy occurs,
including a vacancy created by an increase in the number of Directors, it
shall be filled or not filled at the discretion of the Board of Directors.
The Board may elect a Chairperson of the Board, who may be the same person
as the Chief Executive Officer or the President.

2. Section 2 of Article IV was amended in its entirety to
provide as follows:

Section 2 - No person who has attained 70 years of age shall be
eligible for election or reelection to the Board of Directors. Any
Director who has attained 70 years of age shall resign from the Board of
Directors effective as of the next Annual Meeting of Shareowners. Except
for the Chief Executive Officer, any Officer or employee of the Company
serving as a Director who retires, resigns or is removed or terminated
from his or her office or employment with the Company shall simultaneously
resign from the Board of Directors. In the event the CEO resigns or
retires from his or her office or employment with the Company, he or she
shall simultaneously submit his or her resignation from the Board of
Directors if requested by the Nominating Committee. In the event that the
CEO is removed from his or her office by the Board of Directors, or is
involuntarily terminated from employment with the Company, he or she shall
simultaneously submit his or her resignation from the Board of Directors.
Any Director who is unavailable for reasonably regular attendance at
meetings of the Board shall resign as a Director.

3. Section 7 of Article V was deleted and the remaining
Sections were renumbered accordingly.

4. Section 1 of Article VI was amended in its entirety to
provide as follows:

Section 1 - The Board of Directors shall elect a Chief Executive
Officer, a President, such number of Vice Presidents with such
designations as the Board of Directors at the time may decide upon, a
Secretary, a Treasurer and a Controller. The same person may
simultaneously hold more than one office. The Board of Directors in its
discretion may also elect one or more Assistant Secretaries, one or more
Assistant Treasurers, one or more Assistant Controllers and such other
Officers as may from time to time be provided for by the Board of
Directors. All Officers unless sooner removed shall hold their respective
offices until their successors, willing to serve, shall have been elected
but any Officer may be removed from office at any time at the pleasure of
the Board of Directors. All Officers shall be bonded in such form, in
such amounts, and with such sureties as determined by the Board of
Directors.

BYLAWS OF

WISCONSIN POWER AND LIGHT COMPANY

Revised At June 22, 1995

ARTICLE I

Seal

The corporate seal shall have inscribed thereon the name of the
corporation and the words "Corporate Seal, Wisconsin".

ARTICLE II

Stocks and Transfers

Section 1 - Each holder of fully paid stock shall be entitled to a
certificate or certificates of stock, stating the number of shares owned
by such shareowner and the designation of the Class and Series in which
issued. All stock certificates shall be signed by the President or a Vice
President and by the Secretary or an Assistant Secretary of the Company,
and be sealed with the corporate seal of the Company, which seal may be
facsimile, engraved or printed. If and when a Transfer Agent and/or a
Registrar shall have been appointed by the Board with respect to the
shares of any class of stock, or series thereof, of the Company, the
certificates representing such shares shall also be countersigned by such
Transfer Agent and/or countersigned and registered by such Registrar, as
the case may be. Certificates which have been countersigned by a Transfer
Agent and countersigned and registered by a Registrar, in both cases duly
appointed by the Board of Directors for such purpose, may bear the
signatures of the President or a Vice President and the Secretary or an
Assistant Secretary of the Company in facsimile, engraved or printed;
provided, that no certificate bearing the facsimile signatures of the
Officers of the Company shall be valid or effective for any purpose unless
and until it shall have been so countersigned and registered. In case any
such Officer who has signed any stock certificate, or whose facsimile
signature has been placed thereon, shall have ceased to be such Officer
before such certificate is issued, such certificate may be issued by the
Company with the same effect as if such Officer had not ceased to be such
at the date of its issue.

Section 2 - The stock of the Company shall be divided into such
Classes, with such relative rights and preferences, as shall be provided
by the Articles of Organization of the Company as the same may from time
to time be amended in accordance with the laws of Wisconsin.

Section 3 - Shares of stock shall be transferable only on the books
of the Company; and upon proper endorsement and surrender of the
outstanding certificates representing the same. Subject to such
conditions as the Board of Directors may, by Resolution, establish: (a)
If an outstanding certificate of stock shall be lost, destroyed or stolen,
the holder thereof may have a new certificate issued, upon producing
evidence satisfactory to the Officers of the Company, of such loss,
destruction or theft; and upon furnishing to the Company a bond of
indemnity, surety bond, or such other assurance as the Officers may
require. (b) Where any outstanding certificates of stock are deemed
abandoned by the holder thereof, pursuant to the unclaimed property or
escheatment laws of any state having jurisdiction thereof, the Officers of
the Company are authorized and directed to cause the transfer and delivery
of said certificates or to cause the issuance of replacement certificates,
to such person or persons as may be entitled thereto in accordance with
such escheatment laws.

