Good afternoon. Thank you for holding ladies and gentlemen, and welcome to Wisconsin Energy Corporation conference call to review 2010 first quarter results. This conference is being recorded for re-brought cast and all participants are in a listen-only only mode at this time. 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 discussions, referenced earnings per share will be based on diluted earnings per share unless otherwise noted. After the prepared remarks, 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 2010 first quarter results at www.wisoncsinenergy.com. A replay of our remark will be available at 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.

Thank you. Good afternoon everyone, we appreciate you taking part in our conference call today to review the company's 2010 first quarter results. Let me begin as always by introducing the members of the Wisconsin Energy management team who are here with me. We have Rick Kuester, President and CEO of V-Generation, Allen Leverett our Chief Financial Officer, Jim Fleming our General Counsel, Jeff West Treasure and Steve Dickson, Controller. Allen will review our financial results in detail in just a moment, as you saw from our News Release this morning we reported earnings from continuing operations of $1.10 a share for the first quarter 2010. This compares with $1.20 a share for the first quarter 2009. As we mentioned on our conference call back in February, we expected our first quarter to be lower than last year because of fuel recoveries. Fuel recoveries caused a negative swing for $0.26 share for the quarter but on the other side of the ledger we benefited from earnings related to the first expansion unit at Oak Creek, which was placed into commercial service one minute after midnight on February 2. Overall, we're pleased with our first quarter's results. Now, I'd like 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 principle of energy self sufficiency. Key component on our focus of self-sufficiency include investing in two combined cycle natural gas fired unit at Port Washington, North of Milwaukee. The construction of two super critical plant arise cold unit at Oak Creek which is south of the City and building a significant amount of renewable generation. As we discussed on previous calls, both unit at Port Washington are in service, construction was completed on time and on…

Thank you, Gale. Now, as Gale mentioned earlier, our 2010 first quarter earnings from continuing operations were $1 and $0.10 a share I will focus on operating income by segment and then touch on other income statement items. I will also discuss cash flows in the quarter. Our consolidated operating income in the first quarter of 2010 was $230 million, as compared to $243 million in 2009, a decline of $13 million. Now, as expected, our utility operating earnings were lower because of fuel recoveries, but earnings from our non-utility energy segment were up with a commercial operation of the first unit at Oak Creek. Operating income in our utility energy segment totaled $179 million for a decrease of $37 million versus 2009. On the positive side, our electric revenues excluding fuel collections were up $43 million. This increase is primarily related to our Wisconsin electric retail rates that were effective January 1st. You may remember we received a 3.4% increase in Wisconsin retail electric rates, which included a 13.8% decrease in fuel related revenues. Also, our utility depreciation expense was $15 million lower in the first quarter as we implemented new depreciation rates in connection with the new electric rates. Finally, last year we had a $10 million reduction in revenues related to my so-charges. We did not have a similar charge in 2010. On the negative side, our fuel recoveries were $52 million lower as compared to the first quarter of 2009. In the first quarter 2010, we under recovered our fuel costs by $24 million. In the same period in 2009, we had a favorable recovery of fuel costs totaling $28 million. This represents a $52 million negative swing when we compare 2010 versus 2009. In addition, our utility owned and cost increase by $28 million in…

Allen, thank you very much. Overall, we're on track and focused on delivering value for our customers and our stockholders. And now, we'll head for the Q&A section of our call. I bet our operator is standing by.

(Operator Instructions) We'll take our first question from Bill Appicelli with Morgan Stanley. Bill Appicelli – Morgan Stanley: Hi. Good morning.

Good morning, Bill. Bill Appicelli – Morgan Stanley: Good. How are you?

We’re doing good. You got Greg under control. Bill Appicelli – Morgan Stanley: Yeah. He's down in Florida, but under control last time I checked.

Well, I keep an eye on him. Bill Appicelli – Morgan Stanley: Thanks. Just to rehash in the large C&I, it sounded like the bulk of that was driven by the operations coming back at the mines? Is that correct?

Yeah. That's very much so. We had a double-digit increase in energy usage by the iron ore mines. They have had a very rapid return to virtually full production coming out of the recession. But we're also seeing, some puts and some pluses as you would expect. The other two sectors as we mentioned, the other two sectors that are really beginning to see some material increase are the specialty steel production. In fact, I talked to the largest specialty steel producer in Wisconsin I talked to the CEO and COO yesterday. And they are very optimistic, their order book is full for the remainder of the year, and then paper production and printer is beginning to show some signs of life after really getting hit very hard during the last 18 months. Allen? Bill Appicelli – Morgan Stanley: Okay. So, it sounds like then, this sounds like the production coming back from the mines in some of these specialty steels has the outlook of being sustainable for the foreseeable future, we would hope?

