UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~Sept.~~March 3031, ~~2023~~2024


☐			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: 001-03140


Northern States Power Company
(Exact Name of Registrant as Specified in its Charter)

Wisconsin

39-0508315

(State or Other Jurisdiction of Incorporation or Organization)

(I.R.S Employer Identification No.)

1414 West Hamilton Avenue

Eau Claire

Wisconsin

54701

(Address of Principal Executive Offices)

(Zip Code)

(715) ~~737~~852-~~2625~~5812 (Registrant’s Telephone Number, Including Area Code)


N/A
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

N/A

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 ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ 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 ~~October~~April 2725, ~~2023~~2024
Common Stock, $100 par value						933,000 shares

Northern States Power Company meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format specified in General Instruction H(2) to such Form 10-Q.

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
Item 1 —	Financial Statements (unaudited)	4
	Consolidated Statements of Income	4
	Consolidated Statements of Cash Flows	5
	Consolidated Balance Sheets	6
	Consolidated Statements of Common Stockholder's Equity	7
	Notes to Consolidated Financial Statements	8
Item 2 —	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 4 —	Controls and Procedures	1413
PART II	OTHER INFORMATION
Item 1 —	Legal Proceedings	1514
Item 1A —	Risk Factors	1514
Item 5 —	Other Information	1514
Item 6 —	Exhibits	1514
SIGNATURES		1615

This Form 10-Q is filed by NSP-Wisconsin. NSP-Wisconsin is a wholly owned subsidiary of Xcel Energy Inc. Additional information on Xcel Energy is available in various filings with the SEC. This report should be read in its entirety.

Definitions of Abbreviations


Xcel Energy Inc.’s Subsidiaries and Affiliates (current and former)
e prime			e prime inc.
NSP-Minnesota			Northern States Power Company, a Minnesota corporation
NSP System			The electric production and transmission system of NSP-Minnesota and NSP-Wisconsin operated on an integrated basis and managed by NSP-Minnesota
NSP-Wisconsin			Northern States Power Company, a Wisconsin corporation
PSCo			Public Service Company of Colorado
SPS			Southwestern Public Service Company
Utility subsidiaries			NSP-Minnesota, NSP-Wisconsin, PSCo and SPS
Xcel Energy			Xcel Energy Inc. and its subsidiaries

Federal and State Regulatory Agencies D.C. Circuit United States Court of Appeals for the District of Columbia Circuit EPA United States Environmental Protection Agency FERC Federal Energy Regulatory Commission MPUC Minnesota Public Utilities Commission MPSC Michigan Public Service Commission PSCW Public Service Commission of Wisconsin SEC Securities and Exchange Commission

Other C&I Commercial and Industrial CEO Chief executive officer CERCLA Comprehensive Environmental Response, Compensation, and Liability Act CFO Chief financial officer GAAP United States generally accepted accounting principles IRP Integrated Resource Plan MGP Manufactured gas plant MISO Midcontinent Independent System Operator, Inc. NOx Nitrogen Oxides PFAS Per- and Polyfluoroalkyl Substances O&M Operating and maintenance RFP Request for proposal ROE Return on equity RTO Regional Transmission Organization ~~TOs Transmission owners~~ Measurements MW Megawatts


Forward-Looking Statements

Except for the historical statements contained in this report, the matters discussed herein are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements, including those relating to future sales, future expenses, future tax rates, future operating performance, estimated base capital expenditures and financing plans, projected capital additions and forecasted annual revenue requirements with respect to rider filings, expected rate increases to customers, expectations and intentions regarding regulatory proceedings, and expected impact on our results of operations, financial condition and cash flows of resettlement calculations and credit losses relating to certain energy transactions, as well as assumptions and other statements are intended to be identified in this document by the words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “objective,” “outlook,” “plan,” “project,” “possible,” “potential,” “should,” “will,” “would” and similar expressions. Actual results may vary materially. Forward-looking statements speak only as of the date they are made, and we expressly disclaim any obligation to update any forward-looking information. The following factors, in addition to those discussed in NSP-Wisconsin's Annual Report on Form 10-K for the fiscal year ended Dec. 31, ~~2022,~~2023 and subsequent filings with the SEC, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: operational safety; successful long-term operational planning; commodity risks associated with energy markets and production; rising energy prices and fuel costs; qualified employee workforce and third-party contractor factors; violations of our Codes of Conduct; our ability to recover costs; changes in regulation; reductions in our credit ratings and the cost of maintaining certain contractual relationships; general economic conditions, including recessionary conditions, inflation rates, monetary fluctuations, supply chain constraints and their impact on capital expenditures and/or the ability of NSP-Wisconsin to obtain financing on favorable terms; availability or cost of capital; our customers’ and counterparties’ ability to pay their debts to us; assumptions and costs relating to funding our employee benefit plans and health care benefits; tax laws; uncertainty regarding epidemics, the duration and magnitude of business restrictions including shutdowns (domestically and globally), the potential impact on the workforce, including shortages of employees or third-party contractors due to quarantine policies, vaccination requirements or government restrictions, impacts on the transportation of goods and the generalized impact on the economy; effects of geopolitical events, including war and acts of terrorism; cybersecurity threats and data security breaches; seasonal weather patterns; changes in environmental laws and regulations; climate change and other weather events; natural disaster and resource depletion, including compliance with any accompanying legislative and regulatory changes; costs of potential regulatory penalties and wildfire damages in excess of liability insurance coverage; regulatory changes and/or limitations related to the use of natural gas as an energy source; challenging labor market conditions and our ability to attract and retain a qualified workforce; and our ability to execute on our strategies or achieve expectations related to environmental, social and governance matters including as a result of evolving legal, regulatory and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite financing, and changes in carbon markets.

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

NSP-WISCONSIN AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(amounts in millions)

	Three Months Ended Sept. 30				Nine Months Ended Sept. 30
	Three Months Ended March 31
	2023		2022		2023		2022
	2024		2023
Operating revenues
Electric, non-affiliates	$	~~213~~203	$	~~223~~204	$	~~602~~	$	~~617~~
Electric, affiliates	5053		5150		~~151~~		~~150~~
Natural gas	1554		2077		~~116~~		~~133~~
Other	1		—		1		—
Total operating revenues	310		331
Total operating revenues	279		294		870		900
Operating expenses
Electric fuel and purchased power, non-affiliates	34		54		10		13
Purchased power, affiliates	~~109~~103		~~115~~103		~~305~~		~~343~~
Cost of natural gas sold and transported	624		1046		61		75
Operating and maintenance expenses	5856		5358		~~173~~		~~160~~
Conservation program expenses	3		43		10		10
Depreciation and amortization	4345		3941		~~126~~		~~117~~
Taxes (other than income taxes)	89		8		25		23
Total operating expenses	~~230~~244		~~234~~263		~~710~~		~~741~~
Operating income	4966		6068		~~160~~		~~159~~
Other income (expense), net	1		(1)		2		(2)
Allowance for funds used during construction — equity	3		2
Allowance for funds used during construction — equity	3		2		7		5
Interest charges and financing costs
Interest charges and other financing costs	14		1113		40		33
Allowance for funds used during construction — debt	(1)		(1)		~~(3)~~		~~(2)~~
Total interest charges and financing costs	13		1012		37		31
Income before income taxes	4056		5158		~~132~~		~~131~~
Income tax expense	913		1113		30		29
Net income	$	3143	$	4045	$	~~102~~	$	~~102~~

See Notes to Consolidated Financial Statements

Table of Contents

NSP-WISCONSIN AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(amounts in millions)