Section 4 - Transfer books may be closed by order of the Board of
Directors for short periods, not exceeding forty days at any one time, for
any legal purpose, as the Board of Directors shall deem advisable.

ARTICLE III

Meetings of Shareowners

Section 1 - The Annual Meeting of the Shareowners shall be held on
the fourth Wednesday in May of each year (or if such day be a legal
holiday in Wisconsin, then upon the following day); or on such other day
of each year as the Board of Directors may determine. Each such meeting
shall be held at the hour of 10:00 o'clock A.M. at the office of the
Company in Madison, Wisconsin, unless the Board of Directors shall
otherwise order. The Annual Meeting shall be held for the purposes of
electing Directors, selecting the Company's independent auditors and of
transacting such other business as may properly come before the meeting.

Section 2 - Special Meetings of the shareowners may be called by the
Chairperson of the Board, the Chief Executive Officer; or by the Board of
Directors; or by the Secretary when requested by the owners of shares of
outstanding voting stock having in the aggregate a number of votes at
least equal to one-fifth of the aggregate number of votes possessed by all
such owners; or in such other manner as may be provided by statute.

Section 3 - Notice of the time and place of each Annual or Special
Meeting of Shareowners shall be sent by mail to the recorded address of
each shareowner not less than ten days before the date of the meeting,
except in cases where other special method of notice may be required by
statute, in which case the statutory method shall be followed. The notice
of a special meeting shall state the object of the meeting. Notice of any
meeting of the shareowners may be waived by any shareowners.

Section 4 - At all meetings of shareowners, the representation of
owners of that number of shares of stock entitled to vote at such meeting
having in the aggregate a number of votes at least equal to a majority of
the aggregate number of votes entitled to vote at such meeting shall be
necessary to constitute a quorum for the transaction of any business,
other than (a) adjourning from time to time until a quorum shall be
obtained, or (b) adjourning sine die, and for any such adjournment a
majority vote of whatever shares of stock shall be represented shall be
sufficient.

Section 5 - The Chairperson of the Board when he or she is the Chief
Executive Officer, and when he or she is not the Chief Executive Officer,
or in his or her absence or at his or her request the President, and in an
absence of both the Chairperson of the Board and the President, then a
Vice President, and if no Vice President be in attendance at the meeting,
then a Director selected by the Directors attending the meeting, or if no
selection is made, then the Director in attendance with the longest tenure
in such office, shall preside at each meeting of shareowners, and the
Secretary or an Assistant Secretary of the Company shall act as secretary
of each shareowner meeting.

Section 6 - Any shareowner having the right to vote at a meeting of
shareowners may exercise such right by voting in person or by proxy at
such meeting.

ARTICLE IV

Board of Directors

Section 3 - The Board of Directors may hold regular or special
meetings in or outside the State of Wisconsin.

Section 4 - Regular meetings of the Board of Directors shall be held
at such time and place and in such manner as may be determined by the
Board, at such hour as the notice of meeting may provide, but in no event
shall the Board meet less than once a year.

Section 5 - Special meetings of the Board may be called at any time
by the Chairperson of the Board, or the Chief Executive Officer, or in the
absence of the Chairperson when Chief Executive Officer, by the President,
or by a Vice President when acting as Chief Executive Officer, or by any
two Directors, by mailing to each Director, not less than three days
before the time of such meeting, a written notice stating the time and
place and manner of holding such meeting.

Section 6 - (a) Any or all members of the Board of Directors, or any
committee thereof, may participate in a regular or special meeting by, or
to conduct the meeting through the use of any means of communication by
which any of the following occurs:

1) All participating directors may simultaneously hear each
other during the meeting.

2) All communication during the meeting is immediately
transmitted to each participating director, and each
participating director is able to immediately send
messages to all other participating directors.

(b) If a meeting is conducted by the means of communication
described herein, all participating directors shall be informed
that a meeting is taking place at which official business may be
transacted.

(c) A director participating in a meeting by means of such
communication is deemed to be present in person at the meeting.

Section 7 - Notice of any meeting of the Board may be waived by any
Director.

Section 8 - A majority of the Board of Directors shall constitute a
quorum for the transaction of business at any meeting of the Board, but a
fewer number may adjourn the meeting to some other day or sine die. The
person designated by Section 5 of Article III above shall preside at
meetings of the Board of Directors, and the Secretary or an Assistant
Secretary shall act as Secretary. The members of the Board who are
Officers or employees of the Company shall receive no separate fee for
serving as a Director of the Company. Other members of the Board shall be
paid such fees as the Board shall from time to time determine by
resolution.

