<PAGE>
United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark one)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For Quarter Ended June 30, 1997 Commission File Number 10-3140
NORTHERN STATES POWER COMPANY, A WISCONSIN CORPORATION, MEETS THE CONDITIONS
SET FORTH IN GENERAL INSTRUCTION H (1) AND (2) OF FORM 10-Q AND IS THEREFORE
FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
Northern States Power Company
(Exact name of registrant as specified in its charter)
Wisconsin 39-0508315
(State or other jurisdiction of (I.R.S.Employer Identification No.)
incorporation or organization)
100 North Barstow Street, Eau Claire, Wisconsin 54703
(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code (715) 839-2416
NONE
Former name, former address and former fiscal year, if changed since last
report
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at August 14, 1997
Common Stock, $100 par value 862,000 Shares
All outstanding common stock is owned beneficially and of record by
Northern States Power Company, a Minnesota corporation.
</PAGE>
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Northern States Power Company (Wisconsin)
Statements of Income (Unaudited)
Three Months Ended Six Months Ended
June 30 June 30
1997 1996 1997 1996
(Thousands of dollars)
Operating revenues
Electric............... $90,162 $88,141 $189,035 $188,501
Gas.................... 13,634 13,537 53,011 51,907
Total................ 103,796 101,678 242,046 240,408
Operating expenses
Purchased and inter-
change power......... 44,086 42,903 90,799 90,983
Fuel for electric
generation........... 1,667 819 3,917 2,600
Gas purchased for
resale............... 8,420 8,138 36,212 34,398
Other operation........ 11,781 11,446 24,228 23,400
Maintenance............ 5,615 5,381 9,284 9,995
Administrative and
general.............. 4,456 4,715 9,127 10,903
Conservation and demand
side management...... 2,234 2,279 4,467 4,559
Depreciation and
amortization......... 9,428 8,984 18,778 17,514
Taxes: Property and
general.............. 3,580 3,598 7,218 7,246
Current income tax .... 2,867 3,137 10,366 11,038
Deferred income tax.... 529 603 1,478 984
Investment tax credits
recognized.......... (220) (227) (440) (455)
Total............... 94,443 91,776 215,434 213,165
Operating income....... 9,353 9,902 26,612 27,243
Other income (expense)
Merger costs - net of
applicable income
taxes............... (523) - (523) -
Other income and
deductions - net of
applicable income
taxes............... 302 107 314 233
Allowance for funds
used during con-
struction - equity.. 48 75 98 211
Total other income
(expense) - net.... (173) 182 (111) 444
Income before interest
charges.............. 9,180 10,084 26,501 27,687
Interest charges
Interest on long-term
debt................ 4,078 3,962 8,158 7,942
Other interest and
amortization........ 531 767 1,236 1,566
Allowance for funds
used during con-
struction - debt.... (74) (77) (146) (172)
Total................ 4,535 4,652 9,248 9,336
Net Income ............ $4,645 $5,432 $17,253 $18,351
Statements of Retained Earnings (Unaudited)
Balance at beginning of
period............... $240,360 $228,161 $234,751 $221,638
Net income for period.. 4,645 5,432 17,253 18,351
Dividends paid to
parent............... (7,000) (6,396) (13,999) (12,792)
Balance at end of
period............... $238,005 $227,197 $238,005 $227,197
The Notes to Financial Statements are an integral part of the Statements of
Income and Retained Earnings.
