FORM U-3A-2
File No. 69-35
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Statement by Holding Company
Claiming Exemption Under Rule U-3A-2
from Provisions of the Public Utility
Holding Company Act of 1935.
To be filed annually prior to March 1.
WISCONSIN PUBLIC SERVICE CORPORATION hereby files with the Securities and
Exchange Commission, pursuant to Rule U-3A-2, its statement claiming exemption
as a holding company from the provisions of the Public Utility Holding Company
Act of 1935, and submits the following information:
1. Name, state of organization, location and nature of business of claimant
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and every subsidiary thereof, other than any exempt wholesale generator
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(EWG) or foreign utility company in which claimant directly or
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indirectly holds an interest.
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Wisconsin Public Service Corporation (herein sometimes referred to as
------------------------------------
"WPSC") is incorporated under the laws of the state of Wisconsin and has
its principal executive office at 700 North Adams Street,
P. O. Box 19001, Green Bay, Wisconsin 54307-9001. It is an operating
public utility company engaged chiefly in the production, transmission,
distribution, and sale of electricity and in the purchase, distribution,
and sale of gas. WPSC serves approximately 381,000 electric customers
and 224,000 gas customers in 11,000 square miles in northeastern and
central Wisconsin and an adjacent part of Upper Michigan. The largest
cities served are Green Bay, Sheboygan, Oshkosh, and Wausau, with
populations ranging from 153,642 to 60,854, including contiguous urban
areas (1990 Federal census). WPSC furnishes retail electric service in
all these cities except Sheboygan, and gas in all except Wausau.
Additionally, WPSC provides wholesale electric service to
15 communities. About 97% of operating revenues in the year 1998 were
derived from Wisconsin customers, and 3% from Michigan customers.
WPS Leasing, Inc. was incorporated on September 22, 1994 under the laws
-----------------
of the state of Wisconsin and has its principal office at the principal
executive offices of WPSC. The directors and officers of WPS Leasing,
Inc. are in each case also officers of WPSC. WPSC owns 100% of
WPS Leasing's capital stock, consisting of 1,000 shares of common stock,
with a $1 per share par value, at the stated capital amount of $1 per
share. The total assets of WPS Leasing at December 31, 1998 were
$13,641,986, or 1.1% of WPSC's assets. WPSC's equity in net income for
the year 1998 was $(132,780). The intended principal business of
WPS Leasing, Inc. is to participate in the financing of specific utility
projects. WPS Leasing is not and never has been a public utility.
<PAGE>
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Wisconsin Valley Improvement Company ("Improvement Company"), of which
------------------------------------
WPSC owns 26.9% of the voting stock, is incorporated under the laws of
the state of Wisconsin and has its principal office at Wausau,
Wisconsin. It operates a system of dams and water reservoirs on the
Wisconsin River and tributary streams to produce as nearly a uniform
stream flow as practicable through all seasons, and charges water tolls
to benefited power plant owners as determined semiannually by the Public
Service Commission of Wisconsin, all pursuant to special enactments of
the Wisconsin Legislature (as amended by Chapter 497, Wisconsin Laws of
1939). It generates no electric energy and renders no public utility
services. Total assets of Wisconsin Valley Improvement Company at
December 31, 1998 were $751,000, or .06% of WPSC's assets. WPSC's
equity in net income for the year 1998 was $21,000, or .04% of WPSC's
total net income. It is believed that Improvement Company is not a
"public utility company" as defined in the Public Utility Holding
Company Act of 1935. In findings and opinion promulgated October 28,
1940, in File No. 31-480 (8 S.E.C. Decisions, P. 134), to which
reference is hereby made, the Securities and Exchange Commission
declared Improvement Company not to be a subsidiary of WPSC.