ARTICLE V

Committees

Section 1 - The Board of Directors may, by resolution passed by a
majority of the whole Board, designate from their number an Executive
Committee of such number, not less than three, as the Board may fix from
time to time. The Executive Committee may make its own rules of procedure
and shall meet where and as provided by such rules, or by resolution of
the Board of Directors. A majority of the members of the Committee shall
constitute a quorum for the transaction of business. During the intervals
between the meetings of the Board of Directors, the Executive Committee
shall have all the powers of the Board in the management of the business
and affairs of the Company, including power to authorize the seal of the
Company to be affixed to all papers which may require it, and, by majority
vote of all its members, exercise any and all such powers in such manner
as such Committee shall deem best for the interests of the Company, in all
cases in which specific directions shall not have been given by the Board
of Directors.

Section 2 - The Executive Committee shall keep regular minutes of its
proceedings and report the same to the Board when required.

Section 3 - A Compensation and Personnel Committee is hereby
established. Said Committee shall consist of at least three (3) Directors
who are not and never have been officers, employees or legal counsel of
the Company. The Chairperson and the members of the Compensation and
Personnel Committee shall be elected annually by a majority vote of the
members of the Board of Directors. Vacancies on said Committee may be
filled at any time by action of the Board of Directors. The Committee
shall have the following powers and responsibilities:

1. Review and recommend to the Board new employee benefit plans
or changes, i.e. pension, life, hospital, disability, etc.

2. Review major provisions of any negotiated union contracts
prior to or during negotiations.

3. Review and approve any executive officer employment
contract.

4. Review human resource development programs.

5. Review management development programs.

6. Review the internal equity and external competitiveness of
all executive, management and salary pay grades.

7. Review and authorize salary adjustments for all management
payroll and non-executive officers' pay grades as a group.
All salary ranges and performance for executive officers
shall be reviewed individually by the Committee.

8. Review as a group overall adjustments for all non-management
payroll salary grades.

9. Review personnel budgets.

Said Committee shall meet at such times as it determines, but at least
twice each year, and shall meet at the request of the Chief Executive
Officer, President or any Committee member. Such meeting may be held on a
day separate from or the same as the regular monthly meeting of the Board
of Directors. Subsequent to each such Committee meeting, a report of the
actions taken by such Committee shall be made to the Board of Directors.

Section 4 - An Audit Committee is hereby established and shall
consist of at least three (3) members all of whom shall be outside members
of the Board of Directors. The Chairperson and the members of the
Committee shall be elected annually by a majority vote of the members of
the Board of Directors. Vacancies on said Committee may be filled at any
time by action of the Board of Directors. Said Committee shall meet at
the call of any one of its members, but in no event shall it meet less
than once a year. Such meeting may be held on a day separate from or the
same as the regular monthly meeting of the Board of Directors. Subsequent
to each such Committee meeting, a report of the actions taken by such
Committee shall be made to the Board of Directors.

The functions of said Committee shall be to:

1. Recommend to the shareowners the independent auditors of the
Company.

2. Discuss with the independent auditors the scope of their audit.

3. Discuss with the independent auditors and the management the
Company's accounting principles, policies and practices and its
reporting policies and practices.

4. Discuss with the independent auditors the results of their audit.

5. Discuss with the independent auditors the adequacy of the
Company's or any of its subsidiaries accounting, financial and
operating controls.

6. Discuss with the Company's Director of Internal Audits the scope
and results of internal audits and initiate such accounting
principles, policies and practices, and reporting policies and
practices as it may deem necessary or proper.

7. Approve or disapprove annually, each defined group of non-audit
services performed by the independent auditors, which
consideration may occur before or after performance, giving due
regard to the possible effect of such performance upon the
independence of the independent auditors; and, if considered
prior to such performance, shall include a limitation upon the
magnitude of such services.

Section 5 - A Corporate Operations Review Committee is hereby
established. Such Committee shall consist of at least three members of
the Board of Directors. The Chairperson and the members of the Committee
shall be elected annually by a majority vote of the Board of Directors.
Vacancies on said Committee may be filled at any time by action of the
Board of Directors. Said Committee shall meet at least once annually at
such time and place as it determines, and at other times upon the call of
the Chairperson or any other member of the Committee. Such meeting may be
held on a day separate from or the same as the regular meeting of the
Board of Directors.

The functions of said Committee shall be to:

1. Review proposed operating and construction budgets, financing
plans and other significant project plans and make
recommendations to the Board of Directors.

2. Examine corporate operations and performance against established
budgets, plans and objectives.

3. Review corporate policies as required and make recommendations to
the Board of Directors concerning policy changes and the
establishment of new policies.

4. Periodically review selected operating issues and processes.

Section 6 - A Nominating Committee shall be established and shall
consist of at least three (3) members, all of whom shall be outside
members of the Board. The Chairperson and the members of the Committee
shall be elected annually by a majority vote of the members of the Board
of Directors. Vacancies on said Committee may be filled at any time by
action of the Board of Directors. Said Committee shall meet at the call of
any one of its members, but in no event shall it meet less than once a
year for the express purpose of recommending nominees for election to the
Board at the Annual Meeting of Shareowners.

