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 ~~June 30, 2021~~March 31, 2022


☐			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~~Name of ~~registrant~~Registrant as ~~specified~~Specified in its ~~charter)~~Charter)

Wisconsin

39-0508315

(State or ~~other jurisdiction~~Other Jurisdiction of ~~incorporation~~Incorporation or ~~organization)~~Organization)

(I.R.S Employer Identification No.)

1414 West Hamilton Avenue

Eau Claire

Wisconsin

54701

(Address of ~~principal executive offices)~~Principal Executive Offices)

(Zip Code)


(715)			737-2625
(Registrant’s ~~telephone number, including area code)~~


~~N/A~~
~~(Former name, former address and former fiscal year, if changed since last report)~~Telephone Number, Including Area Code)

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 ~~July 29, 2021~~April 28, 2022
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	1312
Item 4 —	Controls and Procedures	1513

PART II	OTHER INFORMATION
Item 1 —	Legal Proceedings	1514
Item 1A —	Risk Factors	1514
Item 6 —	Exhibits	1614

SIGNATURES		1715

This Form 10-Q is filed by ~~Northern States Power Company, a Wisconsin corporation (NSP-Wisconsin).~~NSP-Wisconsin. NSP-Wisconsin is a wholly owned subsidiary of Xcel Energy Inc. Additional information on Xcel Energy is available on various filings with the ~~Securities and Exchange Commission.~~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-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
~~IRS~~			~~Internal Revenue Service~~
PSCW			Public Service Commission of Wisconsin
SEC			Securities and Exchange Commission


Other
~~ASC~~			~~FASB Accounting Standards Codification~~
C&I			Commercial and Industrial
CEO			Chief executive officer
CFO			Chief financial officer
COVID-19			Novel coronavirus
~~ETR~~CSPV			~~Effective tax rate~~
~~FASB~~			~~Financial Accounting Standards Board~~Crystalline Silicon Photovoltaic
GAAP			United States generally accepted accounting principles
~~MDL~~			~~Multi-district litigation~~
MGP			Manufactured gas plant
MISO			Midcontinent Independent System Operator, Inc.
~~NOL~~			~~Net operating loss~~
O&M			Operating and maintenance
~~PFAS~~			~~Per- and PolyFluoroAlkyl Substances~~
ROE			Return on equity
~~RTO~~			~~Regional Transmission Organization~~
TOs			Transmission owners


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 ~~impacts~~impact on our results of operations, financial condition and cash flows orof 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 ~~elsewhere~~ in ~~this Quarterly Report on Form 10-Q and in other filings with the SEC (including~~ NSP-Wisconsin's Annual Report on Form 10-K for the fiscal year ended Dec. 31, ~~2020,~~2021 and subsequent ~~filings),~~filings with the SEC, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: uncertainty around the impacts and duration of the COVID-19 ~~pandemic;~~pandemic, including potential workforce impacts resulting from vaccination requirements, quarantine policies or government restrictions, and sales volatility; operational safety; successful long-term operational planning; commodity risks associated with energy markets and production; rising energy prices and fuel costs; qualified employee work force and third-party contractor factors; violations of our Code of Conduct; ability to recover costs; changes in regulation; reductions in our credit ratings and the cost of maintaining certain contractual relationships; general economic conditions, including inflation rates, monetary fluctuations, supply chain constraints and their impact on capital expenditures ~~and~~and/or the ability of NSP-Wisconsin and its subsidiaries 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; effects of geopolitical events, including war and acts of terrorism; cyber security threats and data security breaches; seasonal weather patterns; changes in environmental laws and regulations; climate change and other weather; natural disaster and resource depletion, including compliance with any accompanying legislative and regulatory changes; and costs of potential regulatory ~~penalties.~~penalties; and regulatory changes and/or limitations related to the use of natural gas as an energy source.

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 June 30				Six Months Ended June 30					Three Months Ended March 31
		2021		2020		2021		2020			2022		2021
Operating revenues	Operating revenues									Operating revenues
Electric, non-affiliates	Electric, non-affiliates	$	178	$	158	$	356	$	329	Electric, non-affiliates	$	203	$	178
Electric, affiliates	Electric, affiliates	46		41		92		82		Electric, affiliates	47		46
Natural gas	Natural gas	31		19		88		64		Natural gas	78		57

Total operating revenues	Total operating revenues	255		218		536		475		Total operating revenues	328		281

Operating expenses	Operating expenses									Operating expenses
Electric fuel and purchased power, non-affiliates	Electric fuel and purchased power, non-affiliates	5		3		10		6		Electric fuel and purchased power, non-affiliates	4		5
Purchased power, affiliates	Purchased power, affiliates	106		91		206		186		Purchased power, affiliates	108		100
Cost of natural gas sold and transported	Cost of natural gas sold and transported	20		7		51		28		Cost of natural gas sold and transported	45		31
Operating and maintenance expenses	Operating and maintenance expenses	50		45		99		94		Operating and maintenance expenses	53		49
Conservation program expenses	Conservation program expenses	3		3		6		6		Conservation program expenses	3		3
Depreciation and amortization	Depreciation and amortization	36		39		73		77		Depreciation and amortization	38		37
Taxes (other than income taxes)	Taxes (other than income taxes)	8		7		15		14		Taxes (other than income taxes)	8		7
Total operating expenses	Total operating expenses	228		195		460		411		Total operating expenses	259		232

Operating income	Operating income	27		23		76		64		Operating income	69		49

Other expense, net		0		(2)		0		(4)

Allowance for funds used during construction — equity	Allowance for funds used during construction — equity	1		1		2		3		Allowance for funds used during construction — equity	2		1

Interest charges and financing costs	Interest charges and financing costs									Interest charges and financing costs
Interest charges	Interest charges	12		10		21		20		Interest charges	11		9
Allowance for funds used during construction — debt	Allowance for funds used during construction — debt	(1)		(1)		(1)		(1)		Allowance for funds used during construction — debt	(1)		—
Total interest charges and financing costs	Total interest charges and financing costs	11		9		20		19		Total interest charges and financing costs	10		9

Income before income taxes	Income before income taxes	17		13		58		44		Income before income taxes	61		41
Income tax expense (benefit)		3		1		12		(2)
Income tax expense										Income tax expense	14		9
Net income	Net income	$	14	$	12	$	46	$	46	Net income	$	47	$	32

See Notes to Consolidated Financial Statements

Table of Contents

NSP-WISCONSIN AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(amounts in millions)


		Six Months Ended June 30					Three Months Ended March 31
		2021		2020			2022		2021
Operating activities	Operating activities					Operating activities
Net income	Net income	$	46	$	46	Net income	$	47	$	32
Adjustments to reconcile net income to cash provided by operating activities:	Adjustments to reconcile net income to cash provided by operating activities:					Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	73		78		Depreciation and amortization	39		37
Deferred income taxes	Deferred income taxes	10		(15)		Deferred income taxes	(1)		9
Allowance for equity funds used during construction	Allowance for equity funds used during construction	(2)		(3)		Allowance for equity funds used during construction	(2)		(1)
Provision for bad debts	Provision for bad debts	2		3		Provision for bad debts	2		—
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Accounts receivable	Accounts receivable	10		(4)		Accounts receivable	(17)		4
Accrued unbilled revenues	Accrued unbilled revenues	5		10		Accrued unbilled revenues	18		10
Inventories	Inventories	(1)		0		Inventories	4		2
Other current assets	Other current assets	(6)		0		Other current assets	5		6
Accounts payable	Accounts payable	9		(3)		Accounts payable	(8)		(9)
Net regulatory assets and liabilities	Net regulatory assets and liabilities	(47)		5		Net regulatory assets and liabilities	4		(47)
Other current liabilities	Other current liabilities	(2)		(2)		Other current liabilities	15		(3)
Pension and other employee benefit obligations	Pension and other employee benefit obligations	(5)		(7)		Pension and other employee benefit obligations	(1)		(5)
Other, net	Other, net	2		0		Other, net	3		1
Net cash provided by operating activities	Net cash provided by operating activities	94		108		Net cash provided by operating activities	108		36

