Good afternoon, ladies and gentlemen, and welcome to Wisconsin Energy’s Conference Call to review 2011 First Quarter Results. This conference is being recorded for rebroadcast and all participants are in a listen-only mode at this time. Before the conference call begins, I’ll 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 made 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, referenced 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 Web site a package of detailed financial information on its 2011 first quarter results at www.wisconsinenergy.com. A replay of our remarks will be available approximately two hours after the conclusion of this call. Now, I’d like to introduce Mr. Gale Klappa, Chairman of the Board, President and Chief Executive Officer of Wisconsin Energy Corporation.

Colleen, thank you. Good afternoon, everyone. We appreciate you joining us on our call to review the company's 2011 first quarter results. As always, let me begin by introducing the members of the Wisconsin Energy Management team who are here with me today. We’ve Rick Kuester, our Chief Financial Officer; Allen Leverett, President and CEO of We Generation; Jim Fleming, our venerable General Counsel; Steve Dickson, our Controller; and Pat Keyes, who has joined the company as our new Treasurer. Pat, of course, is taking the reins from Jeff West. As many of you know, Jeff retired at the end of April after 41 years of service. Rick 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 $0.72 a share for the first quarter of 2011. This compares with $0.55 a share for the first quarter a year ago. The uplift in earnings for this year’s first quarter driven by the commercial operation of the second expansion unit at Oak Creek, which as you know was placed in service in the early morning hours of January 12. Across our utility operations, we experienced improved fuel recovery in the first quarter and colder winter weather. Overall, we’re off to a solid start for the year. Now, I’d like to briefly touch on the state of the economy across our service areas. Overall, electric sales to large commercial and industrial customers rose just 0.4% over the first quarter of 2010, but a deeper look inside the numbers will give you a more complete picture. First, as you may remember, a Chrysler engine plant in Kenosha, Wisconsin shut down last year, and that is a permanent shut down. This plant was one of our…

Thank you, Gale. Before I discuss our first quarter operating results, I’d like to remind you that our 2 for 1 stock split was effective on March 1, 2011. As a result of the split, we have changed the reporting of all prior earnings per share to reflect a new number of shares outstanding, so the $1.10 a share that we reported in the first quarter of 2010 is now $0.55 a share after the split. As Gale mentioned, our 2011 first quarter earnings from continuing operations were $0.72 a share as compared to $0.55 a share in 2010. I’ll focus on the earnings drivers at the operating income level by segment and then touch on the other income statement items. I’ll also discuss cash flows in the quarter. Our consolidated operating income in the first quarter of 2011 was $296 million as compared to $228 million in the 2010, an increase of $68 million. As expected, our utility operating earnings were higher because of favorable fuel recoveries as compared to 2010 and earnings from our non-utility energy segment were up with the commercial operations with a second unit at Oak Creek and a full quarter of earnings from the first Oak Creek unit. Operating income in our utility energy segment totaled $213 million, an increase of $35 million versus 2010. On the positive side our revenues associated with the recovery of fuel and purchase power costs were up $24 million when compared to the first quarter of 2010. Last year we under collected fuel and purchase power costs by $23 million. During the first quarter this year we were in a slightly favorable position. We also experienced a significantly colder first quarter this year and we estimate that our electric and gas margins were up $22 million as compared…

Rick, 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 Andy Levi with Caris & Company. Please state your question. Andy Levi - Caris & Company: Gentlemen, how are you?

Fine, how are you, Andy? Andy Levi - Caris & Company: I’m doing, all right. Just two very quick questions and I may have missed the first one. O&M is down a lot for the quarter. What was the reason, why?

Actually, we can let Rick and Steve get into the mechanics if you like. So if you really look at utility O&M, it was up about $10 million in the quarter, the remaining impact of the O&M that you see on the income statement is really because of the way the mechanics of the lease payments work between the Utility and We Power. I think, because of this year, we're going to have an unusual year. The one thing you really need to focus on is the utility, O&M and the utilities. Steve, do you want to give us a color on that?

Yes, thanks, Gale. Andy, as you point out, overall in a consolidated level, O&M is down about $22 million and as Gale said that the Utility, it's up about $10 million. The difference which is about $30 million decline relates to the elimination of intercompany revenues and expense. And as I remember it We Power builds the utility for the lease payment. So We Power records revenue and the Utility records expense. This year We Power with the Unit 2 coming on line had about $30 million more of revenue and therefore, on the consolidation entries, we eliminated $30 million more revenue at We Power and $30 million more expense on a consolidated basis, so it's an accounting anomaly, which shows why the O&M is down. Does that make sense, Andy? Andy Levi - Caris & Company: Sure, it does. Thank you very much, and then I have other quick question.

