7.	Borrowings and Other Financing Instruments

In an order dated Feb. 4, 2011, NSP-Wisconsin received regulatory approval from the PSCW to establish a commercial paper program in an amount up to $150 million and to enter into a back-up credit facility. Subsequently, NSP-Wisconsin entered into a four-year credit facility, established a commercial paper program and terminated its intercompany borrowing arrangement with NSP-Minnesota.

Currently, NSP-Wisconsin meets its short-term liquidity requirements primarily through the issuance of commercial paper and borrowings under its credit facility.

Commercial Paper - The following table presents commercial paper outstanding for NSP-Wisconsin under the new commercial paper program:

(Millions of Dollars)	Three Months Ended Sept. 30, 2011
Borrowing limit	$	150
Amount outstanding at period end		28
Average amount outstanding		26
Maximum amount outstanding		47
Weighted average interest rate, computed on a daily basis		0.35	%
Weighted average interest rate at period end		0.34

Credit Facilities - In order to use its commercial paper program to fulfill short-term funding needs, NSP-Wisconsin must have a revolving credit facility in place at least equal to the amount of its commercial paper borrowing limit and cannot issue commercial paper in an aggregate amount exceeding available capacity under this credit agreement.

During March 2011, NSP-Wisconsin executed a new four-year credit agreement. The total size of the credit facility is $150 million and terminates in March 2015. NSP-Wisconsin has the right to request an extension of the revolving termination date for two additional one-year periods, subject to majority bank group approval.

The line of credit provides short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings. Other features of NSP-Wisconsin's credit facility include:

The credit facility has a financial covenant requiring that NSP-Wisconsin's debt-to-total capitalization ratio be less than or equal to 65 percent. NSP-Wisconsin was in compliance as its debt-to-total capitalization ratio was 48 percent at Sept. 30, 2011. If NSP-Wisconsin does not comply with the covenant, an event of default may be declared, and if not remedied, any outstanding amounts due under the facility can be declared due by the lender.

The credit facility has a cross-default provision that provides NSP-Wisconsin will be in default on its borrowings under the facility if NSP-Wisconsin or any of its subsidiaries whose total assets exceed 15 percent of NSP-Wisconsin's consolidated total assets, default on certain indebtedness in an aggregate principal amount exceeding $75 million.

The interest rates under the line of credit are based on the Eurodollar rate or an alternate base rate, plus a borrowing margin of 0 to 200 basis points per year based on the applicable credit ratings.

The commitment fees, also based on applicable long-term credit ratings, are calculated on the unused portion of the line of credit at a range of 10 to 35 basis points per year.

At Sept. 30, 2011, NSP-Wisconsin had the following committed credit facility available (in millions of dollars):

Credit Facility				Drawn (a)				Available
$	150.0			$	28.0			$	122.0

(a) Includes outstanding commercial paper.

All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the credit facility. NSP-Wisconsin had no direct advances on the credit facility outstanding at Sept. 30, 2011.

Letters of Credit - NSP-Wisconsin may use letters of credit, generally with terms of one-year, to provide financial guarantees for certain operating obligations. At Sept. 30, 2011 and Dec. 31, 2010, there were no letters of credit outstanding.

Intercompany Borrowing Arrangement- Prior to entering into its credit facility, NSP-Wisconsin had an intercompany borrowing arrangement with NSP-Minnesota, with interest charged at NSP-Minnesota's short-term borrowing rate. The borrowing arrangement terminated in the first quarter 2011. The following table presents the intercompany borrowing arrangement with NSP-Minnesota at Dec. 31, 2010:

(Millions of Dollars)	Twelve Months Ended Dec. 31, 2010
Borrowing limit	$	100
Amount outstanding at period end		37
Average amount outstanding		11
Maximum amount outstanding		59
Weighted average interest rate, computed on a daily basis		0.33	%
Weighted average interest rate at period end		0.38

Other Short-Term Borrowings- The following table presents the notes payable of Clearwater Investments, Inc., a NSP-Wisconsin subsidiary, to Xcel Energy:

(Millions of Dollars)	Sept. 30, 2011			Dec. 31, 2010
Notes payable to affiliates	$	0.6		$	0.6
Weighted average interest rate		0.34	%		0.36	%