Investing activities	Investing activities					Investing activities
Capital/construction expenditures	Capital/construction expenditures	(111)		(121)		Capital/construction expenditures	(87)		(51)

Net cash used in investing activities	Net cash used in investing activities	(111)		(121)		Net cash used in investing activities	(87)		(51)

Financing activities	Financing activities					Financing activities

Repayments of short-term borrowings, net		(19)		(65)
(Repayments of) proceeds from short-term borrowings, net						(Repayments of) proceeds from short-term borrowings, net	(83)		7
Borrowings under utility money pool arrangement	Borrowings under utility money pool arrangement	186		0		Borrowings under utility money pool arrangement	235		(56)
Repayments under utility money pool arrangement	Repayments under utility money pool arrangement	(153)		0		Repayments under utility money pool arrangement	(187)		43
Proceeds from long-term debt		0		98

Capital contributions from parent	Capital contributions from parent	40		37		Capital contributions from parent	31		39
Dividends paid to parent	Dividends paid to parent	(38)		(32)		Dividends paid to parent	(27)		(20)
Other, net	Other, net	1		0		Other, net	1		2
Net cash provided by financing activities		17		38
Net cash (used in) provided by financing activities						Net cash (used in) provided by financing activities	(30)		15

Net change in cash, cash equivalents and restricted cash	Net change in cash, cash equivalents and restricted cash	0		25		Net change in cash, cash equivalents and restricted cash	(9)		—
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	2		1		Cash, cash equivalents and restricted cash at beginning of period	11		2
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	2	$	26	Cash, cash equivalents and restricted cash at end of period	$	2	$	2

Supplemental disclosure of cash flow information:	Supplemental disclosure of cash flow information:					Supplemental disclosure of cash flow information:
Cash paid for interest (net of amounts capitalized)	Cash paid for interest (net of amounts capitalized)	$	(19)	$	(18)	Cash paid for interest (net of amounts capitalized)	$	(10)	$	(10)
Cash paid for income taxes, net	Cash paid for income taxes, net	(13)		(13)		Cash paid for income taxes, net	—		(1)

Supplemental disclosure of non-cash investing and financing transactions:	Supplemental disclosure of non-cash investing and financing transactions:					Supplemental disclosure of non-cash investing and financing transactions:
Accrued property, plant and equipment additions	Accrued property, plant and equipment additions	$	19	$	18	Accrued property, plant and equipment additions	$	17	$	14
Inventory transfers to property, plant and equipment	Inventory transfers to property, plant and equipment	2		2		Inventory transfers to property, plant and equipment	1		1
Allowance for equity funds used during construction	Allowance for equity funds used during construction	2		3		Allowance for equity funds used during construction	2		1

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)


		June 30, 2021		Dec. 31, 2020			March 31, 2022		Dec. 31, 2021
Assets	Assets					Assets
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	2	$	2	Cash and cash equivalents	$	2	$	11
Accounts receivable, net	Accounts receivable, net	61		70		Accounts receivable, net	85		71
Accrued unbilled revenues	Accrued unbilled revenues	48		53		Accrued unbilled revenues	51		69
Other Receivables	Other Receivables	2		1		Other Receivables	1		3
Inventories	Inventories	15		15		Inventories	22		27
Regulatory assets	Regulatory assets	47		19		Regulatory assets	38		21
Prepaid taxes	Prepaid taxes	30		24		Prepaid taxes	19		25
Prepayments and other	Prepayments and other	5		7		Prepayments and other	9		7
Total current assets	Total current assets	210		191		Total current assets	227		234

Property, plant and equipment, net	Property, plant and equipment, net	2,541		2,484		Property, plant and equipment, net	2,701		2,660

Other assets	Other assets					Other assets
Regulatory assets	Regulatory assets	216		215		Regulatory assets	208		225
Other Investments	Other Investments	3		3		Other Investments	3		3
Other	Other	2		1		Other	1		1
Total other assets	Total other assets	221		219		Total other assets	212		229
Total assets	Total assets	$	2,972	$	2,894	Total assets	$	3,140	$	3,123

Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Current liabilities	Current liabilities					Current liabilities
Current portion of long-term debt		$	19	$	19

Short-term debt	Short-term debt	0		19		Short-term debt	48		83
Borrowings under utility money pool arrangement		33		0

Accounts payable	Accounts payable	47		41		Accounts payable	45		69
Accounts payable to affiliates	Accounts payable to affiliates	29		15		Accounts payable to affiliates	21		23
Dividends payable to parent	Dividends payable to parent	15		19		Dividends payable to parent	21		26
Regulatory liabilities	Regulatory liabilities	7		31		Regulatory liabilities	14		4
Taxes accrued	Taxes accrued	8		12		Taxes accrued	25		10
Environmental liabilities	Environmental liabilities	4		4		Environmental liabilities	4		4
Accrued interest	Accrued interest	10		10		Accrued interest	10		10
Other	Other	17		15		Other	16		17
Total current liabilities	Total current liabilities	189		185		Total current liabilities	204		246

Deferred credits and other liabilities	Deferred credits and other liabilities					Deferred credits and other liabilities
Deferred income taxes	Deferred income taxes	321		307		Deferred income taxes	326		325
Deferred investment tax credits	Deferred investment tax credits	6		0		Deferred investment tax credits	5		5
Regulatory liabilities	Regulatory liabilities	369		350		Regulatory liabilities	377		372
Environmental liabilities	Environmental liabilities	15		16		Environmental liabilities	13		14
Customer advances	Customer advances	21		20		Customer advances	24		23
Pension and employee benefit obligations	Pension and employee benefit obligations	23		28		Pension and employee benefit obligations	15		16
Other	Other	27		33		Other	31		32
Total deferred credits and other liabilities	Total deferred credits and other liabilities	782		754		Total deferred credits and other liabilities	791		787

Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	0		0
Capitalization	Capitalization					Capitalization
Long-term debt	Long-term debt	888		887		Long-term debt	987		987
Common stock — 1,000,000 shares authorized of $100 par value; 933,000 shares outstanding at June 30, 2021 and Dec. 31, 2020, respectively		93		93
Common stock — 1,000,000 shares authorized of $100 par value; 933,000 shares outstanding at March. 31, 2022 and Dec. 31, 2021, respectively						Common stock — 1,000,000 shares authorized of $100 par value; 933,000 shares outstanding at March. 31, 2022 and Dec. 31, 2021, respectively	93		93
Additional paid in capital	Additional paid in capital	638		605		Additional paid in capital	672		642
Retained earnings	Retained earnings	382		370		Retained earnings	393		368
Total common stockholder's equity	Total common stockholder's equity	1,113		1,068		Total common stockholder's equity	1,158		1,103
Total liabilities and equity	Total liabilities and equity	$	2,972	$	2,894	Total liabilities and equity	$	3,140	$	3,123

