SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C 20549
FORM 10-K
For the fiscal year ended December 31, 1995 Commission file number 1-3632
(Mark One)
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from to
INTERSTATE POWER COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 42-0329500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 Main St., P.O. Box 769, Dubuque, IA 52004-0769
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code 319-582-5421
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
Common Stock Par Value $3.50 Per Share ) New York Stock Exchange
) Chicago Stock Exchange
) Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: N O N E
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 shorter 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 by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ X ]
As of February 1, 1996 the aggregate market value of the voting stock
held by non-affiliates of the registrant was $308,448,256.
Indicate the number of shares outstanding of each of the issuer's
classes of common stock.
Shares Outstanding
February 1, 1996
Common Stock Par Value $3.50 Per Share 9,564,287
Documents incorporated by reference - portions of the Annual Report to
Stockholders for 1995 (Exhibit EX-13) are incorporated by reference in Parts
I, II and IV; portions of the Annual Proxy Statement for 1996 are
incorporated by reference in Part III.
INTERSTATE POWER COMPANY
1995 Form 10-K Annual Report
Table of Contents
Page
Part I
Item 1. Business 1
General 1
Construction Program 1
Electric Operations 1
Sources and Availability of Raw Materials 2
Duration and Effect of Electric Patents and Franchises 3
Electric Seasonal Business 3
Working Capital Items 3
Electric Governmental Regulations 4
Electric Competitive Conditions 4
Other Sources of Power 6
Other Electric Operations 7
Gas Operations 7
Gas Sources and Availability of Raw Materials 8
Duration and Effect of Gas Patents and Franchises 9
Gas Seasonal Business 9
Gas Governmental Regulations 9
Gas Competitive Conditions 10
Dependence of Segment Upon a Single Customer 11
Research and Development 11
Electric and Magnetic Fields 11
Environmental Regulations 11
Employees 14
Accounting Matters 14
Item 2. Properties 15
Electric Properties 15
Generating Stations 16
Gas Properties 17
General Properties 17
Titles 17
Item 3. Legal Proceedings 17
Item 4. Submission of Matters to a Vote of Security Holders 18
Part II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters 18
Item 6. Selected Financial Data 18
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 18
Item 8. Financial Statements and Supplementary Data 18
Item 9. Disagreements on Accounting and Financial Disclosure 18
Part III
Item 10. Executive Officers of the Registrant 19
Item 11. Executive Compensation 19
Item 12. Security Ownership of Certain Beneficial Owners and
Management 20
Item 13. Certain Relationships and Related Transactions 20
Part IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K 20
PART I
ITEM 1. BUSINESS
(General)
Interstate Power Company (the company), is an operating public
utility incorporated in 1925 under the laws of the State of Delaware.
The company is engaged in the generation, purchase, transmission,
distribution and sale of electricity. It owns property in portions
of twenty-five counties in the northern and northeastern parts of
Iowa, in portions of twenty-two counties in the southern part of
Minnesota, and in portions of four counties in northwestern Illinois.
The company also engages in the distribution and sale of natural gas
in Albert Lea, Minnesota; Clinton, Mason City and Clear Lake, Iowa;
Fulton and Savanna, Illinois and in a number of smaller Minnesota,
Iowa and Illinois communities, and in the transportation of natural
gas within Iowa, Illinois and Minnesota, and in interstate commerce.
For information pertaining to industry segments and lines of business
please refer to page 27 of Exhibit EX-13 (the Annual Report to
Stockholders).
(Construction Program)
The table below shows actual construction expenditures for 1995 and
estimated expenditures for the period 1996 through 2000:
(Thousands of Dollars)
1995 Actual $28,200
1996 Est. $32,200
1997 Est. $36,000
1998 Est. $38,000
1999 Est. $35,400
2000 Est. $38,400
Revisions in the long range construction program have resulted in a
reduction in the projected additional permanent financing. In 1994,
the company originally planned on issuing $25 million of common
stock in 1995. This issue was later delayed until 1996. Current
projections have now postponed indefinitely the need for this public
offering.
Refer to (Environmental Regulations) on page 11 for additional
information on construction expenditures related to compliance with
the regulations of the Clean Air Act of 1990.
(Electric Operations)
Of the 234 communities served with electricity, Dubuque, Iowa, is the
largest with a population of approximately 58,000. Other major
cities served are Albert Lea, Minnesota and Clinton and Mason City,
Iowa. The remainder of the communities served are under 15,000
population, of which 193 are less than 1,000 population. The company
currently sells electricity at wholesale to 19 small communities
which have municipal distribution systems, 13 of which are total
requirements customers, and 6 of which are partial requirements
customers. As discussed under (Electric Competitive Conditions), six
firm municipal electric wholesale customers have given the company
notice that they intend to purchase their requirements from other
utilities when their contracts expire in 1996.
The estimated population of the company's service area is 340,000.
Six large industrial customers account for 32% of electric MWH sales.
A diverse mixture of residential, agricultural, and industrial
customers constitute the remainder of the company's 163,000 electric
customers.
There have been no significant changes since the beginning of the
fiscal year in the kind of products produced, services rendered,
markets or method of distribution.
The facilities owned or operated by the company include facilities
for the transmission of electric energy in interstate commerce or the
sale of electric energy at wholesale in interstate commerce.
(Sources and Availability of Raw Materials)
Electricity generated by the company in 1995 was 90.9% from coal as a
fuel, 0.2% from oil and 8.9% from natural gas. In 1996, the sources
of such generation are estimated to be: 91.8% from coal, 0.6% from
middle distillate oils, and 7.6% from natural gas. In 1995, 73.7% of
the company's coal requirements came from long-term contracts. In
1996, the company anticipates that 77.7% of its coal requirements
will be from long-term contracts. These contracts have expiration
dates ranging through August 31, 1999.
The company entered into a contract effective March 1, 1995 for a
total of 450,000 tons per year of 0.5% sulfur Colorado coal for its
Kapp #2, a 217 MW unit at Clinton, Iowa. The contract continues
through August 1999, and will allow the company to comply with sulfur
dioxide restrictions mandated by the Clean Air Act Amendments of
1990.
The company has a contract for 500,000 tons per year for its 260 MW
Lansing #4 unit. Lansing Unit #4 requires low sulfur coal, which is
being purchased in the Powder River Basin of Wyoming. The coal is
shipped by rail and then transloaded to barge at facilities near
Keokuk, Iowa. A contract with Orba-Johnson Transshipment Company,
Inc., covers rail to barge coal transloading. Coal required for
generation at the Neal #4 unit, located near Sioux City, Iowa, and
the Louisa #1 unit, located near Muscatine, Iowa, is contracted for
by the operator, MidAmerican Energy Company, under terms of the Unit
Participation Agreements.
