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Wisconsin Energy Corp. (NYSE:WEC)

Q4 2008 Earnings Call

February 03, 2009; 02:00 pm ET

Executives

Gale Klappa - Chairman of the Board, President & Chief Executive Officer

Allen Leverett - Chief Financial Officer

Rick Kuester - President & Chief Executive Officer of Regeneration

James Fleming - Executive Vice President, General Counsel

Jeff West - Treasurer

Steve Dickson - Controller

Analysts

Greg Gordon - Citi Investment Research

Ted Hine - Catapult

Michael Lapides - Goldman Sachs

Reza Hatefi - Unidentified Company

Paul Ridzon - KeyBanc

Steve Gambuza - Longbow Capital

Nathan Judge - Atlantic Equities

Dan Jenkins - State of Wisconsin

Operator

Thank you for holding ladies and gentlemen and welcome to Wisconsin Energy’s conference call to review 2008 year-end results. This conference is being recorded to rebroadcast and all participants are in a listen-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 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 2008 year-end results at www.wisconsinenergy.com. A replay of our remarks will be available approximately two hours after the conclusion of this call.

Now, I would like to introduce Mr. Gale Klappa Chairman of the Board, President and Chief Executive Officer of Wisconsin Energy Corporation.

Gale Klappa

Carlene, thank you very much. Good afternoon everyone. We appreciate you joining us on our conference call to review the company’s 2008 year-end results. Before we proceed with our normal format, let me just mention one very quick thing that some of you may have heard on the news within the last two hours. Apparently at about 11 O’clock this morning, we had an explosion in the coal handling area of the Oak Creek Power Plant.

Now, this area is where the coal trains are unloaded. The facilities are new, but the facilities are operational, so not under construction. We had contract workers in making some repairs in that area and apparently this is an area where coal dust can build up and apparently we had an explosion. From what we’ve learned so far from the site, there are approximately five injuries, we believe that four maybe critical.

The situation at the site is stabilized, the plants are continuing to operate the existing Oak Creek units are continuing to operate. This area is relatively far away from the power block of the new constructions for the two new units, but we wanted to make you aware of the incident that occurred at about 11 O’clock this morning.

Let me begin, our call 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 Regeneration; Allen Leverett, our Chief Financial Officer; Jim Fleming, General Counsel; Jeff West, our Treasurer and Steve Dickson, our Controller.

Allen, of course will review our financial results in detail in just a moment, but as you saw from our new release this morning, we’ve reported earnings per share from continuing operations of $3.03 for 2008, this compares with $2.84 a share for 2007. While we did see a decline in sales of electricity to our commercial and industrial customers because of the slowdown in the economy, our 2008 earnings were boosted by our power of the future investment in the newest generating unit at Port Washington, by the strong customer demand for natural gas during the cold winter months in 2008 and by effective cost controls across our business.

Overall, I’m very pleased with our performance. With customer satisfactions and network reliability to progress on our power of the future plan, the company made great strides during the year and in a tough economy, we posted solid financial results.

Now I’d like to touch briefly on the impact of the economic climate is having on our service area. Generally, our region has a well-diversified industrial and commercial base, which tends to help mitigate the impact of economic downturns. However, in this economy, we’re seeing three sectors that have been dramatically affected, primary metals such as foundries and specialty steel companies, automotive and automotive part production and paper production led by declines of these three sectors, our electricity sales to large commercial and industrial customers declined by 9% in the fourth quarter, as compared with fourth quarter of 2007.

At this point though, based on what we’ve seen in January, we don’t see a need to modify our 2009 sales forecast that we provided you in December. As you would expect, we’re also seeing a slight increase in past due receivables. You may remember; that we currently have some protection in Wisconsin, because we use escrow accounting for any residential bad debt above the level currently collected in rates. We’re actively monitoring also our past due accounts and we’re working with customers on payment plans. On a more positive note, we expect to see at least a 10% increase in state and federal energy assistance dollars for our residential customers this year.

Now, I’ll spend just a moment on our continuing effort to upgrade the energy infrastructure in Wisconsin. Our power of the future plan is fundamental with the principal of energy self sufficiency. Key components of our focus on self sufficiency, include investing in two combined cycle gas-fire units in 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.

As we’ve discussed on previous calls, all units at Port Washington in our complete and in service. Instructions was finished on time and on budget, the units are among the most efficient in the Midwest market, they are operating well and our customers are now benefiting from the low price of natural gas that fuel these units.

Let me turn now to the status of the two new coal-fired units at Oak Creek. As you may recall in last summer, we have the two other owners of the expansion units at Oak Creek reached an agreement with Clean Wisconsin and Sierra Club. The groups that had been actively opposing a water intake permit for the plant.

Under the settlement agreement, the environmental groups withdrew their opposition, just brought to a close the ongoing litigation and administrative challenges to the permit. Few months later, the deadline past for any appeals of the water intake permit, so all litigation matters regarding the permits of the Oak Creek expansion are resolved.

On the construction front, based on Bechtel’s revised schedule Unit 1 and the common facilities were at 85% complete at the end of December and Unit 2 was approximately 37% complete. Bechtel continues to target commercial operation of Unit 1 by the end of this year, by the end of 2009 and Unit 2 by the end of August of 2010. Progress this winter has improved versus last winter, in part because many of the critical buildings are enclosed and largely projected from the weather.

Progress on Unit 1 is gradually shifting now from constructions to commissioning. In fact, the numbers of the systems are already in start-up phase and I’m really pleased to report that the cooling water intake system was placed in the commercial services just few days ago on January 18. This means we’re drawing water through the tunnel supplying it to the four existing units of Oak Creek site.

Of course the tunnel will also supply cooling water to the new units when they go operational. Since our last call, we’ve also successfully unloaded limestone at the site using the newly build dock equipment and storage facilities. We’ve also taken delivery of our first train load of the two unit’s coal, which will be used to commission the new units.

Most time critical activities remain in the power block at the Oak Creek, it was also focused on completing the air quality control equipment and the duct work to allow first fire-on-gas to occur this summer. We’re also working on the air, water, chemical and lubrication systems of our essential to be operation of the plant. Despite the schedule delay, we’re pleased with the progress being made at the site.