Wisconsin River Power Company ("River Company"), of which WPSC owns
-----------------------------
33.1% of the voting stock, is incorporated under the laws of the
state of Wisconsin and has its principal office at Wisconsin Rapids,
Wisconsin. Its business consists of the operation of two
hydroelectric plants on the Wisconsin River, the output of which is
sold in equal parts to three companies, including WPSC, which three
companies own all outstanding stock of River Company in substantially
equal parts. Total assets of Wisconsin River Power Company at
December 31, 1998 were $5,807,000, or .46% of WPSC's assets. WPSC's
equity in net income for the year 1998 was $542,000, or 1.0% of WPSC's
total net income. Further information concerning the nature of the
business of River Company is set forth in findings and opinions of the
Securities and Exchange Commission entered in reference to River Company
on January 29, 1948 in File Nos. 70-1656 and 31-551 (27 S.E.C. Decisions,
P. 539) and its orders in Docket No. EL79-10.
2. A brief description of the properties of claimant and each of its
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subsidiary public utility companies used for the generation,
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transmission, and distribution of electric energy for sale, or for the
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production, transmission, and distribution of natural or manufactured
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gas, indicating the location of principal generating plants,
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transmission lines, producing fields, gas manufacturing plants, and
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electric and gas distribution facilities, including all such properties
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which are outside the state in which claimant and its subsidiaries are
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organized and all transmission or pipelines which deliver or receive
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electric energy or gas at the borders of such state.
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Statistics set forth in the answer to this item are as of December 31,
1998.
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- 3 -
Wisconsin Public Service Corporation owns and operates electric
------------------------------------
properties comprising an integrated system of production, transmission,
and distribution facilities throughout the territory served. Generating
facilities consist of two steam plants (at Green Bay, and south of
Wausau, Wisconsin) with total rated capacity of 875,200 kilowatts
("kw"); a 41.2% share of the Kewaunee Nuclear Power Plant at Kewaunee,
Wisconsin, which WPSC operates, with a rated capacity of 494,000 kw
(WPSC's share is 203,500 kw); a 31.8% share of the Columbia Energy
Center at Portage, Wisconsin, owned jointly with Wisconsin Power and
Light Company, the operator, and Madison Gas and Electric Company, with
a rated capacity of 1,052,000 kw (WPSC's share is 334,400 kw); a
31.8% share of the Edgewater Steam Plant Unit #4 at Sheboygan,
Wisconsin, owned jointly with Wisconsin Power and Light Company, the
operator, with a rated capacity of 348,000 kw (WPSC's share is
110,700 kw); combustion turbines of 49,000 kw and 19,300 kw,
respectively, south of Wausau, Wisconsin; two combustion turbines of
40,700 kw and 40,200 kw and a 68% share in a combustion turbine of
80,200 kw (WPSC's share is 54,536 kw) owned jointly with Marshfield
Electric and Water Department and operated by WPSC, all located near
Marinette, Wisconsin; 15 hydroelectric plants (14 in Wisconsin and 1 on
the border stream between Wisconsin and Michigan) with aggregate rated
capacity of 53,400 kw; a 4,000 kw diesel plant at Eagle River,
Wisconsin; and a 3,600 kw diesel plant at Ashwaubenon, Wisconsin. Its
transmission and distribution facilities include 56 transmission
substations, 111 distribution substations, and approximately 21,105
route miles of transmission and distribution lines. WPSC is
interconnected with Wisconsin River Power Company, has
15 interconnections in Wisconsin for purposes of power pooling
(Wisconsin Power and Light Company and Madison Gas and Electric
Company), and 25 interconnections (23 in Wisconsin and 2 in Michigan)
with nonaffiliated neighboring utilities, principally for the purpose of
sharing reserve capacity and for emergencies. WPSC also has
14 interconnections to serve 4 neighboring municipal utilities. Gas
facilities include approximately 4,774 miles of main, 69 gate and city
regulator stations, and 207,598 services. All gas facilities are
located in Wisconsin except for distribution facilities in and near the
city of Menominee, Michigan, which receive gas from WPSC's gas lines in
the adjacent city of Marinette, Wisconsin. All of WPSC's electric and
gas facilities are located within the borders of the states of Wisconsin
and Michigan. Except for electric and gas lines crossing the common
border of those states necessary to interconnect the various parts of
its system, it does not have any electric transmission or gas pipelines
which deliver or receive electric energy or gas at the borders of such
states. About 99% of utility plant is located in Wisconsin, and the
balance is in Michigan.
3. The following information for the last calendar year with respect to
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claimant and each of its subsidiary public utility companies: (The
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information required by Item 3 of this Form U-3A-2 is shown in Exhibit D
hereto.)
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4. The following information for the reporting period with respect to
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claimant and each interest it holds directly or indirectly in an EWG or
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a foreign utility company, stating monetary amounts in United States
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dollars.
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Not Applicable.
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LIST OF EXHIBITS
Exhibit A-1 Balance Sheet at December 31, 1998, of Wisconsin Public Service
Corporation.
Exhibit A-2 Income Statement and Statement of Retained Earnings of
Wisconsin Public Service Corporation for the year ending
December 31, 1998.
