United States
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
Transition report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For Quarter Ended MARCH 31, 1994 Commission File Number
10-3140
NORTHERN STATES POWER COMPANY, A WISCONSIN CORPORATION,
MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H (1) AND
(2) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE
REDUCED DISCLOSURE FORMAT.
Northern States Power Company
(Exact name of registrant as specified in its charter)
Wisconsin
39-0508315
(State or other jurisdiction of
(I.R.S.Employer Identification No.)
incorporation or organization)
100 North Barstow Street, Eau Claire, Wisconsin 54702
(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code
(715) 839-2621
NONE
Former name, former address and former fiscal year, if changed
since last report
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 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, as of the latest practicable
date.
Class Outstanding at April 30, 1994
Common Stock, $100 par value 862,000 Shares
All outstanding common stock is owned beneficially and of
record by Northern States Power Company, a Minnesota
corporation.
Northern States Power Company (Wisconsin)
NOTES TO FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited
financial statements contain all adjustments necessary to
present fairly the Company's financial position as of March 31,
1994 and December 31, 1993 and the results of its operations for
the three months ended March 31, 1994 and March 31, 1993 and
cash flows for each of the three months then ended.
The accounting policies followed by the Company are set forth in
Note 1 to the Company's financial statements in the 1993 SEC
Form 10-K.
1. Rate Matters
There were no changes in any of the Company's
jurisdictions' rates since the 1993 SEC Form 10-K was filed.
The Company has offered some of its wholesale
customers discounted rates for extended term contracts.
These discounts would not materially affect the company's
earnings.
2. Accounting Changes
Postemployment Benefits
Effective January 1, 1994, the company adopted the provisions of
Statement of Financial Accounting Standards (SFAS) 112,
Accounting for Postemployment Benefits. This standard requires
the accrual of certain postemployment costs (such as injury
compensation and severance) that are payable in future time
periods. No material effect on the Company's results of
operations or financial condition is expected from its adoption.
Stock Compensation Expense
The FASB has issued an Exposure Draft considering the accrual of
compensation expense related to certain stock awards beginning
in 1997 with disclosure required beginning in 1994. The
Company's potential increase in annual compensation expense, as
calculated under the provision of this Exposure Draft, is
expected to be immaterial.
3. Contingent Liabilities
The Company is contingently liable to several financial
institutions for debt incurred by companies under the Company's
Economic Development Guaranty Program. At March 31, 1994, the
Company was contingently liable for approximately $1.4 million
under the agreements. No losses were sustained under these
agreements during 1992, 1993 nor during the first quarter of
1994; the Company anticipates no future material losses will
result from these agreements.
4. Parent Company and Intercompany Agreement-Resolution of
Operating Contingency
Although the Company does not own a nuclear facility, any
impacts on such facilities owned by Northern States Power
Company (Minnesota), the parent company, would be a cost
included under the Interchange Agreement and the Company would
be charged its proportion of the impact.
The parent company proposed construction of a temporary onsite
dry cask (container) storage facility for spent nuclear fuel at
its Prairie Island Nuclear Generating Plant (Prairie Island).
At present operating levels, the current Prairie Island onsite
storage pool will be filled in 1994.
On May 6, 1994, the Minnesota Legislature passed a bill that
authorizes NSP to install 17 dry casks at its Prairie Island
Nuclear Generating Plant if the Company satisfied certain
responsibilities. The first increment of five casks would be
available after NSP executes an agreement with the Governor
concerning the renewable energy and alternative siting
commitments contained in the new law. The second increment of
four casks would be available if the Minnesota Environmental
Quality Board finds that NSP has applied for an alternative site
license, used good faith in locating an alternative site and has
committed to build or purchase 100 megawatts (MW) of wind
generation. The final increment of eight casks would be
available unless prior to June 1, 1999, the Legislature
specifically rejects this authorization for the final eight
casks, which can only happen if NSP fails to meet the renewable
energy commitments of 225 MW of wind generation and 50 MW of
biomass generation by December 31, 1998. The Governor has since
signed the bill into law.
Item 2. Management's Discussion
and Analysis of Results of Operations
Discussion of financial condition and liquidity is omitted per
conditions set forth in general instructions H (1) and (2) of
Form 10-Q for wholly-owned subsidiaries. (Reduced disclosure
format.)
The Company's net income for the first quarter ended March 31,
1994 was $18.3 million, up approximately $2.4 million from the
net income recorded for the comparable period a year ago. The
increase in net income was primarily due to additional revenues
resulting from an increase in weather related energy sales and
to a lesser extent due to a gas rate increase of 2.0 percent
approved by the PSCW effective January 1, 1994.
