UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

[X]    QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR 15 (d) OF THE  SECURITIES
       EXCHANGE ACT OF 1934
       For the quarterly period ended March 31, 1999

                                       or

[ ]    TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15 (d) OF THE  SECURITIES
       EXCHANGE ACT OF 1934
       For the transition period from ______ to _______

               Name of Registrant, State of   
Commission     Incorporation, Address of Principal              IRS Employer
File Number    Executive Offices and Telephone Number      Identification Number
-----------    --------------------------------------      ---------------------
1-9894         INTERSTATE ENERGY CORPORATION                    39-1380265
               (a Wisconsin corporation)
               222 West Washington Avenue
               Madison, Wisconsin  53703
               Telephone (608)252-3311

0-4117-1       IES UTILITIES INC.                               42-0331370
               (an Iowa corporation)
               Alliant Tower
               Cedar Rapids, Iowa  52401
               Telephone (319)398-4411

0-337          WISCONSIN POWER AND LIGHT COMPANY                39-0714890
               (a Wisconsin corporation)
               222 West Washington Avenue
               Madison, Wisconsin  53703
               Telephone (608)252-3311

Indicate  by check mark  whether  the  registrants  (1) have  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
registrants  were required to file such  reports),  and (2) have been subject to
such filing requirements for the past (90) days. Yes X No _____

This combined Form 10-Q is separately  filed by Interstate  Energy  Corporation,
IES Utilities Inc. and Wisconsin Power and Light Company.  Information contained
herein relating to any individual  registrant is filed by such registrant on its
own behalf.  Each registrant makes no representation as to information  relating
to the other registrants.

Number of shares outstanding of each class of common stock as of April 30, 1999:


Interstate Energy Corporation       Common  stock,  $.01 par  value,  78,116,598
                                    shares outstanding

IES Utilities Inc.                  Common  stock,  $2.50 par value,  13,370,788
                                    shares  outstanding  (all of which are owned
                                    beneficially  and of  record  by  Interstate
                                    Energy Corporation)

Wisconsin Power and Light Company   Common  stock,  $5  par  value,   13,236,601
                                    shares  outstanding  (all of which are owned
                                    beneficially  and of  record  by  Interstate
                                    Energy Corporation)

<PAGE>

                                    CONTENTS
                                                       
                                                                            Page
                                                                            ----
Part I.       Financial Information

     Item 1.  Consolidated Financial Statements

              Interstate Energy Corporation:
              Consolidated Statements of Income for the Three Months 
                   Ended March 31, 1999 and 1998                              4
              Consolidated Balance Sheets as of March 31, 1999 and 
                   December 31, 1998                                          5
              Consolidated Statements of Cash Flows for the Three 
                   Months Ended March 31, 1999
                    and 1998                                                  7
              Notes to Consolidated Financial Statements                      8

              IES Utilities Inc.:
              Consolidated Statements of Income for the Three Months 
                   Ended March 31, 1999 and 1998                             10
              Consolidated Balance Sheets as of March 31, 1999 and
                   December 31, 1998                                         11
              Consolidated Statements of Cash Flows for the Three 
                   Months Ended March 31, 1999 and 1998                      13
              Notes to Consolidated Financial Statements                     14

              Wisconsin Power and Light Company:
              Consolidated Statements of Income for the Three Months 
                   Ended March 31, 1999 and 1998                             15
              Consolidated Balance Sheets as of March 31, 1999 and 
                   December 31, 1998                                         16
              Consolidated Statements of Cash Flows for the Three 
                   Months Ended March 31, 1999 and 1998                      18
              Notes to Consolidated Financial Statements                     19

     Item 2.  Management's Discussion and Analysis of Financial 
                   Condition and Results of Operations                       20

     Item 3.  Quantitative and Qualitative Disclosures About Market Risk     33

Part II.      Other Information                                              33

     Item 1.  Legal Proceedings                                              33

     Item 6.  Exhibits and Reports on Form 8-K                               33

              Signatures                                                     35


                                       2
<PAGE>



                                   DEFINITIONS

Certain  abbreviations  or acronyms  used in the text and notes of this combined
Form 10-Q are defined below:

Abbreviation or Acronym     Definition
-----------------------     ----------
Cargill                     Cargill Incorporated
CEMS                        Continuous Emission Monitoring System
Corporate Services          Alliant Energy Corporate Services, Inc.
Dth                         Dekatherm
EAC                         Energy Adjustment Clause
EPA                         United States Environmental Protection Agency
IEC                         Interstate Energy Corporation
IESU                        IES Utilities Inc.
IPC                         Interstate Power Company
IUB                         Iowa Utilities Board
Kewaunee                    Kewaunee Nuclear Power Plant
MAEC                        MidAmerican Energy Company
McLeod                      McLeodUSA Inc.
MD&A                        Management's Discussion and Analysis of Financial
                            Condition and Results of Operations
MW                          Megawatt
MWH                         Megawatt-Hour
NOx                         Nitrogen Oxides
OCA                         Office of Consumer Advocate
PGA                         Purchased Gas Adjustment
Polsky                      Polsky Energy Corporation
PSCW                        Public Service Commission of Wisconsin
PUHCA                       Public Utility Holding Company Act of 1935
Resources                   Alliant Energy Resources, Inc.
SEC                         Securities and Exchange Commission
SIP                         State Implementation Plan
Whiting                     Whiting Petroleum Corporation
WP&L                        Wisconsin Power and Light Company
WPSC                        Wisconsin Public Service Corporation


                                       3
<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1.  CONSOLIDATED FINANCIAL STATEMENTS


                          INTERSTATE ENERGY CORPORATION
                  CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)


                                           For the Three Months Ended March 31
                                               1999                    1998
--------------------------------------------------------------------------------
                                         (in thousands, except per share amounts
Operating revenues:
  Electric utility                          $ 351,338               $ 357,751
  Gas utility                                 133,684                 130,046
  Nonregulated and other                       61,833                  68,486
                                            ---------               ---------
                                              546,855                 556,283
                                            ---------               ---------
--------------------------------------------------------------------------------
Operating expenses:
  Electric and steam production fuels          65,404                  69,556
  Purchased power                              52,065                  56,147
  Cost of utility gas sold                     81,343                  77,280
  Other operation                             130,365                 157,352
  Maintenance                                  23,812                  25,259
  Depreciation and amortization                73,640                  69,832
  Taxes other than income taxes                27,239                  26,977
                                            ---------               ---------
                                              453,868                 482,403
                                            ---------               --------- 
--------------------------------------------------------------------------------

Operating income                               92,987                  73,880
                                            ---------               ---------
--------------------------------------------------------------------------------
Interest expense and other:
  Interest expense                             33,400                  30,924
  Allowance for funds used during
    construction                               (1,934)                 (1,503)
  Preferred dividend requirements 
    of subsidiaries                             1,676                   1,674
  Miscellaneous, net                           (6,771)                 (3,877)
                                            ---------               ---------
                                               26,371                  27,218
                                            ---------               ---------
--------------------------------------------------------------------------------
Income before income taxes                     66,616                  46,662
                                            ---------               ---------
--------------------------------------------------------------------------------

Income taxes                                   24,872                  17,787
                                            ---------               ---------
--------------------------------------------------------------------------------

Net income                                  $  41,744               $  28,875
                                            =========               =========
--------------------------------------------------------------------------------

Average number of common shares
 outstanding                                   77,780                  76,579
                                            =========               =========
--------------------------------------------------------------------------------

Earnings per average common share
 (basic and diluted)                        $    0.54               $    0.38
                                            =========               =========
--------------------------------------------------------------------------------

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.

                                       4
<PAGE>

                          INTERSTATE ENERGY CORPORATION
                           CONSOLIDATED BALANCE SHEETS

                                                March 31,
                                                   1999            December 31,
ASSETS                                         (Unaudited)             1998
--------------------------------------------------------------------------------
                                                        (in thousands)
Property, plant and equipment:
  Utility -
    Plant in service -
      Electric                                $ 4,884,916         $ 4,866,152
      Gas                                         517,775             515,074
      Other                                       409,844             409,711
                                              ------------   -----------------
                                                5,812,535           5,790,937
    Less - Accumulated depreciation             2,917,085           2,852,605
                                              ------------   -----------------
                                                2,895,450           2,938,332
    Construction work in progress                 133,054             119,032
    Nuclear fuel, net of amortization              40,709              44,316
                                              ------------   -----------------
                                                3,069,213           3,101,680
  Other property, plant and equipment,
    net of accumulated depreciation and
    amortization of $189,289 and 
    $178,248, respectively                        354,075             355,100
                                              ------------   -----------------
                                                3,423,288           3,456,780
                                              ------------   -----------------
------------------------------------------------------------------------------
Current assets:
  Cash and temporary cash investments              54,183              31,827
  Accounts receivable:
    Customer, less allowance for doubtfu
      accounts of $2,594 and $2,518, 
      respectively                                 96,973             102,966
    Other, less allowance for doubtful
      accounts of $499 and $490, respectively      22,273              26,054
  Notes receivable, less allowance for
    doubtful accounts of $117 and $120,
    respectively                                    9,433              13,392
  Production fuel, at average cost                 44,397              54,140
  Materials and supplies, at average cost          55,025              53,490
  Gas stored underground, at average cost          12,489              26,013
  Regulatory assets                                26,628              30,796
  Prepaid gross receipts tax                       16,882              22,222
  Other                                            24,316              30,767
                                              ------------   -----------------
                                                  362,599             391,667
                                              ------------   -----------------
------------------------------------------------------------------------------
Investments:
  Investment in McLeodUSA Inc.                    431,255             320,280
  Nuclear decommissioning trust funds             245,024             225,803
  Investment in foreign entities                  119,124              68,882
  Other                                            52,619              54,776
                                              ------------   -----------------
                                                  848,022             669,741
                                              ------------   -----------------
------------------------------------------------------------------------------
Other assets:
  Regulatory assets                               278,147             284,467
  Deferred charges and other                      159,066             156,682
                                              ------------   -----------------
                                                  437,213             441,149
                                              ------------   -----------------
------------------------------------------------------------------------------
Total assets                                  $ 5,071,122         $ 4,959,337
                                              ============   =================
------------------------------------------------------------------------------

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.


                                       5
<PAGE>


                          INTERSTATE ENERGY CORPORATION
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
<TABLE>
<CAPTION>

                                                                                     March 31,
                                                                                        1999             December 31,
CAPITALIZATION AND LIABILITIES                                                      (Unaudited)              1998
------------------------------------------------------------------------------------------------------------------------
                                                                                  (in thousands, except share amounts)
<S>                                                                                <C>                  <C>            
Capitalization:
  Common stock - $.01 par value - authorized 200,000,000 shares;
    outstanding 77,935,693 and 77,630,043 shares, respectively                     $           779      $           776
  Additional paid-in capital                                                               913,728              905,130
  Retained earnings                                                                        540,282              537,372
  Accumulated other comprehensive income                                                   237,434              163,017
                                                                                  -----------------    -----------------
    Total common equity                                                                  1,692,223            1,606,295
                                                                                  -----------------    -----------------

  Cumulative preferred stock of subsidiaries:
   Par/Stated       Authorized        Shares                         Mandatory
      Value           Shares        Outstanding       Series        Redemption
      -----           ------        -----------       ------        ----------
      $ 100              *            449,765      4.40% - 6.20%        No                  44,977               44,977
      $  25              *            599,460          6.50%            No                  14,986               14,986
      $  50           466,406         366,406      4.30% - 6.10%        No                  18,320               18,320
      $  50             **            216,381      4.36% - 7.76%        No                  10,819               10,819
      $  50             **            545,000          6.40%           Yes ***              27,250               27,250
                                                                                  -----------------    -----------------
                                                                                           116,352              116,352
    Less:  unamortized expenses                                                             (2,819)              (2,854)
                                                                                  -----------------    -----------------
      Total cumulative preferred stock of subsidiaries                                     113,533              113,498
                                                                                  -----------------    -----------------

  Long-term debt (excluding current portion)                                             1,545,251            1,543,131
                                                                                  -----------------    -----------------
                                                                                         3,351,007            3,262,924
                                                                                  -----------------    -----------------
* 3,750,000  authorized  shares in total  between  the two classes 
**  2,000,000 authorized  shares  in  total  between  the two  classes  
***  $53.20  mandatory redemption price
------------------------------------------------------------------------------------------------------------------------
Current liabilities:
  Current maturities and sinking funds                                                      54,084               63,414
  Variable rate demand bonds                                                                56,975               56,975
  Commercial paper                                                                          64,000               64,500
  Notes payable                                                                             50,027               51,784
  Capital lease obligations                                                                 12,146               11,978
  Accounts payable                                                                         163,589              204,297
  Accrued taxes                                                                            106,845               84,921
  Other                                                                                    113,414              111,685
                                                                                  -----------------    -----------------
                                                                                           621,080              649,554
                                                                                  -----------------    -----------------
------------------------------------------------------------------------------------------------------------------------
Other long-term liabilities and deferred credits:
  Accumulated deferred income taxes                                                        738,168              691,624
  Accumulated deferred investment tax credits                                               75,949               77,313
  Environmental liabilities                                                                 68,192               68,399
  Customer advances                                                                         35,964               37,171
  Capital lease obligations                                                                 11,499               13,755
  Other                                                                                    169,263              158,597
                                                                                  -----------------    -----------------
                                                                                         1,099,035            1,046,859
                                                                                  -----------------    -----------------
------------------------------------------------------------------------------------------------------------------------
Total capitalization and liabilities                                                   $ 5,071,122          $ 4,959,337
                                                                                  =================    =================
------------------------------------------------------------------------------------------------------------------------

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.