The function of this Committee shall be to recommend to the Board of
Directors nominations for election to the Board of Directors and to review
the appropriateness of continued membership on the Board of present Board
members.

Section 7 - An Environmental Affairs Committee is hereby established.
Such Committee shall consist of three to five members of the Board of
Directors. The Chairperson and members of the Committee shall be elected
annually by a majority vote of the Board of Directors. Vacancies on said
Committee may be filled at any time by action of the Board of Directors.
The Chairperson, the Chief Executive Officer and the President of the
Company shall be ex officio members serving in an advisory capacity. Said
Committee shall meet at least once annually at such time and place as it
determines, and at other times upon the call of the Chairperson or any
other member of the Committee. Such meeting may be held on a day separate
from or the same as the regular monthly meeting of the Board of Directors.
The Committee shall report on its reviews, and, as appropriate, make
recommendations to the Board of Directors.

The responsibility of said Committee shall be to review environmental
policy and planning issues of interest to the Company, including matters
involving the Company before environmental regulatory agencies and
compliance with air, water, and waste regulations.

Section 8 - A majority of the members of a committee shall constitute
a quorum for the transaction of business at any meeting of a committee of
the Board, but a fewer number may adjourn the meeting to some other day or
sine die. Each committee shall arrange for the keeping of its
own minutes.

ARTICLE VI

Officers

Section 2 - Subject to the control of the Board of Directors the
Chief Executive Officer designated by the Board of Directors shall have
and be responsible for the general management and direction of the
business of the Company, shall establish the lines of authority and
supervision of the Officers and employees of the Company, shall have the
power to appoint and remove and discharge any and all agents and employees
of the Company not elected or appointed directly by the Board of
Directors, and shall assist the Board in the formulation of policies of
the Company. The Chairperson of the Board if the Chief Executive Officer
may delegate any part of his or her duties to the President, or to one or
more of the Vice Presidents of the Company.

Section 3 - The Chairperson of the Board if not designated as the
Chief Executive Officer of the Company shall assist the Board in the
formulation of policies and may make recommendations therefore.
Information as to the affairs of the Company in addition to that contained
in the regular reports shall be furnished to him or her on request. He or
she may make suggestions and recommendations to the Chief Executive
Officer regarding any matters relating to the affairs of the Company and
shall be available to the Chief Executive Officer for consultation and
advice.

Section 4 - The President when he or she is not designated as and
does not have the powers of the Chief Executive Officer shall have such
other powers and duties as usually devolve upon the President of a Company
and such other and further powers and duties as may from time to time be
prescribed by the Board of Directors or be delegated to him or her by the
Chairperson of the Board. In the absence or inability to act of the
Chairperson of the Board to act as Chief Executive Officer the powers and
duties of the Chief Executive Officer shall temporarily devolve upon the
President.

Section 5 - Each of the Vice Presidents shall have such powers and
duties as may be prescribed for him or her by the Board of Directors and
by the Chief Executive Officer.

Section 6 - The Secretary shall attend all meetings of the Board of
Directors, shall keep a true and faithful record thereof in proper books
to be provided for that purpose, and shall be responsible for the custody
and care of the corporate seal, corporate records and minute books of the
Company, and of all other books, documents and papers as in the practical
business operation of the Company shall naturally belong in the office or
custody of the Secretary, or shall be placed in his or her custody by the
Chief Executive Officer or by the Board of Directors.

He or she shall also act as Secretary of all shareowners' meetings,
and keep a record thereof. He or she shall, except as may be otherwise
required by statute or by these bylaws, sign, issue and publish all
notices required for meetings of shareowners and of the Board of
Directors. He or she shall be responsible for the custody of the stock
books of the Company and shall keep a suitable record of the addresses of
shareowners. He or she shall also be responsible for the collection,
custody and disbursement of the funds received for dividend reinvestment.
He or she shall sign stock certificates, bonds and mortgages, and all
other documents and papers to which his or her signature may be necessary
or appropriate, shall affix the seal of the corporation to all instruments
requiring the seal, and shall have such other powers and duties as are
commonly incidental to the office of Secretary, or as may be prescribed
for him or her by the Chief Executive Officer or by the Board of
Directors.

Section 7 - The Treasurer shall have charge of, and be responsible
for, the collection, receipt, custody and disbursement of the funds of the
Company, and shall deposit its funds in the name of the Company in such
banks, trust companies, or safety vaults as the Board of Directors may
direct, and shall keep a proper record of cash receipts and disbursements.
He or she may, in the absence of the Secretary and Assistant Secretaries
sign stock certificates. He or she shall be responsible for the custody
of such books, receipted vouchers and other books and papers as in the
practical business operation of the Company shall naturally belong in the
office or custody of the Treasurer, or shall be placed in his or her
custody by the Chief Executive Officer, or by the Board of Directors. He
or she shall sign checks, drafts, and other paper providing for the
payment of money by the Company for operating purposes in the usual course
of business, and shall have such other powers and duties as are commonly
incidental to the office of Treasurer, or as may be prescribed for him or
her by the Chief Executive Officer or by the Board of Directors.

