PROSPECTUS
NORTHERN STATES POWER COMPANY
(A MINNESOTA CORPORATION)
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
COMMON STOCK
($2.50 PAR VALUE)
The Dividend Reinvestment and Stock Purchase Plan (the "Plan") of Northern
States Power Company (the "Company") provides the Company's common and preferred
shareholders, employees and customers with a convenient method of purchasing
shares of the Company's common stock ($2.50 par value) ("Common Stock") without
payment of any brokerage commission or service charge. In addition, other
individuals of legal age who reside in Minnesota, North Dakota, South Dakota,
Wisconsin or Michigan may become shareholders of record of the Company's Common
Stock concurrent with enrollment in the Plan with a minimum initial investment
of $100. Participants may purchase additional shares of Common Stock by
reinvesting dividends and/or making cash payments. Employees of the Company may
participate through payroll deduction.
Beneficial owners of the Company's common or preferred stock held by brokers and
other custodial institutions may participate in the Plan if such brokers and
other custodial institutions holding their stock have established procedures
which permit their customers to participate in the Plan if they so desire.
Individuals who are not shareholders, employees or customers of the Company and
who do not reside in Minnesota, North Dakota, South Dakota, Wisconsin or
Michigan may participate only after becoming a shareholder of record through the
purchase of common or preferred stock of the Company through an independent
broker.
The shares purchased under the Plan may be new issue Common Stock or Common
Stock purchased on the open market. New issue Common Stock will be purchased
from the Company at the current market price on the investment date. The price
of Common Stock purchased on the market will be the weighted average price at
which shares are actually purchased.
A complete description of the Plan begins on Page 3.
PLEASE READ THIS PROSPECTUS CAREFULLY BEFORE INVESTING AND RETAIN IT FOR YOUR
FUTURE REFERENCE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS JULY 17, 1997
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission ("Commission"). Such reports, proxy
statements and other information on file can be inspected and copied at the
public reference offices of the Commission currently at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549; 500 West Madison Street,
Chicago, Illinois 60661; and 7 World Trade Center, New York, New York 10048.
Copies of such materials can also be obtained from the Public Reference Section
of the Commission, Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington D.C. 20549, at prescribed rates. In addition, reports, proxy material
and other information concerning the Company may be inspected at the Library of
the New York Stock Exchange, 20 Broad Street, New York, New York 10005; the
offices of the Chicago Stock Exchange, One Financial Place, 440 South LaSalle
Street, Chicago, Illinois 60605, and at the office of the Pacific Exchange, 301
Pine Street, San Francisco, California 94104, on which exchanges the Company's
Common Stock is listed. In addition, electronically filed documents, including
reports, proxy statements and other information regarding the Company, can be
obtained from the Commission's website at http://www.sec.gov.
INFORMATION INCORPORATED BY REFERENCE
The following documents, as filed by the Company with the Commission, are
incorporated herein by reference: (i) Form 10-K Annual Report of the Company for
the year ended December 31, 1996, (ii) Form 10-Q Quarterly Report of the Company
for the quarter ended March 31, 1997, and (iii) the Company's Current Reports on
Form 8-K dated January 8, 1997, January 21, 1997, January 24, 1997, January 31,
1997, April 22, 1997, May 19, 1997, and May 30, 1997.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this Prospectus and prior to the
termination of this offering shall be deemed to be incorporated by reference in
this Prospectus from the date of filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
in this Prospectus shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained in this Prospectus or
in any other subsequently filed document which also is or is deemed to be
incorporated by reference in this Prospectus modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus. The
Company periodically will include with its Annual Report on Form 10-K or its
Quarterly Report on Form 10-Q an Exhibit containing a description of its Common
Stock.
The Company hereby undertakes to provide without charge to each person
(including any beneficial owner) to whom this Prospectus has been delivered, on
the request of any such person, a copy of any or all of the documents referred
to above which have been or may be incorporated in this Prospectus by reference,
other than certain exhibits to such documents. Written or telephone requests for
such copies should be directed to the Corporate Secretary, Northern States Power
Company, 414 Nicollet Mall, Minneapolis, Minnesota 55401 (612-330-5500).