</PAGE>
<PAGE>
Northern States Power Company (Wisconsin)
Balance Sheets (Unaudited)
June 30, December 31,
1997 1996
ASSETS (Thousands of dollars)
Utility Plant
Electric............................. $908,497 $894,143
Gas.................................. 102,175 99,817
Other................................ 68,061 67,262
Total............................ 1,078,733 1,061,222
Accumulated provision for
depreciation....................... (411,348) (395,619)
Net utility plant................ 667,385 665,603
Other Property and Investments......... 10,857 10,232
Current Assets
Cash................................. 1,146 208
Accounts receivable - net............ 32,897 40,250
Fuel inventories - at average cost... 6,370 7,780
Other materials and supplies
inventories - at average cost...... 5,620 5,918
Unbilled utility revenues............ 10,523 21,074
Prepayments and other................ 10,913 11,703
Total current assets............... 67,469 86,933
Other Assets
Regulatory assets.................... 35,092 37,102
Federal income tax receivable........ 3,307 3,307
Unamortized debt expense............. 1,777 1,855
Other................................ 5,251 4,099
Total other assets................ 45,427 46,363
TOTAL ASSETS..................... $791,138 $809,131
LIABILITIES AND EQUITY
Capitalization
Common stock - authorized 870,000
shares of $100 par value,
issued shares: 1997 and 1996,
862,000............................ $86,200 $86,200
Premium on common stock............ 10,461 10,461
Retained earnings.................. 238,005 234,751
Total common stock equity........ 334,666 331,412
Long-term debt....................... 231,732 231,688
Total capitalization............. 566,398 563,100
Current Liabilities
Notes payable - parent company....... 15,900 39,300
Accounts payable..................... 9,621 16,493
Payable to affiliate companies
(principally parent)............... 23,447 15,544
Salaries, wages, and vacation pay
accrued............................ 4,957 6,417
Taxes accrued........................ 777 1,641
Interest accrued..................... 4,339 4,459
Current regulatory liability -
purchased gas costs................ 3,180 381
Current deferred income taxes........ 1,213 1,670
Other................................ 4,152 3,507
Total current liabilities........ 67,586 89,412
Other Liabilities
Accumulated deferred income taxes.... 102,131 100,898
Accumulated deferred investment tax
credits............................ 19,471 20,024
Regulatory liabilities............... 20,028 19,409
Customer advances.................... 7,754 7,334
Benefit obligations and other........ 7,770 8,954
Total other liabilities.......... 157,154 156,619
Commitments and Contingent Liabilities (see Note 3)
TOTAL LIABILITIES AND EQUITY... $791,138 $809,131
The Notes to Financial Statements are an integral part of the Balance Sheets.
</PAGE>
<PAGE>
Northern States Power Company (Wisconsin)
Statements of Cash Flows (Unaudited)
Six Months Ended
June 30
1997 1996
(Thousands of dollars)
Cash Flows from Operating Activities:
Net Income......................... $17,253 $18,351
Adjustments to reconcile net income
to cash from operating activities:
Depreciation and amortization.... 19,373 17,947
Deferred income taxes............ 563 -
Deferred investment tax credits
recognized..................... (440) (455)
Allowance for funds used during
construction - equity.......... (98) (211)
Cash provided by changes in
working capital................ 21,839 13,559
Cash provided by (used for)
changes in other assets and
liabilities.................... 337 (1,048)
Net cash provided by operating
activities 58,827 48,143
Cash Flows from Investing Activities:
Capital expenditures................ (20,623) (24,137)
Increase in construction payables... 595 413
Allowance for funds used during
construction - equity............. 98 211
Other............................... (560) (242)
Net cash used for investing
activities (20,490) (23,755)
Cash Flows from Financing Activities:
Repayment of notes payable to
parent - net...................... (23,400) (11,600)
Dividends paid to parent............ (13,999) (12,792)
Net cash used for financing
activities (37,399) (24,392)
Net increase (decrease) in cash and
cash equivalents..................... 938 (4)
Cash and cash equivalents at beginning
of period............................ 208 247
Cash and cash equivalents at end of
period............................... $1,146 $243
The Notes to Financial Statements are an integral part of the Statements of
Cash Flows.
</PAGE>
Northern States Power Company (Wisconsin)
NOTES TO FINANCIAL STATEMENTS
The Company is a wholly owned subsidiary of Northern States Power
Company, a Minnesota corporation (NSPM).