The company will purchase coal on an annual basis for the Dubuque
Power Plant and for Lansing Units #1, #2 and #3.
The company owns 120 coal cars and has an undivided ownership
(21.528%) in 372 coal cars in connection with Neal #4. The company
has an undivided ownership (4%) in 136 cars in connection with Louisa
#1. Coal requirements in 1996 will require using leased cars for the
Louisa #1 coal supply.
The company relies on spot purchases of oil. The company burned
867,116 gallons of No. 2 and No. 6 oil in 1995 and has 6,477,000
gallons of oil storage capacity in which to store adequate reserves
during periods of high demand on refineries.
The company presently has interruptible natural gas available for its
electric generation station at Clinton, Iowa through Natural Gas
Pipeline Company of America. At the Fox Lake and Dubuque plants,
interruptible gas is available through Peoples Natural Gas Company.
There is no assurance that interruptible gas will continue to be
available as fuel for electric generating plants.
(Duration and Effect of Electric Patents and Franchises)
The company owns no patents.
The company has, in the opinion of its legal counsel, all necessary
franchises or other rights from the incorporated communities and
other governmental subdivisions now served, required for the
operation of its properties. With 195 electric franchises in effect
in cities and villages, and with the majority of such franchises
being for a term of 25 years, the renewal of such franchises is a
continuing process. Twenty-six percent (51) of the franchises have
been secured since January 1, 1986.
(Electric Seasonal Business)
The effects of air conditioning in summer and heating in winter have
a seasonal impact. The air conditioning sales in the summer months
are primarily related to the residential and commercial customer
classes, however, the company does not meter air conditioning sales
separately. During the past five years, the highest and lowest
average residential consumption in the peak summer month has been 960
Kwh (August 1995) and 571 Kwh (June 1993), respectively, compared to
811 Kwh (January 1991) and 651 Kwh (February 1992) during the peak
winter month. The company estimates that hot summer weather boosted
1995 residential electric revenues and electric margin by $4.7
million and $3.6 million, respectively, over 1994. The company
cannot estimate with any degree of accuracy the impact of warm or
humid weather on commercial or large power & light sales. Refer to
the (Electric Governmental Regulations) section for a discussion of
Iowa and Minnesota seasonal rates.
(Working Capital Items)
Three of the company's generating stations are located on the
Mississippi River at Clinton, Dubuque and Lansing, Iowa. The coal
supply for the three plants is delivered by barge during the shipping
season (approximately April 1st to December 1st). Refinements to the
company's fuel delivery process have decreased the amount of
inventory required to carry the company over the winter. Coal
shipments to the company's Neal #4 and Louisa #1 generating stations
are able to continue through the winter as river transportation is
not involved.
(Electric Governmental Regulations)
In August 1993, the company implemented a revised electric tariff
structure. The new tariffs give greater weight to the demand
component of electric usage, and include a provision for a higher
rate during the summer cooling season (June-September), but did not
change the company's overall annual electric revenue.
The company filed an Iowa electric rate increase application in March
1995. The application requested an annual increase of $13.1 million.
Interim rates in an annual amount of $7.1 million were placed in
effect on June 29, 1995, subject to refund. A December 1995 Iowa
Utilities Board (IUB) Order allowed an annual increase of $6.6
million, including a return on common equity of 11.35%. The
company's original rate increase request included a return on common
equity (ROE) and a management efficiency reward which totaled 13.25%.
The IUB allowed a ROE of 11.35% and no efficiency reward. The lower
ROE granted will not have a significant adverse impact on operating
results. In 1996, the company will refund to customers approximately
$250,000 collected in 1995 in excess of the final order. The 1995
financial statements include a provision for the refund.
The company filed a Minnesota electric rate increase application in
June 1995. The application requested an annual increase of $4.6
million (later adjusted by the company to $3.3 million). The
proposed tariffs include a seasonal rate mechanism similar to that
used in the State of Iowa. Interim rates were not requested. On
March 8, 1996 the MPUC received the report of the Administrative Law
Judge (ALJ) hearing the case. The ALJ recommended a $2.3 million
revenue increase. The major component of the $1.0 million reduction
in revenue requirements is the disallowance of the Minnesota portion
of 100 MW of purchased power contracts. The disallowance is similar
to a ruling in a previous rate case, thus, is not expected to have a
material adverse impact on the company's financial condition. A MPUC
Order is expected by April 1996.
The company's electric rate tariffs provide for recovery of the cost
of fuel through energy adjustment clauses. These clauses are subject
to revision from time to time by the regulatory authority having
jurisdiction, and are designed to pass on to the consumer the
increases or decreases in the cost of fuel without formal rate
proceedings. Purchased capacity costs are not recovered from
customers through energy adjustment clauses, but rather must be
addressed in base rates in a formal rate proceeding. In the
company's Iowa electric jurisdiction, the company is required to
return to customers any jurisdictional revenue from capacity sales to
other utilities.
(Electric Competitive Conditions)
In 1993 the Illinois Commerce Commission entered an order determining
that the company, and not Jo-Carroll Electric Cooperative, had the
right to provide electric service to a large new freezer service
plant near East Dubuque, IL. The company is providing service to
that plant pursuant to Commission order. Jo-Carroll filed for
judicial review of the Commission action in the Illinois 15th
Judicial Circuit, which court remanded the proceeding to the
Commission for further hearings. Proceedings on remand are now
pending before the Commission.
The Energy Policy Act of 1992 (Act) allows FERC to order utilities to
grant access to transmission systems by third-party power producers.
The Act specifically prohibits federally-mandated wheeling of power
for retail customers. The company has experienced difficulty in
retaining electric wholesale customers which take service under one
year contracts. To date, 6 of the company's 18 firm municipal
electric wholesale customers have put the company on notice that they
intend to purchase their requirements from other utilities when their
contracts expire. These six customers account for about 62% of the
company's municipal electric load. Firm electric sales to municipal
utilities account for approximately 3.8% of the company's electric
sales and 2.7% of its electric revenue. It is anticipated that five
of the six municipal customers will use the company's transmission
system to transport power from other utilities, and these five
municipal customers will be required to pay the company a wheeling
fee. The net impact on the company's financial condition is not
expected to be significant.
The company's industrial rates generally compare favorably with those
of neighboring utilities. For the company's six largest industrial
customers, the aggregate 1995 rate was approximately 3.4 cents per
KWH. This rate also compares favorably with that of potential
independent power producers and electric wholesale generators. The
company's favorable rates mitigate the incentive that these customers
might otherwise have to relocate, self-generate or purchase
electricity from other suppliers. The company anticipates that its
generating cost will decline slightly over the next several years as
long-term coal purchase and transloading contracts expire and are
renegotiated.
