NORTHERN STATES POWER CO /MN/, S-3/A, 1997-09-17

NORTHERN STATES POWER CO /MN/
S-3/A, 1997-09-17
ELECTRIC & OTHER SERVICES COMBINED

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 17, 1997

REGISTRATION NO. 333-33785

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- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
---------------

AMENDMENT NO. 1
TO
FORM S-3

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------

NORTHERN STATES POWER COMPANY

(Exact name of registrant as specified in its charter)

<TABLE>
<S> <C>
MINNESOTA 41-0448030
(State or other jurisdiction (I.R.S. Employer
of Identification Number)
incorporation or
organization)
</TABLE>

414 NICOLLET MALL, MINNEAPOLIS, MINNESOTA 55401
(612) 330-5500
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
------------------------------

E.J. MCINTYRE JOHN P. MOORE, JR.
Vice President and Chief Financial Corporate Secretary
Officer Northern States Power Company
Northern States Power Company 414 Nicollet Mall
414 Nicollet Mall Minneapolis, Minnesota 55401
Minneapolis, Minnesota 55401 (612) 330-7550
(612) 330-7712

(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------

COPY TO
PETER D. CLARKE
Gardner, Carton & Douglas
321 North Clark Street
Chicago, Illinois 60610
(312) 245-8685
------------------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT

If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /

If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act") other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. / /

If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
------------------------------

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PER UNIT OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
4,900,000
Common Stock (par value $2.50 per share).... shares(1) $49.875(2) $244,190,700(2) $73,998(3)
$49.219(2)
</TABLE>

(1) Includes 600,000 shares of Common Stock issuable upon exercise of the
Underwriters' over allotment option.

(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) based upon the average of the high and low sale
prices of the Common Stock of the Registrant reported by THE WALL STREET
JOURNAL as New York Stock Exchange-- Corporate Transactions for (i) August
8, 1997 with respect to 4,600,000 shares of Common Stock covered by the
Registration Statement as initially filed, and (ii) September 10, 1997 with
respect to the additional 300,000 shares of Common Stock covered by this
Amendment.

(3) Of this Registration Fee, $69,523 was paid at the time of the initial filing
of the Registration Statement and $4,475 is being paid herewith.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.

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<PAGE>
EXPLANATORY NOTE

The Registration Statement contains a Prospectus relating to a public
offering in the United States and Canada (the "Offering") of an aggregate of
3,600,000 shares of Common Stock, par value $2.50 per share (the "Common
Stock"), of Northern States Power Company, together with separate Prospectus
pages relating to a concurrent offering outside the United States and Canada of
an aggregate of 900,000 shares of Common Stock (the "International Offering").
The complete Prospectus for the Offering follows immediately. After such
Prospectus are the following alternate pages for the International Offering: a
front cover page, an inside front cover page, an "Underwriting" section and a
back cover page. All other pages of the Prospectus for the Offering are to be
used for both the Offering and the International Offering.

Copies of the complete Prospectus for each of the Offering and the
International Offering in the exact forms in which they are to be used after
effectiveness will be filed with the Securities and Exchange Commission pursuant
to Rule 424(b).
<PAGE>

SUBJECT TO COMPLETION, DATED SEPTEMBER 17, 1997

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH
JURISDICTION.
<PAGE>
P_R_O_S_P_E_C_T_U_S

4,500,000 SHARES

NORTHERN STATES POWER COMPANY
(A MINNESOTA CORPORATION)

COMMON STOCK

(PAR VALUE $2.50 PER SHARE)
-------------------

Of the 4,500,000 shares of Common Stock, par value $2.50 per share (the
"Common Stock"), of Northern States Power Company (the "Company") offered
hereby, 3,600,000 shares are being offered initially in the United States and
Canada by the U.S. Underwriters (the "U.S. Offering") and the remaining 900,000
shares of Common Stock are being offered initially in a concurrent offering
outside the United States and Canada by the International Managers (the
"International Offering" and, together with the U.S. Offering, the "Offerings").
The outstanding shares of Common Stock are, and the shares of Common Stock
offered hereby will be, listed on the New York Stock Exchange, the Chicago Stock
Exchange and the Pacific Exchange under the symbol "NSP." The last reported sale
price of the Common Stock on September 15, 1997 on the New York Stock Exchange
Composite Tape was $49 5/8 per share. See "Common Stock Dividends and Price
Information."

-------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT (1) COMPANY (2)
<S> <C> <C> <C>
Per Share............................................ $ $ $
Total (3)............................................ $ $ $
</TABLE>

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities under the Securities Act of 1933, as amended. See
"Underwriting."

(2) Before deducting expenses payable by the Company estimated at $175,000.

(3) The Company has granted the U.S. Underwriters and the International Managers
options to purchase up to an additional 320,000 shares and 80,000 shares,
respectively, of Common Stock to cover over-allotments, if any. If all such
shares are purchased, the total Price to Public, Underwriting Discount and
Proceeds to Company will be $ , $ and $ , respectively. See
"Underwriting."

-------------------

The Common Stock offered hereby is offered by the Underwriters subject to
prior sale, when, as and if issued to and accepted by the Underwriters, and
subject to approval of certain legal matters by counsel for the Underwriters and
certain other conditions. The Underwriters reserve the right to withdraw, cancel
or modify
such offer and to reject orders in whole or in part. It is expected that
delivery of the Common Stock offered hereby will be made in New York, New York,
on or about , 1997.

-------------------
MERRILL LYNCH & CO. GOLDMAN, SACHS & CO.
SALOMON BROTHERS INC
DAIN BOSWORTH PIPER JAFFRAY INC.
INCORPORATED
-------------------

The date of this Prospectus is , 1997.
<PAGE>
NSP
[Map of service territory of utility operations]
Regulated Operations

[Map showing location of NRG projects]
NRG Projects in Operation or in Advanced Development

CERTAIN PERSONS PARTICIPATING IN THESE OFFERINGS MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SHARES OF COMMON
STOCK. SUCH TRANSACTIONS MAY INCLUDE STABILIZING, THE PURCHASE OF COMMON STOCK
TO COVER SYNDICATE SHORT POSITIONS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

2
<PAGE>
PROSPECTUS SUMMARY

The following summary information is qualified in its entirety by the
detailed information and financial statements included elsewhere in this
Prospectus, including the information contained in the documents incorporated
herein by reference.

THE OFFERING

<TABLE>
<S> <C>
Securities Offered....................... 4,500,000 shares of Common Stock (1)
U.S. Offering.......................... 3,600,000 shares
International Offering................. 900,000 shares
Number of Shares of Common Stock to be
Outstanding............................ Approximately 73,592,619(1)
Price Range of Common Stock
(9/15/96-9/15/97)...................... $44 1/2 to $52 15/16
NYSE Listing Symbol...................... NSP
Current Indicated Annual Dividend Rate... $2.82
Book Value Per Common Share at 6/30/97... $30.46
Use of Proceeds.......................... General corporate purposes, including retirement
of $100 million of first mortgage bonds,
construction program and repayment of short-term
borrowings

Principal Business....................... Electric and Gas Utility
Service Area............................. Portions of Minnesota, North Dakota and South
Dakota. Wholly-owned Wisconsin subsidiary serves
customers in Wisconsin and Michigan. Majority of
customers are concentrated in the
Minneapolis-St. Paul metropolitan area. In 1996
approximately 62% of retail electric revenues
and 56% of retail gas revenues were derived from
sales in this area.
Estimated Population of Service Area..... 3,000,000
Approximate Number of Customers at
12/31/96............................... Electric -- 1,415,325; Gas -- 438,997
Estimated Net 1997 Summer Electric
Capability............................. 8,826 MW
Sources of Electric Energy in 1996....... Coal -- 47%; Nuclear -- 28%; Purchase and
interchange -- 21%; Hydro and other fuels -- 4%
</TABLE>

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(1) Assumes the U.S. Underwriters' and International Managers' over-allotment
options are not exercised. See "Underwriting."

3
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(MILLIONS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
12 MONTHS ENDED ----------------------------------------
JUNE 30, 1997 1996 1995 1994
---------------- ------------ ------------ ------------
(UNAUDITED) (FROM AUDITED AMOUNTS IN FORM 10-K)
<S> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Electric Revenues.................................. $ 2,144.9 $ 2,127.4 $ 2,142.8 $ 2,066.6
Gas Revenues....................................... 535.2 526.8 425.8 419.9
Net Income......................................... 248.0(1) 274.5 275.8(2) 243.5
Earnings Available for Common Stock................ 235.5(1) 262.3 263.3(2) 231.1
Average Number of Common and Equivalent Shares
Outstanding (000's).............................. 68,859 68,679 67,416 66,845
Earnings per Average Common Share.................. $ 3.42(1) $ 3.82 $ 3.91(2) $ 3.46
Dividends Declared per Common Share................ $ 2.775 $ 2.745 $ 2.685 $ 2.625
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1997
------------------------------------------------
PERCENT OF ADJUSTED
ACTUAL AS ADJUSTED(3) CAPITALIZATION
--------- -------------- ---------------------
(UNAUDITED)
<S> <C> <C> <C>
BALANCE SHEET DATA:
Short-term Debt (including current maturities).................... $ 563.0 $ %
Long-term Debt, due after one year................................ $ 1,839.7
Manditorily Redeemable Preferred Securities of Subsidiary Trust... 200.0
Cumulative Preferred Stock (including premium).................... 200.3
Common Stockholders' Equity (including premium)................... 2,104.3
--------- -------------- ---
Total Capitalization.......................................... $ 4,907.3 $ 100%
--------- -------------- ---
--------- -------------- ---
Total Assets...................................................... $ 6,869.0
</TABLE>

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(1) 1997 results include a non-recurring charge of $17.1 million (after-tax), or
$0.25 per share, due to merger-related costs. On May 16, 1997, NSP and
Wisconsin Energy Corporation mutually agreed to terminate their plans to
merge the two companies. As a result, NSP charged to expense its share of
deferred merger-related costs.

(2) 1995 results include non-recurring income of $14.7 million (after-tax), or
$0.22 per share.

(3) Adjusted to give effect to the sale of 4,500,000 shares of Common Stock
(based on net proceeds to the Company of $ million and assuming the
Underwriters' over-allotment option is not exercised).

4
<PAGE>
NSP

OVERVIEW

Northern States Power Company, a Minnesota corporation (the "Company"), is
an operating public utility engaged in the generation, transmission and
distribution of electricity in Minnesota, North Dakota and South Dakota, and the
distribution of natural gas in Minnesota and North Dakota. Through its wholly-
owned subsidiary, Northern States Power Company, a Wisconsin corporation, NSP
also is engaged in the generation, transmission and distribution of electricity
and the distribution of natural gas in Wisconsin and Michigan.

The Company's other primary subsidiaries include NRG Energy, Inc. ("NRG"),
which operates and has ownership interests in independent, non-regulated power
and energy businesses in the United States and other countries; Viking Gas
Transmission Company ("Viking"), which owns and operates a 500-mile interstate
natural gas pipeline providing gas transportation services to customers in the
Upper Midwest from connections with three major pipelines in the United States
and Canada; Eloigne Company ("Eloigne") which has ownership interests in
affordable housing projects, principally within the Company's service territory;
and Energy Masters International Inc. (formerly Cenerprise, Inc.) ("Energy
Masters"), which delivers natural gas and electric products and services to
commercial and industrial customers, utilities, municipalities and energy
marketers, and offers performance contracting to customers nationwide. The
Company and its subsidiaries collectively are referred to herein as NSP.

For the twelve months ended June 30, 1997, NSP reported assets of $6.87
billion, revenues of approximately $2.68 billion, after tax income from ongoing
operations of $265 million (excluding merger costs) and earnings per common
share from ongoing operations of $3.67 (excluding merger costs). For this same
period, the earnings contributions of NRG, Eloigne and Energy Masters were
$0.37, $0.05 and $(0.10) per share, respectively.

The Company was incorporated in 1909 under the laws of Minnesota. The
Company's executive offices are located at 414 Nicollet Mall, Minneapolis,
Minnesota 55401 (Phone 612-330-5500).

REGULATED UTILITY ACTIVITIES

NSP generates, transmits and distributes electricity throughout a 49,000
square mile service area encompassing portions of Minnesota, Wisconsin, North
Dakota, South Dakota and Michigan, and transports and distributes gas in 152
communities within this area. Net utility plant for the year ended December 31,
1996, was $4.34 billion, operating utility revenues were $2.65 billion and the
portion of NSP's net income related to utility activities was approximately
$258.2 million. NSP derived approximately 80% of its gross utility operating
revenues from its electric business and 20% from its gas business. Approximately
89% of NSP's utility operating income before taxes was attributable to its
electric business and the balance was attributable to its gas business.

Of the approximately 3 million people in NSP's service area, the majority is
concentrated in the Minneapolis-St. Paul metropolitan area. For 1996,
approximately 62% of NSP's retail electric revenues were derived from sales in
the Minneapolis-St. Paul metropolitan area and approximately 56% of retail gas
revenues came from sales in the St. Paul area.

5
<PAGE>
NSP has a residential, diversified commercial and industrial, and
agricultural customer base. During 1996, NSP's electric and gas operating
revenues were derived from the following types of customers:

<TABLE>
<CAPTION>
ELECTRIC
<S> <C>
Residential.................................. 34%
Small commercial and industrial.............. 18%
Medium commercial and industrial............. 19%
Large commercial and industrial.............. 21%
Other retail................................. 1%
Sales for resale............................. 5%
Miscellaneous................................ 2%

GAS
Residential.................................. 51%
Firm commercial and industrial............... 28%
Interruptible commercial and industrial...... 12%
Other........................................ 9%
</TABLE>

NSP is not dependent on any one customer or group of customers. NSP's
largest electric customer accounts for less than 2% of electric revenue. The
largest 10 electric customers account for about 7% of electric revenue. NSP's
largest retail gas customer accounts for about 1% of gas revenue and the largest
10 customers account for less than 5% of gas revenue.

NSP's electric capability for the summer of 1997 is estimated to be 8,826
megawatts ("MW") (net of contract sales), of which 7,096 MW is Company-owned
capability. The remainder of the capability consists of 903 MW of contracted
purchases from the Manitoba Hydro-Electric Board, a Canadian Crown Corporation,
and 827 MW of other contracted purchases. The Company-owned electric generating
capability includes 3,841 MW of coal-fired generation and 1,571 MW of nuclear
generation. NSP currently owns and operates three nuclear units that were placed
in service in 1971, 1973 and 1974. NSP has no additional nuclear units under
construction. NSP's nuclear plants currently hold the Institute of Nuclear Power
Operations' (INPO) top rating for plant operations and training. In addition,
INPO has awarded NSP's plants the INPO Excellence Award, which is a rigorous
peer review process that recognizes plants with the highest levels of excellence
in operational safety and reliability and which have no significant weaknesses.
For the year ended December 31, 1996, 47% of all electric energy sold by NSP was
coal fueled, 28% was nuclear fueled, 21% was purchased and 4% was generated from
other sources, including hydro.

NSP provides retail gas service in portions of the St. Paul metropolitan
area, portions of eastern North Dakota and northwestern Minnesota, and other
regional centers in Minnesota (Mankato, St. Cloud and Winona) and Wisconsin (Eau
Claire, LaCrosse and Ashland). NSP is directly connected to four interstate
natural gas pipelines serving these regions: Northern Natural Gas Company
("Northern"), Viking, Williston Basin Interstate Pipeline Company and Great
Lakes Transmission Limited Partnership. Approximately 81 percent of NSP's retail
gas customers are served from the Northern pipeline system.

NSP's wholly-owned pipeline subsidiary, Viking, owns and operates a 500 mile
interstate natural gas pipeline serving portions of Minnesota, Wisconsin and
North Dakota with a capacity of approximately 420 million cubic feet per day.
The Viking pipeline currently serves 10 percent of NSP's gas distribution system
needs. Viking operates exclusively as a transporter of natural gas for
third-party shippers under authority granted by the Federal Energy Regulatory
Commission ("FERC"). Rates for Viking's transportation services are regulated by
FERC.

In January 1997, NSP entered into a non-binding letter of intent with
TransCanada PipeLines Limited ("TransCanada") regarding a potential natural gas
pipeline expansion and extension project to serve the Upper Midwest U.S. gas
market, and the potential purchase by TransCanada of a 50% interest in Viking.
The proposed project, called Viking Voyageur, would involve installing a new
pipeline parallel to the existing Viking pipeline, and extending the new
pipeline to the Chicago area. If constructed, the new pipeline could transport
between 1.2 billion and 2.0 billion cubic feet of natural gas per day to markets
in Minnesota, Wisconsin, North Dakota and Illinois. The anticipated project cost
is approximately $1.0 billion (U.S. currency), and the new pipeline is proposed
to be placed in service in late 1999. The project would be constructed only if
sufficient market demand exists, and would be subject to extensive
pre-construction

6
<PAGE>
regulatory and environmental reviews by the FERC and other appropriate
government agencies. In July 1997, Viking Voyageur and NICOR Inc., the parent
company of Northern Illinois Gas, signed a letter of intent to make NICOR a 20%
owner of Viking Voyageur and extend the proposed pipeline by approximately 60
miles. Under this proposal, NSP and TransCanada would each own 40% of Viking
Voyageur.

NON-REGULATED ACTIVITIES

Total non-regulated assets of NSP as of December 31, 1996 were approximately
$808 million. In 1996, operating revenues and sales from non-regulated
activities were approximately $304 million, equity income from unconsolidated
non-regulated projects was approximately $31 million and the portion of NSP's
net income related to non-regulated activities was approximately $16.3 million.
NSP's equity investment in its largest wholly-owned non-regulated subsidiary,
NRG, as of June 30, 1997 was approximately $496 million. One of NSP's objectives
is to increase the earnings contribution from NRG to 20% of NSP's earnings by
the year 2000. NSP expects to meet this goal through the growing profitability
of existing NRG businesses and the addition of new NRG businesses. NRG's goal is
for its operations to be split evenly between domestic and international
projects.

NRG, is principally engaged in the acquisition, development and operation
of, and ownership of interests in, independent power production and cogeneration
facilities, thermal energy production and transmission facilities and resource
recovery facilities. The power generation facilities in which NRG had interests
as of August 1, 1997 (including those under construction) had a total design
capacity of 7,010 MW, of which NRG had or will have operational responsibility
for 4,582 MW and net ownership of or leasehold interests in 2,097 MW. In
addition, NRG has substantial interests in district heating and cooling systems
and steam generation and transmission operations; at December 31, 1996, these
businesses had a thermal capacity of more than 900 MW equivalents. NRG's
refuse-derived fuel ("RDF") plants processed more than 808,000 tons of municipal
solid waste into approximately 644,000 tons of RDF in 1996.

As of August 1, 1997, NRG had interests in 26 power generation facilities
worldwide (not including those facilities in which NEO Corporation ("NEO") has
an interest), including projects under construction. The location of these
projects, along with their design capacity and NRG ownership are as follows:

<TABLE>
<CAPTION>
NUMBER OF FACILITIES DESIGN CAPACITY NRG NET OWNERSHIP
----------------------- --------------- -------------------
<S> <C> <C> <C>
United States...................... 11 531 MW 176 MW
Germany............................ 4 1,160 MW 267 MW
Australia.......................... 4 4,039 MW 1,244 MW
Colombia........................... 2 299 MW 16 MW
Czech Republic..................... 1 382 MW 214 MW
Jamaica............................ 1 74 MW 6.5 MW
Peru............................... 1 155 MW 5.5 MW
Honduras........................... 1 80 MW 6 MW
Bolivia............................ 1 218 MW 126.5 MW
</TABLE>

In addition, through its wholly-owned project subsidiary, NEO, NRG had
interests on August 1, 1997 in 28 small hydroelectric and landfill gas-fired
power generation facilities located in the United States with total design
capacity of 72 MW, of which NRG has net ownership of 35 MW.

At any time, NRG has a number of projects under consideration or in
development and is in various stages of negotiations regarding other potential
projects in the United States and abroad. NRG is currently developing a number
of significant domestic and international projects. These potential projects
include a 45% interest in the West Java Project, a 400 MW coal-fired project in
Indonesia in partnership with Ansaldo Energia and P.T. Kiani Metra; a 27.75%
interest in the 390 MW Alto Cachapoal greenfield hydroelectric complex in
central Chile in partnership with Nordic Power Invest AB and Construtora

7
<PAGE>
Andrade Gutierrez S.A.; and a 50% interest in the Enfield Energy Centre, a 350
MW power project under development in Enfield, England. In addition, NRG and
representatives of the Estonian Government and the state-owned Eesti Energia
signed a Development and Cooperation Agreement under which the parties are to
establish a plan to develop and refurbish two power plants. A business plan for
the joint project was submitted in June 1997. NRG and two partners have filed a
plan in federal bankruptcy court to acquire the fossil-fueled generating assets
of Cajun Electric Power Cooperative of Baton Rouge, Louisiana. Because of the
many complexities inherent in the development, financing and acquisition of such
projects, there can be no assurance that any of these transactions will be
consummated.

NSP's non-regulated wholly-owned subsidiary, Energy Masters, markets natural
gas and electricity to end-use customers and provides customized value-added
energy services to customers, both inside NSP's service territory and on a
national basis. In response to increased market volatility and an increased
focus on end-use customers, Energy Masters discontinued its gas trading
operations during 1996. Losses associated with this discontinued business line
reduced NSP's 1996 earnings by approximately $0.06 per share. Energy Masters
continues to seek to expand its energy products and services and recently
completed the acquisition of two energy services firms.

Through its non-regulated subsidiary, Eloigne, NSP has investments in
various domestic affordable housing projects. As of December 31, 1996,
approximately $48 million had been invested in Eloigne projects, including $15
million in wholly-owned properties (at net book value) and $33 million in equity
interests in jointly-owned projects.

8
<PAGE>
USE OF PROCEEDS

The proceeds from the sale of the shares offered hereby, after deducting an
underwriting discount and expenses of the offering payable by the Company, are
estimated to be $ million ($ million if the Underwriters' over-allotment
option is exercised in full). These proceeds will be added to the general funds
of the Company and used for general corporate purposes, including the retirement
at maturity of $100 million principal amount of the Company's 5 7/8% First
Mortgage Bonds, Series due October 1, 1997, expenditures for the Company's
construction program and the repayment of a portion of outstanding short-term
borrowings. Short-term borrowings of the Company are expected to exceed $260
million immediately prior to the sale of the shares offered hereby. See "Capital
Spending and Financing" and "Underwriting".

