SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C  20549

                                  FORM 10-K

For the fiscal year ended December 31, 1995   Commission file number 1-3632

(Mark One)
(X)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES         
     EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
                                   OR
( )  TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES     
     EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from                     to                      

                          INTERSTATE POWER COMPANY               
           (Exact name of registrant as specified in its charter)

               DELAWARE                                     42-0329500       
 (State or other jurisdiction of                        (I.R.S. Employer
    incorporation or organization)                      Identification No.)

1000 Main St., P.O. Box 769, Dubuque, IA                    52004-0769     
(Address of principal executive office)                     (Zip Code)
                                                                       
Registrant's telephone number, including area code          319-582-5421   

Securities registered pursuant to Section 12(b) of the Act:
                                                  Name of each exchange on 
         Title of each class                          which registered     
Common Stock Par Value $3.50 Per Share            ) New York Stock Exchange 
                                                  ) Chicago Stock Exchange  
                                                  ) Pacific Stock Exchange  
 
Securities registered pursuant to Section 12(g) of the Act:          N O N E
 
    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.    Yes  X  .      No     .

     Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K or any amendment to this Form 10-K. [ X ]

     As of February 1, 1996 the aggregate market value of the voting stock
held by non-affiliates of the registrant was $308,448,256.            

     Indicate the number of shares outstanding of each of the issuer's
classes of common stock.
                                                          Shares Outstanding
                                                           February 1, 1996 
     Common Stock Par Value $3.50 Per Share                   9,564,287

     Documents incorporated by reference - portions of the Annual Report to
Stockholders for 1995 (Exhibit EX-13) are incorporated by reference in Parts
I, II and IV; portions of the Annual Proxy Statement for 1996 are
incorporated by reference in Part III.

                          INTERSTATE POWER COMPANY
                        1995 Form 10-K Annual Report
                              Table of Contents

                                                                     Page
                                   Part I

Item 1.   Business                                                     1
             General                                                   1
             Construction Program                                      1
             Electric Operations                                       1
             Sources and Availability of Raw Materials                 2
             Duration and Effect of Electric Patents and Franchises    3
             Electric Seasonal Business                                3
             Working Capital Items                                     3
             Electric Governmental Regulations                         4
             Electric Competitive Conditions                           4
             Other Sources of Power                                    6
             Other Electric Operations                                 7
             Gas Operations                                            7
             Gas Sources and Availability of Raw Materials             8
             Duration and Effect of Gas Patents and Franchises         9
             Gas Seasonal Business                                     9
             Gas Governmental Regulations                              9
             Gas Competitive Conditions                               10
             Dependence of Segment Upon a Single Customer             11
             Research and Development                                 11
             Electric and Magnetic Fields                             11
             Environmental Regulations                                11
             Employees                                                14
             Accounting Matters                                       14
Item 2.   Properties                                                  15
             Electric Properties                                      15
             Generating Stations                                      16
             Gas Properties                                           17
             General Properties                                       17
             Titles                                                   17
Item 3.   Legal Proceedings                                           17
Item 4.   Submission of Matters to a Vote of Security Holders         18

                                   Part II

Item 5.   Market for Registrant's Common Equity and Related
             Stockholder Matters                                      18
Item 6.   Selected Financial Data                                     18
Item 7.   Management's Discussion and Analysis of Financial 
             Condition and Results of Operations                      18
Item 8.   Financial Statements and Supplementary Data                 18
Item 9.   Disagreements on Accounting and Financial Disclosure        18

                                  Part III

Item 10.  Executive Officers of the Registrant                        19
Item 11.  Executive Compensation                                      19
Item 12.  Security Ownership of Certain Beneficial Owners and 
             Management                                               20
Item 13.  Certain Relationships and Related Transactions              20

                                   Part IV

Item 14.  Exhibits, Financial Statement Schedules, and Reports 
             on Form 8-K                                              20

                                  PART I

ITEM 1.  BUSINESS

     (General)
                         
     Interstate Power Company (the company), is an operating public
     utility incorporated in 1925 under the laws of the State of Delaware. 
     The company is engaged in the generation, purchase, transmission,
     distribution and sale of electricity.  It owns property in portions
     of twenty-five counties in the northern and northeastern parts of
     Iowa, in portions of twenty-two counties in the southern part of
     Minnesota, and in portions of four counties in northwestern Illinois. 
     The company also engages in the distribution and sale of natural gas
     in Albert Lea, Minnesota; Clinton, Mason City and Clear Lake, Iowa;
     Fulton and Savanna, Illinois and in a number of smaller Minnesota,
     Iowa and Illinois communities, and in the transportation of natural
     gas within Iowa, Illinois and Minnesota, and in interstate commerce.

     For information pertaining to industry segments and lines of business
     please refer to page 27 of Exhibit EX-13 (the Annual Report to
     Stockholders).


     (Construction Program)

     The table below shows actual construction expenditures for 1995 and
     estimated expenditures for the period 1996 through 2000:
 
                              (Thousands of Dollars)
          1995 Actual                $28,200
          1996 Est.                  $32,200       
          1997 Est.                  $36,000       
          1998 Est.                  $38,000
          1999 Est.                  $35,400       
          2000 Est.                  $38,400       
     
     Revisions in the long range construction program have resulted in a
     reduction in the projected additional permanent financing.  In 1994,
     the company originally planned on issuing $25 million of common 
     stock in 1995.  This issue was later delayed until 1996.  Current
     projections have now postponed indefinitely the need for this public
     offering.

     Refer to (Environmental Regulations) on page 11 for additional
     information on construction expenditures related to compliance with
     the regulations of the Clean Air Act of 1990.


     (Electric Operations)

     Of the 234 communities served with electricity, Dubuque, Iowa, is the
     largest with a population of approximately 58,000.  Other major
     cities served are Albert Lea, Minnesota and Clinton and Mason City,
     Iowa.  The remainder of the communities served are under 15,000
     population, of which 193 are less than 1,000 population.  The company
     currently sells electricity at wholesale to 19 small communities
     which have municipal distribution systems, 13 of which are total
     requirements customers, and 6 of which are partial requirements
     customers.  As discussed under (Electric Competitive Conditions), six
     firm municipal electric wholesale customers have given the company
     notice that they intend to purchase their requirements from other
     utilities when their contracts expire in 1996.

     The estimated population of the company's service area is 340,000. 
     Six large industrial customers account for 32% of electric MWH sales. 
     A diverse mixture of residential, agricultural, and industrial
     customers constitute the remainder of the company's 163,000 electric
     customers.  

     There have been no significant changes since the beginning of the
     fiscal year in the kind of products produced, services rendered,
     markets or method of distribution.

     The facilities owned or operated by the company include facilities
     for the transmission of electric energy in interstate commerce or the
     sale of electric energy at wholesale in interstate commerce.


     (Sources and Availability of Raw Materials)

     Electricity generated by the company in 1995 was 90.9% from coal as a
     fuel, 0.2% from oil and 8.9% from natural gas.  In 1996, the sources
     of such generation are estimated to be:  91.8% from coal, 0.6% from
     middle distillate oils, and 7.6% from natural gas.  In 1995, 73.7% of
     the company's coal requirements came from long-term contracts.  In
     1996, the company anticipates that 77.7% of its coal requirements
     will be from long-term contracts.  These contracts have expiration
     dates ranging through August 31, 1999.