Exhibit A-3 Balance Sheet at December 31, 1998, and Statements of Income
and Surplus Accounts of Wisconsin River Power Company for the
year ended December 31, 1998, filed by reference to Exhibit A,
of Form U-3A-2 being filed by Consolidated Papers, Inc. in File
No. 69-53. (The financial statements of Wisconsin River Power
Company are not customarily consolidated with those of any
other company.)
Exhibit B Financial Data Schedule
Exhibit D Statement showing sales for the calendar year 1998 of electric
energy and gas by Wisconsin Public Service Corporation and
Wisconsin River Power Company.
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- 6 -
The above-named claimant has caused this statement to be duly executed on its
behalf by its authorized officer on the 26th day of February, 1999.
WISCONSIN PUBLIC SERVICE CORPORATION
/s/ D. P. Bittner
-----------------------------------------
D. P. Bittner
Senior Vice President-Finance
(CORPORATE SEAL)
Attest: /s/ F. J. Kicsar
---------------------------
F. J. Kicsar
Secretary
<PAGE>
- 7 -
Name, title, and address of officer to whom notices and correspondence
concerning this statement should be addressed:
F. J. Kicsar, Secretary
Wisconsin Public Service Corporation
700 North Adams Street, P. O. Box 19001
Green Bay, WI 54307-9001
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION AND SUBSIDIARY EXHIBIT A-1
CONSOLIDATING BALANCE SHEET
AS OF DECEMBER 31, 1998
<CAPTION>
Wisconsin Eliminations
Public WPS Debit Credit Consolidated
Service Leasing, ----- ------ Balance
Corporation Inc. (Thousands) Sheet
----------- -------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
ASSETS
------
Utility Plant:
In service
Electric $1,519,423 $15,288 $ - $ - $1,534,711
Gas 267,892 - - - 267,892
Less - accumulated depreciation 1,118,318 1,740 - - 1,120,058
--------- ------ --- --- ---------
Net plant 668,997 13,548 - - 682,545
Nuclear decommissioning trusts 171,442 - - - 171,442
Construction work in progress 35,996 - - - 35,996
Nuclear fuel - net 18,641 - - - 18,641
--------- ------ --- --- ---------
Net Utility Plant 895,076 13,548 - - 908,624
--------- ------ --- --- ---------
Current Assets:
Cash 1,908 (26) - - 1,882
Customer and other receivables 63,196 120 - 123 63,193
Accrued utility revenues 30,877 - - - 30,877
Fossil fuel, at average cost 12,433 - - - 12,433
Gas in storage, at average cost 14,855 - - - 14,855
Materials and supplies, at average cost 20,054 - - - 20,054
Prepayments and other 19,491 - - - 19,491
--------- ------ --- --- ---------
Total Current Assets 162,814 94 - 123 162,785
--------- ------ --- --- ---------
Regulatory Assets 68,335 - - - 68,335
Net Nonutility Plant 2,888 - - - 2,888
Pension Assets 60,018 - - - 60,018
Investments and Other Assets 64,901 - 31 - 64,932
--------- ------ --- --- ---------
Total Assets $1,254,032 $13,642 $ 31 $123 $1,267,582
========= ====== === === =========
CAPITALIZATION AND LIABILITIES
------------------------------
Capitalization:
Common stock equity $ 203,430 $ 476 $476 $ - $ 203,430
Retained earnings 284,726 (507) - 507 284,726
ESOP loan guarantee (6,448) - - - (6,448)
Preferred stock 51,200 - - - 51,200
Long-term debt 289,972 14,061 - - 304,033
--------- ------ --- --- ---------
Total Capitalization 822,880 14,030 476 507 836,941
--------- ------ --- --- ---------
Current Liabilities:
Note payable 10,000 - - - 10,000
Commercial paper 25,000 - - - 25,000
Accounts payable 60,801 2 123 - 60,680
Accrued interest and taxes 2,593 (3) - - 2,590
Other 6,564 - - - 6,564
--------- ------ --- --- ---------
Total Current Liabilities 104,958 (1) 123 - 104,834
--------- ------ --- --- ---------
Other Long-Term Liabilities
and Deferred Credits:
Accumulated deferred income taxes 118,476 - - - 118,476
Accumulated deferred
investment tax credits 25,159 (387) - - 24,772
Regulatory liabilities 43,591 - - - 43,591
Environmental remediation liabilities 39,028 - - - 39,028