<PAGE>
THE COMPANY
The Company was incorporated in 1909 under the laws of Minnesota. Its executive
offices are located at 414 Nicollet Mall, Minneapolis, Minnesota 55401 (Phone
612-330-5500). The Company has two significant subsidiaries, Northern States
Power Company, an operating public utility incorporated in Wisconsin
(NSP-Wisconsin) and NRG Energy, Inc., a Delaware corporation (NRG). The Company
also has several other subsidiaries, including Cenerprise, Inc. (formerly known
as Cenergy, Inc.), a Minnesota corporation; Viking Gas Transmission Company, a
Delaware corporation (Viking); and Eloigne Company, a Minnesota corporation
(Eloigne).
NSP is predominantly an operating public utility engaged in the generation,
transmission and distribution of electricity throughout a 49,000 square mile
service area and the transportation and distribution of natural gas in
approximately 152 communities within this area. Viking is a regulated natural
gas transmission company that operates a 500-mile interstate natural gas
pipeline. NRG operates several non-regulated energy businesses and is an equity
investor in several non-regulated energy affiliates throughout the world.
The Company serves customers in Minnesota, North Dakota and South Dakota.
NSP-Wisconsin serves customers in Wisconsin and Michigan. Of the
approximately three million people served by the Company and NSP-Wisconsin,
the majority are concentrated in the Minneapolis-St. Paul Metropolitan Area.
In 1996, about 62 percent of NSP's electric retail revenue was derived from
sales in the Minneapolis-St. Paul Metropolitan Area and about 56 percent of
retail gas revenues came from sales in the St. Paul area. NSP's electric
generation for 1996 was provided for by coal (60%), nuclear (37%), and renewable
and other fuels (3%). NSP currently operates three nuclear units that were
placed in service in 1971, 1973 and 1974. NSP has no additional nuclear units
under construction.
DESCRIPTION OF THE PLAN
The following is a summary of the provisions of the Plan:
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The purpose of the Plan is to provide the Company's shareholders, employees and
customers with a convenient method of purchasing Common Stock of the Company and
of systematically increasing ownership interest in the Company without payment
of any brokerage commissions or service charges. The Plan also offers other
individuals of legal age residing in Minnesota, North Dakota, South Dakota,
Wisconsin or Michigan an opportunity to become shareholders of record of the
Company by enrolling in the Plan.
1. HOW TO ENROLL
Eligible persons may join the Plan at any time by completing the appropriate
authorization form and returning it to the Company. An authorization form may be
obtained by sending a written request to Northern States Power Company,
Shareholders Department, 414 Nicollet Mall, Minneapolis, Minnesota 55401, or
by calling the Company at (612) 330-5560.
<PAGE>
2. PARTICIPATION
If you are already a holder of record of Company stock or a beneficial owner of
Company stock held by a broker or other custodial institution that has
established procedures which permit their customers to participate in the Plan,
you must complete the appropriate authorization form to become a participant in
the Plan.
If you are already a participant under the Plan, you are not required to
re-enroll. However, you must contact the Company's Shareholders Department to
request any changes in participation.
If you are a customer or employee of the Company or an individual of legal age
residing in Minnesota, North Dakota, South Dakota, Wisconsin or Michigan, you
must make an initial investment of at least $100 and complete the appropriate
authorization form to become a participant of the Plan. A maximum of $10,000 may
be initially invested in the Plan.
3. HOW THE PLAN WORKS
Participants can reinvest dividends paid on full and fractional shares to
acquire additional shares under the Plan. Participants also may make optional
cash payments of a minimum of $25 per payment up to a $10,000 maximum per
calendar quarter to purchase stock. Employees of the Company may authorize
payroll deductions to purchase shares.
