The 1999 Annual Report of WPS Resources Corporation can be summarized as follows:
1) WPS Resources saw increased revenues, net income, and earnings per share in 1999 compared to 1998. The utility operations also saw growth in revenues and net income.
2) In 1999, WPS Power Development acquired electric generation assets in Maine and Pennsylvania, expanding their portfolio of power generation facilities.
3) WPS Energy Services' DENet technology allows customers to monitor energy usage and access supply information online. This helped drive growth at WPS Energy Services from $13.6 million in 1994 to $292.2 million in 1999.
4) Key projects in 1999 included the installation of wind turbines in Wisconsin
2. Striding Into The New World
Highlights
Year Ended December 31 1999 1998 Percent Change
Revenues – utility (Thousands) $773,992 $708,371 9.3
Revenues – nonregulated (Thousands) 324,548 355,365 (8.7)
Net Income (Thousands) 59,565 46,631 27.7
Basic and diluted earnings per
average share of common stock $ 2.24 $ 1.76 27.3
Dividend paid per share 2.00 1.96 2.0
Book value per share 20.03 19.52 2.6
Common stock price at year end $25.125 $35.25 (28.7)
Electric sales – utility (Kilowatt-hours – Thousands) 12,503,487 12,172,432 2.7
Gas deliveries – utility (Therms – Thousands) 662,615 608,092 9.0
Sources of Money
Electric Utility Revenue
Gas Utility Revenue
Nonregulated Revenue
WPS Resources Corporation
3. Table of Contents
WPS Resources Corporation at a Glance 2
Letter to Shareholders 3
Striding Into The New World 6
Management’s Discussion and Analysis 13
Consolidated Statements of Income,
Comprehensive Income, and
Retained Earnings 24
Consolidated Balance Sheets 25
Consolidated Statements of Capitalization 26
Consolidated Statements of Cash Flows 27
Notes to Consolidated Financial Statements 28
Report of Management 45
Report of Independent Public Accountants 45
Financial Statistics 46
Shareholder Information 49
Board of Directors 50
Officers and Leadership Staff 51
Uses of Money
Gas Utility Purchased Gas Costs
Electric Utility Fuel and Purchased Power
Nonregulated Cost of Sales
Operating and Maintenance Expense
Depreciation and Decommissioning
Common Dividends
Interest, Other Income, and Preferred Dividends
Taxes – Income
4. WPS Resources Corporation at a glance
WPS Resources Corporation is a holding company based in Green Bay, Wisconsin.
System companies provide products and services in both regulated and nonregulated energy markets.
Wisconsin Public WPS Resources Capital Corporation
Service Corporation WPS Resources Capital Corporation is an intermediate holding company
for the nonregulated subsidiaries.
Business: Wisconsin Public Service
Corporation is a regulated electric and
WPS Power Development, Inc. WPS Energy Services, Inc.
natural gas utility serving an 11,000
Business: WPS Energy Services, Inc.
Business: WPS Power Development, Inc.
square-mile area of northeastern and
develops, owns, and operates nonregulated is a diversified nonregulated energy supply
central Wisconsin and an adjacent portion
electric generation facilities and provides and services company with principal
of Upper Michigan (see map at right).
services to the electric power generation
Wisconsin Public Service has operations in Illinois, Maine, Michigan,
industry nationwide (see map below).
2,493 employees. Ohio, and Wisconsin (see map below).
WPS Power Development has
Market: Wisconsin Public Service provides Wholesale products are provided on a
129 employees.
388,451 electric and 229,905 natural gas nationwide basis. WPS Energy Services
Products and Services: WPS Power
customers with a full range of products has 71 employees.
Development’s services include acquisition
and services customarily offered by Market: WPS Energy Services operates
and investment analysis, project
regulated utilities. Electric and gas service is in the retail and wholesale nonregulated
development, engineering and
provided to residential, farm, commercial, energy marketplace. Emphasis is on serving
management services, and operations and
and industrial customers. Electric power is commercial, industrial, and wholesale
maintenance services. WPS Power
also provided to wholesale customers. customers in the northeast quadrant of
Development’s areas of expertise include
Electric operations accounted for 73% of
the United States.
cogeneration, distributed generation,
1999 revenues, while gas operations
Products and Services: WPS Energy
generation from renewables, and
contributed 27%. Electric revenues are
Services provides individualized energy
generation plant repowering projects.
comprised of 89% retail sales and
supply options and strategies that allow
Facilities: WPS Power Development owns
11% wholesale sales. Wisconsin customers
customers to manage energy needs while
a two-thirds interest in the Stoneman
accounted for 96% of the utility’s 1999
capitalizing on opportunities resulting from
Power Plant, a 53-megawatt coal-fired
revenues, compared with 4% from
deregulation. WPS Energy Services provides
merchant steam plant located in Cassville,
Michigan customers.
natural gas, electric, and alternate fuel
Wisconsin. In June, WPS Power
Facilities: Electric generating capacity
products, real-time energy management
Development acquired 92 megawatts of
based on 1999 summer capacity
services, energy utilization consulting, and
generation assets from Maine Public
was 1,994 megawatts, including
project management. Patented DENet®
Service Company. These facilities are
Wisconsin Public Service’s share of jointly-
computer technology allows customers to
located in the State of Maine and in
owned facilities. Wisconsin Public Service
New Brunswick, Canada. In November, monitor their energy usage and to access
has 1,559 miles of electric transmission and
WPS Power Development acquired the energy supply information.
19,745 miles of electric distribution lines.
472-megawatt Sunbury Generation Station
Gas properties include 5,099 miles of main
in Pennsylvania from PP&L Resources, Inc.
and 66 gate and city regulator stations.
WPS Power Development is a two-thirds
Upper Peninsula owner and the operator of a facility in
Alabama which produces synthetic fuel
Power Company from coal which is burned in utility boilers.
Business: Upper Peninsula Power WPS Power Development also owns landfill
Company is a regulated electric utility and wood waste gas generating facilities in
which serves a 4,500 square-mile area of Wisconsin and steam boilers in other states.
primarily rural countryside covering 10 of
the 15 counties in the Upper Peninsula
of Michigan (see map at right).
Upper Peninsula Power has 170 employees. Wisconsin Public Service Corporation
Market: Upper Peninsula Power provides Upper Peninsula Power Company
a full range of electric products and
services to 48,805 electric customers in
99 communities and adjacent areas, in
addition to providing electric energy to
9 wholesale customers. The main industries
in Upper Peninsula Power’s service area are
forest products, iron mining and
processing, tourism, and small
manufacturing. Electric revenues are
comprised of 92% retail sales and
8% wholesale sales.
