-----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, C8Ym/Be4VPcq+uVW6jrLrV8bejETHOWGAU+sPCfbmvPOz65Wv5Bmv2DA33zXbCV+ vcZ85U/6OeTgTWK1IkvYhg== 0000072909-00-000005.txt : 20000515 0000072909-00-000005.hdr.sgml : 20000515 ACCESSION NUMBER: 0000072909-00-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000512 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: SEC FILE NUMBER: 001-03140 FILM NUMBER: 628855 BUSINESS ADDRESS: STREET 1: 100 N BARSTOW ST CITY: EAU CLAIRE STATE: WI ZIP: 54702 BUSINESS PHONE: 7158392592 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 March 31, 2000 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) 1414 W. Hamilton Ave, Eau Claire, Wisconsin 54701 - -------------------------------------------------------------------------------- (Address of principal executive officers) (Zip Code) Registrant's telephone number, including area code (715) 839-2621 ------------------------ 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 May 12, 2000 -------------------------- --------------------------- 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 March 31 2000 1999 ---- ---- (Thousands of dollars) OPERATING REVENUES Electric $105,893 $102,640 Gas 38,561 34,936 -------- -------- Total 144,454 137,576 OPERATING EXPENSES Purchased and interchange power 51,131 46,844 Fuel for electric generation 1,645 1,719 Gas purchased for resale 26,858 23,852 Other operation 13,571 12,654 Maintenance 4,308 4,365 Administrative and general 4,697 5,039 Conservation and demand side management 1,931 1,280 Depreciation and amortization 10,522 10,307 Taxes: Property and general 3,972 3,735 Current income tax 8,621 9,497 Deferred income tax 169 151 Investment tax credits recognized (207) (210) ------- ------- Total 127,218 119,233 ------- ------- OPERATING INCOME 17,236 18,343 OTHER INCOME (EXPENSE) Other income and deductions - net of applicable income taxes 148 2 Allowance for funds used during construction - equity 75 42 --- -- Total other income (expense) net 223 44 INCOME BEFORE INTEREST CHARGES 17,459 18,387 INTEREST CHARGES Interest on long-term debt 4,046 4,046 Other interest and amortization 1,191 770 Allowance for funds used during construction - debt (529) (156) ----- ----- Total interest charges 4,708 4,660 ----- ----- NET INCOME $12,751 $13,727 ======= ======= STATEMENTS OF RETAINED EARNINGS (UNAUDITED) -------------------------------------------- Balance at beginning of period $260,259 $250,890 Net income for period 12,751 13,727 Dividends paid to parent (6,749) (6,749) -------- -------- Balance at end of period $266,261 $257,868 ======== ======== The Notes to Financial Statements are an integral part of the Statements of Income and Retained Earnings.
NORTHERN STATES POWER COMPANY (WISCONSIN) STATEMENTS OF CASH FLOWS (UNAUDITED) ------------------------------------- Three Months Ended March 31 ----------------- 2000 1999 ---- ---- (Thousands of dollars) CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $12,751 $13,727 Adjustments to reconcile net income to cash from operating activities: Depreciation and amortization 10,760 10,535 Deferred income taxes 164 147 Deferred investment tax credits recognized (207) (210) Allowance for funds used during construction - equity (75) (42) Cash provided by changes in working capital 13,691 19,043 Cash used for changes in other assets and liabilities (1,049) (415) ------ ------ Net cash provided by operating activities 36,035 42,785 ------ ------ CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (22,277) (11,887) Decrease in construction payables (3,772) (1,154) Allowance for funds used during construction - equity 75 42 Other 42 103 ------- ------- Net cash used for investing activities (25,932) (12,896) ------- ------- CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of notes payable to parent - net (3,100) (21,900) Dividends paid to parent (6,749) (6,749) ------ ------- Net cash used for financing activities (9,849) (28,649) ------ ------- Net increase in cash and cash equivalents 254 1,240 Cash and cash equivalents at beginning of period 51 51 ---- ---- Cash and cash equivalents at end of period $305 $1,291 ==== ====== The Notes to Financial Statements are an integral part of the Statements of Cash Flows.
