Good afternoon ladies and gentlemen, and welcome to Wisconsin Energy's conference call to review our third quarter 2009 results. (Operator Instructions) Before the conference call begins I will read the forward-looking language. All statements in this presentation other than historical facts are forward-looking statements that involve risks and uncertainties which are subject to change at any time. Such statements are based on management's expectations at the time they are made. In addition to the assumptions and other factors referred to in connection with the statements, factors described in the company's latest Form 10-K and subsequent reports filed with the Securities and Exchange Commission could cause actual results to differ materially from those contemplated. During the discussion, reference to earnings per share will be based on diluted earnings per share unless otherwise noted. After the presentation the conference will be open to analysts for questions and answers. In conjunction with this call Wisconsin Energy has posted on its website a package of detailed financial information on its' 2009 third quarter results at www.wisconsinenergy.com. A replay of our remarks will be available approximately two hours after the conclusion of this call. And now I would like to introduce Mr. Gale Klappa, Chairman of the Board, President and Chief Executive Officer of Wisconsin Energy Corporation.

Good afternoon everyone. Thank you for joining us on our conference call to review the company's third quarter results. Let me begin, as always, by introducing the members of the Wisconsin Energy management team who are here with me today. We have Rick Kuester, President and CEO of We Generation; Allen Leverett, our Chief Financial Officer; Jim Fleming, our venerable General Counsel; Jeff West, Treasurer; and Steve Dickson, Controller. Allen of course will review our financial results in detail in just a moment but as you saw from our news release this morning we reported earnings from continuing operations of $0.50 for the third quarter of 2009. This compares with $0.64 a share for the same period in 2008. Now I’d like to spend just a moment on our continuing effort to upgrade the energy infrastructure in Wisconsin. Our power of the future plan is fundamental to the principal of energy self-sufficiency. Key components of our focus on self efficiency include investing in two combined cycle gas-fired unit at Port Washington, north of Milwaukee, the construction of two super critical pulverized coal units at Oak Creek, which is south of the city, and building a significant amount of renewable generation. Let’s turn now quickly to the status of the two new coal fired units at Oak Creek, unit one and the common facilities are now more then 96% complete and I’m pleased to report that a number of major milestones have been achieved in the past three months. You may recall that on July 23, the main unit one boiler was fired successfully for the first time using natural gas. Since then our contractor Bechtel completed the steam blows, that’s the process necessary to clean the thousands of feet of piping in the unit. Bechtel then connected the boiler to…

Thank you Gale, as Gale mentioned earlier our third quarter 2009 earnings from continuing operations were $0.50 per share. Now I will focus on operating income by segment, and then I’ll touch on other income statement items. I will also discuss cash flows for the first nine months, and discuss our earnings guidance for the remainder of the year. Our consolidated operating income was $105 million as compared to $138 million in the third quarter of 2008 for a decrease of $33 million. Operating income in our utility energy segment totaled $75 million which is $37 million lower then the third quarter of 2008. The most significant factors reducing our utility operating income were an unseasonably cool summer which reduced electric margins by approximately $22 million. In addition we estimate that the economic slowdown lowered electric margins by $14 million and the timing of fuel recoveries reduced electric margins by $19 million. On the positive side our utility O&M was $11 million lower, other pricing items contributed $4 million, and all other items totaled a net $3 million. When we net all other factors together we come to utility operating income that was $37 million lower then the third quarter of 2008. Our non-utility operating income was up $4 million. The key driver of this increase related to a full quarter’s earnings from the water intake system at Oak Creek that was placed into service in January of this year. Corporate and other affiliates had an operating loss of $3 million in 2009 as well as in 2008. Taking the changes for each of these segments together, brings you back to the $33 million decrease in operating income for this quarter. During the third quarter of 2009 earnings from our investment in the American Transmission Company increased almost $1 million…

Allen, thank you very much. Overall we’re on track and focused on delivering value for our customers and our stockholders.

(Operator Instructions) Your first question comes from the line of Dan Jenkins – State of Wisconsin Investment Board

Good afternoon Dan. Dan you know its Halloween coming up and I heard this rumor that they already had an arrest warrant made out in your name on [Mithlin] Street, so you know, kind of good luck with that. Dan Jenkins – State of Wisconsin Investment Board : No, I’m leaving town so they can’t pin that on me.

Probably a good move Dan. How can we help you today. Dan Jenkins – State of Wisconsin Investment Board : Just a few things, first I was curious, I missed a couple of the numbers when you were going through the effect of the various changes like the cool summer and the various cost savings and so forth. I was wondering if you could give me the breakdown again.

That’s never happened to you before Dan but we’ll be happy to go over the numbers.