</TABLE>

                                       6

<PAGE>

                          INTERSTATE ENERGY CORPORATION
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>

                                                                 For the Three Months Ended March 31,
                                                                       1999                1998
-----------------------------------------------------------------------------------------------------
                                                                           (in thousands)
<S>                                                                     <C>                 <C>     
Cash flows from operating activities:
  Net income                                                            $ 41,744            $ 28,875
  Adjustments to reconcile net income to net cash flows  
   from  operating activities:
    Depreciation and amortization                                         73,640              69,832
    Amortization of nuclear fuel                                           5,024               5,437
    Amortization of deferred energy efficiency expenditures                7,930               8,240
    Deferred taxes and investment tax credits                             (1,799)            (13,424)
    Refueling outage provision                                             2,415               1,299
    Impairment of oil and gas properties                                       -               6,746
    Other                                                                 (2,070)              1,197
  Other changes in assets and liabilities:
    Accounts receivable                                                    9,774              20,221
    Notes receivable                                                       3,959               2,091
    Production fuel                                                        9,743               7,289
    Materials and supplies                                                (1,535)             (1,543)
    Gas stored underground                                                13,524              21,544
    Prepaid gross receipts tax                                             5,340               4,912
    Accounts payable                                                     (40,708)            (23,964)
    Accrued taxes                                                         21,924              29,699
    Adjustment clause balances                                             9,168              14,220
    Benefit obligations and other                                         12,079                (398)
                                                                -----------------   -----------------
       Net cash flows from operating activities                          170,152             182,273
                                                                -----------------   -----------------
-----------------------------------------------------------------------------------------------------
Cash flows used for financing activities:
    Common stock dividends declared                                      (38,834)            (36,580)
    Proceeds from issuance of common stock                                 8,538               2,828
    Net change in Alliant Energy Resources, Inc. credit facility          42,995              29,562
    Proceeds from issuance of other long-term debt                        11,994                  41
    Reductions in other long-term debt                                   (62,310)             (1,013)
    Net change in short-term borrowings                                   (2,257)            (67,676)
    Principal payments under capital lease obligations                    (3,369)             (4,106)
    Other                                                                    113                (423)
                                                                -----------------   -----------------
        Net cash flows used for financing activities                     (43,130)            (77,367)
                                                                -----------------   -----------------
-----------------------------------------------------------------------------------------------------
Cashflows used for investing activities:
    Construction and acquisition expenditures:
       Utility                                                           (41,638)            (39,160)
       Nonregulated businesses                                           (49,198)            (22,554)
    Nuclear decommissioning trust funds                                  (15,437)            (13,642)
    Shared savings expenditures                                           (4,247)             (1,808)
    Other                                                                  5,854               7,032
                                                                -----------------   -----------------
       Net cash flows used for investing activities                     (104,666)            (70,132)
                                                                -----------------   -----------------
-----------------------------------------------------------------------------------------------------
Net increase in cash and temporary cash investments                       22,356              34,774
                                                                -----------------   -----------------
-----------------------------------------------------------------------------------------------------
Cash and temporary cash investments at beginning of period                31,827              27,329
                                                                -----------------   -----------------
-----------------------------------------------------------------------------------------------------
                                                                -----------------   -----------------
Cash and temporary cash investments at end of period                    $ 54,183            $ 62,103
                                                                =================   =================
-----------------------------------------------------------------------------------------------------
Supplemental cash flow information: 
    Cash paid during the period for:
       Interest                                                         $ 31,952            $ 32,237
                                                                =================   =================
       Income taxes                                                      $ 4,600            $ 11,892
                                                                =================   =================
    Noncash investing and financing activities:
       Capital lease obligations incurred                                $ 1,414             $ 1,039
                                                                =================   =================
-----------------------------------------------------------------------------------------------------

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
</TABLE>



                                       7


<PAGE>

                          INTERSTATE ENERGY CORPORATION

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.     The interim  consolidated  financial statements included herein have been
       prepared by IEC, without audit,  pursuant to the rules and regulations of
       the  SEC.  Accordingly,  certain  information  and  footnote  disclosures
       normally  included in financial  statements  prepared in accordance  with
       generally accepted accounting  principles have been condensed or omitted,
       although  management  believes that the  disclosures are adequate to make
       the information  presented not  misleading.  The  consolidated  financial
       statements  include IEC and its consolidated  subsidiaries  (WP&L,  IESU,
       IPC, Resources and Corporate Services). These financial statements should
       be read in  conjunction  with  the  financial  statements  and the  notes
       thereto included in IEC's, IESU's and WP&L's latest Annual Report on Form
       10-K.

       In the  opinion  of  management,  all  adjustments,  which are normal and
       recurring  in  nature,  necessary  for a fair  presentation  of  (a)  the
       consolidated  results of operations  for the three months ended March 31,
       1999 and 1998, (b) the consolidated  financial position at March 31, 1999
       and December 31, 1998, and (c) the  consolidated  statement of cash flows
       for the three  months  ended  March 31,  1999 and 1998,  have been  made.
       Because of the seasonal  nature of IESU's,  WP&L's and IPC's  operations,
       results for the three  months  ended  March 31, 1999 are not  necessarily
       indicative  of results that may be expected for the year ending  December
       31, 1999.  Certain prior period amounts have been reclassified on a basis
       consistent with the 1999 presentation.

2.     IEC's  comprehensive  income,  and the components of other  comprehensive
       income (loss), net of taxes, were as follows (in thousands):
<TABLE>
<CAPTION>

                                                                        For the Three Months
                                                                           Ended March 31,
                                                                       1999              1998
                                                                   --------------   ---------------
<S>                                                                    <C>               <C>      
            Net income                                                 $  41,744         $  28,875
            
               Other comprehensive income (loss):
                 Unrealized gain on securities, net of tax (1)                       
                                                                          75,031            61,829
                 Foreign currency translation adjustments                            
                                                                           (614)                55
                                                                   --------------   ---------------
                   Other comprehensive income                             74,417     
                                                                                            61,884
            
                                                                   --------------   ---------------
            Comprehensive income                                       $ 116,161         $  90,759
                                                                   ==============   ===============
 
(1)    Primarily due to the  adjustment to the estimated fair value each quarter
       of IEC's investment in McLeod.

</TABLE>

      IESU and WP&L had no comprehensive income in the periods presented.


                                       8
<PAGE>



3.     Certain  financial  information  relating to IEC's  significant  business
       segments is presented below:
<TABLE>
<CAPTION>

                                         Regulated Domestic Utilities           Nonregulated                 IEC
                                  -------------------------------------------
                                   Electric     Gas      Other      Total        Businesses     Other   Consolidated
                                  ------------------------------------------------------------------------------------
                                                                     (in thousands)
<S>                                <C>        <C>         <C>       <C>               <C>         <C>        <C>     
      Three Months Ended
      March 31, 1999
      --------------
      Operating revenues           $351,338   $133,684    $9,204    $494,226          $53,199     ($570)     $546,855
      Operating income (loss)        68,615     23,939     2,354      94,908           (1,836)      (85)       92,987
      Net income (loss)                                               44,767           (1,906)   (1,117)       41,744

      Three Months Ended
      March 31, 1998
      --------------
      Operating revenues           $357,751   $130,046    $8,409    $496,206          $60,322     ($245)     $556,283
      Operating income (loss)        55,837     22,376     1,831      80,044           (5,499)     (665)       73,880
      Net income (loss)                                               33,177           (3,999)     (303)       28,875
</TABLE>

       Resources'  (i.e.  the  nonregulated  businesses)  assets  increased $150
       million  during the first quarter of 1999,  primarily due to the increase
       in market value of its investment in McLeod and additional investments in
       foreign  entities.  Intersegment  revenues  were  not  material  to IEC's
       operations and there was no single  customer whose revenues  exceeded 10%
       or more of IEC's consolidated revenues.

4.     The  provisions  for  income  taxes  are  based on the  estimated  annual
       effective tax rate, which differs from the federal  statutory rate of 35%
       principally due to: state income taxes,  tax credits,  effects of utility
       rate making and certain nondeductible expenses.

5.     At March 31,  1999,  IEC had  $119.1  million of  investments  in foreign
       entities  on  its   Consolidated   Balance  Sheets  that  included:   (a)
       investments in several New Zealand utility  entities;  (b) investments in
       several  generation  facilities  in China;  and (c) an  investment  in an
       international   venture   capital  fund.   IEC  accounts  for  the  China
       investments  under the equity method and the other  investments under the
       cost method. The geographic concentration of IEC's investments in foreign
       entities at March 31, 1999,  included  investments of approximately $85.7
       million in New Zealand,  $32.9 million in China and $0.5 million in other
       countries.

6.     In October 1998,  the Board of Directors of IEC adopted a new  Shareowner
       Rights  Plan (new  plan) to replace  IEC's  former  plan that  expired on
       February 22,  1999.  The new plan was approved on January 15, 1999 by the
       SEC. On January 20, 1999,  the Board of Directors  declared a dividend of
       one common share  purchase  right  (right) on each  outstanding  share of
       IEC's common stock which was issued on February 22, 1999 to coincide with
       the  expiration  of the former  plan.  Rights  under the new plan will be
       exercisable  only if a person or group  acquires,  or  announces a tender
       offer to  acquire,  15% or more of IEC's  common  stock.  Each right will
       initially  entitle  shareowners  to buy  one-half  of one  share of IEC's
       common stock.  The rights will only be exercisable in multiples of two at
       an initial price of $95.00 per full share, subject to adjustment.  If any
       shareowner  acquires 15% or more of the outstanding  common stock of IEC,
       each right (subject to limitations)  will entitle its holder to purchase,
       at the right's then current  exercise price, a number of common shares of
       IEC or of the  acquirer  having a market  value at the time of twice  the
       right's per full share  exercise  price.  The Board of  Directors is also
       authorized to reduce the 15% thresholds to not less than 10%.



                                       9
<PAGE>


                               IES UTILITIES INC.
                 CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

                                            For the Three Months Ended March 31,
                                                 1999                  1998
-------------------------------------------------------------------------------
                                                       (in thousands)
Operating revenues:
  Electric utility                              $ 140,017           $ 140,649
  Gas utility                                      61,296              60,395
  Steam and other                                   7,952               7,234
                                                ---------           ---------
                                                  209,265             208,278
                                                ---------           ---------
-----------------------------------------------------------------------------
Operating expenses:
  Electric and steam production fuels              26,589              30,649
  Purchased power                                  13,150              11,049
  Cost of gas sold                                 37,912              37,657
  Other operation                                  47,439              47,002
  Maintenance                                       9,904              10,991
  Depreciation and amortization                    25,482              24,335
  Taxes other than income taxes                    12,616              12,306
                                                ---------           ---------
                                                  173,092             173,989
                                                ---------           ---------
-----------------------------------------------------------------------------

Operating income                                   36,173              34,289
                                                ---------           ---------
-----------------------------------------------------------------------------

Interest expense and other:
Interest expense                                   13,204              13,075
  Allowance for funds used during
   construction                                      (849)               (765)
  Miscellaneous, net                                 (857)                279
                                                ---------           ---------
                                                   11,498              12,589
                                                ---------           ---------
-----------------------------------------------------------------------------

Income before income taxes                         24,675              21,700
                                                ---------           ---------
-----------------------------------------------------------------------------

Income taxes                                       10,216              10,040
                                                ---------           ---------
-----------------------------------------------------------------------------

Net income                                         14,459              11,660
                                                ---------           ---------
-----------------------------------------------------------------------------

Preferred dividend requirements                       229                 229
                                                ---------           ---------
-----------------------------------------------------------------------------

Earnings available for common stock             $  14,230           $  11,431
                                                =========           =========
-----------------------------------------------------------------------------


The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.