NORTHERN STATES POWER COMPANY (WISCONSIN) BALANCE SHEETS (UNAUDITED) --------------------------- March 31, December 31, 2000 1999 ---- ---- ASSETS (Thousands of dollars) UTILITY PLANT Electric $1,049,335 $1,034,315 Gas 118,889 118,279 Other 91,384 87,726 --------- --------- Total 1,259,608 1,240,320 Accumulated provision for depreciation (495,115) (487,549) --------- --------- Net utility plant 764,493 752,771 CURRENT ASSETS Cash 305 51 Accounts receivable - net 36,107 37,320 Unbilled utility revenues 18,070 21,768 Fuel inventories - at average cost 4,916 7,465 Other materials and supplies inventories - at average cost 6,984 7,068 Prepayments and other 9,231 13,076 ------ ------ Total current assets 75,613 86,748 OTHER ASSETS Regulatory assets 37,879 39,252 Other investments 9,367 9,295 Nonutility property - net of accumulated depreciation 2,768 2,768 Unamortized debt expense 1,551 1,575 Long-term prepayments and deferred charges 16,176 14,694 ------ ------ Total other assets 67,741 67,584 ------ ------ TOTAL ASSETS $907,847 $907,103 ======== ======== LIABILITIES AND EQUITY CAPITALIZATION Common stock-authorized 1,000,000 shares of $100 par value, issued shares: 2000 and 1999, 862,000 $86,200 $86,200 Premium on common stock 10,541 10,541 Retained earnings 266,261 260,259 ------- ------- Total common stock equity 363,002 357,000 Long-term debt 231,972 231,950 ------- ------- Total capitalization 594,974 588,950 CURRENT LIABILITIES Notes payable - parent company 77,700 80,800 Accounts payable 13,459 18,570 Payable to affiliate companies (principally parent) 15,297 21,404 Salaries, wages, and vacation pay accrued 4,732 5,656 Taxes accrued 7,645 829 Interest accrued 4,399 4,330 Other 9,553 5,950 ------ ------ Total current liabilities 132,785 137,539 OTHER LIABILITIES Accumulated deferred income taxes 112,193 111,772 Accumulated deferred investment tax credits 17,073 17,281 Regulatory liabilities 20,894 21,726 Customer advances 11,812 11,398 Benefit obligations and other 18,116 18,437 ------- ------- Total other liabilities 180,088 180,614 ------- ------- COMMITMENTS AND CONTINGENT LIABILITIES (SEE NOTE 3) TOTAL LIABILITIES AND EQUITY $907,847 $907,103 ======== ======== The Notes to Financial Statements are an integral part of the Balance Sheets.
NORTHERN STATES POWER COMPANY (WISCONSIN) NOTES TO FINANCIAL STATEMENTS -------------------------------- Northern States Power Company, a Wisconsin corporation (NSP-Wisconsin) is a wholly owned subsidiary of Northern States Power Company, a Minnesota corporation (NSP-Minnesota). The term NSP refers to NSP-Wisconsin combined with NSP-Minnesota and its other subsidiaries. In the opinion of management, the accompanying unaudited financial statements contain all adjustments necessary to present fairly the financial position of NSP-Wisconsin as of March 31, 2000 and Dec. 31, 1999, the results of its operations for the three months ended March 31, 2000 and 1999 and its cash flows for the three months ended March 31, 2000 and 1999. Due to the seasonality of NSP-Wisconsin'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 NSP-Wisconsin are set forth in Note 1 to NSP-Wisconsin's financial statements in its Annual Report on Form 10-K for the year ended Dec. 31, 1999 (1999 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 - ------------------------- PROPOSED MERGER - On March 24, 1999 NSP and New Century Energies, Inc. (NCE), a utility based in Denver, Colo., agreed to merge. It is expected that NSP-Wisconsin will continue to exist as an operating subsidiary of the merged company. COMMON STOCK EQUITY - In March 2000, NSP-Wisconsin filed an application with the Public Service Commission of Wisconsin (PSCW) to sell up to $30 million of its common stock to its parent company, NSP-Minnesota. The PSCW issued an order authorizing the sale on April 25. The number of shares to be issued will be determined based on NSP-Wisconsin's book value on or around the issue date. NSP-Wisconsin plans to issue the shares on May 15, 2000. The proceeds will be used primarily to reduce short-term debt levels. NEW CUSTOMER - In 2000, NSP-Wisconsin was selected to supply electricity and operate the distribution system at Fort McCoy, a regional Army training center near Sparta, Wis. In May 1997 NSP-Wisconsin was selected to operate the natural gas system at Fort McCoy. Fort McCoy is a training center for more than 120,000 reserve and active military personnel. There are more than 1,000 buildings on 60,000 acres. WHEATON PLANT CONVERSION - NSP-Wisconsin is converting units 1 and 3 of the Wheaton generating plant to operate on both oil and natural gas. Previously the units operated on oil exclusively. Two other units at Wheaton were converted in 1997. The conversions were prompted by an opportunity to decrease the cost of producing electricity and reduce plant emissions. 