     The company entered into a contract effective March 1, 1995 for a
     total of 450,000 tons per year of 0.5% sulfur Colorado coal for its
     Kapp #2, a 217 MW unit at Clinton, Iowa.  The contract continues
     through August 1999, and will allow the company to comply with sulfur
     dioxide restrictions mandated by the Clean Air Act Amendments of
     1990.

     The company has a contract for 500,000 tons per year for its 260 MW
     Lansing #4 unit.  Lansing Unit #4 requires low sulfur coal, which is
     being purchased in the Powder River Basin of Wyoming.  The coal is
     shipped by rail and then transloaded to barge at facilities near
     Keokuk, Iowa.  A contract with Orba-Johnson Transshipment Company,
     Inc., covers rail to barge coal transloading.  Coal required for
     generation at the Neal #4 unit, located near Sioux City, Iowa, and
     the Louisa #1 unit, located near Muscatine, Iowa, is contracted for
     by the operator, MidAmerican Energy Company, under terms of the Unit
     Participation Agreements.  

     The company will purchase coal on an annual basis for the Dubuque
     Power Plant and for Lansing Units #1, #2 and #3.

     The company owns 120 coal cars and has an undivided ownership
     (21.528%) in 372 coal cars in connection with Neal #4.  The company
     has an undivided ownership (4%) in 136 cars in connection with Louisa
     #1.  Coal requirements in 1996 will require using leased cars for the
     Louisa #1 coal supply.  

     The company relies on spot purchases of oil.  The company burned
     867,116 gallons of No. 2 and No. 6 oil in 1995 and has 6,477,000
     gallons of oil storage capacity in which to store adequate reserves
     during periods of high demand on refineries.  

     The company presently has interruptible natural gas available for its
     electric generation station at Clinton, Iowa through Natural Gas
     Pipeline Company of America.  At the Fox Lake and Dubuque plants,
     interruptible gas is available through Peoples Natural Gas Company. 
     There is no assurance that interruptible gas will continue to be
     available as fuel for electric generating plants.


     (Duration and Effect of Electric Patents and Franchises)

     The company owns no patents.

     The company has, in the opinion of its legal counsel, all necessary
     franchises or other rights from the incorporated communities and
     other governmental subdivisions now served, required for the
     operation of its properties.  With 195 electric franchises in effect
     in cities and villages, and with the majority of such franchises
     being for a term of 25 years, the renewal of such franchises is a
     continuing process.  Twenty-six percent (51) of the franchises have
     been secured since January 1, 1986.

 
     (Electric Seasonal Business)

     The effects of air conditioning in summer and heating in winter have
     a seasonal impact.  The air conditioning sales in the summer months
     are primarily related to the residential and commercial customer
     classes, however, the company does not meter air conditioning sales
     separately.  During the past five years, the highest and lowest
     average residential consumption in the peak summer month has been 960
     Kwh (August 1995) and 571 Kwh (June 1993), respectively, compared to
     811 Kwh (January 1991) and 651 Kwh (February 1992) during the peak
     winter month.  The company estimates that hot summer weather boosted
     1995 residential electric revenues and electric margin by $4.7
     million and $3.6 million, respectively, over 1994.  The company
     cannot estimate with any degree of accuracy the impact of warm or
     humid weather on commercial or large power & light sales.  Refer to
     the (Electric Governmental Regulations) section for a discussion of
     Iowa and Minnesota seasonal rates. 


     (Working Capital Items)

     Three of the company's generating stations are located on the
     Mississippi River at Clinton, Dubuque and Lansing, Iowa.  The coal
     supply for the three plants is delivered by barge during the shipping
     season (approximately April 1st to December 1st).  Refinements to the
     company's fuel delivery process have decreased the amount of
     inventory required to carry the company over the winter.  Coal
     shipments to the company's Neal #4 and Louisa #1 generating stations
     are able to continue through the winter as river transportation is
     not involved.


     (Electric Governmental Regulations)

     In August 1993, the company implemented a revised electric tariff
     structure.  The new tariffs give greater weight to the demand
     component of electric usage, and include a provision for a higher
     rate during the summer cooling season (June-September), but did not
     change the company's overall annual electric revenue.

     The company filed an Iowa electric rate increase application in March
     1995.  The application requested an annual increase of $13.1 million. 
     Interim rates in an annual amount of $7.1 million were placed in
     effect on June 29, 1995, subject to refund.  A December 1995 Iowa
     Utilities Board (IUB) Order allowed an annual increase of $6.6
     million, including a return on common equity of 11.35%.  The
     company's original rate increase request included a return on common
     equity (ROE) and a management efficiency reward which totaled 13.25%. 
     The IUB allowed a ROE of 11.35% and no efficiency reward.  The lower
     ROE granted will not have a significant adverse impact on operating
     results.  In 1996, the company will refund to customers approximately
     $250,000 collected in 1995 in excess of the final order.  The 1995
     financial statements include a provision for the refund.  

     The company filed a Minnesota electric rate increase application in
     June 1995.  The application requested an annual increase of $4.6
     million (later adjusted by the company to $3.3 million).  The
     proposed tariffs include a seasonal rate mechanism similar to that
     used in the State of Iowa.  Interim rates were not requested.  On
     March 8, 1996 the MPUC received the report of the Administrative Law
     Judge (ALJ) hearing the case.  The ALJ recommended a $2.3 million
     revenue increase.  The major component of the $1.0 million reduction
     in revenue requirements is the disallowance of the Minnesota portion
     of 100 MW of purchased power contracts.  The disallowance is similar
     to a ruling in a previous rate case, thus, is not expected to have a
     material adverse impact on the company's financial condition.  A MPUC
     Order is expected by April 1996.

     The company's electric rate tariffs provide for recovery of the cost
     of fuel through energy adjustment clauses.  These clauses are subject
     to revision from time to time by the regulatory authority having
     jurisdiction, and are designed to pass on to the consumer the
     increases or decreases in the cost of fuel without formal rate
     proceedings.  Purchased capacity costs are not recovered from 
     customers through energy adjustment clauses, but rather must be
     addressed in base rates in a formal rate proceeding.  In the
     company's Iowa electric jurisdiction, the company is required to
     return to customers any jurisdictional revenue from capacity sales to
     other utilities.


     (Electric Competitive Conditions)

     In 1993 the Illinois Commerce Commission entered an order determining
     that the company, and not Jo-Carroll Electric Cooperative, had the
     right to provide electric service to a large new freezer service
     plant near East Dubuque, IL.  The company is providing service to
     that plant pursuant to Commission order.  Jo-Carroll filed for
     judicial review of the Commission action in the Illinois 15th
     Judicial Circuit, which court remanded the proceeding to the
     Commission for further hearings.  Proceedings on remand are now
     pending before the Commission.  

     The Energy Policy Act of 1992 (Act) allows FERC to order utilities to
     grant access to transmission systems by third-party power producers.
     The Act specifically prohibits federally-mandated wheeling of power
     for retail customers.  The company has experienced difficulty in
     retaining electric wholesale customers which take service under one
     year contracts.  To date, 6 of the company's 18 firm municipal
     electric wholesale customers have put the company on notice that they
     intend to purchase their requirements from other utilities when their
     contracts expire.  These six customers account for about 62% of the
     company's municipal electric load.  Firm electric sales to municipal
     utilities account for approximately 3.8% of the company's electric
     sales and 2.7% of its electric revenue.  It is anticipated that five
     of the six municipal customers will use the company's transmission
     system to transport power from other utilities, and these five
     municipal customers will be required to pay the company a wheeling
     fee.  The net impact on the company's financial condition is not
     expected to be significant.