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; shares in thousands)


		Common Stock Issued					Retained Earnings			Total Common Stockholder's Equity			Common Stock Issued						Retained Earnings		Total Common Stockholder's Equity
		Shares	Par Value		Additional Paid In Capital				Shares					Par Value		Additional Paid In Capital
Three Months Ended June 30, 2021 and 2020
Balance at March 31, 2020		933	$	93	$	547	$	353		$	993
Three Months Ended March. 31, 2022 and 2021												Three Months Ended March. 31, 2022 and 2021
Balance at Dec. 31, 2020												Balance at Dec. 31, 2020	933		$	93	$	605	$	370	$	1,068
Net income	Net income						12			12		Net income							32		32
Common dividends declared to parent	Common dividends declared to parent						(20)			(20)		Common dividends declared to parent							(20)		(20)
Contribution of capital by parent	Contribution of capital by parent				30					30		Contribution of capital by parent					30				30
Balance at June 30, 2020		933	$	93	$	577	$	345		$	1,015
Balance at March 31, 2021												Balance at March 31, 2021	933		$	93	$	635	$	382	$	1,110

Balance at March 31, 2021		933	$	93	$	635	$	382		$	1,110
Balance at Dec. 31, 2021												Balance at Dec. 31, 2021	933		$	93	$	642	$	368	$	1,103
Net income	Net income						14			14		Net income							47		47
Common dividends declared to parent	Common dividends declared to parent						(14)			(14)		Common dividends declared to parent							(22)		(22)
Contribution of capital by parent	Contribution of capital by parent				3					3		Contribution of capital by parent					30				30
Balance at June 30, 2021		933	$	93	$	638	$	382		$	1,113
Balance at March 31, 2022												Balance at March 31, 2022	933		$	93	$	672	$	393	$	1,158

See Notes to Consolidated Financial Statements												See Notes to Consolidated Financial Statements

Common Stock Issued Retained Earnings Total Common Stockholder's Equity
Shares Par Value Additional Paid
In Capital
Six Months Ended June 30, 2021 and 2020
Balance at Dec. 31, 2019 933 $ 93 $ 537 $ 336 $ 966
Net income 46 46
Common dividends declared to parent (37) (37)
Contribution of capital by parent 40 40
Balance at June 30, 2020 933 $ 93 $ 577 $ 345 $ 1,015
Balance at Dec. 31, 2020 933 $ 93 $ 605 $ 370 $ 1,068
Net income 46 46
Common dividends declared to parent (34) (34)
Contribution of capital by parent 33 33
Balance at June 30, 2021 933 $ 93 $ 638 $ 382 $ 1,113
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 ~~June 30, 2021~~March 31, 2022 and Dec. 31, ~~2020;~~2021; the results of NSP-Wisconsin's operations, including the components of net income, changes in stockholder's equity and comprehensive income for the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020;~~2021; and ~~its~~NSP-Wisconsin's cash flows for the ~~six~~three months ended ~~June 30, 2021~~March 31, 2022 and ~~2020.~~2021.

All adjustments are of a normal, recurring nature, except as otherwise disclosed. Management has also evaluated the impact of events occurring after ~~June 30, 2021~~March 31, 2022 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, ~~2020~~2021 balance sheet information has been derived from the audited ~~2020~~2021 consolidated financial statements included in the NSP-Wisconsin Annual Report on Form 10-K for the year ended Dec. 31, ~~2020.~~2021.

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, ~~2020,~~2021, filed with the SEC on Feb. ~~17, 2021.~~23, 2022. 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, ~~2020~~2021 appropriately represent, in all material respects, the current status of accounting policies and are incorporated herein by reference.


2. Accounting Pronouncements

~~Recently Adopted~~

~~Credit Losses~~ ~~— In 2016,~~As of March 31, 2022, there was no material impact from the ~~FASB issued~~ ~~Financial Instruments - Credit Losses, Topic 326 (ASC Topic 326),~~ which changes how entities account for losses on receivables and certain other assets. The guidance requires use of a current expected credit loss model, which may result in earlier recognition of credit losses than under previous accounting standards.

~~NSP-Wisconsin implemented the guidance using a modified-retrospective approach, recognizing an immaterial cumulative effect charge (after tax) to retained earnings on Jan 1. 2020. The Jan. 1, 2020~~recent adoption of ~~ASC Topic 326 did not have a significant~~new accounting pronouncements, nor expected material impact from recently issued accounting pronouncements yet to be adopted, on ~~NSP-Wisconsin’s consolidated~~NSP-Wisconsin's financial statements.

3. Selected Balance Sheet Data


(Millions of dollars)	(Millions of dollars)	June 30, 2021		Dec. 31, 2020		(Millions of dollars)	March 31, 2022		Dec. 31, 2021
Accounts receivable, net	Accounts receivable, net					Accounts receivable, net
Accounts receivable	Accounts receivable	$	68	$	78	Accounts receivable	$	94	$	79
Less allowance for bad debts	Less allowance for bad debts	(7)		(8)		Less allowance for bad debts	(9)		(8)
Accounts receivable, net	Accounts receivable, net	$	61	$	70	Accounts receivable, net	$	85	$	71


(Millions of dollars)	March 31, 2022		Dec. 31, 2021
Inventories
Materials and supplies	$	8	$	8
Fuel	12		9
Natural gas	2		10
Total inventories	$	22	$	27

(Millions of dollars) June 30, 2021 Dec. 31, 2020
Inventories
Materials and supplies $ 7 $ 7
Fuel 5 4
Natural gas 3 4
Total inventories $ 15 $ 15


(Millions of dollars)	(Millions of dollars)	June 30, 2021		Dec. 31, 2020		(Millions of dollars)	March 31, 2022		Dec. 31, 2021
Property, plant and equipment, net	Property, plant and equipment, net					Property, plant and equipment, net
Electric plant	Electric plant	$	3,253	$	3,197	Electric plant	$	3,408	$	3,348
Natural gas plant	Natural gas plant	402		391		Natural gas plant	428		423
Common and other property	Common and other property	224		221		Common and other property	243		233
Construction work in progress	Construction work in progress	99		71		Construction work in progress	124		134
Total property, plant and equipment	Total property, plant and equipment	3,978		3,880		Total property, plant and equipment	4,203		4,138
Less accumulated depreciation	Less accumulated depreciation	(1,437)		(1,396)		Less accumulated depreciation	(1,502)		(1,478)
Property, plant and equipment, net	Property, plant and equipment, net	$	2,541	$	2,484	Property, plant and equipment, net	$	2,701	$	2,660


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.

