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
For the quarterly period ended March 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-3632
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 Street, P.O. Box 769, Dubuque, Iowa 52004-0769
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 319-582-5421
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 the number of shares outstanding of each of the issuer's
classes of common stock.
Shares Outstanding
May 1, 1996
Common Stock Par Value $3.50 Per Share 9,564,287 Shares
INTERSTATE POWER COMPANY
Form 10-Q
Table of Contents
Part I - Financial Information
Item 1. Statements of Income - Three Months Ended 1
Balance Sheets - Assets 2
Balance Sheets - Capitalization and Liabilities 3
Statements of Cash Flows 4
Summarized Financial Information 5
Item 2. Management's Discussion and Analysis 6
Part II - Other Information
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 12
INTERSTATE POWER COMPANY
STATEMENTS OF INCOME
Three Months
Ended March 31
1996 1995
(In Thousands)
OPERATING REVENUES:
Electric $ 65,915 $ 63,803
Gas 21,134 18,962
87,049 82,765
OPERATING EXPENSES:
Operation:
Fuel for electric generation 14,774 16,840
Power purchased 14,193 12,102
Cost of gas sold 11,473 9,957
Other operating expenses 11,712 12,031
Maintenance 3,693 3,440
Depreciation 7,577 7,226
Income taxes:
Federal currently payable 3,961 2,988
State currently payable 1,186 893
Deferred taxes-net 1,047 1,225
Investment tax credit amortization (257) (257)
Property and other taxes 4,550 4,505
Total operating expenses 73,909 70,950
OPERATING INCOME 13,140 11,815
OTHER INCOME AND DEDUCTIONS 478 159
INCOME BEFORE INTEREST CHARGES 13,618 11,974
INTEREST CHARGES:
Long-term debt 3,646 3,811
Other interest charges 475 488
Allowance for borrowed funds used during construction (44) (82)
Total interest charges 4,077 4,217
NET INCOME 9,541 7,757
PREFERRED STOCK DIVIDENDS 615 614
NET INCOME AVAILABLE FOR COMMON STOCK $ 8,926 $ 7,143
AVERAGE NUMBER OF COMMON SHARES OUTSTANDING 9,564 9,564
EARNINGS PER COMMON SHARE OUTSTANDING $ .93 $ .74
DIVIDENDS PAID PER COMMON SHARE $ .52 $ .52
The accompanying Notes to Financial Statements are an integral part of these
statements.
INTERSTATE POWER COMPANY
BALANCE SHEETS
ASSETS
Mar. 31 Dec. 31 Mar. 31
1996 1995 1995
(In Thousands)
UTILITY PLANT (at original cost) $904,742 $901,212 $883,429
Less accumulated provision for depreciation 409,051 402,685 385,194
Utility plant - net 495,691 498,527 498,235
OTHER PROPERTY AND INVESTMENTS 641 555 477
CURRENT ASSETS:
Cash and cash equivalents 1,218 1,537 1,664
Accounts receivable less reserve 29,559 27,797 24,993
Inventories - at average cost:
Fuel 11,938 19,332 15,523
Materials and supplies 5,762 5,509 5,424
Prepaid pension cost 6,203 3,870 5,846
Prepaid income tax 6,698 6,690 7,070
Other prepayments and current assets 1,264 614 818
Total current assets 62,642 65,349 61,338
DEFERRED DEBITS:
Regulatory assets 11,817 11,889 9,927
Regulatory assets for deferred income taxes 27,903 27,813 27,686
Deferred energy efficiency costs 24,089 23,139 18,203
Unamortized debt expense 5,864 5,915 6,066
Other 1,460 1,129 1,482
Total deferred debits 71,133 69,885 63,364
TOTAL $630,107 $634,316 $623,414
The accompanying Notes to Financial Statements are an integral part of these
statements.