In the opinion of management, the accompanying unaudited financial
statements contain all adjustments necessary to present fairly the financial
position of Northern States Power Company, a Wisconsin corporation (the
Company), as of June 30, 1997 and Dec. 31, 1996, the results of its
operations for the three and six months ended June 30, 1997 and 1996 and its
cash flows for the six months ended June 30, 1997 and 1996. Due to the
seasonality of the Company's electric and gas sales, operating results on a
quarterly and year-to-date basis are not necessarily an appropriate base from
which to project annual results.
The accounting policies followed by the Company are set forth in Note 1
to the Company's financial statements in its Annual Report on Form 10-K for
the year ended Dec. 31, 1996 (1996 Form 10-K). The following notes should be
read in conjunction with such policies and other disclosures in the Form 10-K.
1. Business Developments
Termination of Proposed Merger - As discussed in the Company's Form 8-K
filed on May 19, 1997, NSPM and Wisconsin Energy Corporation (WEC) announced
on May 16, 1997 that they have mutually agreed to terminate their plans to
merge the two companies. As a result of the merger termination, the
Company's second quarter and year-to-date operating results for 1997 include
a charge to nonoperating expense of approximately $900,000 for deferred
merger related costs.
Union Agreements - A new three-year collective-bargaining agreement was
ratified by the Company's union membership on April 10, 1997. All provisions
of this new agreement are effective retroactively to Jan. 1, 1997. The prior
agreement had expired Dec. 31, 1996, but was extended to April 30, 1997.
New Natural Gas System - Through a competitive bidding process, the
Company has been selected to own and operate a natural gas system at Fort
McCoy, a regional U.S. Army training center near Sparta, Wisconsin. The
total project cost is expected to be approximately $2 million and estimated
annual revenue is $1.7 million. The 10-year contract with the U.S. Army
includes renewal provisions. Construction is expected to be completed in time
for the 1997-1998 heating season. On August 5, 1997, the Company received an
order from the Public Service Commission of Wisconsin (PSCW) allowing the
Company to treat the investment as utility property.
2. Regulation and Rate Matters
1997 Rate Cases - There have been no changes in overall customer rates
in any jurisdiction in which the Company operates since the 1996 Form 10-K
was filed. In 1996, the PSCW approved the Company's application for no
change in rates for 1997. However, certain classes of customers experienced
small changes in rates, as a result of rate design revisions approved by the
PSCW, which have an offsetting effect on overall revenues.
In the Company's 1997 rate order, the PSCW denied current rate recovery
of the federal government's assessment for the decommissioning and
decontamination of federal uranium enrichment facilities. The cost of the
Company's share of NSPM's assessment is billed through the Interchange
Agreement. The Company's annual expense for this item is approximately
$600,000. This cost disallowance was considered in the overall cost of
service which, as noted previously, supported no change to overall electric
and gas rates. NSPM plans to continue paying the assessments to the federal
government, and based on the PSCW's decision to allow future rate recovery
with interest if the courts ultimately decide the assessments must be paid,
the Company is recording the assessments as a regulatory asset beginning in
1997.
1998 Rate Cases - The Company anticipates filing electric and gas rate cases
with the PSCW for its Wisconsin jurisdictions in the fourth quarter of 1997
for the test year 1998.
Fuel Cost Recovery - On June 9, 1997, the Company filed for a Wisconsin
retail electric rate increase with the PSCW due to rising fuel and purchased
power costs. The filing seeks a $1.2 million increase effective from August
1, 1997 through December 31, 1997. The PSCW is expected to consider the
Company's filing in September 1997. The increase represents less than one
percent of the current rates and is the first increase request since January
1993.