                                       10

<PAGE>

                               IES UTILITIES INC.
                           CONSOLIDATED BALANCE SHEETS

                                               March 31,
                                                  1999            December 31,
ASSETS                                         (Unaudited)             1998
--------------------------------------------------------------------------------
                                                          (in thousands)
Property, plant and equipment:
  Utility -
    Plant in service -
      Electric                                  $ 2,148,059       $ 2,140,322
      Gas                                           199,209           198,488
      Steam                                          55,794            55,797
      Common                                        106,732           106,940
                                               -------------   ---------------
                                                  2,509,794         2,501,547
    Less - Accumulated depreciation               1,237,623         1,209,204
                                               -------------   ---------------
                                                  1,272,171         1,292,343
    Construction work in progress                    57,141            48,991
    Leased nuclear fuel, net of 
     amortization                                    23,559            25,644
                                               -------------   ---------------
                                                  1,352,871         1,366,978
  Other property, plant and equipment, 
    net of accumulated depreciation and 
    amortization of $1,984 and $1,948,
    respectively                                      5,586             5,623
                                               -------------   ---------------
                                                  1,358,457         1,372,601
                                               -------------   ---------------
------------------------------------------------------------------------------
Current assets:
  Cash and temporary cash investments                   585             4,175
  Temporary cash investments with 
     associated companies                                 -            53,729
  Accounts receivable:
    Customer, less allowance for doubtful
      accounts of $1,056 and $1,058,
      respectively                                   17,543            16,703
    Associated companies                              2,466             2,662
    Other, less allowance for doubtful
      accounts of $363 and $357, 
      respectively                                   10,158            10,346
  Production fuel, at average cost                   13,306            11,863
  Materials and supplies, at average cost            25,972            25,591
  Gas stored underground, at average cost             5,887            12,284
  Regulatory assets                                  19,324            23,487
  Prepayments and other                               3,879             4,185
                                               -------------   ---------------
                                                     99,120           165,025
                                               -------------   ---------------
------------------------------------------------------------------------------
Investments:
  Nuclear decommissioning trust funds                95,398            91,691
  Other                                               6,236             6,019
                                               -------------   ---------------
                                                    101,634            97,710
                                               -------------   ---------------
------------------------------------------------------------------------------
Other assets:
  Regulatory assets                                 133,491           137,908
  Deferred charges and other                         15,201            15,734
                                               -------------   ---------------
                                                    148,692           153,642
                                               -------------   ---------------
------------------------------------------------------------------------------
Total assets                                    $ 1,707,903       $ 1,788,978
                                               =============   ===============
------------------------------------------------------------------------------

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.


                                       11

                                     
<PAGE>

                               IES UTILITIES INC.
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
<TABLE>
<CAPTION>

                                                                                March 31,
                                                                                  1999               December 31,
CAPITALIZATION AND LIABILITIES                                                 (Unaudited)               1998
--------------------------------------------------------------------------------------------------------------------
                                                                             (in thousands, except share amounts)
<S>                                                                               <C>                   <C>        
Capitalization:
  Common stock - $2.50 par value - authorized 24,000,000
    shares; 13,370,788 shares outstanding                                         $    33,427           $    33,427
  Additional paid-in capital                                                          279,042               279,042
  Retained earnings                                                                   245,626               275,372
                                                                            ------------------     -----------------
    Total common equity                                                               558,095               587,841
  Cumulative preferred stock, not mandatorily redeemable -
    $50 par value - authorized 466,406 shares; 366,406 shares outstanding              18,320                18,320
  Long-term debt (excluding current portion)                                          551,086               602,020
                                                                            ------------------     -----------------
                                                                                    1,127,501             1,208,181
                                                                            ------------------     -----------------
--------------------------------------------------------------------------------------------------------------------
Current liabilities:
  Current maturities and sinking funds                                                 51,140                50,140
  Capital lease obligations                                                            12,132                11,965
  Notes payable to associated companies                                                 9,694                     -
  Accounts payable                                                                     30,117                43,953
  Accounts payable to associated companies                                             13,930                22,487
  Accrued payroll and vacations                                                         9,311                 6,365
  Accrued interest                                                                     10,082                12,045
  Accrued taxes                                                                        64,480                55,295
  Accumulated refueling outage provision                                                9,020                 6,605
  Environmental liabilities                                                             5,660                 5,660
  Other                                                                                16,928                17,617
                                                                            ------------------     -----------------
                                                                                      232,494               232,132
                                                                            ------------------     -----------------
--------------------------------------------------------------------------------------------------------------------
Other long-term liabilities and deferred credits:
  Accumulated deferred income taxes                                                   224,893               224,510
  Accumulated deferred investment tax credits                                          28,603                29,243
  Environmental liabilities                                                            29,027                29,195
  Pension and other benefit obligations                                                27,283                25,655
  Capital lease obligations                                                            11,427                13,679
  Other                                                                                26,675                26,383
                                                                            ------------------     -----------------
                                                                                      347,908               348,665
                                                                            ------------------     -----------------
--------------------------------------------------------------------------------------------------------------------
Total capitalization and liabilities                                              $ 1,707,903           $ 1,788,978
                                                                            ==================     =================
--------------------------------------------------------------------------------------------------------------------

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.
</TABLE>


                                       12

<PAGE>

                               IES UTILITIES INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>

                                                                                     For the Three Months Ended March 31,
                                                                                          1999                1998
-------------------------------------------------------------------------------------------------------------------------
                                                                                                   (in thousands)
<S>                                                                                  <C>                 <C>        
Cash flows from operating activities:
  Net income                                                                         $    14,459         $    11,660
  Adjustments to reconcile net income to net cash
   flows from operating activities:
     Depreciation and amortization                                                        25,482              24,335
     Amortization of leased nuclear fuel                                                   3,499               4,010
     Amortization of deferred energy efficiency expenditures                               6,064               6,070
     Deferred taxes and investment tax credits                                              (473)             (8,822)
     Refueling outage provision                                                            2,415               1,299
     Other                                                                                   146                 319
  Other changes in assets and liabilities:
     Accounts receivable                                                                    (456)              2,796
     Production fuel                                                                      (1,443)                197
     Materials and supplies                                                                 (381)             (1,249)
     Gas stored underground                                                                6,397              10,509
     Accounts payable                                                                    (22,393)            (12,292)
     Accrued taxes                                                                         9,185              13,262
     Adjustment clause balances                                                            4,809               9,466
     Benefit obligations and other                                                         5,776               5,449
                                                                                   ------------------   -----------------
       Net cash flows from operating activities                                           53,086              67,009
                                                                                   ------------------   -----------------
-------------------------------------------------------------------------------------------------------------------------
Cash flows used for financing activities:
    Common stock dividends declared                                                      (43,976)            (14,000)
    Dividends payable                                                                     (4,840)             14,000
    Preferred stock dividends                                                               (229)               (229)
    Reductions in long-term debt                                                         (50,000)                  -
    Net change in short-term borrowings                                                    9,694                   -
    Principal payments under capital lease obligations                                    (3,369)             (4,106)
    Other                                                                                     (3)                  -
                                                                                   ------------------  ------------------
      Net cash flows used for financing activities                                       (92,723)             (4,335)
                                                                                   ------------------  ------------------
-------------------------------------------------------------------------------------------------------------------------
Cash flows used for investing activities:
    Construction expenditures - utility                                                  (16,621)            (19,198)
    Nuclear decommissioning trust funds                                                   (1,502)             (1,502)
    Other                                                                                    441                  72
                                                                                   ------------------  ------------------
      Net cash flows used for investing activities                                       (17,682)            (20,628)
                                                                                   ------------------  ------------------
-------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash and temporary cash investments                           (57,319)             42,046
                                                                                   ------------------  ------------------
-------------------------------------------------------------------------------------------------------------------------
Cash and temporary cash investments at beginning of period                                57,904                 230
                                                                                   ------------------  ------------------
-------------------------------------------------------------------------------------------------------------------------
Cash and temporary cash investments at end of period                                 $       585         $    42,276
                                                                                   ==================  ==================
-------------------------------------------------------------------------------------------------------------------------
Supplemental cash flow information: Cash paid during the period for:
    Interest                                                                         $    13,989         $    12,378
                                                                                   ==================  ==================
    Income taxes                                                                     $     7,334         $    11,804
                                                                                   ==================  ==================
  Noncash investing and financing activities - Capital lease obligations incurred    $     1,414         $     1,039
                                                                                   ==================  ==================
-------------------------------------------------------------------------------------------------------------------------

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.


</TABLE>


                                       13

<PAGE>


                               IES UTILITIES INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

       Except  as  modified  below,  the IEC  Notes  to  Consolidated  Financial
       Statements are incorporated by reference  insofar as they relate to IESU.
       IEC  Notes  5 and 6 do  not  relate  to  IESU  and,  therefore,  are  not
       incorporated by reference.

1.     The interim  consolidated  financial statements included herein have been
       prepared by IESU, without audit, pursuant to the rules and regulations of
       the  SEC.  Accordingly,  certain  information  and  footnote  disclosures
       normally  included in financial  statements  prepared in accordance  with
       generally accepted accounting  principles have been condensed or omitted,
       although  management  believes that the  disclosures are adequate to make
       the information  presented not  misleading.  The  consolidated  financial
       statements include IESU and its consolidated wholly-owned subsidiary, IES
       Ventures  Inc. IESU is a subsidiary of IEC.  These  financial  statements
       should be read in conjunction with the financial statements and the notes
       thereto included in IESU's latest Annual Report on Form 10-K.

       In the  opinion  of  management,  all  adjustments,  which are normal and
       recurring  in  nature,  necessary  for a fair  presentation  of  (a)  the
       consolidated  results of operations  for the three months ended March 31,
       1999 and 1998, (b) the consolidated  financial position at March 31, 1999
       and December 31, 1998, and (c) the  consolidated  statement of cash flows
       for the three  months  ended  March 31,  1999 and 1998,  have been  made.
       Because of the  seasonal  nature of IESU's  operations,  results  for the
       three  months  ended March 31,  1999 are not  necessarily  indicative  of
       results  that may be expected  for the year  ending  December  31,  1999.
       Certain prior period amounts have been reclassified on a basis consistent
       with the 1999 presentation.



                                       14
<PAGE>


                        WISCONSIN POWER AND LIGHT COMPANY
                  CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

                                            For the Three Months Ended March 31,
                                                1999                    1998
------------------------------------------------------------------------------
                                                       (in thousands)
Operating revenues:
  Electric utility                           $  149,944            $   151,310
  Gas utility                                    51,794                 50,318
  Water                                           1,252                  1,175
                                             ----------            -----------
                                                202,990                202,803
                                             ----------            -----------
------------------------------------------------------------------------------
Operating expenses:
  Electric production fuels                      27,366                 28,897
  Purchased power                                24,000                 28,602
  Cost of gas sold                               31,181                 30,714
  Other operation                                26,108                 34,003
  Maintenance                                     9,103                  9,967
  Depreciation and amortization                  31,139                 29,258
  Taxes other than income taxes                   7,702                  7,711
                                             ----------            -----------
                                                156,599                169,152
                                             ----------            -----------
------------------------------------------------------------------------------
Operating income                                 46,391                 33,651
                                             ----------            -----------
------------------------------------------------------------------------------
Interest expense and other:
  Interest expense                                9,865                  8,383
  Allowance for funds used during 
     construction                                  (923)                  (656)
  Miscellaneous, net                             (4,344)                (1,867)
                                             ----------            -----------
                                                  4,598                  5,860
                                             ----------            -----------
------------------------------------------------------------------------------

Income before income taxes                       41,793                 27,791
                                             ----------            -----------
------------------------------------------------------------------------------

Income taxes                                     15,505                 10,193
                                             ----------            -----------
------------------------------------------------------------------------------

Net income                                       26,288                 17,598
                                             ----------            -----------
------------------------------------------------------------------------------

Preferred dividend requirements                     828                    828
                                             ----------            -----------
------------------------------------------------------------------------------

Earnings available for common stock          $   25,460            $    16,770
                                             ==========            ===========
------------------------------------------------------------------------------

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.