INTERSTATE POWER COMPANY
BALANCE SHEETS
CAPITALIZATION AND LIABILITIES
Mar. 31 Dec. 31 Mar. 31
1996 1995 1995
(In Thousands)
CAPITALIZATION:
Common stock, par value $3.50 per share;
Authorized - 30,000,000 shares; issued
and outstanding - 9,564,287 in 1996
and 9,564,287 in 1995 $ 33,475 $ 33,475 $ 33,475
Additional paid-in capital 103,135 103,145 103,127
Retained earnings 65,103 61,150 58,063
Total common equity 201,713 197,770 194,665
Preferred stock, par value $50 per share 34,881 34,855 34,777
Total stockholders' equity 236,594 232,625 229,442
Long-term debt 188,899 188,880 189,050
Total capitalization 425,493 421,505 418,492
CURRENT LIABILITIES:
Commercial paper payable 23,150 39,300 22,100
Long-term debt maturing within one year 0 0 14,000
Accounts payable 14,145 11,868 11,179
Dividends payable - preferred stock 599 599 599
Payrolls accrued 3,028 2,846 2,792
Taxes accrued 20,801 16,758 17,712
Interest accrued 4,323 2,819 4,599
FERC Order 636 transition costs 3,000 3,200 4,600
Other 3,764 4,756 4,798
Total current liabilities 72,810 82,146 82,379
DEFERRED CREDITS AND OTHER NON-CURRENT LIABILITIES:
Accumulated deferred income taxes 96,663 95,518 89,723
Accumulated deferred investment tax credits 17,784 18,041 18,812
Deferred pension cost 4,900 4,900 4,827
Accrued postretirement benefit cost 2,904 2,792 3,096
Environmental clean-up costs 6,834 6,860 3,679
Other 2,719 2,554 2,406
Total deferred credits and other non-current
liabilities 131,804 130,665 122,543
TOTAL $630,107 $634,316 $623,414
The accompanying Notes to Financial Statements are an integral part of these
statements.
INTERSTATE POWER COMPANY
STATEMENTS OF CASH FLOWS
Three Months
Ended March 31
1996 1995
(In Thousands)
RECONCILIATION OF NET INCOME TO CASH FLOWS
FROM OPERATING ACTIVITIES:
Net income $ 9,541 $ 7,757
Adjustment for non-cash items:
Depreciation 7,577 7,226
Deferred income taxes 1,056 1,331
Investment tax credit amortization (257) (257)
Allowance for equity funds used during construction (0) (0)
Deferred pension cost 0 0
Changes in assets and liabilities:
Accounts receivable - net (1,762) (2,643)
Fuel 7,397 8,700
Materials and supplies (253) (217)
Accounts payable and other current liabilities 1,350 (1,710)
Accrued and prepaid taxes 4,035 2,868
Interest accrued 1,504 1,669
Other prepayments and current assets (2,983) (710)
Deferred energy conservation costs (950) (1,242)
Regulatory assets (44) 787
Other operating activities 287 627
Cash flows from operating activities 26,498 24,186
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to utility plant (4,756) (4,792)
Allowance for borrowed funds used during construction (44) (82)
Other (292) (110)
Cash flows from investing activities (5,092) (4,984)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 0 0
Retirement of long-term debt (3) (3)
Dividends on common and preferred stock (5,572) (5,572)
Sale of commercial paper - net (16,150) (13,500)
Cash flows from financing activities (21,725) (19,075)
NET INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS: $ (319) $ 127
CASH AND CASH EQUIVALENTS:
Beginning of period $ 1,537 $ 1,537
End of period $ 1,218 $ 1,664
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest (net of amount capitalized) $ 2,373 $ 2,445
Income taxes $ 910 $ 90
The accompanying Notes to Financial Statements are an integral part of these
statements.
INTERSTATE POWER COMPANY
Summarized Financial Information
The March 31, 1996 financial statements included herein have been prepared by
the company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. The accounting policies followed by the
company are set forth in Note 1 to the company's financial statements in the
1995 Form 10-K/A. It is suggested that these condensed financial statements
be read in conjunction with the financial statements and the notes thereto
included in the company's Form 10-K/A for the year ended December 31, 1995.
In the opinion of the company, the financial statements reflect all
adjustments, consisting only of normal recurring accruals, necessary to
fairly state the results of operations.
INTERSTATE POWER COMPANY
PART I - FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis
The company's results of operations and financial condition are affected by
numerous factors, including weather, sales, and the amount of changes in
customer rates. The dividend of $2.08 per share annually and $0.52 per
quarter has been maintained.
EARNINGS PER SHARE for the first quarter of 1996 were $0.93 compared to $0.74
for the corresponding period in 1995. Major contributors to the improved
earnings were increased electric and gas sales due to colder weather, and
rate increases in the Iowa electric, Iowa gas and Minnesota gas
jurisdictions.
The ELECTRIC MARGIN (revenue less cost of fuel and purchased power) for the
first quarter of 1996 was $36.9 million compared to $34.9 million for the
first quarter of 1995. The electric margin for the first quarter of 1996
reflects a 4.7% increase in residential sales, and a $6.6 million annual
electric rate increase which became effective June 29, 1995.