Of course, as we told you on December, Bechtel filed a formal claim seeking relief under the contract. Bechtel deciding a number of factors that they believe have caused a change in the schedule. The factors include weather conditions in the two most recent winters, heavy rains this past spring and what Bechtel believes to be changes in local labor conditions. The claims for schedule and cost relief related to these factors totaled $413 million. Bechtel also stated its belief that the weather events constitute a force majeure.

Now, we don’t believe there is a contractual basis for some of the claims that Bechtel has submitted. For example, we disagree that Bechtel is entitled to either cost or schedule relief as a result of the alleged changes in the local labor market. Bechtel also filed a $72 million claim for the alleged effects of changes and delays prior to the issuance of the full notice to proceed with construction in July of 2005. We believe this claim is without merit and as Bechtel was fully compensated for any and all impacts of the delayed start.

Finally, Bechtel have asked for six months of relief from liquidated damages, beyond the September 29, 2009 guarantee date for Unit 1 and the three months of relief from liquidated damages beyond the September 29, 2010 date for Unit 2. We’re reviewing the claims; we’ve asked Bechtel for additional information. We expect the claims to be a resolved through the contracts formal dispute resolution process. If we’re not able to reach agreement in non-binding mediation, we will move to binding arbitration, which is called for under the contract.

Now, as we assess these developments, I believe there are several key points to keep in mind; first, we’re still recovering carrying costs associated with the construction of these units. So, under the terms of the lease agreements, between Wisconsin Electric and W.E. Power, we are recovering based on a mix of debt and equity, our capital carrying costs as construction continues on the Oak Creek Project. We’re allowed to recover our carrying costs up to the total budget for the project, that’s been approved by Wisconsin Commission.

So we believe our ability to recover cash carrying costs should be largely unaffected by the slight in the construction schedule. I would also like repeat the point I made last fall, about the ultimate recovery of any potential cost increases. We believe that we have several important layers of protection for recovery of our costs. For example, to conclude that an additional cost is not ultimately recoverable, we would have to believe that the cost will not qualify for recovery under at least four opportunities.

First, that the remaining contingency in the project is not sufficient to offset the cost. Second; that the cost would fall outside the 5% band that that the commission has deemed as reasonable or prudent costs above the approved amount for the project. Third; that the cost was not caused by a force majeure event as defined by the lease agreements. And finally, after an opportunity to demonstrate prudency that the costs would be ultimately deemed to be improved.

One more important point, liquidated damaged payments will be due from Bechtel on Unit 1, unless it is determined at any days that maybe granted for weather release, equal or exceed the delays in the schedule. As we move forward, we will continue to provide updates to you on any major developments with the claims through our SEC filings and on our regularly scheduled calls.

I’ll turn now to the subject of renewables. The state of Wisconsin as you will recall has enacted a renewable portfolio standard that increases from 5% in 2010 to 10% in 2015 at a statewide level. The standards sets targets for each of the utilities using an historical baseline, using that baseline approximately 8.5% of our retail electricity sales must come from renewable sources in the year 2015.

Meeting the aggressive 2015 targets will require several additional projects. Of course, with the completion of our Blue Sky Green Field Wind Farm in 2008, we took a major step toward meeting Wisconsin’s goal to reduce its carbon footprints, with a total of 88 turbines, each with a capacity of 1.65 megawatts. Blue Sky Green Field is the largest wind farm to-date in Wisconsin. It was completed last year under budget and ahead of schedule.

To continue on a path of carbon reduction, we exercised an option with FPL Energy and acquired in excellent wind site in East Central Wisconsin in Colombia County. In October of last year, we filed for our approval to build our newest wind project, which is called the Glacier Hills Wind Park. The public service commission deemed our application to be complete just a few days ago on January 27. So, the commission’s 180-day review period has now begun.

The site can accommodate between roughly 130 and 200 megawatts of new capacity, depending on the final layout and the turbine equipment that we select. The first full-year of operation for Glacier Hills is expected to be 2012 and just a reminder of that construction is also underway on a major upgrade of the air quality control of the existing coal-fired units at Oak Creek. We expect the cost of this facility will be roughly $885 million including allowance for funds used during construction with the instillation of wet flue gas de-sulfurization and selected catalytic reduction facilities. These controls should be completed in 2012.

As we look ahead, we expect to file a general rate case on our normal cycle for our Wisconsin Electric and Wisconsin Gas utilities in the first half of this year. The rate cases as you recall in Wisconsin are based on forward-looking test periods. Hearings should take place this fall and we would expect that new retail rates would go into effect in January of 2010.

Finally last December, our Board of Directors approved a new dividend policy for Wisconsin Energy’s common stock. Our new policy as you recall provides for an annual dividend of $1.35 a share in 2009, which is a 25% increase over the dividend in 2008. Our policy also targets a dividend pay out ratio of 40% to 45% of earnings in each year from 2009 through 2011 and 45% to 50% after 2011. The first quarterly dividend for 2009, which was declared by our Board a few days ago will be payable on March 2, at a rate of $33.75 a share.

Now I will turn the call over to Allen, who will give you more details on our financial performance for 2008. Allen.

Allen Leverett

Thank you, Gale. As Gale mentioned earlier, our 2008 year-end earnings from continuing operations were $3.03 per share. I will focus on operating income by segment and then touch on other income statement items. I will also discuss cash flows for the year and discuss our earnings guidance for 2009. Now, you may want to refer to page seven of the earnings package as I make my remarks.

Our consolidated operating income in 2008 was $661 million as compared to $629 million in 2007 or an increase of $32 million. Operating income in our utility energy segment totaled $582 million, a decrease of $4 million versus the last year. Before I discuss the primary drivers, I would like to remind you of a couple developments that caused significant changes in individual items in the income statement.

First, in September of 2007 we sold our Point Beach Nuclear Plant and entered into a long-term power purchase agreement with the new owner. Since, we no longer own Point Beach, our results in 2008 did not include operating or maintenance costs related to this facility nor did we incur any depreciation of the commissioning costs associated with plant. Of course, our fuel and purchase power cost increased as a result of the power purchase agreement we now have.

Our income statement in 2008 reflected $488 million related to the amortization of the gain on the Point Beach sale. The amortization included a one-time refund of $62.5 million to our wholesale customers, a one-time amortization of $85 million offsets certain regulatory assets and the balance related to bill credits that were provided to our Wisconsin Electric retail customers in Wisconsin and Michigan.