Andy, lesson for everyone here for this year if you want to look at the O&M trends really look and we'll break this out for each quarter, really look at the Utility O&M. Andy Levi - Caris & Company: Got it. And then on the stock buyback and/or dividend increase and/or I guess was a debt pay down was that the third thing that you were talking about. Just timing on that, as far as hearing from you guys on that, will that be in the second quarter call or could that come before, what are you guys thinking?

It’ll definitely come by June and we’re working through obviously all of our final analysis. We obviously also want to have our regulatory scheduled Board meetings and so you’ll expect an answer from us by June. Andy Levi - Caris & Company: When is your Board meeting in June, is that something you can share with us today?

We’ve a Board meeting coming up soon. We also need by the way a final decision on our proposed biomass investment in Rothschild, the Domtar investment. So that’s another factor that we’re waiting for, but you’ll be hearing from us in the not too distant future. Andy Levi - Caris & Company: Got it, thank you.

Thanks, Andy.

Your next question comes from the line of Brian Russo with Ladenburg Thalmann.

Good afternoon. Would you mind elaborating a little more on the joint filing with PSCW related to the Domtar biomass cost I apologize, business I haven’t had a chance to read the filing?

Sure. In essence the filing that we made at noon and I understand why you wouldn’t have had a chance to read it, it was noon central time. The filing in the filing Domtar has agreed to, in essence, pay more for the steam that would be produced by the unit, and for background this would be a 50 MW plant. The plant would produce both steam to power Domtar’s paper mill operations and renewable electricity for the grid. And one of the major questions that the Commissioners had during their open meeting last week was, could there be a different allocation of cost between the cost that go to electric customers and the cost that Domtar would accept for the production of steam. And so Domtar has agreed to, what we think is, a very major price change. We’ll let Allen cover the details for you.

Yes, Brian, just to put some numbers around it. What Domtar agreed to was a 20% increase in the rate that they pay for steam. Now, when you sort of track that through the implication then for our customers that translates into about a 7% reduction in the cost of the project took to our customers. We believe that based on the conversation at the Commission last week, we believe this puts the cost of the project as compared to a wind project within a range that at least one of the Commissioners was looking for. So, as Gale mentioned, we would expect the decision in the near future from the Commission, but from a practical standpoint, we really need a decision by May 15 if we’re going to move forward with the project. That’s a high level summary.

Allen is exactly right. We actually need an order by May 15. In that, if we’re going to go forward with this project, we have a construction schedule that we have to meet and federal production tax credits related to biomass that right now at any rate expire at the end of 2013. If we don’t qualify, if we couldn’t get the plant on line by the end of 2013, and if we couldn’t therefore qualify for the production tax credits, it obviously changes the economics of the plant and not for the better. So, we think the Commission understands that and we’re looking for a decision here in the very near future.

Okay, great. And then this $600 million of cumulating free cash flow through 2014, does that assume the biomass plant moves forward and the expenditures are included in the CapEx calculation there? Or would that price of the biomass plant eat into the $600 million?

Rick?

No, Brian. The $600 million assumes that we build the biomass project. If we don't build it, that will be additional equity available. That's a total $255 million investment, so about $125 million of additional cash flow would be available.

That's because obviously of the 50-50 capital structure.

Thank you very much.

Your next question comes from the line of Steve Fleishman with Bank of America.

A couple of questions. First, on the Chrysler plant shut down, do you have a sense if we excluded just that plant kind of what all industrial sales would have done without that impact?

Yes. Matter of fact, I do. It's a very good question. Let me give you a little bit of analysis. The analysis I have look at the four major and not all of them are major, but we had four plant shut downs that we believe are going to be reasonably permanent shut downs. There was the Chrysler engine plant in Kenosha. And then we have the Delphi Automotive Operations in Oak Creek. We had White Pine up in the Upper Peninsula of Michigan, which was a copper refiner, and then we have the NewPage paper mills. Paper mills owned in Northern Wisconsin by NewPage. All four of those shut downs and closings we have factored into our forecast. Now, looking at how that relates, about 25% of our industrial demand and some of our largest customers are in the first quarter of this year their usage is above prerecession levels. The remaining 75% of our industrial grouping of customers, if you take out those four shutdowns, they are about 5% below, as a group about 5% below precession levels. But that's kind of the picture. We’ve, obviously, factored in these shutdowns in our 2011 forecast.