Money pool borrowings for NSP-Wisconsin:


(Amounts in Millions, Except Interest Rates)	(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2021			Year Ended Dec. 31, 2020		(Amounts in Millions, Except Interest Rates)	Three Months Ended March 31, 2022			Year Ended Dec. 31, 2021
Borrowing limit	Borrowing limit	$	150		$	0	Borrowing limit	$	150		$	150
Amount outstanding at period end	Amount outstanding at period end	33			0		Amount outstanding at period end	48			—
Average amount outstanding	Average amount outstanding	20			0		Average amount outstanding	19			16
Maximum amount outstanding	Maximum amount outstanding	41			0		Maximum amount outstanding	65			78
Weighted average interest rate, computed on a daily basis	Weighted average interest rate, computed on a daily basis	0.04		%	N/A		Weighted average interest rate, computed on a daily basis	0.13		%	0.05		%
Weighted average interest rate at period end	Weighted average interest rate at period end	0.02			N/A		Weighted average interest rate at period end	0.19			N/A

Commercial Paper — Commercial paper outstanding for NSP-Wisconsin:


(Amounts in Millions, Except Interest Rates)	(Amounts in Millions, Except Interest Rates)	Three Months Ended June 30, 2021		Year Ended Dec. 31, 2020			(Amounts in Millions, Except Interest Rates)	Three Months Ended March 31, 2022			Year Ended Dec. 31, 2021
Borrowing limit	Borrowing limit	$	150	$	150		Borrowing limit	$	150		$	150
Amount outstanding at period end	Amount outstanding at period end	0		19			Amount outstanding at period end	—			83
Average amount outstanding	Average amount outstanding	0		30			Average amount outstanding	48			3
Maximum amount outstanding	Maximum amount outstanding	0		95			Maximum amount outstanding	123			83
Weighted average interest rate, computed on a daily basis	Weighted average interest rate, computed on a daily basis	N/A		1.59		%	Weighted average interest rate, computed on a daily basis	0.23		%	0.18		%
Weighted average interest rate at period end	Weighted average interest rate at period end	N/A		0.17			Weighted average interest rate at period end	N/A			0.21

Letters of Credit — NSP-Wisconsin uses letters of credit, generally with terms of one year, to provide financial guarantees for certain obligations. At both ~~June 30, 2021~~March 31, 2022 and Dec. 31, ~~2020,~~2021, there ~~were~~we 0re no l ~~letters~~etters of credit outstanding under the credit facility.

~~Table of Contents~~

Revolving Credit Facility — In order to issue its commercial paper, NSP-Wisconsin must have a revolving credit facility in place at least equal to the amount of its 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.

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As of ~~June 30, 2021,~~March 31, 2022, NSP-Wisconsin had the following committed revolving credit facility available (in millions of dollars):


Credit Facility (a)	Credit Facility (a)	Outstanding (b)		Available		Credit Facility (a)	Outstanding (b)		Available
$	150	$	0	$	150	150	$	—	$	150

(a)Expires in June 2024.

(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 0no direct advances on the credit facility outstanding at ~~June 30, 2021~~March 31, 2022 and Dec. 31, ~~2020.~~2021.

Other Short-Term Borrowings — ~~As of June 30, 2021 and Dec. 31, 2020,~~ Clearwater Investments, Inc., a NSP-Wisconsin subsidiary, had ~~0 notes~~an immaterial note payable to Xcel Energy Inc. as of March 31, 2022 and Dec. 31, 2021, respectively.

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 Ended June 30, 2021						Three Months Ended March 31, 2022
(Millions of Dollars)	(Millions of Dollars)	Electric		Natural Gas		Total			(Millions of Dollars)	Electric		Natural Gas		Total
Major revenue types	Major revenue types								Major revenue types
Revenue from contracts with customers:	Revenue from contracts with customers:								Revenue from contracts with customers:
Residential	Residential	$	64	$	15	$	79		Residential	$	81	$	42	$	123
C&I	C&I	108		15		123			C&I	116		34		150
Other	Other	2		0		2			Other	2		—		2
Total retail	Total retail	174		30		204			Total retail	199		76		275
Interchange	Interchange	46		0		46			Interchange	47		—		47
Other	Other	1		1		2			Other	1		1		2
Total revenue from contracts with customers	Total revenue from contracts with customers	221		31		252			Total revenue from contracts with customers	247		77		324
Alternative revenue and other	Alternative revenue and other	3		0		3			Alternative revenue and other	3		1		4
Total revenues	Total revenues	$	224	$	31	$	255		Total revenues	$	250	$	78	$	328

Three Months Ended
June 30, 2020
(Millions of Dollars) Electric Natural Gas Total
Major revenue types
Revenue from contracts with customers:
Residential $ 60 $ 10 $ 70
C&I 93 7 100
Other 2 0 2
Total retail 155 17 172
Interchange 41 0 41
Other 0 1 1
Total revenue from contracts with customers 196 18 214
Alternative revenue and other 3 1 4
Total revenues $ 199 $ 19 $ 218

Six Months Ended June 30, 2021
(Millions of Dollars) Electric Natural Gas Total
Major revenue types
Revenue from contracts with customers:
Residential $ 135 $ 46 $ 181
C&I 211 39 250
Other 3 0 3
Total retail 349 85 434
Interchange 92 0 92
Other 1 2 3
Total revenue from contracts with customers 442 87 529
Alternative revenue and other 6 1 7
Total revenues $ 448 $ 88 $ 536


		Six Months Ended June 30, 2020						Three Months Ended March 31, 2021
(Millions of Dollars)	(Millions of Dollars)	Electric		Natural Gas		Total			(Millions of Dollars)	Electric		Natural Gas		Total
Major revenue types	Major revenue types								Major revenue types
Revenue from contracts with customers:	Revenue from contracts with customers:								Revenue from contracts with customers:
Residential	Residential	$	125	$	35	$	160		Residential	$	71	$	31	$	102
C&I	C&I	194		26		220			C&I	102		24		126
Other	Other	3		0		3			Other	2		—		2
Total retail	Total retail	322		61		383			Total retail	175		55		230
Interchange	Interchange	82		0		82			Interchange	46		—		46
Other	Other	1		2		3			Other	—		1		1
Total revenue from contracts with customers	Total revenue from contracts with customers	405		63		468			Total revenue from contracts with customers	221		56		277
Alternative revenue and other	Alternative revenue and other	6		1		7			Alternative revenue and other	3		1		4
Total revenues	Total revenues	$	411	$	64	$	475		Total revenues	$	224	$	57	$	281


6. Income Taxes

Note 7 to the consolidated financial statements included in NSP-Wisconsin’s Annual Report on Form 10-K for the year ended Dec. 31, ~~2020~~2021 represents, in all material respects, the current status of other income tax matters except to the extent noted below, and are incorporated herein by reference.

~~Table of Contents~~

Difference between the statutory rate and ~~ETR:~~effective tax rate:


		Six Months Ended June 30					Three Months Ended March 31
		2021		2020 (a)			2022		2021
Federal statutory rate	Federal statutory rate	21.0	%	21.0	%	Federal statutory rate	21.0	%	21.0	%
State tax (net of federal tax effect)	State tax (net of federal tax effect)	6.2		6.2		State tax (net of federal tax effect)	6.2		6.2
Increases (decreases) in tax from:	Increases (decreases) in tax from:					Increases (decreases) in tax from:
Plant regulatory differences ~~(b)~~(a)	Plant regulatory differences ~~(b)~~(a)	(5.4)		(18.4)		Plant regulatory differences ~~(b)~~(a)	(3.7)		(5.1)
Amortization of excess nonplant deferred taxes		0		(12.5)
Tax credits, net of NOL & tax credit allowances		(1.3)		(1.7)
Tax credits						Tax credits	(0.7)		(1.1)
Other (net)	Other (net)	0.2		0.9		Other (net)	0.2		1.0
Effective income tax rate	Effective income tax rate	20.7	%	(4.5)	%	Effective income tax rate	23.0	%	22.0	%

(a) ~~Prior periods have been restated to conform to current year presentation.~~

~~(b)~~ Regulatory differences for income tax primarily relate to the credit of excess deferred taxes to customers through the average rate assumption method. Income tax benefits associated with the credit of excess deferred credits are offset by corresponding revenue reductions.