I would like to briefly expand on this item. The January 2008, Wisconsin rate order resulted in about a 17% increase electric rates. This increase was needed to recover higher costs associated with transmission expense and environmental expenditures as well as the lease payments in O&M costs associated with our new power plants and our continued investment in renewables.

However, our customers as a group saw only about a 3% rate increase in 2008 rate order, as the balances is being funded through bill credits from the gain on the sale of Point Beach. In 2009, we expect the bill credits will total approximately $242 million. While we look at the bill credits as a form of revenue, GAAP requires us to report the bill credits as part of the amortization of the gain, because we’re collecting the cash from the restricted cash accounts and not from customers. As we have previously discussed, once all the Point Beach gain has been returned to customers, the full 17% increase will be paid by customers and at that point reflected in operating revenues.

With this as background, I would like to address the primary drivers in our utility operating income for 2008. First, price increases to our retail and wholesale customers resulted in $165 million increase in revenues. The conversion of the Point Beach Nuclear Plant for being an asset owned by Wisconsin Electric to an owned by FPL Energy with an associated power purchase agreement, reduced operating income $116 million.

Additional planned operations and maintenance expenses at our power plants decreased operating income $37 million. All other factors in this segment reduced operating income to net $16 million. Operating income in the non-utility energy segment, which primarily includes We Power, was up $41 million. The key drivers of this increase were a full years earnings contribution from the new coal handling facility at the Oak Creek expansion, which was placed into service in October of 2007 at a cost of approximately $175 million and a partial year of earnings contribution from Unit 2 at Port Washington, which was placed into service in May of 2008.

Corporate and other affiliates had an operating loss of $10 million in 2008, compared to an operating loss of $5 million from 2007. This decrease was primarily related to reduce real estate sales during 2008. In the future, we project to have only slight operating losses in this area, as we expect to have minimal business operations in this segment. Taking the changes for each of these segments together brings you back to the $32 million increase in operating income for 2009.

During 2008, earnings from our investment in the American Transmission Company decreased $9 million. Other income declined $33 million because of lower carrying costs on regulatory assets. These regulatory assets are now component of rate base, so the carrying costs are included in revenues rather than other income.

Total interest expense was down $14 million; although we do have higher gross interest expense because of increased debt levels associated with our construction programs. Our gross interest expense was reduced by lower short-term interest rates and higher capitalized interest.

Consolidated income tax expense increased by approximately $1 million because of higher pretax earnings. Our effective tax rate for 2008 was 37.7%, compared to 39.1% last year.

I expect that our effective tax rate in 2009 will be between 35% and 37%. Combining all of these items brings you to $358.6 million of net income from continuing operations for 2008 for earnings of $3.03 per share.

During 2008, we generated $737 million of cash from operations on a GAAP basis, which is up $205 million from the same period in 2007. This increase was primarily driven by higher cash earnings as a result of better recovery of regulatory assets and reduced cash taxes. On an adjusted basis, our cash from operations totaled $1.82 billion. The adjusted number includes the $345 million of cash impact from the bill credits and the one-time amortization of the gain.

Under GAAP, the cash from the bill credits is reflected in the change in restricted cash, which GAAP defines as an investing activity, but from a management standpoint, we consider this as a source of cash as it directly relates to the bill credits and the one-time amortization. We plan to provide both GAAP and adjusted measures of cash flow as long as the bill credits continue.

We believe the adjusted measure is more representative of the company’s ability to generate cash from operations for two reasons. First, the customer credits are being funded from the proceeds of the Point Beach sale that are set aside in a restricted cash account and second, once all of the Point Beach proceeds have been returned to customers, our prices and hence customer bills will reflect the full cost of electricity without any credits.

During 2008, we completed nearly $1 billion in long-term debt financings. The proceeds were used to provide long-term financing for Port Washington Unit 2, as well as to reduce short-term debt balance into both Wisconsin Energy and the operating companies. These offerings largely mitigate the need for long-term debt offerings in 2009, and allowed us to fund a $289 million contribution for our pension plans and other post employment benefit trusts in January of this year.

Looking to 2010, we expect to complete nearly $900 million in long-term financing in We Power in connection with the completion of the new units at Oak Creek. On a consolidated basis, we have approximately $1.6 billion of available undrawn credit facilities that expired in March and April of 2011. Our commercial paper balances at the end of 2008 were approximately $600 million on a consolidated basis.

This balance is well within the limits of our credit facilities. The Commercial Paper at the Wisconsin Energy level is primarily being used to provide construction financing for the Oak Creek Units, while the Commercial Paper at the operating utilities is used to provide working capital.

Now I would like to move on to a discussion of capital expenditures in 2008. Our total capital expenditures were approximately $1.1 billion in 2008, about $607 million of this was dedicated to our utility businesses and $529 million was from generating units being constructed as part of our Power the Future plan.

In 2009, we expect to spend between $825 million and $875 million of capital to support our Power the Future construction program, additional wind generation and ongoing utility infrastructure improvements. At the $825 million level, we will about $10 million below our previous forecast of 2009 capital spending. We also paid $126 million in common dividends in 2008.

On a GAAP basis, our debt-to-capital ratio was 58.5% as of December 31 and we were at 55.4% on an adjusted basis. This is essentially flat compared to our December 31, 2007 levels of 58.6% and 55.3% adjusted. The adjusted amounts treat half of our $500 million in hybrid securities as common equity, which is the approach used by the majority in the rating agencies.

I would expect our debt-to-capital ratio to increase slightly as of December 31, 2009 as compared to December 31, 2008. Our goal remains to maintain our adjusted debt-to-capital ratio at no more than 60% during the period we’re constructing our new coal-fired generation. We’re using cash to satisfy any shares required for our 401(k) plan, options and other programs. Going forward, we do not expect to issue any additional shares.

As we discussed on our last conference call, given market returns in 2008, we expected to make significant contributions to the trust that find our pension and other post employment benefits. I expect that our FAS 87 pension expense will be about $22 million, which is roughly the level as compared to last year.

Now, I would like to wrap things up with the discussion of earnings guidance for 2009, as well as the first quarter. Our 2009 earnings guidance remains in the range of $3.5 to $3.15 per share that was provided in our press release last December. We expect the primary earnings drivers in 2009 to be as follows. A negative impact of the downturn in the economy, continued implementation of our Power the Future plan, including a full-year earnings contribution from the second unit at Port Washington and the water system at Oak Creek and an increased earnings contribution from our investment in ATC.