Shares purchased with reinvested dividends, optional cash payments and employee
payroll deductions are held by the Plan until the Participant requests issuance
of a share certificate. Dividends paid on shares held by the Plan will be
automatically reinvested. Participants can also choose to reinvest all, a
portion, or none of the dividends earned on their certificated shares of Common
and/or Preferred stock.
No brokerage fees, commissions or service charges will be paid by participants
in connection with the Plan. All administrative service fees will be borne by
the Company. Participants with 25 or less shares credited to their Plan accounts
can request termination and a sale of all Plan shares through the Company.
Full investment of funds will be made on behalf of each participant in the Plan.
Fractions of shares, as well as full shares, are credited to participants'
accounts. Regular Statements of Account will provide simplified record keeping.
Participants can deposit Common Stock certificates for shares acquired through
the Plan or otherwise under the Share Deposit feature of the Plan.
4. HOW INVESTMENTS ARE MADE
Shares may come either from authorized but unissued Common Stock ("new issue
Common Stock") or from purchases of Common Stock of the Company made on any
securities exchange where the shares are traded in the over-the-counter market
or in negotiated transactions. The Company will decide when the Plan will
purchase new issue Common Stock or when Common Stock will be purchased on the
open market. For open market purchases, First Trust National Association (the
"NSP Agent") will act as purchasing agent. As of the date of this Prospectus,
shares of Common Stock purchased for participants under the Plan are being
purchased from the Company as new issue Common Stock. The Company will not
change its determination to use new issue Common Stock or purchase shares on the
open market more than once in any twelve-month period. Participants will be
notified of any change in the source of shares.
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Below are the various ways you can acquire shares:
DIVIDEND REINVESTMENT
Dividends may be reinvested to purchase either new issue Common Stock
or Common Stock on the open market. Common and/or Preferred stock
dividends used to purchase new issue Common Stock will be invested on
the 20th day of each dividend payment month, being: January, April,
July, and October, if that date is a New York Stock Exchange trading
day, or the first succeeding date the New York Stock Exchange is open
for trading during those months. Common and/or Preferred stock
dividends will normally be used by the NSP Agent to purchase Common
Stock on the open market within 10 business days of the payment of a
dividend, depending on market conditions. DIVIDENDS ON SHARES HELD BY
THE PLAN WILL ALWAYS BE REINVESTED.
Participants can authorize full or partial reinvestment of dividends on
certificated shares. To change participation to allow receipt of a
dividend from certificated shares in cash, instead of automatically
reinvesting that dividend, the Company's Shareholders Department must
receive a written request for such on or before the record date
established for the particular dividend. If the request is received
after the record date, the change will begin with the next dividend.
CASH INVESTMENT OPTION -- OPTIONAL CASH PAYMENTS
Participants may, at any time, SEND CHECKS OR MONEY ORDERS ONLY (made
payable in U.S. dollars drawn on a U.S. bank) to make cash investments
in the Plan. Checks and money orders must be made PAYABLE TO "NSP
AGENT". Participants may vary cash investments from a minimum of $25
per payment up to a maximum of $10,000 per calendar quarter.
The Company will process all payments on the date they are received.
Payments post-dated and received on or before that date will be
accepted as of such date. Cash payments are invested monthly on the
10th day of each month, if that date is a New York Stock Exchange
trading day, or the first succeeding date the New York Stock Exchange
is open for trading. In order to be invested in a particular month,
cash payments must be received on or before the seventh day of such
month, or if the seventh day is not a business day, then on or before
the first business day thereafter. Payments received after such seventh
day of the month will be invested on the investment date in the next
month. No interest will be paid on funds being held by the Company or
the NSP Agent.
Cash payments will be used to purchase either new issue Common Stock or
Common Stock purchased on the open market, as determined by the
Company. Cash payments used to purchase new issue Common Stock will be
invested on the investment date each month. Cash payments used to
purchase Common Stock on the open market will normally be purchased by
the NSP Agent 10 business days after the last business day of the
previous month.
To be eligible for quarterly dividends on shares purchased with cash
investments, cash payments MUST be received by the seventh day of
February, March, May, June, August, September, November and December.