ELECTRIC SALES AND REVENUES
Electric revenues for the first quarter of 1994 increased $5.2
million (5.5 percent) from the electric revenues for the first
quarter of 1993. Electric sales increased 6.0 percent in the
first quarter of 1994 as compared with the first quarter of 1993
mainly due to the comparably cooler temperatures in 1994. The
increased electric wholesale rates effective in September of
1993 resulted in approximately $0.2 million of the increase in
the first quarter.
GAS SALES AND REVENUES
Gas revenues increased $4.5 million (15.5 percent) compared to
the first quarter, 1993. This is largely due to a 13 percent
increase in firm gas sales due to comparably cooler temperatures
in 1994. Higher commodity costs resulted in approximately $1.1
million of purchased gas adjustment clause revenue increases and
the forementioned gas rate increase also contributed to the
increase.
OPERATING EXPENSES
Operating expenses increased $7.5 million in the first quarter
of 1994 as compared to the first quarter of 1993. Gas
purchased for resale increases made up $2.0 million of this
increase and were the result of higher commodity costs combined
with increased purchased volumes to supply the increased sales.
The Company's increased electric sales during the first quarter
of 1994 over the first quarter of 1993 combined with increased
costs associated with the NSP System's new (effective May 1993)
contract with Manitoba Hydro, resulted in the Company's fuel for
electric generation and its purchased power and fuel as
purchased under its interchange agreement with its parent to
increase by approximately $1.7 million.
The company's Provision for Deferred Income Taxes has decreased
by approximately $2.5 million as a result of debt reacquisitions
that occurred in 1993. Offsetting impacts are reflected in the
current income tax expense.
OTHER INCOME
There were no material changes to other income and deductions in
the first quarter of 1994 as compared with the first quarter of
1993.
INTEREST CHARGES
In March 1993, the Company issued $110.0 million of first
mortgage bonds due March 1, 2023 with an interest rate of 7-
1/4%. The proceeds from these bonds were used to redeem $47.5
million of 9-1/4% bonds, $38.4 million of 9-3/4% bonds, and
$7.8 million of 9-1/4% bonds. In October 1993, the Company
issued $40.0 million of first mortgage bonds due October 1, 2003
with an interest rate of 5-3/4%. The proceeds from these bonds
were used to redeem $24.3 million of 7-3/4% bonds and
$10.8 million of 4-1/2% bonds.
These transactions resulted in a $0.4 million reduction in this
quarter's interest charges compared to the charges of the first
quarter of 1993.
PART II. OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K
There were no reports on Form 8-K filed for the three
months ended March 31, 1994.
SIGNATURES
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.
NORTHERN STATES POWER COMPANY
(Registrant)
Date: May 13, 1994 /s/
Kenneth J Zagzebski
Controller
(Principal Accounting Officer)
Date: May 13, 1994 /s/
Neal A. Siikarla
Treasurer
(Principal Financial Officer)
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Three Months
March 31
(Thousands of
1994(*) 1993(*)
Operating revenues
Electric...................................... $100,548 $95,313
Gas........................................... 33,456 28,972
Total....................................... 134,004 124,285
Operating expenses
Fuel for electric generation.................. 1,747 1,020
Purchased and interchange power............... 43,462 42,490
Gas purchased for resale...................... 19,912 17,935
Administrative and general.................... 7,018 6,812
Other operation............................... 12,791 12,333
Maintenance................................... 4,144 3,757
Depreciation and amortization................. 7,524 6,917
Taxes: Property and general................... 3,514 3,299
Current income tax expense............. 10,769 6,262
Net Provision for Deferred Income Taxes 1,091 3,619
Net Investment tax credit adjustments.. (236) (239)
Total....................................... 111,736 104,205
Operating income............................... 22,268 20,080
Other income
Other income and deductions - net............. 52 176
Allowance for funds used during construction -
Equity..................................... 152 146
Total Other income........................... 204 322
Income before interest charges................. 22,472 20,402
Interest charges
Interest on long-term debt.................... 3,974 4,427
Other interest and amortization............... 288 233
Allowance for funds used during construction -
Debt....................................... (96) (115)
Total....................................... 4,166 4,545
Net Income..................................... $18,306 $15,857
Statements of Retained Earnings
Balance at beginning of period................. $205,114 $192,816
Net income for period.......................... 18,306 15,857
Net Additions................................ 18,306 15,857
Dividends paid................................. 6,206 5,827
Balance at end of period....................... $217,214 $202,846
<FN>
(*) Unaudited
The Notes to Financial Statements are an integral part of the Statement
of Income and Retained Earnings