The full-year earnings contribution from the second unit at Port Washington and water system at Oak Creek should add $0.11 per share. I estimate that the downturn in the economy will reduce earnings about $0.15 per share net of the O&M actions we have taken in response. An increase in the earnings contribution from ATC and other small items should add a total of $0.06 per share. Combining these factors brings you to a year-over-year increase of $0.02 per share. So, staring at $3.03 per share in 2008 plus $0.02 brings you the low end of our $3.5 to $3.15 guidance range for 2009.

You will note that I did not mention electric fuel cost recovery as a variable driving our estimated range of earnings this year. At this point, our expectation is that we will be in a fully recovered position in 2009, which is where we ended up in 2008. Essentially, the increase in the cost of coal is expected to be offset by the substantial drop in natural gas and diesel fuel prices that have occurred in the past few months.

We expect a total earnings contribution of $0.39 per share from our Power the Future program in 2009. This includes a full calendar year contribution from the two units at Port Washington as well as the water and coal handling systems at Oak Creek. We will not be giving specific quarterly earning guidance, but consistent with our past practice, I will provide you some input on what we expect in terms of the distribution of earnings within the year.

As we discussed in the past, our fuel recoveries have a significant impact on our quarterly earnings. Last year, we were in under-collected position in the first quarter and in July. We received relief for higher rates to cover the increased fuel costs. During 2009, we expect to be in an over-collected position for the first quarter because of the significant decline in natural gas prices.

In addition to 2008, we did not receive the benefit of earnings on our Port Washington unit until it went into service at May of 2008. This year we will benefit from earnings in all four quarters. So, with that I will turn the things back over to Gale.

Gale Klappa

Allen, thank you very much. As you can tell from report we had a very solid year both operationally and financially. We are on track and focused on delivering value for our customers and our stockholders.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Greg Gordon - Citi Investment Research

Greg Gordon - Citi Investment Research

When I try to think about the rate filling that you are going to make in the first half of this year, you use a forward test here, correct?

Gale Klappa

It would be a two-year forward-looking test year.

Greg Gordon – Citi Investment Research

So we’ll be looking at sort of 2010 average rate base.

Gale Klappa

Well again, two-year forward-looking test years, so we would look at 2010 and 2011 at 2010 and 2011 rate base.

Greg Gordon – Citi Investment Research

Great and rate base includes, CapEx minus depreciation obviously, but plus does that also include any dollars that you put into the pension including that $289 million you put in January?

Gale Klappa

It’s meant to include the total capitalization of the company, Greg. So, to the extent that you invest in working capital, your inventories all that, a whole range of things to drive capitalization get included in the rate making formula.

Greg Gordon - Citi Investment Research

The point being that is, it’s seen as funds on which you ought to be allowed to recoup your investment?

Gale Klappa

That’s right.

Rick Kuester

It seen as part of the capital base of the company, that’s right.

Greg Gordon - Citi Investment Research

Okay, I just wanted to make sure. Looking at where interest rates and equity risk premiums have gone over the last year, would it be your expectation that you be requesting a the higher return on equity in the case, same lower and how are you thinking about positioning for the case?

Gale Klappa

Greg, candidly, I don’t think we would be asking for a higher return on equity than we’re currently allowed. In part, I think we have to be in the commission would expect us to be sensitive to the economic climate. So, my sense is that at this stage of the game, again we haven’t put all the final pieces together yet for the filing, because that wont take place for a number of bunch yet.

My sense is, we would stay at a request of a 1075 return on equity and that the big driver actually and if you look at where we’re at, about 83% of all the Power the Future costs are already reflected in rate decisions of the commission has already made. So, one of the drivers for this upcoming case, as we know bring these units into services will be the remaining carrying costs on our Power the Future investment, but I think you will see based on all of the things we’re doing in the company. I think you’ll see a pretty modest rate increase request.

Greg Gordon - Citi Investment Research

Great and when did the Bill credits associated with the nuclear asset sale roll off?

Gale Klappa

Periodically, they would roll off in 2011

Greg Gordon - Citi Investment Research

So, there is another year of them and to the…

Gale Klappa

About a full-year of them, no question about that.

Operator

Your next question comes from Steve Fleishman - Catapult.

Ted Hine - Catapult

It’s actually Ted Hine. I just have a quick question. I think, Allen mentioned that the fuel recoveries, but also just on weather. Could you give us a feeling a sense of where you stand on at the end of ‘08 on actual benefits or hurt from weather and also on fuel recoveries?

Allen Leverett

Weather, Ted was almost a neutral, if you combine gas and electric together, cooling degree days were down in 2008 versus 2007. So, we had a cooler than normal summer, but then of course also a cooler than normal January and December of 2008. So, when you combine the two factors at a consolidated level, almost a neutral impact of weather.

Gale Klappa

Actually my wife says we had no summer, on this ride and just to break that down for Q4, we had a, a very cold December of 2008 very cold. In fact, based on the heating degree days, it was the second coldest December in about 19 years and our customers in December used 13% more natural gas than they did in December of 2007. So, Allen is actually right. Basically, our earnings were hurt by the cool summer, but it got cold in a hurry, but never warmed up, but it got cold in a hurry and really we had very, very strong consumer demand for natural gas in the fourth quarter and in particularly in December.

Allen Leverett

And in terms of fuel recovery Ted, I think you also were asking that question. For the year as a whole, at least as viewed by the shareholders were neutral on fuel recovery, and then we made a filing with the commission actually to refund approximately $8.5 million to customers associated with fuel recovery in 2008. So, shareholder fully recovered and I would say that customers will receive somewhere in the order of $8.5 million in refunds.

Gale Klappa

And that would be a one-time bill credit we would expect for the commission would act pretty quickly, probably have a one-time bill credits to customers in the range Allen talked about in February or early March.

Ted Hine - Catapult

And then just one last question on the fuel recovery. What was the actual under recovery, when we’re looking at the first quarter trying to do our earnings estimates for that? What was the actual under recovery in the first quarter of last year?

Allen Leverett

It’s about $15 million under recovered in the first quarter of ‘08.

Operator

Your next question comes from Michael Lapides – Goldman Sachs.