     The company's industrial rates generally compare favorably with those
     of neighboring utilities.  For the company's six largest industrial
     customers, the aggregate 1995 rate was approximately 3.4 cents per
     KWH.  This rate also compares favorably with that of potential
     independent power producers and electric wholesale generators.  The
     company's favorable rates mitigate the incentive that these customers
     might otherwise have to relocate, self-generate or purchase
     electricity from other suppliers.  The company anticipates that its
     generating cost will decline slightly over the next several years as
     long-term coal purchase and transloading contracts expire and are
     renegotiated.

     The company currently has no competition from the same type of public
     utility service in the sale of electricity in any of the incorporated
     communities it serves.  In the States of Iowa, Illinois and
     Minnesota, territorial laws govern the question of possible service
     to customers in unincorporated areas, and such laws regulate
     competition in such areas.

     Laws and statutory regulations in the different states in which
     service is rendered provide, under varying terms and conditions, for
     municipal ownership of electric generating plants and distribution
     systems.  Certain franchises under which utility service is rendered
     give the municipality the right to purchase the system of the company
     within said municipality upon certain terms and conditions.  However,
     no such purchase option and no right of condemnation of the company's
     properties has been exercised and no municipal generating plant or
     municipal distribution system has been established in the territory
     now served by the  company during the past twenty-five years.

     The Iowa Utilities Board, the Illinois Commerce Commission and the
     Minnesota Public Utilities Commission have each approved tariffs that
     allow the company to offer interruptible electric service for
     qualifying customers.  The availability of this service provides
     price incentives to those customers having the ability to interrupt
     their connected load.  The primary objective of the incentives is to
     reduce the system peak.  The incentives also serve to retain existing
     customers and attract new customers.


     (Other Sources of Power)

     The company has been a participant in the Mid-Continent Area Power
     Pool (MAPP) Agreement since March 31, 1972.  MAPP had a total
     coincident 1995 summer peak of 27,961 MW at which time the net
     capacity of the pool was 31,182 MW.  Membership in the pool permits
     sharing of reserve capacities of the members which affects reductions
     in plant facilities investment for MAPP members.  The minimum reserve
     margin for participants in MAPP has been established at 15%.

     Parties to the MAPP Agreement include, as participants, 28 electric
     power suppliers consisting of 8 investor-owned utilities, the United
     States Department of Interior (Western Area Power Administration), a
     Canadian system, public power districts and rural electric generating
     and transmission cooperative associations, municipal electric supply
     agencies and, as associate participants, 30 other electric power
     suppliers operating in Canada and in the North Central region of the
     United States.  The pool coordinates planning and operation of power
     suppliers in Minnesota, Wisconsin, Montana, Iowa, Nebraska, North
     Dakota and South Dakota and provides reliability and economy for the
     company's bulk power supply.  The MAPP Agreement was filed with the
     FERC and accepted as an initial rate filing effective December 1,
     1972 and has been in operation since that time.  In 1995, MAPP
     implemented an intra-pool transmission service fee.  The company has
     little historical data to use as a basis for quantifying the
     potential maximum intra-pool transmission service fees that are now
     required under the MAPP agreement.  Current projections of such a
     maximum, assuming the MAPP reorganization receives Federal Energy
     Regulatory Commission approval, would be little change in 1996 and up
     to 3 times the current expense level in the period 1997 to 2001.  The
     company cannot estimate the impact beyond 2001 due to uncertainties
     regarding capacity requirements.  The company realized revenues of
     $211,000 and transmission service expenses of $91,000 in 1995.

     In addition to MAPP, the company has interchange connections with
     certain Missouri and Illinois utilities through 345 KV transmission
     systems.  Future interconnections are planned to meet transmission
     requirements for the next ten years.

     In 1992, the company entered into three long-term power purchase
     contracts with other utilities.  The contracts provide for the
     purchase of 255 MW of capacity through April 2001.  Energy is
     available at the company's option at approximately 100% to 110% of
     monthly production costs for the designated units.  The three power
     purchase contracts required capacity payments of $24.6, $24.6, and
     $24.1 million in 1995, 1994, and 1993, respectively.  Over the
     remaining life of the contracts, total capacity payments will be
     approximately $130 million.  The purchased power contract payments
     are not for debt service requirements of the selling utility, nor do
     they transfer risk or rewards of ownership.

     In Iowa the IUB has concluded that the capacity purchases were
     prudent and allowed recovery of costs in rates.  The rate structure
     approved by the MPUC does not provide for full recovery of purchased
     power applicable to the Minnesota jurisdiction.  A 1992 rate order by
     the MPUC held that the company had 100 MW of excess capacity.  The
     company is seeking to adjust this disallowance in its current rate
     case.

     The company has not filed for rate recovery of the allocable portions
     of the purchased power payments in the Illinois and FERC
     jurisdictions.  The payments of approximately $2.5 million annually
     are expensed as incurred.

     The company has contracts with several governmental power agencies
     whereby the company provides transmission service to their
     customer/members.  During 1995, the company received $1,263,408 for
     transmission service to customers of the Western Area Power
     Administration (WAPA), and $1,321,801 from Cooperative Power
     Association (CPA) for wheeling power to nine of its member
     distribution cooperatives.

     The company's contract with CPA also provides for payment by the
     company for needed mutually utilized facilities constructed and owned
     by CPA.  During 1995, these payments amounted to $329,471.

     The company and Southern Minnesota Municipal Power Agency (SMMPA)
     have agreed by contract to compensate each other if
     over/underinvestment in the shared transmission system occurs. 
     During 1995, SMMPA made payments to the company in the amount of
     $340,397.

     The company's contract with Central Iowa Power Cooperative (CIPCO)
     provides for compensation to each other if over/underinvestment in
     the shared transmission system occurs.  During 1995, the company paid
     CIPCO $136,827 for underinvestment in the Liberty Substation
     property, of which $41,038 was owed for 1994.


     (Other Electric Operations)

     The 1995 peak of 1,010,821 KW occurred on July 14, 1995 between 2:00
     and 3:00 in the afternoon.  At the time of its 1995 peak the company
     had a net effective electric capability of 1,310,600 KW.  Of this net
     effective capability, 903,300 KW was in steam generation, 113,500 KW
     was in combustion turbine and the balance was in internal combustion
     units and purchases.  The previous historical system net peak load
     for a sixty-minute period, of 932,081 KW, was reached on June 17,
     1994.


     (Gas Operations)

     The company supplies retail gas service in 39 communities and serves
     approximately 48,800 gas customers.

     There have been no significant changes since the beginning of the
     fiscal year in the kind of products produced, markets or methods of
     distribution.




     (Gas Sources and Availability of Raw Materials)

     The company purchases pipeline transportation capacity from Northern
     Natural Gas Company (NNG), Natural Gas Pipeline Company of America
     (NGPL) and Northern Border Pipeline Company (NBPL).  During 1995 the
     company purchased gas from eleven non-traditional suppliers, i.e.
     producers, brokers and marketers, at market responsive rates.  FERC
     Order 636 became effective in 1993.  Order 636 unbundled pipeline
     supply from its capacity.  Subsequent to Order 636, FERC continues to
     approve the tariffs of NNG and NGPL, but only with regard to capacity
     and storage rates, subject to change as rate cases are filed.