Section 8 - The Controller shall be the principal accounting Officer
of the Company. He or she shall have general supervision over the books
of accounts of the Company. He or she shall examine the accounts of all
Officers and employees from time to time and as often as practicable, and
shall see that proper returns are made of all receipts from all sources.
All bills, properly made in detail and certified, shall be submitted to
him or her, and he or she shall audit and approve the same if found
satisfactory and correct, but he or she shall not approve any voucher
unless charges covered by the voucher have been previously approved
through work orders, requisition or otherwise by the head of the
department in which it originated, or unless he or she shall be otherwise
satisfied of its propriety and correctness. He or she shall have full
access to all minutes, contracts, correspondence and other papers and
records of the Company relating to its business matters, and shall be
responsible for the custody of such books and documents as shall naturally
belong in the custody of the Controller and as shall be placed in his or
her custody by the Chief Executive Officer or by the Board of Directors.
The Controller shall have such other powers and duties as are commonly
incidental to the office of Controller, or as may be prescribed for him or
her by the Chief Executive Officer or by the Board of Directors.

Section 9 - The Assistant Secretaries, Assistant Treasurers and
Assistant Controllers shall respectively assist the Secretary, Treasurer
and Controller of the Company in the performance of the respective duties
assigned to such principal Officer, and in assisting his or her principal
Officer each assistant Officer shall to that extent and for such purpose
have the same powers as his or her principal Officer. The powers and
duties of any such principal Officer shall temporarily devolve upon an
assistant Officer in case of the absence, disability, death, resignation
or removal from office of such principal Officer.

Section 10 - In the event of the untimely death or absence or
inability to act of the Chief Executive Officer, his or her powers and
duties shall devolve temporarily in the following manner: first to any
former Chief Executive Officer who is a member of the Board, next, to the
Board member with the longest tenure on the Board. Within sixty (60)
days, the temporary Chief Executive Officer shall notify the outside
members of the Board of the absence or inability to act of the Chief
Executive Officer and shall convene a meeting of the outside members of
the Board, who shall act as a Committee. The Committee shall determine
and evaluate all the facts pertinent to the Chief Executive Officer's
absence or inability to act, and then make such recommendations to the
Board of Directors as it deems appropriate under the circumstances. The
Board of Directors shall meet and act upon said recommendations within
thirty (30) days following the determinations of said Committee.

ARTICLE VII

Cash Management

Section 1 - Deposits - The funds of the Company shall be deposited to
its credit in such banks or trust companies ("depositories") as the
Treasurer and Vice President-Finance shall designate or in the manner
provided in Paragraph 5 of Section 2 of this Article. All deposits in any
depository shall be made initially to the general account of the Company
and not to any special account, fund or deposit. All special accounts,
funds or deposits shall be created and maintained solely by transfers of
funds from the general account.

Section 2 - Withdrawals and Check Signing -

1. Funds shall be withdrawn only by Company check or draft except:

a. to effect transfers of funds between Company accounts
maintained at one or more depositories;

b. as provided in paragraph 5 of this Section 2 and Section 3 of
this Article; or

c. as provided by resolution of the Board of Directors.

2. No debts shall be contracted except for current expenses unless
authorized by the Board of Directors or the Executive Committee,
and no invoices shall be paid by the Treasurer unless audited and
approved by the Controller or by a person or committee
specifically authorized by the Board of Directors or the
Executive Committee to audit and approve invoices for payment.

3. Checks, drafts and notes drawn on any account or deposit of the
Company (except those special purpose accounts specified in
paragraphs 5 and 6 of this Section and except drafts specified in
paragraph 7 of this Section) shall be valid instruments when
signed on behalf of the Company by the Vice President-Finance,
the Treasurer or an Assistant Treasurer. Instruments may be
signed by the facsimile signature of the Vice President-Finance
or the Treasurer.

4. For the purposes of this Section, a facsimile signature of any
Officer of the Company shall mean a stamp or perforation of that
Officer's signature. Each depository is authorized to honor
instruments signed in this manner provided the facsimile
resembles a specimen on file which has been certified by the
Secretary or other duly authorized Officer of the Company.

5. In addition to the provisions of Section 1 of this Article VII,
the Treasurer of the Company is authorized to establish petty
cash funds, on an imprest basis. Each such account shall be
designated as a "Cashier's Trust Account" and shall be separately
maintained and accounted for by the cashier or other employee
assigned such responsibility by the Treasurer.

a. Checks drawn on a Cashier's Trust Account may be signed and
countersigned on behalf of the Company by such employees as
the Treasurer or Vice President-Finance may from time to time
authorize and designate; provided, however, that no such
check shall be signed and countersigned by the same person.

b. No payment out of petty cash funds, whether by cash or check,
shall exceed $2,500 in the case of payments by district
offices, area offices or the Treasury Department, or $1,000
in the case of payments by generating stations.