Facilities: Electric generating capacity
based on 1999 summer capacity was
95 megawatts. Upper Peninsula Power
has 806 miles of electric transmission WPS Power Development, Inc.
and 2,764 miles of distribution lines. WPS Energy Services, Inc.
Both WPS Energy Services, Inc. and
WPS Power Development, Inc.
WPS Resources Corporation 2
5. Striding Into The New World
To Our Shareholders
WPS Resources Corporation is striding into a new world! plants in different areas of the country. In June, we completed
We have hastened our pace and are surging forward in our the purchase of electric generation assets with an aggregate
goal to create value for you, our shareholders. As in most tests capacity of 92 megawatts from Maine Public Service
of endurance, we have experienced hills and valleys that Company. The $37.4 million transaction yielded hydroelectric
require both strategy and strength. Let me describe for you facilities, diesel peaking units, and oil-fired generation in
the course we traveled during 1999 and our new world stride. Maine and the Canadian province of New Brunswick. We also
were successful in placing 64 percent of the project cost as
An Overview nonrecourse debt with Bayerische Landesbank Girozentrale.
Our financial performance has improved. We immediately found a market for the energy these
WPS Resources Corporation plants produce. In November of 1999, the Maine Public
• Revenues were $1,098.5 million in 1999 compared Utilities Commission selected WPS Energy Services to
with $1,063.7 million in 1998. serve all residential and industrial accounts taking service
• Net income was $59.6 million in 1999 compared under the “standard offer” in the Maine Public Service
with $46.6 million in 1998. Company service territory as well as providing 80 percent of
• Earnings per share were $2.24 in 1999 compared the market for mid-size business customers in Northern Maine.
with $1.76 in 1998. This is very important because starting March 1, 2000,
Utility Operations - Wisconsin Public Service consumers in Maine will be able to choose from competing
Corporation and Upper Peninsula Power Company power producers.
• Revenues were $781.9 million in 1999 compared In November, WPS Power Development completed the
with $715.1 million in 1998. purchase of a four-unit, coal-fired power plant located in
• Net income was $67.3 million in 1999 compared Pennsylvania. The $107 million transaction yielded assets with
with $56.4 million in 1998. a nameplate capacity of 472 megawatts.
• Assets were $1,515.2 million in 1999 compared These purchases by WPS Power Development are a part of
with $1,363.8 million in 1998. our strategy to develop a portfolio of power generation assets
Nonregulated Subsidiaries - WPS Energy which produce energy that is then marketed by WPS Energy
Services, Inc. and WPS Power Development, Inc. Services, our diversified nonregulated energy supply and
• Revenues were $327.6 million in 1999 compared services company.
Our DENet® technology, patented in 1999, was designed
with $357.2 million in 1998.
• Losses totaled $7.3 million in 1999 compared from the ground up to meet the needs of our customers, and
with $9.3 million in 1998. it has quickly set us apart from companies focused solely on
• Assets were $255.1 million in 1999 compared electricity and gas as commodities. WPS Energy Services’
with $104.7 million in 1998. DENet system allows real-time monitoring of energy and
• WPS Energy Services’ revenues have grown from process information as well as the ability to verify bills and
$13.6 million in 1994 to $292.2 million in 1999. analyze load profiles, which helps our customers identify
• WPS Power Development’s assets have grown from energy management opportunities. Internet access allows our
$4.8 million in 1995 to $190.2 million in 1999. customers to access their information from anywhere in the
A number of factors contributed to our success in 1999. world at their convenience.
Wisconsin Public Service Corporation, our electric and natural Our DENet product is also used in conjunction with our
gas utility, was granted a rate increase at the start of 1999. 24-hour energy monitoring, dispatch, and coordination center
Wisconsin retail rates were increased 6.3 percent for electric as it allows us to monitor and control our generation plants
and 5.1 percent for gas for 1999 and 2000. A fall rate located in other parts of the nation from our Green Bay offices.
reopener on certain issues that were not resolved in that rate Twice in 1999, national recognition came our way for our
case yielded an additional 4.6 percent electric increase extraordinary customer service and extremely competitive
effective January 1, 2000. Additionally, Wisconsin Public energy prices. Wisconsin Public Service was recognized
Service earned its 12.1 percent allowed rate of return for 1999 when a J. D. Powers & Associates’ residential customer
as authorized by the Public Service Commission of Wisconsin. survey found us tied for 2nd in the nation in customer
Unfortunately, we struggled in achieving one of our five satisfaction among approximately 100 utilities surveyed.
goals set out in last year’s report. Achieving profitability within Later in 1999, WPS Energy Services was recognized when
the nonregulated sector of our business starting in 1999 proved Mastio & Co. performed an independent, nation-wide
difficult for us. This was in part due to a poor return from an customer satisfaction survey in which we were ranked 6th
investment made by WPS Power Development for two-thirds of out of 77 energy marketers in the survey. We take great
a facility in Alabama. We’ve since solved the problems, which pride in the recognition of our exemplary customer service
will allow WPS Power Development to move forward in 2000 because we have always believed that our customers are
to achieve its projected returns on this investment. the cornerstone of our business. It is important we serve
them well.
The Milestones Also in 1999, Wisconsin Public Service installed 14 wind
Our progress in 1999 began with the course we set in turbines on a wind farm in Kewaunee County at a cost of
1998. The strategies we developed then allowed us to grow in $10.1 million. When operating at full capacity, they will
many areas. Our pace is confident and it allows us to lengthen produce enough electricity to serve 3,600 homes. These
our stride as we pass numerous milestones. wind turbines represent our latest entry into the renewable
WPS Power Development, our nonregulated electric resources environment and will allow us to learn more
generation asset development company, is a good example of about this technology, its impact on Wisconsin, and
the confident strides we made with the purchase of power whether it is a viable resource for future investment.