Certainly from our conversations with those customers, I think the remainder of the year looks pretty solid for those two sectors. Bill Appicelli – Morgan Stanley: Okay. Great. And then, the second question is regarding the 2011 guidance. I know it's still at $4 and I think, if you can just kind of walk me through the changes in the buckets. I know the outlook for Power the Future has increased from $1.14 to $1.33. While the earnings contribution from the electric and gas utilities has declined from, by about $0.22. I assume that's, you're now assuming a lower dollar ROE at the utilities, and is the Power the Future step up because of all in cost, the ultimately expect to reflect in rates at that point to be higher?

So, Bill, let me make sure. This is Allen to make sure you're asking for a comparison between 2010 and 2011. Bill Appicelli – Morgan Stanley: No. I'm sorry just to clarify. The 2011 just kind of looking at slides from maybe in the fall to what you're last presentation was, it's usually the buckets that are adding up to the $4, so it's 2011 versus 2011, but just the breakout of how you get to there?

Yeah. That's right. If you look looked at the presentation, say, that we would have done in September of last year, a couple of, actually two conferences in September, we still have the $4 number for 2011, that's exactly right. But the electric utilities were slightly higher than what you would see today. So for right now, my outlook for 2011 for the utilities is $2.61. It was slightly higher back in September and really the differential between the two is the, the allowed rates of return at the utilities. So they're down somewhat because remember in September that's before we got the outcome and the rate case. And the Power the Future earnings contribution is up slightly. I think the ATC contribution was about the same, Bill, if you looked at the September version versus the current version. But bottom line, our expectation is still for at least $4 a share in 2011. Bill Appicelli – Morgan Stanley: Okay. And then, but the driving the higher assumption on Power the Future would be just the assumption that the cost maybe a little bit higher than what was initially out there when you had the $1.14 or?

Well, remember, there were really, at least two big uncertainties when we were doing the presentations back in September. One, we didn't know the outcome of the rate cases, and two, we didn't know the outcome of the Bechtel settlement. We were yet to get either of those resolved. So in the former, the allowed return ended up being a bit less than what I would expected back in September, and in the latter case, the Bechtel settlement was a positive surprise. Bill Appicelli – Morgan Stanley: Okay. So driven most part by the Bechtel, okay. And then, the $1.33 which should be the assumed kind of run rate going forward until you hit the kind of five-year escalator, assuming that, the, there's no equity issuance during that time, is that a fair, in terms of price…

That's right. Yeah. We would expect, if you look for a full year in 2011, a $1.33. So that assumes all four units online for a full year and no equity issue answer at all. Bill Appicelli – Morgan Stanley: Okay. Great. Thank you very much.

Thank you, Bill.

Yeah. And then, the – basically what will happen after five years with the lease payments on the coal units. There will be a step up in the lease, in the payment, so that will affect cash, certainly. But in terms of the way the revenues get spread over the term of the lease, if you take deferred revenue plus current revenues those all get levelized over the term of lease. Bill Appicelli – Morgan Stanley: Okay.

There's book accounting impact for that. That makes sense? Bill Appicelli – Morgan Stanley: Yeah. Thank you.

Okay. All right.

Good to hear you call, Bill.

Moving onto Michael Lapides with Goldman Sachs.

Hi, Michael. How are you doing? Michael Lapides – Goldman Sachs: I’m fine, Gale. How are you?

Yeah. We are hanging in there. We are doing all right. Michael Lapides – Goldman Sachs: A couple questions for you. What's in your guidance? What's the assumption in guidance for the Michigan rate case outcome?

I believe the, I'm not sure that we have an actual, I mean…

That's not something that we...

Yeah.

It’s not something…

It’s not something that we've talked about.

Yeah. I don’t, it's not something that we've specifically broken out, Michael. But as we talked about on the February earnings call, what's sort of baked in behind that $3.70, we're in the midpoint of the guidance range, is 10% earned…

Return…

… ROE, for Wisconsin Electric Power Company, but we've never talked specifically about the Michigan outcome. Michael Lapides – Goldman Sachs: Got it. Okay. And the other thing you talked a little bit about some D&A changes per the rate agreement. Can you go into a little bit more detail, I apologize, I didn't catch that?