Shares purchased with cash payments in January, April, July and October
will not be eligible for that quarter's dividends.
Participants can request a refund of the current month's cash payment
by sending a written request to the Company's Shareholders Department.
The request must be received at lease two
<PAGE>
business days prior to the investment date. Payments that are rejected
by the Company will be refunded to participants as promptly as
practicable.
PAYROLL DEDUCTION
Employees who participate in the Plan may authorize payroll deductions
to purchase shares under the Plan. Deductions may be made in addition
to reinvestment of dividends and optional cash payments. The combined
total of payroll deductions and optional cash payments may not exceed
$10,000 in any calendar quarter. The minimum monthly payroll deduction
is $25.
Payroll Deduction forms can be obtained from the Company's Shareholders
Department. Employees may change or terminate payroll deductions at any
time by completing a new Payroll Deduction Authorization form. The
commencement, change or termination will become effective as soon as
practicable after receipt of the authorization form.
PRICE
The price per share of new issue Common Stock will be the current
market price of Common Stock as determined by the Company on the basis
of the average of the closing prices of Common Stock as reported by THE
WALL STREET JOURNAL as New York Stock Exchange Composite Transactions
on the five trading days prior to the applicable investment date.
The price of shares purchased for the Plan on the open market will be
the weighted average price at which Common Stock of the Company is
actually purchased.
The Company has no basis for estimating either the number of shares
that will be purchased under the Plan or the prices at which shares
will be purchased. Participants should be aware that since investment
prices are determined as of specified dates, they may lose any
advantages otherwise available from being able to select the timing of
their investment.
5. STATEMENTS OF ACCOUNT
The Company will maintain an account for each Plan participant and will send
Statements of Account to each participant as soon as practicable after each
quarterly dividend reinvestment and each monthly cash investment. The Statements
detail dividends, cash payments, number of shares, price per share, taxable
dividend income and total number of accumulated shares. These Statements provide
participants with records of their purchases and should be retained for tax
purposes.
6. CERTIFICATES FOR SHARES
Normally, certificates for Plan shares are not issued to participants unless
requested. Instead, the shares are credited to Plan accounts and are shown on
the Statements of Account. This protects against loss, theft or destruction of
stock certificates, and reduces the Company's administrative costs.
Participants can, however, request stock certificates for any number of full
shares credited to their Plan accounts. There is no charge for this service. A
written request must be made to the Company's Shareholders Department by
completing the back side of the account correspondence stub attached to the
Statements of Account or by submitting a written request. A separate request
must be made for each certificate requested specifying the number of full shares
to be issued. Requests are processed as soon as practicable after receipt.
Generally, the certificates are issued within 10 business days after the
<PAGE>
Company receives the request. Any remaining full and fractional shares will
continue to be credited to participants' accounts. Certificates for fractional
shares will not be issued under any conditions.
The Company reserves the right to suspend its policy of issuing certificates,
other than upon termination or partial withdrawal from the Plan, at any time.
REGISTRATION OF SHARE CERTIFICATES
Certificates can be registered and issued in names other than
participants' names subject to compliance with any applicable laws. To
do this, participants must complete an "Assignment Separate from
Certificate" form and return it to the Company's Shareholders
Department. This form must bear the signature of the participant with
the signature guaranteed by an eligible financial institution.
Assignment forms can be obtained from the Company's Shareholders
Department.
If a participant wants shares issued or a transfer to be effective for
a particular dividend payment, the appropriate form must be received at
least five days before the record date established for that dividend.
Shares credited to participants' accounts may not be pledged and may
not be assigned, except to another Plan account. To pledge or assign
shares, participants must make a written request for certificates to be
issued.