3 WPS Resources Corporation
6. In November, Wisconsin Public Service filed an application In 1999, we increased our dividend for the 41st
with the Public Service Commission of Wisconsin for the consecutive year. We view the continued moderate growth
construction of a 250-mile, 345-kilovolt transmission line. We of dividends as a necessity to attract and retain the type of
believe this line is the largest transmission project being investors that a company of our size, our profile, and our
pursued in the nation right now. Certainly, it’s the largest strategy needs.
transmission project in Wisconsin in terms of dollars, distance, We are growing our earnings to bring our payout ratio in
and voltage, and it’s the first new transmission line to be built line with our targeted payout ratio of 70 percent or less. Your
in Wisconsin in 30 years. The investment opportunity is investment in our company provides a rising cash return
around $150 million, and we are targeting completion for from the dividends over the long run while offering the
2003. This line will strengthen the electric network in additional benefit of price appreciation.
Wisconsin and provide resources for many consumers in We are using our financial strength and financial flexibility
the state. to support the planned growth of our nonregulated
In September, Wisconsin Public Service began installing subsidiaries. We are using nonrecourse financing for our
automated meter reading equipment that is capable of nonregulated projects, and our utilities are moving away
hourly meter reads. This equipment allows us to read gas from first mortgage bonds to give us more financing
and electric meters electronically and gives our customers flexibility when we need it.
flexibility on when and how often their meters are read. We understand the risks associated with our energy
We feel this technology is consistent with where commerce business as it becomes deregulated and have strategies in
in the energy industry is going and that it will give us the place to allow us to mitigate risks and seize opportunities. As
capability to serve our customers better while aiding in the a result, we have extensive policies and procedures requiring
creation of a competitive environment in Wisconsin. daily monitoring of the use of financial instruments to take
Our jointly-owned Kewaunee Nuclear Power Plant advantage of synergistic opportunities as well as to enhance
celebrated its 25th year of operation. Kewaunee also the profitability of energy purchases.
completed the year with 100 percent availability for the first Our officers are compensated in part through incentive
time in its history as a result of our move to an 18-month pay plans that require them to meet certain operational
refueling cycle. As an owner and operator of the plant, we are targets. A portion of our officers’ and directors’ compensation
proud of the plant’s 440-day continuous operating record is also provided via stock options. These compensation
which began in 1998 and continues today. Kewaunee enjoys policies help to align the interests of our officers and directors
a reputation as one of the best operated plants in the world with those of our shareholders.
and is a flagship in the industry. Wisconsin Public Service’s rates are from 10 percent to
We became partners with three other utilities in the 15 percent lower than the average rates for all customer
creation of Nuclear Management Company, LLC in 1999. classes of the major investor-owned utilities in Wisconsin.
This new company will assume the day-to-day operating In fact, in 2000, Wisconsin Public Service’s typical residential
responsibility for the seven nuclear plants owned by the electric customer will pay only about one percent more than
partners, representing 3,800 megawatts of nuclear capacity, by they paid in 1993.
mid-2000. The short-term goals of the Nuclear Management One area of disappointment in 1999 has been our
Company are to sustain long-term safety, optimize reliability, stock price. From a high of $35.50 on January 4, 1999, our
and improve operational performance. We expect to transfer stock dropped to $25.125 on December 31, 1999. Our stock
our operating license for the Kewaunee plant to the Nuclear tracks the trend of the electric utility industry, which has
Management Company sometime in 2000. experienced difficulty with deregulation and merger
We also continue to play a role in shaping the energy uncertainties. Wisconsin utilities have been particularly
industry in Wisconsin and indeed the nation. Since our affected by the slow pace of deregulation in this state,
subsidiaries operate in several states, we are involved in the unfavorable weather, and state power reliability legislation.
restructuring initiatives being championed both by the But the single most important event in the broad economic
legislators and regulators in those states. Restructuring is environment is the increased yield on the 30-year
occurring differently in each of these states, and we’ve been government bond. Our stock trades in an inverse relationship
successful in understanding and influencing the restructuring to bond yields. Thus, our stock price peaked at the same
plans of the states in which we operate. time that the government bond yields were at their
lowest, and our stock price was near its lowest point at
Financial Hurdles year-end when government bonds were yielding their
For any marathon or like undertaking, participants must highest rate in two years. But looking at the stock price
be assured that their pace will take them through to the positively, as the economic uncertainty is alleviated and
finish. It is no different in our industry. given our financial strength, we expect our stock price to
Wisconsin Public Service owns just under recover. Eventually, the market will begin to recognize the
1,800 megawatts of generation. We recently completed success of our growth strategies, which will then be
detailed analysis which suggests that these generation reflected in our stock price.
assets are worth up to five times their current book value.
Financial Goals
Our current strategy is to retain existing generation, but the
low book value and competitive position of our generation, Our future course includes the following financial goals:
especially considering transmission limitations in Wisconsin, • Achieving a return for Wisconsin Public Service
offer both insurance against stranded investment and consistent with the Public Service Commission
increased shareholder value potential as generation of Wisconsin’s allowed rate of return of 12.1 percent
deregulation evolves in the Midwest. for 2000.
7. • Achieving profitability within the nonregulated segment change, and thus we have in place initiatives to allow every
of our business in 2000. employee an opportunity to understand our strategic plan
• Achieving 10 percent of our earnings from WPS Energy and to be a part of ensuring its success by using their skills
Services and WPS Power Development in 2000. and knowledge.
• Achieving a dividend payout ratio of 70 percent within Examples of this include the integration of Upper
three years. Peninsula Power Company and the Sunbury Plant
• Achieving earnings growth of 10 percent per annum. in Pennsylvania into WPS Resources. We were able to
accomplish these integrations at a great savings while at the
Passing the Baton same time offering employees whose jobs were eliminated a
The membership on our Board of Directors has changed. job opportunity should they choose. We feel it is important to
Sister Lois Bush, a valued member of our Board since 1993, use the skills and knowledge of employees who join us as part
did not seek re-election in 1999. As the Board had expanded of an integration, whether in their existing job or in another
in 1998 as a result of our merger with Upper Peninsula Energy position that is suited to their skills and talents. This allows
Corporation and the addition of Clarence R. Fisher to the us to retain valued employees. As a result, we are able to
Board, we did not replace Sister Lois and instead returned the continue striding forward rather than taking steps backward
Board to nine members. to ramp up because of personnel changes.
December 31, 1999, brought the retirement of another And, to be a success as a company, we must be a success
Board member. Daniel A. Bollom has served our company for in the communities we serve. So, we actively support our
over 41 years in roles that included not only Board member, communities through involvement by our employees and
but also Chairman, President, and Chief Executive Officer. contributions from our foundations.
Dan’s leadership and true concern for our company will be Approaching the next corner in the road, we must be
missed. Our new Board member is John C. Meng, who joined confident we can proceed in stride, without losing speed.
our Board on February 10, 2000. Our strategy, as detailed in the following article, will provide
Retirement also claimed our Corporate Secretary in 1999 insights into why we believe we will be able to take that next
when Francis J. Kicsar retired after more than 33 years of corner with ease.
service in numerous capacities throughout his tenure.