                                       15

<PAGE>
                        WISCONSIN POWER AND LIGHT COMPANY
                           CONSOLIDATED BALANCE SHEETS

                                                March 31,
                                                  1999             December 31,
ASSETS                                        (Unaudited)              1998
--------------------------------------------------------------------------------
                                                     (in thousands)
Property, plant and equipment:
  Utility -
    Plant in service -
      Electric                                 $ 1,847,950          $ 1,839,545
      Gas                                          246,188              244,518
      Water                                         26,584               26,567
      Common                                       219,715              219,268
                                             --------------    -----------------
                                                 2,340,437            2,329,898
    Less - Accumulated depreciation              1,199,761            1,168,830
                                             --------------    -----------------
                                                 1,140,676            1,161,068
    Construction work in progress                   63,950               56,994
    Nuclear fuel, net of amortization               17,151               18,671
                                             --------------    -----------------
                                                 1,221,777            1,236,733
  Other property, plant and equipment, 
    net of accumulated depreciation and
    amortization of $44 for both years                 630                  630
                                             --------------    -----------------
                                                 1,222,407            1,237,363
                                             --------------    -----------------
--------------------------------------------------------------------------------
Current assets:
  Cash and temporary cash investments                9,496                1,811
  Accounts receivable:
    Customer                                         9,932               13,372
    Associated companies                             1,921                3,019
    Other                                            7,307                8,298
  Production fuel, at average cost                  14,851               20,105
  Materials and supplies, at average cost           21,117               20,025
  Gas stored underground, at average cost            5,924               10,738
  Regulatory assets                                  3,707                3,707
  Prepaid gross receipts tax                        16,882               22,222
  Other                                              1,413                6,987
                                             --------------    -----------------
                                                    92,550              110,284
                                             --------------    -----------------
--------------------------------------------------------------------------------
Investments:
  Nuclear decommissioning trust funds              149,627              134,112
  Other                                             15,476               15,960
                                             --------------    -----------------
                                                   165,103              150,072
                                             --------------    -----------------
--------------------------------------------------------------------------------
Other assets:
  Regulatory assets                                 74,788               76,284
  Deferred charges and other                       113,058              111,147
                                             --------------    -----------------
                                                   187,846              187,431
                                             --------------    -----------------
--------------------------------------------------------------------------------
Total assets                                   $ 1,667,906          $ 1,685,150
                                             ==============    =================
--------------------------------------------------------------------------------

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.



                                       16
<PAGE>

                        WISCONSIN POWER AND LIGHT COMPANY
                     CONSOLIDATED BALANCE SHEETS (CONTINUED)
<TABLE>
<CAPTION>

                                                                     March 31,
                                                                        1999              December 31,
CAPITALIZATION AND LIABILITIES                                      (Unaudited)               1998
---------------------------------------------------------------------------------------------------------
                                                                   (in thousands, except share amounts)
<S>                                                                    <C>                   <C>        
Capitalization:
  Common stock - $5 par value - authorized 18,000,000
    shares; 13,236,601 shares outstanding                              $    66,183           $    66,183
  Additional paid-in capital                                               199,438               199,438
  Retained earnings                                                        305,181               294,309
                                                                  -----------------     -----------------
    Total common equity                                                    570,802               559,930
                                                                  -----------------     -----------------

  Cumulative preferred stock, not mandatorily redeemable 
    without par value - authorized 3,750,000 shares, maximum
    aggregate stated value $150,000,000:
      $100 stated value - 449,765 shares outstanding                        44,977                44,977
      $25 stated value - 599,460 shares outstanding                         14,986                14,986
                                                                  -----------------     -----------------
        Total cumulative preferred stock                                    59,963                59,963
                                                                  -----------------     -----------------

  Long-term debt (excluding current portion)                               414,603               414,579
                                                                  -----------------     -----------------
                                                                         1,045,368             1,034,472
                                                                  -----------------     -----------------
---------------------------------------------------------------------------------------------------------
Current liabilities:
  Variable rate demand bonds                                                56,975                56,975
  Notes payable                                                             50,000                50,000
  Notes payable to associated companies                                      1,102                26,799
  Accounts payable                                                          70,884                84,754
  Accounts payable to associated companies                                  16,468                20,315
  Accrued payroll and vacations                                              5,052                 5,276
  Accrued interest                                                           8,093                 6,863
  Accrued taxes                                                             16,502                   740
  Other                                                                     10,197                13,860
                                                                  -----------------     -----------------
                                                                           235,273               265,582
                                                                  -----------------     -----------------
---------------------------------------------------------------------------------------------------------
Other long-term liabilities and deferred credits:
  Accumulated deferred income taxes                                        243,750               245,489
  Accumulated deferred investment tax credits                               32,705                33,170
  Customer advances                                                         33,253                34,367
  Environmental liabilities                                                 11,644                11,683
  Other                                                                     65,913                60,387
                                                                  -----------------     -----------------
                                                                           387,265               385,096
                                                                  -----------------     -----------------
---------------------------------------------------------------------------------------------------------
Total capitalization and liabilities                                   $ 1,667,906           $ 1,685,150
                                                                  =================     =================
---------------------------------------------------------------------------------------------------------

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.


</TABLE>


                                       17
<PAGE>


                        WISCONSIN POWER AND LIGHT COMPANY
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>

                                                                             For the Three Months Ended March 31,
                                                                                  1999                   1998
-------------------------------------------------------------------------------------------------------------------
                                                                                     (in thousands)
<S>                                                                          <C>                    <C>       
Cash flows from operating activities:
  Net income                                                                 $   26,288             $   17,598
  Adjustments to reconcile net income to net cash
   flows from operating activities:
     Depreciation and amortization                                               31,139                 29,258
     Amortization of nuclear fuel                                                 1,525                  1,427
     Deferred taxes and investment tax credits                                   (1,578)                (1,607)
     Other                                                                       (1,617)                  (457)
  Other changes in assets and liabilities:
     Accounts receivable                                                          5,529                 15,460
     Production fuel                                                              5,254                  4,889
     Materials and supplies                                                      (1,092)                   (32)
     Gas stored underground                                                       4,814                  8,768
     Prepaid gross receipts tax                                                   5,340                  4,912
     Accounts payable                                                           (17,717)                (3,302)
     Accrued taxes                                                               15,762                 10,396
     Adjustment clause balances                                                   7,157                  3,691
     Benefit obligations and other                                                2,814                   (361)
                                                                   ---------------------  ---------------------
       Net cash flows from operating activities                                  83,618                 90,640
                                                                   ---------------------  ---------------------
---------------------------------------------------------------------------------------------------------------
Cash flows used for financing activities:
    Common stock dividends                                                      (14,588)               (14,586)
    Preferred stock dividends                                                      (828)                  (828)
    Net change in short-term borrowings                                         (25,697)               (42,500)
                                                                   ---------------------  ---------------------
      Net cash flows used for financing activities                              (41,113)               (57,914)
                                                                   ---------------------  ---------------------
---------------------------------------------------------------------------------------------------------------
Cash flows used for investing activities:
    Construction expenditures - utility                                         (18,967)               (15,584)
    Nuclear decommissioning trust funds                                         (13,935)               (12,140)
    Shared savings expenditures                                                  (2,519)                (1,808)
    Other                                                                           601                    477
                                                                   ---------------------  ---------------------
      Net cash flows used for investing activities                              (34,820)               (29,055)
                                                                   ---------------------  ---------------------
---------------------------------------------------------------------------------------------------------------
Net increase in cash and temporary cash investments                               7,685                  3,671
                                                                   ---------------------  ---------------------
---------------------------------------------------------------------------------------------------------------
Cash and temporary cash investments at beginning of period                        1,811                  2,492
                                                                   ---------------------  ---------------------
---------------------------------------------------------------------------------------------------------------
Cash and temporary cash investments at end of period                            $ 9,496                $ 6,163
                                                                   =====================  =====================
---------------------------------------------------------------------------------------------------------------
Supplemental cash flow information: 
  Cash paid (refunded) during the period for:
    Interest                                                                    $ 8,468                $ 8,150
                                                                   =====================  =====================
    Income taxes                                                                 $ (357)               $ 1,668
                                                                   =====================  =====================
---------------------------------------------------------------------------------------------------------------

The accompanying Notes to Consolidated Financial Statements are an integral part
of these statements.

</TABLE>


                                       18


<PAGE>


                        WISCONSIN POWER AND LIGHT COMPANY

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

       Except  as  modified  below,  the IEC  Notes  to  Consolidated  Financial
       Statements are incorporated by reference  insofar as they relate to WP&L.
       IEC  Notes  5 and 6 do  not  relate  to  WP&L  and,  therefore,  are  not
       incorporated by reference.

1.     The interim  consolidated  financial statements included herein have been
       prepared by WP&L, without audit, pursuant to the rules and regulations of
       the  SEC.  Accordingly,  certain  information  and  footnote  disclosures
       normally  included in financial  statements  prepared in accordance  with
       generally accepted accounting  principles have been condensed or omitted,
       although  management  believes that the  disclosures are adequate to make
       the information  presented not  misleading.  The  consolidated  financial
       statements  include  WP&L  and  its  consolidated  subsidiary.  WP&L is a
       subsidiary  of  IEC.  These  financial   statements  should  be  read  in
       conjunction with the financial  statements and the notes thereto included
       in WP&L's latest Annual Report on Form 10-K.

       In the  opinion  of  management,  all  adjustments,  which are normal and
       recurring  in  nature,  necessary  for a fair  presentation  of  (a)  the
       consolidated  results of operations  for the three months ended March 31,
       1999 and 1998, (b) the consolidated  financial position at March 31, 1999
       and December 31, 1998, and (c) the  consolidated  statement of cash flows
       for the three  months  ended  March 31,  1999 and 1998,  have been  made.
       Because of the  seasonal  nature of WP&L's  operations,  results  for the
       three  months  ended March 31,  1999 are not  necessarily  indicative  of
       results  that may be expected  for the year  ending  December  31,  1999.
       Certain prior period amounts have been reclassified on a basis consistent
       with the 1999 presentation.


                                       19
<PAGE>




     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS

IEC is currently doing business as Alliant Energy  Corporation and is the result
of a three-way  merger  involving WP&L Holdings,  Inc., IES Industries  Inc. and
Interstate  Power  Company  that was  completed  in April  1998.  The first tier
subsidiaries of IEC include:  WP&L, IESU, IPC, Resources and Corporate Services.
Among various  other  regulatory  constraints,  IEC is operating as a registered
public utility holding company subject to the limitations imposed by PUHCA.

This MD&A includes  information  relating to IEC, IESU and WP&L (as well as IPC,
Resources and Corporate Services). Where appropriate,  information relating to a
specific  entity  has  been  segregated  and  labeled  as  such.  The  following
discussion  and analysis  should be read in  conjunction  with the  Consolidated
Financial Statements and Notes to Consolidated  Financial Statements included in
this  report as well as the  financial  statements,  notes and MD&A  included in
IEC's, IESU's and WP&L's latest Annual Report on Form 10-K.

                           FORWARD-LOOKING STATEMENTS

Statements  contained in this report (including MD&A) that are not of historical
fact are  forward-looking  statements  intended to qualify for the safe  harbors
from liability  established by the Private  Securities  Litigation Reform Act of
1995.  From  time to time,  IEC,  IESU or WP&L may  make  other  forward-looking
statements  within  the  meaning of the  federal  securities  laws that  involve
judgments,  assumptions  and other  uncertainties  beyond  the  control  of such
companies.   These  forward-looking   statements  may  include,   among  others,
statements  concerning  revenue and cost trends,  cost recovery,  cost reduction
strategies and anticipated outcomes, pricing strategies,  changes in the utility
industry,  planned  capital  expenditures,  financing  needs  and  availability,
statements of expectations,  beliefs,  future plans and strategies,  anticipated
events or trends and similar comments concerning matters that are not historical
facts. Investors and other users of the forward-looking statements are cautioned
that such  statements  are not a guarantee of future  performance  and that such
forward-looking  statements  are subject to risks and  uncertainties  that could
cause actual results to differ  materially  from those  expressed in, or implied
by, such statements.  Some, but not all, of the risks and uncertainties  include
weather effects on sales and revenues,  competitive  factors,  general  economic
conditions in the relevant  service  territory,  federal and state regulatory or
government  actions,  unanticipated  construction and acquisition  expenditures,
issues  related to stranded  costs and the recovery  thereof,  the operations of
IEC's  nuclear  facilities,   unanticipated  issues  or  costs  associated  with
achieving Year 2000 compliance, the ability of IEC to successfully integrate its
operations  and   unanticipated   costs  associated   therewith,   unanticipated
difficulties  in achieving  expected  synergies  from the merger,  unanticipated
costs associated with certain environmental remediation efforts being undertaken
by  IEC,  technological  developments,  employee  workforce  factors,  including
changes in key executives,  collective  bargaining agreements or work stoppages,
political,   legal  and  economic   conditions  in  foreign  countries  IEC  has
investments in and changes in the rate of inflation.