Network Transmission Service Costs (NTS) - In July 1997, the Company
received authorization from the PSCW to defer its share of network
transmission service (NTS) costs incurred after May 23, 1997. Beginning in
the third quarter 1997, the Company will begin deferring these costs,
including a retroactive adjustment to May 23, 1997. The Company estimates
that about $2.4 million of its annual NTS costs of approximately $3.8 million
will be deferred in 1997 as a result of this action. There was no impact
from this authorization in the second quarter results of operations.
Recovery of deferred NTS costs is expected to be sought in the Company's 1998
electric rate case.
Under NTS, participating utilities share the annual transmission cost for
their combined joint-use systems, net of related transmission revenues, based
upon each company's share of the total network load. NSPM and the Company
offered NTS service to qualifying transmission customers as a result of the
Federal Energy Regulatory Commission (FERC) Order No. 888. The Company's
share of this expense is billed through the Interchange Agreement with NSPM.
NSPM and the Company plan to file later in 1997 a rate application with the FERC
to update rates for transmission service.
Wisconsin Purchased Gas Adjustment Clause - In March 1996, the PSCW
conducted a generic hearing to consider alternative incentive-based gas cost
recovery mechanisms to replace the current purchased gas adjustment clause.
In November 1996, the PSCW issued an order with general guidelines for
incentive-based gas cost recovery mechanisms as well as "modified one-for-
one" gas cost recovery mechanisms. All major gas utilities in Wisconsin were
required to file a proposal to replace their current purchased gas adjustment
clause. The Company was to file a proposal by July 1, 1997, according to the
original schedule established by PSCW. A 90-day extension was obtained from
the PSCW, in which the Company anticipates filing a modified one-for-one gas
cost recovery mechanism proposal. Under this proposal, the allowable gas
commodity cost recovery would be based on a benchmark index, which in turn is
based on the market price of gas. The allowable cost recovery of the
remaining components of the cost of gas (for example, peak day capacity
costs, supply reservation costs and other FERC approved charges) would be
based on actual costs incurred, as is now the case with the purchased gas
adjustment clause.
Michigan Power Supply Cost Recovery Factor (PSCR) - On July 30, 1997, the
Company filed for reinstatement of a PSCR for Michigan electric customers to
be effective in 1998 with the Michigan Public Service Commission (MPSC).
(Earlier in 1997, the Company had received approval of a waiver from the PSCR
requirement due to the pending merger between NSPM and WEC.) The PSCR
provides for recovery of power supply costs for electric customers based on a
twelve-month projection of costs. After each twelve-month period is
completed, a reconciliation is submitted to the MPSC whereby over-recovery of
costs are refunded and any under-recovery of costs are billed, including
interest.
3. Commitments and Contingent Liabilities
As discussed in Note 8 to the Financial Statements in the 1996 Form 10-
K, the Company has been named as a potentially responsible party in
connection with environmental contamination at a site in Ashland, Wisconsin.
With respect to developments since the 1996 Form 10-K was filed, the Company
anticipates discussions to begin with the Wisconsin Department of Natural
Resources in the third quarter of 1997, concerning other responsible parties
and remediation options for the Ashland site.
Item 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
Discussion of financial condition and liquidity is omitted per
conditions set forth in general instructions H (1) and (2) of Form 10-Q for
wholly-owned subsidiaries (reduced disclosure format).
The Company's net income for the quarter and six months ended June 30, 1997
was $4.6 million and $17.3 million, respectively, a decrease of $0.8 million
and $1.1 million, respectively from the comparable periods a year ago. The
following analysis summarizes the specific revenue and expense items
impacting these results.
Except for the historical statements contained herein, the matters
discussed in the following discussion and analysis are forward-looking
statements that are subject to certain risks, uncertainties and assumptions.
Such forward-looking statements are intended to be identified in this
document 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; and the other risk factors listed from time to time by the
Company in reports filed with the SEC, including Exhibit 99.01 to this report
on Form 10-Q for the quarter ended June 30, 1997.