DEPOSIT OF COMMON STOCK CERTIFICATES INTO THE PLAN
Participants can deposit any certificates for Common Stock of the
Company into the Plan, whether such certificates were issued under this
Plan or otherwise, at no cost. To take advantage of this feature,
participants must send certificates for Common Stock to the Company's
Shareholders Department with a completed "Share Deposit Letter of
Transmittal" form which can be obtained from the Company's Shareholders
Department. Shares of Common Stock represented by such certificates are
credited to the appropriate participant account under the Plan and
dividends on these shares are automatically reinvested in the same
manner as Plan shares. CERTIFICATES FOR PREFERRED STOCK OF THE COMPANY
ARE NOT ELIGIBLE FOR DEPOSIT.
The Company strongly recommends that registered or certified mail be
used, along with adequate insurance, should participants choose to
deposit certificates. However, the method used to submit certificates
to the Company is at the option and risk of the participant.
Participants SHOULD NOT endorse the certificates.
7. HOW TO MAKE A CHANGE IN PARTICIPATION
Any change in enrollment in the Plan or any change in the manner of
participation in the Plan is considered a change in participation. For example,
since dividends on Plan shares are always automatically reinvested, a request to
issue a stock certificate to receive such dividends in cash is considered a
change in participation. Participants may make this or any other change in
participation by completing the appropriate information on the back side of the
account correspondence stub attached to the Statements of Account or by sending
a separate written request to the Company's Shareholders Department. The request
must indicate the number of shares affected by any change and provide
instructions on the new method of participation.
<PAGE>
8. HOW TO TERMINATE PARTICIPATION
Participants may terminate participation at any time by submitting the
appropriate information on the back side of the account correspondence stub
attached to the Statements of Account or by submitting a separate written
request to the Company's Shareholders Department.
When participants terminate participation or upon termination of the Plan by the
Company, stock certificates for full shares credited to Plan accounts are issued
and mailed directly to participants along with a check covering the value of any
fractional shares. The fractional share check amount is based on the closing
market price of the Company's Common Stock on the day before the day the
termination request is processed. For income tax purposes, the amount of the
fractional share check is taxable and is reported accordingly.
The request for termination will be processed as soon as practicable after
receipt. A stock certificate for full shares and a check for the value of the
fractional share will normally be mailed within 10 days after receipt of the
request, unless the request is received during a dividend month, in which case
the stock certificate and check for the value of the fractional share will be
mailed by the end of the month. If the request to terminate is received by the
15th day of a dividend payment month, being: January, April, July and October,
the dividend that would have been reinvested in the Plan will be paid directly
to the terminating participant in cash as soon as practicable. Any cash payments
waiting for investment will be returned as soon as practicable. Any subsequent
dividends, if applicable, will be paid in cash.
To cancel payroll deductions, employees must complete a Payroll Deduction
Authorization form. Forms can be obtained from the Company's Shareholders
Department.
SELLING PLAN SHARES
To terminate participation and sell Plan shares (except for
participants wishing to terminate with 25 or less shares as explained
below), participants must send a written request to the Company's
Shareholders Department specifying that a stock certificate be issued
and indicating the number of Plan shares to be issued in certificated
form. Participants can then sell the certificated shares through a
stockbroker or to another buyer.
Participants wishing to terminate with 25 or less shares credited under
the Plan may sell all, but not less than all, Plan shares through the
Company, without the issuance of a certificate and without payment of a
brokerage fee. Participants must submit a request for a sale of 25 or
less shares by completing the information on the back side of the
account correspondence stub attached to the Statements of Account or by
submitting a separate written request to the Company's Shareholders
Department. Unless the shares are needed to meet Plan requirements, the
Company will place a sale order for such shares with a fiduciary
institution selected by the Company within 10 days after receipt. In
the event that shares being sold by terminating participants are needed
to meet Plan requirements, those shares will be purchased by the Plan.
In either case, the participant will receive the proceeds of the sale,
less any backup withholding tax, within 10 days after the sale. The
price of the Plan shares being sold will be the market price of the
Common Stock of the Company on the day of the sale.
After termination, previous participants can re-enroll in the Plan by
completing the appropriate authorization form. However, the Company
reserves the right to reject any enrollment forms from
<PAGE>
previous participants on the grounds of excessive joining and
termination. Such reservation is intended to minimize unnecessary
administrative expense and to encourage use of the Plan as a long-term
investment service.