                            UTILITY INDUSTRY OUTLOOK

A summary of the  current  regulatory  environment  is included in the Form 10-K
filed by IEC,  IESU and WP&L for the year ended  December  31,  1998.  Set forth
below are several developments relating to such regulatory environment.

The IUB has been  reviewing  all forms of  competition  in the electric  utility
industry for several years.  A group  comprised of the IUB, IEC, MAEC, the rural
electric  cooperatives,  the  municipal  utilities  and  Iowans  for  Choice  in
Electricity (a diverse group of industrial customers,  marketers, such as Enron,
and a low income customer representative, among others) endorsed a bill to allow
for such  competition that was introduced in the Iowa Legislature in March 1999.
The  bill  was  opposed  by  the  OCA,   which  is  charged  by  Iowa  law  with
representation of all consumers generally.  While the bill did not pass, it will
by operation of Iowa General Assembly rules remain alive in the General Assembly
upon  adjournment of its 1999 regular  session.  By operation of House rules, it
will be

                                       20
<PAGE>

rereferred to the House  Commerce  Committee and will again be inserted into the
legislative  process in the Second Regular Session of the 78th General  Assembly
(2000).

In November 1998,  IEC and Northern  States Power Co. (NSP)  announced  plans to
develop an independent  transmission  company to provide  electric  transmission
services to the Upper Midwest. The companies are evaluating modifications to the
original structure as a result of the recent merger announcement between NSP and
New Century Energies Inc.

Each of the  utilities  complies  with the  provisions of Statement of Financial
Accounting  Standards (SFAS) 71, "Accounting for the Effects of Certain Types of
Regulation."  SFAS 71  provides  that  rate-regulated  public  utilities  record
certain  costs and  credits  allowed in the rate  making  process  in  different
periods than for nonregulated entities.  These are deferred as regulatory assets
or regulatory  liabilities and are recognized in the consolidated  statements of
income at the time they are  reflected  in rates.  If a portion  of the  utility
subsidiaries'  operations becomes no longer subject to the provisions of SFAS 71
as a result of competitive  restructurings or otherwise, a write-down of related
regulatory assets and possibly other charges would be required, unless some form
of transition  cost recovery is established by the  appropriate  regulatory body
that would meet the requirements under generally accepted accounting  principles
for continued  accounting as regulatory  assets during such recovery period.  In
addition,  each utility subsidiary would be required to determine any impairment
of other  assets and  write-down  any impaired  assets to their fair value.  The
utility subsidiaries believe they currently meet the requirements of SFAS 71.

                            IEC RESULTS OF OPERATIONS

Overview

IEC  reported  net  income  of $41.7  million,  or $0.54 per  share  (basic  and
diluted),  for the  first  quarter  of 1999  compared  with net  income of $28.9
million, or $0.38 per share (basic and diluted), for the first quarter of 1998.

The 44%  increase  in earnings  resulted  from higher  electric  margins,  lower
utility  operation  and  maintenance  expenses,   improved  results  from  IEC's
nonregulated  operations and income from a weather hedge. In addition,  the 1998
results  included  approximately  $10  million of  non-recurring  merger-related
expenses ($0.07 per share).  Higher depreciation and interest expenses partially
offset the 1999 increase in earnings.

The 1999  first  quarter  utility  earnings  were  approximately  $44.8  million
compared with $33.2 million ($39.0 million  excluding  merger-related  expenses)
for the same period in 1998. The increase in utility earnings resulted primarily
from a $5.3 million increase in electric margins  (excluding  energy  efficiency
revenues),  a $2.6  million  decrease  in  operation  and  maintenance  expenses
(excluding  merger-related  and energy efficiency  expenses) and $2.5 million of
pre-tax income realized from a weather hedge. Increases of $3.7 million and $1.6
million in depreciation  and interest  expense,  respectively,  partially offset
these items.

The higher  electric  margins  stemmed  from  separate  $15 million  annual rate
increases  implemented  at WP&L in July 1998 and  early  March  1999 to  recover
higher  purchased  power and  transmission  costs and a 4%  increase in sales to
retail customers.

The sales increase resulted from a combination of more normal weather conditions
in 1999 as well as  continued  economic  growth  within  IEC's  utility  service
territory. While the weather conditions in the first quarter of 1999 were milder
than normal,  they were more favorable to earnings than the same period of 1998.
Through the first quarter,  the estimated  benefit to earnings in 1999 was $0.03
per share  compared to 1998.  Decreased  sales to  off-system  customers at WP&L
partially offset these items.

The  lower  operation  and  maintenance  expenses  resulted  from  decreases  in
administrative  and  general  expenses  (including  lower  costs  in 1999 due to
merger-related operating  efficiencies).  This was partially offset by increased
expenses for Year 2000 readiness efforts.


                                       21
<PAGE>



IEC's nonregulated  operations  reported a net loss of $1.9 million in the first
quarter of 1999, compared with a net loss of $4.0 million for the same period in
1998.  The change in earnings was largely due to improved  operating  results at
Whiting,  IEC's  Denver-based  oil and gas  subsidiary.  The 1998  results  also
included  an asset  impairment  charge  of $6.7  million  at  Whiting.  However,
Whiting's  average oil and gas prices were 25% and 16% lower,  respectively,  in
the first  quarter of 1999  compared  with the same period in 1998. As a result,
Whiting experienced a slight loss in the first quarter of 1999.

Electric Utility Operations

Electric  margins and MWH sales for IEC for the three months ended March 31 were
as follows:
<TABLE>
<CAPTION>

                                         Revenues and Costs                             MWHs Sold
                                           (in thousands)                            (in thousands)
                                    ------------------------------             ----------------------------
                                        1999             1998       Change         1999           1998       Change
                                    --------------   ------------- ---------   -------------  ------------- ---------
<S>                                     <C>             <C>              <C>          <C>            <C>           <C>
Residential                             $ 130,280       $ 127,069        3%           1,810          1,712         6%
                                                                                      
Commercial                                 72,023          72,035        -            1,244          1,185         5%
                                                                
Industrial                                102,601         106,403       (4%)          3,076          2,999         3%
                                    --------------   -------------             -------------  -------------
   Total from ultimate customers          304,904         305,507        -            6,130          5,896         4%
                                                              
Sales for resale                           36,214          43,032      (16%)          1,345          1,670       (19%)
                                                                
Other                                      10,220           9,212       11%              41             43        (5%)
                                    --------------   -------------             -------------  -------------
   Total                                  351,338         357,751       (2%)          7,516          7,609        (1%)
                                                                               =============  ============= =========
Electric production fuels                  61,309          65,702       (7%)
                                           
Purchased power                            52,065          56,147       (7%)
                                           
                                    --------------   -------------
   Margin                               $ 237,964       $ 235,902        1%
                                    ==============   ============= =========
</TABLE>

Electric  margin  increased  $2.1 million,  or 1%, in the first quarter of 1999,
compared  with the same  period  in 1998.  The  increase  was  primarily  due to
separate $15 million annual rate increases  implemented at WP&L in July 1998 and
early March 1999 to recover higher purchased power and transmission  costs and a
4% increase in sales to retail  customers.  The sales  increase  resulted from a
combination  of more favorable  weather  conditions in 1999 as well as continued
economic  growth  within  IEC's  retail  utility  service  territory.  Partially
offsetting the increase in electric  margin were  decreased  sales to off-system
customers at WP&L and decreased recoveries of concurrent and previously deferred
expenditures  for  Iowa-mandated  energy  efficiency  program  costs.   Electric
revenues included recoveries for energy efficiency program costs of $7.3 million
and $12.0 million for the first quarter of 1999 and 1998, respectively, which is
in accordance  with IUB orders (a portion of these  recoveries is also amortized
to expense in other operation expenses).

IESU's and IPC's electric  tariffs  include EAC's that are designed to currently
recover the costs of fuel and the energy portion of purchased power billings.




                                       22
<PAGE>


Gas Utility Operations

Gas  margins and Dth sales for IEC for the three  months  ended March 31 were as
follows:
<TABLE>
<CAPTION>

                                        Revenues and Costs                       Dekatherms Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                     <C>           <C>              <C>      <C>             <C>          <C>
Residential                             $ 82,439      $ 80,293         3%                                     8%
                                                                                 14,836         13,779
Commercial                                39,159        39,198         -          8,559          8,112        6%
                                                             
Industrial                                 6,767         7,129        (5%)        1,919          1,841        4%
                                                              
Transportation and other                   5,319         3,426        55%        14,609         14,790       (1%)
                                    ------------- -------------             -----------   ------------
                                                                            
   Total                                 133,684       130,046         3%        39,923         38,522        4%
                                                                            ============  ============= =========
Cost of gas sold                          81,343        77,280         5%
                                    ------------- -------------
   Margin                               $ 52,341      $ 52,766       (1%)
                                    ============= =============  =========
</TABLE>

Gas margin decreased $0.4 million, or 1%, in the first quarter of 1999, compared
with the same  period  in  1998,  primarily  due to  reduced  revenues  from the
recovery of concurrent and previously  deferred  expenditures for  Iowa-mandated
energy  efficiency  program  costs in  accordance  with IUB orders (a portion of
these  recoveries is also amortized to expense in other operation  expenses) and
gas cost adjustments at IPC. Partially offsetting the decrease was a 4% increase
in Dth sales,  largely due to colder weather.  Gas revenues included  recoveries
for energy efficiency program costs in Iowa of $6.2 million and $7.1 million for
the first quarter of 1999 and 1998, respectively. Refer to "Interest Expense and
Other" for a discussion  of income IEC  realized  from  settlement  of a weather
hedge in the first quarter of 1999.

IESU's and IPC's gas tariffs  include PGA clauses that are designed to currently
recover the cost of utility gas sold.

Nonregulated and Other Revenues

Nonregulated  and other  revenues  for the three  months  ended March 31 were as
follows (in thousands):

                                                    1999              1998
                                                -------------     -------------
Environmental and engineering services             $16,174           $16,637
Oil and gas production                              12,833            17,147
Nonregulated energy                                 10,175            13,445
Transportation, rents and other                     10,065             9,676
Steam                                                8,262             7,445
Affordable housing                                   3,072             2,961
Water                                                1,252             1,175
                                                -------------     -------------
                                                   $61,833           $68,486
                                                =============     =============

Oil and gas  production  revenues  declined $4.3 million in the first quarter of
1999, compared with the same period in 1998,  primarily due to lower oil and gas
prices as well as reduced volumes sold at Whiting. Average oil and gas prices in
the first  quarter of 1999 declined by 25% and 16%,  respectively.  In addition,
nonregulated  energy revenues  declined by $3.3 million primarily due to a shift
to higher margin, lower volume gas customers.



                                       23
<PAGE>

Operating Expenses

Other operation expenses for the three months ended March 31 were as follows (in
thousands):

                                                     1999           1998
                                                --------------  --------------
           Utility-IESU / WP&L / IPC              $  87,829        $102,747
           Nonregulated and other                    42,536          54,605
                                                --------------  --------------
                                                  $ 130,365        $157,352
                                                ==============  ==============

Other operation expenses at the utility subsidiaries  decreased $14.9 million in
the first quarter of 1999, compared with the same period in 1998,  primarily due
to $9.7 million of  merger-related  expenses in the first quarter of 1998, lower
administrative  and  general  expenses  (including  lower  costs  in 1999 due to
merger-related  operating  efficiencies) and lower energy  efficiency  expenses.
This was partially offset by increased expenses for Year 2000 readiness efforts.

Other operation expenses at the nonregulated  businesses decreased $12.1 million
in the first quarter of 1999, compared with the first quarter in 1998, primarily
due to a $6.7 million  asset  impairment  charge in the first quarter of 1998 at
Whiting and lower operation expenses in the gas marketing business.

Depreciation  and  amortization  expense  increased  $3.8  million  in the first
quarter of 1999 compared  with the same period last year,  primarily as a result
of utility property additions.

Interest Expense and Other

Interest expense  increased $2.5 million in the first quarter of 1999,  compared
with  the  first  quarter  in  1998,  due to  higher  utility  and  nonregulated
borrowings outstanding during 1999.

Miscellaneous,  net income  increased $2.9 million in the first quarter of 1999,
compared with the same period last year, primarily due to $2.5 million of income
realized from settlement of a weather hedge at WP&L for the November 1, 1998, to
March 31, 1999, heating season.