The company currently has no competition from the same type of public
utility service in the sale of electricity in any of the incorporated
communities it serves. In the States of Iowa, Illinois and
Minnesota, territorial laws govern the question of possible service
to customers in unincorporated areas, and such laws regulate
competition in such areas.
Laws and statutory regulations in the different states in which
service is rendered provide, under varying terms and conditions, for
municipal ownership of electric generating plants and distribution
systems. Certain franchises under which utility service is rendered
give the municipality the right to purchase the system of the company
within said municipality upon certain terms and conditions. However,
no such purchase option and no right of condemnation of the company's
properties has been exercised and no municipal generating plant or
municipal distribution system has been established in the territory
now served by the company during the past twenty-five years.
The Iowa Utilities Board, the Illinois Commerce Commission and the
Minnesota Public Utilities Commission have each approved tariffs that
allow the company to offer interruptible electric service for
qualifying customers. The availability of this service provides
price incentives to those customers having the ability to interrupt
their connected load. The primary objective of the incentives is to
reduce the system peak. The incentives also serve to retain existing
customers and attract new customers.
(Other Sources of Power)
The company has been a participant in the Mid-Continent Area Power
Pool (MAPP) Agreement since March 31, 1972. MAPP had a total
coincident 1995 summer peak of 27,961 MW at which time the net
capacity of the pool was 31,182 MW. Membership in the pool permits
sharing of reserve capacities of the members which affects reductions
in plant facilities investment for MAPP members. The minimum reserve
margin for participants in MAPP has been established at 15%.
Parties to the MAPP Agreement include, as participants, 28 electric
power suppliers consisting of 8 investor-owned utilities, the United
States Department of Interior (Western Area Power Administration), a
Canadian system, public power districts and rural electric generating
and transmission cooperative associations, municipal electric supply
agencies and, as associate participants, 30 other electric power
suppliers operating in Canada and in the North Central region of the
United States. The pool coordinates planning and operation of power
suppliers in Minnesota, Wisconsin, Montana, Iowa, Nebraska, North
Dakota and South Dakota and provides reliability and economy for the
company's bulk power supply. The MAPP Agreement was filed with the
FERC and accepted as an initial rate filing effective December 1,
1972 and has been in operation since that time. In 1995, MAPP
implemented an intra-pool transmission service fee. The company has
little historical data to use as a basis for quantifying the
potential maximum intra-pool transmission service fees that are now
required under the MAPP agreement. Current projections of such a
maximum, assuming the MAPP reorganization receives Federal Energy
Regulatory Commission approval, would be little change in 1996 and up
to 3 times the current expense level in the period 1997 to 2001. The
company cannot estimate the impact beyond 2001 due to uncertainties
regarding capacity requirements. The company realized revenues of
$211,000 and transmission service expenses of $91,000 in 1995.
In addition to MAPP, the company has interchange connections with
certain Missouri and Illinois utilities through 345 KV transmission
systems. Future interconnections are planned to meet transmission
requirements for the next ten years.
In 1992, the company entered into three long-term power purchase
contracts with other utilities. The contracts provide for the
purchase of 255 MW of capacity through April 2001. Energy is
available at the company's option at approximately 100% to 110% of
monthly production costs for the designated units. The three power
purchase contracts required capacity payments of $24.6, $24.6, and
$24.1 million in 1995, 1994, and 1993, respectively. Over the
remaining life of the contracts, total capacity payments will be
approximately $130 million. The purchased power contract payments
are not for debt service requirements of the selling utility, nor do
they transfer risk or rewards of ownership.
In Iowa the IUB has concluded that the capacity purchases were
prudent and allowed recovery of costs in rates. The rate structure
approved by the MPUC does not provide for full recovery of purchased
power applicable to the Minnesota jurisdiction. A 1992 rate order by
the MPUC held that the company had 100 MW of excess capacity. The
company is seeking to adjust this disallowance in its current rate
case.
The company has not filed for rate recovery of the allocable portions
of the purchased power payments in the Illinois and FERC
jurisdictions. The payments of approximately $2.5 million annually
are expensed as incurred.
The company has contracts with several governmental power agencies
whereby the company provides transmission service to their
customer/members. During 1995, the company received $1,263,408 for
transmission service to customers of the Western Area Power
Administration (WAPA), and $1,321,801 from Cooperative Power
Association (CPA) for wheeling power to nine of its member
distribution cooperatives.
The company's contract with CPA also provides for payment by the
company for needed mutually utilized facilities constructed and owned
by CPA. During 1995, these payments amounted to $329,471.
The company and Southern Minnesota Municipal Power Agency (SMMPA)
have agreed by contract to compensate each other if
over/underinvestment in the shared transmission system occurs.
During 1995, SMMPA made payments to the company in the amount of
$340,397.
The company's contract with Central Iowa Power Cooperative (CIPCO)
provides for compensation to each other if over/underinvestment in
the shared transmission system occurs. During 1995, the company paid
CIPCO $136,827 for underinvestment in the Liberty Substation
property, of which $41,038 was owed for 1994.
(Other Electric Operations)
The 1995 peak of 1,010,821 KW occurred on July 14, 1995 between 2:00
and 3:00 in the afternoon. At the time of its 1995 peak the company
had a net effective electric capability of 1,310,600 KW. Of this net
effective capability, 903,300 KW was in steam generation, 113,500 KW
was in combustion turbine and the balance was in internal combustion
units and purchases. The previous historical system net peak load
for a sixty-minute period, of 932,081 KW, was reached on June 17,
1994.
(Gas Operations)
The company supplies retail gas service in 39 communities and serves
approximately 48,800 gas customers.
There have been no significant changes since the beginning of the
fiscal year in the kind of products produced, markets or methods of
distribution.
(Gas Sources and Availability of Raw Materials)
The company purchases pipeline transportation capacity from Northern
Natural Gas Company (NNG), Natural Gas Pipeline Company of America
(NGPL) and Northern Border Pipeline Company (NBPL). During 1995 the
company purchased gas from eleven non-traditional suppliers, i.e.
producers, brokers and marketers, at market responsive rates. FERC
Order 636 became effective in 1993. Order 636 unbundled pipeline
supply from its capacity. Subsequent to Order 636, FERC continues to
approve the tariffs of NNG and NGPL, but only with regard to capacity
and storage rates, subject to change as rate cases are filed.