~~Federal Audits~~ — NSP-Wisconsin is a member of the Xcel Energy affiliated group that files a consolidated federal income tax return. Statute of limitations applicable to Xcel Energy’s consolidated federal income tax returns expire as follows:


~~Tax Years~~						~~Expiration~~
~~2014 - 2016~~						~~January 2022~~
~~2017~~						~~September 2021~~

Additionally, the statute of limitations related to a federal tax loss carryback claim filed in 2020 has been extended. Xcel Energy has recognized its best estimate of income tax expense that will result from a final resolution of this issue; however, the outcome and timing of a resolution is unknown.

~~State Audits~~ — NSP-Wisconsin is a member of the Xcel Energy affiliated group that files consolidated state income tax returns. As of June 30, 2021, NSP-Wisconsin’s earliest open tax year subject to examination by state taxing authorities under applicable statutes of limitations is 2016. In March 2021, Wisconsin began an audit of tax years 2016 - 2019. No material adjustments have been proposed.

~~Unrecognized Benefits~~ — The unrecognized tax benefit balance includes permanent tax positions, which if recognized would affect the ETR. In addition, the unrecognized tax benefit balance includes temporary tax positions for which deductibility is highly certain, but for which there is uncertainty about the timing. A change in the timing of deductibility would not affect the ETR but would accelerate the payment to the taxing authority.

~~Unrecognized tax benefits — permanent vs. temporary:~~

(Millions of Dollars) June 30, 2021 Dec. 31, 2020
Unrecognized tax benefit — Permanent tax positions $ 2 $ 1
Unrecognized tax benefit — Temporary tax positions 1 1
Total unrecognized tax benefit $ 3 $ 2

~~Unrecognized tax benefits were reduced by tax benefits associated with NOL and tax credit carryforwards:~~

(Millions of Dollars) June 30, 2021 Dec. 31, 2020
NOL and tax credit carryforwards $ (2) $ (2)

~~As the IRS audits resume and state audit progresses, it is reasonably possible that the amount of unrecognized tax benefit could decrease up to approximately $1 million in the next 12 months.~~

~~Payables for interest related to unrecognized tax benefits were not material and 0 amounts were accrued for penalties related to unrecognized tax benefits as of June 30, 2021 or Dec. 31, 2020.~~


7. Fair Value of Financial Assets and Liabilities

Fair Value Measurements

Accounting guidance for fair value measurements and disclosures provides a single definition of fair value and requires disclosures about assets and liabilities measured at fair value. A hierarchical framework for disclosing the observability of the inputs utilized in measuring assets and liabilities at fair value is established by this guidance.

•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 highly liquid and actively traded instruments with quoted prices.

•Level 2 — Pricing inputs are other than quoted 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 are those valued with models requiring significant management judgment or estimation.

Specific valuation methods include:

Cash equivalents — The fair values of cash equivalents are generally based on cost plus accrued interest; money market funds are measured using quoted net asset value.

Interest rate derivatives — The fair values of interest rate derivatives are based on broker quotes that utilize current market interest rate forecasts.

Commodity derivatives — The 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 contractual settlements relate to inactive delivery locations or extend to periods beyond those readily observable on active exchanges or quoted by brokers, the significance of the use of less observable inputs on a valuation is evaluated and may result in Level 3 classification.

Derivative Instruments Fair Value Measurements

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

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Interest Rate Derivatives — NSP-Wisconsin may enter into various instruments that effectively fix the yield or price on a specified benchmark interest rate for an anticipated debt issuance for a specific period. These derivative instruments are generally designated as cash flow hedges for accounting purposes. As of ~~June 30, 2021~~March 31, 2022 and Dec. 31, ~~2020, there were 0~~2021, NSP-Wisconsin had no unsettled interest rate ~~derivatives designated as cash flow hedges.~~derivatives.

Commodity Derivatives — NSP-Wisconsin may enter into derivative instruments to manage variability of future cash flows from changes in commodity prices in its electric and natural gas operations, as well as for trading purposes. This could include the purchase or sale of natural gas to generate electric energy and natural gas for resale. At March 31, 2022 and Dec. 31, 2021, NSP-Wisconsin had no gross notional amounts of commodity options.

~~Table of Contents~~

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.

Impact of Derivative Activities on Income — Changes in the fair value of natural gas commodity derivatives resulted in 0immaterial net gains ~~or losses and $1 million in losses~~ for both the three ~~and six~~ months ended ~~June 30,~~March 31, 2022 and 2021, ~~respectively,~~ which were recognized as regulatory assets and liabilities. ~~There were immaterial net losses for the three and six months ended June 30, 2020.~~ The classification as a regulatory asset or liability is based on commission approved regulatory recovery mechanisms.

During the three months ended ~~June 30, 2021 and 2020,~~March 31, 2022 there were ~~0 settlement gains or losses on~~immaterial natural gas commodity ~~derivatives. During the six months ended June 30,~~derivatives settlement losses and during 2021, ~~and 2020, there were~~ $1 million of settlement losses ~~respectively, which~~ were recognized subject to purchased natural gas cost recovery mechanisms, which result in reclassifications of derivative settlement gains and losses out of income to a regulatory asset or liability, as appropriate.

NSP-Wisconsin had 0no derivative instruments designated as fair value hedges during the three ~~and six~~ months ended ~~June 30, 2021~~March 31, 2022 and ~~2020, respectively.~~2021.

Recurring Fair Value Measurements — ~~As of June 30, 2021, there were immaterial~~NSP-Wisconsin had no derivative assets ~~measured at fair value on a recurring basis. At Dec. 31, 2020, NSP-Wisconsin's derivative assets~~or liabilities measured at fair value on a recurring basis ~~were as follows:~~at March 31, 2022. NSP-Wisconsin's derivative assets and liabilities measured at fair value on a recurring basis:


		Dec. 31, 2020														Dec. 31, 2021
		Fair Value						Fair Value Total		Netting (a)			Total (b)			Fair Value						Fair Value Total			Netting (a)			Total (b)
(Millions of Dollars)	(Millions of Dollars)	Level 1		Level 2		Level 3						(Millions of Dollars)			Level 1		Level 2		Level 3
Current derivative assets	Current derivative assets															Current derivative assets
Natural gas commodity	Natural gas commodity	$	0	$	1	$	0	$	1	$	0		$	1	Natural gas commodity	$	—	$	1	$	—		$	1		$	—		$	1


	Dec. 31, 2021
	Fair Value						Fair Value Total		Netting (a)		Total (c)
(Millions of Dollars)	Level 1		Level 2		Level 3
Current derivative liabilities
Natural gas commodity	$	—	$	1	$	—	$	1	$	—	$	1

(a) NSP-Wisconsin nets derivative instruments and related collateral on its consolidated balance sheets when supported by a legally enforceable master netting agreement, and all derivative instruments and related collateral amounts were subject to master netting agreements at Dec. 31, ~~2020.~~2021. The counterparty netting amounts presented exclude settlement receivables and payables and non-derivative amounts that may be subject to the same master netting agreements.

(b) Included in prepayments and other current assets ~~balance of $7 million~~ at Dec. 31, ~~2020~~2021 on the consolidated balance sheets.