2. REGULATION AND RATE MATTERS - --------------------------------- ELECTRIC TRANSMISSION In April 1998, Wisconsin state legislators enacted a law which includes provisions that require the PSCW to order a public utility that owns transmission facilities in Wisconsin to transfer control of its transmission facilities to an ISO (an independent nonprofit organization which will operate, but not own, an electric transmission system) or divest its interest in its transmission facilities to an Independent Transmission Company or ITC (an independent organization that would own and operate an electric transmission system) if the public utility has not already transferred control to an ISO or divested to an ITC by June 30, 2000. NSP joined the Midwest ISO (MISO) in late 1999 and filed for PSCW and FERC approval in March 2000. It is expected that, during 2000, the PSCW will approve NSP-Wisconsin's request to transfer operating control of its transmission system to the MISO and certify that joining the MISO meets the statutory requirement for a separate transmission operating structure. Also in support of a separate transmission operating structure, in March the PSCW held hearings in a proceeding aimed at developing a definition of transmission facilities. NSPW and numerous other Wisconsin utilities filed testimony supporting their positions. The PSCW is expected to issue an order by the end of June 2000. CONSTRUCTION AUTHORIZATION - In 1996, NSP and Dairyland Power Cooperative (DPC) of LaCrosse, Wis. proposed building an electric transmission system between NSP-Minnesota's Chisago substation in eastern Minnesota and DPC's Apple River substation in northwestern Wisconsin in response to a need for additional reliability and capacity in both regions. During the second quarter of 1999, the PSCW granted permission to build the Wisconsin portion of the system. The City of St. Croix Falls. Wis. and the Concerned River Valley Citizens advocacy group (the "parties") filed lawsuits against the PSCW appealing the decision. Those cases are currently pending. Approval from the Minnesota Environmental Quality Board (MEQB) was delayed to address additional discovery by the parties. NSP and DPC agreed with the parties in early 2000 to enter into mediation. The mediation will be coordinated by a mediator from the Office of Adminstrative Hearings in Minneapolis, Minn. An agreement by the parties from this process could occur by the end of May 2000. The Wisconsin lawsuit is expected to be decided in July 2000. Should a mediated decision be agreed to by the parites, an alternative solution to the original filing would likely be pursued. TEMPORARY FUEL COST SURCHARGE - On Feb. 14, 2000, NSP-Wisconsin filed an application with the PSCW to increase electric rates for fuel costs. This application was subsequently updated with additional information on March 17, 2000. The increase is primarily the result of higher than forecast purchased power costs. The surcharge factor is expected to increase revenues by approximately $6.5 million in 2000 and represents an average increase for all customer classes of approximately 3 percent. The PSCW issued their order granting the surcharge on May 2, 2000. The surcharge factor is expected to be effective through Dec. 31, 2001. RELIABILITY 2000 - During the summer of 1999, Wisconsin state lawmakers passed "Reliability 2000" legislation which included steps necessary to further progress toward a restructured industry, including allowing retail customers to choose their electric supplier. One of the provisions of the legislation will increase the amount of money that must be collected from NSP-Wisconsin's customers to fund low-income assistance and conservation programs. In July 2000 NSP-Wisconsin will begin collecting a surcharge from its Wisconsin customers for the low-income assistance and conservation programs, which will be remitted to the State of Wisconsin. 3. COMMITMENTS AND CONTINGENT LIABILITIES - -------------------------------------------- LEGAL CONTINGENCIES - In the normal course of business, various lawsuits and claims have arisen against NSP. Management, after consultation with legal counsel, has recorded an estimate of the probable cost of settlement or other disposition of these matters. ENVIRONMENTAL CONTINGENCIES - As discussed in Note 8 to the Financial Statements in the 1999 Form 10-K, NSP-Wisconsin had been named as one of three potentially responsible parties in connection with environmental contamination at a site in Ashland, Wis. As discussed below, the United States Environmental Protection Agency (EPA) and Wisconsin Department of Natural Resources (WDNR) continues to evaluate proposed methods of remediating the contamination. The Ashland site has been evaluated using the Hazardous Ranking System under the Comprehensive Environmental Response, Compensation and Liability Act. Preliminary results indicate that the Ashland site is likely to be named as a Superfund site. The EPA has requested that the Governor of Wisconsin concur with this assessment. Being named as a Superfund site will increase the administrative and transaction costs of the cleanup project. The EPA and WDNR have approved NSP-Wisconsin's proposal for an interim groundwater treatment system for the portion