6. Checks drawn on special accounts which the Company creates or
maintains for the payment of dividends may be signed by the
manual or facsimile signature of its Chief Executive Officer
or President and shall not require any countersignature.

7. Sight drafts may be drawn on the Treasury of the Company as
follows:

a. Any employee authorized by the treasurer of the Company may
draw such sight drafts in amounts not exceeding $10,000
payable to any one person in exchange for release of the
Company from claims for personal injury and/or property
damage.

b. Any employee or agent authorized by the treasurer of the
Company may draw such sight drafts in amounts not exceeding
$7,500 payable to any one person or in any transaction for
right-of-way easements, reimbursements for damages to land,
payments to bind agreements for purchases of real estate and
payments of document recording fees.

8. All bonds and notes issued under an indenture or mortgage shall
be executed on behalf of the Company by the manual or facsimile
signature of its Chief Executive Officer, President or a Vice
President and its Secretary or an Assistant Secretary, unless
otherwise provided by resolution of the Board of Directors.

Section 3 - Special Withdrawals - The President, any Vice President,
the Treasurer, or any Assistant Treasurer of the Company, or any person
authorized in writing by any of the foregoing Officers, is authorized to
direct any depository:

1. to charge amounts directly to the account of the Company without
the issuance of a check or draft of the Company, for the purpose
of paying principal of and interest on bonds and notes issued by
the Company, and

2. to accept and process data submitted via electronic means or by
wire transfer for purposes of receipt or disbursement of funds;

provided that such direction is in writing and describes the type of such
transactions permitted to be made by such depository.

ARTICLE VIII

Miscellaneous

Section 1 - All dividends shall be declared by a vote of the Board of
Directors.

Section 2 - The fiscal year of the Company shall close at the end of
December of each calendar year.

Section 3 - All or any shares of stock of any corporation owned by
this Company may be voted at any meeting of the shareowners of such
corporation by the Chief Executive Officer of this Company or such other
person as may be designated by the Chief Executive Officer for that
purpose, upon any question that may be presented at such meeting, and the
Chief Executive Officer or such other person may, on behalf of the
Company, waive any notice of the calling of such meeting required by any
statute or by-law and consent to the holding of any such meeting without
notice. The Chief Executive Officer or such other person as may be
designated by the Board of Directors to vote stock owned by this Company
shall have authority to give to any person a written proxy, in the name of
this Company and under its corporate seal, to vote at any meeting of the
shareowners of any corporation all or any shares of stock of such
corporation owned by this Company, upon any question that may be presented
at such meeting, with full power to waive any notice of the calling of
such meeting required by any statute or by-law and to consent to the
holding of any such meeting without notice.

ARTICLE IX

Amendment or Repeal of Bylaws

These bylaws may be altered, amended or repealed by the Board of
Directors at any regular or special meeting of the Board, or at any Annual
Meeting or Special Meeting of Shareowners by the affirmative vote of
owners of shares of outstanding voting stock of the Company having in the
aggregate a number of votes at least equal to a majority of the aggregate
number of votes possessed by all such owners (provided it shall have been
stated in the notice calling any such Special Meeting of Shareowners that
it is proposed at such meeting to alter, amend or rescind the bylaws), or
in such other manner as may be provided by law or in the Restated Articles
of Organization.

ARTICLE X

Indemnification and Liability of
Corporate Directors and Officers

Section 1 - Definitions Applicable to Article X - In this
Article X:

1. "Corporation" means Wisconsin Power and Light Company.

2. "Director or Officer" means any of the following:

a. A natural person who is or was a Director or Officer of the
Corporation.

b. A natural person who, while a Director or Officer of the
Corporation, is or was serving at the Corporation's request
as a Director, Officer, partner, trustee, member of any
governing or decision-making committee, employee or agent of
another corporation or foreign corporation, partnership,
joint venture, trust or other enterprise.

c. A natural person who, while a Director or Officer of the
Corporation, is or was serving an employee benefit plan
because his or her duties to the Corporation also impose
duties on, or otherwise involve services by, the person to
the plan or to participants in or beneficiaries of the plan.

d. Unless the context requires otherwise, the estate or personal
representative of a Director or Officer.

3. "Expenses" include fees, costs, charges, disbursements, attorney
fees and any other expenses incurred in connection with a
proceeding.

4. "Liability" includes the obligation to pay a judgment,
settlement, penalty, assessment, forfeiture or fine, including an
excise tax assessed with respect to an employee benefit plan, and
reasonable expenses.

5. "Party" includes a natural person who was or is, or who is
threatened to be made, a named defendant or respondent in a
proceeding.