Yes and Dan, on page eight of the earnings package if you could refer to that. Retail sales as it relate to weather, that was a negative effect 2008 versus 2009, so that was $22 million. Fuel recoveries was a negative swing of $19 million and then our estimate of the economic, the change in the economy, our estimate of that effect on retail sales was a $14 million swing, again negative. The other single largest item that was actually going the other way positive item, related to O&M reductions, so that was $11 million. So really the big three negative factors were weather, economy, fuel recoveries and again that fuel recovery is more of a timing within the year but a difference nonetheless. And then finally O&M reductions were an $11 million positive swing. Dan Jenkins – State of Wisconsin Investment Board : Okay on the O&M part of that, how sustainable are those savings going forward or are they more, how much of, just deferral type items.

There’s a combination, obviously we have taken as Allen mentioned earlier, we’ve taken very seriously the downturn and reprioritized a number of the work projects. Some of those work projects will have to be done eventually, there’s no question about that. But I would say this, a large percentage of the O&M savings that we’ve achieved this year has really come from headcount reduction. In fact if you just look at the end of the third quarter a year ago and compare that with the end of the third quarter this year, our full time equivalent headcount is down 2.4% and we’ve really reduced our headcount by gosh, almost 1,000 people in total over the last five years. So we continue to get productivity gains. We continue to get O&M savings. Some of the deferral of maintenance work though will have to be at some point addressed later down the road. And the other thing that Rick is pointing out to me and he’s absolutely right, the decline in wholesale power market prices has allowed us to do things like not work overtime at the plants if we have a scheduled outage. So some of the savings that we’ve I think intelligently reaped here in O&M have been taking advantage of lower market prices in [inaudible]. Dan Jenkins – State of Wisconsin Investment Board : And I was wondering if you could update us on the amortization of the gains on the Point Beach, is that, is next year the final year of that and is it, you kind of look at the long-term and short-term restricted cash, is that kind of the extent of what that amortization will be going forward.

Let me first mention to you our proposal that is in our current rate case before the Wisconsin Commission would have all the remaining Point Beach credits delivered to customers during 2010. The current situation if the Commission does not adopt our proposal would be that the bulk of the credits would be delivered in 2010 with the remainder in 2011. My guess is the Commission will agree with us, that all the remaining credits should be delivered in 2010.

And from a cash standpoint, restricted cash if you will that will yet to go back to customers, roughly $240 million worth of credits or restricted cash if you will, that we would expect to go back to customers and as Gale mentioned, some of that will be in the fourth quarter of this year obviously as we continue to give credits and we would expect the remainder of those credits at least if the Commission in Wisconsin follows our proposal to go back in 2010. Now all of the FERC credits are done. We provided all of those last year. There’s about $2.16 million worth of credits that are remaining in Michigan that I would expect will go back in 2010. Dan Jenkins – State of Wisconsin Investment Board : And speaking in the rate case, given items that you’ve agreed with the staff on and like fuel and so forth, how far apart are you and the staff now going into the end of this case.

Well basically the staff is at about $62 million in terms of their recommendation to the Commission. Our ask is at $96 million, so about a $30 million difference. Dan Jenkins – State of Wisconsin Investment Board : And what’s the primary reason for that.

Well there are a couple of things, one is clearly on O&M. The other is on, in terms of O&M spending how much does the Commission think we should be increasing our O&M spending next year compared to what we have proposed. That’s the biggee. There’s another one and that relates to the settlement that we reached, oh gosh, a year ago with the environmental groups over the water intake permit at Oak Creek. As you may recall we agreed with the environmental groups that we would fund some Lake Michigan water quality improvement projects if you will. Such as working on reduction of invasive species in the lake, in return for the environmental groups’ dropping all litigation against the water intake permit. That agreement would call for spending $4 million a year only if the Commission so approves. The staff has recommended zero so there is a $4 million annual issue as well right there. But the big two or three would be on how much additional O&M should be spent particularly on network projects and plant operations and maintenance and then another one would be the $4 million a year related to this environmental settlement.

Your next question comes from the line of Leslie Rich – Columbia Management Leslie Rich – Columbia Management : I wondered if you could review again the liquidated damages portion of the Bechtel claim and how that likely plays out. You went through that sort of quickly. Like the liquidated damage payments would be due on unit one under what set of circumstances and on unit two under what set of circumstances.