CAPITAL SPENDING AND FINANCING

NSP's utility capital expenditures (including allowance for funds used
during construction) are currently estimated to be $420 million for 1997 and
$2.0 billion for the five years ending December 31, 2001. These estimates do not
include potential capital expenditures for the proposed Viking Voyageur natural
gas pipeline project. Included in NSP's projected utility capital expenditures
is $50 million in 1997 and $280 million during the five years ending December
31, 2001 for nuclear fuel for the Company's three existing nuclear units. The
remaining capital expenditures through 2001 are for many utility projects, none
of which are extraordinarily large relative to the total capital expenditure
program. Approximately 90% of the 1997 utility capital expenditures and
approximately 95% of the 1997-2001 utility capital expenditures are expected to
be provided by internally generated funds. Internally generated funds from all
operations are expected to equal approximately 42% and 75%, respectively, of
NSP's total capital requirements (including equity investments in non-regulated
projects) anticipated for 1997 and the five-year period 1997-2001. The foregoing
estimates of utility capital expenditures and internally generated funds may be
subject to substantial changes due to unforeseen factors, such as changed
economic conditions, competitive conditions, resource planning requirements, new
government regulations, changed tax laws and rate regulation.

Although they may vary depending on the success, timing, level of
involvement in planned and future projects and other unforeseen factors,
potential capital requirements for investments in existing and additional
non-regulated projects are estimated to be $500 million in 1997 and $940 million
for the five year period 1997-2001. The majority of these non-regulated capital
requirements relate to equity investments (excluding costs financed by project
debt) in NRG's projects. The remainder consists mainly of affordable housing
investments by Eloigne Company. Equity investments by NRG and Eloigne would be
funded through their own internally generated funds, equity investments by the
Company, or long-term debt issued by the non-regulated subsidiary. Such equity
investments by the Company are expected to be financed on a long-term basis
through the Company's internally generated funds.

NSP continues to evaluate opportunities to enhance its competitive position
and shareholder returns through strategic acquisitions of existing businesses.
Long-term non-regulated financing may be required for any such future
acquisitions that NSP consummates.

9
<PAGE>
COMMON STOCK DIVIDENDS AND PRICE INFORMATION

The Company has increased the annual dividend for 23 consecutive years. The
following tabulation shows cash dividends declared per share of Common Stock and
the high and low sale prices thereof, as reported on the New York Stock Exchange
Composite Tape, during the periods indicated:

<TABLE>
<CAPTION>
DIVIDENDS
HIGH LOW DECLARED
------- ------- ------
<S> <C> <C> <C>
1994.................................... $47 $38 3/4 $2.625
1995.................................... 49 1/2 42 1/2 2.685
First Quarter......................... 46 3/4 42 1/2 .660
Second Quarter........................ 47 3/8 42 7/8 .675
Third Quarter......................... 46 7/8 42 1/2 .675
Fourth Quarter........................ 49 1/2 45 1/8 .675

<CAPTION>
DIVIDENDS
HIGH LOW DECLARED
------- ------- ------
<S> <C> <C> <C>
1996.................................... $53 3/8 $44 1/2 $2.745
First Quarter......................... 53 3/8 47 5/8 .675
Second Quarter........................ 49 5/8 45 1/2 .690
Third Quarter......................... 49 3/4 44 1/2 .690
Fourth Quarter........................ 49 1/8 45 1/2 .690
1997
First Quarter......................... 49 1/8 45 1/2 .690
Second Quarter........................ 52 44 1/2 .705
Third Quarter (through 9/15/97)....... 52 15/16 48
</TABLE>

The reported last sale price on the New York Stock Exchange Composite Tape
on September 15, 1997 was $49 5/8 per share. As of June 30, 1997 there were
84,797 shareholders of record of the Common Stock.

The next quarterly dividend is expected to be paid on October 20, 1997 to
shareholders of record on October 1, 1997.

Future dividends will depend upon the future earnings and financial
condition of the Company and other factors affecting dividend policy that are
not currently determinable. Reference is made to "Description of Common Stock --
Dividend Rights" for information concerning certain restrictions upon the
payment of dividends on the Common Stock.

DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN

The Company's Dividend Reinvestment and Stock Purchase Plan (the "Plan")
permits participants to reinvest their dividends paid by the Company in
additional shares of the Company's Common Stock and to make optional cash
payments (not exceeding $10,000 per calendar quarter). The shares purchased
under the Plan may be authorized but unissued shares of Common Stock or Common
Stock purchased on the open market. During the remainder of 1997, the shares
purchased under the Plan are expected to come from the Company's authorized but
unissued common stock.

10
<PAGE>
DESCRIPTION OF COMMON STOCK

GENERAL

The capital stock of the Company consists of two classes: Common Stock, par
value $2.50 per share (160,000,000 shares authorized of which 69,292,619 shares
were outstanding as of July 31, 1997); and Preferred Stock, par value $100 per
share (the "Cumulative Preferred Stock") (7,000,000 shares authorized, of which
the following series were outstanding as of July 31, 1997: $3.60 Series --
275,000 shares; $4.08 Series -- 150,000 shares; $4.10 Series -- 175,000 shares;
$4.11 Series -- 200,000 shares; $4.16 Series -- 100,000 shares; $4.56 Series --
150,000 shares; Variable Rate Series A -- 300,000 shares; and Variable Rate
Series B -- 650,000 shares). The Board of Directors of the Company is authorized
to provide for the issue from time to time of Cumulative Preferred Stock in
series and, as to each series, to fix the designation, dividend rates and times
of payment, redemption price, and liquidation price or preference as to assets
in voluntary liquidation. Cumulative dividends, redemption provisions and
sinking fund requirements, to the extent that some or all of these features are
or may be present when Cumulative Preferred Stock is issued, could have an
adverse effect on the availability of earnings for distribution to the holders
of the Common Stock or for other corporate purposes.

The statements under this caption, except as otherwise indicated, are
summaries of certain provisions of the Restated Articles of Incorporation of the
Company as amended, and are subject to the detailed provisions thereof.

DIVIDEND RIGHTS

Before any dividends may be paid on the Common Stock, the holders of each
series of the Company's Cumulative Preferred Stock are entitled to receive their
dividends at the respective rates provided for the shares of the respective
series. In addition, the Company may not, except in certain limited
circumstances, declare or pay any dividends on its Common Stock if the Company
has deferred payment of interest on its Junior Subordinated Debentures that were
issued in connection with the Trust Originated Preferred Securities (TOPrS)
issued and sold by its subsidiary trust, NSP Financing I.

LIMITATIONS ON PAYMENT OF DIVIDENDS ON AND ACQUISITIONS OF COMMON STOCK

So long as any shares of Cumulative Preferred Stock are outstanding,
dividends (other than dividends payable in Common Stock) or distributions on, or
acquisitions for value of, Common Stock (i) may not exceed 50% of net income of
the Company for a preceding twelve-month period, after deducting dividends
accruing on any Cumulative Preferred Stock during the period, if the sum of the
capital represented by the Common Stock, premiums on capital stock (restricted
to premiums on Common Stock only by Commission Orders), and surplus accounts is
less than 20% of the sum of the total capital, premiums on capital stock,
surplus accounts and debt maturing more than one year after date of issue, (ii)
may not exceed 75% of net income for such preceding twelve-month period, as
adjusted, if such capitalization ratio is 20% or more but less than 25%, and
(iii) if such capitalization ratio exceeds 25%, such dividends, distributions or
acquisitions may not reduce such ratio to less than 25% except to the extent
permitted by clauses (i) and (ii) above.

In the Company's Trust Indenture dated February 1, 1937, as supplemented
(the "Trust Indenture"), securing its First Mortgage Bonds, the Company has
covenanted that the sum of (i) all dividends and distributions on the Common
Stock of the Company after September 30, 1954 (other than in Common Stock), and
(ii) the cost of all shares of its Common Stock acquired by it after that date
shall not exceed the sum of (a) the earned surplus of the Company and certain of
its former subsidiary companies, consolidated, at September 30, 1954, and (b) an
amount equal to the net income of the Company and certain of its former
subsidiary companies, consolidated, earned after September 30, 1954, after
making provisions for all dividends accruing after that date on preferred stock
of the Company and after taking into consideration all proper charges and
credits to earned surplus made after that date. In computing net

11
<PAGE>
income for the purpose of this covenant, there will be deducted an amount, if
any, by which 15% of the consolidated gross operating revenues of such
companies, as defined in the Trust Indenture, after certain deductions, exceeds
the aggregate of the amounts expended for maintenance and provided for
depreciation. None of the foregoing provisions are expected to impair the
Company's ability to pay dividends in the foreseeable future.

The Company's Supplemental and Restated Trust Indenture dated May 1, 1988
(the "Restated Indenture") amends and restates the Trust Indenture. The Restated
Indenture will not become effective and operative until all First Mortgage Bonds
of each series issued under the Trust Indenture prior to July 1989 shall have
been retired through payment or redemption or, subject to certain limitations,
until the holders of the requisite principal amount of such First Mortgage Bonds
shall have consented to the amendments contained in the Restated Indenture (the
"Effective Date"). The Restated Indenture will replace the dividend restriction
described in the preceding paragraph with the requirement that (a) the sum of:
(i) all dividends and distributions on the Company's Common Stock after the
Effective Date (other than in Common Stock) and (ii) the amount, if any, by
which the considerations given by the Company for the purchase or other
acquisition of its Common Stock after the Effective Date exceeds the
considerations received by it after the Effective Date from the sale of Common
Stock, shall not exceed (b) the sum of: (i) the retained earnings of the Company
at the Effective Date, and (ii) an amount equal to the net income of the Company
earned after the Effective Date, after deducting all dividends accruing after
the Effective Date on all classes and series of preferred stock of the Company.
In computing net income for the purpose of this amended covenant, there will be
deducted the amount, if any, by which, after the date commencing 365 days prior
to the Effective Date, the actual expenditures or charges for ordinary repairs
and maintenance and the charges for reserves, renewals, replacements,
retirements, depreciation and depletion are less than 2.50% of the Company's
completed depreciable property, as defined in the Restated Indenture.

VOTING RIGHTS

The holders of shares of Cumulative Preferred Stock of the $3.60 Series are
entitled to three votes for each share held, and the holders of shares of Common
Stock and shares of Cumulative Preferred Stock of all other series are entitled
to one vote for each share held on all matters submitted to a vote of the
Company's stockholders; provided that when dividends payable on the Cumulative
Preferred Stock of any series outstanding are in default in an amount equivalent
to the amount payable thereon during the immediately preceding twelve-month
period, and until such default shall have been remedied, the holders of shares
of Cumulative Preferred Stock, voting as a class and without regard to series,
are entitled to elect the smallest number of directors necessary to constitute a
majority of the Board of Directors and the holders of shares of Common Stock,
voting as a class, are entitled to elect the remaining directors of the Company.

The affirmative vote or consent of the holders of various specified
percentages of Cumulative Preferred Stock is required to effect certain changes
in the capital structure of the Company and certain other transactions that
might affect their rights. Except to the extent required by law, holders of
Common Stock do not vote as a class in case of any modification of their rights.

CHANGE OF CONTROL

The Company's By-laws and the Minnesota Business Corporation Act, as amended
(the "Minnesota BCA"), contain provisions that could discourage or make more
difficult a change of control of the Company. Such provisions are designed to
protect the Company's shareholders against coercive, unfair or inadequate tender
offers and other abusive takeover tactics and to encourage any person
contemplating a business combination with the Company to negotiate with its
Board of Directors for the fair and equitable treatment of all of the Company's
shareholders.

12
<PAGE>
ELECTION OF DIRECTORS. In electing directors, shareholders may cumulate
their votes in the manner provided in the Minnesota BCA. The Board of Directors
is divided into three classes as nearly equal in number as possible with
staggered terms of office so that only approximately one-third of the directors
are elected at each annual meeting of shareholders. The existence of a
classified Board along with cumulative voting rights may make it more difficult
for a group owning a significant amount of the Company's voting securities to
effect a change in the majority of the Board than would be the case if
cumulative voting did not exist.

BY-LAW PROVISIONS. The Company's By-laws require advance notice of the
introduction by shareholders of business at annual or special meetings of
shareholders of the Company. For any such proposal to be properly brought before
an annual or special meeting, a shareholder must comply with the shareholder
proposal requirements under the federal proxy rules or deliver a written notice
to the Secretary of the Company not less than 20 days nor more than 90 days
prior to the scheduled annual or special meeting, as the case may be; provided
that if the date of such meeting is not disclosed at least 30 days in advance, a
shareholder notice will be timely delivered if received by the close of business
on the tenth day following the earlier of the day on which notice of the date of
the scheduled meeting was mailed or the day on which public disclosure of the
meeting date occurred. The required notice from a shareholder must contain (i) a
description of the proposed business and the reasons for conducting such
business, (ii) the name and address of each shareholder supporting the proposal
as it appears on the Company' s books, (iii) the class and number of shares
beneficially owned by each such shareholder, and (iv) a description of any
financial or other interest of each such shareholder in the proposal.

MINNESOTA BCA. Section 302A.671 of the Minnesota BCA applies to potential
acquirers of 20% or more of the Company's voting shares. Section 302A.671
provides in substance that shares acquired by such acquirer will not have any
voting rights unless (a) the acquisition is approved by (i) a majority of the
voting power of all shares of the Company entitled to vote and (ii) a majority
of the voting power of all shares of the Company entitled to vote excluding all
shares owned by the acquirer or by any officer of the Company, or (b) the
acquisition (i) is pursuant to an all-cash tender offer for all of the voting
shares of the Company, (ii) results in the acquirer becoming the owner of at
least a majority of the outstanding voting shares of the Company, and (iii) has
been approved by a committee of disinterested directors.

Section 302A.673 of the Minnesota BCA generally prohibits public Minnesota
corporations, including the Company, from engaging in any business combination
with a person or entity owning 10% or more of the Company's voting shares for a
period of four years after the date of the transaction in which such person or
entity became a 10% shareholder unless the business combination or the
acquisition resulting in 10% ownership was approved by a committee of
disinterested directors prior to the date such person or entity became a 10%
shareholder.

Section 302A.675 of the Minnesota BCA provides in substance that a person or
entity making a takeover offer (an "offeror") for the Company is prohibited from
acquiring any additional Company shares within two years following the last
purchase of shares pursuant to a takeover offer with respect to that class
unless (i) the acquisition is approved by a committee of disinterested directors
before the purchase of any shares by the offeror pursuant to a takeover offer or
(ii) shareholders of the Company are afforded, at the time of the acquisition, a
reasonable opportunity to dispose of their shares to the offeror upon
substantially equivalent terms as those provided in the earlier takeover offer.

LIQUIDATION RIGHTS

In the event of liquidation, after the holders of all series of Cumulative
Preferred Stock have received $100 per share in the case of involuntary
liquidation, and the then applicable redemption prices in the case of voluntary
liquidation, plus in either case an amount equal to all accumulated and unpaid
dividends, the holders of the Common Stock are entitled to the remaining assets.

13
<PAGE>
PREEMPTIVE AND SUBSCRIPTION RIGHTS

No holder of stock of the Company has the preemptive right to purchase or
subscribe for any additional capital stock of the Company.

The Company's Common Stock is listed on the New York Stock Exchange, the
Chicago Stock Exchange and the Pacific Exchange. The Transfer Agent for the
Common Stock is the Company and the Registrar is Norwest Bank Minnesota, N.A.

LEGAL OPINIONS

Legal opinions relating to the Common Stock will be rendered by John P.
Moore, Jr., 414 Nicollet Mall, Minneapolis, Minnesota, counsel for the Company,
and by Gardner, Carton & Douglas, 321 North Clark Street, Chicago, Illinois,
counsel for the Underwriters. John P. Moore, Jr., Corporate Secretary of the
Company, is the beneficial owner of 3,728 shares of Company Common Stock.
Matters pertaining to local laws will be passed upon by counsel for the Company
and as to these matters Gardner, Carton & Douglas will rely on their opinions.
Gardner, Carton & Douglas from time to time acts as special counsel for NSP in
connection with certain matters.

EXPERTS

The consolidated historical financial statements of the Company as of and
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 as of
and for the years ended December 31, 1996 and 1995 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
experts in auditing and accounting.

The consolidated historical financial statements for 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.

14
<PAGE>
CERTAIN UNITED STATES TAX CONSEQUENCES
TO NON-UNITED STATES HOLDERS

The following is a general discussion of certain United States federal
income and estate tax consequences of the ownership and disposition of Common
Stock by a person who is not a "U.S. person" (a "Non-U.S. Holder"). For this
purpose, a "U.S. person" is any person who is, for United States federal income
tax purposes, (i) a citizen or resident of the United States, (ii) a corporation
or partnership created or organized in or under the laws of the United States or
of any State, (iii) an estate the income of which is subject to U.S. federal
income tax, regardless of its source, or (iv) a trust if (a) a court within the
United States is able to exercise primary supervision over the administration of
the trust and (b) one or more United States fiduciaries have the authority to
control all substantial decisions of the trust. This discussion does not address
all aspects of United States federal income and estate taxes and does not deal
with foreign, state and local consequences that may be relevant to such Non-U.S.
Holders in light of their personal circumstances. Furthermore, this discussion
is based on provisions of the United States Internal Revenue Code of 1986, as
amended, existing and proposed regulations promulgated thereunder and
administrative and judicial interpretations thereof, as of the date hereof, all
of which are subject to change (possibly with retroactive effect).

An individual may, subject to certain exceptions, be deemed to be a resident
alien (as opposed to a non-resident alien) by virtue of being present in the
United States on at least 31 days in the calendar year and for an aggregate of
at least 183 days during a three-year period ending in the current calendar year
(counting for such purposes all of the days present in the current year,
one-third of the days present in the immediately preceding year, and one-sixth
of the days present in the second preceding year). Resident aliens are generally
subject to U.S. federal tax as if they were U.S. citizens and, thus, are not
Non-U.S. Holders for purposes of this discussion.

THIS DISCUSSION IS FOR GENERAL INFORMATION PURPOSES ONLY. EACH PROSPECTIVE
PURCHASER OF COMMON STOCK IS ADVISED TO CONSULT A TAX ADVISOR WITH RESPECT TO
CURRENT AND POSSIBLE FUTURE TAX CONSEQUENCES OF ACQUIRING, HOLDING AND DISPOSING
OF COMMON STOCK AS WELL AS ANY TAX CONSEQUENCES THAT MAY ARISE UNDER THE LAWS OF
ANY FOREIGN, STATE, LOCAL OR OTHER TAXING JURISDICTION.

DIVIDENDS

Dividends paid to a Non-U.S. Holder of Common Stock generally will be
subject to withholding of United States federal income tax either at a rate of
30% of the gross amount of the dividends or at such lower rate as may be
specified by an applicable income tax treaty. However, dividends that are
effectively connected with the conduct of a trade or business by the Non-U.S.
Holder within the United States and, where a tax treaty applies, are
attributable to a United States permanent establishment of the Non-U.S. Holder,
are not subject to the withholding tax (provided the Non-U.S. Holder files
appropriate documentation, including, under current law, Form 4224, with the
payor of the dividend), but instead are subject to United States federal income
tax on a net income basis at applicable graduated income tax rates. Any such
effectively connected dividends received by a Non-U.S. Holder that is a
corporation may, under certain circumstances, be subject to an additional
"branch profits tax" at a 30% rate or such lower rate as may be specified by an
applicable income tax treaty.

In order to claim the benefit of an applicable tax treaty, a Non-U.S. Holder
of Common Stock may have to file with the Company or its dividend paying agent
an exemption or reduced treaty rate certificate or letter in accordance with the
terms of the treaty. Under current law, dividends paid to an address outside the
United States are presumed to be paid to a resident of such country (unless the
payor has knowledge to the contrary) for purposes of the withholding discussed
above and for purposes of determining the applicability of a tax treaty rate.
However, under proposed Treasury regulations not currently in

15
<PAGE>
effect, in the case of dividends paid after December 31, 1997 (December 31, 1999
in the case of dividends paid to accounts in existence on or before the date
that is 60 days after the proposed regulations are published as final
regulations), a Non-U.S. Holder of Common Stock who wishes to claim the benefit
of an applicable treaty rate would be required to satisfy applicable
certification and other requirements either directly or through an intermediary.
In addition, backup withholding, as discussed below, may apply in certain
circumstances if applicable certification and other requirements are not met.

A Non-U.S. Holder of Common Stock eligible for a reduced rate of United
States withholding tax pursuant to an income tax treaty may obtain a refund of
any excess amounts withheld by filing an appropriate claim for refund with the
Internal Revenue Service (the "IRS").

GAIN ON DISPOSITION OF COMMON STOCK

A Non-U.S. Holder will generally not be subject to United States federal
income tax with respect to gain recognized on a sale or other disposition of
Common Stock unless (i) the gain is effectively connected with a trade or
business of the Non-U.S. Holder in the United States, and, where a tax treaty
applies, is attributable to a United States permanent establishment of the
Non-U.S. Holder, (ii) in the case of a Non-U.S. Holder who is an individual and
holds the Common Stock as a capital asset, such holder is present in the United
States for 183 or more days in the taxable year of the sale or other disposition
and certain other conditions are met, or (iii) the Company is or has been a
"U.S. real property holding corporation" for United States federal income tax
purposes. The Company believes it is not and does not anticipate becoming a
"U.S. real property holding corporation" for United States federal income tax
purposes. Further, an exemption to the U.S. real property holding corporation
rules applies for persons holding 5 percent or less of the class of stock, such
ownership to be determined using constructive ownership rules.

If an individual Non-U.S. Holder falls under clause (i) in the preceding
paragraph, he will, unless an applicable treaty provides otherwise, be taxed on
his net gain derived from the sale under regular graduated United States federal
income tax rates. If an individual Non-U.S. Holder falls under clause (ii) in
the preceding paragraph, he will be subject to a flat 30% tax on the gain
derived from the sale, which may be offset by certain United States-source
capital losses. Certain individual Non-U.S. Holders who were once United States
citizens may be subject to special rules applicable to United States
expatriates.