Three Months Ended March 31
ELECTRIC SALES (Mwh) 1996 1995 % Change
Residential 281,350 268,769 4.7
Commercial 188,455 187,415 0.6
Industrial 774,179 768,701 0.7
Interchange 37,183 4,973 N/A
Sales for Resale 61,022 64,049 (4.7)
Other 15,663 15,537 0.8
Total Electric Sales 1,357,852 1,309,444 3.7
The 4.7% increase in sales to residential customers is primarily a result of
cold weather this year. Residential electric heat usage was up 8.9%. Sales
to commercial and industrial customers, which are less weather sensitive,
increased 0.6% and 0.7%, respectively. The 4.7% decline in sales for resale
is primarily attributable to reduced non-firm sales to one municipal resale
customer. The higher interchange sales reflect the increased power marketing
activities resulting in long-distance transmission of electric power, a trend
which is expected to continue.
Three Months Ended March 31
ELECTRIC REVENUES (000'S) 1996 1995 % Change
Residential 20,052 19,185 4.5
Commercial 11,864 11,760 0.9
Industrial 28,635 28,235 1.4
Interchange 727 106 N/A
Sales for Resale 2,065 2,188 (5.6)
Other 2,572 2,329 10.4
Total Electric Revenues 65,915 63,803 3.3
The increase in residential, commercial and industrial electric revenues for
the first quarter of 1996 compared to 1995 was due to the Iowa electric rate
increase effective June 29, 1995, and the increase in residential kwh sales.
The rate increase contributed approximately $0.04 per share to improved
earnings and increased residential sales contributed approximately $0.03 per
share. The increase in interchange sales did not significantly affect the
electric margin nor net income, as the margin on such sales applicable to the
Iowa jurisdiction is flowed back to customers through the fuel adjustment
clause.
The GAS MARGIN (revenue less purchased gas) for the first quarter of 1996 was
$9.7 million compared to $9.0 million for the same period in 1995. Factors
in the improved gas margin include the increased temperature sensitive sales
to residential and commercial customers, and rate increases in the Iowa and
Minnesota gas jurisdictions. Interim Iowa gas rates in an annual amount of
$1.3 million were implemented October 20, 1995, while interim Minnesota gas
rates in an annual amount of $1.5 million were implemented June 30, 1995.
The Iowa and Minnesota gas rates increases contributed $0.5 million and $0.7
million, respectively, to the first quarter of 1996 gas margin.
COST OF GAS SOLD increased $1.5 million, or 15.2%, during the first quarter
of 1996 compared to the same period in 1995 primarily due to the 7.4%
increase in volumes sold and a 3.7% increase in the unit cost of gas due to
colder weather.
Three Months Ended March 31
GAS DELIVERIES (MMcf) 1996 1995 % Change
Residential 2,484 2,231 11.3
Commercial 1,403 1,275 10.0
Industrial 387 467 (17.1)
Other 5 11 N/A
Total Gas Sales 4,279 3,984 7.4
Gas Transportation 6,701 6,616 1.3
Total Gas Deliveries 10,980 10,600 3.6
The increase in residential and commercial gas sales is mainly a result of
11.4% colder temperatures in 1996. Although industrial sales were down,
volumes transported to industrial customers increased, resulting in total
industrial deliveries of approximately the same level for the first quarter
of 1996 and the first quarter of 1995.
Three Months Ended March 31
GAS REVENUES (000's) 1996 1995 % Change
Residential $12,496 $11,053 13.1
Commercial 6,441 5,657 13.9
Industrial 1,482 1,587 (6.6)
Other 49 59 N/A
Total Gas Sales Revenues 20,468 18,356 10.3
Gas Transportation 666 607 9.7
Total Gas Revenues $21,134 $18,963 11.5
The increase in residential and commercial revenues is primarily a result of
increased sales due to colder temperatures. The rate increases contributed
approximately $0.075 per share to improved earnings and increased residential
sales contributed approximately $0.03 per share. Revenue from retail
industrial sales decreased mainly as a result of the decreased sales. There
have been no significant developments concerning FERC Order 636 transition
costs since the company's discussion of this matter in the 1995 Annual Report
to Stockholders.
ACCOUNTS RECEIVABLE were $29.6 million at March 31, 1996 compared to $27.8
million at December 31, 1995 and $25.0 million at March 31, 1995. The
increase was mainly due to the colder weather which resulted in higher
revenues, and the electric and gas rate increases implemented in 1995.