	Nine Months Ended Sept. 30
	Three Months Ended March 31
	2023		2022
	2024		2023
Operating activities
Net income	$	~~102~~43	$	~~102~~45
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	~~128~~46		~~118~~42
Deferred income taxes	~~(17)~~3		—(2)
Allowance for equity funds used during construction	(73)		(52)
Provision for bad debts	31		2
Changes in operating assets and liabilities:
Accounts receivable	1(13)		(116)
Accrued unbilled revenues	239		1920
Inventories	43		~~(21)~~15
Other current assets	285		~~(2)~~13
Accounts payable	12(7)		2(10)
Net regulatory assets and liabilities	61(1)		517
Other current liabilities	35		6—
Pension and other employee benefit obligations	(27)		(3)
Other, net	42		~~(3)~~1
Net cash provided by operating activities	~~343~~86		~~219~~122
Investing activities
Capital/construction expenditures	(~~343~~121)		(~~244~~101)
Investments in utility money pool arrangement	(88)		(36)
Net cash used in investing activities	(121)		(101)
Repayments from utility money pool arrangement	88		—
Net cash used in investing activities	(343)		(280)
Financing activities
Repayments of short-term borrowings, net	(4760)		(8335)
Borrowings under utility money pool arrangement	73130		~~575~~—
Repayments under utility money pool arrangement	(73111)		~~(575)~~—
Proceeds from long-term debt	124		99
Capital contributions from parent	106		36
Capital contributions from parent	57		111
Dividends paid to parent	(25)		(23)
Dividends paid to parent	(72)		(67)
Net cash provided (used in) by financing activities	40		(22)
Net cash provided by financing activities	62		60
Net change in cash, cash equivalents and restricted cash	5		(1)
Net change in cash, cash equivalents and restricted cash	62		(1)
Cash, cash equivalents and restricted cash at beginning of period	6		2
Cash, cash equivalents and restricted cash at beginning of period	2		11
Cash, cash equivalents and restricted cash at end of period	$	11	$	1
Cash, cash equivalents and restricted cash at end of period	$	64	$	10
Supplemental disclosure of cash flow information:
Cash paid for interest (net of amounts capitalized)	$	(3412)	$	(3013)
Cash paid for income taxes, net	(307)		(264)
Supplemental disclosure of non-cash investing and financing transactions:
Accrued property, plant and equipment additions	$	3133	$	3033
Inventory transfers to property, plant and equipment	52		2
Allowance for equity funds used during construction	73		52

See Notes to Consolidated Financial Statements

Table of Contents

NSP-WISCONSIN AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(amounts in millions, except share and per share data)

	Sept. 30, 2023		Dec. 31, 2022
	March 31, 2024		Dec. 31, 2023
Assets
Current assets
Cash and cash equivalents	$	6411	$	26
Accounts receivable, net	7490		8489
Accrued unbilled revenues	5153		7463
Other receivables	—		19
Inventories	24		29
Inventories	29		39
Regulatory assets	23		24
Regulatory assets	28		44
Prepaid taxes	21		28
Prepaid taxes	22		27
Prepayments and other	7		6
Prepayments and other	6		11
Total current assets	229		245
Total current assets	274		300
Property, plant and equipment, net	3,332		3,237
Property, plant and equipment, net	3,155		2,914
Other assets
Regulatory assets	181		~~193~~185
Other	3		3
Total other assets	184		~~196~~188
Total assets	$	3,~~613~~745	$	3,~~410~~670
Liabilities and Equity
Current liabilities
Current portion of long-term debt	$	200	$	—200
Short-term debt	—		4760
Accounts payable	70		92
Borrowings under utility money pool arrangement	19		—
Accounts payable to affiliates	26		19
Accounts payable	61		64
Dividends payable to parent	24		23
Accounts payable to affiliates	20		21
Regulatory liabilities	47		21
Dividends payable to parent	18		25
Taxes accrued	20		13
Regulatory liabilities	41		42
Accrued interest	13		12
Taxes accrued	19		16
Other	20		28
Accrued interest	13		13
Total current liabilities	420		255
Other	24		23
Total current liabilities	415		464
Deferred credits and other liabilities
Deferred income taxes	~~324~~336		~~333~~330
Deferred investment tax credits	5		5
Regulatory liabilities	~~417~~412		~~383~~407
Customer advances	2526		2325
Pension and employee benefit obligations	2220		2327
Other	4234		4335
Total deferred credits and other liabilities	~~835~~833		~~810~~829
Commitments and contingencies
Capitalization
Long-term debt	1,011		1,~~086~~011
Common stock — 1,000,000 shares authorized of $100 par value; 933,000 shares outstanding at Sept. 30, 2023 and Dec. 31, 2022, respectively	93		93
Common stock — 1,000,000 shares authorized of $100 par value; 933,000 shares outstanding at March 31, 2024 and Dec. 31, 2023, respectively	93		93
Additional paid in capital	~~820~~938		~~761~~843
Retained earnings	~~434~~455		~~405~~430
Total common stockholder's equity	1,~~347~~486		1,~~259~~366
Total liabilities and equity	$	3,~~613~~745	$	3,~~410~~670

See Notes to Consolidated Financial Statements

Table of Contents

NSP-WISCONSIN AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY (UNAUDITED)

(amounts in millions, except share data)

	Common Stock Issued					Retained Earnings		Total Common Stockholder's Equity
	Shares	Par Value		Additional PaidIn Capital
Three Months Ended Sept. 30, 2023 and 2022
Three Months Ended March 31, 2024 and 2023
Balance at June 30, 2022	933,000	$	93	$	702	$	389	$	1,184
Balance at December 31, 2022	933,000	$	93	$	761	$	405	$	1,259
Net income						4045		4045
Common dividends declared to parent						(23)		(23)
Contribution of capital by parent				50				50
Balance at Sept. 30, 2022	933,000	$	93	$	752	$	406	$	1,251
Balance at June 30, 2023	933,000	$	93	$	806	$	427	$	1,326
Net income						31		31
Common dividends declared to parent						(24)		(24)
Contribution of capital by parent				1430				1430
Balance at Sept. 30, 2023	933,000	$	93	$	820	$	434	$	1,347
Balance at March 31, 2023	933,000	$	93	$	791	$	426	$	1,310
Balance at December 31, 2023	933,000	$	93	$	843	$	430	$	1,366
Net income						43		43
Common dividends declared to parent						(18)		(18)
Contribution of capital by parent				95				95
Balance at March 31, 2024	933,000	$	93	$	938	$	455	$	1,486

								Total Common Stockholder's Equity
	Common Stock Issued					Retained Earnings
	Shares	Par Value		Additional PaidIn Capital
Nine Months Ended Sept. 30, 2023 and 2022
Balance at Dec. 31, 2021	933,000	$	93	$	642	$	368	$	1,103
Net income						102		102
Common dividends declared to parent						(64)		(64)
Contribution of capital by parent				110				110
Balance at Sept. 30, 2022	933,000	$	93	$	752	$	406	$	1,251
Balance at Dec. 31, 2022	933,000	$	93	$	761	$	405	$	1,259
Net income						102		102
Common dividends declared to parent						(73)		(73)
Contribution of capital by parent				59				59
Balance at Sept. 30, 2023	933,000	$	93	$	820	$	434	$	1,347
See Notes to Consolidated Financial Statements

Total Common Stockholder's Equity

See Notes to Consolidated Financial Statements

Table of Contents

NSP-WISCONSIN AND SUBSIDIARIES

Notes to Consolidated Financial Statements (UNAUDITED)

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments necessary to present fairly, in accordance with GAAP, the financial position of NSP-Wisconsin and its subsidiaries as of ~~Sept.~~March 3031, ~~2023~~2024 and Dec. 31, ~~2022~~2023; the results of NSP-Wisconsin's operations, including the components of net income, cash flows, and changes in stockholder's equity ~~and comprehensive income~~ for the three ~~and nine~~ months ended ~~Sept.~~March 3031, ~~2023~~2024 and ~~2022; and NSP-Wisconsin's cash flows for the nine months ended Sept. 30,~~ 2023 ~~and 2022~~.