Yeah. The, what happened in connection with the rate case, we did a new depreciation study. And based on the results of depreciation study, which we had to file the new study as a part of the rate case, it basically supported, lengthening if you will the depreciable life of lives of the assets. And I believe that our total utility level you’ll see, that results in about a $60 million reduction in depreciation expense. So that's, and so that was reflected of course in rates, Michael. So it's a variance. Your actual, actual but it was reflected when we set rates or when the commission set rates, rather last year.

It was all part of the review of the entire business that gets conducted during a rate case. Michael Lapides – Goldman Sachs: And at $60 million annualized across Webco, Inc. and Wisconsin Gas, is there any way to break that in half, I mean, by sub?

We can certainly.

We can try.

We can breakdown for you late, but it’s, but to tell you the truth, we’re going to – we've applied to merge Wisconsin Gas with Wisconsin Electric here pretty soon, so it will be one big number soon anyway, Michael. Michael Lapides – Goldman Sachs: Got it. Thank you. Thanks, guys.

Take care, Michael.

Moving onto Paul Ridzon with KeyBanc.

Good afternoon, Paul. How are you, today? Paul Ridzon – KeyBanc: Fine. Yourself.

We are doing well. Paul Ridzon – KeyBanc: When we look at second quarter with $0.60 at starting point, when you think about the rate case, the depreciation study, I guess…

We've baked all that into what Allen mentioned to you is a good starting point.

Well, in term of when we set, well, the guidance for the year for the utilities is, Paul, is for it to be flat, the utilities to be flat, that's our guidance, in terms of earnings, if that's your question for the year. Paul Ridzon – KeyBanc: Does your $0.60 second quarter starting point contemplate the new rates that took effect January 1?

Yeah.

Yeah.

Absolutely. Paul Ridzon – KeyBanc: And what was whether versus normal?

The weather in the first quarter of this year was warmer than normal. I think in terms of heat and degree days, we were probably about 100 heating degree days, below normal on or unfavorable on degree days. In terms of margin, I think, we broke that out in the factors, we were about $23 million in total. You want to break that out for us Steve?

Yeah. 23 in total, the electric we were – had about $9 million and the gas was about 14. Again, as Allen said in, the first quarter, it was mild. It was about 6% warmer than normal. Last year, it was colder, so that's the swing.

Yeah. There was a big swing, Paul, in part because we had a mild, as Steve is indicating a mild winter this year, a very, very cold winter in the prior year. So the bigger swing than just the change in degree days to normal might indicate.

You have margin versus normal? How much is 23ish residual from last year rolling off?

Well, if you look at maybe we'll just talk you through it. In the first quarter of 2009, Paul, it was better than normal from the standpoint of weather and if you measure that in terms of margin, that was about a $15.5 million pickup versus normal weather in, in 2009. Then in 2010, as, as Steve mentioned, as I mentioned, that was worse than normal, unfavorable versus normal and that was $7.5 million. So $15.5 million benefit from weather versus normal in the first quarter of '09, $7.5 million going the other way in 2010 for a total swing of 23.

23.

Does that help? Paul Ridzon – KeyBanc: Yes.

Yep. Paul Ridzon – KeyBanc: Then the depreciation study, that had a dollar for dollar offset in the revenue requirement, isn’t that?

Absolutely.

Absolutely right. Paul Ridzon – KeyBanc: So that's earnings neutral that depreciation study?

That's right.

That's correct. Paul Ridzon – KeyBanc: Okay. Thank you very much.

Thank you, Paul.

Our next question will come from Leon Dubov. Leon Dubov – Catapult Capital Management: Hi. Good afternoon.

Hi Leon, how are you today? Leon Dubov – Catapult Capital Management: I just wanted to check for your 2011 guidance; I think you guys have baked in some, I guess, some fuel variability in Wisconsin. I'm wondering if this new bill that's based there, is that kind of give you a little bit more comfort around that or how does that affect it?

Well go ahead.

Generally, generally when we do guidance, particularly for a period as far hard as 2011 we just assume that fuel is a neutral. So you know, we haven't made any, sort of assumption that we'll be over or under collected in 2011. So that's, as it relates to guidance. Now, Gale, if you want to amplify that anymore.