A couple of other questions. The $16 million of net drag on fuel from the delay on the fuel case, was that in your initial guidance or is that kind of incremental to your initial guidance?

We had assumed there would be some drag because of the delay in getting an order from the Commission. So, it's really not incremental.

And then I know you had mentioned one potential use of cash might be, for example, the fact that the state may be looking to sell some of their power assets?

Yes.

Is there any update on that issue?

Very good question, Steve, and that is the potential use of cash. The State of Wisconsin or the Walker administration has expressed an interest in selling a number of the plants and steam heating power islands that currently are operated by the State of Wisconsin across college campuses and the biggest, obviously, would be the UW campus in Madison. It will require for the state to move forward with any sale. A piece of legislation would be required to be passed by both the State Senate and the assembly, and my understanding is that the Walker administration is hoping to introduce that legislation sometime this summer. So, there won't be any immediate movement until a piece of legislation is passed and signed by the governor, but our understanding is the Walker administration would like to move forward with the sale of those assets.

One last question, just your take on the EPA proposed air toxics rules and how that affects your capital plan for the remaining non-cleaned up coal plants and the like?

Sure, absolutely. I'll ask Allen to add his thoughts on this as well. Some background, Steve, might be very helpful. We really see very little impact on customer electric rates or our capital plan between now and 2015 as a result of all the new EPA regulations that have been proposed. That may surprise you because so many utilities are indicating that they are going to see huge capital increases and huge cost increases from the need to comply with these proposed rules, but there are three very good reasons why we do not see that kind of impact. Allen?

Yes. Just as background Steve. Of course, the first reason is, 10 years ago, the company made the decision to retire old coal, build new natural gas plants, build new coal plants. So, of course, those are the Port Washington plants and the Oak Creek plants. So, that's the first driver of why we are where we are. Second, you may remember in 2003, we entered into a consent decree with EPA, which drove controls at many of our other major plants. And then, finally, we as a company unlike many others, we don't have ash impoundments. We’ve 100% beneficial reuse of the ash that comes from the combustion of the coal. So, we don't really see much many impact from EGU MACT or IB MACT on the company. The only three plants that we see they are mainly impacts on down the road, you have heard us talk about our Valley and our Milwaukee County power plants which are actually CoGen plants that produce steam as well as electricity and an electric plant that we have in the UP. We see little impact on those units there could be a small amount of investment of those units because of EGU and or IB MACT, but the bigger impacts if there are going to be impacts than those plants would be out in the 2017 timeframe. They wouldn’t be driven by MACT, they would be driven by NAAQS, the National Ambient Air Quality Standard for SO2 in particular now, but again, we wouldn’t see impacts there if any until 2017. So it’s probably more than you wanted to know, but that’s kind of where we see ourselves positioned.

Steve, speaking more than you wanted to know you are probably seeing some of the national studies that have been done now that would indicate that the average price of electricity in the country maybe going up by as much as 20%, because of these proposed EPA rules. We might see 1% to 2% increase our best guess. So that gives you an example of how well we are positioned from the environmental standpoint in terms of complying with even the new proposed rule. So I think, this is going to materially help our competitive position.

Great, thank you.

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

The return on capital, you are waiting on Domtar and we are in a kind of a period where things are getting better but things aren’t perfect. I’m going to ask a question I think, your entire investor base probably won’t love which is what’s the rush?

Well I don’t feel like we are in a rush, I really don’t. We've taken I think,, very good time to do the proper analysis, we will have sooner or later within the next week or two I believe a decision from the Wisconsin Commission on Domtar, we’ve laid out $3.4 billion or up to $3.4 billion capital plan for the next five years. So, Michael, I think, all of the elements are in place for us to really have a very good understand of what our earnings potential, our investment opportunities and our cash flows look like. So, I don’t sense that we’re in a rush at all.

I’d just add onto that Michael, in other way to interpret your question would be, why now and what's happened in the first part of this year, is that we’ve gotten more clarity on the EPA rule, so we kind of know what the exposure is there. We sold Edgewater 5 which was going to be an investment that those are going to be required to make from an air quality control standpoint. So, that’s no longer an uncertainty out there, and we finished the last unit at Oak Creek, so we’ve got a number of things resolved. So, I think, the timing actually is pretty good, if you look at the issues that we were facing a few months ago versus the issues that we’re facing now in terms of capital expenditure.

