-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CUbQGfGAuYsrPgoFbOR0i4LGcdifES0bOte84N0V8El/tB1lcDEvCzYdOOyZpJb9 zD0+SK+lsI6/ZG77C6g8mA== 0000072909-97-000006.txt : 19970815 0000072909-97-000006.hdr.sgml : 19970815 ACCESSION NUMBER: 0000072909-97-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORTHERN STATES POWER CO /WI/ CENTRAL INDEX KEY: 0000072909 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 390508315 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03140 FILM NUMBER: 97663211 BUSINESS ADDRESS: STREET 1: 100 N BARSTOW ST CITY: EAU CLAIRE STATE: WI ZIP: 54702 BUSINESS PHONE: 7158392621 MAIL ADDRESS: STREET 1: P O BOX 8 CITY: EAU CLAIRE STATE: WI ZIP: 54702-008 10-Q 1 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. 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. 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. 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. 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. EX-27 2
UT EXHIBIT 27.01 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. 1,000 6-MOS DEC-31-1996 JUN-30-1997 PER-BOOK 667,385 10,857 67,469 45,427 0 791,138 86,200 10,461 238,005 334,666 0 0 231,732 15,900 0 0 0 0 0 0 208,840 791,138 242,046 11,404 204,030 215,434 26,612 (111) 26,501 9,248 17,253 0 17,253 13,999 8,158 58,827 $20.02 $20.02
EX-99 3 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. -----END PRIVACY-ENHANCED MESSAGE-----