If a Non-U.S. Holder that is a corporation falls under clause (i) in the
next preceding paragraph, it will be taxed on its gain under regular graduated
United States federal income tax rates and may be subject to an additional
branch profits tax at a 30% rate, unless it qualifies for a lower rate under an
applicable income tax treaty.

FEDERAL ESTATE TAX

Common Stock held by an individual who is not a citizen or resident (as
specifically defined for United States federal estate tax purposes) of the
United States at the time of death will be included in such holder's gross
estate for United States federal estate tax purposes, unless an applicable
estate tax treaty provides otherwise.

INFORMATION REPORTING AND BACKUP WITHHOLDING TAX

The Company must report annually to the IRS and to each Non-U.S. Holder the
amount of dividends paid to such holder and the tax withheld with respect to
such dividends, regardless of whether withholding was required. Copies of the
information returns reporting such dividends and withholding may also be made
available to the tax authorities in the country in which the Non-U.S. Holder
resides under the provisions of an applicable income tax treaty.

United States backup withholding tax is imposed at the rate of 31% on
certain payments to persons not otherwise exempt that fail to furnish certain
identifying information to the payor. Under current law,

16
<PAGE>
backup withholding generally will not apply to dividends paid to a Non-U.S.
Holder at an address outside the United States (unless the payor has knowledge
that the payee is a U.S. person), but generally will apply to dividends paid on
Common Stock at addresses inside the United States to Non-U.S. Holders that fail
to provide certain identifying information in the manner required. However,
under proposed Treasury regulations not currently in effect, in the case of
dividends paid after December 31, 1997 (December 31, 1999 in the case of
dividends paid to accounts in existence on or before the date that is 60 days
after the proposed regulations are published as final regulations), a Non-U.S.
Holder generally would be subject to backup withholding at a 31% rate, unless
certain certification procedures (or, in the case of payments made outside the
United States with respect to an offshore account, certain documentary evidence
procedures) are complied with, directly or through an intermediary, or a
Non-U.S. Holder otherwise establishes an exemption from backup withholding.

Payment of the proceeds of a sale of Common Stock by or through a United
States office of a broker is subject to both backup withholding and information
reporting unless the beneficial owner provides the payor with its name and
address and certifies under penalties of perjury that it is a Non-U.S. Holder,
or otherwise establishes an exemption. In general, backup withholding and
information reporting will not apply to a payment of the proceeds of a sale of
Common Stock by or through a foreign office of a broker. If, however, such
broker is, for United States federal income tax purposes a U.S. person, a
controlled foreign corporation, or a non-United States person that derives 50%
or more of its gross income for certain periods from the conduct of a trade or
business in the United States, such payments will not be subject to backup
withholding but will be subject to information reporting, unless (i) such broker
has documentary evidence in its records that the beneficial owner is a Non-U.S.
Holder and certain other conditions are met, or (ii) the beneficial owner
otherwise establishes an exemption.

Any amounts withheld under the backup withholding rules generally will be
allowed as a refund or a credit against such holder's U.S. federal income tax
liability provided the required information is furnished in a timely manner to
the IRS.

17
<PAGE>
UNDERWRITING

The Underwriters named below (the "U.S. Underwriters"), acting through their
Representatives, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman,
Sachs & Co., Salomon Brothers Inc, Dain Bosworth Incorporated and Piper Jaffray
Inc. (the "Representatives") have severally agreed, subject to the terms and
conditions of the purchase agreement relating to the Common Stock (the "U.S.
Purchase Agreement") and concurrently with the sale of 900,000 shares of Common
Stock to certain underwriters outside the United States and Canada (the
"International Managers" and, together with the U.S. Underwriters, the
"Underwriters"), to purchase from the Company the number of shares of Common
Stock offered hereby set forth below opposite their respective names. Under
certain circumstances, the commitments of non-defaulting U.S. Underwriters or
International Managers may be increased.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- --------------------------------------------------------------------------------- ----------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated...........................................................
Goldman, Sachs & Co..............................................................
Salomon Brothers Inc.............................................................
Dain Bosworth Incorporated.......................................................
Piper Jaffray Inc................................................................

----------
Total.................................................................. 3,600,000
----------
----------
</TABLE>

The Company has also entered into a purchase agreement (the "International
Purchase Agreement") with the International Managers. Subject to the terms and
conditions set forth in the International Purchase Agreement, and concurrently
with the sale of 3,600,000 shares of Common Stock to the U.S. Underwriters
pursuant to the U.S. Purchase Agreement, the Company has agreed to sell to the
International Managers, and the International Managers have severally agreed to
purchase from the Company, an aggregate of 900,000 shares of Common Stock. The
initial public offering price per share of the Common Stock and the total
underwriting discount per share of the Common Stock are identical under the
International Purchase Agreement and the U.S. Purchase Agreement.

In the U.S. Purchase Agreement and the International Purchase Agreement, the
U.S. Underwriters and the International Managers, respectively, have agreed,
subject to the terms and conditions set forth therein, to purchase all of the
shares of Common Stock being sold pursuant to each such Purchase Agreement if
any of such shares of Common Stock being sold pursuant to each such Purchase
Agreement are purchased. The closings with respect to the sale of the shares to
be purchased by the U.S. Underwriters and the International Managers are
conditioned upon one another.

The International Managers and the U.S. Underwriters have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Under the terms of the Intersyndicate
Agreement, the U.S. Underwriters and the International Managers are permitted to
sell shares of Common Stock to each other for purposes of resale at the initial
public offering price, less an amount not greater than the selling concession.
Under the terms of the Intersyndicate Agreement, the U.S. Underwriters and any
dealer to whom they sell shares of Common Stock will not offer to sell or sell
shares of Common Stock to persons who are non-United States or non-Canadian
persons or to persons they believe intend to resell to persons who are
non-United States or non-Canadian persons, and the International Managers and
any dealer to whom they sell shares of Common Stock will not offer to sell or
sell shares of Common Stock to United States or Canadian persons or to persons
they believe intend to resell to persons who are United States or Canadian
persons, except in each case for transactions pursuant to the Intersyndicate
Agreement.

18
<PAGE>
The U.S. Representatives have advised the Company that the several U.S.
Underwriters propose initially to offer the shares of Common Stock to the public
at the public offering price set forth on the cover page of this Prospectus, and
to certain dealers (who may include International Managers) at such price less a
concession not in excess of $ per share. The U.S. Underwriters may allow,
and such dealers may reallow, a discount not in excess of $ per share on
sales to certain other dealers. After the initial public offering, the public
offering price, concession and discount may be changed.

The Company has granted the U.S. Underwriters an option, exercisable within
thirty days after the date the U.S. Purchase Agreement is executed, to purchase
up to 320,000 additional shares of Common Stock to cover over-allotments, if
any, at the initial public offering price, less the underwriting discount. If
the U.S. Underwriters exercise this option, each of the U.S. Underwriters will
have a firm commitment, subject to certain conditions, to purchase approximately
the same percentage of such additional shares that the number of shares to be
purchased by it shown in the foregoing table bears to the 3,600,000 shares of
Common Stock initially offered hereby.

The Company has agreed that for a period of 120 days after the date of this
Prospectus it will not, without the prior written consent of Merrill Lynch,
directly or indirectly issue, pledge, sell, offer to sell, grant any option for
the sale of, or otherwise transfer or dispose of any share of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
except for (i) the Common Stock to be sold in the Offerings, (ii) any shares of
Common Stock issued or options to purchase Common Stock granted pursuant to
existing employee benefit plans of the Company and its subsidiaries or (iii) any
shares of Common Stock issued pursuant to dividend reinvestment and stock
purchase plans of the Company.

Until the distribution of the Common Stock is completed, rules of the
Commission may limit the ability of the Underwriters and certain selling group
members to bid for and purchase the Common Stock. As an exception to these
rules, the Representatives are permitted to engage in certain transactions that
stabilize the price of the Common Stock. Such transactions consist of bids or
purchases for the purpose of pegging, fixing or maintaining the price of the
Common Stock.

If the Underwriters create a short position in the Common Stock in
connection with the Offerings (i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus), the Representatives
may reduce that short position by purchasing Common Stock in the open market.
The Representatives may also elect to reduce any short position through the
exercise of all or part of the over-allotment option described above.

The Representatives may also impose a penalty bid on certain Underwriters
and selling group members. This means that if the Representatives purchase
shares of Common Stock in the open market to reduce the Underwriters' short
position or to stabilize the price of the Common Stock, they may reclaim the
amount of the selling concession from the Underwriters and selling group members
who sold those shares as part of the Offerings.

In general, purchases of a security for the purpose of stabilization or to
reduce a short position could cause the price of the security to be higher than
it might be in the absence of such purchases. The imposition of a penalty bid
might also have an effect on the price of a security to the extent that it were
to discourage resales of the security.

Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Common Stock. In addition, neither
that Company nor any of the Underwriters makes any representation that the
Representatives will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.

In the Purchase Agreements, the Company has agreed to indemnify the
Underwriters against certain liabilities under the Act or to contribute to
payments the Underwriters may be required to make in respect thereof.

19
<PAGE>
From time to time, in the ordinary course of their respective businesses,
the Underwriters and their affiliates have engaged and may engage in commercial
and investment banking transactions with the Company and its affiliates.

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 (the "Commission"). Such reports, proxy
statements and other information on file can be inspected at the public
reference offices of the Commission currently at 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 material can be
obtained from the Public Reference Section of the Commission at its principal
office at 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, at the office of the Chicago Stock Exchange, 440
South LaSalle Street, Chicago, Illinois, and at the office of the Pacific
Exchange, 301 Pine Street, San Francisco, California, 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.

The Company has filed with the Commission a registration statement on Form
S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Act"). This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information, reference
is made to the Registration Statement.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents filed by the Company with the Commission are
incorporated by reference into this Prospectus:

1. The Company's Annual Report on Form 10-K for the year ended December 31,
1996;

2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997 and June 30, 1997; and

3. 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, May 30, 1997 and July 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 the 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 WILL PROVIDE WITHOUT CHARGE TO EACH PERSON (INCLUDING ANY
BENEFICIAL OWNER) TO WHOM A COPY OF THIS PROSPECTUS HAS BEEN DELIVERED, UPON THE
WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A COPY OF ANY OR ALL OF THE
DOCUMENTS REFERRED TO ABOVE WHICH HAVE BEEN INCORPORATED IN THIS PROSPECTUS BY
REFERENCE, OTHER THAN EXHIBITS TO SUCH DOCUMENTS. REQUESTS FOR SUCH COPIES
SHOULD BE DIRECTED TO THE CORPORATE SECRETARY, NORTHERN STATES POWER COMPANY,
414 NICOLLET MALL, MINNEAPOLIS, MINNESOTA 55401 (612-330-7550).

20
<PAGE>
SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS

Certain statements under the captions "NSP", "Capital Spending and
Financing", "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business" included or incorporated by reference in
this Prospectus constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 ("Reform Act"). Such
forward-looking statements are intended to be identified by the words
"anticipate", "estimate", "expect", "objective", "possible", "potential" and
similar expressions. Actual results may vary materially. Factors that could
cause actual results to differ materially include, but are not limited to:
general economic conditions, including their impact on capital expenditures;
business conditions in the energy industry; competitive factors; unusual
weather; changes in federal or state legislation; the higher degree of risk
associated with the Company's non-regulated businesses as compared to the
Company's regulated businesses; and the other factors listed from time to time
by the Company in reports filed with the Commission, including Exhibit 99.01 to
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997.

21
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

NO DEALER, SALESPERSON, OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY
OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 3
NSP....................................................................... 5
Use of Proceeds........................................................... 9
Capital Spending and Financing............................................ 9
Common Stock Dividends and Price Information.............................. 10
Description of Common Stock............................................... 11
Legal Opinions............................................................ 14
Experts................................................................... 14
Certain United States Tax Consequences to Non-United States Holders....... 15
Underwriting.............................................................. 18
Available Information..................................................... 20
Documents Incorporated by Reference....................................... 20
Special Note Regarding Forward Looking Statements......................... 21
</TABLE>

4,500,000 SHARES

NORTHERN STATES
POWER COMPANY

COMMON STOCK
(PAR VALUE $2.50 PER SHARE)
NSP

---------------------

PROSPECTUS

---------------------

MERRILL LYNCH & CO.
GOLDMAN, SACHS & CO.
SALOMON BROTHERS INC
DAIN BOSWORTH
INCORPORATED
PIPER JAFFRAY INC.

, 1997

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
[Alternate page for International Prospectus]

SUBJECT TO COMPLETION, DATED SEPTEMBER 17, 1997

P_R_O_S_P_E_C_T_U_S

4,500,000 SHARES

NORTHERN STATES POWER COMPANY
(A MINNESOTA CORPORATION)

COMMON STOCK
(PAR VALUE $2.50 PER SHARE)
-------------------

Of the 4,500,000 shares of Common Stock, par value $2.50 per share (the
"Common Stock"), of Northern States Power Company (the "Company") offered
hereby, 900,000 shares are being offered initially outside the United States and
Canada by the International Managers (the "International Offering") and the
remaining 3,600,000 shares of Common Stock are being offered initially in a
concurrent offering in the United States and Canada by the U.S. Underwriters
(the "U.S. Offering" and, together with the International Offering, the
"Offerings"). The outstanding shares of Common Stock are, and the shares of
Common Stock offered hereby will be, listed on the New York Stock Exchange, the
Chicago Stock Exchange and the Pacific Exchange under the symbol "NSP". The last
reported sale price of the Common Stock on September 15, 1997 on the New York
Stock Exchange Composite Tape was $49 5/8 per share. See "Common Stock Dividends
and Price Information."

------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION, NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE
CONTRARY IS A CRIMINAL
OFFENSE.

<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT (1) COMPANY (2)
<S> <C> <C> <C>
Per Share...................................... $ $ $
Total (3)...................................... $ $ $
</TABLE>

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities under the Securities Act of 1933, as amended. See
"Underwriting."

(2) Before deducting expenses payable by the Company estimated at $175,000.

(3) The Company has granted the International Managers and the U.S. Underwriters
options to purchase up to an additional 80,000 and 320,000 shares,
respectively, of Common Stock to cover over-allotments, if any. If all such
shares are purchased, the total Price to Public, Underwriting Discount and
Proceeds to Company will be $ , $ and $ , respectively. See
"Underwriting."

-------------------

The Common Stock offered hereby is offered by the Underwriters subject to
prior sale, when, as and if issued to and accepted by the Underwriters, and
subject to approval of certain legal matters by counsel for the Underwriters and
certain other conditions. The Underwriters reserve the right to withdraw, cancel
or modify such offer and to reject orders in whole or in part. It is expected
that delivery of the Common Stock offered hereby will be made in New York, New
York, on or about , 1997.

-------------------
MERRILL LYNCH INTERNATIONAL GOLDMAN SACHS INTERNATIONAL
SALOMON BROTHERS INTERNATIONAL LIMITED
DAIN BOSWORTH PIPER JAFFRAY INC.
INCORPORATED
-------------------

The date of this Prospectus is , 1997.
<PAGE>
[Alternate page for International Prospectus]

NSP
[Map of service territory of utility operations]

Regulated Operations
[Map showing location of NRG projects]
NRG Projects in Operation or in Advanced Development

THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION
IS UNLAWFUL. THERE ARE RESTRICTIONS ON THE OFFER AND SALE OF SECURITIES IN THE
UNITED KINGDOM. ALL APPLICABLE PROVISIONS OF THE FINANCIAL SERVICES ACT 1986 AND
THE PUBLIC OFFERS OF SECURITIES REGULATIONS 1995 WITH RESPECT TO ANYTHING DONE
BY ANY PERSON IN RELATION TO ANY SECURITIES IN, FROM OR OTHERWISE INVOLVING THE
UNITED KINGDOM MUST BE COMPLIED WITH. SEE "UNDERWRITING."

2
<PAGE>
[Alternate page for International Prospectus]

UNDERWRITING

The underwriters named below (the "International Managers"), acting through
their respective representatives, Merrill Lynch International, Goldman Sachs
International, Salomon Brothers International Limited, Dain Bosworth
Incorporated and Piper Jaffray Inc. (collectively, the "International
Representatives" and, together with the U.S. Representatives, the
"Representatives"), have severally agreed, subject to the terms and conditions
contained in a purchase agreement relating to the Common Stock (the
"International Purchase Agreement") and concurrently with the sale of 3,600,000
shares of Common Stock to certain underwriters in the United States and Canada
(the "U.S. Underwriters" and, together with the International Managers, the
"Underwriters"), to purchase from the Company the number of shares of Common
Stock set forth opposite their respective names below. Under certain
circumstances, the commitments of certain non-defaulting International Managers
or U.S. Underwriters may be increased.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- ----------------------------------------------------------------------------------- -----------
<S> <C>
Merrill Lynch International........................................................
Goldman Sachs International........................................................
Salomon Brothers International Limited.............................................
Dain Bosworth Incorporated.........................................................
Piper Jaffray Inc..................................................................
-----------
Total.................................................................... 900,000
-----------
-----------
</TABLE>

The Company has also entered into a purchase agreement (the "U.S. Purchase
Agreement") with the U.S. Underwriters. Subject to the terms and conditions set
forth in the U.S. Purchase Agreement, and concurrently with the sale of 900,000
shares of Common Stock to the International Managers pursuant to the
International Purchase Agreement, the Company has agreed to sell to the U.S.
Underwriters, and the U.S. Underwriters have severally agreed to purchase from
the Company, an aggregate of 3,600,000 shares of Common Stock. The initial
public offering price per share of the Common Stock and the total underwriting
discount per share of the Common Stock are identical under the International
Purchase Agreement and the U.S. Purchase Agreement.

In the International Purchase Agreement and the U.S. Purchase Agreement, the
International Managers and the U.S. Underwriters, respectively, have agreed,
subject to the terms and conditions set forth therein, to purchase all of the
shares of Common Stock being sold pursuant to each such Purchase Agreement if
any of such shares of Common Stock being sold pursuant to each such Purchase
Agreement are purchased. The closings with respect to the sale of the shares to
be purchased by the International Managers and the U.S. Underwriters are
conditioned upon one another.

The International Managers and the U.S. Underwriters have entered into an
intersyndicate agreement (the "Intersyndicate Agreement") that provides for the
coordination of their activities. Under the terms of the Intersyndicate
Agreement, the U.S. Underwriters and the International Managers are permitted to
sell shares of Common Stock to each other for purposes of resale at the initial
offering price, less an amount not greater than the selling concession. Under
the terms of the Intersyndicate Agreement, the International Managers and any
dealer to whom they sell shares of Common Stock will not offer to sell or sell
shares of Common Stock to United States or Canadian persons or to persons they
believe intend to resell to United States or Canadian persons, and the U.S.
Underwriters and any dealer to whom they sell shares of Common Stock will not
offer to sell or sell shares of Common Stock to non-United States or non-
Canadian persons or to persons they believe intend to resell to non-United
States or non-Canadian persons, except in each case for transactions pursuant to
the Intersyndicate Agreement.

The International Representatives have advised the Company that the
International Managers propose initially to offer the shares of Common Stock to
the public at the public offering price set forth on the cover page of this
Prospectus, and to certain dealers (who may include International Managers) at
such price less a concession not in excess of $ per share of Common
Stock. The International Managers may allow, and such dealers may reallow, a
discount not in excess of $ per share on sales to certain other dealers.
After the initial public offering, the public offering price, concession and
discount may be changed.

18
<PAGE>
[Alternate page for International Prospectus]

The Company has granted to the International Managers an option exercisable
within thirty days after the International Purchase Agreement is executed to
purchase up to an additional 80,000 shares of Common Stock to cover
over-allotments, if any, at the initial public offering price, less the
underwriting discount. If the International Managers exercise this option, each
International Manager will have a firm commitment, subject to certain
conditions, to purchase approximately the same percentage of such additional
shares that the number of shares of Common Stock to be purchased by it shown in
the foregoing table bears to the 900,000 shares of Common Stock initially
offered hereby.

Each International Manager has represented and agreed that (i) it has not
offered or sold, and will not for a period of six months following consummation
of the Offerings offer or sell any shares of Common Stock to persons in the
United Kingdom except to persons whose ordinary activities involve them in
acquiring, holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances that do not
constitute an offer to the public in the United Kingdom for the purposes of the
Public Offers of Securities Regulations 1995, (ii) it has complied with and will
comply with all applicable provisions of the Financial Services Act 1986 with
respect to anything done by it in relation to the shares of Common Stock in,
from, or otherwise involving the United Kingdom and (iii) it has only issued or
passed on and will only issue or pass on in the United Kingdom any document
received by it in connection with the issue or sale of the shares of Common
Stock to a person who is of a kind described in Article 11(3) of the Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996 or is a
person to whom the document may otherwise lawfully be issued or passed on.

The Company has agreed that for a period of 120 days after the date of this
Prospectus it will not, without the prior written consent of Merrill Lynch,
Pierce, Fenner & Smith Incorporated, directly or indirectly issue, pledge, sell,
offer to sell, grant any option for the sale of, or otherwise transfer or
dispose of any share of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, except for (i) the Common Stock to
be sold in the Offerings, (ii) any shares of Common Stock issued or options to
purchase Common Stock granted pursuant to existing employee benefit plans of the
Company and its subsidiaries or (iii) any shares of Common Stock issued pursuant
to dividend reinvestment and stock purchase plans of the Company.

If the Underwriters create a short position in the Common Stock in
connection with the Offerings, (i.e., if they sell more shares of Common Stock
than are set forth on the cover page of this Prospectus), the Representatives
may reduce that short position by purchasing Common Stock in the open market.
The Representatives may also elect to reduce any short position by exercising
all or part of the over-allotment options described above.

Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Common Stock. In addition, neither
the Company nor any of the Underwriters makes any representation that the
Representatives will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.

In the Purchase Agreements, the Company has agreed to indemnify the several
Underwriters against certain liabilities under the Act or to contribute to
payments the Underwriters may be required to make in respect thereof.