Got it. One other…

Michael, one other point to add onto what Rick said, I personally think it’s important for our investor base to understand, it’s very clearly where what our philosophy is on our dividend payout ratio as well. I mean, we’re entering, as I mentioned in the earlier comments, I think, the company is at a very positive inflection point, but clearly our dividend payout ratio is below our peers, and I think, it’s important to clarify for our investors going forward at a minimum what our goals are related to our dividend payout ratio.

No, and that’s makes it understand synonymously over the last 5 to 7, 5 to 10 years, you guys have been among the best in terms of stewards of shareholder and bondholder capital. One follow-up related to capital structure, but just in general in your discussions with the new Chairman, what are you getting in terms of potential direction for state energy policy in Wisconsin for the next 3 to 5 years?

Really, Phil has just gotten in the chair. I think, he has been pretty busy trying with the other Commissioners to work off the backlog of items that they had really built up when they were short of Commissioner. So I don't think Phil has had a great opportunity yet to sit down and think about energy policy for the state. He did say though during the last open meeting that he was part of the crafting of the renewable energy standard for 2015 and supports that standard. So, I think, the first and only comment that we've really seen from Phil so far is his support for the 2015 energy standard, renewable energy standard.

What does that then mean if Domtar doesn't get approved?

That's when we will have some conversations and try to seek some guidance from the Commissioners, because the truth of the matter is, if Domtar is approved it will get us to where we need to be for 2015 and 2016. I mean, that would be the last major investment we would need to make in the near-term in renewables to meet that 2015 and 2016 standard. Without that then we've got some decisions to make and in our first step if they decide that Domtar is just too expensive a proposal, our next step would be to sit down and work with the Commissioners and get some guidance, and frankly work with the Walker administration as well. I know that the governor would want to have some say in that thinking.

Got it, okay, thank you, guys, much appreciate it.

You’re more than welcome, Michael. Take care.

Your next question comes from the line of Jay Dobson with Wunderlich Securities.

I was hoping we could continue on the Domtar topic. I know it's timely we’ll have a decision here shortly, but I didn’t hear the commentary that the PSC made but just judging from your reaction you took some solace in the fact that with the price cut they would compare that or would look economically similar to a wind asset. I was just hoping you could elaborate on that solace, simply because it seemed as if a lot of the desire for wind in the state quite frankly lost a lot of its backing with the new governor. So I'm just wondering if that's economic we would feel more comfortable with or that’s something that obviously will be determined in the ultimate decision, but just tell us how the wind economics or the comparison with wind economics makes you feel more comfortable?

I think, there is one very clear reason why it makes me feel more comfortable and that is the former Chairman and current Commissioner Eric Callisto during the open discussions with the other commissioners said that he would like to be able to see this renewable alternative, meaning the Domtar co-generation plant that we are proposing. He was concerned that it looked like based on staff analysis that this proposal was more expensive than generic wind. He said gosh, he would feel comfortable he said, if we could have some kind of, as he put it wind bogie against which to compare. Now, when we look at the staff assumption on generic wind and the cost of generic wind, there are a couple of items here that I think, are worth pointing out. The staff's analysis on the cost of generic wind assumed that the federal production tax credit for wind would go on for a very long time. We don't think it's prudent to make that assumption because under the current law the federal production tax credit for wind expires at the end of 2012. And then when you factor that into the fact that generic wind may not represent the real cost of building wind in Wisconsin in light of the flux that the state is in regarding the citing rules. I mean, we think the real generic cost of wind can be materially higher than what the staff indicated. And then if you couple that with price reduction that Allen described from what Domtar and we filed at noon today, you get much, much closer. In fact, we think and hope we’ve achieved what Commissioner Callisto was looking for which was a proposal that would be quite close to the cost of generic wind. Guys, would you like to add anything?

No. I think you've covered it Gale. If you kind of stand back and look at it, it’s not really possible to build the generic wind project that would be compared to because if it’s a Greenfield project, because one, citing rules aren’t clear, two, the production tax credit expires one year early than biomass. So, I think, by bringing the numbers closer we’ve been responsive to the Commission.

There’s another factor here, the area where we’re proposing to build the biomass plant, which is a suburb of Wausau in Northern Wisconsin. Like all areas, that area can benefit from jobs and there is a very strong job protection and job creation story associated with this plant that we think should also play into the mix here.