Other long-term liabilities 99,940 - - - 99,940
--------- ------ --- --- ---------
Total Other Long-Term Liabilities 326,194 (387) - - 325,807
--------- ------ --- --- ---------
Total Capitalization and Liabilities $1,254,032 $13,642 $599 $507 $1,267,582
========= ====== === === =========
</TABLE>
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION AND SUBSIDIARY EXHIBIT A-2
CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1998
<CAPTION>
Wisconsin Eliminations
Public WPS Debit Credit Consolidated
Service Leasing, ----- ------ Statement
Corporation Inc. (Thousands) of Income
----------- -------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
Operating Revenues:
Electric $487,340 $ - $ - $ - $487,340
Gas 165,111 - - - 165,111
Other - 1,452 1,452 - -
------- ----- ----- ----- -------
Total Operating Revenues 652,451 1,452 1,452 - 652,451
------- ----- ----- ----- -------
Operating Expenses:
Electric production fuels 111,361 - 534 1,452 110,443
Purchased power 42,340 - - - 42,340
Cost of gas sold 104,608 - - - 104,608
Other 138,220 12 - - 138,232
Maintenance 49,425 - - - 49,425
Depreciation and amortization 78,206 534 - 534 78,206
Taxes other than income 26,403 - - - 26,403
------- ----- ----- ----- -------
Total Operating Expenses 550,563 546 534 1,986 549,657
------- ----- ----- ----- -------
Operating Income 101,888 906 1,986 1,986 102,794
------- ----- ----- ----- -------
Other Income and (Deductions):
Allowance for equity funds
used during construction 173 - - - 173
Other, net 6,632 - - 133 6,765
------- ----- ----- ----- -------
Total Other Income and (Deductions) 6,805 - - 133 6,938
------- ----- ----- ----- -------
Income Before Interest Expense 108,693 906 1,986 2,119 109,732
------- ----- ----- ----- -------
Interest Expense:
Interest on long-term debt 19,273 1,127 - - 20,400
Allowance for borrowed funds
during construction (177) - - - (177)
Other interest 2,801 - - - 2,801
------- ----- ----- ----- -------
Total Interest Expense 21,897 1,127 - - 23,024
------- ----- ----- ----- -------
Income Before Income Taxes 86,796 (221) 1,986 2,119 86,708
Income Taxes 29,610 (88) - - 29,522
------- ----- ----- ----- -------
Net Income 57,186 (133) 1,986 2,119 57,186
Preferred Stock Dividends of Subsidiary 3,111 - - - 3,111
------- ----- ----- ----- -------
Earnings on Common Stock $ 54,075 $ (133) $1,986 $2,119 $ 54,075
======= ===== ===== ===== =======
</TABLE>
PAGE
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION AND SUBSIDIARY EXHIBIT A-2
CONSOLIDATING STATEMENT OF RETAINED EARNINGS (CONTINUED)
AS OF DECEMBER 31, 1998
<CAPTION>
Wisconsin Eliminations Consolidated
Public WPS Debit Credit Statement of
Service Leasing, ----- ------ Retained
Corporation Inc. (Thousands) Earnings
----------- -------- ----- ------ ------------
<S> <C> <C> <C> <C> <C>
Retained Earnings (1/1/98)
Wisconsin Public Service Corporation $297,489 $ - $ - $ - $297,489
WPS Leasing, Inc. (374) - 374 -
Net Income 57,186 (133) - 133 57,186
------- ---- -- --- -------
354,675 (507) - 507 354,675
Dividends Declared (Common and Preferred):
Wisconsin Public Service Corporation 69,949 - - - 69,949
------- ---- -- --- -------
Retained Earnings (12/31/98) $284,726 $(507) $ - $507 $284,726
======= ==== == === =======
</TABLE>
<PAGE>
[ARTICLE] OPUR3 EXHIBIT B
[MULTIPLIER] 1,000
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] DEC-31-1998
[PERIOD-START] JAN-01-1998
[PERIOD-END] DEC-31-1998
[BOOK-VALUE] PER-BOOK
[TOTAL-ASSETS] 1,267,582
[TOTAL-OPERATING-REVENUES] 652,451
[NET-INCOME] 57,186
</TABLE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION EXHIBIT D
SALES OF ELECTRIC ENERGY AND GAS
Calendar Year 1998
<CAPTION>
Wisconsin Wisconsin
Public Service River Power
Corporation Company
-------------- -----------
<S> <C> <C>
(a) Electric energy sold
(at retail or wholesale)
Wisconsin (kWh) 11,276,166,301 167,541,000
Michigan (kWh) 323,997,704 None
-------------- -----------