Michael Lapides – Goldman Sachs

Hi, guys really two questions a little bit separate from each other. First of all, Allen when we think about major construction projects post Power the Future, I mean if you’ve got the South Oak Creek environmental retrofits and you have got the second winds plant construction? Can you talk a little bit about how much of the materials, the labor, the ENC contract. How much of that’s locked down versus how much is kind of open price change?

Gale Klappa

First of all on Oak Creek, what we call ourselves Oak Creek air quality control project. The commission is already approved that is under construction, engineering is almost complete and we have locked down virtually all of the costs. All the major equipment has been procured and as Rick is pointing out, the steel is also locked down in terms of the price and procurement.

So, not much variability that we would expect other than we need to get appropriate labor productivity, but we are pretty well fixed in terms of the procurement and the costs related to the air quality controls at Oak Creek. Now on the other hand, Michael the Glacier Hills Wind project is in the earliest stages of review by the commission. So, we have not locked in any pricing as of yet.

Michael Lapides - Goldman Sachs

Okay, so if the cost of wind turbines just kind of moving your way a little bit you’ll be able to be capture. Your customers will capture the benefit of the lower facility; it might have a slight impact on your forward rate base there.

Gale Klappa

That is absolutely correct.

Michael Lapides – Goldman Sachs

Okay.

Gale Klappa

The potential size of this wind farm, you could see that the investment cost of that wind farm being easily $500 million.

Michael Lapides - Goldman Sachs

Right, understood, I mean what’s the in-service date needed?

Gale Klappa

We would want to bring Glacier Hills Wind during 2012.

Michael Lapides - Goldman Sachs

All 500 megawatts?

Gale Klappa

Preferably, actually at the end of 2011, so we’d have a full-year of service in 2012.

Michael Lapides - Goldman Sachs

I’m sorry, I missed that. So, if it’s 500 megawatts breaking ground late this year?

Gale Klappa

200 at the upper end about 200 megawatts and projecting around the cost of the fact size wind farm roughly $0.5 billion and then we would assuming the commission gives that go ahead in the timely fashion. We would strive to bring it in right of end of 2011, for our full-year of service in 2012.

Michael Lapides - Goldman Sachs

Right because that gets you though to the, what is that I think the 8% required renewable portfolio outstanding?

Gale Klappa

Michael it doesn’t. It would get us with the other things we have in mind about 65% of the way there. We are also going to propose not in the next few months, but as we move forward and as actually as the renewable portfolio standard become clear, we’re going to propose adding some modest amount of slower and perhaps a 50 megawatts biomass land and then we’ll look and see where we are, but Glacier Hills does not get us to where we need to be by 2015. I think what we have on the table we can see how they get 65% of the way there.

Michael Lapides - Goldman Sachs

Got it, last item just on the pension contribution, Allen, can you state what the pension contribution was you made January and more importantly what you expect to make over the next one or two years?

Allen Leverett

Yes, the total contribution Michael was $290 million, $270 million of that, $290 million was for the pension trusts to fund the qualified pension benefits and then the remaining $20 million was for other post employment benefits, not related to pension, so things like retiree medical. Sitting here today, I can’t predict, today Michael what market returns if any will look like in 2009, but at this point, I wouldn’t expect to be making contributions in 2010 or ‘11. So, we will see what market returns are like this year.

Michael Lapides - Goldman Sachs

Michael, I was looking forward to the Hard Rock in Vegas, but I think its going to be conference room in New York.

Michael Lapides – Goldman Sachs

You know third year in a row for the conference room in New York. I think I’ll tell you when I meet you for golf in Vegas one day.

Operator

Your next question comes from Reza Hatefi – [Unidentified Company].

Reza Hatefi - Unidentified Company.

Allen, you were mentioning some of the economic issues being offset by O&M cuts, could you quantify O&M increase or decrease year-over-year from 2008 to ‘09?

Allen Leverett

I would expect in terms of overall O&M. So, just take regulatory amortization, so the side rates you just look at what I would view as controllable O&M in the business. We see that being essentially flat. In fact, it might actually be down slightly in 2009 as compared to 2008. So, when I talked about the net $0.15 per share negative impact, I’m already netting out of that, originally what we might have expected to be some O&M increases, which now we’re not going to see those increases.

Gale Klappa

Reza two things, we have done which we haven’t discussed on the call, but we’ve talked about elsewhere. We have frozen officer salaries for 2009 and we have also put in place of limited hiring policy. We will not be replacing any non-critical positions and not hiring additional people other than what are needed for the Power the Future investments.

We obviously need to train operations people and maintenance folks for the new Power the Future assets that are coming online. So, clearly we will be hiring in that area, but only operations critical positions will be replaced. So, pretty much a limited hiring freeze and the freeze in officer salaries in a lot of other of very intelligent cost reductions that we don’t believe will affect operational performance, but we’re taking a very hard look as are all companies and what we absolutely must spend in ‘09.

Reza Hatefi - Unidentified Company

Okay and pension I’m sorry, I missed that number. What is it, how much higher is it in ‘09 versus 2008?

Gale Klappa

That the FAS 87 expense is actually above level, I would expect at about $22 million. So, the $22 million away and I would say about $22 million in 2009, again that the FAS 87 expense.

Reza Hatefi - Unidentified Company

Okay, is the expected online time of the Oak Creek plant still the same as your previous guidance?

Rick Kuester

At the moment, Bechtel is still focusing and targeting on year-end 2009 for Unit 1 at the end of August 2010 for Unit 2. We will know, they’re making good progress, we will know a lot more is in terms of a specific in service dates. As we come out of this spring and get into early summer.

There are number of milestones that they are targeting to meet and we’ll have a much better feel probably by the end of June, but real likelihood of making me undergone ‘09, but I will say this in fact Rick and I, we’re talking about this just a few minutes ago and that progress has been made nowhere, the book-ends are reasonably clear as to when we could expect the units to come online, but so far, that is Bechtel’s continuing target, they are working toward it.

Reza Hatefi - Unidentified Company

Okay Allen, you’ve mentioned I think $0.39 guidance for Power the Future for 2009. How much that is associated with the $0.39?

Allen Leverett

Well, that’s an after-tax consolidated contribution Reza, from the four factors that I’ve mentioned our full-year earnings from Port Washington one, full-year from Port two, as well as the earnings on the water handling system and the coal handling system. So, that all after tax consolidated basis after bottom line.