All adjustments are of a normal, recurring nature, except as otherwise disclosed. Management has also evaluated the impact of events occurring after ~~Sept.~~March 3031, ~~2023~~2024 up to the date of issuance of these consolidated financial statements. These statements contain all necessary adjustments and disclosures resulting from that evaluation. The Dec. 31, ~~2022~~2023 balance sheet information has been derived from the audited ~~2022~~2023 consolidated financial statements included in the NSP-Wisconsin Annual Report on Form 10-K for the year ended Dec. 31, ~~2022~~2023.

Notes to the consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC for Quarterly Reports on Form 10-Q. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP on an annual basis have been condensed or omitted pursuant to such rules and regulations. For further information, refer to the consolidated financial statements and notes thereto included in the NSP-Wisconsin Annual Report on Form 10-K for the year ended Dec. 31, ~~2022~~2023, filed with the SEC on Feb. 2321, ~~2023~~2024. Due to the seasonality of NSP-Wisconsin’s electric and natural gas sales, interim results are not necessarily an appropriate base from which to project annual results.


1. Summary of Significant Accounting Policies

The significant accounting policies set forth in Note 1 to the consolidated financial statements in the NSP-Wisconsin Annual Report on Form 10-K for the year ended Dec. 31, ~~2022~~2023 appropriately represent, in all material respects, the current status of accounting policies and are incorporated herein by reference.


2. Accounting Pronouncements

AsRecently of Sept. 30, 2023, there was no material impact from the recent adoption of new accounting pronouncements, nor expected material impact from recently issued accounting pronouncements yet to be adopted, on NSP-Wisconsin’s consolidated financial statements. Issued

Segment Reporting — In November 2023, the FASB issued ASU 2023-07 – Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures, which extends the existing requirements for annual disclosures to quarterly periods, and requires that both annual and quarterly disclosures present segment expenses using line items consistent with information regularly provided to the chief operating decision maker. The ASU is effective for annual periods beginning after Dec. 15, 2023 and quarterly periods beginning after Dec. 15, 2024, and Xcel Energy does not expect implementation of the new disclosure guidance to have a material impact to its consolidated financial statements.

Income Taxes — In December 2023, the FASB issued ASU 2023-09 – Income Taxes (Topic 740) – Improvements to Income Tax Disclosures, with new disclosure requirements including presentation of prescribed line items in the effective tax rate reconciliation and disclosures regarding state and local tax payments. The ASU is effective for annual periods beginning after Dec. 15, 2024, and Xcel Energy does not expect implementation of the new disclosure guidance to have a material impact to its consolidated financial statements.

Climate-Related Disclosures — In March 2024, the SEC issued Final Rule 33-11275 – The Enhancement and Standardization of Climate-Related Disclosures for Investors. This rule requires registrants to provide standardized disclosures in Form 10-K related to climate-related risks, Scope 1 and 2 greenhouse gas emissions, as well as to include in a footnote to the consolidated financial statements the financial impact of severe weather events and other natural conditions. The rule requires implementation in phases between 2025 and 2033. In April 2024, the SEC announced that it would voluntarily stay its final climate disclosure rules pending judicial review. Xcel Energy does not expect implementation of the new guidance to have a material impact on the consolidated financial statements.

3. Selected Balance Sheet Data

(Millions of dollars)	~~Sept.~~March 3031, ~~2023~~2024		Dec. 31, ~~2022~~2023
Accounts receivable, net
Accounts receivable	$	8298	$	9398
Less allowance for bad debts	(8)		(9)
Accounts receivable, net	$	7490	$	8489

(Millions of dollars)	~~Sept.~~March 3031, ~~2023~~2024		Dec. 31, ~~2022~~2023
Inventories
Materials and supplies	$	1112	$	811
Fuel	10		1110
Natural gas	82		208
Total inventories	$	2924	$	3929

(Millions of dollars)

~~Sept.~~March 3031, ~~2023~~2024

Dec. 31, ~~2022~~2023

Property, plant and equipment, net

Electric plant

3,~~767~~895

3,~~579~~845

Natural gas plant

~~496~~504

~~465~~502

Common and other property

~~290~~287

~~260~~278

Construction work in progress

~~237~~306

~~174~~252

Total property, plant and equipment

4,~~790~~992

4,~~478~~877

Less accumulated depreciation

(1,~~635~~660)

(1,~~564~~640)

Property, plant and equipment, net

3,~~155~~332

23,~~914~~237


4. Borrowings and Other Financing Instruments

Short-Term Borrowings

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

Money Pool — Xcel Energy Inc. and its utility subsidiaries have established a money pool arrangement that allows for short-term investments in and borrowings between the utility subsidiaries. Xcel Energy Inc. may make investments in the utility subsidiaries at market-based interest rates; however, the money pool arrangement does not allow the utility subsidiaries to make investments in Xcel Energy Inc.

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Money pool borrowings:

(Amounts in Millions, Except Interest Rates)	Three Months Ended ~~Sept.~~March 3031, ~~2023~~2024			Year Ended Dec. 31, ~~2022~~2023
Borrowing limit	$	150		$	150
Amount outstanding at period end	—19			—
Average amount outstanding	—12			256
Maximum amount outstanding	—54			8143
Weighted average interest rate, computed on a daily basis	~~N/A~~5.33		%	14.1098		%
Weighted average interest rate at period end	~~N/A~~5.33			N/A

Commercial Paper — Commercial paper outstanding:

(Amounts in Millions, Except Interest Rates)	Three Months Ended ~~Sept.~~March 3031, ~~2023~~2024			Year Ended Dec. 31, ~~2022~~2023
Borrowing limit	$	150		$	150
Amount outstanding at period end	—			4760
Average amount outstanding	—41			1815
Maximum amount outstanding	—99			~~123~~93
Weighted average interest rate, computed on a daily basis	~~N/A~~5.49		%	14.0385		%
Weighted average interest rate at period end	N/A			45.5550

Letters of Credit — NSP-Wisconsin uses letters of credit, generally with terms of one year, to provide financial guarantees for certain obligations. At both ~~Sept.~~March 3031, ~~2023~~2024 and Dec. 31, ~~2022~~2023, there were noimmaterial letters of credit outstanding under the credit facility.

Revolving Credit Facility — In order to issue its commercial paper, NSP-Wisconsin must have a revolving credit facility equal to or greater than the commercial paper borrowing limit and cannot issue commercial paper exceeding available capacity under this credit facility. The credit facility provides short-term financing in the form of notes payable to banks, letters of credit and back-up support for commercial paper borrowings.

NSP-Wisconsin has the right to request an extension of the revolving credit facility termination date for an additional one-year period. All extension requests are subject to majority bank group approval.

8As of March 31, 2024, NSP-Wisconsin had the following committed revolving credit facility available (in millions of dollars):

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As of Sept. 30, 2023, NSP-Wisconsin had the following committed revolving credit facility available (in millions of dollars):


Credit Facility (a)		Outstanding (b)		Available
$	150	$	—	$	150

(a)Expires in September 2027.

(b)Includes outstanding commercial paper.

All credit facility bank borrowings, outstanding letters of credit and outstanding commercial paper reduce the available capacity under the credit facility. NSP-Wisconsin had no direct advances on the credit facility outstanding at ~~Sept.~~March 3031, ~~2023~~2024 and Dec. 31, ~~2022~~2023.

Other Short-Term Borrowings — Clearwater Investments, Inc., a NSP-Wisconsin subsidiary, had an immaterial note payable to Xcel Energy Inc. as of ~~Sept.~~March 3031, ~~2023~~2024 and Dec. 31, ~~2022~~2023, respectively.

Long-Term Borrowings and Other Financing Instruments

During the nine months ended Sept. 30, 2023, NSP-Wisconsin issued $125 million of 5.30% private placement first mortgage bonds due June 15, 2053.