I'll be happy to. Again, simply because of the way fuel recoveries work, as Allen said, when you go out farther, it's really not possible to pinpoint precisely what our fuel recovery situation is going to look like, so on our farther out years we do assume neutral fuel recovery. You're correct that a bill passed the legislature this past session. That would in essence be an improvement in the way the recovery mechanism works. In that the commission would be allowed under this piece of legislation that passed to basically ask all the utilities to project their annual fuel costs in the fall of the year prior to the New Year. So for example, the commission could ask the utilities to come in, in October or November, with a pretty firm projection of their fuel costs for the following calendar year. And then theoretically after a hearing, the commission could set a new fuel rate that would be effective January 1. If that should occur, it would obviously damp even and reduce the volatility in our fuel recovery. We think that would be a positive improvement. The bill ended up being very non-controversial, which was a very good thing. It actually passed the state Senate on a voice vote and was supported by all the parties involved. The Wisconsin commission testified on behalf of the bill, the consumers utility board and the industrial groups, the industrial owner groups testified on behalf of it. The utilities were obviously in favor of it. So it was a, it was a well supported piece of legislation. And the remaining step is, the governor would need to sign the bill and we'll, we'll be able to determine whether that happens over the course of the next 20 days. Leon Dubov – Catapult Capital Management: Okay. Does that change anything for 2010 guidance?

No. No. Because it would take a while for the commission to put all the rules in place for this new recovery mechanism and I wouldn't expect assuming the governor does sign the bill, I would not expect that mechanism to be in place probably until the start of 2011. Leon Dubov – Catapult Capital Management: Got it. Thank you very much.

Thank you.

We'll now hear from Vedula Murti with CDP.

Rock-and-roll, Vedula, how are you? Vedula Murti – CDP: I'm well. Thank you. Good afternoon.

Good afternoon. Vedula Murti – CDP: I would see – if I recall from your last call, I think when you set up the outlook for the year-end, particularly the 10% earned return assumption. You talked about the challenges in terms of I think the sales forecasts versus, you know, what you were thinking as well as cost challenges that were, that you were facing versus what was provided for, in the last rate outcome. Could you talk about a little bit how the first quarter tracked versus that and kind of what you're seeing either things that are moving in your favor or things that might be incremental headwinds versus your comments from the last quarterly call, if I'm phrasing that properly?

I'll be happy to, Vedula, and Allen can join in with whatever thoughts he has. I think the key variables, the key factors that could swing, obviously, first related to the economy and whether our sales forecast was on target. And as Allen mentioned during his remarks, we're actually tracking just slightly better overall than our sales forecast. So at the moment – on a weather normalized basis, so at the moment, our sales forecast seems to be holding up well.

Now that's versus our financial forecasts, Vedula, which you'll remember that the sales forecast that we bake, that was used for our financial forecast was not quite as rosy as what the commission used to set rate. So when Gale talks about how we're doing versus sales, it's versus the sales that are in our financial forecast. Vedula Murti – CDP: Okay.

Okay. And secondly, always a big variable for every utility is weather. And weather clearly did not cooperate in the first quarter of this year. We also had a very mild April. It was the second mildest April on record since weather records began here in Milwaukee. So weather remains a variable and clearly we'll see how the summer goes, but it certainly has been a very warm spring. And then the third is obviously is obviously cost control and I'm very pleased with where we are on, on our managing the costs in our business. We continue to track slightly under the budget on our O&M expenses and that was helpful to us in Q1 when the weather was not. So the three big variables, I think, we clearly have – strong effective cost controls in place. We'll see how the weather pans out, and of course, the fuel volatility in the first quarter. Allen mentioned on the call that we do have interim fuel rate in place and we expect to still be under recovered for the year but hopefully, hopefully with the new fuel recovery in place, which is much more reflective of what we're seeing in the wholesale power and natural gas markets, hopefully that won't materially get worse as we end the year.

Yes. Vedula, there's one other factor that we did discuss back in February and that was the Michigan REIT case and, we, we don't have an outcome in that. Of course, we're waiting for a proposal for decision from the ALJ, that should be any day. And then the commission, I believe, they have to rule in July. So that's something we, don't yet know what the final outcome of that's going to be, of course. Vedula Murti – CDP: All right. Thank you very much.

Thanks, Vedula.

Reza Hatefi with Decade Capital has the next question.

Hi, Reza. Reza Hatefi – Decade Capital: Thank you. Hi, guys, how are you?