No. That’s very helpful. Maybe seizing on the national question, from where you indicated if it doesn’t go forward you’d like to have discussions with the Walker administration. Where do you think their desires might be on where you might fill if need be, and you certainly would have to under the renewable standard where he would like you to sort of focus?

I'd hate to pre-judge what the Governor might say on this, but clearly in the past particularly in this kind of economic climate, he has focused on near-term cost to the customer. So one option and I'm not suggesting this would be the option, we would have to get the proper inputs, but one option which is allowed under the law is the filing of RAM. The law says that if it is not practical or if it is excessive in cost to meet the 2015 standard, then a utility could file for an of RAM. None have done so at this point and we certainly would not need to do so assuming we could move forward with the Rothschild of Domtar biomass project.

Last question on Domtar, how much is in the CapEx budget for '11? I think, you answered that question and it just went by me too quick.

About $100 million this year.

About $100 million this year?

$255 million.

Great. And my last question, on the under collection, the fuel under recoveries for the balance of this year, how do they flow over the remaining three quarters, understanding it's just about $16 million of financial exposure?

Right, we're about even now on fuel recovery going into Q2. Steve or Rick, do you have that flow for the final three quarters?

As Gale said, basically our cost of fuel was right on top of our collection rate in the first quarter. As Gale said, we expect to be $16 million. We expect to hit the threshold. If you look in the next couple of quarters, we expect to under recovering the second, but most of it would be in the third quarter. That's probably when we would exceed the $16 million amount and start to edge up toward the $20 million to $25 million that Gale mentioned. And then in the fourth quarter, we typically claw back some of that that we’ve lost in the third quarter because of the higher cost of power during the summer. So at the end of the year we expect to be in that $20 million to $25 million under collected, but we're capped at $16 million based on how the fuel rules work.

How much would be in that 36 to 39 you gave Rick for the second quarter, it’s probably pretty small number I know but…

Basically, on the fuel recoveries, we'll under collect anywhere from $5 million to $7 million in the second quarter and that amount is comparable to 2010. So we don't expect earnings varying in some 2010 to 2011 related to fuel in Q2.

Great, perfect, thank you so much.

Your next question comes from the line of Ted Heyn with Catapult.

I had a few quick questions, first on just on the under recoveries, so the $16 million represents basically the 2% bandwidth, the 16 is cap of the earnings exposure?

You've nailed it.

Just quickly on weather, how much above normal was at this quarter and how much does it contribute?

In terms of average temperatures Q1 was about 10% colder than last year and Steve how much colder than normal?

6%, colder than normal, last year it was 4% warmer than normal.

Do you have a dollar impact or gross margin impact from being above normal?

On electric side we think that compared to normal our electric margins which is revenues minus fuel were helped by about $7 million and on the gas side, our gas margins were held at about $8 million, so in total about $15 million.

So, 15 ahead but you also have the 16 of fuel under recovery so kind of net-net on a normalized basis you are kind of…

No. The 16 of fuel under recovery was already in our guidance

We fully collected on fuel this quarter. That 16 actually fell through till third quarter.

I guess I was thinking as when I do a bridge from '11 to '12 those two things should wash each other out?

Yes from '11 and '12, yes exactly.

And then on the Domtar, the filing mentioned that they increased their capital allocation by $22 million. Does that change the amount of dollars you would spend or is that…..

No. All it does and again you need to think about this as about $255 million capital investment and then the questions becomes what share of the cost of that investment and what share of the operating costs would be allocated to Domtar for taking the steam for their paper mill operations and what share would go to electric customers for the renewable electricity that would go to the grid? This is all a question about allocation of the total cost not about change of total cost.

So, if your revised proposal was approved, the spend would still be $255 million?

You got it.

It's just the rate that they pay for the steam.

It's just the rate. And then just finally I think, that there is some movement to try to change the RPS standard to allow hydropower for Manitoba to potentially count. If that were to happen could you talk maybe about how – what the investment opportunities would be for you there?

I'm not sure there is an investment opportunity there in terms of that change or any Wisconsin utility because what is being proposed is particularly if I want other Wisconsin utilities is that, in essence they would sign a purchase power agreement for new hydro power that would be developed in Canada to be imported into Wisconsin. So, there is no real construction investment opportunity there for the hydropower itself, but as Rick is pointing out, there may be a transmission in this.

Okay. So, maybe ATC would have some opportunity?

That is entirely possible.

But that’s probably longer term in nature.

Ted, I would be thinking this is a post 2015 type of matter, because first of all the new hydro facilities aren’t even built yet.

Got you. Okay. Thanks a lot for all the help.