5. Revenues

Revenue is classified by the type of goods/services rendered and market/customer type. NSP-Wisconsin’s operating revenues consisted of the following:

	Three Months EndedSept. 30, 2023
	Three Months EndedMarch 31, 2024
(Millions of Dollars)	Electric		Natural Gas		~~All Other~~		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	7977	$	830	$	—	$	87107
C&I	~~136~~118		522		—		~~141~~140
Other	2		—		1		32
Total retail	~~217~~197		1352		1		~~231~~249
Interchange and other	4356		1		—		4457
Total revenue from contracts with customers	~~260~~253		1453		1		~~275~~306
Alternative revenue and other	3		1		—		4
Total revenues	$	~~263~~256	$	1554	$	1	$	~~279~~310

	Three Months EndedSept. 30, 2022
	Three Months EndedMarch 31, 2023
(Millions of Dollars)	Electric		Natural Gas		~~All Other~~		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	7882	$	941	$	—	$	87123
C&I	~~139~~120		934		—		~~148~~154
Other	2		—		—		2
Total retail	~~219~~204		1875		—		~~237~~279
Interchange and other	5247		1		—		5348
Total revenue from contracts with customers	~~271~~251		1976		—		~~290~~327
Alternative revenue and other	3		1		—		4
Total revenues	$	~~274~~254	$	2077	$	—	$	~~294~~331

	Nine Months EndedSept. 30, 2023
(Millions of Dollars)	Electric		Natural Gas		All Other		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	229	$	62	$	—	$	291
C&I	378		48		—		426
Other	6		—		1		7
Total retail	613		110		1		724
Interchange and other	131		2		—		133
Total revenue from contracts with customers	744		112		1		857
Alternative revenue and other	9		4		—		13
Total revenues	$	753	$	116	$	1	$	870

	Nine Months EndedSept. 30, 2022
(Millions of Dollars)	Electric		Natural Gas		All Other		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	226	$	69	$	—	$	295
C&I	374		58		—		432
Other	6		—		—		6
Total retail	606		127		—		733
Interchange and other	153		3		—		156
Total revenue from contracts with customers	759		130		—		889
Alternative revenue and other	8		3		—		11
Total revenues	$	767	$	133	$	—	$	900


6. Income Taxes

Reconciliation between the statutory rate and effective tax rate:

	Nine Months Ended Sept. 30
	Three Months Ended March 31
	2023		2022
	2024		2023
Federal statutory rate	21.0	%	21.0	%
State tax (net of federal tax effect)	6.2		6.2
Decreases:
(Decreases) increases:
Plant regulatory differences (a)	(3.4.3)		(3.75)
Other (net)	(10.1)3		(1.43)
Effective income tax rate	2223.72	%	22.14	%

(a)Plant regulatory differences primarily relate to the credit of excess deferred taxes to customers through the average rate assumption method. Income tax benefits associated with the credit are offset by corresponding revenue reductions.

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7. Fair Value of Financial Assets and Liabilities

Fair Value Measurements

Accounting guidance for fair value measurements and disclosures provides a hierarchical framework for disclosing the observability of the inputs utilized in measuring assets and liabilities at fair value.

•Level 1 — Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. The types of assets and liabilities included in Level 1 are actively traded instruments with observable actual trading prices.

•Level 2 — Pricing inputs are other than actual trading prices in active markets, but are either directly or indirectly observable as of the reporting date. The types of assets and liabilities included in Level 2 are typically either comparable to actively traded securities or contracts or priced with models using highly observable inputs.

•Level 3 — Significant inputs to pricing have little or no observability as of the reporting date. The types of assets and liabilities included in Level 3 include those valued with models requiring significant judgment or estimation.

Specific valuation methods include:

Commodity Derivatives — Methods used to measure the fair value of commodity derivative forwards and options utilize forward prices and volatilities, as well as pricing adjustments for specific delivery locations, and are generally assigned a Level 2 classification. When contracts relate to inactive delivery locations or extend to periods beyond those readily observable on active exchanges, the significance of the use of less observable inputs on a valuation is evaluated, and may result in Level 3 classification.

Derivative Activities and Fair Value Measurements

NSP-Wisconsin enters into derivative instruments, including forward contracts, futures, swaps and options, to manage risk in connection with changes in utility commodity prices.

Commodity Derivatives — NSP-Wisconsin enters into derivative instruments to manage variability of future cash flows from changes in commodity prices in its electric and natural gas operations. This could include the purchase or sale of natural gas to generate electric energy and natural gas for resale.

As of ~~Sept.~~March 3031, ~~2023~~2024, NSP-Wisconsin had no commodity contracts designated as cash flow hedges.

Consideration of Credit Risk and Concentrations — NSP-Wisconsin continuously monitors the creditworthiness of counterparties to its interest rate derivatives and commodity derivative contracts prior to settlement, and assesses each counterparty’s ability to perform on the transactions set forth in the contracts. Impact of credit risk was immaterial to the fair value of unsettled commodity derivatives presented on the consolidated balance sheets.

Recurring Derivative Fair Value Measurements

Impact of derivative activity:

Changes in the fair value of natural gas commodity derivatives resulted in immaterial ~~net~~and ~~losses~~$1 million ~~and~~of net gains for the three ~~and nine~~ months ended ~~Sept.~~March 3031, ~~2023~~2024 and ~~2022~~2023, respectively, which were recognized as regulatory assets and liabilities. The classification as a regulatory asset or liability is based on commission approved regulatory recovery mechanisms.

During the three ~~and nine~~ months ended ~~Sept.~~March 3031, ~~2023~~2024 and ~~2022~~2023, ~~there~~$1 million ~~were~~and ~~immaterial~~$2 million, ~~natural~~respectively, ~~gas~~of ~~commodity~~pre-tax ~~derivatives settlement~~ losses ~~and~~were ~~gains.~~recognized ~~During~~during the ~~three~~period ~~and~~related ~~nine~~to ~~months~~option ~~ended~~premium ~~Sept.~~amortization ~~30,~~subject ~~2023~~to ~~and~~natural ~~2022,~~gas ~~immaterial~~cost ~~pre-tax~~recovery ~~losses~~mechanisms ~~were~~and ~~recognized~~reclassified ~~during~~out ~~the~~of ~~period in~~ income ~~related~~ to ~~option~~a ~~premium~~regulatory ~~amortization~~asset, as appropriate.

NSP-Wisconsin had immaterial outstanding derivative assets or liabilities measured at fair value as of ~~Sept.~~March 3031, ~~2023~~2024 and Dec. 31, ~~2022~~2023.

Fair Value of Long-Term Debt

As of ~~Sept.~~March 3031, ~~2023~~2024, other financial instruments for which the carrying amount did not equal fair value:

Sept. 30, 2023

Dec. 31, 2022

March 31, 2024

Dec. 31, 2023

(Millions of Dollars)

Carrying Amount

Fair Value

Carrying Amount

Fair Value

Long-term debt, including current portion

1,211

1,~~062~~104

1,~~086~~211

~~980~~1,117

Fair value of NSP-Wisconsin’s long-term debt is estimated based on recent trades and observable spreads from benchmark interest rates for similar securities. Fair value estimates are based on information available to management as of ~~Sept.~~March 3031, ~~2023~~2024 and Dec. 31, ~~2022~~2023, and given the observability of the inputs, fair values presented for long-term debt were assigned as Level 2.

