Revenues

NSP-Wisconsin principally generates revenue from the generation, transmission, distribution and sale of electricity and the transportation, distribution and sale of natural gas to retail customers. Performance obligations related to the sale of energy are satisfied as energy is delivered to customers. NSP-Wisconsin recognizes revenue in an amount that corresponds directly to the price of the energy delivered to the customer. The measurement of energy sales to customers is generally based on the reading of their meters, which occurs on a systematic basis throughout the month. At the end of each month, amounts of energy delivered to customers since the date of the last meter reading are estimated, and the corresponding unbilled revenue is recognized. Contract terms are generally short-term in nature, and as such NSP-Wisconsin does not recognize a separate financing component of its collections from customers. NSP-Wisconsin presents its revenues net of any excise or other fiduciary-type taxes or fees.

NSP-Wisconsin has various rate-adjustment mechanisms in place that provide for the recovery of natural gas, electric fuel and purchased energy costs. These cost-adjustment tariffs may increase or decrease the level of revenue collected from customers and are revised periodically for differences between the total amount collected under the clauses and the costs incurred. When applicable,

under governing regulatory commission rate orders, fuel cost over-recoveries (the excess of fuel revenue billed to customers over fuel

costs incurred) are deferred as regulatory liabilities and under-recoveries (the excess of fuel costs incurred over fuel revenues billed to

customers) are deferred as regulatory assets. NSP-Wisconsin must submit a forward looking fuel cost plan annually for approval by the PSCW. The rules also allow for deferral of any under-recovery or over-recovery of fuel costs in excess of a two percent annual tolerance band, for future rate recovery or refund, subject to PSCW approval.

Certain rate rider mechanisms qualify as alternative revenue programs under GAAP. These mechanisms arise from costs imposed upon the utility by action of a regulator or legislative body related to an environmental, public safety or other mandate. When certain criteria are met (including collection within 24 months), revenue is recognized equal to the revenue requirement, which may include return on rate base items and incentives. The mechanisms are revised periodically for differences between the total amount collected and the revenue recognized, which may increase or decrease the level of revenue collected from customers. Alternative revenue is recorded on a gross basis and is disclosed separate from revenue from contracts with customers in the period earned.

In the following tables, revenue is classified by the type of goods/services rendered and market/customer type. The tables also reconcile revenue to the reportable segments.



	Three Months Ended June 30, 2018
(Thousands of Dollars)	Electric		Natural Gas		All Other		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	58,734	$	10,912	$	10	$	69,656
Commercial and industrial (C&I)	106,367		9,407		25		115,799
Other	1,782		—		236		2,018
Total retail	166,883		20,319		271		187,473
Interchange	38,370		—		—		38,370
Other	1,360		1,069		—		2,429
Total revenue from contracts with customers	206,613		21,388		271		228,272
Alternative revenue and other	2,889		593		—		3,482
Total revenues	$	209,502	$	21,981	$	271	$	231,754



	Three Months Ended June 30, 2017
(Thousands of Dollars)	Electric		Natural Gas		All Other		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	54,754	$	9,015	$	—	$	63,769
C&I	107,899		8,577		27		116,503
Other	1,678		—		230		1,908
Total retail	164,331		17,592		257		182,180
Interchange	42,965		—		—		42,965
Other	523		910		—		1,433
Total revenue from contracts with customers	207,819		18,502		257		226,578
Alternative revenue and other	2,923		525		—		3,448
Total revenues	$	210,742	$	19,027	$	257	$	230,026



	Six Months Ended June 30, 2018
(Thousands of Dollars)	Electric		Natural Gas		All Other		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	126,537	$	41,238	$	26	$	167,801
Commercial and industrial (C&I)	211,184		33,957		50		245,191
Other	3,388		—		473		3,861
Total retail	341,109		75,195		549		416,853
Interchange	76,044		—		—		76,044
Other	2,864		2,076		—		4,940
Total revenue from contracts with customers	420,017		77,271		549		497,837
Alternative revenue and other	5,851		1,210		—		7,061
Total revenues	$	425,868	$	78,481	$	549	$	504,898



	Six Months Ended June 30, 2017
(Thousands of Dollars)	Electric		Natural Gas		All Other		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	120,797	$	35,643	$	20	$	156,460
C&I	210,279		28,835		51		239,165
Other	3,198		—		461		3,659
Total retail	334,274		64,478		532		399,284
Interchange	85,343		—		—		85,343
Other	1,492		1,818		—		3,310
Total revenue from contracts with customers	421,109		66,296		532		487,937
Alternative revenue and other	5,942		1,078		—		7,020
Total revenues	$	427,051	$	67,374	$	532	$	494,957