Income Taxes

IEC's income tax expense  increased  $7.1 million in the first  quarter of 1999,
compared with the same period last year, primarily due to higher pre-tax income.
The  effective  rate was 36.4% and 36.8% for the first quarter of 1999 and 1998,
respectively.

                           IESU RESULTS OF OPERATIONS

Overview

IESU's earnings  available for common stock increased $2.8 million for the first
quarter of 1999,  compared with the same period in 1998. The increased  earnings
in 1999 were primarily due to the non-recurrence of $2 million of merger-related
expenses  in the first  quarter of 1998,  higher  electric  margins  and a lower
effective  tax  rate.  Higher  operation  and  maintenance  expenses  (excluding
merger-related  expenses) and increased  depreciation and  amortization  expense
partially offset these items.




                                       24
<PAGE>



Electric Utility Operations

Electric margins and MWH sales for IESU for the three months ended March 31 were
as follows:
<TABLE>
<CAPTION>

                                        Revenues and Costs                          MWHs Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                     <C>           <C>             <C>         <C>            <C>         <C>
Residential                             $ 54,353      $ 54,569         -            693            663        5%
                                                                                    
Commercial                                38,548        37,611         2%           628            583        8%
                                                                
Industrial                                37,882        40,239        (6%)        1,182          1,163        2%
                                    ------------- -------------             ------------  -------------
   Total from ultimate customers         130,783       132,419        (1%)        2,503          2,409        4%
                                                                           
Sales for resale                           6,353         5,712        11%           341            189       80%
                                                                 
Other                                      2,881         2,518        14%            10             10        -
                                    ------------- -------------             ------------  -------------
   Total                                 140,017       140,649         -          2,854          2,608        9%
                                                                          
                                                                            ============  ============= =========
Electric production fuels                 22,494        26,795       (16%)
                                          
Purchased power                           13,150        11,049        19%
                                    ------------- -------------
   Margin                              $ 104,373     $ 102,805         2%
                                    ============= =============  =========
</TABLE>

Electric  margin  increased $1.6 million,  or 2%, for the first quarter of 1999,
compared  with the same period in 1998,  primarily due to a 4% increase in sales
volumes to retail customers due to economic growth in the service  territory and
colder weather.  Increased  purchased power capacity costs partially  offset the
increase.  Sales for resale increased significantly in the first quarter of 1999
as a result of the  implementation  of a  merger-related  joint sales  agreement
during the second quarter of 1998.  Off-system sales revenues are passed through
IESU's EAC and therefore have no impact on electric margin.

IESU's electric tariffs include EAC's that are designed to currently recover the
costs of fuel and the energy portion of purchased power billings.

Gas Utility Operations

Gas margins and Dth sales for IESU for the three  months  ended March 31 were as
follows:
<TABLE>
<CAPTION>

                                        Revenues and Costs                       Dekatherms Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                     <C>           <C>            <C>         <C>            <C>         <C>
Residential                             $ 39,161      $ 38,002         3%         6,855          6,624       3%
                                                                                  
Commercial                                17,970        17,992         -          3,889          3,876       -
                                                              
Industrial                                 2,803         3,163       (11%)          873            914      (4%)
                                                                
Transportation and other                   1,362         1,238        10%         3,195          3,237      (1%)
                                    ------------- -------------             ------------  -------------
   Total                                  61,296        60,395         1%        14,812         14,651       1%
                                                                            ============  ============= =========
Cost of gas sold                          37,912        37,657         1%
                                    ------------- -------------
   Margin                               $ 23,384      $ 22,738         3%
                                    ============= =============  =========
</TABLE>

Gas  margin  increased  $0.6  million,  or 3%,  for the first  quarter  of 1999,
compared with the same period in 1998,  primarily  due to increased  residential
sales resulting from colder weather.

IESU's gas tariffs  include PGA clauses that are  designed to currently  recover
the cost of gas sold.

                                       25
<PAGE>



Operating Expenses

IESU's other operation  expenses  increased $0.4 million in the first quarter of
1999,  compared with the same period in 1998, largely due to increased Year 2000
readiness efforts and higher employee pension and benefits costs. Merger-related
expenses of $1.8 million in the first quarter of 1998 and lower costs associated
with  merger-related  operating  efficiencies  realized in 1999 virtually offset
these items.

Interest Expense and Other

Miscellaneous,  net income increased $1.1 million for the first quarter of 1999,
compared with the same period in 1998,  primarily due to higher interest income,
lower sale of accounts receivable expenses and merger-related  expenses incurred
in 1998.

Income Taxes

IESU's income tax expense  increased $0.2 million for the first quarter of 1999,
compared with the same period in 1998,  due to higher  taxable  income which was
largely  offset by a decrease in the overall  effective tax rate.  The effective
income tax rates  were  41.4% and 46.3% for the first  quarter of 1999 and 1998,
respectively.  The effective income tax rate was lower in 1999, primarily due to
a  reduction  in  flow-through  depreciation  expense and  nondeductible  merger
expenses in 1998.

                           WP&L RESULTS OF OPERATIONS

Overview

WP&L's earnings  available for common stock increased $8.7 million for the first
quarter of 1999,  compared  with the same period in 1998.  In addition to a $3.2
million decrease in merger-related  expenses, the improvement in earnings in the
first  quarter  of  1999  primarily  reflects  higher  electric  margins,  lower
operation  expenses and $2.5 million of pre-tax income  realized from settlement
of a weather hedge.  Partially offsetting these items were $1.9 million and $1.5
million increases in depreciation and amortization expense and interest expense,
respectively.

Electric Utility Operations

Electric margins and MWH sales for WP&L for the three months ended March 31 were
as follows:
<TABLE>
<CAPTION>

                                        Revenues and Costs                          MWHs Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                     <C>           <C>            <C>         <C>            <C>         <C>
Residential                             $ 53,889      $ 49,755         8%           801            758        6%
                                                                                    
Commercial                                27,016        25,604         6%           465            459        1%
                                                                
Industrial                                39,599        37,069         7%         1,087          1,041        4%
                                    ------------- -------------             ------------  -------------
   Total from ultimate customers         120,504       112,428         7%         2,353          2,258        4%
                                                                           
Sales for resale                          24,929        35,626       (30%)          813          1,415      (43%)
                                                                
Other                                      4,511         3,256        39%           15             17       (12%)
                                    ------------- -------------             ------------  -------------
   Total                                 149,944       151,310        (1%)       3,181          3,690       (14%)
                                                                            ============  ============= =========
Electric production fuels                 27,366        28,897        (5%)
                                          
Purchased power                           24,000        28,602       (16%)
                                    ------------- -------------
   Margin                               $ 98,578      $ 93,811         5%
                                    ============= =============  =========
</TABLE>

                                       26
<PAGE>


Electric margin increased $4.8 million, or 5%, during the first quarter of 1999,
compared  with the same period in 1998,  primarily  due to separate  $15 million
annual rate  increases  implemented in July 1998 and early March 1999 to recover
higher  purchased  power  and  transmission  costs.  Sales to  retail  customers
increased  4% due to  economic  strength  in the  service  territory  and colder
weather  compared  with the same period in 1998.  Lower  income from  off-system
sales,  due to increased  transmission  constraints  and  implementation  of the
merger-related  joint sales agreement,  partially offset these items.  Under the
joint sales  agreement,  the margins  resulting from IEC's  off-system sales are
allocated among IESU, IPC and WP&L.

Gas Utility Operations

Gas margins and Dth sales for WP&L for the three  months  ended March 31 were as
follows:
<TABLE>
<CAPTION>

                                        Revenues and Costs                       Dekatherms Sold
                                          (in thousands)                          (in thousands)
                                    ---------------------------             ---------------------------
                                        1999          1998        Change       1999           1998       Change
                                    ------------- -------------  ---------  ------------  ------------- ---------
<S>                                     <C>           <C>            <C>         <C>            <C>          <C>
Residential                             $ 31,260      $ 31,010         1%         5,857          5,227       12%
                                                                                  
Commercial                                 15,100        15,237       (1%)        3,493          3,121       12%
                                                             
Industrial                                  2,504         2,675       (6%)          659            602        9%
                                                                
Transportation and other                    2,930         1,396      110%         4,043          3,829        6%
                                    ------------- -------------             ------------  -------------
   Total                                   51,794        50,318        3%        14,052         12,779       10%
                                                                            ============  ============= =========
Cost of gas sold                           31,181        30,714        2%
                                    ------------- -------------
   Margin                               $ 20,613      $ 19,604         5%
                                    ============= =============  =========
</TABLE>

Gas  margin  increased  $1.0  million,  or 5%,  for the first  quarter  of 1999,
compared with the same period in 1998, primarily due to an increase in Dth sales
resulting from colder weather and customer  growth.  Refer to "Interest  Expense
and Other" for a discussion  of income WP&L realized from a weather hedge in the
first quarter of 1999.

Operating Expenses

Other  operation  expense  decreased  $7.9 million in the first quarter of 1999,
compared  to the  same  period  in  1998,  primarily  due  to  $3.2  million  of
merger-related  expenses in the first quarter of 1998 and reduced administrative
and  general  expenses  in 1999,  including  lower  costs due to  merger-related
operating efficiencies.

Depreciation  and  amortization  expense  increased  $1.9  million  in the first
quarter  of 1999,  compared  with  the same  period  in 1998,  primarily  due to
property additions.

Interest Expense and Other

Interest expense  increased $1.5 million in the first quarter of 1999,  compared
with the same period in 1998, primarily due to higher borrowings  outstanding in
1999.

The increase in miscellaneous, net income in the first quarter of 1999, compared
with the same period in 1998, was due to $2.5 million of pre-tax income realized
from  settlement of a weather hedge for the November 1, 1998, to March 31, 1999,
heating season.

Income Taxes

Income taxes increased $5.3 million in the first quarter of 1999,  compared with
the same period in 1998,  due to higher pre-tax  income.  The effective rate for
the first  quarter of 1999 was 37.1%  compared with 36.7% for the same period in
1998.

                                       27
<PAGE>

                         LIQUIDITY AND CAPITAL RESOURCES

Cash flows from operating  activities at IEC decreased $12 million for the three
months ended March 31, 1999,  compared  with the same period in 1998,  primarily
due to changes in working capital, which were partially offset by changes in net
income,  and deferred  taxes and  investment  tax  credits.  Cash flows used for
financing  activities decreased $34 million for the three months ended March 31,
1999,  compared  with the same period in 1998,  primarily as a result of the net
changes  in the  amount  of debt  outstanding.  Cash  flows  used for  investing
activities  increased  $35 million for the three  months  ended March 31,  1999,
compared with the same period in 1998, primarily due to changes in the levels of
construction and acquisition expenditures.

Cash flows generated from operating activities at IESU decreased $14 million for
the three months ended March 31,  1999,  compared  with the same period in 1998,
primarily due to changes in working capital,  which were partially offset by the
change in  deferred  taxes and  investment  tax  credits.  Cash  flows  used for
financing  activities increased $88 million for the three months ended March 31,
1999, compared with the same period in 1998, due to a reduction in the amount of
debt  outstanding  in 1999 and increased  common stock  dividends as no dividend
payments were made in the last three quarters of 1998 due to merger-related  tax
considerations.  As a result,  the dividend payment in the first quarter of 1999
was  larger  than  IESU's  historical  quarterly  payment.  Cash  flows used for
investing  activities  decreased $3 million for the three months ended March 31,
1999,  compared  with the same period in 1998,  primarily  due to changes in the
levels of construction expenditures.

Cash flows generated from operating  activities at WP&L decreased $7 million for
the three months ended March 31,  1999,  compared  with the same period in 1998,
primarily  due to changes in working  capital,  which were  partially  offset by
higher net  income.  Cash  flows used for  financing  activities  decreased  $17
million for the three months ended March 31, 1999, compared with the same period
in 1998, primarily due to changes in the amount of short-term  borrowings.  Cash
flows used for  investing  activities  increased $6 million for the three months
ended March 31, 1999,  compared  with the same period in 1998,  primarily due to
increased construction expenditures.

Future Considerations

At  March  31,  1999,  IEC  had  an  investment  in  the  stock  of  McLeod,   a
telecommunications  company, valued at $431.3 million (based on a March 31, 1999
closing  price  of  $42.00  per  share  and  compared  to a cost  basis of $29.1
million).  Pursuant to the applicable  accounting  rules,  the carrying value of
this  investment is adjusted to the  estimated  fair value each quarter based on
the closing price at the end of the quarter.  The  adjustments do not impact net
income as the unrealized gains or losses, net of taxes, are recorded directly to
the common  equity  section of the balance  sheet and are a  component  of other
comprehensive  income.  In addition,  any such gains or losses are  reflected in
current  earnings only at the time they are realized through a sale. IEC entered
into an agreement in November 1998 with McLeod whereby IEC's ability to sell the
McLeod stock is subject to various restrictions.