Reza Hatefi - Unidentified Company

At the top your head, I know you have the optionality of issuing debt as per the debt ratio and agreement, but then you could also issue some back leverage so to speak that. I’m just wondering within that $0.39 calculation what the total debt is?

Gale Klappa

Well, I think the reasonable working assumption is that you look our consolidated capital structure, which at this point at least there is roughly 45% equity if you treat half of the hybrids as equity and half as debt, 45% equity, 75% debt on a consolidated basis. So, to your report Reza, the differential in the debt between the subsidiaries in holding company. In fact that back leverage brings 45, 55 capital structure and so when I quote $0.39 of share its levered on that basis 55% debt.

Reza Hatefi - Unidentified Company

Do you recall what the power of future earnings were in ‘07 and ‘08.

Allen Leverett

2007 we only had one of the units at Port Washington, so each unit is on the order of $0.14 a share, so we probably have on the order of $0.14 share, Reza in 2007 and 2008 we would have half of years earnings from Port two, so add $0.07 or 14 gives you 21 and I believe we had about the 21 think about a nickel probably from the coal handling system so total with the $0.26 or 26, 27 somewhere in that range for 2008 and $0.11 to issue to 39 in the 2009

Operator

Your next question comes from Paul Ridzon - KeyBanc. Please state your question

Paul Ridzon – KeyBanc

Q4 guidance $0.72. I just wondering what the big drivers are that allowed $0.13.

Allen Leverett

We mention one thing we didn’t give fourth quarter guidance per se although we certainly back into we gave guidance for the year at 290 and one way to look at it essentially they were three positives that helped overcome the impact of the economy and lower electric sales and the positives are pretty simply one weather two weather three weather, no I am kidding. But, weather was a big factor as I mentioned earlier consumer demand for natural gas in December was off the charts.

We have 13% increase in natural gas send out in December compared to December of year ago so weather was a big driver obviously we have the earnings that Allen mentioned in the Q4 of ‘08 from the operation of second unit at Port Washington that was in Q4’07. We had good fuel recoveries in good control and those things together offset to decline in Energy sales particularly to our large commercial and industrial customers.

Yes, Paul the guidance that we gave early December with our press release when we reaffirmed the 290 that was based on I didn’t get have November results and as actually turned out; we had a pickup also in November from weather. So, just to reiterate what Gale is saying not only December weather, but we got a help from November weather better performance on O&M and then fuel also broke our way relative to the forecast that I had when we reaffirmed the guidance for the year early in December.

Paul Ridzon - KeyBanc

What happened to fuel in the fourth quarter?

Rick Kuester

Well, in terms of fuel in the fourth quarter the figure that I have, we were essentially neutral. If we take cumulative for the three quarters Q1, Q2 and Q3 together for 2008, we were essentially in a neutral position going into the fourth quarter and we at least from the shareholders standpoint, remained in a neutral position and in fact built up that roughly $8.5 million over the recover balance, which we expect to return to customers as Gale mentioned earlier in the hopefully on February.

Paul Ridzon - KeyBanc

But, you didn’t book that?

Rick Kuester

No, we didn’t book that, but again I took your question to be ones the differential between where you finally came in on the fourth quarter versus your financial plan or your forecast that you based your guidance on at December and honestly, when I did my guidance in December, I was still thinking that there was a chance that we could end up with under recovery.

Paul Ridzon - KeyBanc

You still thinking 0-20 under recovery then?

Rick Kuester

No, I would say, going into the fourth quarter it could have been a couple million dollars under recovery. I certainly wouldn’t have expected a big one, but we didn’t see that and in fact we were neutral from a shareholders standpoint, if I understand your question.

Paul Ridzon - KeyBanc

And for Q’07 you were under recovery, correct?

Rick Kuester

Let say, let me go back herein the forecast that were my recollection and my under recovery that I can see in ‘07 is about $36 million under recovery in the fourth quarter of ‘07.

Paul Ridzon - KeyBanc

Kind of you gave an earnings walk, but you got us to 305, but you reiterating 305 to 315 where do we see the upside opportunities?

Allen Leverett

Well, the reason that I would step and I’m sticking at the 305 to 315, if you look at the differential between the 290 and the 303, while as we discussed that’s driven big factor is weather. So, at this point at least although January was cold, there are a lot of months to go in the year, so I wouldn’t want to step out there and say that weather for the year is going to be net adder versus the financial plan.

Gale Klappa

Although, a lot of moving parts and we’re working on all of them. So, we feel we can get some more in the and as Allen said, we have a pretty good feel for how to get to the 305 and we are working on the moving parts to see what we can do beyond that.

Allen Leverett

Yes, and on sales, as Gale mentioned in the script. Sitting here today, we don’t see a need to change the sales forecast outlook that we put out there in December, but being very candid results were kind of mixed in January. So, we are not changing our sales forecast, but the results were somewhat mixed in January. So, I think that’s still might potentially be a downside force we will see.

Paul Ridzon – KeyBanc

Was there pending fuel legislation in Wisconsin, has that been resolved?

Gale Klappa

No, that has not yet been resolved. The Wisconsin Commission basically came to a conclusion that it changed in how the fuel recovery mechanism works in Wisconsin that any change in that mechanism would require legislative approval, and our latest understanding is that the commission and the governor will propose a legislative change sometime during 2009. Given the time it takes to get a bill through the legislature my guess is we will not see any change in the fuel rules for 2009. If there were to be change passed from the legislature probably would take effect to 2010.

Paul Ridzon – KeyBanc

Whatever they do I’m sure they are going to make it harder for us to figure out what’s going on into fuel because investors.

Gale Klappa

Well, wait the whole idea if there is a change would be make it more transparent and easier to administer. So, let’s hope you are on in that one.

Operator

Your next question comes from Steve Gambuza - Longbow Capital.

Steve Gambuza - Longbow Capital

Sorry if you went over this already, but would you mind just repeating what the kind of annual expiration of the Point Beach credits are in over the next three years to 2010, ‘11 or ‘12 just of I’m trying to sense for what kind of built-in rate increase is there?

Gale Klappa

Allen is looking for the specifics, we will not have. So, there is no plan for the Point Beach credits to go into 2012.

Steve Gambuza - Longbow Capital

Okay, so, it’s a roll-off in 2000, is there a roll-off in 2009 at all?

Gale Klappa

There is a step down

Steve Gambuza - Longbow Capital

Step down meaning great rates actually the customers see the smaller rate increase in 2009?