19
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

------------------------

TABLE OF CONTENTS

4,500,000 SHARES

NORTHERN STATES
POWER COMPANY

COMMON STOCK
(PAR VALUE $2.50 PER SHARE)
NSP

---------------------

PROSPECTUS

---------------------

MERRILL LYNCH INTERNATIONAL
GOLDMAN SACHS INTERNATIONAL
SALOMON BROTHERS
INTERNATIONAL LIMITED
DAIN BOSWORTH
INCORPORATED
PIPER JAFFRAY INC.

, 1997

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

Set forth below is an estimate of the approximate amount of fees and
expenses payable by the Registrant (other than underwriting discounts and
commissions) in connection with the issuance of the Shares:

<TABLE>
<S> <C>
Registration fee under the Securities Act of 1933................. $ 73,998
Stock Exchange listing fees....................................... 35,100
Printing and engraving............................................ 35,000
Accounting services............................................... 15,000
Transfer Agents and Registrar fees and expenses................... 2,500
Miscellaneous, including traveling, telephone, copying, shipping
and other out-of-pocket expenses................................. 13,402
---------
Total......................................................... $ 175,000
---------
---------
</TABLE>

- ------------------------

All items are estimated except the first.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 302A.521 of the Minnesota Statutes permits indemnification of
officers and directors of domestic or foreign corporations under certain
circumstances and subject to certain limitations. Pursuant to authorization
contained in the Restated Articles of Incorporation, as amended, Article 4 of
the Bylaws of the Company contains provisions for of its directors and officers
consistent with the provisions of Section 302A.521 of the Minnesota Statutes.

The Company has obtained insurance policies indemnifying the Company and the
Company's directors and officers against certain civil liabilities and related
expenses.

II-1
<PAGE>
ITEM 16. EXHIBITS.

Certain Exhibits listed below were filed with the Securities and Exchange
Commission as Exhibits to certain Registration Statements under the Exhibit
number indicated after each such Exhibit and are incorporated herein by this
reference. These Registration Statements are identified as follows:

<TABLE>
<CAPTION>
EXHIBIT
- --------------
<S> <C>
1.01 U.S. Purchase Agreement.

1.02 International Purchase Agreement.

4.01 Restated Articles of Incorporation and Amendments, filed as Exhibit 3.01 to Form 10-Q for the
quarter ended March 31, 1992, File No. 1-3034 and incorporated herein by reference.

4.02 Bylaws of the Registrant as amended January 22, 1992, filed as Exhibit 3.02 to Form 10-K for the
year ended December 31, 1991, File No. 1-3034 and incorporated herein by reference.

4.03 Specimen share certificate*

4.04A(a) Copy of Trust Indenture, dated February 1, 1937, from the Company to Harris Trust and Savings
Bank, Trustee. (B-7)

4.04B(a) Copy of Supplemental Trust Indenture. dated June 1, 1942, being a supplemental instrument to
Exhibit 4.04A hereto. (B-8)

4.04C(a) Copy of Supplemental Trust Indenture, dated February 1, 1944, being a supplemental instrument to
Exhibit 4.04A hereto. (B-9 (Revised))

4.04D(b) Copy of Supplemental Trust Indenture, dated October 1, 1945, being a supplemental instrument to
Exhibit 4.04A hereto. (7.09)

4.04E(c) Copy of Supplemental Trust Indenture, dated July 1, 1948, being a supplemental instrument to
Exhibit 4.04A hereto. (7.05)

4.04F(d) Copy of Supplemental Trust Indenture, dated August 1, 1949, being a supplemental instrument to
Exhibit 4.04A hereto. (7.06)

4.04G(e) Copy of Supplemental Trust Indenture, dated June 1, 1952, being a supplemental instrument to
Exhibit 4.04A hereto. (4.08)

4.04H(f) Copy of Supplemental Trust Indenture, dated October 1, 1954, being a supplemental instrument to
Exhibit 4.04A hereto. (4.10)

4.04I(g) Copy of Supplemental Trust Indenture, dated September 1, 1956, being a supplemental instrument to
Exhibit 4.04A hereto. (2.09)

4.04J(h) Copy of Supplemental Trust Indenture, dated August 1, 1957, being a supplemental instrument to
Exhibit 4.04A hereto. (2.10)

4.04K(i) Copy of Supplemental Trust Indenture, dated July 1, 1958, being a supplemental instrument to
Exhibit 4.04A hereto. (4.12)
</TABLE>

II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
- --------------
<S> <C>
4.04L(j) Copy of Supplemental Trust Indenture, dated December 1, 1960, being a supplemental instrument to
Exhibit 4.04A hereto. (2.12)

4.04M(k) Copy of Supplemental Trust Indenture, dated August 1, 1961, being a supplemental instrument to
Exhibit 4.04A hereto. (2.13)

4.04N(l) Copy of Supplemental Trust Indenture, dated June 1, 1962, being a supplemental instrument to
Exhibit 4.04A hereto. (2.14)

4.04O(m) Copy of Supplemental Trust Indenture, dated September 1, 1963, being a supplemental instrument to
Exhibit 4.04A hereto. (4.16)

4.04P(n) Copy of Supplemental Trust Indenture, dated August 1, 1966, being a supplemental instrument to
Exhibit 4.04A hereto. (2.16)

4.04Q(o) Copy of Supplemental Trust Indenture, dated June 1, 1967, being a supplemental instrument to
Exhibit 4.04A hereto. (2.17)

4.04R(p) Copy of Supplemental Trust Indenture, dated October 1, 1967, being a supplemental instrument to
Exhibit 4.04A hereto. (2.01R)

4.04S(q) Copy of Supplemental Trust Indenture, dated May 1, 1968, being a supplemental instrument to
Exhibit 4.04A hereto. (2.01S)

4.04T(r) Copy of Supplemental Trust Indenture, dated October 1, 1969, being a supplemental instrument to
Exhibit 4.04A hereto. (2.01T)

4.04U(s) Copy of Supplemental Trust Indenture, dated February 1, 1971, being a supplemental instrument to
Exhibit 4.04A hereto. (2.01U)

4.04V(t) Copy of Supplemental Trust Indenture, dated May 1, 1971, being a supplemental instrument to
Exhibit 4.04A hereto. (2.01V)

4.04W(u) Copy of Supplemental Trust Indenture, dated February 1, 1972, being a supplemental instrument to
Exhibit 4.04A hereto. (2.01W)

4.04X(v) Copy of Supplemental Trust Indenture, dated January 1, 1973, being a supplemental instrument to
Exhibit 4.04A hereto. (2.01X)

4.04Y(w) Copy of Supplemental Trust Indenture, dated January 1, 1974, being a supplemental instrument to
Exhibit 4.04A hereto. (2.01Y)

4.04Z(w) Copy of Supplemental Trust Indenture, dated September 1, 1974, being a supplemental instrument to
Exhibit 4.04A hereto. (2.01Z)

4.04AA(x) Copy of Supplemental Trust Indenture, dated April 1, 1975, being a supplemental instrument to
Exhibit 4.04A hereto. (4.01AA)

4.04BB(x) Copy of Supplemental Trust Indenture, dated May 1, 1975, being a supplemental instrument to
Exhibit 4.04A hereto. (4.01BB)

4.04CC(x) Copy of Supplemental Trust Indenture, dated March 1, 1976, being a supplemental instrument to
Exhibit 4.04A hereto. (4.01CC)

4.04DD(x) Copy of Supplemental Trust Indenture, dated June 1, 1981, being a supplemental instrument to
Exhibit 4.04A hereto. (4.01DD)

4.04EE(y) Copy of Supplemental Trust Indenture, dated December 1, 1981, being a supplemental instrument to
Exhibit 4.04A hereto. (4.01EE)

4.04FF(z) Copy of Supplemental Trust Indenture, dated May 1, 1983, being a supplemental instrument to
Exhibit 4.04A hereto. (4.01FF)
</TABLE>

II-3
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
- --------------
<S> <C>
4.04GG(z) Copy of Supplemental Trust Indenture, dated December 1, 1983, being a supplemental instrument to
Exhibit 4.04A hereto. (4.01GG)

4.04HH(z) Copy of Supplemental Trust Indenture, dated September 1, 1984, being a supplemental instrument to
Exhibit 4.04A hereto. (4.01HH)

4.04II(z) Copy of Supplemental Trust Indenture, dated December 1, 1984, being a supplemental instrument to
Exhibit 4.04A hereto. (4.01II)

4.04JJ Copy of Supplemental Trust Indenture, dated May 1, 1985, being a supplemental instrument to
Exhibit 4.04A hereto, filed as Exhibit 4.36 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1985, File No. 1-3-34 and incorporated herein by reference.

4.04KK Copy of Supplemental Trust Indenture, dated September 1, 1985, being a supplemental instrument to
Exhibit 4.04A hereto, filed as Exhibit 4.37 to the Company's Annual Report on Form 10-K for the
year ended December 31, 1985, File No. 1-3034 and incorporated herein by reference.

4.04LL Copy of Supplemental and Restated Trust Indenture, dated May 1, 1988, being a supplemental
instrument to Exhibit 4.04A hereto, filed as Exhibit 4.02 to the Company's Annual Report on Form
10-K for the year ended December 31, 1988, File No. 1-3034 and incorporated herein by reference.

4.04MM Copy of Supplemental Trust Indenture, dated July 1, 1989, being a supplemental instrument to
Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current Report on Form 8-K dated
July 2, 1989, File No. 1-3034 and incorporated herein by reference.

4.04NN Copy of Supplemental Trust Indenture, dated June 1, 1990, being a supplemental instrument to
Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current Report on Form 8-K dated
June 6, 1990, File No. 1-3034 and incorporated herein by reference.

4.04OO Copy of Supplemental Trust Indenture, dated October 1, 1992, being a supplemental instrument to
Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current Report on Form 8-K dated
October 13, 1992, File No. 1-3034 and incorporated herein by reference.

4.04PP Copy of Supplemental Trust Indenture, dated April 1, 1993, being a supplemental instrument to
Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current Report on Form 8-K dated
March 30, 1993, File No. 1-3034 and incorporated by reference.

4.04QQ Copy of Supplemental Trust Indenture, dated December 1, 1993, being a supplemental instrument to
Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current Report on Form 8-K dated
December 7, 1993, File No. 1-3034, and incorporated herein by reference.

4.04RR Copy of Supplemental Trust Indenture, dated February 1, 1994, being a supplemental instrument to
Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current Report on Form 8-K dated
February 10, 1994, File No. 1-3034, and incorporated herein by reference.

4.04SS Copy of Supplemental Trust Indenture, dated October 1, 1994, being a supplemental instrument to
Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current Report on Form 8-K dated
October 5, 1994, File No. 1-3034, and incorporated herein by reference.
</TABLE>

II-4
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
- --------------
<S> <C>
4.04TT Copy of Supplemental Trust Indenture, dated June 1, 1995, being a supplemental instrument to
Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current Report on Form 8-K dated
June 28, 1995, File No. 1-3034, and incorporated herein by reference.

4.04UU Copy of Supplemental Trust Indenture, dated April 1, 1997, being a supplemental instrument to
Exhibit 4.04A hereto*

5.01 Opinion of John P. Moore, Jr. as to legality of the Shares, as revised.

23.01 Consents of Independent Accountants*.

23.02 Independent Auditors' Consent*

23.03 Consent of Legal Counsel (included in Exhibit 5.01).

24.01 Powers of Attorney*.
</TABLE>

- ------------------------

* Previously filed.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, (1) each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof, (2)
the information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Company pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective; and (3) each post-effective
amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions described under Item 15, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.

II-5
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements of filing on Form S-3 and has duly caused this Amendment No.
1 to Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Minneapolis, and State of Minnesota,
on the 15th day of September, 1997.

<TABLE>
<S> <C> <C>
NORTHERN STATES POWER COMPANY

By: /s/ PAUL E. PENDER
-----------------------------------------
Paul E. Pender
VICE PRESIDENT-FINANCE AND TREASURER
</TABLE>

Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------

<C> <S> <C>
/s/ JAMES J. HOWARD*
- ------------------------------ Principal Executive
James J. Howard Officer and Director

/s/ EDWARD J. MCINTYRE*
- ------------------------------ Principal Financial
Edward J. McIntyre Officer

/s/ ROGER D. SANDEEN*
- ------------------------------ Principal Accounting
Roger D. Sandeen Officer

/s/ H. LYMAN BRETTING*
- ------------------------------ Director
H. Lyman Bretting

/s/ DAVID A. CHRISTENSEN*
- ------------------------------ Director
David A. Christensen

/s/ W. JOHN DRISCOLL*
- ------------------------------ Director
W. John Driscoll

/s/ DALE L. HAAKENSTAD*
- ------------------------------ Director
Dale L. Haakenstad

/s/ RICHARD M. KOVACEVICH*
- ------------------------------ Director
Richard M. Kovacevich
</TABLE>

II-6
<PAGE>
<TABLE>
<CAPTION>
NAME TITLE DATE
- ------------------------------ -------------------------- -------------------

<C> <S> <C>
/s/ DOUGLAS W. LEATHERDALE*
- ------------------------------ Director
Douglas W. Leatherdale

/s/ MARGARET R. PRESKA*
- ------------------------------ Director
Margaret R. Preska

/s/ A. PATRICIA SAMPSON*
- ------------------------------ Director
A. Patricia Sampson
</TABLE>

*By: /s/ PAUL E. PENDER
-------------------------
Paul E. Pender September 15, 1997
ATTORNEY-IN-FACT

II-7
<PAGE>
INDEX TO EXHIBITS

1.02 International Purchase Agreement

4.01 Restated Articles of Incorporation and Amendments, filed as Exhibit 3.01 to Form 10-Q
for the quarter ended March 31, 1996 *

4.02 Bylaws of the Registrant as amended January 22, 1996, filed as Exhibit 3.02 to Form 10-K
for the year ended December 31, 1991 *

4.03 Specimen share certificate** **

4.04A(a) Copy of Trust Indenture, dated February 1, 1937, from the Company to Harris Trust and
Savings Bank, Trustee. (B-7) *

4.04B(a) Copy of Supplemental Trust Indenture, dated June 1, 1942, being a supplemental
instrument to Exhibit 4.04A hereto. (B-8) *

4.04C(a) Copy of Supplemental Trust Indenture, dated February 1, 1944, being a supplemental
instrument to Exhibit 4.04A hereto. (B-9 (Revised)) *

4.04D(b) Copy of Supplemental Trust Indenture, dated October 1, 1945, being asupplemental
instrument to Exhibit 4.04A hereto. (7.09) *

4.04E(c) Copy of Supplemental Trust Indenture, dated July 1, 1948, being a supplemental
instrument to Exhibit 4.04A hereto. (7.05) *

4.04F(d) Copy of Supplemental Trust Indenture, dated August 1, 1949, being a supplemental
instrument to Exhibit 4.04A hereto. (7.06) *

4.04G(e) Copy of Supplemental Trust Indenture, dated June 1, 1952, being a supplemental
instrument to Exhibit 4.04A hereto. (4.08) *

4.04H(f) Copy of Supplemental Trust Indenture, dated October 1, 1954, being a supplemental
instrument to Exhibit 4.04A hereto. (4. 1 0) *

4.04I(g) Copy of Supplemental Trust Indenture, dated September 1, 1956, being a supplemental
instrument to Exhibit 4.04A hereto. (2.09) *

4.04J(h) Copy of Supplemental Trust Indenture, dated August 1, 1957, being a supplemental
instrument to Exhibit 4.04A hereto. (2. 1 0) *

4.04K(i) Copy of Supplemental Trust Indenture, dated July 1, 1958, being a supplemental
instrument to Exhibit 4.04A hereto. (4.12) *

4.04L(j) Copy of Supplemental Trust Indenture, dated December 1, 1960, being a supplemental
instrument to Exhibit 4.04A hereto. (2.12) *

4.04M(k) Copy of Supplemental Trust Indenture, dated August 1, 1961, being a supplemental
instrument to Exhibit 4.04A hereto. (2.13) *
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
- --------------- ---------------------------------------------------------------------------------------- ---------
<S> <C> <C>
4.04N(l) Copy of Supplemental Trust Indenture, dated June 1, 1962, being a supplemental
instrument to Exhibit 4.04A hereto. (2.14) *

4.04O(m) Copy of Supplemental Trust Indenture, dated September 1, 1963, being a supplemental
instrument to Exhibit 4.04A hereto. (4.16) *

4.04P(n) Copy of Supplemental Trust Indenture, dated August 1, 1966, being a supplemental
instrument to Exhibit 4.04A hereto. (2.16) *

4.04Q(o) Copy of Supplemental Trust Indenture, dated June 1, 1967, being a supplemental
instrument to Exhibit 4.04A hereto. (2.17) *

4.04R(p) Copy of Supplemental Trust Indenture, dated October 1, 1967, being a supplemental
instrument to Exhibit 4.04A hereto. (2.01R) *

4.04S(q) Copy of Supplemental Trust Indenture, dated May 1, 1968, being a supplemental instrument
to Exhibit 4.04A hereto. (2.01S) *

4.04T(r) Copy of Supplemental Trust Indenture, dated October 1, 1969, being a supplemental
instrument to Exhibit 4.04A hereto. (2.01T) *

4.04U(s) Copy of Supplemental Trust Indenture, dated February 1, 1971, being a supplemental
instrument to Exhibit 4.04A hereto. (2.01U) *

4.04V(t) Copy of Supplemental Trust Indenture, dated May 1, 1971, being a supplemental instrument
to Exhibit 4.04A hereto. (2.01V) *

4.04W(u) Copy of Supplemental Trust Indenture, dated February 1, 1972, being a supplemental
instrument to Exhibit 4.04A hereto. (2.01W) *

4.04X(v) Copy of Supplemental Trust Indenture, dated January 1, 1973, being a supplemental
instrument to Exhibit 4.04A hereto. (2.01X) *

4.04Y(w) Copy of Supplemental Trust Indenture, dated January 1, 1974, being a supplemental
instrument to Exhibit 4.04A hereto. (2.01Y) *

4.04Z(w) Copy of Supplemental Trust Indenture, dated September 1, 1974, being a supplemental
instrument to Exhibit 4.04A hereto. (2.01Z) *

4.04AA(x) Copy of Supplemental Trust Indenture, dated April 1, 1975, being a supplemental
instrument to Exhibit 4.04A hereto. (4.01AA) *

4.04BB(x) Copy of Supplemental Trust Indenture, dated May 1, 1975, being a supplemental instrument
to Exhibit 4.04A hereto. (4.01BB) *

4.04CC(x) Copy of Supplemental Trust Indenture, dated March 1, 1976, being a supplemental
instrument to Exhibit 4.04A hereto. (4.01CC) *

4.04DD(x) Copy of Supplemental Trust Indenture, dated June 1, 1981, being a supplemental
instrument to Exhibit 4.04A hereto. (4.01DD) *

4.04EE(y) Copy of Supplemental Trust Indenture, dated December 1, 1981, being a supplemental
instrument to Exhibit 4.04A hereto. (4.01EE) *

4.04FF(z) Copy of Supplemental Trust Indenture, dated May 1, 1983, being a supplemental instrument
to Exhibit 4.04A hereto. *

4.04GG(z) Copy of Supplemental Trust Indenture, dated December 1, 1983, being a supplemental
instrument to Exhibit 4.04A hereto. *

4.04HH(z) Copy of Supplemental Trust Indenture, dated September 1, 1984, being a supplemental
instrument to Exhibit 4.04A hereto. *

4.04II(z) Copy of Supplemental Trust Indenture, dated December 1, 1984, being a supplemental
instrument to Exhibit 4.04A hereto. *
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
- --------------- ---------------------------------------------------------------------------------------- ---------
<S> <C> <C>
4.04JJ Copy of Supplemental Trust Indenture, dated May 1, 1985, being a supplemental instrument
to Exhibit 4.04A hereto, filed as Exhibit 4.36 to the Company's Annual Report on Form
10-K for the year ended December 31, 1985 and incorporated herein by reference *

4.04KK Copy of Supplemental Trust Indenture, dated September 1, 1985, being a supplemental
instrument to Exhibit 4.04A hereto, filed as Exhibit 4.37 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1985 and incorporated herein by
reference *

4.04LL Copy of Supplemental and Restated Trust Indenture, dated May 1, 1988, being a
supplemental instrument to Exhibit 4.04A hereto, filed as Exhibit 4.02 to the
Company's Annual Report on Form 10-K for the year ended December 31, 1988 and
incorporated herein by reference *

4.04MM Copy of Supplemental Trust Indenture, dated July 1, 1989, being a supplemental
instrument to Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current
Report on Form 8-K dated July 2, 1989, and incorporated herein by reference *

4.04NN Copy of Supplemental Trust Indenture, dated June 1, 1990, being a supplemental
instrument to Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current
Report on Form 8-K dated June 6, 1990, and incorporated herein by reference *

4.04OO Copy of Supplemental Trust Indenture, dated October 1, 1992, being a supplemental
instrument to Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current
Report on Form 8-K dated October 13, 1992, and incorporated herein by reference *

4.04PP Copy of Supplemental Trust Indenture, dated April 1, 1993, being a supplemental
instrument to Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current
Report on Form 8-K dated March 30, 1993, and incorporated by reference *

4.04QQ Copy of Supplemental Trust Indenture, dated December 1, 1993, being a supplemental
instrument to Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current
Report on Form 8-K dated December 7, 1993, File No. 1-3034, and incorporated herein by
reference. *

4.04RR Copy of Supplemental Trust Indenture, dated February 1, 1994, being a supplemental
instrument to Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current
Report on Form 8-K dated February 10, 1994, File No. 1-3034, and incorporated herein
by reference. *

4.04SS Copy of Supplemental Trust Indenture, dated October 1, 1994, being a supplemental
instrument to Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current
Report on Form 8-K dated October 5, 1994, File No. 1-3034, and incorporated herein by
reference. *

4.04TT Copy of Supplemental Trust Indenture, dated June 1, 1995, being a supplemental
instrument to Exhibit 4.04A hereto, filed as Exhibit 4.01 to the Company's Current
Report on Form 8-K dated June 28, 1995, File No. 1-3034, and incorporated herein by
reference. *

4.04UU Copy of Supplemental Trust Indenture, dated April 1, 1997, being a supplemental
instrument to Exhibit 4.04A hereto** **

5.01 Opinion of John P. Moore, Jr. as to legality of the Shares

23.01 Consents of Independent Accountants** **
</TABLE>

<PAGE>

23.03 Consent of Legal Counsel (included in Exhibit 5.01)

24.01 Powers of Attorney** **
</TABLE>

- ------------------------

* Indicates incorporation by reference.