Total (kWh) 11,600,164,005 167,541,000
Wisconsin (revenues -
excludes miscellaneous) $472,044,272 None
Michigan (revenues -
excludes miscellaneous) 13,000,619 None
-----------
Total (revenues associated
with energy sold) $485,044,891 None
Intercompany
Wisconsin - Wisconsin River
Power to WPSC (kWh) None 55,847,000 *
Wisconsin - WPSC to
Upper Peninsula Power
Company (kWh) 266,249,000 None
Wisconsin - Wisconsin River
Power to WPSC (revenues) None $1,761,661
Wisconsin - WPSC to
Upper Peninsula Power
Company (revenues) $6,386,223 None
Other
Wisconsin (kWh) 11,009,917,301 111,694,000 *
Michigan (kWh) 323,997,704 None
-------------- -----------
Total (kWh) 11,333,915,005 111,694,000
Wisconsin (revenues -
excludes miscellaneous) $465,658,049 None
Michigan (revenues -
excludes miscellaneous) 13,000,619 None
-----------
Total (revenues associated
with energy sold) $478,658,668 None
</TABLE>
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION EXHIBIT D
(CONTINUED)
<CAPTION>
Wisconsin Wisconsin
Public Service River Power
Corporation Company
-------------- -----------
<S> <C> <C>
Gas distributed at retail
Wisconsin (MCF) 33,100,136 ** None
Michigan (MCF) 646,796 ** None
----------
Total (MCF) 33,746,932 None
Wisconsin (revenues -
excludes miscellaneous) $157,906,004 ** None
Michigan (revenues -
excludes miscellaneous) 2,976,605 ** None
-----------
Total (revenues -
excludes miscellaneous) $160,882,609 None
Intercompany None None
Other (transport gas)
Wisconsin (MCF) 25,242,277 ** None
Michigan (MCF) 1,036,244 ** None
-----------
Total (MCF) 26,278,521 None
Wisconsin (revenues) $5,206,780 ** None
Michigan (revenues) 385,478 ** None
---------
Total (revenues) $5,592,258 None
(b) Electric energy distributed
at retail outside state
of organization
Michigan (kWh) 312,791,104 None
Michigan (revenues -
excludes miscellaneous) $12,588,675 None
Gas distributed at
retail outside state
of organization
Michigan (MCF) 1,683,040 ** None
Michigan (revenues -
excludes miscellaneous) $3,362,083 ** None
</TABLE>
<PAGE>
<TABLE>
WISCONSIN PUBLIC SERVICE CORPORATION EXHIBIT D
(CONTINUED)
<CAPTION>
Wisconsin Wisconsin
Public Service River Power
Corporation Company
-------------- -----------
<S> <C> <C>
(c) Electric energy sold at
wholesale outside state of
organization or at state line
Michigan (kWh) 11,206,600 None
Michigan (revenues) $411,944 None
Gas sold at wholesale outside
state of organization or at
state line
Michigan (kWh) None None
Michigan (revenues) None None
(d) Electric energy purchased
outside state of organization
or at state line #
State line - Wisconsin
border (kWh) 92,801,000 None
State line - Wisconsin
border (expenses) $2,368,535 None
Outside state -
Canada/Minnesota
border (kWh) 420,342,000 None
Outside state -
Canada/Minnesota
border (expenses) $7,287,525 None
Gas purchased outside state of
organization or at state line
Numerous states (MCF) 33,775,075 None
Numerous states (expenses) $104,607,306 None
</TABLE>
<PAGE>
WISCONSIN PUBLIC SERVICE CORPORATION EXHIBIT D
(CONTINUED)
* Quantities shown represent actual deliveries. By contract, each of the
three purchasers of the output of Wisconsin River Power Company is
entitled to receive, and is required to pay for one-third of the total
output.
** "Gas distributed at retail" for Wisconsin includes 9,992,689 MCF and
$36,889,454, and "Gas distributed at retail" for Michigan includes
125,468 MCF and $592,464 respectively, of sales to Large Commercial and
Industrial Customers (those using 2,000 CCF within one month of a year)
under Wisconsin Public Service Corporation's retail rates. Industrial
usage is indeterminable.
# Receipts of 75,430 kWh of interchange energy were offset by deliveries of
211 kWh to same supplier at other points in the system. These deliveries
(and other offsetting deliveries of interchange energy) are omitted from
Wisconsin Public Service Corporation's sales shown above.
<PAGE>