Gas for the company's Mason City, Albert Lea and Savanna service
areas is transported by NNG under capacity contracts for 36,338 Mcf
daily, and for an additional 15,657 Mcf in the November to March time
frame. The majority, 26,999 Mcf, of the above capacities is from the
producing areas of Oklahoma and Texas, etc. These contracts expire
in October, 1997. Gas is supplied by producers, marketers and
brokers, as well as from storage services, to meet the peak heating
season requirements. The company had 15,170 Mcf/d of storage, with
the necessary pipeline capacity, available for the 1994-1995 heating
season.
Gas for its Clinton service area is transported by NGPL under
capacity contracts for 19,611 Mcf annually, with expiration dates of
November 30, 1998, December 1, 2000, February 28, 1996, and November
30, 1996. This gas is supplied by producers, marketers and brokers.
The company supplements this capacity with storage gas, which has the
pipeline capacity embedded in its FERC approved rate. The company
had 16,609 Mcf of storage available for the 1994-1995 heating season.
During 1995, the company utilized approximately 34.9% of its
annualized daily contract gas available from its firm suppliers. The
company's 1995 total throughput level of 35,320,385 Mcf represents a
4.9% increase over 1994. The total throughput was composed of sales
gas (22.1%), spot gas (3.1%) and customer transportation gas (74.8%).
During 1995, twenty-one of Interstate's customers transported a total
of 26,400,766 Mcf of their own gas over the company's pipeline and
distribution systems. This reflects an increase over 1993 and 1994
in the number of customers exercising the transportation option. In
1993, nineteen of Interstate's customers transported a total of
23,994,891 Mcf, and in 1994, eighteen customers transported a total
of 24,498,793 Mcf. The customer owned gas was delivered by
interstate pipeline companies for those customers' accounts to
Interstate's town border stations. The company subsequently
delivered the gas to customers under tariffs approved by respective
state commissions. Company policy is to assist any customer that
wishes to purchase gas directly from the producing sector.
The company owns propane-air gas plants in Albert Lea, Minnesota and
Clinton and Mason City, Iowa. The daily output capacities are:
5,000 Mcf, 4,000 Mcf and 9,600 Mcf of propane-air mix gas
respectively.
The requirement for gas on the peak winter day of the 1994-1995
season was 141,109 Mcf, including both firm and interruptible
customers. This peak consisted of 21.5% jurisdictional sales gas,
9.1% spot gas, 53.4% customer purchased gas, 16.0% storage gas and
0.0% propane-air from the company's peak-shaving plant. The maximum
daily firm gas sales during the 1994-1995 season were as follows:
Albert Lea 12,497 Mcf; Savanna 2,808 Mcf; Clinton 20,651 Mcf; Mason
City 25,218 Mcf, or 43.4% of the peak winter day throughput.
(Duration and Effect of Gas Patents and Franchises)
The company owns no patents.
The company has, in the opinion of its legal counsel, all necessary
franchises or other rights from the incorporated communities and
other governmental subdivisions now served, required for the
operation of its properties. With 34 gas franchises in effect in
cities and villages, and with the larger majority of such franchises
being for a term of 25 years, the renewal of such franchises is a
continuing process. Forty-seven percent (16) of the franchises have
been secured since January 1, 1986.
(Gas Seasonal Business)
The effects of heating sales to the residential and commercial
classes of customers have a significant seasonal impact on the
company's business. The heating sales in the winter months account
for 98% of the total annual sales to these classes of customers. The
average consumption for a residential customer during the peak winter
months is 18.7 Mcf compared to the average of 2.5 Mcf during the
summer. The average consumption for a commercial customer during the
peak winter months is 90.3 Mcf compared to the average of 12.6 Mcf
during the summer.
(Gas Governmental Regulations)
The company filed an Iowa gas rate increase application in August
1995. The application requested an annual increase of $2.2 million.
Interim rates in an annual amount of $1.3 million were placed in
effect on October 20, 1995, subject to refund. The company and other
parties to the rate application have agreed on an increase of $1.1
million subject to approval by the IUB. The IUB, by order dated
February 21, 1996, has approved the $1.1 million increase in revenue
requirements for the company's Iowa gas jurisdiction. The increase
represents a 3.5% increase in rates to Iowa gas customers and 0.4% of
total 1995 revenue. An IUB Order is expected by June 1996. Iowa gas
rates implemented in October 1995 did not include recovery of any
investigative or remediation costs to be incurred in the clean-up of
former manufactured gas plants. However, the company recovered $0.7
million annually of costs through the prior Iowa gas tariffs, and the
company anticipates that future investigation and remediation costs
applicable to the Iowa jurisdiction will be recovered from customers.
The company filed a Minnesota gas rate increase application in May
1995. The application requested an annual increase of $2.4 million,
including a return on common equity of 11.75%. Interim rates in an
annual amount of $1.5 million were placed in effect in June 1995,
subject to refund. A MPUC Order issued February 29, 1996 allowed an
annual increase of $2.1 million and a return on common equity of
10.75%. On March 20, 1996 the Minnesota Department of Public Service
and the Office of the Attorney General both requested reconsideration
of the MPUC Order. The $2.1 million increase in revenues included in
the MPUC Order represented a 24% increase in rates for Minnesota gas
customers and approximately 5% of the company's total gas revenues.
The return on equity granted by the MPUC (10.75%) is lower than
expected, however, it is within a reasonable range and the lower rate
will not have a material adverse impact on the company's financial
condition.
FERC Order 636 provides a mechanism under which pipelines can recover
prudently incurred transition costs associated with the restructuring
process. The company's pipeline suppliers have filed with the FERC
to recover transition costs from the local distribution companies.
The company incurred $2.0 million of transition costs in 1995 and is
currently recovering these costs from customers through the purchased
gas adjustment clause. The Illinois Commerce Commission, in Docket
No. 93-0328, allowed recovery of Gas Supply Realignment costs. The
Iowa Utilities Board accepted transition costs as a component of the
purchased gas adjustment in Dockets PGA-92-229, PGA-92-244, and PGA-
93-7. The Minnesota Public Utilities Commission allowed Order 636
transition costs to be passed through the purchased gas adjustment in
Docket No. G001/AA-94-762. While the ultimate level of transition
costs could vary as Order 636 filings are revised and proceedings
completed, the company estimates that the remainder will aggregate
approximately $3.2 million payable in declining installments from
1996 to 2005. The company anticipates that under customary
ratemaking practices, future transition costs will be recovered from
customers, and has recorded on its balance sheet a liability and a
corresponding regulatory asset in the amount of $3.2 million.
(Gas Competitive Conditions)
The company has no competition from the same type of public utility
service in the sale of gas in any of the incorporated communities
serviced by it. Certain major industrial customers of the company
purchase their own gas supply from producers and have that gas
transported by the company as described in the "Gas Sources and
Availability of Raw Materials" section.