Fair Value of Long-Term Debt

Other financial instruments for which the carrying amount did not equal fair value:


		June 30, 2021				Dec. 31, 2020					March 31, 2022				Dec. 31, 2021
(Millions of Dollars)	(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value		(Millions of Dollars)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Long-term debt, including current portion	Long-term debt, including current portion	$	907	$	1,067	$	906	$	1,124	Long-term debt, including current portion	$	987	$	1,043	$	987	$	1,143

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 ~~June 30, 2021~~March 31, 2022 and Dec. 31, ~~2020~~2021 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 ~~(Credit)~~


		Three Months Ended June 30				Three Months Ended March 31
		2021		2020						2022		2021
(Millions of Dollars)	(Millions of Dollars)	Pension Benefits					(Millions of Dollars)	Pension Benefits
Service cost	Service cost	$	1	$	1				Service cost	$	1	$	2
Interest cost (a)	Interest cost (a)	1		1					Interest cost (a)	1		1
Expected return on plan assets (a)	Expected return on plan assets (a)	(2)		(2)					Expected return on plan assets (a)	(2)		(2)

Amortization of net loss (a)	Amortization of net loss (a)	1		1					Amortization of net loss (a)	1		1

Net periodic benefit cost	Net periodic benefit cost	$	1	$	1				Net periodic benefit cost	$	1	$	2
Effects of regulation	Effects of regulation	0		2					Effects of regulation	—		—
Net benefit cost recognized for financial reporting	Net benefit cost recognized for financial reporting	$	1	$	3				Net benefit cost recognized for financial reporting	$	1	$	2

Six Months Ended June 30
2021 2020
(Millions of Dollars) Pension Benefits
Service cost $ 3 $ 2
Interest cost (a)
2 2
Expected return on plan assets (a)
(4) (4)
Amortization of net loss (a)
2 3
Net periodic benefit cost $ 3 $ 3
Effects of regulation 0 4
Net benefit cost recognized for financial reporting $ 3 $ 7

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

In January ~~2021,~~2022, contributions of ~~$125~~$50 million were made across 4 of Xcel Energy’s pension plans, of which $5$1 million was attributable to NSP-Wisconsin. Xcel Energy does not expect additional pension contributions during ~~2021.~~2022.

9. Commitments and Contingencies

The following includes commitments, contingencies and unresolved contingencies that are material to NSP-Wisconsin’s financial position.

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.

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.

~~Table of Contents~~

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.

~~Two cases remain~~

NaN case remains active which ~~include an MDL~~includes a multi-district litigation matter consisting of ~~a Colorado purported class (Breckenridge) and~~ a Wisconsin purported class (Arandell Corp.).

~~Breckenridge/Colorado~~ ~~— In February 2019, the MDL panel remanded Breckenridge back to the U.S. District Court in Colorado. Settlement of approximately~~ ~~$3 million was reached in February 2021. The parties have sought and are awaiting court approval of the settlement. A hearing was held on July 22, 2021. A decision is anticipated in Q3.~~

~~Arandell Corp.~~ — The trial has been vacated and will be rescheduled after the court rules on the pending motions for reconsideration and for class certification. Xcel Energy has concluded that a loss is remote for the remaining lawsuit.

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~~Regional Transmission Organization membership). The second complaint requested, for a subsequent time period, a base ROE reduction from 12.38% to 8.67%.

In September 2016, the FERC issued an order (Opinion No. 551) granting a 10.32% base ROE effective for the first complaint period of Nov. 12, 2013 to Feb. 11, 2015 and subsequent to the date of the order. The D.C Circuit subsequently vacated and remanded Opinion No. 551.

~~In November 2019, the FERC issued an order (Opinion No. 569), which set the MISO base ROE at 9.88%, effective Sept. 28, 2016 and for the first complaint period.~~ The FERC ~~also dismissed the second complaint. In December 2019, MISO TOs filed a request for rehearing regarding the new~~has subsequently issued various related orders (including Opinion Nos. 569, 569A and 569B) related to ROE ~~methodology announced in Opinion No. 569. Customers also filed requests for rehearing claiming, among other points, that the FERC erred by dismissing the second complaint without refunds.~~

~~In May 2020, the FERC issued an order (Opinion No. 569-A) which granted rehearing in part to Opinion 569~~methodology/calculations and further refined the FERC’s ROE methodology, most significantly to incorporate the risk premium model (in addition to the discounted cash flow and capital asset pricing models), resulting in a new base ROE of 10.02%, effective Sept. 28, 2016 and for the first complaint period. The FERC also affirmed its decision in Opinion No. 569 to dismiss the second complaint.

In November 2020, the FERC issued an order (Opinion No. 569-B) in response to rehearing requests. The FERC corrected certain inputs to its ROE calculation model, did not change the ROE effective Sept. 28, 2016, and for the first MISO complaint period and upheld its decision to deny refunds for the second complaint period. timing. NSP-Minnesota has recognized a liability for its best estimate of final refunds to ~~customers. Each 10 basis point reduction in ROE~~customers for applicable complaint periods on behalf of the ~~first complaint period, second complaint period,~~Northern States Power system (NSP-Minnesota and ~~subsequent period relative to amounts accrued would reduce Xcel Energy’s net income by $1 million, $1 million, and $2 million, respectively.~~NSP-Wisconsin).

The MISO TOs and various other parties have filed petitions for review of ~~Opinion Nos. 569, 569-A and 569-B~~the FERC’s most recent applicable opinions at the D.C. ~~Circuit with initial briefs filed~~Circuit. Oral arguments were held in ~~March~~late 2021 and ~~final briefs~~a decision is expected ~~in August 2021.~~

~~FERC NOPR on ROE Incentive Adders~~ — In April 2021, the FERC issued a NOPR proposing to limit collection of ROE incentive adders for RTO membership to the first three years after an entity begins participation in an RTO. If adopted as a final rule, following a comment period expected to be complete by the end of ~~2021 or 2022,~~ ~~NSP-Wisconsin would prospectively discontinue charging their current 0.5% ROE incentive adders. Amounts related to a discontinuance~~the third quarter of ~~the adder would ultimately be offset by an increase in retail rates, following future rate cases.~~2022.

Environmental

MGP, Landfill and Disposal Sites

NSP-Wisconsin is ~~currently~~ investigating, remediating or performing post-closure actions at 24 MGP, landfill or other disposal sites across its service territories.

NSP-Wisconsin has recognized its best estimate of costs/liabilities ~~that will result~~ from final resolution of these issues, however, the outcome and timing is unknown. In addition, there may be 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 that these structures reflect the best technology available for minimizing impingement and entrainment of aquatic species. NSP-Wisconsin estimates the likely future cost for complying with impingement requirements is approximately $4 million, to be incurred between 2022 and 2028, while the total cost of entrainment improvements is anticipated to be immaterial. NSP-Wisconsin believes 2 plants could be required to make improvements to reduce impingement and entrainment. The exact total cost of the impingement and entrainment improvements is uncertain, but could be up to $4 million. NSP-Wisconsin anticipates these costs will be fully recoverable through regulatory mechanisms.

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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.

~~Table of Contents~~

NSP-Wisconsin's segment information:


		Three Months Ended June 30					Three Months Ended March 31
(Millions of Dollars)	(Millions of Dollars)	2021		2020		(Millions of Dollars)	2022		2021
Regulated Electric	Regulated Electric					Regulated Electric

Total revenues (a)	Total revenues (a)	$	224	$	199	Total revenues (a)	$	250	$	224
Net income	Net income	16		16		Net income	32		24
Regulated Natural Gas	Regulated Natural Gas					Regulated Natural Gas

Total revenues	Total revenues	$	31	$	19	Total revenues	$	78	$	57
Net loss		(2)		(3)
All Other
Total revenues		$	0	$	0
Net loss		0		(1)
Net income						Net income	15		8

Consolidated Total	Consolidated Total					Consolidated Total
Total revenues (a)	Total revenues (a)	$	255	$	218	Total revenues (a)	$	328	$	281

Net income	Net income	14		12		Net income	47		32

(a)Total revenues include ~~$46~~$47 million and ~~$41~~$46 million of affiliate electric revenue for the three months ended ~~June 30,~~March 31, 2022 and 2021, ~~and 2020,~~ respectively.