Second Quarter 1997 Compared with Second Quarter 1996
Electric revenues in total increased $2.0 million or 2.3 percent for the
second quarter of 1997 compared with the second quarter of 1996. Sales to
customers other than NSPM increased $1.4 million mainly due to sales growth
in the commercial and industrial sector. The remaining $0.6 million increase
in electric revenues relates to higher Interchange Agreement billings to NSPM
in 1997. On a weather-normalized basis, sales are estimated to have
increased 3.9 percent in the second quarter of 1997 compared to the second
quarter of 1996.
Gas revenues increased $0.1 million or 0.7 percent in the second quarter
of 1997 compared with the second quarter of 1996. Gas sales for the second
quarter of 1997 decreased 1.2 percent compared to the same period in 1996
mainly due to less favorable weather in 1997. Offsetting the sales decline
were higher costs per unit of purchased gas, as discussed below, which are
reflected in customer rates through the purchased gas adjustment clause
mechanism.
Fuel for electric generation and Purchased and interchange power costs
combined increased $2.0 million or 4.6 percent for the second quarter of 1997
compared with the second quarter of 1996 mainly due to additional power
purchases from NSPM and the usage of higher cost peaking plants to support
increased sales levels.
Gas purchased for resale increased $0.3 million or 3.5 percent in the
second quarter of 1997 compared with the second quarter of 1996 primarily due
to higher costs per unit of purchased gas charged by suppliers. Partially
offsetting the increase in unit costs were reduced purchases in 1997 due to
lower gas sales.
Other operation, Maintenance, and Administrative and general expenses
combined increased $0.3 million or 1.4 percent in the second quarter of 1997
compared with the same period in 1996. NTS costs incurred as a result of
FERC Order No. 888 (as discussed in Note 2) were $0.9 million in the second
quarter of 1997. Partially offsetting this cost increase were lower employee
benefit expenses, lower fixed charges from NSPM relating to property
insurance and property taxes, and lower maintenance expenses in the
transmission and distribution area in 1997.
Depreciation and amortization increased $0.4 million or 4.9 percent in the
second quarter of 1997 compared with the same period in 1996 due to increases
in the Company's plant in service.
Property and general taxes were approximately the same for both periods.
Income tax expense decreased $0.3 million in the second quarter of 1997 as
compared with the second quarter of 1996, reflecting lower pretax operating
income in 1997.
Other income (expense) - net decreased $0.4 million due primarily to
the write-off of deferred merger costs (as discussed in Note 1) partially
offset by higher subsidiary earnings in 1997.
Interest charges decreased $0.1 million in the second quarter of 1997
compared with the first quarter of 1996 primarily due to lower levels of
short term debt in 1997.
First Six Months of 1997 Compared with First Six Months of 1996
Electric revenues in total increased $0.5 million or 0.3 percent for the
first six months of 1997 compared with the first six months of 1996. Sales
to customers other than NSPM increased $0.3 million largely due to sales
growth in the commercial and industrial sector, partially offset by less
favorable weather in 1997. The remaining $0.2 million increase in electric
revenues relates to higher Interchange Agreement billings to NSPM in 1997.
On a weather-normalized basis, sales are estimated to have increased 2.9
percent in the first six months of 1997 compared with the first six months of
1996.
Gas revenues increased $1.1 million or 2.1 percent in the first six
months of 1997 compared with the first six months of 1996. Gas sales for the
first six months of 1997 decreased 2.8 percent compared to the same period in
1996 due to less favorable weather in 1997. Offsetting the sales decline were
higher costs per unit of purchased gas, as discussed below, which are
reflected in customer rates through the purchased gas adjustment clause
mechanism.
Fuel for electric generation and Purchased and interchange power costs
combined increased $1.1 million or 1.2 percent for the first six months of
1997 compared with the first six months of 1996 mainly due to additional
power purchases from NSPM and the usage of higher cost peaking plants to
support increased sales levels.