** Previously filed.

<PAGE>

Exhibit 1.01
Draft of 9/15/97

- --------------------------------------------------------------------------------

NORTHERN STATES POWER COMPANY

(a Minnesota corporation)

3,600,000 Shares of Common Stock

U.S. PURCHASE AGREEMENT

Dated: September ____, 1997

- --------------------------------------------------------------------------------
<PAGE>

TABLE OF CONTENTS

<S> <C> <C>
SECTION 1. Representations and Warranties. . . . . . . . . . . . . . . . . . . . . 4
(a) Representations and Warranties by the Company . . . . . . . . . . . . . 4
(i) Compliance with Registration Requirements . . . . . . . . . . . 4
(ii) Incorporated Documents. . . . . . . . . . . . . . . . . . . . . 4
(iii) Independent Accountants . . . . . . . . . . . . . . . . . . . . 5
(iv) Financial Statements. . . . . . . . . . . . . . . . . . . . . . 5
(v) No Material Adverse Change in Business. . . . . . . . . . . . . 5
(vi) Good Standing of the Company . . . . . . . . . . . . . . . . . 5
(vii) Good Standing of Subsidiaries . . . . . . . . . . . . . . . . . 6
(viii) Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . 6
(ix) Authorization of Agreement. . . . . . . . . . . . . . . . . . . 6
(x) Authorization and Description of Securities . . . . . . . . . . 6
(xi) Absence of Defaults and Conflicts . . . . . . . . . . . . . . . 7
(xii) Absence of Labor Dispute. . . . . . . . . . . . . . . . . . . . 7
(xiii) Absence of Proceedings. . . . . . . . . . . . . . . . . . . . . 7
(xiv) Accuracy of Exhibits. . . . . . . . . . . . . . . . . . . . . . 8
(xv) Possession of Intellectual Property . . . . . . . . . . . . . . 8
(xvi) Absence of Further Requirements . . . . . . . . . . . . . . . . 8
(xvii) Possession of Licenses and Permits. . . . . . . . . . . . . . . 8
(xviii) Title to Property . . . . . . . . . . . . . . . . . . . . . . . 9
(xix) Compliance with Cuba Act. . . . . . . . . . . . . . . . . . . . 9
(xx) Investment Company Act. . . . . . . . . . . . . . . . . . . . . 9
(xxi) Environmental Laws. . . . . . . . . . . . . . . . . . . . . . . 9
(b) Officer's Certificates. . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2. Sale and Delivery to U.S. Underwriters; Closing . . . . . . . . . . . . 10
(a) U.S. Initial Securities . . . . . . . . . . . . . . . . . . . . . . . . 10
(b) U.S. Option Securities. . . . . . . . . . . . . . . . . . . . . . . . . 10
(c) Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
(d) Denominations; Registration . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3. Covenants of the Company. . . . . . . . . . . . . . . . . . . . . . . . 11
(a) Compliance with Securities Regulations and Commission Requests. . . . . 11
(b) Filing of Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . 12
(c) Delivery of Registration Statements . . . . . . . . . . . . . . . . . . 12
(d) Delivery of Prospectuses. . . . . . . . . . . . . . . . . . . . . . . . 12
(e) Continued Compliance with Securities Laws . . . . . . . . . . . . . . . 12
(f) Blue Sky Qualifications . . . . . . . . . . . . . . . . . . . . . . . . 13
(g) Rule 158. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(h) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(i) Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
(j) Restriction on Sale of Securities . . . . . . . . . . . . . . . . . . . 13
(k) Reporting Requirements. . . . . . . . . . . . . . . . . . . . . . . . . 14

</TABLE>

<PAGE>

<S> <C>

SECTION 4. Payment of Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(b) Termination of Agreement. . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5. Conditions of U.S. Underwriters' Obligations. . . . . . . . . . . . . . 15
(a) Effectiveness of Registration Statement . . . . . . . . . . . . . . . . 15
(b) Opinion of Counsel for Company. . . . . . . . . . . . . . . . . . . . . 15
(c) Opinion of Counsel for U.S. Underwriters. . . . . . . . . . . . . . . . 15
(d) Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . 15
(e) Accountant's Comfort Letter . . . . . . . . . . . . . . . . . . . . . . 16
(f) Bring-down Comfort Letter . . . . . . . . . . . . . . . . . . . . . . . 16
(g) Approval of Listing . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(h) Purchase of International Initial Securities. . . . . . . . . . . . . . 16
(i) Conditions to Purchase of U.S. Option Securities. . . . . . . . . . . . 16
(i) Officers' Certificate . . . . . . . . . . . . . . . . . . . . . 16
(ii) Opinion of Counsel for Company. . . . . . . . . . . . . . . . . 16
(iii) Opinion of Counsel for U.S. Underwriters. . . . . . . . . . . . 17
(iv) Bring-down Comfort Letter . . . . . . . . . . . . . . . . . . . 17
(j) Additional Documents. . . . . . . . . . . . . . . . . . . . . . . . . . 17
(k) Termination of Agreement. . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Indemnification of Underwriters . . . . . . . . . . . . . . . . . . . . 17
(b) Indemnification of Company, Directors and Officers. . . . . . . . . . . 18
(c) Actions against Parties; Notification . . . . . . . . . . . . . . . . . 18
(d) Settlement without Consent if Failure to Reimburse. . . . . . . . . . . 19
SECTION 7. Contribution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 8. Representations, Warranties and Agreements to Survive Delivery. . . . . 21
SECTION 9. Termination of Agreement. . . . . . . . . . . . . . . . . . . . . . . . 21
(a) Termination; General. . . . . . . . . . . . . . . . . . . . . . . . . . 21
(b) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 10. Default by One or More of the U.S. Underwriters. . . . . . . . . . . . 21
SECTION 11. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 12. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 13. Governing Law and Time . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 14. Effect of Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Schedule A List of U.S. Underwriters . . . . . . . . . . . . . . . . . . . . . . . 25
Schedule B Pricing Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Exhibit A Form of Opinion of Company Counsel. . . . . . . . . . . . . . . . . . . A-1

</TABLE>

<PAGE>

Draft of 9/15/97

NORTHERN STATES POWER COMPANY

(a Minnesota corporation)

3,600,000 Shares of Common Stock

(Par Value $2.50 Per Share)

U.S. PURCHASE AGREEMENT

September _____, 1997

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
SALOMON BROTHERS INC
DAIN BOSWORTH INCORPORATED
PIPER JAFFRAY INC.

as Representatives of the several U.S. Underwriters

c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209

Ladies and Gentlemen:

Northern States Power Company, a Minnesota corporation (the "Company"),
confirms its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated ("Merrill Lynch") and each of the other U.S. Underwriters
named in Schedule A hereto (collectively, the "U.S. Underwriters", which term
shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Merrill Lynch, Goldman, Sachs & Co., Salomon
Brothers Inc, Dain Bosworth Incorporated and Piper Jaffray Inc. are acting as
representatives (in such capacity, the "U.S. Representatives"), with respect to
(i) the sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of shares of Common Stock,
par value $2.50 per share, of the Company ("Common Stock") set forth in Schedule
A hereto and (ii) the grant by the Company to the U.S. Underwriters, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 320,000 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 3,600,000 shares of Common Stock (the
"U.S. Initial

<PAGE>

Securities") to be purchased by the U.S. Underwriters and all or any part of the
320,000 shares of Common Stock subject to the option described in Section 2(b)
hereof (the "U.S. Option Securities") are hereinafter called, collectively, the
"U.S. Securities".

It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "International Purchase Agreement")
providing for the offering by the Company of an aggregate of 900,000 shares of
Common Stock (the "International Initial Securities") through arrangements with
certain underwriters outside the United States and Canada (the "International
Managers") for which Merrill Lynch International, Goldman Sachs International,
Salomon Brothers International Limited, Dain Bosworth Incorporated and Piper
Jaffray Inc. are acting as lead managers (the "Lead Managers") and the grant by
the Company to the International Managers, acting severally and not jointly, of
an option to purchase all or any part of 80,000 additional shares of Common
Stock solely to cover overallotments, if any (the "International Option
Securities" and, together with the U.S. Option Securities, the "Option
Securities"). The International Initial Securities and the International Option
Securities are hereinafter called the "International Securities". It is
understood that the Company is not obligated to sell, and the U.S. Underwriters
are not obligated to purchase, any U.S. Initial Securities unless all of the
International Initial Securities are contemporaneously purchased by the
International Managers.

The U.S. Underwriters and the International Managers are hereinafter
collectively called the "Underwriters", the U.S. Initial Securities and the
International Initial Securities are hereinafter collectively called the
"Initial Securities", and the U.S. Securities and the International Securities
are hereinafter collectively called the "Securities".

The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of Merrill Lynch.

The Company understands that the U.S. Underwriters propose to make a public
offering of the Securities as soon as the U.S. Representatives deem advisable
after this Agreement has been executed and delivered.

The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-33785) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses and
such amendments thereto, if any, as may have been required to the date hereof.
Two forms of prospectus are to be used in connection with the offering and sale
of the Securities: one relating to the U.S. Securities (the "Form of U.S.
Prospectus") and one relating to the International Securities (the "Form of
International Prospectus"). The Form of International Prospectus will be
identical to the Form of U.S. Prospectus, except for the front cover, inside
front cover and back cover page and the information under the caption
"Underwriting." Promptly after execution and delivery of this Agreement, the
Company will either (i) prepare and file a Form of U.S. Prospectus and a Form of
International Prospectus in accordance with the provisions of Rule 430A ("Rule
430A") of the

<PAGE>

rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act
Regulations or (ii) if the Company has elected to rely upon Rule 434 ("Rule
434") of the 1933 Act Regulations, prepare and file term sheets (a "Term Sheet")
in accordance with the provisions of Rule 434 and Rule 424(b). The information
included in each such prospectus or in each such Term Sheet, as the case may be,
that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of U.S.
Prospectus and the final Form of International Prospectus, including the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the form first furnished to the Underwriters for use in
connection with the offering of the Securities is herein called the "U.S.
Prospectus" and the "International Prospectus," respectively, and collectively,
the "Prospectuses." If Rule 434 is relied on, the term terms "U.S. Prospectus"
and "International Prospectus" shall refer to the preliminary U.S. Prospectus
dated August 27, 1997 and preliminary International Prospectus dated August 27,
1997, respectively, each together with the applicable Term Sheet and all
references in this Agreement to the date of the Prospectus shall mean the date
of the applicable Term Sheet. For purposes of this Agreement, all references to
the Registration Statement, any preliminary prospectus, the Prospectus, the U.S.
Prospectus, the International Prospectus or any Term Sheet or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").

All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus (including the Form of U.S.
Prospectus and Form of International Prospectus) or the Prospectuses (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectuses or the
Prospectuses, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectuses shall be deemed to mean and include the filing of
any document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectuses, as the case may be.

<PAGE>

SECTION 1. REPRESENTATIONS AND WARRANTIES.

(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company
represents and warrants to each U.S. Underwriter as of the date hereof, as of
the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each U.S.
Underwriter, as follows:

(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the Registration
Statement and any Rule 462(b) Registration Statement has become effective under
the 1933 Act and no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.

At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule 462(b)
Registration Statement and any amendments and supplements thereto complied and
will comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and did not and will not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. Neither the
Prospectuses nor any amendments or supplements thereto, at the time the
Prospectuses or any such amendment or supplement was issued and at the Closing
Time (and, if any U.S. Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a material fact or
omitted or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration Statement or
U.S. Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any U.S. Underwriter through Merrill
Lynch expressly for use in the Registration Statement or U.S. Prospectus.

Each preliminary prospectus and the prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment thereto,
or filed pursuant to Rule 424 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and each preliminary prospectus
and the Prospectuses delivered to the Underwriters for use in connection with
the offering of the Securities was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.

<PAGE>

(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectuses, at
the time they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder (the "1934 Act Regulations"),
and, when read together with the other information in the Prospectuses, at the
time the Registration Statement became effective, at the time the Prospectuses
were issued and at the Closing Time (and, if any U.S. Option Securities are
purchased, at the Date of Delivery), did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.

(iii) INDEPENDENT ACCOUNTANTS. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act and the
1933 Act Regulations.

(iv) FINANCIAL STATEMENTS. The financial statements included in the
Registration Statement and the Prospectuses, together with the related schedules
and notes, present fairly the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial statements
have been prepared in conformity with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods involved. The
supporting schedules, if any, included in the Registration Statement present
fairly in accordance with GAAP the information required to be stated therein.
The selected financial data and the summary financial information included in
the Prospectuses present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial statements
included in the Registration Statement.

(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and the
Prospectuses, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one enterprise, and
(C) except for regular dividends on the Common Stock and the Company's
preferred stock in amounts per share that are consistent with past practice,
there has been no dividend or distribution of any kind declared, paid or made
by the Company on any class of its capital stock.

(vi) GOOD STANDING OF THE COMPANY. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Minnesota and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under this
Agreement and the International Purchase Agreement; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in

<PAGE>

which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or be in good standing would not result in a Material
Adverse Effect.

(vii) GOOD STANDING OF SUBSIDIARIES. Each subsidiary of the Company
named in Exhibit 21.01 to the Company's Annual Report on Form 10-K for the year
ended December 31, 1996 ("Significant Subsidiary") has been duly organized and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectuses and is duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect; except as otherwise
disclosed in the Registration Statement, all of the issued and outstanding
capital stock of each such Significant Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the outstanding
shares of capital stock of any Significant Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such Subsidiary. The
only subsidiaries of the Company are (a) the subsidiaries listed on Exhibit
21.01 to the Company's Annual Report on Form 10-K for the year ended December
31, 1996 and (b) certain other subsidiaries which, considered in the aggregate
as a single Subsidiary, do not constitute a "significant subsidiary" as defined
in Rule 1-02 of Regulation S-X.

(viii) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectuses in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent issuances, if
any, pursuant to this Agreement or the International Purchase Agreement,
pursuant to reservations, agreements or employee benefit plans referred to in
the Prospectuses or pursuant to the exercise of convertible securities or
options referred to in the Prospectuses). The shares of issued and outstanding
capital stock have been duly authorized and validly issued and are fully paid
and non-assessable; none of the outstanding shares of capital stock was issued
in violation of the preemptive or other similar rights of any securityholder of
the Company.

(ix) AUTHORIZATION OF AGREEMENT. This Agreement and the International
Purchase Agreement have been duly authorized, executed and delivered by the
Company.

(x) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The Securities have
been duly authorized for issuance and sale to the U.S. Underwriters pursuant
to this Agreement and to the International Managers pursuant to the
International Purchase Agreement and, when issued and delivered by the
Company pursuant to this Agreement and the International Purchase Agreement,
respectively, against payment of the consideration set forth herein and
therein, will be validly issued and fully paid and non-assessable; the Common
Stock conforms to all statements relating thereto contained in the
Prospectuses and such description conforms to the rights set forth in the
instruments defining the same; no holder of the Securities will be subject to
personal liability by

<PAGE>

reason of being such a holder; and the issuance of the Securities is not subject
to the preemptive or other similar rights of any securityholder of the Company.

(xi) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any of
its subsidiaries is in violation of its charter or by-laws or, except as
disclosed in the Registration Statement, in default in the performance or
observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any subsidiary is
subject (collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the International Purchase
Agreement and the consummation of the transactions contemplated herein and
therein and in the Registration Statement (including the issuance and sale of
the Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectuses under the caption "Use of Proceeds") and
compliance by the Company with its obligations hereunder and thereunder have
been duly authorized by all necessary corporate action and do not and will
not, whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would
not result in a Material Adverse Effect), nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or any
subsidiary or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or any subsidiary
or any of their assets, properties or operations. As used herein, a
"Repayment Event" means any event or condition which gives the holder of any
note, debenture or other evidence of indebtedness (or any person acting on
such holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any
subsidiary.

(xii) ABSENCE OF LABOR DISPUTE. No labor dispute with the employees of
the Company or any subsidiary exists or, to the knowledge of the Company, is
imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.

(xiii) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any subsidiary, which is
required to be disclosed in the Registration Statement (other than as disclosed
therein), or which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially or adversely affect
the properties or assets thereof or the consummation of the transactions
contemplated in this Agreement or the performance by the Company of its
obligations hereunder; the aggregate of all

<PAGE>

pending legal or governmental proceedings to which the Company or any subsidiary
is a party or of which any of their respective property or assets is the subject
which are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Effect.

(xiv) ACCURACY OF EXHIBITS. There are no contracts or documents which
are required in the Registration Statement, the Prospectuses or the documents
incorporated by reference therein or to be filed as exhibits thereto which
have not been so described and filed as required.

(xv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how (including
trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service marks,
trade names or other intellectual property (collectively, "Intellectual
Property") necessary to carry on the business now operated by them, and
neither the Company nor any of its subsidiaries has received any notice or is
otherwise aware of any infringement of or conflict with asserted rights of
others with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its subsidiaries
therein, and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or inadequacy, singly
or in the aggregate, would result in a Material Adverse Effect.

(xvi) ABSENCE OF FURTHER REQUIREMENTS. The Minnesota Public Utilities
Commission has issued its order approving capital structure which order
authorizes the issuance of the Securities, and no other filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations under this
Agreement and the International Purchase Agreement, in connection with the
offering, issuance or sale of the Securities hereunder and thereunder or the
consummation of the transactions contemplated by this Agreement and the
International Purchase Agreement, except such as have been already obtained or
as may be required under the 1933 Act or the 1933 Act Regulations or foreign or
state securities laws.

(xvii) POSSESSION OF LICENSES AND PERMITS. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such Governmental
Licenses to be in full force and effect would not have a Material Adverse
Effect; and neither the Company nor any of its subsidiaries has received any
notice of proceedings relating to the revocation or modification of any such
Governmental Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.

<PAGE>

(xviii) TITLE TO PROPERTY. The Company has good and valid title to all
real and fixed property and leasehold rights owned by it, subject only to taxes
and assessments not yet delinquent; the lien of the Company's Trust Indenture,
dated as of February 1, 1937, as supplemented and amended (the "Indenture"); as
to parts of the Company's property, certain easements, conditions, restrictions,
leases, and similar encumbrances which do not affect the Company's use of such
property in the usual course of its business and certain minor defects in titles
which are not material, and defects in titles to certain properties which are
not essential to the Company's business; and mechanics' lien claims being
contested or not of record or for the satisfaction or discharge of which
adequate provision has been made by the Company pursuant to the Indenture; and
any real property and buildings held under lease by the Company is held by it
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company.

(xix) COMPLIANCE WITH CUBA ACT. The Company has complied with, and is
and will be in compliance with, the provisions of that certain Florida act
relating to disclosure of doing business with Cuba, codified as Section 517.075
of the Florida statutes, and the rules and regulations thereunder or is exempt
therefrom.

(xx) INVESTMENT COMPANY ACT. The Company is not, and upon the issuance
and sale of the Securities as herein contemplated and the application of the
net proceeds therefrom as described in the Prospectus will not be, an
"investment company" or an entity "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (the
"1940 Act").

(xxi) ENVIRONMENTAL LAWS. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of its subsidiaries
is in violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution or
protection of human health, the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata)
or wildlife, including, without limitation, laws and regulations relating to
the release or threatened release of chemicals, pollutants, contaminants,
wastes, toxic substances, hazardous substances, petroleum or petroleum
products (collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "Environmental Laws"), (B) the
Company and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance
with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation, investigation
or proceeding relating to any Environmental Law against the Company or any of
its subsidiaries and (D) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental

<PAGE>

body or agency, against or affecting the Company or any of its subsidiaries
relating to Hazardous Materials or any Environmental Laws.

(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the
Company or any of its subsidiaries and delivered to the U.S. Representatives or
to counsel for the U.S. Underwriters shall be deemed a representation and
warranty by the Company to each U.S. Underwriter as to the matters covered
thereby.

SECTION 2. SALE AND DELIVERY TO U.S. UNDERWRITERS; CLOSING.

(a) U.S. INITIAL SECURITIES. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each U.S. Underwriter and each U.S.
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price per share set forth in Schedule B, the number of U.S. Initial
Securities set forth in Schedule A opposite the name of such U.S. Underwriter,
plus any additional number of U.S. Initial Securities which such U.S.
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof, subject to such adjustments among the U.S. Underwriters as
the Representatives in their sole discretion shall make to eliminate any sales
or purchases of fractional securities.

(b) U.S. OPTION SECURITIES. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the U.S.
Underwriters, severally and not jointly, to purchase up to an additional 320,000
shares of Common Stock, at the price per share set forth in Schedule B, less an
amount per share equal to any dividends or distributions declared by the Company
and payable on the U.S. Initial Securities but not payable on the U.S. Option
Securities. The option hereby granted will expire 30 days after the date hereof
and may be exercised in whole or in part from time to time only for the purpose
of covering over-allotments which may be made in connection with the offering
and distribution of the U.S. Initial Securities upon notice by the U.S.
Representatives to the Company setting forth the number of U.S. Option
Securities as to which the several U.S. Underwriters are then exercising the
option and the time and date of payment and delivery for such U.S. Option
Securities. Any such time and date of delivery (a "Date of Delivery") shall be
determined by the U.S. Representatives, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined. If the option is exercised as to all or
any portion of the U.S. Option Securities, each of the U.S. Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
U.S. Option Securities then being purchased which the number of U.S. Initial
Securities set forth in Schedule A opposite the name of such U.S. Underwriter
bears to the total number of U.S. Initial Securities, subject in each case to
such adjustments as the U.S. Representatives in their discretion shall make to
eliminate any sales or purchases of fractional shares.

(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the U.S. Initial Securities shall be made at the offices of
Gardner, Carton & Douglas, 321 N. Clark Street, Chicago, Illinois 60610, or at
such other place as shall be agreed upon by the U.S.

<PAGE>

Representatives and the Company at 9:00 A.M. (Central time) on the third
(fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any given day)
business day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than ten business days
after such date as shall be agreed upon by the U.S. Representatives and the
Company (such time and date of payment and delivery being herein called "Closing
Time").