Thank you, Take care, Ted.

You too. Bye-bye.

Your next question comes from the line of Sarah Akers with Wells Fargo.

Hey, good afternoon. I just had a quick clarification question on the $600 million of free cash flow. First, does that include the sale proceeds from Edgewater 5 and second, does it include the impact of the DOE settlement, which I believe was about $45 million?

Yes and no. It includes the Edgewater 5 sale proceeds, but the proceeds from our settlement with the federal government regarding the extra cost we incurred at Point Beach on spent nuclear fuel, those dollars are in an Al Gore lock-box down the street in a bank and those dollars will be completely returned to customers overtime, and so they’re not counted in our cash flow assumptions.

Got it, okay, thank you very much.

You’re welcome, Sarah.

Your next question comes from the line of Dan Jenkins with State of Wisconsin Investment Board.

Hi, good afternoon. Just to follow-up on what you just talked about with further, so is that the $45 million of restricted cash then that we're seeing on the balance sheet?

Yes, $45 million.

And then lower on the balance sheet, I noticed the material supplies inventories are about $100 million lower which I assume it’s also been part of the working capital gain that we're seeing on the cash flow statement. I just wondered if you could talk about what is going on with that.

Yes, its gas and coal inventories that Steve can talk about that.

Yes, the balance sheet is comparing December 31st to March 31st and at the end of December we had a significant amount of gas in storage and we pulled that out at the end of the year. So, we had the same decline last year. The number this year is about $50 million more because March was significantly coldish so we would show more in gas and storage. In addition we were able to reduce coal inventories down and so those are the two big drivers.

Is there anything else then that's driving that working capital gain $150 million on the cash flow statement?

Well, the balance depreciation is having an effect on that Dan.

Yes, the increase in the deferred taxes.

Yes.

Was that 60 odd million you see?

Yes

And then I think, you mentioned you're expecting to file for a rate increase in the next month or so.

That is correct.

I was curious what your current ROE, earned ROE is and then are there any other items driving that, that you expect that'll drive that request beyond ROE impact?

Well, for all of 2010, our earned ROE was very close to the allowed ROE at the utility. So, again, we performed very close to the allowed ROE at the utility last year. Of course, the way Wisconsin regulation works, the Commission uses and ask us to file a two-year forward-looking test year. We project our expenses, our O&M expense, our fuel expenses, our capital costs for, in this case, 2012 and 2013. The big driver of the rate proposal that we will file is really completing construction and placing into service about $1.2 billion of new assets that have already been approved by the Commission. In specific, the two large projects that would be the big drivers would be the completion of the air quality controls of the older existing Oak Creek units. Remember, I mentioned that's a $900 million capital expenditure, and then the completion later this year we believe of the Glacier Hills Wind Park, which is another $360-ish million.

$360 million and $370 million.

You put those two together and that's $1.2 billion of new capital that once placed into service needs to be reflected in customer rates. So that would be the big driver of our rate proposal that we expect to file in the next few weeks.

And then the last thing I was curious is, it looks like the residential usage was up about 1.5% and the small commercial was up about 2.5%. If you strip out the weather impact, what would those have looked like?

You strip out the weather impact, against 20-year average weather, you would see residential actually being down slightly. You would see small commercial and industrial up about 0.5%. You would see large commercial and industrial about flat, and total large commercial and industrial up about four-tenth of one percent.

Dan, one other thing, on the $45 million that restricted cash in the DoD settlement that would be returned to customers net of the cost to achieve. That was about a 10-year process where we were suing the federal government. So, there are costs associated with that. So, just point of clarification.

What's the timeframe for returning there?

Actually, it's certainly up to the Commission when they would like to have and over what timeframe they would like to have those dollars flow back to customers, but we will propose an option for the Commission in the (inaudible) filing.

Okay, thank you.

You’re more than welcome, Dan.

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

Hey, guys, Rick, a modeling question real quickly. What is left in 2011 in terms of deferred income tax or really bonus depreciation for you to take and even deferred income taxes separate from bonus depreciation, meaning the deferred income tax benefit you get from Oak Creek?

We said all along we’ve got about $100 million worth of bonus depreciation impacts in 2011.

Most of that's to come this year yet.

Meaning very little of that is what showed in the first quarter?

About $60 million showed in the first quarter I believe.

So, another $40 million for the rest of the year?

All right, Michael, thank you.

Thanks, guys. Much appreciate it.

You’re more than welcome.

At this time, there are no further questions.