Striding Forward
Barth J. Wolf has stepped into the newly created role of
Secretary and Manager-Legal Services. We are striding with confidence and bringing value to
We also saw the appointment of new officers during the our shareholders and customers through our technological
past year. Diane L. Ford became Vice President-Controller and innovations, our mastery of power plant development and
Chief Accounting Officer. optimization, and our customer solutions.
At Wisconsin Public Service, Lawrence T. Borgard became We appreciate the confidence you have shown in our
Vice President-Transmission. company and ask that you continue your support. We are in
At WPS Energy Services, Mark A. Radtke became President, a competitive race, but we have studied and trained for this
Daniel J. Verbanac became Vice President in our Green Bay time. We are ready to yield impressive results.
office, Ruqaiyah Z. Stanley-Lolles became Vice President in our
Chicago office, and Betty J. Merlina became Vice President-FSG Sincerely,
Energy Services in our Columbus, Ohio, office.
These individuals fill strategic positions within our company
and will support our confident pace into the new world.
Around the Next Corner Larry L. Weyers
As we view the road ahead, we are confident that the skills Chairman, President, and
and knowledge of our employees combined with our strategy Chief Executive Officer
will carry us forward. Our employees are instrumental in
allowing us to stride with confidence in a world of constant February 11, 2000
WPS Resources Corporation 5
8. Striding Into The New World
WPS Power Development, Inc.
A new world of energy beckons, and WPS Resources
Corporation is answering this call to discover and grow.
Building the Architecture
The landscape of the energy world has changed. It is
Our strategy at WPS Power Development is to increase
more expansive, extending into other states and regions.
WPS Resources’ asset base. This is the steel and concrete side
And, it is filled with the architecture of competition and
of our nonregulated business, including fossil power plants,
customers who have choice.
hydroelectric stations, and renewable energy sources. It is
Backed by a strong growth strategy, advances in
the infrastructure we believe is necessary to serve our new
technology, and our dedicated employees, we are striding
customers well.
forward with confidence on the road ahead.
As electric markets deregulate, many utilities are selling
their generation assets. WPS Power Development continually
Expanding Through New Customers evaluates these opportunities. We’ve been successful at
and New Investments winning bids to purchase plants that have great potential in
this new world of energy. And more importantly, we’ve taken
At WPS Resources, we believe our strategy must begin those purchases and managed them to extract value for
with our customers. We can provide value in the marketplace WPS Resources’ shareholders.We’re also evaluating the
only when we truly understand what our customers value in construction of new plants and the possibility of repowering
energy and aggressively pursue the solutions they seek. existing plants. Diversity in these projects—in location,
market, technology, and fuel—brings us strength.
Producing Power in Maine and Pennsylvania
WPS Energy Services, Inc.
In 1999,WPS Power
Development made great
Taking the Lead with Natural Gas Marketing
strides by bringing to reality
WPS Energy Services, our diversified nonregulated
our theories about buying Mark Radtke (center),
energy supply and services company, leads into new markets
and developing generation
with natural gas marketing, because customers in many states
President of WPS Energy
facilities, and then significantly
are able to choose their natural gas supplier. Then, as the
reducing their operating
states restructure their electric industries, we provide
Services, co-developed
costs to be competitive in
electricity to these customers as well.With this strategy, we
the marketplace.
the patented DENet®
refine the tools and talents we need to grow, and we build
In June,WPS Power
a foundation for entering the competitive electric market.
Development purchased
Making Inroads to the Competitive Electric Market energy management
92 megawatts of generation
The volatility of the emerging competitive electric
facilities from Maine Public system. Using DENet,
market exposes customers to risk. All customers must begin
Service. This $37.4 million
to deal with this risk, and our customer representatives at
acquisition included customers like Wausau-
WPS Energy Services are prepared to be a resource for these
35.8 megawatts of
customers. They work to understand each customer’s
Mosinee Paper Corp.,
hydroelectric generation and
business and the challenges in that industry. Then they
55.9 megawatts of fossil-fueled
recommend an energy strategy to address those needs.
based in Mosinee,
generation in Northern Maine
Investing in Growth
and New Brunswick, Canada.
Historically, we have made substantial investments in our
Wisconsin, can manage
As a result, we are able to
growth at WPS Energy Services. As a result, the number of
participate in Maine’s newly
WPS Energy Services’ customers has grown by 25 percent multiple plants’ energy
opened energy marketplace.
or more annually.
In November, we purchased
That growth has resulted in a negative financial impact in and processes from one
the 472-megawatt Sunbury
the short term. Our objective in 2000 is to continue expanding
Power Plant in Pennsylvania. central point.
WPS Energy Services, but at a measured rate that provides more
This plant, purchased for
immediate rewards for WPS Resources’ shareholders.
$107 million, will enable us to
Establishing a Regional Presence
compete as an energy supplier
As we grow, WPS Energy Services establishes a physical
in the sizable Pennsylvania,
presence in the major regional markets the company serves.
New Jersey, and Maryland marketplace. These states have
Our office in Traverse City, Michigan, for example, opened in
already established open electric markets, so they provide
December 1999, hiring seasoned energy professionals from
a good opportunity for us to extract value from the plant.
that area. Our staff there specializes in creating products that
serve the needs of producers, utilities, other energy marketing
Synergy in the Competitive Marketplace
companies, and end-use customers. Because there’s significant
natural gas production and storage in Michigan, our Traverse
In 1995,WPS Energy Services and WPS Power
City office develops products and services that marry the
Development began a journey together into the competitive
needs of gas producers with those of end-use customers.
marketplace. Today, they continue to travel as partners and
WPS Energy Services has used this distributed business
support one another as we stride into the new world.
design, which puts us close to our customers, with positive results.
WPS Resources Corporation
6
9. The Tinker Hydro Station,
on the Aroostook River in
New Brunswick, Canada, is
one of three hydroelectric
facilities WPS Power
Development purchased in
1999. Coexisting on the
river with wildlife such as
salmon, bald eagles, and
moose, the Tinker plant
offers a stunning view of
the new energy landscape.
At our utility companies, storm
restoration can mean more than
restoring power. Wisconsin Public
Service employees delivered dry ice
following the most damaging
summer storm in the area in 1999.
WPS Resources Corporation 7
10. Striding Into The New World
Each day, workers at the
Tinker Hydro Station walk
over the plant’s forebay,
where water from the
Aroostook River is directed
into the hydroelectric units.