We're great. How you doing? Reza Hatefi – Decade Capital: Pretty good. Sorry, if I missed this earlier, but what's the ROE embedded in the 2011 utility guidance?

Well, basically, you know, 2010 just to remind everybody is about 10%. And then the assumption that we're making in 2011 is about the same, you know, going back to the question that I got. I can't remember who it was from. Earlier on the call, but when we're looking at the 2011 numbers, the 261 that we had in our – our analyst presentation for 2011 for the electric and gas utilities, the return is just under 10%. So about 10% this year and just under 10% next year. Reza Hatefi – Decade Capital: So a little, little degradation because you're in between rate cases? I mean, it's sort of like you're in middle year?

Yes. And obviously we'll seek to do better than that because we would aspire always to earn our allowed returns but right now our forecast is for something little less than 10% in 2011. Reza Hatefi – Decade Capital: But, of course, as you build more including the HUCS, the Oak Creek HUCS and these other large projects, you're earning some (inaudible) on that in '11 that, you know, then gets rate based in 2012. Is that the best way to think about it?

Right.

Right.

So basically as we spend the dollars on renewables so glacier hills and south Oak Creek, we spend the dollars and then those earnings go ahead and manifests themselves below the line as AFUDC and then we would, we would seek to put them into rates into 2012. Reza Hatefi – Decade Capital: Okay. Thank you very much.

You're welcome, Reza. Thank you

We'll now here with Phyllis Gray with Dwight Asset Management. Phyllis Gray – Dwight Asset Management: Good afternoon.

Welcome. How are you? Phyllis Gray – Dwight Asset Management: I’m well. How are you?

We're doing well. Phyllis Gray – Dwight Asset Management: I wondered, if you had received any additional information from Moody’s regarding the potential change in equity credit allocated to hybrid securities?

Yeah. My – of course, they put out their proposed changes comment. I'm not sure exactly, Phyllis, when the comments are due back. But they – they put those out for comment. If, unless they change the – the way they're headed, the hybrids that we have under the Moody’s sort of scheme if you will, instead of having a 50% credit, they'd have 25% equity credit. So if they do that, sort of interesting result of one agency Fitch they will treat them at 75% equity. S&P would treat them as 50% and Moody's would treat them at 25. So I guess everybody has to be different, so they all the way across on the scale on the equity credit. But Phyllis from a practical standpoint, we're not going to change anything about our financing plan, right. Based on what Moody's does or doesn't do with the equity credit of the hybrids.

The arithmetic average is still 50%, even if they go down to 25.

Right. Is that responsive to your question, Phyllis? Phyllis Gray – Dwight Asset Management: Yes. It is. Thank you.

Our next question will come from Dan Jenkins with State of Wisconsin Investment Board.

Dan. Dan Jenkins – State of Wisconsin Investment Board: Hi.

Hello. Dan Jenkins – State of Wisconsin Investment Board: Good afternoon.

Good afternoon. Did you survive the Mifflin Street block party? Dan Jenkins – State of Wisconsin Investment Board: Barely.

Barely. Yeah. You didn't see any vans, black vans sitting there smoking or anything. Did you Dan? Dan Jenkins – State of Wisconsin Investment Board: No, I'm getting ready to send all those folks your way in a couple weeks so.

Yeah. Okay. Well, what's on your mind today, Dan? Dan Jenkins – State of Wisconsin Investment Board: First of all, I just wanted to make sure I understood your addendum on the retail sales to try to adjust for the normalization.

Okay. Dan Jenkins – State of Wisconsin Investment Board: So I guess the lower right corner with the – that’s the Original forecast assuming normalized weather for the first quarter? Is that correct?

That's right.

Yes.

So you are looking just to be clear. You're looking at page 11, Dan? Dan Jenkins – State of Wisconsin Investment Board: Right.

Yep. Dan Jenkins – State of Wisconsin Investment Board: So based on that, so I guess it's right that the residential and small commercial industrial and mines did better on a normalized basis than you expected but the large commercial industrial X mines did a little worse.

That's accurate.

That's exactly right.

Yep. Dan Jenkins – State of Wisconsin Investment Board: Okay. So what's, I guess I'm curious, what was the discrepancy in the large commercial industrial X mines since it's fairly sizable difference there?