We’ll be happy to do that and if I miss a detail, Rick Kuester will add in his thoughts as well. Essentially the, as you know we signed a fixed price turnkey guaranteed contract with Bechtel. And in that contract Bechtel guaranteed that they would deliver both unit one and unit two to us by a given date. The date for unit one that was guaranteed in the contract is September 29, 2009. Under the contract if they don’t make September 29, 2009, which they’ve obviously not done, they would owe us $250,000 a day in liquidated damages unless there was schedule relief granted to them for any number of very specific reasons. So essentially unless there is schedule relief granted at the end of this entire process, then Bechtel would owe $250,000 a day. Now as you know they’ve made a case for relief because of severe weather. Frankly we think there is some merit, they clearly were up against for example almost 100 inches of snow two winters ago and I think both Rick and I and all of our experts agree that there may be some schedule relief and therefore relief from some specific number of days of liquidated damages due to them, but all of that will get worked out during the arbitration process.

Just to remind you what Gale had mentioned earlier is that Bechtel has asked for six months of relief so that would put them at the end of the first quarter of next year for unit one and three months’ relief which would put them at the end of the year next for unit two. And those final determination of what is granted will be part of what is being arbitrated right now. Leslie Rich – Columbia Management : I see so that cash won’t actually exchange hands if any, until the whole issue is resolved.

That is our current belief. That is correct.

Your next question comes from the line of James Dobson - Wunderlich Securities

Allen question for you, tax rate, you indicated it was 35% to 37% for full year 2009. When I look back at my notes that was a hard 37% in the second quarter. Can you help me understand what’s moving that around in the balance for second half of this year.

Why don’t I ask Steve Dickson our Controller to give you little more light on that.

As you know the effective tax rate takes into consideration the permanent differences and as pre-tax income may change, that may change the effective rate. There’s nothing significant. We’ve got many tax years that are outstanding and some items may settle, but it’s a lot of small items and we just thought 35% to 37% made more sense then a hard number.

Would you expect that to pop back, because when I look back historically you’ve been closer to 37%, would you expect 2010 is more like a 37% year because it is sort of like a $0.10 benefit or so if we take you all the way to 35%.

Keep in mind though, one of the things that’s impacting our ETR right now and will continue to impact the effective tax rate are the production tax credits associated with the wind projects. Now what happens under regulation effectively we’re given those credits back so on a net impact I wouldn’t expect an impact on the company but if you just look at the ETR the ETR would be slightly less then maybe what you’ve seen historically.

On O&M I was wondering going back to Dan’s question if you couldn’t put a couple of numbers around that and that’s really to say what were the O&M cuts you would be able to quantify that comes from hiring freeze and your activities to manage costs for the first nine months of the year and then if you can, obviously not maybe a dollar number but a percentage of those that would be sustainable and those that might not and I’m understanding that the majority of them are sustainable.

Just to frame it for you a little bit, our O&M for the third quarter of 2009 was 5% below Q3 of 2008 and for the year to date, for the first nine months of 2009, we’ve reduced O&M by 7.5% compared to the comparable nine months in 2008. Those are very significant numbers. Much of that as I mentioned to you is coming from basically headcount savings because we have materially, we have frozen our hiring except for absolute critical positions and we’re at a point where I have to personally approve any headcount addition. So we have been very firm about controlling and reducing our O&M and gaining some productivity. But as we look forward, we have, 2010 is a very different year from an O&M standpoint then 2009 because we’ll be bringing on two new major coal-fired units. We’re going to have $20 million or more ammonia costs to operate the scrubbers at Oak Creek that we do not experience today.

We’re adding scrubbers. We’ve added them at Pleasant Prairie, we’re adding them at South Oak Creek and we’ve obviously, will have them at [Bergs], the Oak Creek expansion.

So 2010 will look a good bit different simply because we’re bringing in major addition of capacity and comes with that several hundred well paid, highly trained technicians and operators to operate the new Oak Creek units and then you have basically the commodities like ammonia that you have to have to operate, another catalyst that you have to have to operate the air quality control equipment. And we’re also starting to hire people now, we will in our plan for later next year, to operate the air quality controls that will be coming in on the existing Oak Creek units. So we have to make considerable adjustments in 2010. Having said that I do think we will continue to be very, very judicious about headcount additions other than the people that we absolutely need to operate the units and the new air quality controls. I hope that’s helpful to some degree. Its just not an apples to apples comparison going forward.

No, that’s fair. And then last question on the Edison Sault sale, I assume since that’s right at book after-tax proceeds will be right about $61.5 million.

There is a book tax basis difference so after-tax proceeds on a cash basis probably closer I would say $45 to $50 million.

Your next question comes from the line of Michael Lapides - Goldman Sachs

If I take the midpoint between what you’ve requested and the [Webco] and Wisconsin gas rate cases, and where staff or intervener testimony is right now, can you earn your ROE in 2010 with a number like that and then furthermore if you’re not getting a second increase in 2011 can you earn your ROE just at the core utility, not at PTF in 2011.