WPS Resources Corporation
8
11. When WPS Power Development purchases generation our customers’ needs, and tap new generation resources
assets,WPS Energy Services moves in to market the energy such as the De Pere Energy Center. We are proud to say
produced and maximize the value of those assets. For Wisconsin Public Service is the lowest-cost electric supplier
example, when WPS Power Development bought generating among all major investor-owned utilities in Wisconsin. This is
facilities in Maine in 1999,WPS Energy Services immediately true even after a rate increase of 4.6 percent that began on
opened a marketing office there. As a result,WPS Energy January 1, 2000.Wisconsin Public Service is also among the
Services now serves more than 90 percent of the electric low-cost providers of natural gas in the state.
customers in Northern Maine. Substantial additional value We believe our use of technology and more efficient
was derived from our assets in Maine because we actively systems in the years ahead will enable us to remain a low- cost
marketed the power through WPS Energy Services. provider—always operating in an effective, least-cost manner
Conversely, when WPS Energy Services enters a that facilitates the new marketplace.
new retail market, it will require generation supplies
(to be provided by Advancing Through Technology
WPS Power Development
wherever possible) to
Operating Systems for the
back its electric sales.
New World of Energy
In the new world of
energy, our strategy is to Technology for Customers and Backroom Operations
The Aroostook River, continue growing through the We take pride in the technology we’ve developed to
synergy our two nonregulated offer advanced real-time energy management systems to
running from Northern subsidiaries offer—putting our customers and also streamline our own backroom
WPS Power Development’s operations. With WPS Energy Services’ patented DENet®
Maine into Canada, is assets to work to support the energy management system, customers can manage their
market growth WPS Energy energy and processes in real time, access this information
a significant waterway,
Services achieves. remotely over the Internet, and generate historical reports
with a drainage area for analysis. System flexibility allows monitoring of virtually
A Competitive any utility or process parameter, such as gas, electricity, water,
measuring 2,350 Position for Our steam, temperature, and production output.
WPS Energy Services and WPS Power Development
Regulated Utilities
square miles. also use DENet to tie together our nonregulated plants
Finding a Place through an integrated computer network. All of our
In spring, its waters
in This World employees in these nonregulated businesses, wherever
WPS Resources they are located along the energy landscape, have access
travel up to 40,000
believes our regulated to this system.
companies—Wisconsin Public In addition to DENet and the benefits it provides for
cubic feet per second.
Service Corporation, based in our customers and backroom operations, we’ve developed
It’s a powerful Green Bay,Wisconsin, and Internet-based customer enrollment, information, and
Upper Peninsula Power billing systems to support the needs of our diverse
natural resource. Company, based in Houghton, customers—from large industrial accounts to residential
Michigan—will also expand homes. This is part of the technological infrastructure that
in this new environment. In a supports our growth strategy.
new world of energy, a large Centralizing Plant Operations
number of customers will continue to desire the comfort, In 1999, our nonregulated companies established a
ease, and value brought by a regulated energy supplier. The 24-hour energy monitoring, dispatch, and coordination
regulated delivery of energy will also continue to be a center in Green Bay, Wisconsin, operated by WPS Energy
profitable business, meeting a critical customer need. Services. This center monitors and controls our production
Our utility companies have the expertise to serve customers facilities and generating plants in Maine, Pennsylvania,
reliably and at a reasonable cost. Alabama, Arkansas, Wisconsin, and Oregon—scheduling
Remaining a Low-Cost Provider operations, bringing units on line or taking them off line
The entire energy marketplace is becoming more in response to market prices, and coordinating operations
volatile. This was evident in skyrocketing prices—up to 100 with the employees at the plants. A centralized operation
times higher than usual—some companies paid for electricity contributes greatly to the savings we’ve achieved in
over the past two summers. The new energy market has operating our new plants.
brought unprecedented price spikes, and costs are increasing WPS Power Development has contracted with
because investments in new generation, transmission WPS Energy Services for this function.WPS Energy Services’
systems, and technology have become necessary. employees are on duty 24 hours a day, scheduling energy
Wisconsin Public Service has proven, however, that even delivery. They’re familiar with the markets for energy and
as energy costs rise across the system, we are able to operate are prepared to make decisions about the energy we
our facilities efficiently, acquire capacity in advance to meet produce at our generating facilities.
WPS Resources Corporation 9
12. Striding Into The New World
their power. Our use will benefit thousands of electric
Wind Energy
customers in northern Wisconsin, where significant growth
and summer tourism have been straining power lines.
Perhaps the most striking visible evidence of the new
Six D-SMES units, each self-contained in a semi-trailer, will
world of energy is the sight of wind turbines along the
be installed on concrete pads at electric substations throughout
horizon. In 1999,Wisconsin Public Service erected 14 wind
the northern portion of our service area. When our system
turbines, capable of producing approximately 10 megawatts
detects a voltage drop, electricity
of wind power, in the Town of Lincoln,Wisconsin.
stored in the D-SMES units will
The turbines are operating well, with the capacity to
instantaneously flow onto the
power about 3,600 homes. In addition, they are giving us
electric grid. So, the power will
more experience and more data as we move into a future
keep flowing, and customers
that will call for more renewable energy resources.
won’t feel the negative impact
Wisconsin Public Service has a history of developing
of momentary outages.
wind power. Several years ago, we built a wind turbine in
The D-SMES technology
Kewaunee,Wisconsin, and in 1998 we built two wind
has reasonable costs, is quicker
turbines on the Niagra Escarpment, outside of Green Bay.
to deploy than transmission
We’ve also conducted wind studies to evaluate possible
lines, and has less environmental
future sites. The experience we’ve gained will help us make
WPS Power
impact. And while we believe
decisions about wind generation as we continue to look at
the true answer to Wisconsin’s
renewable options.
Development purchased
reliability concerns is the
Wisconsin Act 9, signed into law in October 1999,
proposed Wausau-Duluth
requires that by the end of 2011, 2.2 percent of energy sold the coal-fired Sunbury
transmission line, this
to Wisconsin Public Service customers must come from
innovative, temporary
renewable resources. Our strategy will be to fine-tune Power Plant in 1999.
solution will mean good
the renewable options that make the most sense for our
things for our customers. The plant is located near
customers, our shareholders, and the environment.