FUEL FOR ELECTRIC GENERATION decreased $2.1 million, or 12.3%, in the first
quarter of 1996 compared to the same period in 1995. The decrease was due to
a 7.3% reduction in kilowatt-hours generated by the company. The cost of gas
used for generation decreased $1.0 million compared to last year. Greater
quantities of gas were burned at the Fox Lake Power Plant during the first
quarter of 1995 due to lower gas costs. In 1995, the company entered into
new coal supply agreements which are estimated to reduce 1996 prices over
7.0% compared to 1995 prices.
PURCHASED POWER EXPENSE increased $2.1 million, or 17.3%, during the first
quarter of 1996 compared to 1995. This increase is primarily a result of the
27.2% increase in Kwh's. Capacity charges included in purchased power
expense were $5.8 million for both the first quarter of 1996 and the first
quarter of 1995. During the first quarter of 1996, the company realized
revenues of $30,000 and transmission service expenses of $44,000 under the
intra-pool transmission service fee requirement of the MAPP Agreement.
OTHER OPERATING EXPENSE included merger related expense of approximately
$0.2 million during the first quarter of 1996. Expenses totaled
approximately $1.5 million for the twelve months ended March 31, 1996.
See ITEM 5, OTHER INFORMATION for details concerning the merger.
DEPRECIATION EXPENSE increased by $0.4 million or 4.9%. This is primarily
due to increased investment in utility plant and increased depreciation rates
approved by the Minnesota Public Utilities Commission in September 1995.
Total INCOME TAX EXPENSE increased approximately $1.1 million during the
first quarter of 1996 compared to the first quarter of 1995 mainly due to
higher income. Net income before taxes was $15.5 million for the first
quarter of 1996 compared to $12.6 million for the same period in 1995.
OTHER INCOME for the first quarter of 1996 includes $0.4 million of energy
efficiency carrying costs and curtailment credits compared to $0.3 million
for the same period in 1995. The increase is primarily due to an increase in
the total amount of demand side management (DSM) costs ($24.1 million at
March 31, 1996 compared to $18.2 million at March 31, 1995). The 1991 and
1992 DSM costs are being recovered over a four year period beginning in
October 1994. The company filed an application with the Iowa Utilities Board
(IUB) on April 30, 1996 for recovery of the 1993, 1994 and 1995 DSM costs.
The application seeks recovery of an annual amount of $7.3 million over a
four year period. The IUB is expected to issue a final order by October 31,
1996.
INTEREST ON LONG-TERM DEBT decreased approximately $0.2 million during the
first quarter of 1996 compared to the same period in 1995. On May 1, 1995,
$14,000,000 of 4 5/8% Series First Mortgage Bonds were retired.
OTHER INTEREST EXPENSE decreased approximately $13,000 primarily due to
interest on short-term borrowings. Short-term interest expense was $429,000
for the first quarter of 1996 compared to $448,000 for the first quarter of
1995. The average outstanding balance of short-term borrowings during the
first quarter of 1996 was $30.3 million compared to $29.9 million during the
first quarter of 1995. Interest rates for the first quarter of 1996 averaged
5.6% compared to 6.0% in 1995.
AVERAGE TEMPORARY INVESTMENTS during the first quarter of 1996 were $2.9
million compared to $1.9 million in 1995. The average interest rate was 5.4%
in the first quarter of 1996 compared to 5.7% in 1995.
FUEL INVENTORIES were $11.9 million at March 31, 1996, compared to $19.3
million at December 31, 1995 and $15.5 million at March 31, 1995. The
decline in inventories from December 31st is primarily due to normal seasonal
draw-down of coal supplies during the winter when the river is closed to
barge traffic.
CONSTRUCTION EXPENDITURES totaled $4.8 million during both the first quarter
of 1996 and the first quarter of 1995. There were no major individual
construction projects during the first quarter of 1996. Construction work in
progress as of March 31, 1996 totalled $3.9 million compared to $8.4 million
at March 31, 1995. The 1996 and 1997 construction programs are estimated to
be $32 million and $36 million, respectively.
The company does not anticipate any public offerings for new debt or new
stock in the next two years, other than for re-establishing the Dividend
Reinvestment Program whereby new shares will be purchased on the open market,
beginning either in the second or third quarter of 1996.