In addition, in the event that any or all of the U.S. Option Securities are
purchased by the U.S. Underwriters, payment of the purchase price for, and
delivery of certificates for, such U.S. Option Securities shall be made at the
above-mentioned offices, or at such other place as shall be agreed upon by the
U.S. Representatives and the Company, on each Date of Delivery as specified in
the notice from the U.S. Representatives to the Company.

Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company against delivery to
the U.S. Representatives for the respective accounts of the U.S. Underwriters of
certificates for the U.S. Securities to be purchased by them. It is understood
that each U.S. Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment of the purchase
price for, the U.S. Initial Securities and the U.S. Option Securities, if any,
which it has agreed to purchase. Merrill Lynch, individually and not as
representative of the U.S. Underwriters, may (but shall not be obligated to)
make payment of the purchase price for the U.S. Initial Securities or the U.S.
Option Securities, if any, to be purchased by any U.S. Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such U.S. Underwriter from
its obligations hereunder.

(d) DENOMINATIONS; REGISTRATION. Certificates for the U.S. Initial
Securities and the U.S. Option Securities, if any, shall be in such
denominations and registered in such names as the U.S. Representatives may
request in writing at least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The certificates for the U.S.
Initial Securities and the U.S. Option Securities, if any, will be made
available for examination and packaging by the U.S. Representatives in The City
of New York not later than 10:00 A.M. (Eastern time) on the business day prior
to the Closing Time or the relevant Date of Delivery, as the case may be.

SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each U.S.
Underwriter as follows:

<PAGE>

to the Prospectuses or any amended Prospectuses shall have been filed, (ii) of
the receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectuses or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.

(b) FILING OF AMENDMENTS. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectuses included in the
Registration Statement at the time it became effective or to the Prospectuses,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the U.S. Representatives or counsel for the
Underwriters shall object.

(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to the U.S. Representatives and counsel for the U.S. Underwriters,
without charge, signed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the U.S. Representatives,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the U.S.
Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the U.S. Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.

(d) DELIVERY OF PROSPECTUSES. The Company has delivered to each U.S.
Underwriter, without charge, as many copies of each preliminary prospectus as
such U.S. Underwriter reasonably requested, and the Company hereby consents to
the use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each U.S. Underwriter, without charge, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
such number of copies of the Prospectuses (as amended or supplemented) as such
U.S. Underwriter may reasonably request. The Prospectuses and any amendments or
supplements thereto furnished to the U.S. Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.

(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to

<PAGE>

permit the completion of the distribution of the Securities
as contemplated in this Agreement and the International Purchase Agreement and
in the Prospectuses. If at any time when a prospectus is required by the 1933
Act to be delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the U.S. Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectuses in order that the
Prospectuses will not include any untrue statements of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectuses in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectuses comply with such requirements, and the Company
will furnish to the U.S. Underwriters such number of copies of such amendment or
supplement as the U.S. Underwriters may reasonably request.

(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts, in
cooperation with the U.S. Underwriters, to qualify the Securities for offering
and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the U.S. Representatives may designate
and to maintain such qualifications in effect for a period of not less than one
year from the later of the effective date of the Registration Statement and any
Rule 462(b) Registration Statement; provided, however, that the Company shall
not be obligated to file any general consent to service of process or to qualify
as a foreign corporation or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so subject. In
each jurisdiction in which the Securities have been so qualified, the Company
will file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any
Rule 462(b) Registration Statement.

(g) RULE 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of
Section 11(a) of the 1933 Act.

(h) USE OF PROCEEDS. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds".

(i) LISTING. The Company will use its best efforts to effect the listing
of the Securities on the New York Stock Exchange, Chicago Stock Exchange and
Pacific Exchange.

(j) RESTRICTION ON SALE OF SECURITIES. During a period of 120 days from
the date of the Prospectuses, the Company will not, without the prior written
consent of Merrill Lynch, (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract

<PAGE>

to purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of any share of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock or file any registration statement under the 1933 Act with respect
to any of the foregoing or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder or under the
International Purchase Agreement, (B) any shares of Common Stock issued by the
Company upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof and referred to in the Prospectuses, (C)
any shares of Common Stock issued or options to purchase Common Stock granted
pursuant to existing employee benefit plans of the Company referred to in the
Prospectuses or (D) any shares of Common Stock issued pursuant to any
non-employee director stock plan or dividend reinvestment plan.

(k) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to the
1934 Act within the time periods required by the 1934 Act and the 1934 Act
Regulations.

SECTION 4. PAYMENT OF EXPENSES. (a) EXPENSES. The Company will pay or cause
to be paid all expenses incident to the performance of its obligations under
this Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters, any Intersyndicate Agreement and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters and the transfer of
the Securities between the U.S. Underwriters and the International Managers,
(iv) the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the U.S. Underwriters in
connection therewith and in connection with the preparation of any Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectuses and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of copies of any Blue Sky
Survey and any supplement thereto, (viii) the fees and expenses of any transfer
agent or registrar for the Securities and (ix) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange,
Chicago Stock Exchange and Pacific Exchange.

(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the U.S.
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i)

<PAGE>

hereof, the Company shall reimburse the U.S. Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the U.S. Underwriters.

SECTION 5. CONDITIONS OF U.S. UNDERWRITERS' OBLIGATIONS. The obligations of
the several U.S. Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:

(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A) or, if the Company has elected to rely upon Rule 434,
a Term Sheet shall have been filed with the Commission in accordance with Rule
424(b).

(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Gary R. Johnson, Vice President and General Counsel of the Company, in
form and substance satisfactory to counsel for the U.S. Underwriters, together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters to the effect set forth in Exhibit A hereto and to such further
effect as counsel to the U.S. Underwriters may reasonably request.

(c) OPINION OF COUNSEL FOR U.S. UNDERWRITERS. At Closing Time, the U.S.
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Gardner, Carton & Douglas, counsel for the U.S. Underwriters, together
with signed or reproduced copies of such letter for each of the other U.S.
Underwriters with respect to the matters set forth in paragraphs (1), (2), (5),
(6) (solely as to preemptive or other similar rights arising by operation of law
or under the charter or by-laws of the Company), (8) through (10), inclusive,
(13), (15) (solely as to the information in the Prospectuses under "Description
of Common Stock") and the penultimate paragraph of Exhibit A hereto. In giving
such opinion such counsel may rely, as to all matters governed by the laws of
the jurisdictions other than the federal law of the United States, upon the
opinions of counsel satisfactory to the U.S. Representatives. Such counsel may
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.

(d) OFFICERS' CERTIFICATE. At Closing Time, there shall have not been,
since the date hereof or since the respective dates as of which information is
given in the Prospectuses, any

<PAGE>

material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the U.S. Representatives shall have received a
certificate of the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company, dated as of Closing Time,
to the effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct with
the same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time, and (iv)
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or are
pending or are contemplated by the Commission.

(e) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this
Agreement, the U.S. Representatives shall have received from Price Waterhouse
LLP a letter dated such date, in form and substance satisfactory to the U.S.
Representatives, together with signed or reproduced copies of such letter for
each of the other U.S. Underwriters containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectuses.

(f) BRING-DOWN COMFORT LETTER. At Closing Time, the U.S. Representatives
shall have received from Price Waterhouse LLP a letter, dated as of Closing
Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.

(g) APPROVAL OF LISTING. At Closing Time, the Securities shall have been
approved for listing on the New York Stock Exchange, subject only to official
notice of issuance.

(h) PURCHASE OF INTERNATIONAL INITIAL SECURITIES. Contemporaneously with
the purchase by the U.S. Underwriters of the U.S. Initial Securities under this
Agreement, the International Managers shall have purchased the International
Initial Securities under the International Purchase Agreement.

(i) CONDITIONS TO PURCHASE OF U.S. OPTION SECURITIES. In the event that
the U.S. Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the U.S. Option Securities, the representations
and warranties of the Company contained herein and the statements in any
certificates furnished by the Company and any subsidiary of the Company
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the U.S. Representatives shall have received:

(i) OFFICERS' CERTIFICATE. A certificate, dated such Date of Delivery, of
the President or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company confirming that
the certificate delivered at the Closing

<PAGE>

Time pursuant to Section 5(d) hereof remains true and correct as of such Date of
Delivery.

(ii) OPINION OF COUNSEL FOR COMPANY. The favorable opinion of Gary R.
Johnson, Vice President and General Counsel of the Company in form and
substance satisfactory to counsel for the U.S. Underwriters, dated
such Date of Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(b) hereof.

(iii) OPINION OF COUNSEL FOR U.S. UNDERWRITERS. The favorable opinion
of Gardner, Carton & Douglas, counsel for the U.S. Underwriters, dated
such Date of Delivery, relating to the U.S. Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(c) hereof.

(iv) BRING-DOWN COMFORT LETTER. A letter from Price Waterhouse LLP, in
form and substance satisfactory to the U.S. Representatives and dated
such Date of Delivery, substantially in the same form and substance as
the letter furnished to the U.S. Representatives pursuant to Section
5(e) hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five days
prior to such Date of Delivery.

(j) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of Delivery
counsel for the U.S. Underwriters shall have been furnished with such documents
and opinions as they may require for the purpose of enabling them to pass upon
the issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the U.S.
Representatives and counsel for the U.S. Underwriters.

(k) TERMINATION OF AGREEMENT. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of U.S. Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several U.S. Underwriters to purchase the relevant U.S.
Option Securities, may be terminated by the U.S. Representatives by notice to
the Company at any time at or prior to Closing Time or such Date of Delivery, as
the case may be, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 1, 6, 7
and 8 shall survive any such termination and remain in full force and effect.

<PAGE>

SECTION 6. INDEMNIFICATION.

(a) INDEMNIFICATION OF UNDERWRITERS. The Company agrees to indemnify and
hold harmless each U.S. Underwriter and each person, if any, who controls any
U.S. Underwriter within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act as follows:

(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and Rule
434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in any
preliminary prospectus or the Prospectuses (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;

(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and

(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill Lynch),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;

PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
U.S. Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
U.S. Prospectus (or any amendment or supplement thereto).

(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each U.S.
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection

<PAGE>

(a) of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
U.S. Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such U.S.
Underwriter through Merrill Lynch expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the U.S.
Prospectus (or any amendment or supplement thereto).

(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.

(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.

<PAGE>

SECTION 7. CONTRIBUTION. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages or expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the U.S. Underwriters on the other hand from the offering of the U.S.
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the U.S.
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.

The relative benefits received by the Company on the one hand and the U.S.
Underwriters on the other hand in connection with the offering of the U.S.
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the U.S.
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total underwriting discount received by the U.S.
Underwriters, in each case as set forth on the cover of the U.S. Prospectus, or,
if Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the U.S. Securities as set forth on
such cover.

The relative fault of the Company on the one hand and the U.S. Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the U.S. Underwriters and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

The Company and the U.S. Underwriters agree that it would not be just and
equitable if the contribution pursuant to this Section 7 were determined by pro
rata allocation (even if the U.S. Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages or expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.

Notwithstanding the provisions of this Section 7, no U.S. Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the U.S. Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which such
U.S. Underwriter has otherwise been required to pay by reason of any such untrue
or alleged untrue statement or omission or alleged omission.

<PAGE>

No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

For purposes of this Section 7, each person, if any, who controls a U.S.
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such U.S.
Underwriter, and each director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act shall have the same rights to contribution as the Company. The U.S.
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of U.S. Initial Securities set forth
opposite their respective names in Schedule A hereto and not joint.

SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any U.S. Underwriter or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities to the U.S. Underwriters.

SECTION 9. TERMINATION OF AGREEMENT.

(a) TERMINATION; GENERAL. The U.S. Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectuses, any
material adverse change, or any development which could reasonably be expected
to result in a prospective material adverse change, in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the U.S.
Representatives, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New
York Stock Exchange, or if trading generally on the American Stock Exchange or
the New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal, Minnesota or New York
authorities.

<PAGE>

(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.

SECTION 10. DEFAULT BY ONE OR MORE OF THE U.S. UNDERWRITERS. If one or more of
the U.S. Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the U.S. Representatives shall have the
right, within 24 hours thereafter, to make arrangement for one or more of the
non-defaulting U.S. Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, the U.S.
Representatives shall not have completed such arrangements within such 24-hour
period; then:

(a) if the number of Defaulted Securities does not exceed 10% of the
number of U.S. Securities to be purchased on such date, each of the non-
defaulting U.S. Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting U.S. Underwriters, or

(b) if the number of Defaulted Securities exceeds 10% of the number
of U.S. Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the U.S. Underwriters to purchase and of the Company to sell
the U.S. Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any non-
defaulting U.S. Underwriter.

No action taken pursuant to this Section shall relieve any defaulting U.S.
Underwriter from liability in respect of its default.

In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the U.S.
Underwriters to purchase and the Company to sell the relevant U.S. Option
Securities, as the case may be, either the U.S. Representatives or the Company
shall have the right to postpone the Closing Time or the relevant Date of
Delivery, as the case may be, for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectuses or in
any other documents or arrangements. As used herein, the term "U.S.
Underwriter" includes any person substituted for a U.S. Underwriter under this
Section 10.

SECTION 11. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the U.S. Underwriters
shall be directed to the U.S. Representatives at North Tower, World Financial
Center, New York, New York 10281-1201, attention of Richard A. Vaccari, Managing
Director; with a copy to Gardner, Carton & Douglas,

<PAGE>

321 N. Clark Street, Chicago, Illinois 60610, attention of Robert J. Joseph,
Esq.; and notices to the Company shall be directed to it at Northern States
Power Company, 414 Nicollet Mall, Minneapolis, Minnesota 55401, attention of
Corporate Secretary.

SECTION 12. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the U.S. Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the U.S.
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the U.S. Underwriters and the Company and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Securities from any U.S.
Underwriter shall be deemed to be a successor by reason merely of such purchase.

SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MINNESOTA APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. EXCEPT AS OTHERWISE SET
FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO MINNEAPOLIS TIME.

SECTION 14. EFFECT OF HEADINGS. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.

<PAGE>

If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the U.S. Underwriters and the Company in accordance with its terms.

Very truly yours,

NORTHERN STATES POWER COMPANY
(a Minnesota corporation)

By:
---------------------------------------
Title:

CONFIRMED AND ACCEPTED,
as of the date first above written:

MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
SALOMON BROTHERS INC
DAIN BOSWORTH INCORPORATED
PIPER JAFFRAY INC.

By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED

By:
----------------------------------
Authorized Signatory

For themselves and as U.S. Representatives of the other U.S. Underwriters named
in Schedule A hereto.

<PAGE>

SCHEDULE A

Number of
U.S. Initial
Name of U.s. Underwriters Securities
------------------------- ----------

Merrill Lynch, Pierce, Fenner & Smith
Incorporated. . . . . . . . . . . . . .
Goldman, Sachs & Co. . . . . . . . . . . . .
Salomon Brothers Inc . . . . . . . . . . . .
Dain Bosworth Incorporated . . . . . . . . .
Piper Jaffray Inc. . . . . . . . . . . . . .

-----------

Total. . . . . . . . . . . . . . . . . . . . 3,600,000
-----------
-----------

<PAGE>

SCHEDULE B

NORTHERN STATES POWER COMPANY
(a Minnesota corporation)
3,600,000 Shares of Common Stock
(Par Value $2.50 Per Share)

1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $__________.

2. The purchase price per share for the U.S. Securities to be paid by the
several U.S. Underwriters shall be $__________, being an amount equal to the
initial public offering price set forth above less $__________ per share;
provided that the purchase price per share for any U.S. Option Securities
purchased upon the exercise of the over-allotment option described in Section
2(b) shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the U.S. Initial Securities
but not payable on the U.S. Option Securities.

<PAGE>

EXHIBIT A

FORM OF OPINION OF GARY R. JOHNSON

Re: 3,600,000 Shares of Common Stock, par value $2.50
per share, of Northern States Power Company,
a Minnesota corporation

Gentlemen:

For the purpose of rendering this opinion, I have examined the proceedings
taken by Northern States Power Company, a Minnesota corporation, herein called
the "Company," with respect to the issue and sale by the Company of 3,600,000
shares of Common Stock, par value $2.50 per share, herein called the "U.S.
Securities." In connection therewith I have participated in the preparation of
the proceedings for the issuance and sale of the Securities including (i) the
U.S. Purchase Agreement dated September _____, 1997, between you and the Company
relating to your purchase of the U.S. Securities, herein called the "Agreement"
and (ii) the International Purchase Agreement dated September _____, 1997
between Merrill Lynch International, Goldman Sachs International, Salomon
Brothers International Limited, Dain Bosworth Incorporated and Piper Jaffray
Inc. and the Company relating to the issue and sale of the International
Securities, herein called the "International Purchase Agreement." I also have
participated in the preparation of or examined the registration statement and
any amendments thereto and the accompanying prospectuses and any supplements
thereto, as filed under the Securities Act of 1933, as amended (the "Act"), with
respect to the Securities. Capitalized terms not otherwise defined herein shall
have the respective meanings set forth in the Agreement. My examination has
extended to all statutes, records, instruments, and documents which I have
deemed necessary to examine for the purposes of this opinion.

I am of the opinion that:

1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Minnesota.

2. The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under the Agreement
and the International Purchase Agreement.

3. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.

4. The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectuses in the column entitled "Actual" under the
caption "Capitalization"

A-1

<PAGE>

(except for subsequent issuances, if any, pursuant to the Agreement and the
International Purchase Agreement or pursuant to reservations, agreements or
employee benefit plans referred to in the Prospectuses or pursuant to the
exercise of convertible securities or options referred to in the
Prospectuses); the shares of issued and outstanding capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights of
any securityholder of the Company.

5. The Securities to be purchased by the U.S. Underwriters and the
International Managers from the Company have been duly authorized for issuance
and sale to the U.S. Underwriters and the International Managers pursuant to the
Agreement and the International Purchase Agreement, respectively, and, when
issued and delivered by the Company pursuant to the Agreement and the
International Purchase Agreement, respectively, against payment of the
consideration set forth in the Agreement and the International Purchase
Agreement, respectively, will be validly issued and fully paid and non-
assessable and no holder of the Securities is or will be subject to personal
liability by reason of being such a holder.

6. The issuance and sale of the Securities by the Company is not subject
to the preemptive or other similar rights of any securityholder of the Company.

7. Each Significant Subsidiary has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectuses and
is duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect; except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and validly issued, is fully
paid and non-assessable and, to the best of my knowledge, is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of any Significant Subsidiary was issued in
violation of the preemptive or similar rights of any securityholder of such
Subsidiary.

8. The Agreement and the International Purchase Agreement have been duly
authorized, executed and delivered by the Company.

9. The Registration Statement, including any Rule 462(b) Registration
Statement has been declared effective under the 1933 Act; any required filing of
the Prospectuses pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b); and, to the best of my knowledge, no
stop order suspending the effectiveness of the Registration Statement or any
Rule 462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or threatened
by the Commission.

A-2

<PAGE>

10. The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectuses, excluding the documents incorporated by reference
therein, and each amendment or supplement to the Registration Statement and
Prospectuses, excluding the documents incorporated by reference therein, as of
their respective effective or issue dates (other than the financial statements
and supporting schedules included therein or omitted therefrom, as to which I
need express no opinion) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.

11. The documents incorporated by reference in the Prospectuses (other
than the financial statements and supporting schedules included therein or
omitted therefrom, as to which I need express no opinion), when they were filed
with the Commission complied as to form in all material respects with the
requirements of the 1934 Act and the rules and regulations of the Commission
thereunder.

12. If Rule 434 has been relied upon, the Prospectuses were not
"materially different," as such term is used in Rule 434, from the prospectuses
included in the Registration Statement at the time it became effective.

13. The form of certificate used to evidence the Common Stock complies in
all material respects with all applicable statutory requirements, with any
applicable requirements of the charter and by-laws of the Company and the
requirements of the New York Stock Exchange.

14. To the best of my knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, to which the Company or any
subsidiary is a party, or to which the property of the Company or any subsidiary
is subject, before or brought by any court or governmental agency or body,
domestic or foreign, which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably by expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the Agreement and the International Purchase
Agreement or the performance by the Company of its obligations thereunder.

15. The information in the Prospectuses under "Description of Common
Stock" and "Certain United States Tax Consequences to Non United States
Holders", and in the Registration Statement under Item 15, to the extent that it
constitutes matters of law, summaries of legal matters, the Company's charter
and bylaws or legal proceedings, or legal conclusions, has been reviewed by me
and is correct in all material respects.

16. To the best of my knowledge, there are no statutes or regulations that
are required to be described in the Prospectuses that are not described as
required.

17. All descriptions in the Registration Statement of contracts and other
documents to which the Company or its subsidiaries are a party are accurate in
all material respects; to the best of my knowledge, there are no franchises,
contracts, indentures,

A-3

<PAGE>

mortgages, loan agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or to be filed as
exhibits thereto other than those described or referred to therein or filed
or incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are correct in all material respects.

18. To the best of my knowledge, neither the Company nor any subsidiary is
in violation of its charter or by-laws and no default by the Company or any
subsidiary exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or the
Prospectuses or filed or incorporated by reference as an exhibit to the
Registration Statement.

19. The Minnesota Public Utilities Commission has issued its order
approving the Company's capital structure which order authorizes the issuance of
the Securities, and no other filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under the 1933
Act and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states, as to
which I need express no opinion) is necessary or required in connection with the
due authorization, execution and delivery of the Agreement and the International
Purchase Agreement or for the offering, issuance, sale or delivery of the
Securities.

20. The execution, delivery and performance of the Agreement and the
International Purchase Agreement and the consummation of the transactions
contemplated in the Agreement and the International Purchase Agreement and in
the Registration Statement (including the issuance and sale of the Securities
and the use of the proceeds from the sale of the Securities as described in the
Prospectuses under the caption "Use of Proceeds") and compliance by the Company
with its obligations under the Agreement and the International Purchase
Agreement do not and will not, whether with or without the giving of notice or
lapse of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(a)(xi) of the Agreement) under or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any subsidiary pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument, known to me, to which the Company or any
subsidiary is a party or by which it or any of them may be bound, or to which
any of the property or assets of the Company or any subsidiary is subject
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a Material Adverse Effect), nor will such
action result in any violation of the provisions of the charter or by-laws of
the Company or any subsidiary, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to me, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any subsidiary or any of their respective properties, assets or
operations.