Later, we will redeploy this
Sunbury, Pennsylvania,
equipment elsewhere on
A New High-Voltage Transmission Line
the energy landscape—always
one of the first cities
pursuing what is needed by
As a good economy continues and business and industry
our customers.
expand, the electric system in Wisconsin is becoming
Thomas Edison wired
increasingly strained. The state’s electric load over the last
two summers has brought utilities throughout the state close Bringing Value to for electricity.
to maximizing the system. Shareholders
Wisconsin needs more generation and more
transmission to improve electric reliability in the state and WPS Resources
to make available abundant supplies of energy from other Corporation is striving for a
regions. The Wisconsin Reliability Assessment Organization position of strength in the new world of energy. Strategy,
has strongly recommended a line from the middle of of course, is key to our success—but we also need
Wisconsin north and west to access power from Canada employees who can perform in a competitive environment.
and the West. The combination of a strong growth strategy and people
In 1999,Wisconsin Public Service, along with Minnesota with excellent skills and work ethic is what allows us to
Power, took the lead in developing plans for a 250-mile-long, stride confidently into the new world.
345-kilovolt transmission line from Wausau,Wisconsin, to At WPS Resources, we continue to rely on our
Duluth, Minnesota. We filed our request to build the line in strengths—the commitment of our employees, our low-cost
November, and we hope to receive approval from the Public production and low rates, a commitment to quality facilities,
Service Commission of Wisconsin in 2000. Our goal is to and financial performance. These strengths will carry us into
complete construction of the line in 2003. the future.
We continue to maintain our focus on providing value
to customers in a way that creates value for our
Distributive Superconducting
shareholders.We’re increasing our efforts to understand our
Magnetic Energy Storage
customers, and we’re investing in systems and technology
that support service to our customers.
While plans are under way to remedy Wisconsin’s strained
We are not resting. We’re looking for ways to improve
transmission system for the long term,Wisconsin Public
our operations. We continue our efforts to control costs.
Service is working on energy solutions for the near term.
We’ve taken steps to ensure that we can improve cost
In February 2000,Wisconsin Public Service was the
projections for each of our business units.
first utility in the world to use distributed superconducting
With a strong financial foothold and the flexibility to
magnetic energy storage (D-SMES) to stabilize the voltage
grow, we are in a position of strength for whatever the new
on its electric system. This technology, while not new, has
world brings.
typically been used only by individual businesses to control
WPS Resources Corporation
10
13. “We’re successful because we understand
which plants are profitable, which ones
aren’t, and how to optimize those that
aren’t,” says Jerry Mroczkowski (below right),
Vice President of WPS Power Development.
In September 1999,
Wisconsin Public Service
began installing automated
meter reading equipment in
its service area. This
system, which electronically
reads gas and electric
meters, is a hallmark of
where the energy industry
is going.We save by not
having to travel to
customers’ properties, and
we gain up-to-the-hour
energy use data.
WPS Resources Corporation 11
14. Striding Into The New World
Earnings per Share
1990-1999
Dollars
2.48
2.5 2.28
2.25 2.24
2.19
2.17
2.10
1.99
1.95
2.0 1.76
Forward - Looking Statements
1.5
1.0
This report contains forward-looking statements within
0.5
the meaning of Section 21E of the Securities Exchange Act
of 1934.You can identify these statements by the fact that
0.0
they do not relate strictly to historical or current facts and
90 91 92 93 94 95 96 97 98 99
often include words such as “anticipate,” “believe,”
“estimate,”“expect,”“intend,”“plan,”“project,” and other
similar words. Although we believe we have been prudent
in our plans and assumptions, there can be no assurance
that indicated results will be realized. Should known or
Dividend per Share unknown risks or uncertainties materialize, or should
1990-1999
underlying assumptions prove inaccurate, actual results
Dollars
could vary materially from those anticipated.
2.00
Forwarding-looking statements speak only as of the date
1.96
1.92
1.88
2.0 1.84
1.80
on which they are made, and we undertake no obligation to
1.76
1.72
1.68
1.64
update any forward-looking statements, whether as a result
1.5 of new information, future events, or otherwise. We
recommend that you consult any further disclosures we
make on related subjects in our 10-Q, 8-K, and 10-K reports
1.0
to the Securities and Exchange Commission.
The following is a cautionary list of risks and
0.5
uncertainties that may affect the assumptions which form
the basis of forward-looking statements relevant to our
0.0
business. These factors, and other factors not listed here,
90 91 92 93 94 95 96 97 98 99 could cause actual results to differ materially from those
contained in forward-looking statements.
• General economic, business, and regulatory conditions
• Legislative and regulatory initiatives regarding
deregulation and restructuring of the utility industry
which could affect costs and investment recovery
• State and federal rate regulation
Cumulative Total Return* • Growth and competition and the extent and timing of
1990-1999
new business development in the markets of
Dollars
subsidiary companies
• The performance of projects undertaken by
300
subsidiary companies
258.98
234.68
250 • Business combinations among our competitors
207.87 197.79
and customers
185.17
181.64
200
• Energy supply and demand
162.95
153.94
136.91
• Financial market conditions, including availability,
150
107.20
terms, and use of capital
100
• Nuclear and environmental issues
• Weather and other natural phenomena
50
• Commodity price and interest rate risk
0
90 91 92 93 94 95 96 97 98 99
* Assumes $100 investment in common stock at year-end 1989 and all
dividends reinvested quarterly. Cumulative total return for the ten-year
period is equilavent to an average annual return of 7.06%.
WPS Resources Corporation
12
15. Management’s Discussion and Analysis
A 6.3% increase in electric rates was authorized by the Public
Results of Operations
Service Commission of Wisconsin.
WPS Resources Corporation is a holding company.
Our wholly-owned subsidiaries include two regulated utilities, WPS Resources’ Consolidated Electric Utility Results
Wisconsin Public Service Corporation and Upper Peninsula Power (Thousands) 1999 1998 1997
Company. Another wholly-owned subsidiary, WPS Resources Revenues $582,471 $543,260 $536,885
Capital Corporation, is a holding company for our nonregulated Fuel and purchased power 187,399 167,256 171,935
businesses including WPS Energy Services, Inc. and WPS Power Margin $395,072 $376,004 $364,950
Development, Inc. Approximately 83% of our assets at Sales in kilowatt-hours 12,503,487 12,172,432 11,993,358
December 31, 1999 and approximately 71% of our 1999 revenues
were derived from electric and gas utility operations. Substantially
Our consolidated electric utility revenues increased
all of our 1999 net income was derived from utility operations.