Actually, if you look at all the major sectors that we look at in terms of our customer segments, it was really, it was really a lot of puts and takes. There were a couple of sectors like for example, other utilities, I mean, we have a very large water utility system here in the Milwaukee region that was very under in term of its, its expected electricity usage, but there really wasn't one single pattern. We had the three sectors that we talked about that were definitely going in the right direction and not – and then a lot of little movement back and forth among all the other sectors. So nothing really stood out other than perhaps other utilities and MMSD, the Metropolitan Milwaukee Sewerage District really stood out to me but nothing material and it is interesting, though at least to me, the largest energy users are beginning to show growth. Our normal largest consumers are, our normal largest industrial customers are beginning to show growth, what's lagging is the smaller – the smaller customers within that large segment. Dan Jenkins – State of Wisconsin Investment Board: Okay. You mentioned that you targeting maybe fall for the financing of the Oak Creek two, would that be similar sized to what you did for Oak Creek one or how should we think about the size of that financing?

Well, in total, we're looking at doing a total of $950 million worth of financing to the two units combined this year. So we did $530 million back in February, so we'd do the balance of $420 million roughly with the second unit and Dan, in terms of timing, essentially what we would do is do the financing contemporaneous with the commercial operation of the second plan. Dan Jenkins – State of Wisconsin Investment Board: Okay. Then on page seven, you mentioned part of the O&M cost, year-over-year comparison was due to the new coal unit being in effect. Is that correct?

Yes. I mean, obviously once the unit goes into, goes into service you have thing like ammonia costs to run the scrubbers, you have personnel costs, et cetera. Dan Jenkins – State of Wisconsin Investment Board: Yeah.

That's a big factor. And I think we've done a specific breakdown for you.

Yeah. About six of the $28 million was O&M for the power of the future units, Dan.

You have to remember that's only for two of the three months of the quarter. Dan Jenkins – State of Wisconsin Investment Board: Okay. So that should be something that will continue then throughout the rest of the year, would it be that similar rate about $3 million a month?

Yeah. But just keep in mind, of course, that was reflected when we, when the commission set rates. Dan Jenkins – State of Wisconsin Investment Board: Right. But I'm just, when we look at year over year –

Yeah.

GAAP results.

That's what you'll see in the account. Dan Jenkins – State of Wisconsin Investment Board: So I guess the another thing I'm, I want to try to understand, how is it that, – those costs are up in the utility, but then you have the benefit of $24 million in the non-utility, is that like a pass-through?

Dan. The way the lease works is basically the utility, remember now, We Power, which is our subsidiary of the parent, designed and built the unit and is leasing the unit for a set period of time approved by the commission, leasing the units of the utility. But the utility is responsible for operation and the utility's responsible for all the associated O&M cost. And the utility is also responsible for a lease payment each month to We Power for leasing the unit. So that's why you're seeing the O&M in the utility, in the utility statements and why you're seeing the result of the lease payment in We Power's income statement. Dan Jenkins – State of Wisconsin Investment Board: Okay. As part of the cost of the utility's paying being reflected in other, in like say fuel and other parts to them?

Oh, sure. The fuel costs would be part of our normal fuel recovery rate. That's part of the electric bill and part of the utility's costs. Dan Jenkins – State of Wisconsin Investment Board: Okay. And then last –

Fuel and all operation and maintenance expense, or the power of the future units are responsibilities and are reflected in the utility statements. Dan Jenkins – State of Wisconsin Investment Board: Is the lease payment, is that included in O&M or is that included in (inaudible).

The answer is yes. Steve, go ahead.

Yeah. Dan, I just want to summarize what Gale had said, as the utility is responsible for operating the plant, but the fuel cost associated with the new units, the O&M costs for running the day-to-day, the day-to-day operations, those are included in utility's income statement. In addition, the utility is making a lease payment for the right to use that unit. The lease payment is also in the utility O&M, but the lease payment is reflected as revenue in the We Power in the non-regulated segment. So if you think, if you carve out the lease payment that's in O&M, that amount matches the revenue that's being recorded in the non-regulated energy sent. Does that make sense? Dan Jenkins – State of Wisconsin Investment Board: Right. Yeah. I was just trying to make sure I understood how that was working across.

Okay. And then on a consolidated basis, then that lease payment gets eliminated against the revenue that We Power. So that gets eliminated in consolidation. Dan Jenkins – State of Wisconsin Investment Board: Okay.

Does that makes sense Dan. Dan Jenkins – State of Wisconsin Investment Board: Yeah. That makes sense.

Good. Dan Jenkins – State of Wisconsin Investment Board: The last question I had was you mentioned the new units go into service that you consider revising your dividends to reflect that. What's your ideas as far as the timing that when that might be reflected?