In April  1999,  IEC  announced  that it  expects  to  participate  as a selling
shareholder  in a secondary  offering of McLeod Class A Common  Stock.  IEC will
sell  approximately  640,000  shares of McLeod stock in the offering (at a gross
sales price of $55.63 per share).  The sale is  scheduled  to close in May 1999.
IEC plans to use the proceeds from the sale to repay outstanding short-term debt
at Resources.  IEC  presently  beneficially  owns 10.3 million  shares of McLeod
Class A Common Stock.

Under  PUHCA,  IEC's  investments  in exempt  wholesale  generators  and foreign
utility companies is limited to 50% of IEC's consolidated  retained earnings. In
addition, there are limitations on the amount of non-utility investments IEC can
make under the Wisconsin  Utility Holding Company Act (WUHCA) as well. If IEC is
unable to obtain relief from the WUHCA provisions,  the company may be forced to
divest certain assets to stay in compliance.

Under terms of comprehensive  restructuring  legislation  passed in New Zealand,
IEC will be selling a portion of its current New  Zealand  utility  investments.
IEC anticipates that it may realize a gain on such sales.

                                       28
<PAGE>


Financing and Capital Structure

At March 31, 1999,  Resources had $296 million of commercial  paper  outstanding
and backed by its 3-Year  Credit  Agreement  with  interest  rates  ranging from
4.90%-5.25%.  Resources  intends to continue issuing  commercial paper backed by
this  facility,  and no conditions  existed at March 31, 1999 that would prevent
the  issuance  of  commercial  paper or  direct  borrowings  on its bank  lines.
Accordingly, this debt is classified as long-term.

On February 11,  1999,  IPC issued $3.25  million of pollution  control  revenue
bonds due February 1, 2010.  The proceeds  were used to retire $3.25  million of
6.375%  pollution  control revenue bonds that were due serially  1999-2007.  The
bonds have a fixed interest rate of 4.05% for the first five years.  Thereafter,
IPC will have the  option to reset the  interest  rate at one of three  variable
short-term interest rates or at a new long-term interest rate, based on the then
prevailing market conditions, provided the rate does not exceed 12% per annum.

On March 23, 1999,  IPC issued $7.7 million of pollution  control  revenue bonds
due January 1, 2013.  The proceeds were used to refinance $7.7 million of 6.375%
pollution control revenue bonds that were due serially 1999-2007. The bonds have
a fixed  interest rate of 4.20% for the first five years.  Thereafter,  IPC will
have the option to reset the interest rate at one of three  variable  short-term
interest rates or at a new long-term interest rate, based on the then prevailing
market conditions, provided the rate does not exceed 12% per annum.

On March 1, 1999,  IESU  retired  $50  million of Series Z, 7.6% First  Mortgage
Bonds due in March  1999.  Internally  generated  funds  were used to retire the
bonds.

Capital Requirements

On April 7, 1998, the PSCW approved  WPSC's  application  for replacement of the
two  steam  generators  at  Kewaunee.  The  total  cost of  replacing  the steam
generators would be approximately  $90.7 million,  with WP&L's share of the cost
being approximately  $37.2 million.  The replacement work originally planned for
the  spring  of 2000 is now  scheduled  for the  fall  of  2001  and  will  take
approximately  60 days. The delay is  attributable to the inability of the steam
generator  manufacturer  to meet the spring 2000  delivery  schedule.  Delays in
meeting the delivery  schedule did not allow for steam generator  replacement to
occur prior to the start of the summer weather in 2000. Therefore,  the decision
was made to store the steam  generators  after they are  received and wait until
the next scheduled  refueling outage in the fall of 2001. It is anticipated that
the delay will not adversely  impact the reliability of Kewaunee in the interim.
Plans to shutdown the plant for a spring 2000 refueling remain unchanged.

Rates and Regulatory Matters

In January 1999, WP&L made a filing with the PSCW proposing to begin  deferring,
on January 1, 1999,  all costs  associated  with the EPA's required NOx emission
reductions.  In connection  with a statewide  docket to  investigate  compliance
issues associated with the EPA's NOx emission reductions, on March 30, 1999, the
PSCW authorized deferral of all non-labor related costs incurred after March 30,
1999. However, the utilities are not allowed to defer costs of replacement power
associated with NOx compliance.  WP&L has requested  expedited approval to start
construction of NOx reduction  investments at several  generating units operated
by WP&L and has  requested  recovery of all the NOx  reduction  costs  through a
surcharge mechanism. WP&L anticipates receiving a final order in this proceeding
in late 1999.  No  assurance  can be given as to what  relief,  if any,  will be
granted by the PSCW. Refer to the "Other Matters - Environmental"  section for a
further discussion of the NOx issue.

Pursuant to PSCW  requirements,  WP&L  recognizes  annual demand side management
expense based on: 1) an annual fixed expenditure  amount as approved by the PSCW
in the ratemaking process,  and 2) PSCW approved  amortization of any difference
in historical demand side management expenditures and associated rate recoveries
of such costs.  Effective  with WP&L's rates  implemented  April 29,  1997,  the
annual rate recovery for demand side  management  expenses  (and the  associated
demand side management  expense) was reduced to $6.9 million  reflecting  annual
demand  side  management  expenditures  of $14.4  million  reduced by a two-year
amortization  of


                                       29
<PAGE>

prior period  expenditures  which were less than the associated  rate recoveries
($7.5 million per year). At the completion of the two-year  amortization period,
the annual demand side  management  expense to be recognized by WP&L returned to
the $14.4 million level. Given the price freeze WP&L has in effect in Wisconsin,
the  annual  rate  recovery  of demand  side  management  expense  is still $6.9
million.

The OCA has  requested  certain  financial  information  related to the electric
utility  operations  within  the  state of Iowa  for IESU and IPC.  IESU and IPC
responded to the data requests in a timely  manner.  It is unknown if additional
data requests will be received by either IESU or IPC.  While IESU and IPC cannot
predict the outcome of this process,  such data requests could lead to an effort
by the OCA to seek a rate reduction for one or both of IESU and IPC in Iowa.

                                  OTHER MATTERS

Year 2000

A summary of IEC's Year 2000  program is included in the Form 10-K filed by IEC,
IESU  and WP&L for the year  ended  December  31,  1998.  Set  forth  below  are
developments relating to the Year 2000 program.

Remediation and Testing Year 2000 remediation and testing has been substantially
completed for all operational  areas of IEC which include  generating  stations,
substations, transmission and distribution substations, natural gas distribution
systems,  system  and  distribution  operating  centers  and  all  key  building
infrastructure.  However,  IEC is still  dependent upon the timely  provision of
necessary  upgrades and modifications by certain software  vendors.  As of March
31, 1999,  IEC was expecting  upgrades  from  approximately  10 embedded  system
vendors and 14  information  technology  vendors.  IEC  considers  the potential
impact on the Year 2000  program  to be  minimal  as:  1) the  upgrades  are for
non-mission  critical  systems or  applications,  or 2) operational  contingency
plans have already been developed and deployed.

A.  Embedded Systems -
All testing for assessing  Year 2000  compliance has been  completed.  Remaining
work includes minor upgrades on less than 15 miscellaneous systems.

B.  Information Technology -
As of  March  31,  1999,  approximately  90%  of  the  systems  and  80%  of the
infrastructure  components  have been  remediated  and  tested.  IEC's  customer
information  systems and financial systems make up the majority of the remaining
remediation  and testing  effort.  The  remediation  and testing of the customer
information  systems was 95% complete at the end of March 1999. All  remediation
work was  completed in early May 1999 and will be  operational  by May 31, 1999.
The  financial  systems  have been  remediated  with final  roll-forward-testing
scheduled to be completed by July 15, 1999.  Therefore,  it is anticipated  that
IEC will have its  information  technology  remediation  and testing efforts 99%
complete  by July  15,  1999.  On July 15,  1999  there  will be four  remaining
non-mission critical systems waiting for vendor supplied software, scheduled for
completion by September 1, 1999.  Contingency  plans for these remaining systems
are already in place as well as for all other critical systems.

Costs to  Address  Year 2000  Compliance  IEC's  historical  Year  2000  project
expenditures as well as CURRENT ESTIMATES for the remaining costs to be incurred
on the project are as follows (incremental costs, in millions):

                    Description                 Total     IESU      WP&L   Other
                    -----------                 -----     ----      ----   -----
 Costs incurred from 1/1/98 - 12/31/98          $ 8.7     $4.8      $3.2    $0.7
 Costs incurred from 1/1/99 - 3/31/99           $ 5.2     $2.3      $1.9    $1.0
 Current estimate of remaining modifications    $18.5     $5.4      $8.6    $4.5

In addition,  IEC  estimates it incurred $3 million in costs for internal  labor
and associated  overheads in 1998 and anticipates  expenditures of $6 million in
1999  ($1.6  million  was  incurred  in the first  quarter  of 1999).  The total


                                       30
<PAGE>


estimated  project cost has decreased from the figures reported in the Form 10-K
due  to  lower  than  anticipated  remediation  costs  and a  reduction  in  the
contingency estimate.

In accordance  with an order received from the PSCW,  WP&L is deferring its Year
2000  project  costs,  other  than  internal  labor  and  associated   overheads
(approximately $4.3 million of the expenditures incurred at WP&L from January 1,
1998 through March 31, 1999 have been deferred).

Risks and Contingency Planning IEC continues to work on developing its Year 2000
contingency  plan.  The planning  process  includes  three  components:  1) base
contingency  planning,  2)  emergency  preparedness,  and 3)  electric  and  gas
industry-wide  coordination.  The base  contingency  planning phase involves the
development  of operating  procedures  to handle the  malfunction  of a specific
device.  This work was  completed in the first  quarter of 1999.  The  emergency
preparedness  phase involves the  development of operating  procedures to handle
the malfunction of major business processes.  This work started in late 1998 and
will continue through the end of 1999.

The  electric  and gas  industry-wide  coordination  is a major  focus  of IEC's
efforts in preparation for  industry-wide  drills which are being coordinated by
the  North  American  Electric  Reliability  Council  (NERC).  As  part  of  its
contingency  planning process,  NERC scheduled two nation-wide  electric utility
industry drills in April 1999 and September 1999. These drills focus on safe and
reliable    electrical    system   operations   with   the   partial   loss   of
telecommunications. Results of the April 1999 NERC drill were very positive. All
contingency  plans worked as  anticipated,  however,  some procedures and manual
data forms will be refined to enhance efficiency.

In  addition  to these  NERC  drills,  IEC will be  conducting  five  additional
internal  drills.  These include an already  completed March table-top  drill, a
June 1999 functional drill and an August 1999 full-scale development drill where
key employees will test and critique  IEC's  contingency  plans.  Two additional
internal  drills will also be  scheduled  after the  September  NERC  full-scale
drill.

IEC also  retained an outside  third party to assess and  evaluate its Year 2000
program and such study did not find any material deficiencies in the program.

Summary Based on IEC's current  schedule for  completion of its Year 2000 tasks,
IEC believes its plan is adequate to secure Year 2000  readiness of its critical
systems.  Nevertheless,  achieving  Year 2000 readiness is subject to many risks
and uncertainties, as described above. If IEC, or third parties, fail to achieve
Year 2000  readiness  with respect to critical  systems and, as such,  there are
systematic  problems,  there could be a material adverse effect on IEC's results
of operations and financial condition.

Market Risk Sensitive Instruments and Positions

Whiting is exposed to market risk in the pricing of its oil and gas  production.
Historically,  prices  received for oil and gas  production  have been  volatile
because of seasonal weather patterns, supply and demand factors,  transportation
availability  and price, and general economic  conditions.  Worldwide  political
developments  have  historically  also had an impact on oil prices. In the past,
IEC generally  has not utilized  derivative  instruments  designed to reduce its
exposure to these price fluctuations. However, during the first quarter of 1999,
IEC entered into a limited amount of commodity  derivative  transactions  to fix
the ultimate sales price for approximately  two-thirds of Whiting's  anticipated
gas  production for the remainder of 1999. At March 31, 1999, the estimated fair
value of the outstanding  agreements would have resulted in a settlement payment
by IEC of approximately $1.8 million.