$39.2 million, or 7.2%, primarily due to the electric rate increase
at Wisconsin Public Service. Also contributing to higher electric
1999 Compared with 1998
revenues was a 2.8% increase in overall kilowatt-hour sales at
Wisconsin Public Service. Included in 1998 electric revenues,
WPS Resources Corporation Overview
but not in 1999 electric revenues, are surcharge revenues at
WPS Resources’ 1999 and 1998 results of operations are
Wisconsin Public Service of $3.8 million related to the recovery
shown in the following chart:
of the deferred costs for the 1997 Kewaunee Nuclear Power
WPS Resources’ Results Percent Plant steam generator repairs.Wisconsin Public Service is the
(Millions, except share amounts) 1999 1998 Change operator and 41.2% owner of the Kewaunee plant.
Consolidated operating revenues $1,098.5 $1,063.7 3.3 Our consolidated electric production fuel expense increased
Net income 59.6 46.6 27.9 $3.0 million, or 2.7%, primarily as a result of increased generation
Basic and diluted requirements at Wisconsin Public Service’s combustion turbine
earnings per share $2.24 $1.76 27.3 and nuclear generating plants in 1999. Partially offsetting this
factor was a decrease in production at Wisconsin Public Service’s
coal-fired generation plants as a result of both scheduled and
The primary reasons for the higher earnings were
unscheduled maintenance activities.
increased sales volumes at Wisconsin Public Service coupled
Our consolidated purchased power requirements increased
with the implementation of new Wisconsin retail electric
$17.2 million, or 30.4%, primarily due to additional purchase
and gas rates and the elimination of net trading losses at
requirements at both Wisconsin Public Service and Upper
WPS Energy Services.
Peninsula Power in 1999. Purchase requirements increased 20.1%
at Wisconsin Public Service due to the lack of production at its
Overview of Utility Operations (Wisconsin Public
coal-fired generation plants during the time they were off-line for
Service and Upper Peninsula Power)
maintenance in 1999. In addition, the cost of purchases was
Revenues and earnings for our electric and gas utility
12.8% higher in 1999 than in 1998.
operations are shown in the following chart:
The Public Service Commission of Wisconsin allows
Percent Wisconsin Public Service to adjust prospectively the amount
Results (Millions) 1999 1998 Change
billed to Wisconsin retail customers for fuel and purchased
Wisconsin Public Service
power if costs fall outside a specified range.Wisconsin Public
Operating revenues $719.4 $652.5 10.3
Service is required to file an application to adjust rates either
Earnings 65.3 52.9 23.4
higher or lower when costs are plus or minus 2.0% from
Upper Peninsula Power
forecasted costs on an annualized basis. Annual 1999 fuel costs
Operating revenues 62.4 62.7 (0.5) at December 31, 1999 were within this 2.0% window and,
Earnings 2.0 3.5 (42.9) accordingly, no adjustment will be made.
Gas Utility Operations (Wisconsin Public Service)
The primary reasons for higher earnings at Wisconsin Public
Service were increased sales coupled with the implementation of The consolidated gas utility margin represents
new Wisconsin retail electric and gas rates. gas revenues less purchases exclusive of intercompany
transactions. The consolidated gas utility margin increased
Electric Utility Operations (Wisconsin Public Service $13.4 million in 1999. The gas utility margin at Wisconsin
and Upper Peninsula Power) Public Service increased $13.4 million, or 22.2%, in 1999.
Our consolidated electric margins increased $19.1 million, This increase was primarily due to the implementation of a
or 5.1%. This increase was due to increased sales volume at Public Service Commission of Wisconsin rate order which
Wisconsin Public Service coupled with the January 15, 1999 authorized a 5.1% increase in Wisconsin retail gas rates and
implementation of new Wisconsin retail electric rates. to an increase in therm sales.
WPS Resources Corporation 13
16. Striding Into The New World
Management’s Discussion and Analysis
Overview of Nonregulated and Nonutility Operations
Wisconsin Public Service’s Gas Utility Results
Nonregulated operations consist of the gas and electric
(Thousands) 1999 1998 1997
sales at WPS Energy Services, Inc., a diversified energy supply
and services company. Nonregulated operations also include
Revenues $191,521 $165,111 $211,090
those of WPS Resources as a holding company and those of
Purchase costs 117,582 104,608 147,493
WPS Power Development, Inc., an electric generation asset
Margin $ 73,939 $ 60,503 $ 63,597
development company. Nonutility operations refer to the
Sales in therms 662,615 608,092 662,008
activities of Wisconsin Public Service and Upper Peninsula
Power which do not fall under utility regulation.
Wisconsin Public Service’s gas operating revenues Nonregulated and nonutility operations experienced
increased $26.4 million, or 16.0%. This increase was due to a loss of $7.8 million in 1999 compared with a loss of
the implementation of new Wisconsin retail gas rates and a $9.8 million in 1998. Although margins on nonregulated energy
9.0% increase in overall therm sales as a result of colder weather sales continue to grow, losses are being experienced primarily
in 1999. Although the winter weather was 11.4% colder in 1999 due to operating expenses associated with new facilities, market
than in 1998, it was still 8.3% warmer than normal. expansion, and the pursuit of additional projects. Nonutility
Note that 1998 gas utility revenues were reduced by operations in 1999 included a one-time special dividend of
$7.5 million for refunds from ANR Pipeline Company which $0.5 million. This special dividend was related to a land sale from
were passed on to Wisconsin Public Service’s customers. an investment held at Wisconsin Public Service. Nonregulated
Gas purchase costs in 1998 were likewise reduced as this earnings in 1998 included a one-time dividend of $2.0 million
$7.5 million refund was credited to gas expense. received by WPS Resources from a venture capital investment.
Wisconsin Public Service’s gas purchase costs increased
Overview of WPS Energy Services, Inc.
$13.0 million, or 12.4%. This increase was due to increased sales
and to a higher cost of gas. Under current regulatory practice, the Revenues at WPS Energy Services were $292.2 million
Public Service Commission of Wisconsin and the Michigan Public in 1999 compared with $351.3 million in 1998, a decrease of
Service Commission allow Wisconsin Public Service to pass 16.8%. The revenue decrease is attributable to a combination
changes in the cost of gas on to customers through a purchased of lower overall natural gas prices experienced in 1999, and a
gas adjustment clause. deliberate change in the wholesale product mix.WPS Energy
Services experienced an improvement in operating results,
Other Utility Expenses/Income (Wisconsin Public reducing net losses by 49.3% in 1999. Net losses were
Service and Upper Peninsula Power) $3.5 million in 1999 compared with $6.9 million in 1998.