     Gas for the company's Mason City, Albert Lea and Savanna service
     areas is transported by NNG under capacity contracts for 36,338 Mcf
     daily, and for an additional 15,657 Mcf in the November to March time
     frame.  The majority, 26,999 Mcf, of the above capacities is from the
     producing areas of Oklahoma and Texas, etc.  These contracts expire
     in October, 1997.  Gas is supplied by producers, marketers and
     brokers, as well as from storage services, to meet the peak heating
     season requirements.  The company had 15,170 Mcf/d of storage, with
     the necessary pipeline capacity, available for the 1994-1995 heating
     season.

     Gas for its Clinton service area is transported by NGPL under
     capacity contracts for 19,611 Mcf annually, with expiration dates of
     November 30, 1998, December 1, 2000, February 28, 1996, and November
     30, 1996.  This gas is supplied by producers, marketers and brokers. 
     The company supplements this capacity with storage gas, which has the
     pipeline capacity embedded in its FERC approved rate.  The company
     had 16,609 Mcf of storage available for the 1994-1995 heating season.
     During 1995, the company utilized approximately 34.9% of its
     annualized daily contract gas available from its firm suppliers.  The
     company's 1995 total throughput level of 35,320,385 Mcf represents a
     4.9% increase over 1994.  The total throughput was composed of sales
     gas (22.1%), spot gas (3.1%) and customer transportation gas (74.8%).

     During 1995, twenty-one of Interstate's customers transported a total
     of 26,400,766 Mcf of their own gas over the company's pipeline and
     distribution systems.  This reflects an increase over 1993 and 1994
     in the number of customers exercising the transportation option.  In
     1993, nineteen of Interstate's customers transported a total of
     23,994,891 Mcf, and in 1994, eighteen customers transported a total
     of 24,498,793 Mcf.  The customer owned gas was delivered by
     interstate pipeline companies for those customers' accounts to
     Interstate's town border stations.  The company subsequently
     delivered the gas to customers under tariffs approved by respective
     state commissions.  Company policy is to assist any customer that
     wishes to purchase gas directly from the producing sector.

     The company owns propane-air gas plants in Albert Lea, Minnesota and
     Clinton and Mason City, Iowa.  The daily output capacities are: 
     5,000 Mcf, 4,000 Mcf and 9,600 Mcf of propane-air mix gas
     respectively.

     The requirement for gas on the peak winter day of the 1994-1995
     season was 141,109 Mcf, including both firm and interruptible
     customers.  This peak consisted of 21.5% jurisdictional sales gas,
     9.1% spot gas, 53.4% customer purchased gas, 16.0% storage gas and
     0.0% propane-air from the company's peak-shaving plant.  The maximum
     daily firm gas sales during the 1994-1995 season were as follows: 
     Albert Lea 12,497 Mcf; Savanna 2,808 Mcf; Clinton 20,651 Mcf; Mason
     City 25,218 Mcf, or 43.4% of the peak winter day throughput.


     (Duration and Effect of Gas Patents and Franchises)

     The company owns no patents.

     The company has, in the opinion of its legal counsel, all necessary
     franchises or other rights from the incorporated communities and
     other governmental subdivisions now served, required for the
     operation of its properties.  With 34 gas franchises in effect in
     cities and villages, and with the larger majority of such franchises
     being for a term of 25 years, the renewal of such franchises is a
     continuing process.  Forty-seven percent (16) of the franchises have
     been secured since January 1, 1986.


     (Gas Seasonal Business)

     The effects of heating sales to the residential and commercial
     classes of customers have a significant seasonal impact on the
     company's business.  The heating sales in the winter months account
     for 98% of the total annual sales to these classes of customers.  The
     average consumption for a residential customer during the peak winter
     months is 18.7 Mcf compared to the average of 2.5 Mcf during the
     summer.  The average consumption for a commercial customer during the
     peak winter months is 90.3 Mcf compared to the average of 12.6 Mcf
     during the summer.


     (Gas Governmental Regulations)

     The company filed an Iowa gas rate increase application in August
     1995.  The application requested an annual increase of $2.2 million. 
     Interim rates in an annual amount of $1.3 million were placed in
     effect on October 20, 1995, subject to refund.  The company and other
     parties to the rate application have agreed on an increase of $1.1
     million subject to approval by the IUB.  The IUB, by order dated
     February 21, 1996, has approved the $1.1 million increase in revenue
     requirements for the company's Iowa gas jurisdiction.  The increase
     represents a 3.5% increase in rates to Iowa gas customers and 0.4% of
     total 1995 revenue.  An IUB Order is expected by June 1996.  Iowa gas
     rates implemented in October 1995 did not include recovery of any
     investigative or remediation costs to be incurred in the clean-up of
     former manufactured gas plants.  However, the company recovered $0.7
     million annually of costs through the prior Iowa gas tariffs, and the
     company anticipates that future investigation and remediation costs
     applicable to the Iowa jurisdiction will be recovered from customers.
     
     The company filed a Minnesota gas rate increase application in May
     1995.  The application requested an annual increase of $2.4 million,
     including a return on common equity of 11.75%.  Interim rates in an
     annual amount of $1.5 million were placed in effect in June 1995,
     subject to refund.  A MPUC Order issued February 29, 1996 allowed an
     annual increase of $2.1 million and a return on common equity of
     10.75%.  On March 20, 1996 the Minnesota Department of Public Service
     and the Office of the Attorney General both requested reconsideration
     of the MPUC Order.  The $2.1 million increase in revenues included in
     the MPUC Order represented a 24% increase in rates for Minnesota gas
     customers and approximately 5% of the company's total gas revenues. 
     The return on equity granted by the MPUC (10.75%) is lower than
     expected, however, it is within a reasonable range and the lower rate
     will not have a material adverse impact on the company's financial
     condition.

     FERC Order 636 provides a mechanism under which pipelines can recover
     prudently incurred transition costs associated with the restructuring
     process.  The company's pipeline suppliers have filed with the FERC
     to recover transition costs from the local distribution companies. 
     The company incurred $2.0 million of transition costs in 1995 and is
     currently recovering these costs from customers through the purchased
     gas adjustment clause.  The Illinois Commerce Commission, in Docket
     No. 93-0328, allowed recovery of Gas Supply Realignment costs.  The
     Iowa Utilities Board accepted transition costs as a component of the
     purchased gas adjustment in Dockets PGA-92-229, PGA-92-244, and PGA-
     93-7.  The Minnesota Public Utilities Commission allowed Order 636
     transition costs to be passed through the purchased gas adjustment in
     Docket No. G001/AA-94-762.  While the ultimate level of transition
     costs could vary as Order 636 filings are revised and proceedings
     completed, the company estimates that the remainder will aggregate
     approximately $3.2 million payable in declining installments from
     1996 to 2005.  The company anticipates that under customary
     ratemaking practices, future transition costs will be recovered from
     customers, and has recorded on its balance sheet a liability and a
     corresponding regulatory asset in the amount of $3.2 million.