WP&L settled the weather insurance agreement it entered into for the November 1,
1998, to March 31, 1999, heating season and recognized income of $2.5 million in
the first quarter of 1999 relating to such settlement.

At  March  31,  1999,  IEC  had  an  investment  in  the  stock  of  McLeod,   a
telecommunications  company, valued at $431.3 million (based on a March 31, 1999
closing  price  of  $42.00  per  share  and  compared  to a cost  basis of $29.1
million).  Pursuant to the applicable  accounting  rules,  the carrying value of
this  investment is adjusted to the  


                                       31
<PAGE>

estimated  fair value each quarter  based on the closing price at the end of the
quarter.  IEC entered  into an agreement  in November  1998 with McLeod  whereby
IEC's ability to sell the McLeod stock is subject to various restrictions.

IEC has a 50% interest in an  electricity  trading  joint  venture with Cargill.
Guarantees of approximately $61 million have been issued of which  approximately
$12 million were  outstanding  at March 31,  1999.  Under the terms of the joint
venture agreement, any payments required under the guarantees would be shared by
IEC and Cargill on a 50/50 basis to the extent the joint  venture is not able to
reimburse the guarantor for payments made under the guarantee.

Environmental

A summary of IEC's  environmental  issues is  included in the Form 10-K filed by
IEC,  IESU and WP&L for the year ended  December 31,  1998.  Set forth below are
several developments relating to IEC's environmental issues.

In October  1998,  the EPA issued a final rule  requiring  22 states,  including
Wisconsin,  to modify  their SIP's to address  the ozone  transport  issue.  The
implementation  of the rule will likely require WP&L to reduce its NOx emissions
at all of its  plants  to a fleet  average  of .15  lbs/mmbtu  by 2003.  WP&L is
currently  evaluating various options to meet the emission levels. These options
include fuel switching, operational modifications and capital investments. Based
on  existing  technology,   the  preliminary  estimates  indicate  that  capital
investments  will be in the range of $150 to $215  million.  Refer to the "Rates
and Regulatory  Matters" section for a discussion of a filing WP&L made with the
PSCW regarding seeking rate recovery of these costs.

On February 28,  1998,  the EPA issued the final report to Congress on the Study
of Hazardous Air Pollutant  Emissions  from  Electric  Utility Steam  Generating
Units regarding  hazardous air pollutant  emissions from electric utilities (the
HAPs report).  The HAPs report concluded that mercury  emissions from coal fired
utilities were a concern. However, the EPA does not believe they have sufficient
information  regarding  mercury  emissions from coal fired units. To remedy this
lack of information,  the EPA required IESU,  WP&L, IPC and all other coal fired
electric  utilities  to start  collecting  information  regarding  the types and
amount of mercury emitted as of January 1, 1999. Although the control of mercury
emissions  from coal fired plants is uncertain at this time,  IEC believes  that
the  capital  investments  and/or  modifications  required  to  control  mercury
emissions could be significant.

Pursuant to an internal review of operations,  IPC discovered that Unit No. 6 at
its generating facility in Dubuque, Iowa might require a Clean Air Act Acid Rain
permit and CEMS. IPC initiated  discussions with the regulators and discontinued
operation  of the unit during  resolution  of the issues.  IPC has  resolved the
issue by  installing  a CEMS on the  unit and  obtaining  an Acid  Rain  permit.
Pursuant to its internal review, IPC also identified and disclosed to regulators
a potentially similar situation at its Lansing,  Iowa generating  facility,  and
will potentially be installing CEMS and applying for Acid Rain permits for these
units as well, pending the outcome of regulatory review. IPC may be subject to a
penalty for not having installed the CEMS and for not having obtained the permit
previously.  However,  IPC believes that any likely actions  resulting from this
matter  will not have a material  adverse  effect on its  financial  position or
results of operations.

Power Supply

In July 1998, IEC and Polsky announced an agreement  whereby Polsky would build,
own and operate a power plant in southeastern  Wisconsin capable of producing up
to 450 MW of electricity. Under the agreement, IEC will purchase the capacity to
meet the electric needs of its utility  customers,  as outlined by the Wisconsin
Reliability  Act.  During the first quarter of 1999,  Polsky changed its name to
SkyGen Energy LLC (SkyGen).  Recent  developments  for the 450 MW SkyGen project
include an appeal to the EPA Appeals Board on the NOx mitigation. The appeal, if
successful,  would  require  selective  catalytic  reduction  to be used for NOx
mitigation  instead  of dry  low  NOx  burners.  Accelerated  treatment  (60 day
process) of the appeal is being  requested  and, if approved,  would still allow
the  facility to meet its  in-service  date of June 2000.  Management  currently
believes that the EPA will rule in favor of SkyGen.

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<PAGE>


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Quantitative  and Qualitative  Disclosures  About Market Risk are reported under
Item 2. MD&A "Other Matters - Market Risk Sensitive Instruments and Positions."

                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

On April 17, 1998, MG&E and Citizens  Utility Board appealed the decision of the
SEC approving the merger,  Madison Gas and Electric Company and Citizens Utility
Board v.  Securities  and Exchange  Commission.  On May 15,  1998,  IEC moved to
intervene in this appeal and the United States Court of Appeals for the District
of Columbia  District  granted the motion.  Briefs were filed with the court and
oral  arguments  were held on January 13, 1999. The court issued its decision on
March 16, 1999  upholding the SEC's decision in approving the merger and denying
the petition for review.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

     The  following  Exhibits  are  filed  herewith  or  incorporated  herein by
     reference.  Documents  indicated by an asterisk (*) are incorporated herein
     by reference.

     3.1*       Bylaws of Interstate Energy Corporation, effective as of January
                20, 1999 (incorporated by reference to Exhibit 3.2 to IEC's Form
                10-K for the year ended December 31, 1998)

     3.2*       Bylaws of  Wisconsin  Power and Light  Company,  effective as of
                January 20, 1999  (incorporated  by  reference to Exhibit 3.4 to
                WP&L's Form 10-K for the year ended December 31, 1998)

     3.3*       Bylaws of IES Utilities  Inc.,  effective as of January 20, 1999
                (incorporated  by  reference  to Exhibit 3.6 to IESU's Form 10-K
                for the year ended December 31, 1998)

     4.1*       Rights  Agreement,  dated January 20, 1999,  between  Interstate
                Energy   Corporation   and   Firstar   Bank   Milwaukee,    N.A.
                (incorporated by reference to Exhibit 4.1 to IEC's  Registration
                Statement on Form 8-A, dated January 20, 1999)

     10.1       Restricted  Stock  Agreement  pursuant to the Interstate  Energy
                Corporation Long-Term Equity Incentive Plan

     10.2       Key Executive  Employment and Severance  Agreement,  dated March
                29,  1999,  by and between  Interstate  Energy  Corporation  and
                Erroll B. Davis, Jr.

     10.3       Key Executive  Employment and Severance  Agreement,  dated March
                29, 1999, by and between  Interstate Energy Corporation and each
                of J.E. Hoffman,  W.D. Harvey,  E.G. Protsch,  P.J. Wegner, T.M.
                Walker and B.J. Swan

     10.4       Key Executive  Employment and Severance  Agreement,  dated March
                29, 1999, by and between  Interstate Energy Corporation and each
                of T.L. Aller,  D.A. Doyle,  E.M.  Gleason,  D.K.  Langer,  D.L.
                Mineck, D.R. Sharp and K.K. Zuhlke

     10.5       Employment   Agreement   by  and   between   Interstate   Energy
                Corporation and Erroll B. Davis, Jr., amended and restated as of
                March 29, 1999

                                       33
<PAGE>

     27.1       Financial Data Schedule for Interstate Energy Corporation at and
                for the period ended March 31, 1999

     27.2       Financial  Data Schedule for IES  Utilities  Inc. at and for the
                period ended March 31, 1999

     27.3       Financial Data Schedule for Wisconsin Power and Light Company at
                and for the period ended March 31, 1999

(b)  Reports on Form 8-K:

Interstate Energy  Corporation filed a Current Report on Form 8-K, dated January
20,  1999,  reporting  (under  Item 5) that on  January  20,  1999 the  Board of
Directors of Interstate Energy Corporation adopted a series of amendments to the
Bylaws of Interstate Energy Corporation.

Interstate Energy  Corporation filed a Current Report on Form 8-K, dated January
20,  1999,  reporting  (under  Item 5) that on January  20,  1999,  the Board of
Directors of  Interstate  Energy  Corporation  declared a dividend of one common
share purchase right for each outstanding share of common stock, $.01 par value,
of Interstate Energy Corporation.  The description and terms of the common share
purchase  rights are set forth in a Rights  Agreement  dated  January  20,  1999
between  Interstate  Energy  Corporation  and Firstar Bank  Milwaukee,  N.A., as
Rights Agent.


                                       34
<PAGE>


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934,  Interstate
Energy  Corporation,  IES Utilities  Inc. and Wisconsin  Power and Light Company
have each duly caused this report to be signed on its behalf by the  undersigned
thereunto duly authorized on the 17th day of May 1999.


INTERSTATE ENERGY CORPORATION
Registrant

By: /s/ Thomas M. Walker                  Executive Vice President and Chief
Thomas M. Walker                           Financial Officer
                                             (Principal Financial Officer)

By: /s/ John E. Ebright                   Vice President-Controller 
John E. Ebright                              (Principal Accounting Officer)


IES UTILITIES INC.
Registrant

By: /s/ Thomas M. Walker                  Executive Vice President and Chief 
Thomas M. Walker                          Financial Officer
                                             (Principal Financial Officer)

By: /s/ John E. Ebright                   Vice President-Controller 
John E. Ebright                              (Principal Accounting Officer)


WISCONSIN POWER AND LIGHT COMPANY
Registrant

By: /s/ Thomas M. Walker                  Executive Vice President and Chief 
Thomas M. Walker                          Financial Officer
                                             (Principal Financial Officer)

By: /s/ John E. Ebright                   Vice President-Controller
John E. Ebright                               (Principal Accounting Officer)


                                       35
<PAGE>


                                 EXHIBIT INDEX

(a)  Exhibits:

     The  following  Exhibits  are  filed  herewith  or  incorporated  herein by
     reference.  Documents  indicated by an asterisk (*) are incorporated herein
     by reference.

     3.1*       Bylaws of Interstate Energy Corporation, effective as of January
                20, 1999 (incorporated by reference to Exhibit 3.2 to IEC's Form
                10-K for the year ended December 31, 1998)

     3.2*       Bylaws of  Wisconsin  Power and Light  Company,  effective as of
                January 20, 1999  (incorporated  by  reference to Exhibit 3.4 to
                WP&L's Form 10-K for the year ended December 31, 1998)

     3.3*       Bylaws of IES Utilities  Inc.,  effective as of January 20, 1999
                (incorporated  by  reference  to Exhibit 3.6 to IESU's Form 10-K
                for the year ended December 31, 1998)

     4.1*       Rights  Agreement,  dated January 20, 1999,  between  Interstate
                Energy   Corporation   and   Firstar   Bank   Milwaukee,    N.A.
                (incorporated by reference to Exhibit 4.1 to IEC's  Registration
                Statement on Form 8-A, dated January 20, 1999)

     10.1       Restricted  Stock  Agreement  pursuant to the Interstate  Energy
                Corporation Long-Term Equity Incentive Plan

     10.2       Key Executive  Employment and Severance  Agreement,  dated March
                29,  1999,  by and between  Interstate  Energy  Corporation  and
                Erroll B. Davis, Jr.

     10.3       Key Executive  Employment and Severance  Agreement,  dated March
                29, 1999, by and between  Interstate Energy Corporation and each
                of J.E. Hoffman,  W.D. Harvey,  E.G. Protsch,  P.J. Wegner, T.M.
                Walker and B.J. Swan

     10.4       Key Executive  Employment and Severance  Agreement,  dated March
                29, 1999, by and between  Interstate Energy Corporation and each
                of T.L. Aller,  D.A. Doyle,  E.M.  Gleason,  D.K.  Langer,  D.L.
                Mineck, D.R. Sharp and K.K. Zuhlke

     10.5       Employment   Agreement   by  and   between   Interstate   Energy
                Corporation and Erroll B. Davis, Jr., amended and restated as of
                March 29, 1999

     27.1       Financial Data Schedule for Interstate Energy Corporation at and
                for the period ended March 31, 1999

     27.2       Financial  Data Schedule for IES  Utilities  Inc. at and for the
                period ended March 31, 1999

     27.3       Financial Data Schedule for Wisconsin Power and Light Company at
                and for the period ended March 31, 1999