Six Months Ended June 30
(Millions of Dollars) 2021 2020
Regulated Electric
Total revenues (a)
$ 448 $ 411
Net income 40 41
Regulated Natural Gas
Total revenues $ 88 $ 64
Net income 6 6
All Other
Total revenues $ 0 $ 0
Net loss 0 (1)
Consolidated Total
Total revenues (a)
$ 536 $ 475
Net income 46 46

~~(a)Total revenues include $92 million and $82 million of affiliate electric revenue for the six months ended June 30, 2021 and 2020, 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 ~~electric margin and natural gas margin.~~ongoing earnings. Generally, a non-GAAP financial measure is a measure of a company’s financial performance, financial position or cash flows that ~~excludes (or includes)~~adjusts amounts that are adjusted from measures calculated and presented in accordance with GAAP.

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.

~~Electric~~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 ~~Natural Gas Margins~~

~~Electric margin~~provide details of NSP-Wisconsin’s core earnings and underlying performance. We believe this measurement is ~~presented as electric revenues less electric fuel~~useful to investors to evaluate the actual and ~~purchased power expenses. Natural gas margin is presented as natural gas revenues less~~projected financial performance and contribution of NSP-Wisconsin. For the ~~cost of natural gas sold~~three months ended March 31, 2022 and ~~transported. Expenses incurred for electric fuel~~2021, there were no such adjustments to GAAP earnings and ~~purchased power and the cost of natural gas are generally recovered through various regulatory recovery mechanisms. As a result, changes in these expenses are generally offset in operating revenues.~~

Management believes electric and natural gas margins provide the most meaningful basis for evaluating our operations because they exclude the revenue impact of fluctuations in these expenses. These margins can be reconciled to operating income, atherefore GAAP ~~measure, by including other operating revenues, O&M expenses, conservation, depreciation and amortization and taxes (other than income taxes).~~earnings equal ongoing earnings.

Results of Operations

NSP-Wisconsin’s year-to-date net income was ~~flat~~$47 million, compared with ~~the same period in 2020 ($46~~$32 million for ~~both~~ the ~~six months ended June 30, 2021~~prior year, reflecting the impact of regulatory rate outcomes and ~~2020).~~higher sales attributable to weather, partially offset by higher O&M expenses.

Electric Margin

Electric ~~production expenses tend to vary with the quantity of electricity sold and changes in the unit costs of fuel and purchased power. The~~margin is presented as electric revenues less electric fuel and purchased power ~~cost~~expenses. Expenses incurred for electric fuel and purchased power are generally recovered through various regulatory recovery ~~mechanism of the Wisconsin jurisdiction may not allow for complete recovery of all expenses and, therefore,~~mechanisms. As a result, changes in ~~fuel or purchased power costs can impact earnings.~~these expenses are generally offset in operating revenues.

Electric revenues and ~~margin:~~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 impact on 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.

Six Months Ended June 30
(Millions of Dollars) 2021 2020
Electric revenues $ 448 $ 411
Electric fuel and purchased power (216) (192)
Electric margin $ 232 $ 219
Electric Revenues, Fuel and Purchased Power and Electric Margin

~~Changes in electric margin:~~


	Three Months Ended March 31
(Millions of Dollars)	2022		2021
Electric revenues	$	250	$	224
Electric fuel and purchased power	(112)		(105)
Electric margin	$	138	$	119

Changes:


(Millions of Dollars)	~~Six~~Three Months Ended ~~June 30,~~March 31, 2022 vs. 2021 ~~vs. 2020~~
Regulatory rate outcomes	$	129
Sales and demand(a)	4
Estimated impact of weather	4
~~Sales and demand~~ ~~(a)~~	43

~~Interchange agreement billings with NSP-Minnesota~~	~~(6)~~
Other (net)	~~(1)~~3
Total increase ~~in electric margin~~	$	1319

(a) Sales ~~decline~~increase excludes weather impact.

1312

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Natural Gas Margin

~~Total~~Natural gas margin is presented as natural gas revenues less the cost of natural gas sold and transported. Expenses incurred for the cost of natural gas sold are generally recovered through various regulatory recovery mechanisms. As a result, changes in these expenses are generally offset in operating revenues.

Natural gas expense varies with changing sales ~~requirements~~ and the cost of natural gas. However, fluctuations in the cost of natural gas generally have minimal earnings impact ~~on natural gas margin~~ due to ~~natural gas~~ cost recovery mechanisms.

Natural ~~gas revenues~~Gas Revenues, Cost of Natural Gas Sold and ~~margin:~~Transported and Natural Gas Margin


		Six Months Ended June 30					Three Months Ended March 31
(Millions of Dollars)	(Millions of Dollars)	2021		2020		(Millions of Dollars)	2022		2021
Natural gas revenues	Natural gas revenues	$	88	$	64	Natural gas revenues	$	78	$	57
Cost of natural gas sold and transported	Cost of natural gas sold and transported	(51)		(28)		Cost of natural gas sold and transported	(45)		(31)
Natural gas margin	Natural gas margin	$	37	$	36	Natural gas margin	$	33	$	26

~~Changes in natural gas margin:~~Changes:


(Millions of Dollars)	~~Six~~Three Months Ended ~~June 30,~~March 31, 2022 vs. 2021 ~~vs. 2020~~
Regulatory rate outcomes (Wisconsin)	$	5
Estimated impact of weather	3
Other (net)	(1)

Total increase	$	7




~~Sales growth~~		1

~~Total increase in natural gas margin~~		$
	1

Non-Fuel Operating Expenses and Other Items

~~Depreciation and Amortization~~O&M Expenses — ~~— Depreciation and amortization expense~~ ~~decreased~~O&M costs increased $4 million, ~~or 5.2%, year-to-date. The decrease is~~primarily due to ~~lower amortization~~timing of ~~environmental regulatory assets,~~distribution maintenance, storm costs, additional investments in technology and customer programs and interchange expenses, partially offset by ~~normal system expansion and deferred tax liability amortization.~~a reduction in benefit costs.

Income Taxes — Income tax expense increased ~~$14~~$5 million for the first ~~six months of 2021.~~quarter. The increase was primarily driven by ~~a decrease in plant regulatory differences, lower non-plant accumulated deferred income tax amortization and~~ higher pretax earnings in ~~2021.~~2022.

See Note 6 to the consolidated financial statements for further information.


~~Other~~

~~Winter Storm Uri~~

In February 2021, the central portion of the United States experienced a major winter storm (Winter Storm Uri). Extreme cold temperatures impacted certain operational assets as well as the availability of renewable generation across the region. The cold weather also affected the country’s supply and demand for natural gas. These factors contributed to extremely high market prices for natural gas and electricity.

As a result of the extremely high market prices, NSP-Wisconsin incurred net natural gas, fuel and purchased energy costs of approximately $45 million (largely deferred as regulatory assets) in the first quarter. Certain energy transactions are subject to final/settlement calculation adjustments, including the impacts of credit losses shared among market participants. Such adjustments are not expected to be material to our results of operations, financial condition or cash flows.