One customer recently proposed to construct independent distribution
facilities and bypass the company's system. This situation raises a
new competitive issue which the company has not previously dealt
with. The company is evaluating its response to the bypass issue and
developing policies to deal with future competitive conditions which
could result from potential system bypass. The customers most likely
to bypass the company's distribution facilities are transportation
customers. At the present time the company has 21 gas transportation
customers with total revenues of $2.6 million (6% of gas revenues and
0.8% of total company revenues). Over 60% of the $2.6 million of
revenues occurs in an area where the potential for bypass is
considered to be minimal. The loss of any one customer would not
have a material adverse impact on the company's financial condition.
(Dependence of Segment Upon a Single Customer)
In 1995, 1994 and 1993, the company had no single customer or
industry for which electric and/or gas sales accounted for 10% or
more of the company's consolidated revenues. In 1995, the company's
three largest industrial customers accounted for 1,396,284,716 Kwh of
electric sales ($45,777,786) and 23,540,434 Mcf of gas sales and
transportation ($1,922,694). The company's largest gas customer,
which represents 31% of the company's total gas throughput, is
committed by contract for the next six years.
(Research and Development)
The company has no full-time professional employees engaged in
research activities and had no company-sponsored research programs
during 1995, 1994 and 1993. In the public utility industry, research
is commonly and traditionally done by manufacturers of equipment,
trade organizations to which the company belongs, and university
research programs. In 1995 approximately $1,054,925 was paid for
research activities compared with $1,072,871 in 1994 and $1,090,184
in 1993.
(Electric and Magnetic Fields)
The possibility that exposure to electric and magnetic fields
emanating from power lines and other electric sources may result in
adverse health effects has been a subject of increased public,
governmental and media attention. A considerable amount of
scientific research has been conducted on this topic with no
definitive results. Research is continuing. It is not possible to
tell what, if any, impact these actions may have on the company's
financial condition.
(Environmental Regulations)
The company is subject to various federal and state government
environmental regulations. The company meets existing air and water
regulations. The Federal Clean Air Act Amendments of 1990 requires
reductions in certain emissions from power plants. The legislation
has two deadlines for compliance, Phase 1 (January 1, 1995) and Phase
2 (January 1, 2000). The company has switched to a low sulfur coal
and installed low nitrogen oxide burners at the 217 MW plant affected
by Phase 1. Management anticipates that additional costs incurred
will be recovered through customer rates.
The United States EPA and the states have promulgated discharge
limits necessary to meet water quality standards. A National
Pollutant Discharge Elimination System (NPDES) permit is required for
all discharges. The company has current NPDES permits for all
discharges and meets or falls within the required discharge limits.
Early this century, various utilities including the company operated
plants which produced manufactured gas for cooking and lighting. The
company's facilities ceased operations approximately 40 years ago
when natural gas pipelines were extended into the upper Midwest.
Some of the former gasification sites contain coal tar waste products
which may present an environmental hazard.
The company has identified nine sites which may contain waste from
former coal gasification sites. The company has recorded an
estimated liability for its pro rata share of expenses applicable to
the sites. Of the nine sites, 3 are on property currently owned by
the company, while the remaining 6 are located on property currently
owned by other parties.
The company has been named a Potentially Responsible Party (PRP) by
Federal or State environmental agencies for most of its former
manufactured gas plant sites. In December 1994, the U.S. EPA, in
submitting an information request, claimed that the company is a
present and former owner of the Clinton, Iowa site. The company has
not been officially named as a PRP for the Savanna and Galena sites
by those agencies. In addition, the current owner of the Galena,
Illinois site has claimed that the company is a PRP at that site
based upon a predecessor company's ownership of the site.
The estimated environmental liabilities recorded on the books of the
company include amounts expected to be incurred to complete the
investigation of those sites where the investigative process has
begun, and the minimum of the estimated cost range for those sites
where the investigation is in its early stages or not been started.
At the present time the company has insufficient information,
regarding the sites that have not been fully investigated, to revise
those cost estimates.
It is possible that cost estimates may be revised upwards as the
investigative process proceeds. In view of the past rate treatment
allowed by the Iowa, Minnesota and Illinois Commissions, the company
believes that prudently incurred unreimbursed costs will be recovered
from customers and that the investigation, remediation or monitoring
process will not have a material adverse impact on the company's
financial condition or the results of operations.
In 1957, the company purchased facilities in Mason City, Iowa, from
Kansas City Power & Light Company (KCPL) which included land
previously used for a coal gasification plant. Coal tar waste was
discovered on the property in 1984. In 1995, a settlement was
reached with KCPL for sharing of costs to remediate the site.
Interstate Power Company has been reimbursed $1.0 million by KCPL for
expenses incurred in the past. The reimbursement has been deferred,
pending a decision by the IUB on the amount to be refunded to
customers. KCPL will pay for future soil remediation costs up to a
$2.6 million level. If soil remediation costs exceed that level, the
next $1.0 million will be shared 2/3 KCPL and 1/3 Interstate Power
Company. If soil remediation costs exceed the $3.6 million level,
Interstate Power Company is 100% responsible. Any ground water
remediation cost will be split 50 - 50 between KCPL and Interstate
Power Company. A Remedial Investigation and Feasibility Study has
been approved and the company has assumed responsibility for managing
the remediation of the Mason City site. The current estimated cost
of soil remediation is $2.6 million, which will be paid by KCPL.
The company formerly operated a manufactured gas plant in Rochester,
Minnesota. Soil remediation was completed in 1995 and post-
remediation groundwater monitoring is underway. From 1991 through
1995, the company incurred costs aggregating $6.7 million applicable
to the Rochester site. Groundwater monitoring costs are expected to
be $75,000 to $100,000 per year for a period of two to twenty years.
The MPUC accounting order allows the company to defer these costs and
recover them in subsequent rate cases. This level of expenditure
would be considered to be immaterial, therefore, the company may
choose to expense them as incurred.
In addition to the Rochester site, the company owned or operated four
other manufactured gas plant sites in Minnesota: Albert Lea, Austin,
New Ulm and Owatonna. Wastes associated with former coal
gasification operations have been identified at each site. The
company anticipates that these sites will be investigated in 1996 or
1997. When the investigation process is complete, the company will
be able to determine if any remediation will be necessary.
In addition, the company has identified three other sites: Galena
and Savanna, Illinois, and Clinton, Iowa. Wastes associated with
former coal gasification operations have been identified at each of
these sites. Little or no activity is expected at any of these sites
in 1996.