Gas purchased for resale increased $1.8 million or 5.3 percent in the first
six months of 1997 compared with the first six months of 1996 primarily due
to higher costs per unit of purchased gas charged by suppliers. Partially
offsetting the increase in unit costs were reduced purchases in 1997 due to
lower gas sales.
Other operation, Maintenance, and Administrative and general expenses
combined decreased $1.7 million or 3.7 percent in the first six months of
1997 compared with the same period in 1996. The decrease was primarily due
to lower employee benefit expenses, lower fixed charges from NSPM relating to
property insurance and property taxes, and lower maintenance expenses in the
transmission and distribution area in 1997. Partially offsetting these
decreases were approximately $1.8 million in network transmission service
costs incurred as a result of FERC Order No. 888 (as discussed in Note 2).
Depreciation and amortization increased $1.3 million or 7.2 percent in the
first six months of 1997 compared with the same period in 1996 due to
increases in the Company's plant in service.
Property and general taxes were approximately the same for both periods.
Income tax expense decreased $0.2 million in the first six months of 1997
compared with the first six months of 1996, reflecting lower pretax operating
income in 1997.
Other income (expense) - net decreased $0.5 million due primarily to the
write-off of deferred merger costs (as discussed in Note 1) partially offset
by higher subsidiary earnings in 1997 and a reduction of AFUDC.
Interest expense was approximately the same for both periods.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are filed with this report:
27.01 Financial Data Schedule for the six months ended June 30,
1997.
99.01 Statement pursuant to Private Securities Litigation Reform Act
of 1995.
(b) Reports on Form 8-K
May 16, 1997 (Filed May 19, 1997) - Item 5. Other Events.
Disclosure of the announcement of the mutually agreed merger
termination between Northern States Power Company, a
Minnesota corporation (NSPM), and Wisconsin Energy Corporation, a
Wisconsin corporation.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORTHERN STATES POWER COMPANY
(Registrant)
/s/
Roger D. Sandeen
Controller
(Principal Accounting Officer)
/s/
Neal A. Siikarla
Treasurer
(Principal Financial Officer)
Date: August 14, 1997
EXHIBIT INDEX
Method of Exhibit Description
Filing No.
DT 27.01 Financial Data Schedule
DT 99.01 Statement pursuant to
Private Securities
Litigation Reform Act of
1995
DT = Filed electronically with this direct transmission.
<TABLE> <S> <C>
<ARTICLE> UT
EXHIBIT 27.01
<LEGEND>
This schedule contains summary financial information
extracted from the Consolidated Statements of Income,
Consolidated Balance Sheets and Consolidated Statements of
Cash Flows and is qualified in its entirety by reference to
such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1997
<BOOK-VALUE> PER-BOOK
<TOTAL-NET-UTILITY-PLANT> 667,385
<OTHER-PROPERTY-AND-INVEST> 10,857
<TOTAL-CURRENT-ASSETS> 67,469
<TOTAL-DEFERRED-CHARGES> 45,427
<OTHER-ASSETS> 0
<TOTAL-ASSETS> 791,138
<COMMON> 86,200
<CAPITAL-SURPLUS-PAID-IN> 10,461
<RETAINED-EARNINGS> 238,005
<TOTAL-COMMON-STOCKHOLDERS-EQ> 334,666
0
0
<LONG-TERM-DEBT-NET> 231,732
<SHORT-TERM-NOTES> 15,900
<LONG-TERM-NOTES-PAYABLE> 0
<COMMERCIAL-PAPER-OBLIGATIONS> 0
<LONG-TERM-DEBT-CURRENT-PORT> 0
0
<CAPITAL-LEASE-OBLIGATIONS> 0
<LEASES-CURRENT> 0
<OTHER-ITEMS-CAPITAL-AND-LIAB> 208,840
<TOT-CAPITALIZATION-AND-LIAB> 791,138
<GROSS-OPERATING-REVENUE> 242,046
<INCOME-TAX-EXPENSE> 11,404
<OTHER-OPERATING-EXPENSES> 204,030
<TOTAL-OPERATING-EXPENSES> 215,434
<OPERATING-INCOME-LOSS> 26,612
<OTHER-INCOME-NET> (111)
<INCOME-BEFORE-INTEREST-EXPEN> 26,501
<TOTAL-INTEREST-EXPENSE> 9,248
<NET-INCOME> 17,253
0
<EARNINGS-AVAILABLE-FOR-COMM> 17,253
<COMMON-STOCK-DIVIDENDS> 13,999
<TOTAL-INTEREST-ON-BONDS> 8,158
<CASH-FLOW-OPERATIONS> 58,827
<EPS-PRIMARY> $20.02
<EPS-DILUTED> $20.02
</TABLE>
Exhibit 99.01
Northern States Power Company Cautionary Factors