9. OTHER INFORMATION
STOCK SPLITS
Should the Company declare a stock split, the number of additional
shares participants receive will be based on the number of shares in
the Plan account. Additional full and fractional shares that result
from a stock split will be credited to participants' Plan accounts.
Stock split shares issued with respect to certificated shares held by
participants will be mailed directly to the participants in the same
manner as to shareholders who are not participating in the Plan.
VOTING AT THE ANNUAL MEETING OF SHAREHOLDERS
The Company will vote the shares participating in the Plan (those
certificated and those credited to a Plan account) in accordance with
participants' signed proxies, or participants can vote in person at the
annual meeting.
PROCEEDS FROM THE SALE OF NEW ISSUE COMMON STOCK
Proceeds received from the sale of new issue Common Stock will be used
for general corporate purposes.
COMPANY RESPONSIBILITY IN ADMINISTERING THE PLAN
In administering the Plan, the Company is not liable for any good faith
act or omission to act, including, without limitation, any claim of
liability (a) arising out of failure to terminate participants'
accounts upon death prior to receipt of notice in writing of such
death; (b) with respect to the prices at which the shares are purchased
or sold and the time such purchases or sales are made; or (c) as to the
value of the shares acquired for participants; provided, however, that
nothing herein shall be deemed to constitute a waiver of any rights a
participant may have under applicable federal securities laws. The
Company reserves the right to interpret and regulate the Plan as it
deems desirable or necessary in connection with the Plan's operation.
The Company will have no responsibility beyond the exercise of ordinary
care for any action taken or omitted pursuant to the Plan nor will it
have any duties or responsibilities except such as are expressly set
forth herein.
Participants should recognize that neither the Company nor the NSP
Agent can assure them of a profit or protect them against a loss on
shares purchased or sold by them under the Plan. The Company believes
that its serving as administrator, rather than a registered
broker-dealer or a federally insured banking institution, poses no
material risks to participants.
COMPANY'S RIGHT TO TERMINATE THE PLAN
While the Company expects to continue the Plan indefinitely, it
reserves the right to suspend or terminate the Plan at any time. The
Company reserves the right to terminate Plan accounts if participants
are unwilling to abide by the rules and provisions of the Plan. It also
reserves the right to make modifications to the Plan. Any such
suspension, termination or modification will be announced to
participants in advance.
<PAGE>
10. FEDERAL INCOME TAX INFORMATION
THE INFORMATION SET FORTH BELOW IS ONLY A SUMMARY AND DOES NOT CLAIM TO BE A
COMPLETE DESCRIPTION OF ALL TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN. THE
DESCRIPTION MAY BE AFFECTED BY FUTURE LEGISLATION, IRS RULINGS AND REGULATIONS,
OR COURT DECISIONS. ACCORDINGLY, PARTICIPANTS SHOULD CONSULT WITH THEIR OWN TAX
ADVISORS WITH RESPECT TO THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES
OF PARTICIPATION IN THE PLAN.
WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES OF PARTICIPATION IN THE PLAN?
For tax purposes, participants' reinvested dividends are treated in the same
manner they would have been treated had the participants received them in cash
on the applicable dividend payment date. In addition, brokerage commissions paid
by the Company for participants if shares are acquired through open market
transactions are treated as taxable dividend income and are reported
accordingly.
Participants will not realize any taxable income when stock certificates for
full shares are issued from Plan accounts. However, participants will realize
gain or loss when the shares are sold either at their request through the
Company or by them after certificates have been issued. The amount of the gain
or loss is the difference between the amount the participant receives for the
shares and the cost basis of the shares. In addition, terminating participants
will realize gain or loss upon receipt of the check covering the value of the
fractional share.
HOW WILL PARTICIPANTS BE NOTIFIED OF THEIR TAXABLE DIVIDEND INCOME?