In 1994, the company filed a lawsuit against certain of its insurers
to recover the costs of investigating and remediating the former coal
gasification plants. On June 23, 1995, the company filed a lawsuit
in the District Court of Iowa in Clinton County, Iowa against certain
of its insurers to recover the costs of investigating and remediating
the former coal gasification plants. The insurers named as
defendants in this lawsuit include: American Home Assurance Company,
American Re-Insurance Company, C.E. Heath Compensation and Liability
Insurance Company of California (Successor to Employers' Surplus
Lines Insurance Company), Commercial Union Insurance Company
(Successor to Employers' Liability Assurance Corporation, Ltd.), The
Home Insurance Company, Indemnity Insurance Company of North America,
Insurance Company of North America, International Insurance Company
(Successor to International Surplus Lines Insurance Company), Signet
Star Reinsurance Corporation (Successor to North Star Reinsurance
Corporation), Zurich Insurance Company (Successor to Zurich General
Accident and Liability Insurance Company), and Certain Underwriters
at Lloyd's London & London Market Insurance Companies. The company
believes that the insurers have not fulfilled their obligations under
insurance policies sold to the company. Because the company is
seeking full coverage of costs as they are incurred, no specific
dollar amount has been sought in this lawsuit. In addition to
seeking monetary damages in an unspecified amount, the company is
seeking a declaratory order and equitable relief. Two insurers paid
the company a total of $0.3 million in 1995 in order to be discharged
from the lawsuit. The trial against the remaining insurers is
expected to begin in Iowa in 1997. Neither the company nor its legal
counsel is able to predict the amount of any insurance recovery, and
accordingly, no potential recovery has been recorded. The company
anticipates the recovery of insurance proceeds would first be applied
to offset expenses of pursuing the lawsuit against the insurance
companies. It is expected that the company's customers paying for
environmental clean-up costs would also share in the insurance
proceeds. It is uncertain as to what portion of the proceeds, if
any, the company's stockholders would be allowed to retain.
Therefore, based on the above, the company considers the potential
impact on its financial position not to be material.
In April 1995, the company received an accounting order from the
Minnesota Public Utilities Commission (MPUC) which allows the
deferral of investigation and remediation costs applicable to the
Rochester and Albert Lea sites and further allows the company to seek
recovery in a rate case. The company's Minnesota gas rate case filed
in May 1995 seeks recovery of $4.9 million. The company filed a
petition in June 1995 for an accounting order which would allow it to
defer and seek recovery in a future rate case of costs applicable to
the three other Minnesota sites (Austin, Owatonna and New Ulm).
Action by the MPUC is pending.
Under the Federal Comprehensive Environmental Response, Compensation
and Liability Act (CERCLA), a past waste generator can be designated
by the United States Environmental Protection Agency (U.S. EPA) as a
Potentially Responsible Party (PRP). Certain types of used
transformer oil (primarily those containing polychlorinated
biphenyls, or "PCBs") have been designated as hazardous substances by
the U.S. EPA. The company has been cited as a PRP by the U.S. EPA
for the clean-up of the facilities formerly operated by Martha C.
Rose Chemicals, Inc. in Holden, Missouri. Clean-up of the site began
in 1994, with final completion in 1995. The company received a
refund of previously paid costs of $0.1 million in 1995 in final
settlement, and estimated reserves remaining are adequate for
continuing groundwater monitoring.
In 1988, the U.S. EPA designated the company a PRP for the clean-up
of former salvage facilities operated by the Missouri Electric Works,
Inc. (MEW) in Cape Girardeau, Missouri. A portion of the
PCB-contaminated equipment found at the site was formerly owned by
the company. The company has notified the U.S. EPA that it disclaims
responsibility for the site, as the equipment was in proper operating
condition when sold by the company to a third party, which
subsequently made arrangements to transport this equipment to MEW.
The U.S. EPA has not responded to the company's disclaimer. The
company has not recorded any liability for the MEW site, and
management believes that it will be able to successfully defend
itself against any claims applicable to the site.
(Employees)
The company has 935 regular employees consisting of 902 full-time and
33 part-time employees.
(Accounting Matters)
The company will be required to adopt SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be
Disposed Of" in 1996. The new standard imposes stricter standards
for regulatory assets by requiring that such assets be probable of
future recovery at each balance sheet date. The company believes
that the initial adoption of SFAS 121 will not have a material impact
on its financial position or results of operations.
ITEM 2. PROPERTIES
The principal power plants and other materially important physical
properties of the company are maintained in accordance with sound
operating practices. Their general character and location are
described below:
(Electric Properties)
The company has been a participant in the Mid-Continent Area Power
Pool (MAPP) Agreement since March 31, 1972. As a part of this power
network the company is the owner of a 55.0 mile section of the 345 KV
transmission line extending from St. Louis, Missouri to Minneapolis,
Minnesota; a 15.5 mile section of the 345 KV transmission line
between Minneapolis, Minnesota and Kansas City, Missouri; a 5.0 mile
345 KV transmission line from near Clinton, Iowa to near Cordova,
Illinois; a 49.8 mile 345 KV transmission line from near Clinton,
Iowa to a substation south of Dubuque, Iowa; and three associated
345/161 KV substations.
The company's electric generating stations at year-end consist of six
steam plants, three combustion turbine stations, and five internal
combustion facilities. Pertinent information regarding each electric
generating station is shown on the following page:
INTERSTATE POWER COMPANY GENERATING STATIONS
Net
Generating Units December 31, 1995 Output
Nameplate Capability in KWH
Unit Capacity Year KW KW (000's)
Location Number KW Installed (Gross) (Net) 1995
STEAM:
Dubuque, IA 2 15,000 1929 82,500 78,000 194,561
3 25,000 1952
4 33,000 1959
Clinton, IA 1 15,000 1947 254,900 235,000 1,050,504
(M.L.Kapp Plt.) 2 212,284 1967
Lansing, IA 1 15,000 1948 337,800 320,000 775,611
2 11,500 1949
3 33,000 1957
4 252,649 1977
Sherburn, MN 1 11,500 1950 113,500 108,000 335,179
(Fox Lake Plt.) 2 11,500 1951
3 75,000 1962
Sioux City, IA 4* 125,924 1979 142,000 134,300 993,471
(Neal Unit #4)
Louisa County, IA 1** 27,400 1983 29,400 28,000 174,882
(Louisa Unit #1)
TOTAL STEAM 960,100 903,300 3,524,208
GAS TURBINE:
Montgomery, MN 1 26,535 1974 22,200 22,200 253
Sherburn, MN 4 26,535 1974 21,300 21,300 332
(Fox Lake Plt.)