6. "Proceeding" means any threatened, pending or completed civil,
criminal, administrative or investigative action, suit,
arbitration or other proceeding, whether formal or informal,
which involves foreign, federal, state or local law and which is
brought by or in the right of the Corporation or by any other
person.

Section 2 - Mandatory Indemnification -

1. The Corporation shall indemnify a Director or Officer, to the
extent he or she has been successful on the merits or
otherwise in the defense of a proceeding, for all reasonable
expenses incurred in the proceeding if the Director or
Officer was a party because he or she is a Director or
Officer of the Corporation.

2. a. In cases not included under sub. 1., the Corporation shall
indemnify a Director or Officer against liability incurred by
the Director or Officer in a proceeding to which the Director
or Officer was a party because he or she is a Director or
Officer of the Corporation, unless liability was incurred
because the Director or Officer breached or failed to perform
a duty he or she owes to the Corporation and the breach or
failure to perform constitutes any of the following:

1) A willful failure to deal fairly with the Corporation or
its shareholders in connection with a matter in which the
Director or Officer has a material conflict of interest.

2) A violation of criminal law, unless the Director or
Officer had reasonable cause to believe his or her
conduct was lawful or no reasonable cause to believe his
or her conduct was unlawful.

3) A transaction from which the Director or Officer derived
an improper personal profit.

4) Willful misconduct.

b. Determination of whether indemnification is required under
this subsection shall be made under Section 3.

c. The termination of a proceeding by judgment, order,
settlement or conviction, or upon a plea of no contest or an
equivalent plea, does not, by itself, create a presumption
that indemnification of the Director or Officer is not
required under this subsection.

3. A Director or Officer who seeks indemnification under this
section shall make a written request to the Corporation.

4. a. Indemnification under this Article X is not required to the
extent limited by the articles of incorporation under
Section 180.048, Wis. Stats.

b. Indemnification under this Article X is not required if the
Director or Officer has previously received indemnification
or allowance of expenses from any person, including the
Corporation, in connection with the same proceeding.

Section 3 - Determination of Right to Indemnification - Unless
otherwise provided by the articles of incorporation or bylaws or by
written agreement between the Director or Officer and the Corporation, the
Director or Officer seeks indemnification under Section 2, 2. shall select
one of the following means for determining his or her right to
indemnification:

1. By a majority vote of a quorum of the Board of Directors
consisting of Directors not at the time parties to the same or
related proceedings. If a quorum of disinterested Directors
cannot be obtained, by majority vote of a committee duly
appointed by the Board of Directors and consisting solely of 2 or
more Directors not at the time parties to the same or related
proceedings. Directors who are parties to the same or related
proceedings may participate in the designation of members of the
committee.

2. By independent legal counsel selected by a quorum of the Board of
Directors or its committee in the manner prescribed in 1., above,
if unable to obtain such a quorum or committee, by a majority
vote of the full Board of Directors, including Directors who are
parties to the same or related proceedings.

3. By a panel of three arbitrators consisting of one arbitrator
selected by those Directors entitled under 2., above, to select
independent legal counsel, one arbitrator selected by the
Director or Officer seeking indemnification and one arbitrator
selected by the two arbitrators previously selected.

4. By an affirmative vote of shares as provided in Section 180.28,
Wis. Stats., shares owned by, or voted under the control of,
persons who are at the time parties to the same or related
proceedings, whether as plaintiffs or defendants or in any other
capacity, may not be voted in making the determination.

5. By a court under Section 180.051, Wis. Stats., as created by 1987
Wisconsin Act 13.

6. By any other method provided for in any additional right to
indemnification permitted under Section 5, below.

Section 4 - Allowance of Expenses as Incurred - Upon written request
by a Director or Officer who is a party to a proceeding, the Corporation
may pay or reimburse his or her reasonable expenses as incurred if the
Director or Officer provides the Corporation with all of the following:

1. A written affirmation of his or her good faith belief that he or
she has not breached or failed to perform his or her duties to
the Corporation.

2. A written undertaking, executed personally or on his or her
behalf, to repay the allowance and/if required by the
Corporation, to pay reasonable interest on the allowance to the
extent that it is ultimately determined under Section 3, above,
that indemnification under Section 2, above, is not required and
that indemnification is not ordered by a court. The undertaking
under this subsection shall be an unlimited general obligation of
the Director or Officer and may be accepted without reference to
his or her ability to repay the allowance. The undertaking may
be secured or unsecured.

Section 5 - Additional Rights to Indemnification and Allowance of
Expenses
1. Except as provided in 2. below, Sections 2 and 4 above, do not
preclude any additional right to indemnification or allowance of
expenses that a Director or Officer may have under any of the
following:

a. The articles of incorporation or bylaws.

b. A written agreement between the Director or Officer and the
Corporation.

c. A resolution of the Board of Directors.

d. A resolution, after notice, adopted by a majority vote of all
the Corporation's voting shares then issued and outstanding.

