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 Sept. 30, 2018
(Thousands of Dollars)	Electric		Natural Gas		All Other		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	67,919	$	7,021	$	12	$	74,952
Commercial and industrial (C&I)	127,936		6,818		24		134,778
Other	1,325		—		262		1,587
Total retail	197,180		13,839		298		211,317
Interchange	39,993		—		—		39,993
Other	363		940		—		1,303
Total revenue from contracts with customers	237,536		14,779		298		252,613
Alternative revenue and other	2,808		576		—		3,384
Total revenues	$	240,344	$	15,355	$	298	$	255,997



	Three Months Ended Sept. 30, 2017
(Thousands of Dollars)	Electric		Natural Gas		All Other		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	62,025	$	6,428	$	48	$	68,501
C&I	119,495		6,441		23		125,959
Other	1,329		—		244		1,573
Total retail	182,849		12,869		315		196,033
Interchange	45,916		—		—		45,916
Other	1,157		1,011		—		2,168
Total revenue from contracts with customers	229,922		13,880		315		244,117
Alternative revenue and other	2,880		514		—		3,394
Total revenues	$	232,802	$	14,394	$	315	$	247,511



	Nine Months Ended Sept. 30, 2018
(Thousands of Dollars)	Electric		Natural Gas		All Other		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	194,456	$	48,259	$	38	$	242,753
Commercial and industrial (C&I)	339,120		40,775		74		379,969
Other	4,713		—		735		5,448
Total retail	538,289		89,034		847		628,170
Interchange	116,037		—		—		116,037
Other	3,227		3,016		—		6,243
Total revenue from contracts with customers	657,553		92,050		847		750,450
Alternative revenue and other	8,659		1,786		—		10,445
Total revenues	$	666,212	$	93,836	$	847	$	760,895



	Nine Months Ended Sept. 30, 2017
(Thousands of Dollars)	Electric		Natural Gas		All Other		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	182,822	$	42,071	$	68	$	224,961
C&I	329,774		35,276		74		365,124
Other	4,527		—		705		5,232
Total retail	517,123		77,347		847		595,317
Interchange	131,259		—		—		131,259
Other	2,649		2,829		—		5,478
Total revenue from contracts with customers	651,031		80,176		847		732,054
Alternative revenue and other	8,822		1,592		—		10,414
Total revenues	$	659,853	$	81,768	$	847	$	742,468