     (Gas Competitive Conditions)

     The company has no competition from the same type of public utility
     service in the sale of gas in any of the incorporated communities
     serviced by it.  Certain major industrial customers of the company
     purchase their own gas supply from producers and have that gas
     transported by the company as described in the "Gas Sources and
     Availability of Raw Materials" section.  

     One customer recently proposed to construct independent distribution
     facilities and bypass the company's system.  This situation raises a
     new competitive issue which the company has not previously dealt
     with.  The company is evaluating its response to the bypass issue and
     developing policies to deal with future competitive conditions which
     could result from potential system bypass.  The customers most likely
     to bypass the company's distribution facilities are transportation
     customers.  At the present time the company has 21 gas transportation
     customers with total revenues of $2.6 million (6% of gas revenues and
     0.8% of total company revenues).  Over 60% of the $2.6 million of
     revenues occurs in an area where the potential for bypass is
     considered to be minimal.  The loss of any one customer would not
     have a material adverse impact on the company's financial condition.


     

     (Dependence of Segment Upon a Single Customer)

     In 1995, 1994 and 1993, the company had no single customer or
     industry for which electric and/or gas sales accounted for 10% or
     more of the company's consolidated revenues.  In 1995, the company's
     three largest industrial customers accounted for 1,396,284,716 Kwh of
     electric sales ($45,777,786) and 23,540,434 Mcf of gas sales and
     transportation ($1,922,694).  The company's largest gas customer,
     which represents 31% of the company's total gas throughput, is
     committed by contract for the next six years.


     (Research and Development)

     The company has no full-time professional employees engaged in
     research activities and had no company-sponsored research programs
     during 1995, 1994 and 1993.  In the public utility industry, research
     is commonly and traditionally done by manufacturers of equipment,
     trade organizations to which the company belongs, and university
     research programs.  In 1995 approximately $1,054,925 was paid for
     research activities compared with $1,072,871 in 1994 and $1,090,184
     in 1993.


     (Electric and Magnetic Fields)

     The possibility that exposure to electric and magnetic fields
     emanating from power lines and other electric sources may result in
     adverse health effects has been a subject of increased public,
     governmental and media attention.  A considerable amount of
     scientific research has been conducted on this topic with no
     definitive results.  Research is continuing.  It is not possible to
     tell what, if any, impact these actions may have on the company's
     financial condition.


     (Environmental Regulations)

     The company is subject to various federal and state government
     environmental regulations.  The company meets existing air and water
     regulations.  The Federal Clean Air Act Amendments of 1990 requires
     reductions in certain emissions from power plants.  The legislation
     has two deadlines for compliance, Phase 1 (January 1, 1995) and Phase
     2 (January 1, 2000).  The company has switched to a low sulfur coal
     and installed low nitrogen oxide burners at the 217 MW plant affected
     by Phase 1. Management anticipates that additional costs incurred
     will be recovered through customer rates.

     The United States EPA and the states have promulgated discharge
     limits necessary to meet water quality standards.  A National
     Pollutant Discharge Elimination System (NPDES) permit is required for
     all discharges.   The company has current NPDES permits for all
     discharges and meets or falls within the required discharge limits.

     Early this century, various utilities including the company operated
     plants which produced manufactured gas for cooking and lighting.  The
     company's facilities ceased operations approximately 40 years ago
     when natural gas pipelines were extended into the upper Midwest. 
     Some of the former gasification sites contain coal tar waste products
     which may present an environmental hazard. 

     The company has identified nine sites which may contain waste from
     former coal gasification sites.  The company has recorded an
     estimated liability for its pro rata share of expenses applicable to
     the sites.  Of the nine sites, 3 are on property currently owned by
     the company, while the remaining 6 are located on property currently
     owned by other parties.  

     The company has been named a Potentially Responsible Party (PRP) by
     Federal or State environmental agencies for most of its former
     manufactured gas plant sites.  In December 1994, the U.S. EPA, in
     submitting an information request, claimed that the company is a
     present and former owner of the Clinton, Iowa site.  The company has
     not been officially named as a PRP for the Savanna and Galena sites
     by those agencies.  In addition, the current owner of the Galena,
     Illinois site has claimed that the company is a PRP at that site
     based upon a predecessor company's ownership of the site.

     The estimated environmental liabilities recorded on the books of the
     company include amounts expected to be incurred to complete the
     investigation of those sites where the investigative process has
     begun, and the minimum of the estimated cost range for those sites
     where the investigation is in its early stages or not been started. 
     At the present time the company has insufficient information,
     regarding the sites that have not been fully investigated, to revise
     those cost estimates.

     It is possible that cost estimates may be revised upwards as the
     investigative process proceeds.  In view of the past rate treatment
     allowed by the Iowa, Minnesota and Illinois Commissions, the company
     believes that prudently incurred unreimbursed costs will be recovered
     from customers and that the investigation, remediation or monitoring
     process will not have a material adverse impact on the company's
     financial condition or the results of operations.

     In 1957, the company purchased facilities in Mason City, Iowa, from
     Kansas City Power & Light Company (KCPL) which included land
     previously used for a coal gasification plant.  Coal tar waste was
     discovered on the property in 1984.  In 1995, a settlement was
     reached with KCPL for sharing of costs to remediate the site. 
     Interstate Power Company has been reimbursed $1.0 million by KCPL for
     expenses incurred in the past.  The reimbursement has been deferred,
     pending a decision by the IUB on the amount to be refunded to
     customers.  KCPL will pay for future soil remediation costs up to a
     $2.6 million level.  If soil remediation costs exceed that level, the
     next $1.0 million will be shared 2/3 KCPL and 1/3 Interstate Power
     Company.  If soil remediation costs exceed the $3.6 million level,
     Interstate Power Company is 100% responsible.  Any ground water
     remediation cost will be split 50 - 50 between KCPL and Interstate
     Power Company.  A Remedial Investigation and Feasibility Study has
     been approved and the company has assumed responsibility for managing
     the remediation of the Mason City site.  The current estimated cost
     of soil remediation is $2.6 million, which will be paid by KCPL.

     The company formerly operated a manufactured gas plant in Rochester,
     Minnesota.  Soil remediation was completed in 1995 and post-
     remediation groundwater monitoring is underway.  From 1991 through
     1995, the company incurred costs aggregating $6.7 million applicable
     to the Rochester site.  Groundwater monitoring costs are expected to
     be $75,000 to $100,000 per year for a period of two to twenty years. 
     The MPUC accounting order allows the company to defer these costs and
     recover them in subsequent rate cases.  This level of expenditure
     would be considered to be immaterial, therefore, the company may
     choose to expense them as incurred.

     In addition to the Rochester site, the company owned or operated four
     other manufactured gas plant sites in Minnesota:  Albert Lea, Austin,
     New Ulm and Owatonna.  Wastes associated with former coal
     gasification operations have been identified at each site.  The
     company anticipates that these sites will be investigated in 1996 or
     1997.  When the investigation process is complete, the company will
     be able to determine if any remediation will be necessary.

     In addition, the company has identified three other sites:  Galena
     and Savanna, Illinois, and Clinton, Iowa.  Wastes associated with
     former coal gasification operations have been identified at each of
     these sites.  Little or no activity is expected at any of these sites
     in 1996.