Mason City, IA 1 37,520 1991 70,400 70,000 3,012
(Lime Creek Plt.) 2 37,520 1991
TOTAL GAS TURBINE 113,900 113,500 3,597
INTERNAL COMBUSTION:
Dubuque, IA 1 2,000 1966 4,600 4,600 (83)
2 2,000 1966
Hills, MN 2 2,000 1960 2,000 2,000 (57)
Lansing, IA 1 1,000 1970 2,000 2,000 11
2 1,000 1971
New Albin, IA 1 685 1970 700 700 (50)
Rushford, MN 1 2,000 1961 2,000 2,000 (95)
TOTAL INTERNAL COMBUSTION 11,300 11,300 (274)
TOTAL COMPANY 1,085,300 1,028,100 3,527,531
* Interstate owns 21.528% of a 584,931 KW unit operated by MidAmerican
Energy Company.
** Interstate owns 4.0% of a 685,000 KW unit operated by MidAmerican
Energy Company.
(Gas Properties)
The company owns and operates natural gas distributing systems in
Albert Lea, Minnesota; Savanna, Illinois; Clinton, Mason City and
Clear Lake, Iowa and in a number of smaller Minnesota, Illinois and
Iowa communities. At Albert Lea, the company owns 14 tanks with a
liquid propane storage capacity of 357,000 gallons; at Clinton, there
are 12 tanks with 306,000 gallons capacity and at Mason City, 22
tanks with 561,000 gallons capacity.
The company also owns 95 gas regulating stations and approximately
972 miles of gas distribution mains.
(General Properties)
The company owns numerous properties in various parts of its
territory which are used for office, service and other purposes. The
most important of these are three General Office buildings in Dubuque
and the district office buildings at Clinton, Decorah, Dubuque, Mason
City and Oelwein, Iowa and Albert Lea, and Winnebago, Minnesota and
the distribution service buildings in each of those locations. The
company, as lessee, leases office space at various locations. The
company also leases a few small parcels of land for storage of poles
and miscellaneous temporary uses.
(Titles)
In the opinion of legal counsel for the company, the company has
satisfactory title to its properties for use in its utility
businesses subject only to permitted liens as defined in the Bond
Indenture and to minor defects and encumbrances customarily found in
cases of like size and character and which do not materially
interfere with the use of such properties.
Properties such as electric transmission and electric and gas
distribution lines are constructed principally on rights-of-way which
are maintained under franchise or held by easement only.
All properties of the company, other than "excepted property" as
defined in the Bond Indenture, are subject to the lien of the
company's Bond Indenture dated as of January 1, 1948, as
supplemented, securing the company's outstanding First Mortgage
Bonds.
ITEM 3. LEGAL PROCEEDINGS
Reference is made to "Electric Governmental Regulations", "Electric
Competitive Conditions" and "Environmental Regulations" under "Item
1. Business" for certain pending legal proceedings and proceedings
known to be contemplated by governmental authorities. Reference is
also made to Note 8 to Financial Statements of the Annual Report to
Stockholders, included herein as EX-13. Other than these items,
there are no material pending legal proceedings, or proceedings known
to be contemplated by governmental authorities, other than ordinary
routine litigation incidental to the business, to which the company
is a party or of which any of the company's property is the subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There was no submission of matters to a vote of security holders
during the fourth quarter of the 1995 year.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
For information pertaining to common stock market data required by
Item 201 of Regulation S-K please refer to page 31 of Exhibit EX-13
(the Annual Report to Stockholders).
ITEM 6. SELECTED FINANCIAL DATA
For information pertaining to selected financial data required by
Item 301 of Regulation S-K please refer to page 30 of Exhibit EX-13
(the Annual Report to Stockholders).
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
For information pertaining to management's discussion and analysis
required by Item 303 of Regulation S-K please refer to pages 1
through 9 of Exhibit EX-13 (the Annual Report to Stockholders).
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Financial statements and supplementary data incorporated by reference
to Exhibit EX-13 (the Annual Report to Stockholders for 1995):
Statements of Income and Retained Earnings Page 10
Balance Sheets Pages 11 & 12
Statements of Cash Flows Page 13
Statements of Capitalization Page 14
Notes to Financial Statements Pages 15 - 27
Independent Auditors' Report Page 28
ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. EXECUTIVE OFFICERS OF THE REGISTRANT
Name Age Offices Held Past 5 Years
W. H. Stoppelmoor 62 5-1-90 - President, Chief Executive Officer
& Chairman of the Board
M. R. Chase 57 1-1-91 - Vice President-Production
5-7-91 - Vice President-Power Production
7-1-95 - Executive Vice President
*A. D. Cordes 64 5-1-90 - Vice President-District
Administration & Public Affairs
R. R. Ewers 51 5-1-90 - Vice President-Administrative
Services
7-1-95 - Vice President-Administration
D. E. Hamill 59 9-1-80 - Vice President-Budgets &
Regulatory Affairs
**G. L. Kopischke 64 9-1-80 - Vice President-Electric Operations
J. C. McGowan 58 2-1-89 - Secretary & Treasurer
R. P. Richards 59 1-1-91 - Vice President-Gas Operations
D. R. Sharp 55 7-1-95 - Vice President-Power Production
1-1-96 - Vice President-Engineering
W. C. Troy 57 5-1-86 - Controller
*Retired effective 7-1-95
**Retired effective 1-1-96
All officers are elected and serve as such until the next annual
meeting of directors. There are no arrangements or understandings
with respect to election of any person as an officer.
For information pertaining to directors, and other data required by
Items 401 and 405 of Regulation S-K, refer to pages 136 through 139
of the company's Official Proxy Statement to be filed with the
Securities and Exchange Commission within 120 days after the last day
of the fiscal year ended December 31, 1995.
ITEM 11. EXECUTIVE COMPENSATION
Refer to information on pages 141 through 145 of the company's
Official Proxy Statement filed with the Securities and Exchange
Commission to be filed with the Securities and Exchange Commission
within 120 days after the last day of the fiscal year ended December
31, 1995.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Refer to information on pages 139 and 140 of the company's Official
Proxy Statement filed with the Securities and Exchange Commission to
be filed with the Securities and Exchange Commission within 120 days
after the last day of the fiscal year ended December 31, 1995.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions with Management and Others:
In 1995 there were no transactions and there are presently proposed
no transactions with management, to which the company or its
subsidiary was or is to be a party, of the character as to which
answer is called for in response to Item 404(a) of Regulation S-K.
Indebtedness of Management:
No director or officer, or nominee for election as a director, or any
associate of any thereof, was indebted to the company or its
subsidiary during 1995, as to which answer is called for in response
to Item 404(b) of Regulation S-K.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) List of documents filed as part of this report:
1. The financial statements, including supporting schedules,
are listed in the Index to Financial Statements, Schedules
and Exhibits filed as part of this Annual Report.