2. Regardless of the existence of an additional right under
subsection 1., above, the Corporation may not indemnify a
Director or Officer, or permit a Director or Officer to retain
any allowance of expenses unless it is determined by or on behalf
of the Corporation that the Director or Officer did not breach or
fail to perform a duty he or she owes to the Corporation which
constitutes conduct under Section 2, 2. a. 1), 2), 3) or 4). A
Director or Officer who is a party to the same or related
proceeding for which indemnification or an allowance of expenses
is sought may not participate in a determination under this
subsection.

3. No provision of this Article X shall affect the Corporation's
power to pay or reimburse expenses incurred by a Director or
Officer in any of the following circumstances:

a. As a witness in a proceeding to which he or she is not a
party.

b. As a plaintiff or petitioner in a proceeding because he or
she is or was an employee, agent, Director or Officer of the
Corporation.

Section 6 - Insurance - The Corporation may purchase and maintain
insurance on behalf of an individual who is an employee, agent, Director
or Officer of the Corporation against liability asserted against or
incurred by the individual in his or her capacity as an employee, agent,
Director or Officer or arising from his or her status as an employee,
agent, Director or Officer, regardless of whether the Corporation is
required or authorized to indemnify or allow expenses to the individual
against the same liability under Sections 2, 3, 4 or 5 of this Article X.

Section 7 - Indemnification and Insurance Against Securities
Law Claims - Sections 1 through 6, inclusive, apply to the extent
applicable to any other proceeding, to any proceeding involving a federal
or state statute, rule or regulation regulating the offer, sale or
purchase of securities, securities brokers or dealers, or investment
companies or investment advisers.

Section 8 - Reliance by Directors or Officers -

1. Unless the Director or Officer has knowledge that makes reliance
unwarranted, a Director or Officer, in discharging his or her
duties to the Corporation, may rely on information, opinions,
reports or statements, any of which may be written or oral,
formal or informal, including financial statements and other
financial data, if prepared or presented by any of the following:

a. An Officer or employee of the Corporation whom the Director
or Officer believes in good faith to be reliable and
competent in the matters presented.

b. Legal counsel, public accountants or other persons as to
matters the Director or Officer believes in good faith are
within the person's professional or expert competence.

c. In the case of reliance by a Director, a committee of the
Board of Directors of which the Director is not a member if
the Director believes in good faith that the committee merits
confidence.

2. This section does not apply to a Director's reliance under
Section 180.40(3), Wis. Stats., as in effect on the date of
adoption hereof.

Section 9 - Consideration of Interests in Addition to Shareholders'
Interests - In discharging his or her duties to the Corporation and in
determining what he or she believes to be in the best interests of the
Corporation, a Director or Officer may, in addition to considering the
effects of any action on shareholders, consider the following:

1. The effects of the action on employees, suppliers and customers
of the Corporation.

2. The effects of the action on communities in which the Corporation
operates.

3. Any other factors the Director or Officer considers pertinent.

<ARTICLE> UT
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE FORM 10-Q FILED BY WISCONSIN POWER AND
LIGHT COMPANY FOR THE QUARTER ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 1,275,998
<OTHER-PROPERTY-AND-INVEST> 31,363
<TOTAL-CURRENT-ASSETS> 80,316
<TOTAL-DEFERRED-CHARGES> 205,188
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 1,592,865
<COMMON> 66,183
<CAPITAL-SURPLUS-PAID-IN> 199,170
<RETAINED-EARNINGS> 287,392
<TOTAL-COMMON-STOCKHOLDERS-EQ> 552,745
0
59,963
<LONG-TERM-DEBT-NET> 318,585
<SHORT-TERM-NOTES> 56,975
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 54,500
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 550,097
<TOT-CAPITALIZATION-AND-LIAB> 1,592,865
<GROSS-OPERATING-REVENUE> 502,380
<INCOME-TAX-EXPENSE> 35,027
<OTHER-OPERATING-EXPENSES> 103,290
<TOTAL-OPERATING-EXPENSES> 426,625
<OPERATING-INCOME-LOSS> 75,755
<OTHER-INCOME-NET> 1,910
<INCOME-BEFORE-INTEREST-EXPEN> 77,665
<TOTAL-INTEREST-EXPENSE> 21,863
<NET-INCOME> 53,352
2,483
<EARNINGS-AVAILABLE-FOR-COMM> 50,869
<COMMON-STOCK-DIVIDENDS> 42,630
<TOTAL-INTEREST-ON-BONDS> 23,971
<CASH-FLOW-OPERATIONS> 145,100
<EPS-PRIMARY> 0<F1>
<EPS-DILUTED> 0<F1>
<FN>
<F1>Earnings per share of common stock is not reflected because all of such shares
are held by WPL Holdings, Inc.
</FN>

</TABLE>