     In 1994, the company filed a lawsuit against certain of its insurers
     to recover the costs of investigating and remediating the former coal
     gasification plants.  On June 23, 1995, the company filed a lawsuit
     in the District Court of Iowa in Clinton County, Iowa against certain
     of its insurers to recover the costs of investigating and remediating
     the former coal gasification plants.  The insurers named as
     defendants in this lawsuit include:  American Home Assurance Company,
     American Re-Insurance Company, C.E. Heath Compensation and Liability
     Insurance Company of California (Successor to Employers' Surplus
     Lines Insurance Company), Commercial Union Insurance Company
     (Successor to Employers' Liability Assurance Corporation, Ltd.), The
     Home Insurance Company, Indemnity Insurance Company of North America,
     Insurance Company of North America, International Insurance Company
     (Successor to International Surplus Lines Insurance Company), Signet
     Star Reinsurance Corporation (Successor to North Star Reinsurance
     Corporation), Zurich Insurance Company (Successor to Zurich General
     Accident and Liability Insurance Company), and Certain Underwriters
     at Lloyd's London & London Market Insurance Companies.  The company
     believes that the insurers have not fulfilled their obligations under
     insurance policies sold to the company.  Because the company is
     seeking full coverage of costs as they are incurred, no specific
     dollar amount has been sought in this lawsuit.  In addition to
     seeking monetary damages in an unspecified amount, the company is
     seeking a declaratory order and equitable relief.  Two insurers paid
     the company a total of $0.3 million in 1995 in order to be discharged
     from the lawsuit.  The trial against the remaining insurers is
     expected to begin in Iowa in 1997.  Neither the company nor its legal
     counsel is able to predict the amount of any insurance recovery, and
     accordingly, no potential recovery has been recorded.  The company
     anticipates the recovery of insurance proceeds would first be applied
     to offset expenses of pursuing the lawsuit against the insurance
     companies.  It is expected that the company's customers paying for
     environmental clean-up costs would also share in the insurance
     proceeds.  It is uncertain as to what portion of the proceeds, if
     any, the company's stockholders would be allowed to retain. 
     Therefore, based on the above, the company considers the potential
     impact on its financial position not to be material.

     In April 1995, the company received an accounting order from the
     Minnesota Public Utilities Commission (MPUC) which allows the
     deferral of investigation and remediation costs applicable to the
     Rochester and Albert Lea sites and further allows the company to seek
     recovery in a rate case.  The company's Minnesota gas rate case filed
     in May 1995 seeks recovery of $4.9 million.  The company filed a
     petition in June 1995 for an accounting order which would allow it to
     defer and seek recovery in a future rate case of costs applicable to
     the three other Minnesota sites (Austin, Owatonna and New Ulm). 
     Action by the MPUC is pending.

     Under the Federal Comprehensive Environmental Response, Compensation
     and Liability Act (CERCLA), a past waste generator can be designated
     by the United States Environmental Protection Agency (U.S. EPA) as a
     Potentially Responsible Party (PRP).  Certain types of used
     transformer oil (primarily those containing polychlorinated
     biphenyls, or "PCBs") have been designated as hazardous substances by
     the U.S. EPA.  The company has been cited as a PRP by the U.S. EPA
     for the clean-up of the facilities formerly operated by Martha C.
     Rose Chemicals, Inc. in Holden, Missouri.  Clean-up of the site began
     in 1994, with final completion in 1995.  The company received a
     refund of previously paid costs of $0.1 million in 1995 in final
     settlement, and estimated reserves remaining are adequate for
     continuing groundwater monitoring.

     In 1988, the U.S. EPA designated the company a PRP for the clean-up
     of former salvage facilities operated by the Missouri Electric Works,
     Inc. (MEW) in Cape Girardeau, Missouri.  A portion of the
     PCB-contaminated equipment found at the site was formerly owned by
     the company.  The company has notified the U.S. EPA that it disclaims
     responsibility for the site, as the equipment was in proper operating
     condition when sold by the company to a third party, which
     subsequently made arrangements to transport this equipment to MEW.
     The U.S. EPA has not responded to the company's disclaimer.  The
     company has not recorded any liability for the MEW site, and
     management believes that it will be able to successfully defend
     itself against any claims applicable to the site.


     (Employees)

     The company has 935 regular employees consisting of 902 full-time and
     33 part-time employees.


     (Accounting Matters)

     The company will be required to adopt SFAS No. 121, "Accounting for
     the Impairment of Long-Lived Assets and for Long-Lived Assets to be
     Disposed Of" in 1996.  The new standard imposes stricter standards
     for regulatory assets by requiring that such assets be probable of
     future recovery at each balance sheet date.  The company believes
     that the initial adoption of SFAS 121 will not have a material impact
     on its financial position or results of operations.

ITEM 2.  PROPERTIES

     The principal power plants and other materially important physical
     properties of the company are maintained in accordance with sound
     operating practices.  Their general character and location are
     described below:


     (Electric Properties)

     The company has been a participant in the Mid-Continent Area Power
     Pool (MAPP) Agreement since March 31, 1972.  As a part of this power
     network the company is the owner of a 55.0 mile section of the 345 KV
     transmission line extending from St. Louis, Missouri to Minneapolis,
     Minnesota; a 15.5 mile section of the 345 KV transmission line
     between Minneapolis, Minnesota and Kansas City, Missouri; a 5.0 mile
     345 KV transmission line from near Clinton, Iowa to near Cordova,
     Illinois; a 49.8 mile 345 KV transmission line from near Clinton,
     Iowa to a substation south of Dubuque, Iowa; and three associated
     345/161 KV substations.

     The company's electric generating stations at year-end consist of six
     steam plants, three combustion turbine stations, and five internal
     combustion facilities.  Pertinent information regarding each electric
     generating station is shown on the following page:


































                INTERSTATE POWER COMPANY GENERATING STATIONS

                                                                    Net
                      Generating Units        December 31, 1995    Output
                        Nameplate                Capability        in KWH
                 Unit   Capacity     Year      KW         KW       (000's)
Location        Number     KW     Installed  (Gross)     (Net)      1995   
STEAM:  
Dubuque, IA         2     15,000     1929      82,500     78,000    194,561
                    3     25,000     1952
                    4     33,000     1959
Clinton, IA         1     15,000     1947     254,900    235,000  1,050,504
 (M.L.Kapp Plt.)    2    212,284     1967
Lansing, IA         1     15,000     1948     337,800    320,000    775,611
                    2     11,500     1949
                    3     33,000     1957
                    4    252,649     1977 
Sherburn, MN        1     11,500     1950     113,500    108,000    335,179
 (Fox Lake Plt.)    2     11,500     1951
                    3     75,000     1962
Sioux City, IA      4*   125,924     1979     142,000    134,300    993,471
 (Neal Unit #4)
Louisa County, IA   1**   27,400     1983      29,400     28,000    174,882
 (Louisa Unit #1)                                                          
TOTAL STEAM                                   960,100    903,300  3,524,208


GAS TURBINE:        
Montgomery, MN      1     26,535     1974      22,200     22,200        253 
Sherburn, MN        4     26,535     1974      21,300     21,300        332
 (Fox Lake Plt.)
Mason City, IA      1     37,520     1991      70,400     70,000      3,012
 (Lime Creek Plt.)  2     37,520     1991                                  
TOTAL GAS TURBINE                             113,900    113,500      3,597


INTERNAL COMBUSTION:
Dubuque, IA         1      2,000     1966       4,600      4,600        (83)
                    2      2,000     1966
Hills, MN           2      2,000     1960       2,000      2,000        (57)
Lansing, IA         1      1,000     1970       2,000      2,000         11
                    2      1,000     1971         
New Albin, IA       1        685     1970         700        700        (50)
Rushford, MN        1      2,000     1961       2,000      2,000        (95)
TOTAL INTERNAL COMBUSTION                      11,300     11,300       (274)


TOTAL COMPANY                               1,085,300  1,028,100  3,527,531


*    Interstate owns 21.528% of a 584,931 KW unit operated by MidAmerican
     Energy Company.
**   Interstate owns 4.0% of a 685,000 KW unit operated by MidAmerican 
     Energy Company.
     