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8. Benefit Plans and Other Postretirement Benefits

Components of Net Periodic Benefit Cost

	Three Months Ended Sept. 30
	Three Months Ended March 31
	2023		2022
	2024		2023
(Millions of Dollars)	Pension Benefits
Service cost	$	1	$	21
Interest cost (a)	2		12
Expected return on plan assets (a)	(2)		(2)
Amortization of net loss (a)	—		1
Net periodic benefit cost	$	1	$	1
Settlement charge (b)	—		4
Net periodic benefit cost	$	1	$	6
Effects of regulation	—		(2)
Net benefit cost recognized for financial reporting	$	1	$	4

	Nine Months Ended Sept. 30
	2023		2022
(Millions of Dollars)	Pension Benefits
Service cost	$	3	$	4
Interest cost (a)	5		3
Expected return on plan assets (a)	(6)		(6)
Amortization of net loss (a)	1		3
Settlement charge (b)	—		4
Net periodic benefit cost	$	3	$	8
Effects of regulation	—		(2)
Net benefit cost recognized for financial reporting	$	3	$	6

(a)The components of net periodic cost other than the service cost component are included in the line item “Other income (expense), net” in the consolidated statements of income or capitalized on the consolidated balance sheets as a regulatory asset.

~~(b)A~~In ~~settlement~~January ~~charge~~2024, iscontributions ~~required~~totaling ~~when~~$100 ~~the~~million ~~amount~~were ofmade ~~all~~across ~~lump-sum~~Xcel ~~distributions~~Energy’s ~~during the year is greater than the sum of the service and interest cost components of the net periodic~~ pension ~~cost.~~plans, ~~In the third quarter~~ of ~~2022~~which as$7 million awas ~~result~~attributable ofto ~~lump-sum distributions during the 2022 plan year,~~ NSP-Wisconsin. ~~recorded~~Xcel aEnergy ~~pension~~does ~~settlement charge of $4 million, the majority of which was~~ not ~~recognized~~expect inadditional ~~earnings~~pension ~~due~~contributions toduring ~~the effects of regulation~~2024.

In January 2023, contributions totaling $50 million were made across Xcel Energy’s pension plans, of which $4 million was attributable to NSP-Wisconsin. Xcel Energy does not expect additional pension contributions during 2023.

9. Commitments and Contingencies

Legal

NSP-Wisconsin is involved in various litigation matters in the ordinary course of business. The assessment of whether a loss is probable or is a reasonable possibility, and whether the loss or a range of loss is estimable, often involves a series of complex judgments about future events. Management maintains accruals for losses probable of being incurred and subject to reasonable estimation. Management is sometimes unable to estimate an amount or range of a reasonably possible loss in certain situations, including but not limited to when (1) the damages sought are indeterminate, (2) the proceedings are in the early stages, or (3) the matters involve novel or unsettled legal theories.

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In such cases, there is considerable uncertainty regarding the timing or ultimate resolution, including a possible eventual loss. For current proceedings not specifically reported herein, management does not anticipate that the ultimate liabilities, if any, would have a material effect on NSP-Wisconsin’s consolidated financial statements. Legal fees are generally expensed as incurred.

Gas Trading Litigation — e prime is a wholly owned subsidiary of Xcel Energy. e prime was in the business of natural gas trading and marketing but has not engaged in natural gas trading or marketing activities since 2003. Multiple lawsuits involving multiple plaintiffs seeking monetary damages were commenced against e prime and its affiliates, including Xcel Energy, between 2003 and 2009 alleging fraud and anticompetitive activities in conspiring to restrain the trade of natural gas and manipulate natural gas prices. Cases were all consolidated in the U.S. District Court in Nevada.

One case remains active which includes a multi-district litigation matter consisting of a Wisconsin purported class (Arandell Corp.). The Court issued a ruling in June 2022 granting plaintiffs’ class certification. In April 2023, the Seventh Circuit Court of Appeals heard the defendants’ appeal challenging whether the district court properly assessed class certification. A decision relating to class certification is expected ~~later this year~~imminently. Xcel Energy considers the reasonably possible loss associated with this litigation to be immaterial.

Rate Matters

NSP-Wisconsin is involved in various regulatory proceedings arising in the ordinary course of business. Until resolution, typically in the form of a rate order, uncertainties may exist regarding the ultimate rate treatment for certain activities and transactions. Amounts have been recognized for probable and reasonably estimable losses that may result. Unless otherwise disclosed, any reasonably possible range of loss in excess of any recognized amount is not expected to have a material effect on the financial statements.

MISO ROE Complaints — In November 2013 and February 2015, customer groups filed two ROE complaints against MISO TOs, which includes NSP-Minnesota and NSP-Wisconsin. The first complaint requested a reduction in base ROE transmission formula rates from 12.38% to 9.15% for the time period of Nov. 12, 2013 to Feb. 11, 2015, and removal of ROE adders (including those for RTO membership). The second complaint requested, for a subsequent time period, a base ROE reduction from 12.38% to 8.67%.

The FERC subsequently issued various related orders (including Opinion Nos. 569, 569A and 569B) related to ROE methodology/calculations and timing. NSP-Minnesota has processed refunds to customers for applicable complaint periods based on the ROE in the most recent applicable opinions on behalf of the NSP System.

The MISO TOs and various other parties have filed petitions for review of the FERC’s most recent applicable opinions at the D.C. Circuit. In August 2022, the D.C. Circuit ruled that FERC had not adequately supported its conclusions, vacated FERC’s related orders, and remanded the issue back to FERC for further proceedings, which remain pending. Additional exposure, if any, related to this matter is expected to be immaterial.

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Environmental

New and changing federal and state environmental mandates can create financial liabilities for NSP-Wisconsin, which are normally recovered through the regulated rate process.

Site Remediation

Various federal and state environmental laws impose liability where hazardous substances or other regulated materials have been released to the environment. NSP-Wisconsin may sometimes pay all or a portion of the cost to remediate sites where past activities of their predecessors or other parties have caused environmental contamination.

Environmental contingencies could arise from various situations, including sites of former MGPs; and third-party sites, such as landfills, for which NSP-Wisconsin is alleged to have sent wastes to that site.

MGP, Landfill and Disposal Sites

NSP-Wisconsin is investigating, remediating or performing post-closure actions at one MGP, landfill or other disposal sites across its service territories.

NSP-Wisconsin has recognized ~~its~~approximately ~~best~~$13 million ~~estimate~~ of costs/liabilities from final resolution of these issues, however, the outcome and timing are unknown. In addition, there may be regulatory recovery, insurance recovery and/or recovery from other potentially responsible parties, offsetting a portion of costs incurred.

Environmental Requirements — Water and Waste

Federal Clean Water Act Section 316(b) — The Federal Clean Water Act requires the EPA to regulate cooling water intake structures to assure they reflect the best technology available for minimizing impingement and entrainment of aquatic species. NSP-Wisconsin estimates capital expenditures of approximately $5 million may be required to comply with the requirements. NSP-Wisconsin believes two plants could be required to make improvements to reduce impingement and entrainment. NSP-Wisconsin anticipates these costs will be recoverable through regulatory mechanisms.

Environmental Requirements — Air

Clean Air Act NOx Allowance Allocations — In June 2023, ~~after disapproving state implementation plans,~~ the EPA published final regulations under the "Good Neighbor" provisions of the Clean Air Act. The final rule applies to generation facilities in Wisconsin, as well as other states outside of our service territory. The rule establishes an allowance trading program for NOx that will impact NSP-Wisconsin’s fossil fuel-fired electric generating facilities. ~~Applicable~~Subject facilities will have to secure additional allowances, install NOx controls and/or develop a strategy of operations that utilizes the existing allowance allocations. Guidelines are also established for allowance banking and emission limit backstops.

While the financial impacts of the final rule are uncertain and dependent on market forces and anticipated generation, NSP-Wisconsin anticipates the costs would be recoverable through regulatory mechanisms.

10. Segment Information

NSP-Wisconsin evaluates performance based on profit or loss generated from the product or service provided. These segments are managed separately because the revenue streams are dependent upon regulated rate recovery, which is separately determined for each segment.

NSP-Wisconsin has the following reportable segments:

•Regulated Electric — The regulated electric utility segment generates electricity, which is transmitted and distributed in Wisconsin and Michigan.