of the Ashland site that NSP-Wisconsin owns. Bids for design and construction will now be solicited. The system is estimated to cost $350,000 and should be operational in 2000. In March 2000 NSP-Wisconsin received two formal data requests for its Wheaton and French Island generating facilities from the EPA under Section 114(a) of the Clean Air Act. For the Wheaton facility the data request focuses on fuel usage, operating hours, operating loads and stack test data for the time period Jan. 1, 1999 to present. It was during this time period that two units at Wheaton had failed stack tests for particulate matter and carbon monoxide (Unit # 2) and particulate matter (Unit #4) when firing oil at low load. The WDNR issued a Notice of Violation (NOV) letter to NSP-Wisconsin for each of these incidents. The two units were retested later in 1999 and found to be in compliance. The NOV's were formally closed out by DNR in early January 2000. Data requests of this type from the EPA under Section 114(a) of the Clean Air Act are sometimes used in anticipation of a potential enforcement action. The second EPA request involves French Island and whether its classification in the "small municipal waste combustor" category under Section 129 of the Clean Air Act is appropriate. This request was made as a result of an inquiry to the EPA brought by the Midwest Environmental Advocates, an environmental legal foundation recently formed in Madison, Wis. The EPA has already concluded, based on past data submissions that French Island should be classified as a "small combustor". NSP-Wisconsin has been asked to resubmit the operational and design data that was used for the original determination and additional information to confirm the classification. Both facility data responses were submitted to the EPA. These are the first Section 114(a) requests NSP-Wisconsin has ever received. These types of data requests are increasing in frequency in Wisconsin as a result of the EPA's more aggressive enforcement policy. 4. SEGMENT INFORMATION - ----------------------- NSP-Wisconsin has two reportable segments: Electric Utility and Gas Utility. Segment information for the three-month periods ended March 31, 2000 and 1999 is as follows:
BUSINESS SEGMENTS Operating Revenues 3 MOS. ENDED 3/31/00 from External Intersegment Segment Net (Thousands of dollars) Customers Revenues Income/(Loss) - --------------------------------------------------------------------------------- Electric Utility $ 105,853 $ 40 $ 8,959 Gas Utility 37,877 684 3,792 --------- --------- --------- Consolidated Total $ 143,730 $ 724 $ 12,751
Operating Revenues 3 MOS. ENDED 3/31/99 from External Intersegment Segment Net (Thousands of dollars) Customers Revenues Income/(Loss) - --------------------------------------------------------------------------------- Electric Utility $ 102,610 $ 30 $ 10,264 Gas Utility 34,051 885 3,463 --------- --------- ---------- Consolidated Total $ 136,661 $ 915 $ 13,727
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). Except for the historical statements contained in this report, 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; - - regulation; - - issues relating to Year 2000 remediation efforts; - - the items set forth below under "Factors Affecting Results of Operations"; - - and the other risk factors listed from time to time by NSP in reports filed with the Securities and Exchange Commission (SEC), including Exhibit 99.01 to this report on Form 10-Q for the quarter ended March 31, 2000. RESULTS OF OPERATIONS - ----------------------- On March 24, 1999, NSP and NCE agreed to merge. It is expected that NSP-Wisconsin will continue to exist as an operating subsidiary of the merged company. The following discussion and analysis is based on the financial condition and operations of NSP-Wisconsin and does not reflect the potential effects of the combination between NSP and NCE. FACTORS AFFECTING RESULTS OF OPERATIONS - ------------------------------------------- In addition to items noted in the Notes to the Financial Statements of this report, the historical and future trends of NSP-Wisconsin's operating results are affected by the following factors: VARIATIONS IN WEATHER CONDITIONS - Both electric and gas sales levels are significantly affected by variations in weather conditions. NSP-Wisconsin estimates sales levels under normal weather conditions and analyzes the approximate effect of variations from historical average temperatures on actual sales levels. The estimated impact of weather on operating revenues in relation to sales under normal weather conditions is shown in the discussion of electric revenues and gas revenues. SALES GROWTH - The following table summarizes NSP-Wisconsin's growth in actual electric and gas sales and growth on a weather normalized (W/N) basis for the three-month period ended March 31, 2000, as compared with the three-month period ended March 31, 1999. NSP-Wisconsin's weather normalization process removes the estimated impact on sales of temperature variations from historical averages.