Gale Klappa

That’s correct and has seen a smaller rate increase. I think our, typical industrial customer probably saw in January about 1.3% to 1.5% rate increase, but to make a long story short and we will get you the numbers, the bill credits would step down in ‘09, step down again its 2010 there maybe some modest amount left in 2011 we will have to see.

Allen Leverett

Yes, if you look at retail. So, we are talking about Wisconsin and Michigan retail, It provided approximately $316 million in credits in 2008 and then in 2009, my expectation would be to provide roughly $240 million worth of credits. Again, to Wisconsin and Michigan retail.

I do want to clarify one thing, Gale is exactly right. We would expect Wisconsin credits unless the commission decides to do it differently, we would expect Wisconsin credits to run through 2010 and 2011. Now the Michigan commission decided to give credits over 18 months so, I believe those started in November of ‘07.

Gale Klappa

So they’ll roll off before 2011.

Allen Leverett

Right, they will roll off in early 2010.

Steve Gambuza - Longbow Capital

Do you have for the Wisconsin, what that kind of the 2009? I just want to trying to get sense for what the impact in 2010 will be relative to 2009 and Wisconsin from the roll off of credits?

Gale Klappa

I’m sorry, Steve, the impact on rates?

Steve Gambuza - Longbow Capital

The impact on Wisconsin retail customers in 2000, like how much credits roll off in 2010 versus 2009?

Gale Klappa

That’s easy, essentially for the retail customers as a whole would be about a 3% increase from the step down to the Bill credits in 2009.

Allen Leverett

Steve, on wholesale, those guys got their one-time credit in 2008. So there are no credits to come from wholesale.

Steve Gambuza - Longbow Capital

Okay, Gale, you commented on 2009, could you comment on 2010?

Gale Klappa

Regarding the price increase?

Steve Gambuza - Longbow Capital

Yes.

Gale Klappa

No, it would be roughly again based on data I have seen roughly another 3% rate increase.

Steve Gambuza - Longbow Capital

Okay, is it possible that giving the decline in power prices and coal prices and gas prices that essentially rate increase could be offset by just the decline in the curve?

Gale Klappa

Well, if we see 450 gas in weak coal markets, it is entirely possible, but there could be another fuel price decrease coming our way in ‘09 and yes, it could a major offset to that 3% increase that took effect in January of this year. So, I have very good question and the answer is yes.

Steve Gambuza - Longbow Capital

When will you file your fuel clause, are you making a filing for 2009 on your fuel and purchase power rates or?

Gale Klappa

No, Steve, the way it works is a fuel recovery rate is set and unless we trip the bandwidth if you will plus or minus 2% recovery on an annual basis. So, unless you are going to over recover your projected fuel cost by more than 2% of under recover by more than 2%. Basically, the rate stays in affect with one exception and that is we had a special agreement with our commission last year that if we over recovered last year we would refund and that’s what Allen has mentioned about an $8.5 million refund that we filed to be able to provide the customers and hope to do so, with very shortly here.

Steve Gambuza - Longbow Capital

Okay and then moving on to the sales work forecast. I take it you guys are in conversation with some of your large industrial customers, and given the trend you saw in the fourth quarter versus what you’ve guided to in terms of I think like 6% or so, decline in 2009. I guess it certainly implies some improvement or stabilization in the outlook during the year in 2009. Is that the case that’s what your customers are telling that you were kind of in the worst part of the decline right now and they expect to be using more power in the third or fourth quarter?

Allen Leverett

Well, based upon the interviews and just to be more specific, we have done interviews. I would say fairly structured interviews with roughly our top 100 customers and listening to what they’re saying, obviously they all have their own view and they’re in different sectors, but we would indicate that we would start to see a turnaround in electric sales into the third quarter of 2009, but of course, who knows if they are right or not, but if you look at what they’re telling us that certainly would imply.

And Steve, what were doing right now, I’m getting weekly reports, since we have pretty much automated meters on all large customers. We can poll that the meters on a weekly basis at least and it’s a blunt instrument, but try to at lest to get a snapshot of what’s going on with key customers.

So, that’s not to say that won’t get surprise, I mean we still may get surprised, but we are trying to get as much real time data we can to ascertain what’s going on and that’s certainly something that we will keep you all apprised of on our earnings calls, and one other Steve just to clarify what Gale was saying on the fuel, obviously we are filing a general rate case as he said and within the context of that general rate case, you will also file fuel information and you are filing all those work papers in the first half of this year, included with those work papers will be a forecast o fuel.

Steve Gambuza - Longbow Capital

Great, so I guess on that point Allen from if we continue to have kind of a week gas and power price outlook that it seems like your O&M is relatively stable, you are not really increasing the CapEx, that much versus the current run rate. So, the real moving pieces are fuel and these bill credits and so, it seems like if we get a nice tail and from fuel it could actually result in a headline amount that shouldn’t be that bad for customers? Is that a fair way to think about it?

Gale Klappa

Yes, I think that’s a very fair way to think about it and one other point that Allen was alluding to, I really think the visibility that our customers have about there future markets and future orders is very limited right now. It’s interesting to see and we’ve practiced Allen said a lot of our large customers, I have looked at four or five virtually every other day and in one instance, one of our largest customers who gave us their input and what they’ve thought their usage and production would be in late November ramped 12% above what they thought they were going to do in January.

In another instance, another large Wisconsin customer was dead on, but is now saying they’re not sure about February. So, I think that the visibility Steve is, just not great given where the economy is in the uncertainty, but I think the good news is, that the mixed results some better, some worse, but it came out in terms of what we were seeing for January for our largest customers on a composite basis about exactly where we thought it would.

Steve Gambuza - Longbow Capital

Finally, when will you file for the rate case?

Gale Klappa

Sometime in the first half of this year.

Operator

Your next question comes from Nathan Judge - Atlantic Equities.

Nathan Judge - Atlantic Equities

I wanted to just ask a question on the recovery of fuel. You’ve mentioned that in 2008, you agreed to give all over recovery back to customers. Is that the case in 2009 and if we have $4.50 gas will there potentially to be sent to shareholders? Or how does that work?