We have, as you may know, Dan, a stated policy that our board has approved related to the dividend. In an essence it's in two pieces, right now. And the first is we would pay out 40 to 45% of our earnings in dividends, this year and 2011. And then after 2011, we're proposing to raise the payout ratio, again, from 40 to 45% currently to 45 to 50%. So that would be effective based on our policy in 2012. Dan Jenkins – State of Wisconsin Investment Board: Okay. Thank you. That's all I have.

You are more than welcome. Hang in there Dan. Dan Jenkins – State of Wisconsin Investment Board: Okay. You too.

We'll take a follow-up from Paul Ridzon. Paul Ridzon – KeyBanc: Do you have any for Medicare D or Cadillac health plans?

No. We don't, and I'm not sure whether we were brilliant or lucky, but when we did the assumptions associated with the future costs of our health plans, we realized that the subsidy under the current law, not related to the new healthcare legislation, but the subsidy under the law then in effect, in essence went away at the end of the 2013. We have several different plans that we offer to our retirees. And we assume that with the subsidy going away that that particular plan that was the beneficiary of the subsidies, we assumed that plan wouldn't be economic anymore. And so we wouldn't keep any of our retirees on that plan. So we didn't, we didn't basically take into account any benefits to the corporation for the subsidy beyond 2013 and therefore, no accounting charge was needed. Paul Ridzon – KeyBanc: So you mentioned, though the word Cadillac and so were you asking, so Gale, gave a very good answer to this, the drug subsidy issue, because the tax deductibility of the drug subsidy is changing, no longer, no longer deductible. So that's one issue. And Gale answered that question. Were you asking a different question, because you said the word Cadillac, which is a – it's a longer term issue about excise tax.

That's a longer term, were you wanting to know about that Paul? Paul Ridzon – KeyBanc: Apparently, I guess actuarials have started to dig deeper into that and it may be a bigger issue than the people thought at first glance.

On the Cadillac? Paul Ridzon – KeyBanc: Yes.

Well, we do know that the Cadillac plans are under the current law. So the excise tax on the "Cadillac plans", don't kick until 2018. So at the moment I think a lot of people are going to be digging into that and looking at that. I believe to be very candid, that all of our plans, if you look at all of our plans, which I don't view as Cadillac plans. By the year 2018, just given inflation that's expected in medical care costs, all of our plans would be deemed Cadillac by 2018. My guess is that virtually every company's plan would be deemed Cadillac by 2018. So at the moment, we'll just have to see as that unfolds

Yeah. And I guess from an actuarial standpoint, there is this remeasurement concept, Paul, that you may have heard people talk about, and I certainly don't expect remeasurements to be required this year yet. But we will have to do a remeasurement of the FAS 106 liabilities in 2011. And we'll see what impact if any potential excise taxes in the future might have on that remeasurement, but I wouldn't expect a remeasurement in '10, but I would expect almost assuredly you'll have do some remeasurement in 2011. But there are a lot of uncertainties, I mean for example, Paul, Apparently HHS has to promulgate quite a bit – They have to did a lot of rule makings and depending on where they hit on some of that rule making, that could also have effect. Paul Ridzon – KeyBanc: Absolutely.

Good or bad, on your retirees as well as our active medical experience.

Allen is right, Paul. The first set of rules were theoretically to be delivered by HHS in 90 days, after the date of passage of the legislation. We haven't hit the 90-day mark yet. There's some discussion that perhaps a lot of those rules won't be promulgated in 90 days. I think we've got a long way to go to work our way through this ticket. Paul Ridzon – KeyBanc: I just hope they don't go after my Yugo plan. Where does, where does the Point Beach, bill credit stand?

Well, we're cranking the Point Beach bill credits every month on schedule and under the current, the commission's current rate order, those Point Beach bill credits for retail customers in Wisconsin would basically run through all of calendar 2010 and then be completed.

Yeah. And of course the Michigan credits are done and the FERC credit, there were no bill credits there, there was just a lump sum that was handed over to the customers back in 2007, I believe.

So all of the bill credits essentially from the Point Beach transaction will be dealt with, by the end of 2010 and the remaining jurisdiction is just Wisconsin. Paul Ridzon – KeyBanc: Thank you very much.

Thank you, Paul. And take care wherever you go.

Mr. Klappa, we have no further questions. So I'll turn it back over to you for closing, sir.