•Regulated Natural Gas — The regulated natural gas utility segment purchases, transports, stores and distributes natural gas in portions of Wisconsin and Michigan.

Asset and capital expenditure information is not provided for NSP-Wisconsin's reportable segments. As an integrated electric and natural gas utility, NSP-Wisconsin operates significant assets that are not dedicated to a specific business segment. Reporting assets and capital expenditures by business segment would require arbitrary and potentially misleading allocations, which may not necessarily reflect the assets that would be required for the operation of the business segments on a stand-alone basis.

Certain costs, such as common depreciation, common O&M expenses and interest expense are allocated based on cost causation allocators across each segment. In addition, a general allocator is used for certain general and administrative expenses, including office supplies, rent, property insurance and general advertising.

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NSP-Wisconsin's segment information:

	Three Months Ended Sept. 30
	Three Months Ended March 31
(Millions of Dollars)	~~2023~~2024		~~2022~~2023
Regulated Electric
Total revenues (a)	$	~~263~~256	$	~~274~~254
Net income	3233		4233
Regulated Natural Gas
Total revenues	$	1554	$	2077
Net loss	(3)		(3)
Net income	10		11
All Other
Total revenues	$	1	$	—
Net income	$	—	$	1
Net income	$	2	$	1
Consolidated Total
Total operating revenues (a)	$	279	$	294
Total revenues (a)	$	310	$	331
Net income	3143		4045

(a)Total revenues include $5053 million and $5150 million of affiliate electric revenue for the three months ended ~~Sept.~~March 3031, ~~2023~~2024 and ~~2022~~2023, respectively.

	Nine Months Ended Sept. 30
(Millions of Dollars)	2023		2022
Regulated Electric
Total revenues (a)	$	753	$	767
Net income	95		89
Regulated Natural Gas
Operating revenues	$	116	$	133
Intersegment revenue	1		—
Total revenues	$	117	$	133
Net income	5		11
All Other
Total revenues	$	1	$	—
Net income	$	2	$	2
Consolidated Total
Operating revenues (a)	$	871	$	900
Reconciling eliminations	(1)		—
Total operating revenues	$	870	$	900
Net income	102		102

(a)Total revenues include $151 million and $150 million of affiliate electric revenue for the nine months ended Sept. 30, 2023 and 2022, respectively.

ITEM 2 — MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Discussion of financial condition and liquidity for NSP-Wisconsin is omitted per conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q for wholly owned subsidiaries. It is replaced with management’s narrative analysis of the results of operations set forth in General Instruction H(2)(a) of Form 10-Q for wholly owned subsidiaries (reduced disclosure format).

Non-GAAP Financial Measures

The following discussion includes financial information prepared in accordance with GAAP, as well as certain non-GAAP financial measures such as ongoing earnings. Generally, a non-GAAP financial measure is a measure of a company’s financial performance, financial position or cash flows that adjusts measures calculated and presented in accordance with GAAP.

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NSP-Wisconsin’s management uses non-GAAP measures for financial planning and analysis, for reporting of results to the Board of Directors, in determining performance-based compensation and communicating its earnings outlook to analysts and investors. Non-GAAP financial measures are intended to supplement investors’ understanding of our performance and should not be considered alternatives for financial measures presented in accordance with GAAP. These measures are discussed in more detail below and may not be comparable to other companies’ similarly titled non-GAAP financial measures.

Earnings Adjusted for Certain Items (Ongoing Earnings)

Ongoing earnings reflect adjustments to GAAP earnings (net income) for certain items.

We use this non-GAAP financial measure to evaluate and provide details of NSP-Wisconsin’s core earnings and underlying performance. We believe this measurement is useful to investors to evaluate the actual and projected financial performance and contribution of NSP-Wisconsin. For the three ~~and nine~~ months ended ~~Sept.~~March 3031, ~~2023~~2024 and ~~2022~~2023, there were no such adjustments to GAAP earnings and therefore GAAP earnings equal ongoing earnings.

Results of Operations

NSP-Wisconsin's net income was $~~102~~43 million ~~for~~and ~~both~~$45 million for the ~~nine~~three months ended ~~Sept.~~March 3031, ~~2023~~2024 and ~~2022.~~2023, ~~Additional~~respectively, ~~electric~~as ~~and~~lower ~~natural~~O&M ~~gas~~expenses ~~infrastructure investment recoveries~~ were offset by ~~higher~~increased depreciation~~, O&M expenses and interest expenses~~.

Electric ~~Margin~~Revenue

Electric ~~margin is presented as electric~~ revenues ~~less~~are ~~electric~~impacted ~~fuel~~by ~~and~~fluctuations ~~purchased~~in ~~power~~the ~~expenses.~~price ~~Expenses~~of ~~incurred~~natural ~~for~~gas, ~~electric~~coal ~~fuel~~ and ~~purchased~~uranium, ~~power are generally recovered through various~~ regulatory ~~recovery mechanisms. As a result~~outcomes, ~~changes~~market inprices ~~these~~and ~~expenses~~seasonality. Electric ~~are~~revenues ~~generally~~increased ~~offset~~$2 million infor ~~operating~~the ~~revenues~~first quarter.

Electric revenues and fuel and purchased power expenses are impacted by fluctuations in the price of natural gas, coal and uranium. However, these price fluctuations generally have minimal earnings impact due to fuel recovery mechanisms. In addition, electric customers receive a credit for production tax credits generated, which reduce electric revenue and income taxes.


(Millions of Dollars)	Three Months Ended March. 31, 2024 vs. 2023
Estimated impact of weather	$	(3)
Sales and demand	(2)

Regulatory rate outcomes	4
Interchange agreement revenue from NSP-Minnesota	3

Total increase	$	2

~~Electric~~Natural ~~revenues,~~Gas ~~fuel and purchased power and margin:~~Revenues

	Nine Months Ended Sept. 30
(Millions of Dollars)	2023		2022
Electric revenues	$	753	$	767
Electric fuel and purchased power	(315)		(356)
Electric margin	$	438	$	411

Natural gas revenues vary with changing sales and the cost of natural gas and regulatory outcomes. Natural gas revenues decreased $23 million in the first quarter.

(Millions of Dollars)	~~Nine~~Three Months Ended ~~Sept~~March. 3031, ~~2023~~2024 vs. ~~2022~~2023
Interchange agreement billings with NSP-Minnesota	$	15
Recovery of lower cost of natural gas	$	(21)
Regulatory rate outcomes	4
Estimated impact of weather	(3)
Other (net)	111
Total increase	$	27
Total decrease	$	(23)

~~Natural~~Electric ~~Gas~~Fuel ~~Margin~~and Purchased Power — Expenses incurred for electric fuel and purchased power are impacted by fluctuations in market prices of natural gas, coal and uranium, as well as seasonality. However, these incurred expenses are generally recovered through various regulatory recovery mechanisms. As a result, changes in these expenses are generally offset in operating revenues and have minimal earnings impact.

~~Natural~~Electric ~~gas~~fuel ~~margin~~and ispurchased ~~presented~~power asexpenses ~~natural~~remained ~~gas~~flat ~~revenues less the cost of natural gas sold and transported. Expenses incurred~~ for the ~~cost~~first quarter of ~~natural gas sold are generally recovered through various regulatory recovery mechanisms~~2024. ~~As a result, changes in these expenses are generally offset in operating revenues.~~

Cost of Natural ~~gas~~Gas ~~expense~~Sold ~~varies~~and ~~with~~Transported ~~changing~~— ~~sales~~Expenses ~~and~~incurred for the cost of natural gas. ~~However,~~sold ~~fluctuations~~are inimpacted ~~the~~by ~~cost~~market ofprices ~~natural~~and ~~gas~~seasonality. ~~generally~~These ~~have~~costs ~~minimal~~are ~~earnings~~generally ~~impact~~recovered ~~due~~through tovarious ~~cost~~regulatory recovery mechanisms. As a result, changes in these expenses are generally offset in operating revenues and have minimal earnings impact.