Other operating expenses at Wisconsin Public Service The primary reason for the decrease in losses was the elimination
increased $12.6 million, or 9.1%, primarily due to higher of trading losses that occurred in 1998.WPS Energy Services
customer service expenses of $5.1 million related to implemented a deliberate shift in focus within its trading unit to
conservation expenditures, and higher pension costs of emphasize capturing present opportunities in the market rather
$3.4 million due to a change in the assumptions used to than taking a position in anticipation of a future market
calculate this expense. Also contributing to increased operating movement.While not without risk, this lower-risk approach did
expenses were higher medical benefit expenses of $1.2 million yield gains in 1999. WPS Energy Services also experienced an
and higher electric distribution expenses of $1.2 million. increase in total gas margin due to improved gas procurement
Maintenance expense at Wisconsin Public Service increased operations and processes, and an increased emphasis on creation
$7.2 million, or 14.6%, primarily due to additional costs of of wholesale products providing greater value, thus higher
$8.0 million at its coal-fired generation plants and $1.6 million at margin, to customers in the wholesale marketplace. Partially
its other power generation plants for both scheduled and offsetting these factors was a one-time pretax write-down of
unscheduled maintenance activities. Offsetting these costs was a $0.7 million related to an investment in a gas production field.
decrease in maintenance expense of $8.5 million at the
Nonregulated Margins (WPS Energy Services)
Kewaunee plant. A scheduled refueling outage at the Kewaunee
plant in 1998 caused 1998 nuclear maintenance expenses to be Gas margins at WPS Energy Services were $4.6 million
higher. In addition, $3.8 million in deferred costs for the 1997 in 1999 compared with $4.0 million in 1998, an increase of
Kewaunee plant’s steam generator repairs was recognized in 15.0%. Electric margins remained fairly stable. Gas revenues at
1998. Maintenance of overhead distribution lines increased WPS Energy Services were $288.0 million in 1999 compared
$4.7 million in 1999 due to additional tree trimming, line with $330.0 million in 1998. This decrease was the result
clearance, and storm damage repairs. of lower overall natural gas market prices and an increased
emphasis on higher quality and lower-risk wholesale products
Price Risk Management Activities (Wisconsin Public rather than a large volume of wholesale transactions with lower
Service and Upper Peninsula Power) margins. Electric revenues were $3.4 million in 1999 and
WPS Resources engages in minimal price risk management $20.5 million in 1998, a decrease of 83.4%. This decrease was
activities at its utility operations because much of the utility the result of WPS Energy Services’ efforts to focus participation
price risk exposure is recoverable through customer rates. in the wholesale electric markets where transactions are
WPS Resources Corporation
14
17. Management’s Discussion and Analysis
based on physical generation assets controlled by an affiliate energy purchases, as well as trading activities. Derivatives may
of WPS Resources. include futures and forward contracts, basis swap agreements,
WPS Energy Services’ cost of sales was $286.6 million or call and put options.
in 1999 and $346.4 million in 1998, a decrease of 17.3%. Gains and losses on derivatives are recognized immediately
This decrease was due to decreased gas purchases of in earnings when it is no longer probable that the related
$42.7 million primarily due to lower natural gas prices and, forecasted transaction will occur. Each accounting period,
to a lesser extent, reduced wholesale sales volumes. Also WPS Energy Services records gains or losses on changes in
contributing to the lower cost of sales was continued market value of trading derivatives in other income.WPS Energy
improvement in gas procurement processes. Electric purchases Services recorded net trading gains of $0.1 million in 1999 and
decreased $17.1 million due to decreased sales. net trading losses of $6.1 million in 1998.
At December 31, 1999,WPS Energy Services had
Other Nonregulated Expenses/Income outstanding 11.4 million notional dekatherms of natural gas
(WPS Energy Services) under futures and option agreements and 5.9 million notional
Other operating expenses at WPS Energy Services increased dekatherms of natural gas under basis swap agreements in
$1.0 million, or 11.1%, primarily due to costs of $0.7 million order to manage market risk. These financial instruments
associated with entering into expanded retail customer-choice expire at various times through October 2001.WPS Energy
programs. Improved processes and strategies emphasizing Services has gas sales commitments through October 2000
reduced risk at WPS Energy Services resulted in a gas trading with a range of sale prices from $2.06 to $3.09 per dekatherm
gain in 1999 compared with gas trading losses of $4.9 million in and a range of associated gas purchase costs of $2.05 to
1998. Essentially no electric trading losses were experienced in $3.00 per dekatherm.
1999 compared with $1.2 million in 1998. At December 31, 1999, the fair value of trading instruments
included assets of $7.5 million and liabilities of $6.8 million.
Price Risk Management Activities Natural gas derivatives were used for all trading activities in
(WPS Energy Services) 1999 and 1998, except for a small amount of electric trading
WPS Energy Services uses derivative financial and transactions. At December 31, 1999,WPS Energy Services had
commodity instruments to reduce market risk associated with outstanding 1.4 million notional dekatherms of natural gas
the changing prices of natural gas and electricity sold under futures and option agreements and 1.7 million notional
at firm prices to customers. WPS Energy Services also uses dekatherms of natural gas under basis swap agreements for
derivatives to manage market risk associated with anticipated trading purposes.
Derivatives (contract amounts in millions)
Expected Maturity
Fair
2000 2001 2002 Total Value
Futures NYMEX – hedging
Long (billion cubic feet) 25.3
Weighted average settlement price (per dekatherm) $2.54
Contract amount $64.4 $64.4 $(5.1)
Short (billion cubic feet) 23.1 0.4
Weighted average settlement price (per dekatherm) $2.60 $2.80
Contract amount $59.9 $1.1 $61.0 $5.8
Futures NYMEX – trading
Long (billion cubic feet) 10.3
Weighted average settlement price (per dekatherm) $2.63
Contract amount $27.2 $27.2 $(3.0)
Short (billion cubic feet) 10.8
Weighted average settlement price (per dekatherm) $2.63
Contract amount $28.5 $28.5 $3.2
OTC futures – hedging
Long (billion cubic feet) 7.8 0.7 0.18
Weighted average settlement price (per dekatherm) $2.36 $2.22 $2.22
Contract amount $18.5 $1.6 $0.4 $20.5 $0.4
Short (billion cubic feet) 3.2
Weighted average settlement price (per dekatherm) $2.64
Contract amount $8.4 $8.4 $0.9
WPS Resources Corporation 15