The Company will report the dividend income to participants and to the IRS on
Form 1099-Div. The brokerage commission paid by the Company will be included as
dividend income. When Plan accounts are terminated and shares are sold through
the Company, the Company will also report the proceeds from the sale to
terminated participants and to the IRS on Form 1099-B.
WHAT IS THE FEDERAL TAX BASIS OF PLAN SHARES?
The tax basis of participants' Plan shares acquired after 1985 is equal to their
purchase price as indicated on the participants' statements.
The tax basis of participants' shares acquired under the Plan in calendar years
1982 through 1985 will depend on whether they excluded reinvested dividends up
to $750 ($1,500 in the case of a joint return) per tax year under certain
provisions of the Economic Recovery Tax Act of 1981. If participants excluded
qualified dividends, the tax basis for the resulting shares will be zero. If
participants did not exclude the dividends, the tax basis will be the purchase
price as indicated on the participant's statements.
HOW DOES THE COMPANY INVEST AND REPORT DIVIDENDS SUBJECT TO FEDERAL BACKUP
WITHHOLDING OR FOREIGN TAX WITHHOLDING?
The Company will invest an amount equal to the dividends less the amount of tax
withheld. The net dividend will purchase shares. The Statements sent to
participants subject to tax withholding will not indicate the amount of tax
withheld, but will show the net dividend reinvested by the Company. For IRS
reporting purposes, the amount of the dividend withheld will be included in the
dividend income of participants subject to backup withholding or foreign
participants subject to foreign withholding.
<PAGE>
11. EXPERTS
The consolidated historical financial statements of the Company for the years
ended December 31, 1996 and 1995 and the consolidated historical financial
statements of Wisconsin Energy Corporation incorporated in this Prospectus by
reference to the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, and the consolidated financial statements of NRG for the year
ended December 31, 1996 incorporated in this Prospectus by reference to the
Company's Current Report on Form 8-K dated May 30, 1997, have been so
incorporated in reliance upon the reports of Price Waterhouse LLP, independent
accountants, given on the authority of said firm as expert in auditing and
accounting.
The financial statements of the Company for the year ended December 31, 1994
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K for the year ended December 31, 1996 have been audited by Deloitte and
Touche LLP independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
12. LEGAL OPINION
A legal opinion in connection with shares issued under the Plan was rendered by
Chandra G. Houston, an attorney for the Company.
13. INDEMNIFICATION
The Company's Bylaws contain provisions for indemnification of its directors and
officers consistent with the provisions of Section 302A.521 of the Minnesota
Statutes. The Company's Restated Articles of Incorporation also contain
provisions limiting the liability of the Company's directors in certain
instances.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
14. ADDITIONAL INFORMATION
For further information and assistance, please write:
Northern States Power Company
Shareholders Department
414 Nicollet Mall
Minneapolis, MN 55401
or call: 612-330-5560 from the Minneapolis-St. Paul area; or 1-800-527-4677
toll-free from other locations.
<PAGE>
TABLE OF CONTENTS
PAGE
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Available Information 2
Information Incorporated by Reference 2
The Company 3
Description of the Plan 3
How to Enroll 3
Participation 4
How the Plan Works 4
How Investments are Made 4
Statements of Account 6
Certificates for Shares 6
How to Make a Change in Participation 7
How to Terminate Participation 8
Other Information 9
Federal Income Tax Information 10
Experts 11
Legal Opinion 11
Indemnification 11
Additional Information 11
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALES HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. NO DEALER, BROKER, SALESMAN OR ANY
OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION
WITH THE OFFERING CONTAINED IN THIS PROSPECTUS, AND INFORMATION OR
REPRESENTATIONS NOT HEREIN CONTAINED, IF GIVEN OR MADE, MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFERING IN ANY STATE IN WHICH SUCH OFFERING MAY NOT LAWFULLY BE MADE.
PROSPECTUS
[LOGO]
NORTHERN STATES
POWER COMPANY
(A MINNESOTA CORPORATION)
Dividend Reinvestment and
Stock Purchase Plan