The Private Securities Litigation Reform Act of 1995 (the Act) provides
a new "safe harbor" for forward-looking statements to encourage such
disclosures without the threat of litigation providing those statements are
identified as forward-looking and are accompanied by meaningful, cautionary
statements identifying important factors that could cause the actual results
to differ materially from those projected in the statement. Forward-looking
statements have been and will be made in written documents and oral
presentations of Northern States Power Company, a Wisconsin Corporation (the
Company). Such statements are based on management's beliefs as well as
assumptions made by and information currently available to management. When
used in the Company's documents or oral presentations, the words
"anticipate", "estimate", "expect", "objective", "possible", "potential" and
similar expressions are intended to identify forward-looking statements. In
addition to any assumptions and other factors referred to specifically in
connection with such forward-looking statements, factors that could cause the
Company's actual results to differ materially from those contemplated in any
forward-looking statements include, among others, the following:
- - Economic conditions including inflation rates and monetary fluctuations;
- - Trade, monetary, fiscal, taxation, and environmental policies of
governments, agencies and similar organizations in geographic areas where
the Company has a financial interest;
- - Customer business conditions including demand for their products or
services and supply of labor and materials used in creating their products
and services;
- - Financial or regulatory accounting principles or policies imposed by the
Financial Accounting Standards Board, the Securities and Exchange
Commission, the Federal Energy Regulatory Commission and similar entities
with regulatory oversight;
- - Availability or cost of capital such as changes in: interest rates; market
perceptions of the utility industry, or the Company; or security ratings;
- - Factors affecting operations such as unusual weather conditions;
catastrophic weather-related damage; unscheduled generation outages,
maintenance or repairs; unanticipated changes to fossil fuel or gas supply
costs or availability due to higher demand, shortages, transportation
problems or other developments; environmental incidents; or electric
transmission or gas pipeline system constraints;
- - Employee workforce factors including loss or retirement of key executives,
collective bargaining agreements with union employees, or work stoppages;
- - Increased competition in the utility industry, including: industry
restructuring initiatives; transmission system operation and/or
administration initiatives; recovery of investments made under traditional
regulation; nature of competitors entering the industry; retail wheeling; a
new pricing structure; and former customers entering the generation market;
- - Rate-setting policies or procedures of regulatory entities, including
environmental externalities, which are values established by regulators
assigning environmental costs to each method of electricity generation when
evaluating generation resource options;
- - Social attitudes regarding the utility and power industries;
- - Cost and other effects of legal and administrative proceedings,
settlements, investigations and claims;
- - Technological developments that result in competitive disadvantages and
create the potential for impairment of existing assets;
- - Other business or investment considerations that may be disclosed from time
to time in the Company's Securities and Exchange Commission filings or in
other publicly disseminated written documents.
The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events or otherwise. The foregoing review of factors pursuant to the Act
should not be construed as exhaustive or as any admission regarding the
adequacy of disclosures made by the Company prior to the effective date of
the Act.