     (Gas Properties)

     The company owns and operates natural gas distributing systems in
     Albert Lea, Minnesota; Savanna, Illinois; Clinton, Mason City and
     Clear Lake, Iowa and in a number of smaller Minnesota, Illinois and
     Iowa communities.  At Albert Lea, the company owns 14 tanks with a
     liquid propane storage capacity of 357,000 gallons; at Clinton, there
     are 12 tanks with 306,000 gallons capacity and at Mason City, 22
     tanks with 561,000 gallons capacity.

     The company also owns 95 gas regulating stations and approximately
     972 miles of gas distribution mains.


     (General Properties)

     The company owns numerous properties in various parts of its
     territory which are used for office, service and other purposes.  The
     most important of these are three General Office buildings in Dubuque
     and the district office buildings at Clinton, Decorah, Dubuque, Mason
     City and Oelwein, Iowa and Albert Lea, and Winnebago, Minnesota and
     the distribution service buildings in each of those locations.  The
     company, as lessee, leases office space at various locations.  The
     company also leases a few small parcels of land for storage of poles
     and miscellaneous temporary uses.


     (Titles)

     In the opinion of legal counsel for the company, the company has
     satisfactory title to its properties for use in its utility
     businesses subject only to permitted liens as defined in the Bond
     Indenture and to minor defects and encumbrances customarily found in
     cases of like size and character and which do not materially
     interfere with the use of such properties.

     Properties such as electric transmission and electric and gas
     distribution lines are constructed principally on rights-of-way which
     are maintained under franchise or held by easement only.

     All properties of the company, other than "excepted property" as
     defined in the Bond Indenture, are subject to the lien of the
     company's Bond Indenture dated as of January 1, 1948, as
     supplemented, securing the company's outstanding First Mortgage
     Bonds.


ITEM 3.  LEGAL PROCEEDINGS

     Reference is made to "Electric Governmental Regulations", "Electric
     Competitive Conditions" and "Environmental Regulations" under "Item
     1. Business" for certain pending legal proceedings and proceedings
     known to be contemplated by governmental authorities.  Reference is
     also made to Note 8 to Financial Statements of the Annual Report to
     Stockholders, included herein as EX-13.  Other than these items,
     there are no material pending legal proceedings, or proceedings known
     to be contemplated by governmental authorities, other than ordinary
     routine litigation incidental to the business, to which the company
     is a party or of which any of the company's property is the subject.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     There was no submission of matters to a vote of security holders
     during the fourth quarter of the 1995 year.



                                  PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS

     For information pertaining to common stock market data required by
     Item 201 of Regulation S-K please refer to page 31 of Exhibit EX-13
     (the Annual Report to Stockholders).


ITEM 6.  SELECTED FINANCIAL DATA

     For information pertaining to selected financial data required by
     Item 301 of Regulation S-K please refer to page 30 of Exhibit EX-13
     (the Annual Report to Stockholders).


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

     For information pertaining to management's discussion and analysis
     required by Item 303 of Regulation S-K please refer to pages 1 
     through 9 of Exhibit EX-13 (the Annual Report to Stockholders). 


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Financial statements and supplementary data incorporated by reference
     to Exhibit EX-13 (the Annual Report to Stockholders for 1995):

     Statements of Income and Retained Earnings     Page  10        
     Balance Sheets                                 Pages 11 & 12
     Statements of Cash Flows                       Page  13      
     Statements of Capitalization                   Page  14      
     Notes to Financial Statements                  Pages 15 - 27
     Independent Auditors' Report                   Page  28


ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     None.








                                 PART III

ITEM 10. EXECUTIVE OFFICERS OF THE REGISTRANT

     Name               Age  Offices Held Past 5 Years
     W. H. Stoppelmoor  62   5-1-90 - President, Chief Executive Officer
                                        & Chairman of the Board

     M. R. Chase        57   1-1-91 - Vice President-Production
                             5-7-91 - Vice President-Power Production
                             7-1-95 - Executive Vice President

    *A. D. Cordes       64   5-1-90 - Vice President-District
                                        Administration & Public Affairs

     R. R. Ewers        51   5-1-90 - Vice President-Administrative
                                        Services
                             7-1-95 - Vice President-Administration

     D. E. Hamill       59   9-1-80 - Vice President-Budgets &
                                        Regulatory Affairs

   **G. L. Kopischke    64   9-1-80 - Vice President-Electric Operations

     J. C. McGowan      58   2-1-89 - Secretary & Treasurer

     R. P. Richards     59   1-1-91 - Vice President-Gas Operations

     D. R. Sharp        55   7-1-95 - Vice President-Power Production 
                             1-1-96 - Vice President-Engineering

     W. C. Troy         57   5-1-86 - Controller


    *Retired effective 7-1-95
   **Retired effective 1-1-96


     All officers are elected and serve as such until the next annual
     meeting of directors.  There are no arrangements or understandings
     with respect to election of any person as an officer.

     For information pertaining to directors, and other data required by
     Items 401 and 405 of Regulation S-K, refer to pages 136 through 139
     of the company's Official Proxy Statement to be filed with the
     Securities and Exchange Commission within 120 days after the last day
     of the fiscal year ended December 31, 1995.


ITEM 11. EXECUTIVE COMPENSATION

     Refer to information on pages 141 through 145 of the company's
     Official Proxy Statement filed with the Securities and Exchange
     Commission to be filed with the Securities and Exchange Commission
     within 120 days after the last day of the fiscal year ended December
     31, 1995.



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Refer to information on pages 139 and 140 of the company's Official
     Proxy Statement filed with the Securities and Exchange Commission to
     be filed with the Securities and Exchange Commission within 120 days
     after the last day of the fiscal year ended December 31, 1995.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Transactions with Management and Others:

     In 1995 there were no transactions and there are presently proposed
     no transactions with management, to which the company or its
     subsidiary was or is to be a party, of the character as to which
     answer is called for in response to Item 404(a) of Regulation S-K.

     Indebtedness of Management:

     No director or officer, or nominee for election as a director, or any
     associate of any thereof, was indebted to the company or its
     subsidiary during 1995, as to which answer is called for in response
     to Item 404(b) of Regulation S-K.



                                  PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

     (a)    List of documents filed as part of this report:

            1.  The financial statements, including supporting schedules,
                are listed in the Index to Financial Statements, Schedules
                and Exhibits filed as part of this Annual Report.

            2.  Exhibits which are filed herewith, including those incor-
                porated by reference are listed in the Index to Financial
                Statements, Schedules and Exhibits filed as part of this
                Annual Report.