Instinctively I would say no, because of the normal disallowances that any Commission will apply. For example any bonuses, the cost of any stock options, would always be disallowed in most every rate case anywhere in the country and that would certainly apply here. So I would think it would be if indeed our sales forecast is correct, I think it would be somewhat difficult to get right on top of the allowed rates of return at the utilities themselves.

That’s exactly right.

Do you know, and does that become, assuming a slight uptick in 2011 from 2010 demand, does that problem exacerbate in 2011 due to lag.

No, I don’t think so.

I wouldn’t say so. I would hope that we would start seeing an improvement in the top line in electric sales in 2011 and as you always try to do, continue to improve your cost position, so I would hate, hope to be in a better position all things being equal on our ability to earn our allowed return in 2011 as compared to 2010.

I absolutely agree with that.

Your next question comes from the line of Greg Gordon - Morgan Stanley

Just had question as to what you are assuming for the sales outlook for next year given that you’ve kind of seen the stabilization in the sales this past quarter. Do you expect to see more deterioration or more of a flattish outlook.

Its really the latter being a flattish outlook and I’ve really have that view very consistently. We’re looking at what we believe is a flat outlook for electric sales in 2010 as compared to 2009.

Weather-normalized.

So still flattish.

And then on the Michigan rate case the three steps that you outlined for us, does that reflect self-implementation as well or would those numbers move around if you chose to self implement.

The three phases, phase one would be basically a self implementation in conjunction with the commercial operation of unit one at Oak Creek and then phase two, again because of the way the new Michigan rules work, the Michigan Commission has a full year to decide appropriate test year expenses and make a decision on the rate case. So the way we have chosen to propose a phasing in of our request would be self-implementation for the first phase which is about as I recall $22 million in conjunction with operation of unit one at Oak Creek. And then in approximately July of 2010 we would think the Commission would decide on phase two as well as then the phase three which would be about $4 million when the second unit at Oak Creek would come into service in the second half of 2010. So only one phase of the three would clearly be self-implementation.

Your next question comes from the line of Paul Ridzon - Keybanc Capital Markets

What was the absolute fuel recovery in the quarter as opposed to just the quarter over quarter.

In the third quarter typically its where we under recover because the incremental cost of fuel is higher. So in the third quarter of this year we had about $22 million of under recovery compared to last year it was about $3 million. So that’s where you get the $19 million variance third quarter year over year.

And what’s your forecast now for full year fuel recovery.

Positive over recovery of $15 to $20 million.

Over recovery.

Yes, positive recovery position.

And Gale, do you like the night before calls think about what you’re going to say to Dan.

No actually, I can attest, he makes it up on the call.

I think Dan practices his response over night though.

Your next question comes from the line of Andrew Levy – Incremental Capital Andrew Levy – Incremental Capital : Actually the questions have been asked but I didn’t hear the answer, just can you just real quickly on the over and under recovery of the fuel for the third quarter and for the fourth quarter and what the expectations are and what it was.

You remind me of [Karnack], you devine the answer without knowing the question. We’ll ask Steve to go over that again very quickly.

Third quarter this year under recovered by about $22 million, third quarter last year we under recovered by about $3, so its $19 million. As we look at the fourth quarter it will probably be about $5 million worse as compared to last year if we’re looking at the fourth quarter standalone. Andrew Levy – Incremental Capital : So total under recovery for the two quarters is about $27 million or so.

And remember what really happened, 2009 second and third quarters, well actually third quarter was the mirror image reverse of last year. We had just come off of getting a fuel cost recovery increase in July of 2008 and we have just reduced fuel rates and those reduced rates were in effect for the third quarter of 2009. Andrew Levy – Incremental Capital : You reduced them like March 31 or something like that.

So its just kind of a reverse in the timing of fuel recovery swung the numbers.

Your final question comes from the line of Paul Patterson – Glenrock Associates Paul Patterson – Glenrock Associates : I’m afraid I got on just a little bit late and I did hear the comments about how the, that you thought the economy was stabilizing there, I was just wondering if you and I apologize if you’ve already gone over this but what do you see for 2010 when you speak to your customers, your larger customers, what your expectations are for 2010.

We’ll be happy to answer that, I think the fundamental bottom line is when we talk to customers and we do every day they are very cautious about the outlook for 2010 and that has led us to basically assume a flat compared to 2009 weather normalized sales year.

There are no additional questions at this time; I would like to turn it back over to management for any additional or closing comments.

That does conclude our conference call for today. Thank you so much for participating. If you have any other questions Colleen Henderson is ready and willing in our Investor Relations office at 414-221-2592. Thank you again, bye.