Gale Klappa

We had a special stipulation as you mentioned with the consumer groups and with the consumer groups and with the commission for 2008. The normal fuel rules will apply for 2009 and as I mentioned earlier, the normal fuel rules work off a bandwidth plus or minus your projected fuel recovery amount. So, depending upon how the fuel markets work and what our actual fuel costs are and actually it also what our actual MISO costs are in terms of purchase power. We will operate within that 2% bandwidth for 2009.

Nathan judge - Atlantic equities

Just as far as going back to your EPC contract to Bechtel and the negotiations going on there. Could you just give us an update on timing as you see at currently, I think you’ve mentioned some comments on the call, but could you be a bit more specific and give us more color on that, that will be appreciated, thank you.

Gale Klappa

We’ve covered in the early remarks, obviously the fact that Bechtel filed basically two major claims in late December and there is a very specific process laid out in the contract to resolve any disputes and essentially, if mediation and management discussions don’t work, then the contract calls to move to binding arbitration.

We’re in the discussion mediation stage right now; I expect that will take a fair amount of time, just because of the modest data involved in the amount of data interchanged that’s needed and if that doesn’t work and we go to binding arbitration. I think we have estimated that the whole process to take 12 to 18 months. I’m looking at our correct legal council on each degree. That’s his best shot 12 to 18 months if we go to binding arbitration.

Operator

Your next question comes from Dan Jenkins – State of Wisconsin.

Dan Jenkins – State of Wisconsin

First, I just wanted to verify, I think you said there is you have no plans to issue any debt in ‘09 is that right?

Gale Klappa

Dan I have no plans to issue any long-term debt. Obviously, we’ll continue to be an issuer of commercial paper and we’ll look at market conditions, if market conditions are good for utility long-term debt, say in the latter part of the year, say in late third, end of the fourth quarter, we may consider doing something with Wisconsin electric power company, but that the point that I was trying to make with my comments, we don’t have to do that. We’ve got some flexibility with the right conditions during this year. If we don’t like the conditions, we can wait until 2010.

Dan Jenkins – State of Wisconsin

Okay, on the Bechtel claims, I think you said it was $413 million, is that right?

Allen Leverett

Well, they’re essentially two large claims. The first one is 413 and second one is for 72 if my memory serves me right.

Dan Jenkins – State of Wisconsin

Okay, so the combined it’s like 485 then.

Allen Leverett

Yes, now that is on a total project basis and of course we have two co-owners that own roughly 15% of the facility. So, to judge any impact on Wisconsin Energy you basically take 485 and subtract 15%.

Allen Leverett

Which works out to be about $412 million.

Dan Jenkins - State of Wisconsin

How much is related to the labor market charges that you’ve mentioned I think you said you’re currently disputing that part?

Gale Klappa

Bechtel has not really broken out. Frankly, we have asked repeatedly for a detailed explanation of their belief of the cost they’ve incurred because of weather they could not have reasonably expected, but they have not in their claim broken out weather versus labor. So, I cannot give you a straight answer or a definitive answer on how much is labor and how is weather. We would like to have that information and we’re pressing for that as well.

Dan Jenkins - State of Wisconsin

Okay, so they have an itemized kind of different areas of dispute?

Gale Klappa

We think that’s something we definitely want to see.

Dan Jenkins - State of Wisconsin

Okay and then if I could just get a little more color on some of your large customers in the economy? Have you had any that have actually shutdown, I know in Janesville they had a big auto plant, I know that’s not in your service territory, but if you had any big customers that have actually shutdown that, probably wouldn’t comeback when the economy comes back?

Gale Klappa

The only one that really comes to mind and this was announced actually about 18 months ago. There is a major Delphi auto parts operation near Oak Creek that announced when Delphi, went into bankruptcy sometime in the past 18 months that they would be as part of the reorganization closing the Delphi plant, but that has really been closed to ideal now for six months to eight months.

Beyond that, we’ve seen production cutbacks virtually across the board and as I mentioned most dramatically with primary metal companies like foundries and specialty steal operations, automotive and automotive products and paper, but beyond that and of course the loss of two large paper mills for the second half of last year that permanently closed. The Niagara and the Kimberly mills that were formally owned by Stora Enso in Eastern and Northern Wisconsin, those two mills have closed, but Delphi and those two mills is about yet, everything else is just kind of reduced production levels.

Dan Jenkins - State of Wisconsin

I was wondering on your O&M, it was up quite a bit both in the fourth quarter and year-to-date the other O&M. Is that related to maybe some reclassification due to Point Beach or is there other things going on there or what?

Gale Klappa

Allen will explain because there is a lot of moving parts because of the commission order and the recovery of regulatory assets and the amortization of the game. So, you really have to work your way through the pieces to get a clear picture.

Allen Leverett

Yes. In the right case Dan and when I say the rate case this would have been the case we filed in ‘07, new rates that we are in effect of beginning of ‘08 and we had increases in the [ATC Terra], PTF leads costs and then amortization and recovery of other deferred costs. If you take all those three together and that was about $263 million, which you would see in the O&M account.

The other impact if you are looking at ‘08 versus ‘07 we had in effect a one-time recovery if you will of bad debt cost, which were $44 million in the first quarter of ‘08, that also runs through the O&M account. So, if you look at transmission PTF recovery of deferred costs essentially that was $307 million. Then we had increase in O&M it’s a power plants and delivery area that was $62 million so all that’s together $369 million. Then we have the nuclear units that come out. So, that’s $120 million in the other way and that gets you roughly $250 million increase in O&M. Steve, you had one other factor.

Steve Dickson

Yeah Dan your question I thought also focused on the fourth quarter and if you remember last year, we sold the Point Beach plant in the fourth quarter. So, on an annual basis if you’re comparing O&M, as Allen said, we have these large increases for the regulatory items, but offsetting that was reduction in an O&M to the Point Beach. That lasted through the third quarter, but in the fourth quarter it’s comparable on Point Beach wouldn’t have that positive benefit as compared to the first three quarters. So, that’s one of the key factors on why the fourth quarter O&M looks even higher.

Operator

Your next question comes from Maurice May - Power Insights.

Maurice May - Power Insights

Yes, actually Paul Ridzon asked both of my questions exactly and so thank you Paul

Gale Klappa

That’s concludes our conference call for today. Ladies and gentlemen, we appreciate you talking part. If you have any other questions Colleen Henderson is available in the Investor Relations office, her direct line 414-221-2592. Thank you again, good afternoon.

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Source: Wisconsin Energy Corporation Q4 2008 Earnings Call Transcript
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