~~Regulatory Overview~~ — NSP-Wisconsin has natural gas, fuel and purchased energy mechanisms in each jurisdiction for recovering incurred costs. However, February cost increases were deferred for future recovery with recovery proposed over a period of up to ten months to mitigate the impact to customer bills. Additionally, NSP-Wisconsin is not requesting recovery of financing costs in order to further limit the impact to our customers.

~~Proceedings initiated:~~


~~Jurisdiction~~			~~Regulatory Status~~
~~Wisconsin~~			~~In March, the PSCW approved NSP-Wisconsin's proposal to recover $45 million of natural gas costs incurred during Storm Uri over nine months through December 2021 with no financing charge.~~
~~Michigan~~			~~In May, the Michigan Public Service Commission approved recovery of $2 million in natural gas costs over 10 months with no financing charge.~~

~~Supply Chain and Capital Expenditures~~

NSP-Wisconsin’s ability to meet customer energy requirements, respond to storm-related disruptions and execute our capital expenditure program are dependent on maintaining an efficient supply chain. Overall, as a result of COVID-19, manufacturing processes have experienced disruptions related to scarcity of raw materials and interruptions in production and shipping. These disruptions have been further exacerbated by inflationary pressures, storms and labor shortages. The Company continues to monitor the availability of materials and seek alternative suppliers as necessary.

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.

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, ~~2020 and in Item 2 of NSP-Wisconsin's Quarterly Report on~~ ~~Form~~ ~~10-Q~~ ~~for the quarterly period ended March 31,~~ 2021 appropriately represent, in all material respects, the current status of public utility regulation and are incorporated herein by reference.

Recently Concluded Regulatory Proceedings

~~NSP-Wisconsin Solar Proposal~~ —Michigan Electric Rate Case — In March 2022, the Michigan Public Service Commission approved an electric rate case settlement granting NSP-Wisconsin an electric revenue increase of $1.6 million in 2022, based on a ROE of 9.7% and an equity ratio of 52.5%. New rates were effective April 1, 2022.

Other

Supply Chain

Xcel Energy’s ability to meet customer energy requirements, 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. Xcel Energy continues to monitor the availability of materials and has sought to mitigate impacts by seeking alternative suppliers as necessary.

Solar Resources

In April 2022, the U.S. Department of Commerce initiated an anti-circumvention investigation that would subject CSPV solar panels and cells imported from Malaysia, Vietnam, Thailand, and Cambodia with potential incremental tariffs ranging from 50% to 250%. These countries account for more than 80% of CSPV panel imports.

The uncertainty of the investigation and the adverse impact on potential tariffs has resulted in the cancellation or delay of certain domestic solar projects.

In June 2021, the ~~PSCW~~Public Service Commission of Wisconsin approved NSP-Wisconsin’s ~~request to purchase the 74 MW~~ Western Mustang ~~build-own-transfer~~ solar project, a 74 megawatt facility that would be built by a developer for approximately $100 million. The project iswas originally scheduled to go into service in ~~2023.~~

~~NSP-Wisconsin Electric and Natural Gas Settlement~~ ~~— In July 2021, NSP-Wisconsin filed an application with the PSCW seeking approval of~~2022. As a ~~rate case settlement with various intervenors for 2022-2023.~~

The settlement agreement increases electric rates by $35 million (4.9%) for 2022 and an incremental $18 million increase (2.5%) for 2023. For the natural gas utility, rates increase by $10 million (8.4%) for 2022 and an incremental $3 million (2.3%) increase for 2023.

~~Key elements~~result of the ~~settlement include:~~

•disruption of the solar supply chain, the developer has indicated difficulty delivering the project at the contract price and scheduled in-service date. Negotiations on a potential solution are on~~ROE of 9.80% for 2022 and 10.00% for 2023.~~-going.

•~~Equity ratio of 52.5% for both 2022 and 2023.~~

•~~Returning $9 million in various net regulatory liabilities to offset customer impacts in 2023.~~

~~Table of Contents~~

•~~Deferring certain pension and other post-employment benefit expense in 2021 through 2023.~~

•~~Addressing COVID-19 deferral recovery in the next rate case proceeding.~~

•~~Deferring potential changes in tax expenses due to changes in federal or state tax law in 2021 through 2023.~~

•~~Incorporating an earnings sharing mechanism for 2022 and 2023.~~

~~A PSCW decision is anticipated in the fourth quarter of 2021.~~


Environmental

Affordable Clean Energy

In July 2019, the EPA adopted the Affordable Clean Energy rule, which requires states to develop plans by 2022 for greenhouse gas reductions from coal-fired power plants. In January 2021, the U.S. Court of Appeals for the D.C. Circuit issued a decision vacating and remanding the Affordable Clean Energy rule. That decision ~~if not successfully appealed or reconsidered,~~ would allow the EPA to proceed with alternate regulation of coal-fired power plants. However, the Court of Appeals decision has been appealed to the U.S Supreme Court, where the Court heard argument in February and is expected to rule by June on the nature and extent of the EPA’s greenhouse gas regulatory authority. If ~~the~~any new rules require additional investment, NSP-Wisconsin believes ~~based on prior state commission practices,~~ that the cost of these initiatives or replacement generation would be recoverable through ~~rates.~~

~~Emerging Regulation~~

New regulations and legislation are being considered to regulate PFAS in drinking water, water discharges, commercial products, wastes, and other areas. PFAS are man-made chemicals found in many consumer products that can persist and accumulate in the environment. These chemicals have received heightened attention by environmental regulators. Increased regulation of PFAS and other emerging contaminants at the federal,rates based on prior state and local level could have a potential adverse effect on our operations but at this time, it is uncertain what impact, if any, there will be on our results of operations, financial condition or cash flows. NSP-Wisconsin will continue to monitor these regulatory developments and their potential impact on its operationscommission practices.

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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 ~~June 30, 2021,~~March 31, 2022, 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.

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.~~

Intheories.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, ~~2020,~~2021, which is incorporated herein by reference. There have been no material changes from the risk factors previously disclosed in the Form 10-K.

~~Table of Contents~~

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)

~~July 29, 2021~~4/28/2022	By:	~~/s/ JEFFREY S. SAVAGE~~
		~~Jeffrey S. Savage~~
		~~Senior Vice President, Controller~~
		~~(Principal Accounting Officer)~~

		/s/ BRIAN J. VAN ABEL
		Brian J. Van Abel
		Executive Vice President, Chief Financial Officer ~~and Director~~
		(Duly Authorized Officer and Principal Financial Officer)

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	Three Months Ended June 30, 2020
(Millions of Dollars)	Electric		Natural Gas		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	60	$	10	$	70
C&I	93		7		100
Other	2		0		2
Total retail	155		17		172
Interchange	41		0		41
Other	0		1		1
Total revenue from contracts with customers	196		18		214
Alternative revenue and other	3		1		4
Total revenues	$	199	$	19	$	218


	Six Months Ended June 30, 2021
(Millions of Dollars)	Electric		Natural Gas		Total
Major revenue types
Revenue from contracts with customers:
Residential	$	135	$	46	$	181
C&I	211		39		250
Other	3		0		3
Total retail	349		85		434
Interchange	92		0		92
Other	1		2		3
Total revenue from contracts with customers	442		87		529
Alternative revenue and other	6		1		7
Total revenues	$	448	$	88	$	536