In 1993 the company adopted Statement of Financial Accounting Standards
(SFAS) 106, "EMPLOYER'S ACCOUNTING FOR POSTRETIREMENT BENEFITS OTHER THAN
PENSIONS". Under the provisions of SFAS 106, the estimated future cost of
providing postretirement benefits will be accrued during the employees'
service periods. The Iowa Utilities Board has allowed the company to recover
SFAS 106 costs in its Iowa gas rates effective May 1993 and Iowa electric
rates effective October 1993. As of March 31, 1996, the company has deferred
approximately $2.1 million of SFAS 106 costs applicable to its Minnesota
jurisdiction pending approval of the company's request for recovery of the
costs in rate increase applications filed in 1995.
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.
Revenues collected in excess of the Board's ordered level in the amount of
approximately $270,000 were refunded in April 1996.
The company filed a Minnesota electric rate increase application with the
Minnesota Public Utilities Commission (MPUC) 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 any additional material adverse impact on the
company's financial condition. On April 10, 1996 the Commission issued an
order allowing an increase in electric rates of $2.3 million. On April 26,
1996, the company filed for reconsideration of the purchased power
disallowance by the Commission. The Commission is expected to respond to the
request before the end of the third quarter of 1996.
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 IUB Order dated February 21, 1996, 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. Iowa gas rates implemented in October 1995 did not include
recovery of any future investigative or remediation costs to be incurred in
the clean-up of former manufactured gas plants. The company anticipates that
future investigation and remediation costs applicable to the Iowa
jurisdiction, if required, will be recovered from customers after a rate
filing.
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. 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. Final resolution of the MPUC Order is expected in 1996.
The company's potential liability for coal tar waste at former manufactured
gas plant sites was discussed in the 1995 Annual Report to Stockholders.
With regard to the nine sites, clean-up has been completed at one site and
ground water monitoring will continue for at least one more year. At another
site, remediation of the site will begin in May 1996. For the remainder of
the other seven sites, testing and soil sampling are continuing, but the
company is unable to determine what, if any, remediation will be necessary
until a later date.
INTERSTATE POWER COMPANY
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to the 1995 Form 10-K/A Item 3 for certain
pending legal proceedings. Reference is also made to the
Management Discussion and Analysis included herein. 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 2. CHANGES IN SECURITIES
The rights of holders of registered securities have not been
materially modified, limited or qualified.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
No defaults upon senior securities.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) THE DATE OF THE MEETING AND WHETHER IT WAS AN ANNUAL OR SPECIAL
MEETING.
(b) IF THE MEETING INVOLVED THE ELECTION OF DIRECTORS, THE NAME OF EACH
DIRECTOR ELECTED AT THE MEETING AND THE NAME OF EACH OTHER DIRECTOR
WHOSE TERM OF OFFICE AS A DIRECTOR CONTINUED AFTER THE MEETING.
(c) A BRIEF DESCRIPTION OF EACH OTHER MATTER VOTED UPON AT THE MEETING
AND STATE THE NUMBER OF VOTES CAST FOR, AGAINST OR WITHHELD, AS
WELL AS THE NUMBER OF ABSTENTIONS AND BROKER NON-VOTES, AS TO EACH
SUCH MATTER, INCLUDING A SEPARATE TABULATION WITH RESPECT TO EACH
NOMINEE FOR OFFICE.
No submission of matters to a vote of security holders.
ITEM 5. OTHER INFORMATION
Proposed Merger
The Company, IES Industries Inc. ("IES"), and WPL Holdings, Inc.
("WPLH") have entered into an Agreement and Plan of Merger ("Merger
Agreement"), dated November 10, 1995, providing for: a) the Company
becoming a wholly-owned subsidiary of WPLH, and b) the merger of
IES with and into WPLH, which will result in the combination of IES
and WPLH as a single holding company (collectively, the "Proposed
Merger"). The new holding company will be named Interstate Energy
Corp. ("Interstate Energy"). The Proposed Merger, which will be
accounted for as a pooling of interests, is still subject to
approval by the shareholders of each company as well as several
federal and state regulatory agencies. The corporate headquarters
of Interstate Energy will be in Madison, Wisconsin.
The business of Interstate Energy will consist of utility
operations and various non-utility enterprises. The utility
subsidiaries currently serve approximately 870,000 electric
customers and 360,000 natural gas customers in Iowa, Illinois,
Minnesota and Wisconsin.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EX-27 Financial Data Schedule (required for electronic
filing only in accordance with Item 601(c)(1) of
Regulation S-K).
(b) No reports were filed on Form 8-K.
SIGNATURE
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.
Interstate Power Company
(Registrant)
Date May 15, 1996 /s/ W. C. Troy
W. C. Troy, Controller
(Duly Authorized Officer and
Principal Accounting Officer)