Percentage Sales Growth FIRST THREE MONTHS 2000 VS. 1999 ------------- ACTUAL W/N ------ --- Electric Residential 3.8 % 5.1 % Electric Industrial and Commercial 4.9 % 5.3 % Total Electric Retail 4.5 % 5.2 % Electric Resale 1.3 % 1.9 % ----- ----- Total Electric Sales 4.2 % 4.9 % ----- ----- Gas total firm (2.0)% 2.9 % Gas interruptible 24.9 % N/A Gas for generation (71.5)% N/A ------- ----- Total Gas Sales and Delivery 1.4 % 4.8 % ----- -----
ACCOUNTING CHANGE - In June 1998, the FASB issued Statement of Financial Accounting Standard (SFAS) No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement requires that all derivatives be recognized at fair value in the balance sheet and all changes in fair value be recognized currently in earnings or deferred as a component of other comprehensive income, depending on the intended use of the derivative, its resulting designation, and its effectiveness. NSP-Wisconsin plans to adopt this standard in 2001, as required. NSP-Wisconsin has not yet determined the potential impact of implementing this statement. FIRST THREE MONTHS 2000 COMPARED WITH FIRST THREE MONTHS 1999 - ---------------------------------------------------------------------- ELECTRIC REVENUES for the first three months of 2000 increased $3.3 million or 3.2 percent, compared with the first three months of 1999. The following table summarizes the change in electric revenues. Power supply and transmission revenue relates to interchange agreement revenues received from NSP-Minnesota and reflect a net decrease in NSP-Wisconsin's fuel and transmission expenses.
Electric Revenues FIRST THREE MONTHS (Millions of Dollars) 2000 VS. 1999 ------------- $ CHANGE % CHANGE --------- --------- Sales growth (excluding weather impact) $ 4.4 5.2 % Weather impact (0.8) (0.9)% --------- --------- Total electric sales revenue $ 3.6 4.3 % Power supply revenue (0.9) (8.1)% Transmission and other revenue 0.6 7.3 % --------- --------- Total Electric Revenue Increase $ 3.3 3.2 % ========= =========
ELECTRIC MARGIN equals electric revenues minus production expenses, consisting of purchased and interchange power and fuel for electric generation. Electric production expenses tend to vary with changing retail and wholesale sales requirements and unit cost changes in fuel and purchased power. The table below summarizes the principal reasons for electric margin changes for the three months ended March 31, 1999 compared to the three months ended March 31, 2000.
Change in Electric Margin FIRST THREE MONTHS (Millions of Dollars) 2000 VS. 1999 ------------- $ CHANGE -------- Sales growth (excluding weather impact) $ 3.3 Weather impact (0.6) Transmission and other revenues (0.3) Purchased and Interchange Power (3.4) ----- Total Electric Margin Decrease $(1.0) ======
GAS REVENUES for the first quarter 2000 increased $3.6 million, or 10.4 percent, compared with the first quarter 1999. The following table summarizes the change in gas revenues. Changes in per unit gas costs are reflected in customer rates through the gas cost recovery mechanism.