Northern States Power Company (Wisconsin)
Balance Sheets
March 31 December 31
1994 1993
ASSETS (Thousands of dollars
UTILITY PLANT
Electric............................................. $812,394 $810,691
Gas.................................................. 81,930 81,567
Other................................................ 44,765 43,279
Total............................................ 939,089 935,537
Accumulated provision for depreciation............. (326,745) (320,938)
Net utility plant................................ 612,344 614,599
OTHER PROPERTY AND INVESTMENTS......................... 6,963 6,887
CURRENT ASSETS
Cash and cash equivalents............................ 287 449
Accounts receivable - net............................ 41,922 37,716
Materials and supplies - at average cost
Fuel............................................... 3,102 2,293
Other.............................................. 5,495 8,692
Accrued utility revenues............................. 12,914 17,230
Prepayments and other................................ 7,403 9,855
Deferred tax asset................................... 1,242 1,254
Total current assets............................. 72,365 77,489
DEFERRED DEBITS
Unamortized debt expense............................. 3,044 3,078
Regulatory assets.................................... 30,714 30,036
Other................................................ 5,521 4,890
Total Deferred Debits............................ 39,279 38,004
TOTAL....................................... $730,951 $736,979
LIABILITIES
CAPITALIZATION
Common Stock - authorized 870,000 shares of $100 par value,
issued shares: 1992 and 1991, 862,000.............. $86,200 $86,200
Premium on common stock.............................. 10,461 10,461
Retained Earnings.................................... 217,214 205,114
Total common stock equity........................ 313,875 301,775
LONG-TERM DEBT 217,100 217,600
Total capitalization............................. 530,975 519,375
CURRENT LIABILITIES
Notes payable - parent company....................... 2,900 23,500
Long-term debt due within one year................... 500
Accounts payable..................................... 8,393 15,264
Salaries, wages, and vacation pay accrued............ 4,737 5,481
Payable to affiliate companies (principally parent).. 10,858 11,636
Federal taxes accrued................................ 10,280 1,606
Other taxes accrued.................................. 3,430 2,492
Interest accrued..................................... 4,929 4,823
Other................................................ 1,866 1,917
Total current liabilities........................ 47,893 66,719
DEFERRED CREDITS
Accumulated deferred income taxes.................... 89,505 88,426
Accumulated deferred investment tax credits.......... 23,417 23,653
Net deferred regulatory liability.................... 22,767 22,416
Other................................................ 16,394 16,390
152,083 150,885
TOTAL........................................ $730,951 $736,979
<FN>
(*) Unaudited
The Notes to Financial Statements are an integral part of the Balance Sheet.
Northern States Power Company (Wisconsin)
Statements of Cash Flows
Three Months Ended
March 31
(Thousands of doll
1994(*) 1993(*)
Cash Flows from Operating Activities:
Net Income........................................................... $18,306 $15,857
Adjustments to reconcile net income to cash from operating activities
Depreciation and amortization...................................... 7,934 7,409
Deferred income taxes.............................................. 1,091 3,727
Investment tax credit adjustments.................................. (236) (239)
Allowance for funds used during construction - equity.............. (152) (146)
Other............................................................... 0 0
Cash provided from (used by) changes in working capital.............. 7,738 4,909
Cash provided from (used by) changes in other assets and liabilities.. (19) (304)
Net cash provided from operating activities 34,662 31,213
Cash Flows from Financing Activities:
Issuance of long-term debt............................................ 0 107,314
Issuance (repayment) of short-term debt.............................. (20,600) (22,000)
Redemption of long-term debt(Including Reacquisition Premium)........ 0 (99,411)
Dividends paid....................................................... (6,206) (5,827)
Net cash used for financing activities (26,806) (19,924)
Cash Flows from Investing Activities:
Capital expenditures................................................. (5,619) (11,247)
Increase (decrease) in construction related accounts payable......... (1,514) (950)
Allowance for funds used during construction - equity................ 152 146
Other................................................................ (1,037) 597
Net cash used for investing activities (8,018) (11,454)
Net increase (decrease) in cash and cash equivalents.................... (162) (165)
Cash and cash equivalents beginning of period........................... 449 881
Cash and cash equivalents end of period................................. $287 $716
<FN>
The Notes to Financial Statements are an integral part of the Statement of Cash Flows