     (b)    Reports on Form 8-K:

            The company filed a Form 8-K report with the Securities and
            Exchange Commission dated November 17, 1995.  This report
            related to the signing of a merger agreement on November 10 
            1995, by Interstate Power Company, IES Industries Inc., and
            WPL Holdings, Inc., providing for the combination of the three
            companies into a holding company which will be known as
            Interstate Energy Corporation.

            







INDEX TO FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS

The 1995, 1994 and 1993 financial statements, together with the
Independent Auditors' Report thereon of Deloitte & Touche LLP, dated 
January 26, 1996, appearing on pages 10 through 28 of Exhibit EX-13 
(the 1995 Annual Report to Stockholders), are incorporated in this 
Form 10-K Annual Report.  The following additional data, as attached 
on EX-23.a, EX-23.b, and S-1 should be read in conjunction with the
financial statements in such Exhibit EX-13.

Schedules and other historical financial information not included with
this additional financial data have been omitted because they are not
applicable or the required information is shown in the financial
statements or notes thereto.


                                                Page or Exhibit Reference 
                                                               
                                                           Exhibit EX-13
                                                 Form    (Annual Report to
                                                 10-K      Stockholders)

Report of Independent Auditors                  EX-23.a
Consent of Independent Auditors                 EX-23.b

Financial Statements:
  Statements of Income and Retained Earnings 
    for the years ended December 31, 1995, 
    1994 and 1993                                                 10
  Balance Sheets, December 31, 1995 and 1994                    11 & 12
  Statements of Cash Flows for the years ended 
    December 31, 1995, 1994 and 1993                              13
  Statements of Capitalization, December 31, 
    1995 and 1994                                                 14
  Notes to Financial Statements                                 15 - 27
  Selected Financial Data                                         30
  Common Stock Market Data                                        31 

Management's Discussion and Analysis                             1 - 9

Schedule II:  Valuation and Qualifying Accounts
                    and Provisions                                S-1







               








INDEX TO FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS (CONT'D.)

Exhibits filed as part of this report:

EX-3.(ii) By-Laws of Interstate Power Company as adopted April 20, 1925
          and as amended January 26, 1996.

EX-10.a   Coal Transloading Agreement between Interstate Power Company and
          Orba-Johnson Transshipment Company dated December 20, 1995

EX-10.b   Coal Transshipment Agreement by and between Interstate 
          Power Company and Orba-Johnson Transshipment Company dated
          December 20, 1979 (previously physically filed in Form 10-K for
          the Year Ended December 31, 1979 as EXHIBIT F)

EX-10.c   Interstate Amendment Agreement between Orba-Johnson
          Transshipment Company and Interstate Power Company dated
          September 1, 1981 (previously physically filed in Form 10-K for
          the Year Ended December 31, 1981 as EXHIBIT J)

EX-12     Statement re Computation of Ratios

EX-13     The Company's 1995 Annual Report to Stockholders.

EX-23.a   Report of Independent Auditors

EX-23.b   Consent of Independent Auditors

EX-27     Financial Data Schedule

EX-99.a   Listing of current material contracts, indentures and other
          exhibits and identified as having been previously filed with the
          Commission.

EX-99.b   Interstate Power Company Supplemental Retirement Plan as amended
          and restated November 10, 1995.























                                SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.


                                       INTERSTATE POWER COMPANY



Date    March 29, 1996                 By /s/ W. H. STOPPELMOOR     
                                             (W. H. Stoppelmoor,    
                                             President and Chief
                                             Executive Officer)



Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.

     Signature                          Title                  

/s/ W. H. STOPPELMOOR         President and Chief Executive   
   (W. H. Stoppelmoor)         Officer (Principal Executive
                               Officer and Principal 
                               Financial Officer)

/s/ W. C. TROY                Controller (Principal           
   (W. C. Troy)                Accounting Officer)
                    
/s/ A. B. ARENDS              Director
   (A. B. Arends)       
                    
/s/ J. E. BYRNS               Director
   (J. E. Byrns)      

/s/ M. R. CHASE               Director
   (M. R. Chase)
                       
/s/ A. D. CORDES              Director
   (A. D. Cordes)

/s/ J. L. HANES               Director                 
   (J. L. Hanes)              
                
/s/ G. L. KOPISCHKE           Director
   (G. L. Kopischke)    
                



Date   March 29, 1996   




                                                               SCHEDULE II

                         INTERSTATE POWER COMPANY

             VALUATION AND QUALIFYING ACCOUNTS AND PROVISIONS
           FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993


                          (Thousands of Dollars)                          
COLUMN A                COLUMN B       COLUMN C       COLUMN D    COLUMN E
                                           
                                       ADDITIONS     
                       BALANCE AT  CHARGED   CHARGED  DEDUCTION   BALANCE 
                       BEGINNING     TO      TO OTHER   FROM      AT END  
DESCRIPTION             OF YEAR    INCOME    ACCOUNTS RESERVES    OF YEAR 

YEAR ENDED DEC. 31, 1995
 Valuation account 
 deducted from caption
 of which it applies -
 accumulated provision
 for doubtful accounts      $200     $169     $144 (a)  $313 (b)    $200

 Provision for medical 
 benefits, injuries 
 and damages              $4,671   $5,729   $1,081    $6,799 (c)  $4,682


YEAR ENDED DEC. 31, 1994
 Valuation account 
 deducted from caption
 of which it applies -
 accumulated provision
 for doubtful accounts      $203     $243     $148 (a)  $394 (b)    $200

 Provision for medical 
 benefits, injuries 
 and damages              $4,105   $7,240   $2,757    $9,431 (c)  $4,671


YEAR ENDED DEC. 31, 1993
 Valuation account 
 deducted from caption
 of which it applies -
 accumulated provision
 for doubtful accounts      $206     $225     $134 (a)  $362 (b)    $203

 Provision for medical 
 benefits, injuries 
 and damages              $1,506   $4,302   $3,521    $5,224 (c)  $4,105


 
(a) Recoveries on accounts previously written off.
(b) Accounts written off.
(c) Claims and damages paid and expenses in connection therewith.



                                    S-1
                             INDEX OF EXHIBITS


EX-3.(ii)   By-Laws of Interstate Power Company as adopted April 20, 1925
            and as amended January 26, 1996.

EX-10.a     Coal Transloading Agreement between Interstate Power Company
            and Orba-Johnson Transshipment Company dated December 20, 1995

EX-10.b     Coal Transshipment Agreement by and between Interstate 
            Power Company and Orba-Johnson Transshipment Company dated
            December 20, 1979 (previously physically filed in Form 10-K
            for the Year Ended December 31, 1979 as EXHIBIT F)

EX-10.c     Interstate Amendment Agreement between Orba-Johnson
            Transshipment Company and Interstate Power Company dated
            September 1, 1981 (previously physically filed in Form 10-K
            for the Year Ended December 31, 1981 as EXHIBIT J)

EX-12       Statement re Computation of Ratios

EX-13       The Company's 1995 Annual Report to Stockholders.

EX-23.a     Report of Independent Auditors

EX-23.b     Consent of Independent Auditors

EX-27       Financial Data Schedule

EX-99.a     Listing of current material contracts, indentures and other
            exhibits and identified as having been previously filed with
            the Commission.

EX-99.b     Interstate Power Company Supplemental Retirement Plan as
            amended and restated November 10, 1995.