21. The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the 1940 Act.

A-4

<PAGE>

22. The Company has good and valid title to all real and fixed property
and leasehold rights owned by it, subject only to: (a) taxes and assessments not
yet delinquent; (b) the lien of the Indenture (as defined in the Agreement); (c)
as to parts of the Company's property, certain easements, conditions,
restrictions, leases, and similar encumbrances which do not affect the Company's
use of such property in the usual course of its business, certain minor defects
in titles which are not material, defects in titles to certain properties which
are not essential to the Company's business; and mechanics' lien claims being
contested or not of record or for the satisfaction or discharge of which
adequate provision has been made by the Company pursuant to the Indenture.

23. The Company has all necessary power under statutory provisions,
franchises (which expire at various dates), or permits to serve the customers in
the jurisdictions where it provides electric and gas service, except in certain
instances that are not material to the Company.

These opinions do not cover title to easements for water flowage purposes
or rights of way for electric and gas transmission and distribution facilities,
steam mains, and telephone lines. However, the Company has the power of eminent
domain in the states in which it operates.

In the course of my participation in the preparation of the Registration
Statement and Prospectuses I made investigations as to the accuracy of certain
of the statements of fact contained therein, I discussed other matters with
officers, employees, and representatives of the Company, and I examined various
corporate records and data. While I do not pass upon or assume responsibility
for, and shall not be deemed to have independently verified, the accuracy and
completeness of the statements contained in the Registration Statement or
Prospectuses (except as to matters set forth in paragraphs 4,15 and 17 above)
nothing has come to my attention that would lead me to believe that the
Registration Statement (including the Rule 430A Information) at the time it
became effective contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectuses as of the date of the
Agreement or at the date hereof contained an untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

A-5

<PAGE>

In giving my opinion under paragraph 22 above, I have relied upon
examinations of abstracts of titles to properties of the Company, said abstracts
bearing various dates, and nothing has come to my attention which would lead me
to believe that anything has occurred since the dates of the abstracts which
would adversely affect the titles shown on the abstracts. In giving opinions as
to conformity to the laws of States other than Minnesota and as to the
franchises and titles to property of the Company, I have in certain instances
relied upon the opinion of other counsel employed or retained by the Company to
render opinions in respect thereto.

Respectfully submitted,

By:
----------------------------------
Gary R. Johnson
VICE PRESIDENT AND GENERAL COUNSEL
NORTHERN STATES POWER COMPANY

A-6

<PAGE>

Exhibit 1.02
Draft of 9/15/97

- --------------------------------------------------------------------------------

NORTHERN STATES POWER COMPANY

(a Minnesota corporation)

900,000 Shares of Common Stock

INTERNATIONAL PURCHASE AGREEMENT

Dated: September _____, 1997

- --------------------------------------------------------------------------------
<PAGE>

TABLE OF CONTENTS

SECTION 1. Representations and Warranties . . . . . . . . . . . . . . 3
(a) Representations and Warranties by the Company . . . . . . . . . 3
(i) Compliance with Registration Requirements. . . . . . . 4
(ii) Incorporated Documents . . . . . . . . . . . . . . . . 4
(iii) Independent Accountants. . . . . . . . . . . . . . . . 5
(iv) Financial Statements . . . . . . . . . . . . . . . . . 5
(v) No Material Adverse Change in Business . . . . . . . . 5
(vi) Good Standing of the Company . . . . . . . . . . . . . 5
(vii) Good Standing of Subsidiaries. . . . . . . . . . . . . 6
(viii) Capitalization . . . . . . . . . . . . . . . . . . . . 6
(ix) Authorization of Agreement . . . . . . . . . . . . . . 6
(x) Authorization and Description of Securities. . . . . . 6
(xi) Absence of Defaults and Conflicts. . . . . . . . . . . 7
(xii) Absence of Labor Dispute . . . . . . . . . . . . . . . 7
(xiii) Absence of Proceedings . . . . . . . . . . . . . . . . 7
(xiv) Accuracy of Exhibits . . . . . . . . . . . . . . . . . 8
(xv) Possession of Intellectual Property. . . . . . . . . . 8
(xvi) Absence of Further Requirements. . . . . . . . . . . . 8
(xvii) Possession of Licenses and Permits . . . . . . . . . . 8
(xviii) Title to Property. . . . . . . . . . . . . . . . . . . 9
(xix) Compliance with Cuba Act . . . . . . . . . . . . . . . 9
(xx) Investment Company Act . . . . . . . . . . . . . . . . 9
(xxi) Environmental Laws . . . . . . . . . . . . . . . . . . 9
(b) Officer's Certificates. . . . . . . . . . . . . . . . . . . . .10
SECTION 2. Sale and Delivery to International Managers; Closing . . .10
(a) International Initial Securities. . . . . . . . . . . . . . . .10
(b) International Option Securities . . . . . . . . . . . . . . . .10
(c) Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
(d) Denominations; Registration . . . . . . . . . . . . . . . . . .11
SECTION 3. Covenants of the Company . . . . . . . . . . . . . . . . .11
(a) Compliance with Securities Regulations and Commission
Requests. . . . . . . . . . . . . . . . . . . . . . . . . . .11
(b) Filing of Amendments. . . . . . . . . . . . . . . . . . . . . .12
(c) Delivery of Registration Statements . . . . . . . . . . . . . .12
(d) Delivery of Prospectuses. . . . . . . . . . . . . . . . . . . .12
(e) Continued Compliance with Securities Laws . . . . . . . . . . .13
(f) Blue Sky Qualifications . . . . . . . . . . . . . . . . . . . .13
(g) Rule 158 . . . . . . . . . . . . . . . . . . . . . . . . . . .13
(h) Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . .13
(i) Listing . . . . . . . . . . . . . . . . . . . . . . . . . . .14
(j) Restriction on Sale of Securities . . . . . . . . . . . . . . .14
(k) Reporting Requirements. . . . . . . . . . . . . . . . . . . . .14
SECTION 4. Payment of Expenses. . . . . . . . . . . . . . . . . . . .14

i
<PAGE>

(a) Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . .14
(b) Termination of Agreement. . . . . . . . . . . . . . . . . . . .15
SECTION 5. Conditions of International Managers' Obligations. . . . .15
(a) Effectiveness of Registration Statement . . . . . . . . . . . .15
(b) Opinion of Counsel for Company. . . . . . . . . . . . . . . . .15
(c) Opinion of Counsel for International Managers . . . . . . . . .15
(d) Officers' Certificate . . . . . . . . . . . . . . . . . . . . .16
(e) Accountant's Comfort Letter . . . . . . . . . . . . . . . . . .16
(f) Bring-down Comfort Letter . . . . . . . . . . . . . . . . . . .16
(g) Approval of Listing . . . . . . . . . . . . . . . . . . . . . .16
(h) Purchase of U.S. Initial Securities.. . . . . . . . . . . . . .16
(i) Conditions to Purchase of International Option Securities . . .17
(i) Officers' Certificate. . . . . . . . . . . . . . . . .17
(ii) Opinion of Counsel for Company.. . . . . . . . . . . .17
(iii) Opinion of Counsel for International Managers. . . . .17
(iv) Bring-down Comfort Letter. . . . . . . . . . . . . . .17
(j) Additional Documents. . . . . . . . . . . . . . . . . . . . . .17
(k) Termination of Agreement. . . . . . . . . . . . . . . . . . . .17
SECTION 6. Indemnification. . . . . . . . . . . . . . . . . . . . . .18
(a) Indemnification of International Managers . . . . . . . . . . .18
(b) Indemnification of Company, Directors and Officers. . . . . . .19
(c) Actions against Parties; Notification . . . . . . . . . . . . .19
(d) Settlement without Consent if Failure to Reimburse. . . . . . .19
SECTION 7. Contribution . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 8. Representations, Warranties and Agreements to
Survive Delivery . . . . . . . . . . . . . . . . . . . .21
SECTION 9. Termination of Agreement . . . . . . . . . . . . . . . . .21
(a) Termination; General. . . . . . . . . . . . . . . . . . . . . .21
(b) Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 10. Default by One or More of the International Managers. . .22
SECTION 11. Notices . . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 12. Parties . . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 13. Governing Law and Time. . . . . . . . . . . . . . . . . .23
SECTION 14. Effect of Headings. . . . . . . . . . . . . . . . . . . .24

Schedule A List of International Managers . . . . . . . . . . . . .25
Schedule B Pricing Terms. . . . . . . . . . . . . . . . . . . . . .26
Exhibit A Form of Opinion of Company Counsel. . . . . . . . . . A-1

ii
<PAGE>

Draft of 9/15/97

NORTHERN STATES POWER COMPANY

(a Minnesota corporation)

900,000 Shares of Common Stock

(Par Value $2.50 Per Share)

INTERNATIONAL PURCHASE AGREEMENT

September ____, 1997

MERRILL LYNCH INTERNATIONAL
GOLDMAN SACHS INTERNATIONAL
SALOMON BROTHERS INTERNATIONAL LIMITED
DAIN BOSWORTH INCORPORATED
PIPER JAFFRAY INC.
as Lead Managers of the several International Managers
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England

Ladies and Gentlemen:

Northern States Power Company, a Minnesota corporation (the "Company"),
confirms its agreement with Merrill Lynch International and each of the other
International Managers named in Schedule A hereto (collectively, the
"International Managers," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Merrill
Lynch International, Goldman Sachs International, Salomon Brothers International
Limited, Dain Bosworth Incorporated and Piper Jaffray Inc. are acting as
representatives (in such capacity, the "Lead Managers"), with respect to (i) the
sale by the Company and the purchase by the International Managers, acting
severally and not jointly, of the respective numbers of shares of Common Stock,
par value $2.50 per share, of the Company ("Common Stock") set forth in Schedule
A hereto and (ii) the grant by the Company to the International Managers, acting
severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 80,000 additional shares of Common Stock to cover
over-allotments, if any. The aforesaid 900,000 shares of Common Stock (the
"International Initial Securities") to be purchased by the International
Managers and all or any part of the 80,000 shares of Common Stock subject to
the option described in Section 2(b) hereof (the "International Option
Securities") are hereinafter called, collectively, the "International
Securities."

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It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "U.S. Purchase Agreement") providing for
the offering by the Company of an aggregate of 3,600,000 shares of Common Stock
(the "U.S. Initial Securities") through arrangements with certain underwriters
in the United States and Canada (the "U.S. Underwriters") for which Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Goldman, Sachs
& Co., Salomon Brothers Inc, Dain Bosworth and Piper Jaffray are acting as
representatives (the "U.S. Representatives") and the grant by the Company to the
U.S. Underwriters, acting severally and not jointly, of an option to purchase
all or any part of the 320,000 additional shares of Common Stock solely to cover
overallotments, if any (the "U.S. Option Securities" and, together with the
International Option Securities, the "Option Securities"). The U.S. Initial
Securities and the U.S. Option Securities are hereinafter called the "U.S.
Securities." It is understood that the Company is not obligated to sell, and
the International Managers are not obligated to purchase, any International
Initial Securities unless all of the U.S. Initial Securities are
contemporaneously purchased by the U.S. Underwriters.

The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the U.S. Initial Securities and the
International Initial Securities are hereinafter collectively called the
"Initial Securities", and the International Securities and the U.S. Securities
are hereinafter collectively called the "Securities."

The Company understands that the International Managers propose to make a
public offering of the International Securities as soon as the Lead Managers
deem advisable after this Agreement has been executed and delivered.

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Company has elected to rely upon Rule 434 ("Rule 434") of the 1933 Act
Regulations, prepare and file term sheets (a "Term Sheet") in accordance with
the provisions of Rule 434 and Rule 424(b). The information included in each
such prospectus or in each such Term Sheet, as the case may be, that was omitted
from such registration statement at the time it became effective but that is
deemed to be part of such registration statement at the time it became effective
(a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each prospectus used before such registration statement
became effective, and any prospectus that omitted, as applicable, the Rule 430A
Information or the Rule 434 Information, that was used after such effectiveness
and prior to the execution and delivery of this Agreement, is herein called a
"preliminary prospectus." Such registration statement, including the exhibits
thereto, schedules thereto, if any, and the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final Form of U.S. Prospectus and the final Form of
International Prospectus, including the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act, in the form first
furnished to the Underwriters for use in connection with the offering of the
Securities is herein called the "U.S. Prospectus" and the "International
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the term terms "U.S. Prospectus" and "International Prospectus" shall
refer to the preliminary U.S. Prospectus dated August 27, 1997 and preliminary
International Prospectus dated August 27, 1997, respectively, each together with
the applicable Term Sheet and all references in this Agreement to the date of
the Prospectus shall mean the date of the applicable Term Sheet. For purposes
of this Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus, the U.S. Prospectus, the International Prospectus or
any Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").

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SECTION 1. REPRESENTATIONS AND WARRANTIES

(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The Company represents
and warrants to each International Manager as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each International
Manager, as follows:

At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any International Option Securities
are purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.
Neither the Prospectuses nor any amendments or supplements thereto, at the time
the Prospectuses or any such amendment or supplement was issued and at the
Closing Time (and, if any International Option Securities are purchased, at the
Date of Delivery), included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading. If Rule 434 is used, the Company will comply with the
requirements of Rule 434. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration Statement or
International Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any International Manager
through Merrill Lynch International expressly for use in the Registration
Statement or International Prospectus.

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(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement and the Prospectuses, at
the time they were or hereafter are filed with the Commission, complied and will
comply in all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder (the "1934 Act Regulations"),
and, when read together with the other information in the Prospectuses, at the
time the Registration Statement became effective, at the time the Prospectuses
were issued and at the Closing Time (and, if any International Option Securities
are purchased, at the Date of Delivery), did not and will not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading.

(v) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective dates as
of which information is given in the Registration Statement and the
Prospectuses, except as otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business (a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than those in the
ordinary course of business, which are material with respect to the Company and
its subsidiaries considered as one enterprise, and (C) except for regular
dividends on the Common Stock and the Company's preferred stock in amounts per
share that are consistent with past practice, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock.

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Agreement and the U.S. Purchase Agreement; and the Company is duly qualified as
a foreign corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or be in good standing would not result in a Material
Adverse Effect.

(viii) CAPITALIZATION. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectuses in the column entitled
"Actual" under the caption "Capitalization" (except for subsequent issuances, if
any, pursuant to this Agreement or the U.S. Purchase Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectuses or pursuant to the exercise of convertible securities or options
referred to in the Prospectuses). The shares of issued and outstanding capital
stock have been duly authorized and validly issued and are fully paid and non-
assessable; none of the outstanding shares of capital stock was issued in
violation of the preemptive or other similar rights of any securityholder of the
Company.

(ix) AUTHORIZATION OF AGREEMENT. This Agreement and the U.S. Purchase
Agreement have been duly authorized, executed and delivered by the Company.

(x) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The Securities have been
duly authorized for issuance and sale to the International Managers pursuant to
this Agreement and to the U.S. Underwriters pursuant to the U.S. Purchase
Agreement and, when issued and delivered by the Company pursuant to this
Agreement and the

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U.S. Purchase Agreement, respectively, against payment of the consideration set
forth herein and therein, will be validly issued and fully paid and non-
assessable; the Common Stock conforms to all statements relating thereto
contained in the Prospectuses and such description conforms to the rights set
forth in the instruments defining the same; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and the issuance
of the Securities is not subject to the preemptive or other similar rights of
any securityholder of the Company.

(xi) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor any of its
subsidiaries is in violation of its charter or by-laws or, except as disclosed
in the Registration Statement, in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of its subsidiaries is
a party or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults that would not result in
a Material Adverse Effect; and the execution, delivery and performance of this
Agreement and the U.S. Purchase Agreement and the consummation of the
transactions contemplated herein and therein and in the Registration Statement
(including the issuance and sale of the Securities and the use of the proceeds
from the sale of the Securities as described in the Prospectuses under the
caption "Use of Proceeds") and compliance by the Company with its obligations
hereunder and thereunder have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any subsidiary pursuant to, the Agreements and Instruments (except
for such conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action result in
any violation of the provisions of the charter or by-laws of the Company or any
subsidiary or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or any of
their assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any subsidiary.

(xiii) ABSENCE OF PROCEEDINGS. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental agency
or body, domestic or

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foreign, now pending, or, to the knowledge of the Company, threatened, against
or affecting the Company or any subsidiary, which is required to be disclosed in
the Registration Statement (other than as disclosed therein), or which might
reasonably be expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially or adversely affect the properties or
assets thereof or the consummation of the transactions contemplated in this
Agreement or the performance by the Company of its obligations hereunder; the
aggregate of all pending legal or governmental proceedings to which the Company
or any subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.

(xv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its subsidiaries
own or possess, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary to carry
on the business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any infringement
of or conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or any of
its subsidiaries therein, and which infringement or conflict (if the subject of
any unfavorable decision, ruling or finding) or invalidity or inadequacy, singly
or in the aggregate, would result in a Material Adverse Effect.

(xvi) ABSENCE OF FURTHER REQUIREMENTS. The Minnesota Public Utilities
Commission has issued its order approving capital structure which order
authorizes the issuance of the Securities, and no other filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any court or governmental authority or agency is necessary or
required for the performance by the Company of its obligations under this
Agreement and the U.S. Purchase Agreement, in connection with the offering,
issuance or sale of the Securities hereunder and thereunder or the consummation
of the transactions contemplated by this Agreement and the U.S. Purchase
Agreement, except such as have been already obtained or as may be required under
the 1933 Act or the 1933 Act Regulations or foreign or state securities laws.

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necessary to conduct the business now operated by them; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not, singly
or in the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the invalidity of
such Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.

(xx) INVESTMENT COMPANY ACT. The Company is not, and upon the issuance and
sale of the Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus will not be, an "investment
company" or an entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940 Act").

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(including, without limitation, ambient air, surface water, groundwater, land
surface or subsurface strata) or wildlife, including, without limitation, laws
and regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company and its subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or threatened
administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigation or
proceeding relating to any Environmental Law against the Company or any of its
subsidiaries and (D) there are no events or circumstances that might reasonably
be expected to form the basis of an order for clean-up or remediation, or an
action, suit or proceeding by any private party or governmental body or agency,
against or affecting the Company or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws.

(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of the
Company or any of its subsidiaries and delivered to the International Managers
or to counsel for the International Managers shall be deemed a representation
and warranty by the Company to each International Manager as to the matters
covered thereby.

SECTION 2. SALE AND DELIVERY TO INTERNATIONAL MANAGERS; CLOSING.

(a) INTERNATIONAL INITIAL SECURITIES. On the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company agrees to sell to each International Manager and each
International Manager, severally and not jointly, agrees to purchase from the
Company, at the price per share set forth in Schedule B, the number of
International Initial Securities set forth in Schedule A opposite the name of
such International Manager, plus any additional number of International Initial
Securities which such International Manager may become obligated to purchase
pursuant to the provisions of Section 10 hereof, subject to such adjustments
among the International Managers as the representatives in their sole discretion
shall make to eliminate any sales or purchases of fractional securities.

(b) INTERNATIONAL OPTION SECURITIES. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
International Managers, severally and not jointly, to purchase up to an
additional 80,000 shares of Common Stock, at the price per share set forth in
Schedule B, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the International Initial Securities but
not payable on the International Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and distribution of the
International Initial Securities upon notice by the Global Coordinator to the
Company setting

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forth the number of International Option Securities as to which the several
International Managers are then exercising the option and the time and date of
payment and delivery for such International Option Securities. Any such time
and date of delivery (a "Date of Delivery") shall be determined by the Global
Coordinator, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
International Option Securities, each of the International Managers, acting
severally and not jointly, will purchase that proportion of the total number of
International Option Securities then being purchased which the number of
International Initial Securities set forth in Schedule A opposite the name of
such International Manager bears to the total number of International Initial
Securities, subject in each case to such adjustments as the Lead Managers in
their discretion shall make to eliminate any sales or purchases of fractional
shares.

(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the International Initial Securities shall be made at the
offices of Gardner, Carton & Douglas, 321 N. Clark Street, Chicago, Illinois
60610, or at such other place as shall be agreed upon by the Global Coordinator
and the Company at 9:00 A.M. (Central time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Global Coordinator and the Company (such time and date of
payment and delivery being herein called "Closing Time").

In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Lead Managers and the Company, on each Date of
Delivery as specified in the notice from the Global Coordinator to the Company.

Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company against delivery to
the Lead Managers for the respective accounts of the International Managers of
certificates for the International Securities to be purchased by them. It is
understood that each International Manager has authorized the Lead Managers, for
its account, to accept delivery of, receipt for, and make payment of the
purchase price for, the International Initial Securities and the International
Option Securities, if any, which it has agreed to purchase. Merrill Lynch,
individually and not as representative of the International Managers, may (but
shall not be obligated to) make payment of the purchase price for the
International Initial Securities or the International Option Securities, if any,
to be purchased by any International Manager whose funds have not been received
by the Closing Time or the relevant Date of Delivery, as the case may be, but
such payment shall not relieve such International Manager from its obligations
hereunder.

(d) DENOMINATIONS; REGISTRATION. Certificates for the International
Initial Securities and the International Option Securities, if any, shall be in
such denominations and registered in

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such names as the Lead Managers may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the International Initial Securities and the
International Option Securities, if any, will be made available for examination
and packaging by the Lead Managers in The City of New York not later than 10:00
A.M. (Eastern time) on the business day prior to the Closing Time or the
relevant Date of Delivery, as the case may be.

SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
International Manager as follows:

(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
or Rule 434, as applicable, and will notify the Lead Managers immediately, and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectuses or any amended Prospectuses shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectuses or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
preliminary prospectus, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.

(b) FILING OF AMENDMENTS. The Company will give the Lead Managers notice
of its intention to file or prepare any amendment to the Registration Statement
(including any filing under Rule 462(b)), any Term Sheet or any amendment,
supplement or revision to either the prospectuses included in the Registration
Statement at the time it became effective or to the Prospectuses, whether
pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the Lead
Managers with copies of any such documents a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file or use any
such document to which the Lead Managers or counsel for the International
Managers shall object.