Gas Revenues FIRST THREE MONTHS (Millions of Dollars) 2000 VS. 1999 ------------- $ CHANGE % CHANGE --------- --------- Sales growth (excluding weather impact) $ 1.7 4.8 % Weather impact (1.2) (3.4)% Gas Cost Recovery 3.1 9.0 % ---- ------ Total Gas Revenue Increase $ 3.6 10.4 % ====== ======
GAS MARGIN equals gas revenues minus the cost of gas sold. The cost of gas tends to vary with changing sales requirements and unit cost of gas purchased. However, due to the gas cost recovery mechanism, nearly all fluctuations in the cost of gas have no effect on gas margin. The table below summarizes the principal reasons for gas margin changes from March 31, 1999 to March 31, 2000.
Change in Gas Margin FIRST THREE MONTHS (Millions of Dollars) 2000 VS. 1999 ------------- $ CHANGE -------- Sales growth (excluding weather impact) $ 0.4 Weather impact (0.5) Timing of Gas Cost Recovery 0.7 ----- Total Gas Margin Increase $ 0.6 =====
OTHER OPERATING, MAINTENANCE, CONSERVATION DEMAND SIDE MANAGEMENT (DSM), AND ADMINISTRATIVE AND GENERAL (A&G) expenses together increased $1.2 million, or 5.0 percent, in the first three months of 2000 compared to the same period in 1999. The increase is due primarily to increased employee benefits, higher authorized DSM, customer service expenses, and transmission expenses partially offset by lower amortization expenses for Network Transmission System deferrals, and liability accruals. DEPRECIATION AND AMORTIZATION expense increased $0.2 million, or 2.1 percent, in the first quarter of 2000 compared to 1999. The increase is due mainly to normal increases in plant in service partially offset by lower depreciation rates and lower depreciation from the change to the remaining life technique for the calculation of straight-line depreciation for production facilities. As discussed in the 1999 Form 10-K Rate Matters by Jurisdiction section, the new rates and new depreciation method authorized by the PSCW were effective Jan. 1, 2000. - ------ 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 three months ended March 31, 2000. 99.01 Statement pursuant to Private Securities Litigation Reform Act of 1995. (B) REPORTS ON FORM 8-K None 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 (WISCONSIN) ----------------------------------------- (Registrant) /s/ ----------------------------------------- Roger D. Sandeen Vice President, Treasurer and Controller (Principal Financial and Accounting Officer) Date: May 12, 2000 -------------- EX-27 2
UT EXHIBIT 27.01 This schedule contains summary financial information extracted from the Statements of Income and Retained Earnings, Balance Sheets and Statements of Cash Flows and is qualified in its entirety by reference to such financial statements. 1,000 3-MOS DEC-31-1999 MAR-31-2000 PER-BOOK 764,493 2,768 75,613 64,973 0 907,847 86,200 10,541 266,261 363,002 0 0 231,972 77,700 0 0 0 0 0 0 235,173 907,847 144,454 8,583 118,635 127,218 17,236 223 17,459 4,708 12,751 0 12,751 6,749 4,046 36,035 14.79 14.79
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 (NSP-Wisconsin). Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. When used in NSP-Wisconsin's documents or oral presentations, the words "anticipate", "estimate", "expect", "objective", "outlook", "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 NSP-Wisconsin'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 NSP-Wisconsin 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 NSP-Wisconsin; 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 work force 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 NSP-Wisconsin's Securities and Exchange Commission filings or in other publicly disseminated written documents. - - Factors associated with Y2K compliance that might cause material differences from the expectations disclosed include, but are not limited to, the availability of key Y2K personnel, NSP's ability to locate and correct all relevant computer codes, the readiness of third parties, and NSP's ability to respond to unforeseen Y2K complications. Such material differences could result in, among other things, business disruptions, operational problems, financial loss, legal liability, and similar risks. - - Regulatory delays or conditions imposed by regulatory agencies in approving the proposed merger with NCE. NSP-Wisconsin 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 factors pursuant to the Act should not be construed as exhaustive or as any admission regarding the adequacy of disclosures made by NSP-Wisconsin prior to the effective date of the Act. -----END PRIVACY-ENHANCED MESSAGE-----