Natural gas ~~revenues,~~sold ~~cost~~and transported decreased $22 million for the first quarter of ~~natural~~2024. ~~gas~~The ~~sold~~decrease ~~and~~is ~~transported~~primarily due to lower commodity prices and ~~margin:~~lower volumes.

	Nine Months Ended Sept. 30
(Millions of Dollars)	2023		2022
Natural gas revenues	$	116	$	133
Cost of natural gas sold and transported	(61)		(75)
Natural gas margin	$	55	$	58

(Millions of Dollars)	Nine Months Ended Sept. 30, 2023 vs. 2022
Estimated impact of weather	$	(4)
Natural gas sales and transport (excluding weather impact)	(1)
Regulatory rate outcomes (Wisconsin)	2
Total decrease	$	(3)

Non-Fuel Operating Expenses and Other Items

O&M Expenses — O&M ~~costs~~expenses ~~increased~~decreased $132 million year to date., ~~Increase is~~ primarily due to ~~vegetation~~ ~~management, higher cost for storms and inflationary pressures including labor and insurance increases, partially offset by~~ lower ~~employee~~storm ~~benefits~~costs.

Depreciation and Amortization — Depreciation and amortization increased $94 million year to date, primarily due to system expansion.

Interest Charges — Interest charges increased $7 million year to date, largely due to increased long-term debt levels.

Public Utility Regulation and Other

The FERC and various state and local regulatory commissions regulate NSP-Wisconsin. The electric and natural gas rates charged to customers of NSP-Wisconsin are approved by the FERC or the regulatory commissions in the states in which it operates.

Rates are designed to recover plant investment, operating costs and an allowed return on investment. NSP-Wisconsin requests changes in utility rates through commission filings.

Changes in operating costs can affect NSP-Wisconsin’s financial results, depending on the timing of rate case filings and implementation of final rates. Other factors affecting rate filings are new investments, sales, conservation and demand side management efforts, and the cost of capital. In addition, the regulatory commissions authorize the ROE, capital structure and depreciation rates in rate proceedings. Decisions by these regulators can significantly impact NSP-Wisconsin’s results of operations. 12

Except to the extent noted below, the circumstances set forth in Public Utility Regulation included in Item 7 of NSP-Wisconsin’s Annual Report on Form 10-K for the year ended Dec. 31, 2022 appropriately represent, in all material respects, the current status of public utility regulation and are incorporated herein by reference.

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~~Pending~~Changes ~~Regulatory~~in ~~Proceedings~~operating costs can affect NSP-Wisconsin’s financial results, depending on the timing of rate case filings and implementation of final rates. Other factors affecting rate filings are new investments, sales, conservation and demand side management efforts, and the cost of capital. In addition, the regulatory commissions authorize the ROE, capital structure and depreciation rates in rate proceedings. Decisions by these regulators can significantly impact NSP-Wisconsin’s results of operations.

~~Wisconsin~~Except ~~Rate~~to ~~Case~~the —extent Innoted ~~April 2023~~below, ~~NSP-Wisconsin~~the ~~filed~~circumstances aset ~~Wisconsin~~forth ~~rate~~in ~~case~~Public ~~seeking~~Utility anRegulation ~~electric~~included ~~increase~~in ofItem ~~$40~~7 ~~million (rate increase~~ of ~~4.8%)~~NSP-Wisconsin’s ~~and~~Annual aReport ~~natural gas increase of $9 million (rate increase of 5.3%). The rate filing is based~~ on aForm ~~2024~~10-K ~~forecast~~for ~~test~~the year, aended ~~ROE of 10~~Dec.~~25%~~ 31, an2023 ~~equity~~appropriately ~~ratio~~represent, ofin ~~52.5%~~all ~~and~~material arespects, ~~forecasted~~the ~~average~~current ~~net~~status ~~rate base~~ of ~~approximately~~public ~~$2.1 billion for the electric~~ utility regulation and ~~$284~~are ~~million~~incorporated ~~for~~herein ~~the~~by ~~natural gas utility~~reference.

OnPending ~~Sept.~~Regulatory 1,Proceedings ~~2023,~~- the PSCW Staff recommended an electric base rate decrease of $3 million or (0.3)% when including depreciation, fuel and purchased power adjustments and a natural gas rate increase of $5 million, or 3.1%. The recommendation was based on a ROE of 9.7% and an equity ratio of 52.5%. NSP-System

In September 2023, NSP-Wisconsin filed rebuttal testimony and updated its request for depreciation life extensions and other updates. NSP-Wisconsin revised its requested rate increase to $25 million for the electric utility and $7 million for the natural gas utility. NSP-Wisconsin will update forecasted fuel costs before the Commission decision. Prudently incurred 2024 fuel costs will be trued up to actuals in a fuel reconciliation process, subject to a 2% band.

A PSCW decision is anticipated late fourth quarter 2023 with new rates effective in January 2024.

2022 Upper Midwest IRP Resource Acquisition

Following the MPUC’s approval of NSP-Minnesota and NSP-Wisconsin’s latest IRP in April 2022, NSP-Minnesota and NSP-Wisconsin have been engaged in multiple resource acquisition processes and proceedings to meet the need identified in the IRP.

•In ~~August~~the ~~2022~~second quarter of 2023, NSP-Minnesota ~~and~~initiated ~~NSP-Wisconsin~~the ~~jointly~~process ~~filed~~with anthe ~~RFP~~MPUC ~~seeking~~for atacquisition ~~least~~of ~~900~~800 MW of ~~solar~~firm ordispatchable ~~solar plus storage capacity~~resources. In ~~May~~January ~~2023~~2024, NSP-Minnesota ~~filed~~and aother ~~recommended~~companies ~~portfolio,~~submitted ~~which~~ proposed anresources ~~additional 250 MW of self-build solar generation at the site of our retiring Sherco coal units~~ and afiled ~~100~~for MWproject ~~solar~~approval ~~PPA~~with ~~located in Wisconsin as part of~~ the ~~resource plan RFP~~MPUC. InNSP-Minnesota ~~September~~expects ~~2023, the MPUC approved the request, subject to~~ a ~~cost~~decision ~~cap~~by ~~based on projected costs for~~ the ~~Sherco~~second ~~solar~~quarter ~~project.~~of 2025.

•In July 2023, NSP-Wisconsin issued an RFP seeking approximately 650 MW of solar and/or solar plus storage development assets that will be developed in the 2027-2029 timeframe to replace the ~~nameplate~~ capacity ~~associated~~from ~~with~~the ~~NSP-Minnesota’s~~ retiring King Generating Station. The RFP closed in September 2023 and bids are being evaluated.

~~Other~~•In October 2023, NSP-Minnesota issued an RFP seeking approximately 1,200 MW of wind development assets to replace capacity and reutilize interconnection rights associated with the retiring Sherco coal facilities. The RFP closed in December 2023 and NSP-Minnesota expects to file for approval of recommended projects by mid-2024.

~~Supply~~2024 ~~Chain~~Upper Midwest Resource Plan

~~NSP-Wisconsin’s~~In ~~ability~~February ~~to meet customer energy requirements~~2024, respond to storm-related disruptions and execute our capital expenditure program are dependent on maintaining an efficient supply chain. Manufacturing processes have experienced disruptions related to scarcity of certain raw materials and interruptions in production and shipping. These disruptions have been further exacerbated by inflationary pressures, labor shortages and the impact of international conflicts/issues. NSP-~~Wisconsin~~Minnesota ~~continues~~filed toits ~~monitor~~Upper ~~the~~Midwest ~~situation~~Resource asPlan itwith ~~remains fluid and seeks to mitigate~~ the ~~impacts~~MPUC bywhich ~~securing~~included ~~alternative suppliers, modifying design standards, and adjusting~~ the ~~timing~~following ofkey ~~work.~~items:

~~Electric~~•Reduced ~~Meters~~carbon ~~and~~emissions ~~Transformers~~by more than 80%, potentially up to 88%, by 2030.