2. Exhibits which are filed herewith, including those incor-
porated by reference are listed in the Index to Financial
Statements, Schedules and Exhibits filed as part of this
Annual Report.
(b) Reports on Form 8-K:
The company filed a Form 8-K report with the Securities and
Exchange Commission dated November 17, 1995. This report
related to the signing of a merger agreement on November 10
1995, by Interstate Power Company, IES Industries Inc., and
WPL Holdings, Inc., providing for the combination of the three
companies into a holding company which will be known as
Interstate Energy Corporation.
INDEX TO FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS
The 1995, 1994 and 1993 financial statements, together with the
Independent Auditors' Report thereon of Deloitte & Touche LLP, dated
January 26, 1996, appearing on pages 10 through 28 of Exhibit EX-13
(the 1995 Annual Report to Stockholders), are incorporated in this
Form 10-K Annual Report. The following additional data, as attached
on EX-23.a, EX-23.b, and S-1 should be read in conjunction with the
financial statements in such Exhibit EX-13.
Schedules and other historical financial information not included with
this additional financial data have been omitted because they are not
applicable or the required information is shown in the financial
statements or notes thereto.
Page or Exhibit Reference
Exhibit EX-13
Form (Annual Report to
10-K Stockholders)
Report of Independent Auditors EX-23.a
Consent of Independent Auditors EX-23.b
Financial Statements:
Statements of Income and Retained Earnings
for the years ended December 31, 1995,
1994 and 1993 10
Balance Sheets, December 31, 1995 and 1994 11 & 12
Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993 13
Statements of Capitalization, December 31,
1995 and 1994 14
Notes to Financial Statements 15 - 27
Selected Financial Data 30
Common Stock Market Data 31
Management's Discussion and Analysis 1 - 9
Schedule II: Valuation and Qualifying Accounts
and Provisions S-1
INDEX TO FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS (CONT'D.)
Exhibits filed as part of this report:
EX-3.(ii) By-Laws of Interstate Power Company as adopted April 20, 1925
and as amended January 26, 1996.
EX-10.a Coal Transloading Agreement between Interstate Power Company and
Orba-Johnson Transshipment Company dated December 20, 1995
EX-10.b Coal Transshipment Agreement by and between Interstate
Power Company and Orba-Johnson Transshipment Company dated
December 20, 1979 (previously physically filed in Form 10-K for
the Year Ended December 31, 1979 as EXHIBIT F)
EX-10.c Interstate Amendment Agreement between Orba-Johnson
Transshipment Company and Interstate Power Company dated
September 1, 1981 (previously physically filed in Form 10-K for
the Year Ended December 31, 1981 as EXHIBIT J)
EX-12 Statement re Computation of Ratios
EX-13 The Company's 1995 Annual Report to Stockholders.
EX-23.a Report of Independent Auditors
EX-23.b Consent of Independent Auditors
EX-27 Financial Data Schedule
EX-99.a Listing of current material contracts, indentures and other
exhibits and identified as having been previously filed with the
Commission.
EX-99.b Interstate Power Company Supplemental Retirement Plan as amended
and restated November 10, 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
INTERSTATE POWER COMPANY
Date March 29, 1996 By /s/ W. H. STOPPELMOOR
(W. H. Stoppelmoor,
President and Chief
Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
Signature Title
/s/ W. H. STOPPELMOOR President and Chief Executive
(W. H. Stoppelmoor) Officer (Principal Executive
Officer and Principal
Financial Officer)
/s/ W. C. TROY Controller (Principal
(W. C. Troy) Accounting Officer)
/s/ A. B. ARENDS Director
(A. B. Arends)
/s/ J. E. BYRNS Director
(J. E. Byrns)
/s/ M. R. CHASE Director
(M. R. Chase)
/s/ A. D. CORDES Director
(A. D. Cordes)
/s/ J. L. HANES Director
(J. L. Hanes)
/s/ G. L. KOPISCHKE Director
(G. L. Kopischke)
Date March 29, 1996
SCHEDULE II
INTERSTATE POWER COMPANY
VALUATION AND QUALIFYING ACCOUNTS AND PROVISIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
(Thousands of Dollars)
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E
ADDITIONS
BALANCE AT CHARGED CHARGED DEDUCTION BALANCE
BEGINNING TO TO OTHER FROM AT END
DESCRIPTION OF YEAR INCOME ACCOUNTS RESERVES OF YEAR
YEAR ENDED DEC. 31, 1995
Valuation account
deducted from caption
of which it applies -
accumulated provision
for doubtful accounts $200 $169 $144 (a) $313 (b) $200
Provision for medical
benefits, injuries
and damages $4,671 $5,729 $1,081 $6,799 (c) $4,682
YEAR ENDED DEC. 31, 1994
Valuation account
deducted from caption
of which it applies -
accumulated provision
for doubtful accounts $203 $243 $148 (a) $394 (b) $200
Provision for medical
benefits, injuries
and damages $4,105 $7,240 $2,757 $9,431 (c) $4,671
YEAR ENDED DEC. 31, 1993
Valuation account
deducted from caption
of which it applies -
accumulated provision
for doubtful accounts $206 $225 $134 (a) $362 (b) $203
Provision for medical
benefits, injuries
and damages $1,506 $4,302 $3,521 $5,224 (c) $4,105
(a) Recoveries on accounts previously written off.
(b) Accounts written off.
(c) Claims and damages paid and expenses in connection therewith.
S-1
INDEX OF EXHIBITS
EX-3.(ii) By-Laws of Interstate Power Company as adopted April 20, 1925
and as amended January 26, 1996.
EX-10.a Coal Transloading Agreement between Interstate Power Company
and Orba-Johnson Transshipment Company dated December 20, 1995
EX-10.b Coal Transshipment Agreement by and between Interstate
Power Company and Orba-Johnson Transshipment Company dated
December 20, 1979 (previously physically filed in Form 10-K
for the Year Ended December 31, 1979 as EXHIBIT F)
EX-10.c Interstate Amendment Agreement between Orba-Johnson
Transshipment Company and Interstate Power Company dated
September 1, 1981 (previously physically filed in Form 10-K
for the Year Ended December 31, 1981 as EXHIBIT J)
EX-12 Statement re Computation of Ratios
EX-13 The Company's 1995 Annual Report to Stockholders.
EX-23.a Report of Independent Auditors
EX-23.b Consent of Independent Auditors
EX-27 Financial Data Schedule
EX-99.a Listing of current material contracts, indentures and other
exhibits and identified as having been previously filed with
the Commission.
EX-99.b Interstate Power Company Supplemental Retirement Plan as
amended and restated November 10, 1995.