(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to the Lead Managers and counsel for the International Mangers,
without charge, signed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all consents and
certificates

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of experts, and will also deliver to the Lead Managers, without charge, a
conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the International Managers.
The copies of the Registration Statement and each amendment thereto furnished to
the International Managers will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.

(d) DELIVERY OF PROSPECTUSES. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the 1933
Act. The Company will furnish to each International Manager, without charge,
during the period when the Prospectuses are required to be delivered under the
1933 Act or the 1934 Act, such number of copies of the Prospectuses (as amended
or supplemented) as such International Manager may reasonably request. The
Prospectuses and any amendments or supplements thereto furnished to the
International Managers will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.

(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and the U.S. Purchase Agreement and in the
Prospectuses. If at any time when a prospectus is required by the 1933 Act to
be delivered in connection with sales of the Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion of
counsel for the International Managers or for the Company, to amend the
Registration Statement or amend or supplement the Prospectuses in order that the
Prospectuses will not include any untrue statements of a material fact or omit
to state a material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectuses in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, the Company will promptly prepare and file with
the Commission, subject to Section 3(b), such amendment or supplement as may be
necessary to correct such statement or omission or to make the Registration
Statement or the Prospectuses comply with such requirements, and the Company
will furnish to the International Managers such number of copies of such
amendment or supplement as the International Managers may reasonably request.

(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts, in
cooperation with the International Managers, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Lead Managers may designate and to
maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall not be
obligated to file any

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general consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so qualified or
to subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule 462(b) Registration
Statement.

(h) USE OF PROCEEDS. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectus under
"Use of Proceeds."

(i) LISTING. The Company will use its best efforts to effect the listing
of the Securities on the New York Stock Exchange, Chicago Stock Exchange and
Pacific Exchange.

(j) RESTRICTION ON SALE OF SECURITIES. During a period of 120 days from
the date of the Prospectuses, the Company will not, without the prior written
consent of Merrill Lynch International (i) directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase or otherwise transfer or dispose of any share of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder or under the
U.S. Purchase Agreement, (B) any shares of Common Stock issued by the Company
upon the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof and referred to in the Prospectuses, (C) any
shares of Common Stock issued or options to purchase Common Stock granted
pursuant to existing employee benefit plans of the Company referred to in the
Prospectuses or (D) any shares of Common Stock issued pursuant to any non-
employee director stock plan or dividend reinvestment plan.

14
<PAGE>

SECTION 4. PAYMENT OF EXPENSES. (a) EXPENSES. The Company will pay or cause
to be paid all expenses incident to the performance of its obligations under
this Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters, any Intersyndicate Agreement and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, including any stock or
other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters and the transfer of
the Securities between the International Managers and the U.S. Underwriters,
(iv) the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the International Managers
in connection therewith and in connection with the preparation of any Blue Sky
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, any Term Sheets and of
the Prospectuses and any amendments or supplements thereto, (vii) the
preparation, printing and delivery to the Underwriters of copies of any Blue Sky
Survey and any supplement thereto, (viii) the fees and expenses of any transfer
agent or registrar for the Securities and (ix) the fees and expenses incurred in
connection with the listing of the Securities on the New York Stock Exchange,
Chicago Stock Exchange and Pacific Exchange.

(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the Lead
Managers in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the International Managers for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the International Managers.

SECTION 5. CONDITIONS OF INTERNATIONAL MANAGERS' OBLIGATIONS. The obligations
of the several International Managers hereunder are subject to the accuracy of
the representations and warranties of the Company contained in Section 1 hereof
or in certificates of any officer of the Company or any subsidiary of the
Company delivered pursuant to the provisions hereof, to the performance by the
Company of its covenants and other obligations hereunder, and to the following
further conditions:

(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective and at
Closing Time no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the International Managers. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and

15
<PAGE>

declared effective in accordance with the requirements of Rule 430A) or, if the
Company has elected to rely upon Rule 434, a Term Sheet shall have been filed
with the Commission in accordance with Rule 424(b).

(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the Lead Managers
shall have received the favorable opinion, dated as of Closing Time, of Gary R.
Johnson, Vice President and General Counsel of the Company, in form and
substance satisfactory to counsel for the International Managers, together with
signed or reproduced copies of such letter for each of the other International
Managers to the effect set forth in Exhibit A hereto and to such further effect
as counsel to the International Managers may reasonably request.

(c) OPINION OF COUNSEL FOR INTERNATIONAL MANAGERS. At Closing Time, the
Lead Managers shall have received the favorable opinion, dated as of Closing
Time, of Gardner, Carton & Douglas, counsel for the International Managers,
together with signed or reproduced copies of such letter for each of the other
International Managers with respect to the matters set forth in paragraphs (1),
(2), (5), (6) (solely as to preemptive or other similar rights arising by
operation of law or under the charter or by-laws of the Company), (8) through
(10), inclusive, (13), (15) (solely as to the information in the Prospectuses
under "Description of Common Stock") and the penultimate paragraph of Exhibit A
hereto. In giving such opinion such counsel may rely, as to all matters
governed by the laws of the jurisdictions other than the federal law of the
United States, upon the opinions of counsel satisfactory to the Lead Managers.
Such counsel may also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper, upon certificates of
officers of the Company and its subsidiaries and certificates of public
officials.

(d) OFFICERS' CERTIFICATE. At Closing Time, there shall have not been,
since the date hereof or since the respective dates as of which information is
given in the Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the Lead Managers
shall have received a certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the Company,
dated as of Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1(a) hereof
are true and correct with the same force and effect as though expressly made at
and as of Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are pending or are contemplated by the Commission.

(e) ACCOUNTANT'S COMFORT LETTER. At the time of the execution of this
Agreement, the Lead Managers shall have received from Price Waterhouse LLP a
letter dated such date, in form

16
<PAGE>

and substance satisfactory to the Lead Managers, together with signed or
reproduced copies of such letter for each of the other International Managers
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectuses.

(f) BRING-DOWN COMFORT LETTER. At Closing Time, the Lead Managers shall
have received from Price Waterhouse LLP a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.

(g) APPROVAL OF LISTING. At Closing Time, the Securities shall have been
approved for listing on the New York Stock Exchange, subject only to official
notice of issuance.

(h) PURCHASE OF U.S. INITIAL SECURITIES. Contemporaneously with the
purchase by the International Managers of the International Initial Securities
under this Agreement, the U.S. Underwriters shall have purchased the U.S.
Initial Securities under the U.S. Purchase Agreement.

(i) CONDITIONS TO PURCHASE OF INTERNATIONAL OPTION SECURITIES. In the
event that the International Underwriters exercise their option provided in
Section 2(b) hereof to purchase all or any portion of the International Option
Securities, the representations and warranties of the Company contained herein
and the statements in any certificates furnished by the Company and any
subsidiary of the Company hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the Lead Managers shall have
received:

(i) OFFICERS' CERTIFICATE. A certificate, dated such Date of Delivery,
of the President or a Vice President of the Company and of the chief financial
or chief accounting officer of the Company confirming that the certificate
delivered at the Closing Time pursuant to Section 5(d) hereof remains true and
correct as of such Date of Delivery.

(ii) OPINION OF COUNSEL FOR COMPANY. The favorable opinion of Gary R.
Johnson, Vice President and General Counsel of the Company in form and substance
satisfactory to counsel for the International Managers, dated such Date of
Delivery, relating to the International Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion required
by Section 5(b) hereof.

(iii) OPINION OF COUNSEL FOR INTERNATIONAL MANAGERS. The favorable
opinion of Gardner, Carton & Douglas, counsel for the International Managers,
dated such Date of Delivery, relating to the International Option Securities to
be purchased on such Date of Delivery and otherwise to the same effect as the
opinion required by Section 5(c) hereof.

17
<PAGE>

(iv) BRING-DOWN COMFORT LETTER. A letter from Price Waterhouse LLP, in
form and substance satisfactory to the Lead Managers and dated such Date of
Delivery, substantially in the same form and substance as the letter furnished
to the Lead Managers pursuant to Section 5(e) hereof, except that the "specified
date" in the letter furnished pursuant to this paragraph shall be a date not
more than five days prior to such Date of Delivery.

(j) ADDITIONAL DOCUMENTS. At Closing Time and at each Date of Delivery
counsel for the International Managers shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them to
pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the Lead
Managers and counsel for the International Managers.

(k) TERMINATION OF AGREEMENT. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of International
Option Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several International Managers to purchase the relevant
International Option Securities, may be terminated by the Lead Managers by
notice to the Company at any time at or prior to Closing Time or such Date of
Delivery, as the case may be, and such termination shall be without liability of
any party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7 and 8 shall survive any such termination and remain in full
force and effect.

SECTION 6. INDEMNIFICATION.

(a) INDEMNIFICATION OF INTERNATIONAL MANAGERS. The Company agrees to
indemnify and hold harmless each International Manager and each person, if any,
who controls any International Manager within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act as follows:

(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and Rule 434
Information, if applicable, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or the
Prospectuses (or any amendment or supplement thereto), or the omission or
alleged omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;

18
<PAGE>

(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company; and

(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch International),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above;

PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through Merrill Lynch International expressly for use in
the Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto).

(b) INDEMNIFICATION OF COMPANY, DIRECTORS AND OFFICERS. Each
International Manager severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the International Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such International Manager through Merrill Lynch International
expressly for use in the Registration Statement (or any amendment thereto) or
such preliminary prospectus or the International Prospectus (or any amendment or
supplement thereto).

19
<PAGE>

shall be selected by Merrill Lynch International, and, in the case of parties
indemnified pursuant to Section 6(b) above, counsel to the indemnified
parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their
own counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances. No indemnifying party
shall, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or
Section 7 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim
and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.

SECTION 7. CONTRIBUTION. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages or expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the International Managers on the other hand from the offering of the
International Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and the
International Managers on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.

20
<PAGE>

The relative benefits received by the Company on the one hand and the
International Managers on the other hand in connection with the offering of the
International Securities pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
International Securities pursuant to this Agreement (before deducting expenses)
received by the Company and the total underwriting discount received by the
International Managers, in each case as set forth on the cover of the
International Prospectus, or, if Rule 434 is used, the corresponding location on
the Term Sheet, bear to the aggregate initial public offering price of the
International Securities as set forth on such cover.

The relative fault of the Company on the one hand and the International
Managers on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by the International Managers and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

The Company and the International Managers agree that it would not be just
and equitable if the contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the International Managers were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section
7. The aggregate amount of losses, liabilities, claims, damages or expenses
incurred by an indemnified party and referred to above in this Section 7 shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue or alleged untrue statement or omission or alleged omission.

Notwithstanding the provisions of this Section 7, no International Manager
shall be required to contribute any amount in excess of the amount by which the
total price at which the International Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such International Manager has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission.

For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
The International Managers' respective obligations to contribute pursuant to
this Section 7 are several in

21
<PAGE>

proportion to the number of International Initial Securities set forth opposite
their respective names in Schedule A hereto and not joint.

SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of any International Manager or
controlling person, or by or on behalf of the Company, and shall survive
delivery of the Securities to the International Managers.

SECTION 9. TERMINATION OF AGREEMENT.

(a) TERMINATION; GENERAL. The Lead Managers may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectuses, any material adverse
change, or any development which could reasonably be expected to result in a
prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Lead Managers, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company has been suspended or
materially limited by the Commission or the New York Stock Exchange, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority, or (iv) if a banking moratorium has been
declared by either Federal, Minnesota or New York authorities.

SECTION 10. DEFAULT BY ONE OR MORE OF THE INTERNATIONAL MANAGERS. If one or
more of the International Managers shall fail at Closing Time or a Date of
Delivery to purchase the Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the Lead Managers shall have
the right, within 24 hours thereafter, to make arrangement for one or more of
the non-defaulting International Managers, or any other underwriters, to
purchase all, but not less than all, of the Defaulted Securities in such amounts
as

22
<PAGE>

may be agreed upon and upon the terms herein set forth; if, however, the Lead
Managers shall not have completed such arrangements within such 24-hour period;
then:

(a) if the number of Defaulted Securities does not exceed 10% of the
number of International Securities to be purchased on such date, each of the
non-defaulting International Managers shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting International Managers, or

(b) if the number of Defaulted Securities exceeds 10% of the number of
International Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the International Managers to purchase and of the Company to sell
the International Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any non-defaulting
International Manager.

No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.

In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
International Managers to purchase and the Company to sell the relevant
International Option Securities, as the case may be, either the Lead Managers or
the Company shall have the right to postpone the Closing Time or the relevant
Date of Delivery, as the case may be, for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or
Prospectuses or in any other documents or arrangements. As used herein, the
term "International Manager" includes any person substituted for an
International Manager under this Section 10.

SECTION 11. NOTICES. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the International
Managers shall be directed to the Lead Managers at: Merrill Lynch International,
Ropemaker Place, 25 Ropemaker Street, London EC2Y 9LY, England, attention of
Equity Capital Markets; with a copy to Gardner, Carton & Douglas, 321 N. Clark
Street, Chicago, Illinois 60610, attention of Robert J. Joseph, Esq.; and
notices to the Company shall be directed to it at Northern States Power Company,
414 Nicollet Mall, Minneapolis, Minnesota 55401, attention of Corporate
Secretary.

SECTION 12. PARTIES. This Agreement shall inure to the benefit of and be
binding upon the International Managers and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
International Managers and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or

23
<PAGE>

claim under or in respect of this Agreement or any provision herein contained.
This Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the International Managers and the Company and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
International Manager shall be deemed to be a successor by reason merely of such
purchase.

24
<PAGE>

SECTION 14. EFFECT OF HEADINGS. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.

If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the International Managers and the Company in accordance with its terms.

Very truly yours,

NORTHERN STATES POWER COMPANY
(a Minnesota corporation)

By:
--------------------------
Title:

CONFIRMED AND ACCEPTED,
as of the date first above written:

MERRILL LYNCH INTERNATIONAL
GOLDMAN SACHS INTERNATIONAL
SALOMON BROTHERS INTERNATIONAL LIMITED
DAIN BOSWORTH INCORPORATED
PIPER JAFFRAY INC.

By: MERRILL LYNCH INTERNATIONAL

By:
-----------------------------
Authorized Signatory

For themselves and as Lead Managers of the other International Managers named in
Schedule A hereto.

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<PAGE>

SCHEDULE A

Number of
International
Name of International Managers Initial Securities
------------------------------ ------------------

Merrill Lynch International
Goldman Sachs International. . . . . . . . . . . . . . .
Salomon Brothers International Limited . . . . . . . . .
Dain Bosworth Incorporated . . . . . . . . . . . . . . .
Piper Jaffray Inc. . . . . . . . . . . . . . . . . . . .

------------------

Total. . . . . . . . . . . . . . . . . . . . 900,000
-------
-------

26
<PAGE>

SCHEDULE B

NORTHERN STATES POWER COMPANY
(a Minnesota corporation)
900,000 Shares of Common Stock
(Par Value $2.50 Per Share)

1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $__________.

2. The purchase price per share for the International Securities to be
paid by the several International Managers shall be $__________, being an amount
equal to the initial public offering price set forth above less $__________ per
share; provided that the purchase price per share for any International Option
Securities purchased upon the exercise of the over-allotment option described in
Section 2(b) shall be reduced by an amount per share equal to any dividends or
distributions declared by the Company and payable on the International Initial
Securities but not payable on the International Option Securities.

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<PAGE>

EXHIBIT A

FORM OF OPINION OF GARY R. JOHNSON

Re: 900,000 Shares of Common Stock, par value $2.50
per share, of Northern States Power Company,
a Minnesota corporation

Gentlemen:

For the purpose of rendering this opinion, I have examined the proceedings
taken by Northern States Power Company, a Minnesota corporation, herein called
the "Company," with respect to the issue and sale by the Company of 900,000
shares of Common Stock, par value $2.50 per share, herein called the
"International Securities." In connection therewith I have participated in the
preparation of the proceedings for the issuance and sale of the Securities
including (i) the International Purchase Agreement dated September _____, 1997,
between you and the Company relating to your purchase of the International
Securities, herein called the "Agreement" and (ii) the U.S. Purchase Agreement
dated September _____, 1997 between Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Goldman, Sachs & Co., Salomon Brothers Inc, Dain
Bosworth Incorporated and Piper Jaffray Inc. and the Company relating to the
issue and sale of the U.S. Securities, herein called the "U.S. Purchase
Agreement." I also have participated in the preparation of or examined the
registration statement and any amendments thereto and the accompanying
prospectuses and any supplements thereto, as filed under the Securities Act of
1933, as amended (the "Act"), with respect to the Securities. Capitalized terms
not otherwise defined herein shall have the respective meanings set forth in the
Agreement. My examination has extended to all statutes, records, instruments,
and documents which I have deemed necessary to examine for the purposes of this
opinion.

I am of the opinion that:

1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Minnesota.

4. The authorized, issued and outstanding capital stock of the Company is
as set forth in the Prospectuses in the column entitled "Actual" under the
caption "Capitalization"

A-1
<PAGE>

(except for subsequent issuances, if any, pursuant to the Agreement and the U.S.
Purchase Agreement or pursuant to reservations, agreements or employee benefit
plans referred to in the Prospectuses or pursuant to the exercise of convertible
securities or options referred to in the Prospectuses); the shares of issued and
outstanding capital stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; and none of the outstanding shares
of capital stock of the Company was issued in violation of the preemptive or
other similar rights of any securityholder of the Company.

5. The Securities to be purchased by the International Managers and the
U.S. Underwriters from the Company have been duly authorized for issuance and
sale to the International Managers and the U.S. Underwriters pursuant to the
Agreement and the U.S. Purchase Agreement, respectively, and, when issued and
delivered by the Company pursuant to the Agreement and the U.S. Purchase
Agreement, respectively, against payment of the consideration set forth in the
Agreement and the U.S. Purchase Agreement, respectively, will be validly issued
and fully paid and non-assessable and no holder of the Securities is or will be
subject to personal liability by reason of being such a holder.

6. The issuance and sale of the Securities by the Company is not subject
to the preemptive or other similar rights of any securityholder of the Company.

8. The Agreement and the U.S. Purchase Agreement have been duly
authorized, executed and delivered by the Company.

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12. If Rule 434 has been relied upon, the Prospectus were not "materially
different," as such term is used in Rule 434, from the prospectuses included in
the Registration Statement at the time it became effective.

14. To the best of my knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, to which the Company or any
subsidiary is a party, or to which the property of the Company or any subsidiary
is subject, before or brought by any court or governmental agency or body,
domestic or foreign, which might reasonably be expected to result in a Material
Adverse Effect, or which might reasonably by expected to materially and
adversely affect the properties or assets thereof or the consummation of the
transactions contemplated in the Agreement and the U.S. Purchase Agreement or
the performance by the Company of its obligations thereunder.

16. To the best of my knowledge, there are no statutes or regulations that
are required to be described in the Prospectuses that are not described as
required.

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loan agreements, notes, leases or other instruments required to be described or
referred to in the Registration Statement or to be filed as exhibits thereto
other than those described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or references
thereto are correct in all material respects.

19. The Minnesota Public Utilities Commission has issued its order
approving the Company's capital structure which order authorizes the issuance of
the Securities, and no other filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other than under the 1933
Act and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states, as to
which I need express no opinion) is necessary or required in connection with the
due authorization, execution and delivery of the Agreement and the U.S. Purchase
Agreement or for the offering, issuance, sale or delivery of the Securities.

20. The execution, delivery and performance of the Agreement and the U.S.
Purchase Agreement and the consummation of the transactions contemplated in the
Agreement and the U.S. Purchase Agreement and in the Registration Statement
(including the issuance and sale of the Securities and the use of the proceeds
from the sale of the Securities as described in the Prospectuses under the
caption "Use of Proceeds") and compliance by the Company with its obligations
under the Agreement and the U.S. Purchase Agreement do not and will not, whether
with or without the giving of notice or lapse of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined in
Section 1(a)(xi) of the Agreement) under or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company or
any subsidiary pursuant to any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or any other agreement or instrument,
known to me, to which the Company or any subsidiary is a party or by which it or
any of them may be bound, or to which any of the property or assets of the
Company or any subsidiary is subject (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not have a Material
Adverse Effect), nor will such action result in any violation of the provisions
of the charter or by-laws of the Company or any subsidiary, or any applicable
law, statute, rule, regulation, judgment, order, writ or decree, known to me, of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their respective
properties, assets or operations.

21. The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the 1940 Act.

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Respectfully submitted,

By:
---------------------------------
Gary R. Johnson
VICE PRESIDENT AND GENERAL COUNSEL
NORTHERN STATES POWER COMPANY

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EXHIBIT 5.01

[NSP LETTERHEAD]

September 15, 1997

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: 4,900,000 shares of Common Stock of Northern States Power Company,
a Minnesota corporation

Ladies and Gentlemen:

I am participating in the proceedings incident to the proposed public
offering by Northern States Power Company, a Minnesota corporation (the
"Company"), of up to 4,900,000 shares of its Common Stock, par value $2.50 per
share (the "Shares"). I have examined all records, instruments, and documents
which I have deemed necessary to examine for the purposes of this opinion,
including the Registration Statement on Form S-3 relating to the shares to be
filed by the Company pursuant to the Securities Act of 1933.

Based upon the foregoing and upon my general familiarity with the Company
and its affairs, I am of the opinion:

1. That the Company is a duly organized and validly existing corporation
under the laws of the State of Minnesota and that it is legally qualified and
authorized to operate and conduct business in the State of Minnesota.

2. When, as and if the Registration Statement on Form S-3 to which this
opinion is an exhibit becomes effective pursuant to the provisions of the
Securities Act of 1933, as amended, and the Shares have been duly issued and
delivered, and the consideration for the Shares has been duly received by the
Company, all in the manner contemplated by said

<PAGE>

Securities and Exchange Commission
September 15, 1997
Page 2

Registration Statement, the Shares will be legally issued, fully paid, and
nonassessable shares of stock of the Company.

I hereby consent to the incorporation of this opinion into said
Registration Statement and the reference to me under the heading "Legal
Opinions" in said Registration Statement.

Respectfully submitted,

John P. Moore Jr.
Corporate Secretary