~~Supply~~•Extends ~~chain issues associated with semi-conductors have delayed~~ the ~~availability~~operation of ~~advanced~~Prairie ~~infrastructure~~Island ~~meters.~~and AsMonticello athrough ~~result~~the ofearly ~~delays, NSP-Wisconsin projects impacts to deployment schedules into 2025~~2050s.

~~Additionally~~•Adds 3,600 ~~the~~MWs ~~availability~~ of ~~certain transformers is an industry-wide issue that has significantly impacted and in some cases may result in delays in projects and~~ new ~~customer~~wind ~~connections. Proposed governmental actions related to transformer efficiency standards may compound these delays in the future. NSP-Wisconsin continues to seek alternative suppliers~~ and ~~prioritize~~solar ~~work~~resources ~~plans~~by ~~to mitigate impacts of supply constraints~~2030.

~~Environmental~~•Adds 600 MWs of battery energy storage by 2030.

•Adds more than 2,200 MWs of dispatchable resources by 2030.

These proposed resources are in addition to projects already approved by the MPUC. NSP-Minnesota anticipates a MPUC decision in 2025.


Emerging Environmental Regulation

Clean Air Act

Power Plant Greenhouse Gas Regulations — In ~~May~~April ~~2023~~2024, the EPA published ~~proposed~~final rules addressing control of CO2 emissions from the power sector. The ~~rule~~rules ~~proposed~~regulate ~~regulations for~~ new natural gas generating units ~~under Clean Air Act Section 111(b)~~ and emission guidelines for existing coal and certain natural gas generation ~~under Clean Air Act Section 111(d)~~. The ~~proposed~~ rules create subcategories of coal units based on planned retirement date and subcategories of natural gas combustion turbines and combined cycle units based on utilization. The CO2 control requirements vary by subcategory. NSP-Wisconsin ~~Until~~continues ~~final~~to ~~rules~~evaluate ~~are issued, it is not certain what~~ the impact ~~will~~of bethese onrules ~~NSP-Wisconsin.~~and ~~NSP-Wisconsin~~ believes that the cost of these initiatives or replacement generation would be recoverable through rates based on prior state commission practices.

Waste-to-Energy Air Regulations — In January 2024, the EPA proposed air regulations addressing new and existing large municipal waste combustors. The proposed rules lower current emission standards for certain pollutants and would require installation of new pollution controls and/or more intense use of existing pollution controls at French Island Generating Station. Until final rules are issued, it is not certain what the impact will be on NSP-Wisconsin. NSP-Wisconsin believes that the cost of these initiatives or replacement generation would be recoverable through rates based on prior state commission practices.

Emerging Contaminants of Concern

PFAS are man-made chemicals that are widely used in consumer products and can persist and bio-accumulate in the environment. NSP-Wisconsin does not manufacture PFAS but because PFAS are so ubiquitous in products and the environment, it may impact our operations.

In September 2022, the EPA proposed to designate two types of PFAS as “hazardous substances” under the CERCLA.

In March 2023, the EPA published a proposed rule that would establish enforceable drinking water standards for certain PFAS chemicals.

~~NSP-Wisconsin~~In ~~provided~~February ~~comments~~2024, ~~related~~the toEPA ~~both~~proposed ~~efforts~~to ~~described~~change ~~above~~the ~~through~~Resource ~~its~~Conservation ~~regulatory~~and ~~coalitions.~~Recovery ~~Final~~Act ~~rules~~by ~~are~~adding ~~expected~~nine inPFAS ~~2024.~~to ~~Costs~~its ~~are~~list ~~uncertain~~of ~~until~~hazardous ~~a final rule is published~~constituents.

~~The~~Final ~~proposed~~ rules ~~could~~for ~~result~~all inthree ~~new~~proposals ~~obligations~~are ~~for~~expected ~~investigation~~in ~~and~~2024 ~~cleanup.~~which ~~NSP-Wisconsin~~could isresult ~~monitoring~~in ~~changes~~new toobligations. ~~state~~Potential ~~laws~~costs ~~addressing~~are ~~PFAS.~~uncertain ~~The~~until ~~impact~~final ofrules ~~these~~are ~~proposed~~published ~~regulations~~and/or agency action is ~~uncertain~~taken.


ITEM 4 — CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

NSP-Wisconsin maintains a set of disclosure controls and procedures designed to ensure that information required to be disclosed in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms.

In addition, the disclosure controls and procedures ensure that information required to be disclosed is accumulated and communicated to management, including the CEO and CFO, allowing timely decisions regarding required disclosure.

As of ~~Sept.~~March 3031, ~~2023~~2024, based on an evaluation carried out under the supervision and with the participation of NSP-Wisconsin’s management, including the CEO and CFO, of the effectiveness of its disclosure controls and procedures, the CEO and CFO have concluded that NSP-Wisconsin’s disclosure controls and procedures were effective.

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Internal Control Over Financial Reporting

No changes in NSP-Wisconsin’s internal control over financial reporting occurred during the most recent fiscal quarter that materially affected, or are reasonably likely to materially affect, NSP-Wisconsin’s internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1 — LEGAL PROCEEDINGS

Management is sometimes unable to estimate an amount or range of a reasonably possible loss in certain situations, including but not limited to, when (1) the damages sought are indeterminate, (2) the proceedings are in the early stages, or (3) the matters involve novel or unsettled legal theories. In such cases, there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss.

For current proceedings not specifically reported herein, management does not anticipate that the ultimate liabilities, if any, would have a material effect on NSP-Wisconsin’s consolidated financial statements. Legal fees are generally expensed as incurred.

See Note 9 to the consolidated financial statements and Part I Item 2 for further information.

ITEM 1A — RISK FACTORS

NSP-Wisconsin's risk factors are documented in Item 1A of Part I of its Annual Report on Form 10-K for the year ended Dec. 31, ~~2022~~2023, which is incorporated herein by reference. There have been no material changes from the risk factors previously disclosed in the Form 10-K.


ITEM 5 — OTHER INFORMATION

None of the Company’s directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company’s fiscal quarter ended ~~Sept.~~March 3031, ~~2023~~2024.

ITEM 6 — EXHIBITS

* Indicates incorporation by reference


Exhibit Number	Description	Report or Registration Statement	Exhibit Reference
3.01*	Amended and Restated Articles of Incorporation of NSP-Wisconsin, dated May 28, 1998	NSP-Wisconsin Form S-4 dated Jan. 21, 2004	3.01
3.02*	Amended and Restated Bylaws of NSP-Wisconsin, dated Jan. 25, 2019	NSP-Wisconsin Form 10-K for the year ended Dec. 31, 2018	3.02

31.01	Principal Executive Officer’s certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.02	Principal Financial Officer’s certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.01	Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Schema
101.CAL	Inline XBRL Calculation
101.DEF	Inline XBRL Definition
101.LAB	Inline XBRL Label
101.PRE	Inline XBRL Presentation
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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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 (a Wisconsin corporation)
10/27/23	By:	/s/ BRIAN J. VAN ABEL
4/25/2024	By:	/s/ MELISSA L. OSTROM
		Melissa L. Ostrom
		Vice President, Controller
		(Principal Accounting Officer)
	By:	/s/ BRIAN J. VAN ABEL
		Brian J. Van Abel
		Executive Vice President, Chief Financial Officer
		(Principal Accounting Officer and Principal Financial Officer)
		(Principal Financial Officer)

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Filing Compare · NORTHERN STATES POWER CO /WI/