(Mark One)

|[X] | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
|--- | ------------------------------------------------------------------------------------------

For the fiscal year ended December 31, 2000

OR

|[ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
|--- | ----------------------------------------------------------------------------------------------

For the transition period from ________________ to ___________________

|CommissionFile Number | Registrant; State of IncorporationAddress; and
      Telephone Number                                                                                                               | IRS Employer  Identification No.
|--------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------
|                      |                                                                                                                                                                                     |                                 
|1-11337               | WPS RESOURCES CORPORATION
        (A Wisconsin Corporation)
        700 North Adams Street
        P. O. Box 19001
        Green Bay, WI 54307-9001
        920-433-4901            | 39-1775292                      
|                      |                                                                                                                                                                                     |                                 
|1-3016                | WISCONSIN PUBLIC SERVICE CORPORATION
        (A Wisconsin Corporation)
        700 North Adams Street
        P. O. Box 19001
        Green Bay, WI 54307-9001
        800-450-7260 | 39-0715160                      

Securities registered pursuant to Section 12(b) of the Act:

|                          | Title of each class                                                                                    | Name of each exchangeon which registered
|------------------------- | ------------------------------------------------------------------------------------------------------ | ----------------------------------------
|                          |                                                                                                        |                                         
|WPS RESOURCES CORPORATION | Common Stock,
      $1 par value                                                                       | New York Stock Exchange                 
|                          |                                                                                                        |                                         
|                          | Rights to purchase
      Common Stock pursuant to
      Rights Agreement dated
      December 12, 1996 | New York Stock Exchange                 

Securities registered pursuant to Section 12(g) of the Act:

|WISCONSIN PUBLIC SERVICE CORPORATION                                               
|-----------------------------------------------------------------------------------
|                                                                                   
|Preferred Stock, Cumulative, $100 par value                                        
|5.00%
            Series     5.08% Series
            5.04% Series     6.76% Series

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]

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



|State the aggregate market value
      of the voting stock held bynonaffiliates of the Registrant.
|--------------------------------------------------------------------------------------------------
|                                                                                                  
|WPS RESOURCES CORPORATION                                                                         
|                                                                                                  
|WISCONSIN PUBLIC SERVICE CORPORATION                                                              



|Number of shares outstanding of each classof common stock, as of December 31, 2000
|----------------------------------------------------------------------------------
|                                                                                  
|WPS RESOURCES CORPORATION                                                         
|                                                                                  
|WISCONSIN PUBLIC SERVICE CORPORATION                                              

DOCUMENTS INCORPORATED BY REFERENCE

(1) Definitive proxy statement for the WPS Resources Corporation
    Annual Meeting of Shareholders on May 3, 2001 is incorporated into Parts I
    and III.



WPS RESOURCES CORPORATION
and
WISCONSIN PUBLIC SERVICE CORPORATION

FORM 10-K
ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION
For the Year Ended December 31, 2000



TABLE OF CONTENTS

|PART I |                                                          
|------ | ---------------------------------------------------------
|       |                                                          
|1.     | BUSINESS                                                 
|       |                                                          
|       | A.                                                       
|       |                                                          
|       |                                                          
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|       |                                                          
|       | B.                                                       
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|       | C.                                                       
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|       | D.                                                       
|       |                                                          
|       | E.                                                       
|       |                                                          
|       | F.                                                       
|       |                                                          
|       | G.                                                       
|       |                                                          
|       | H.                                                       
|       |                                                          
|2.     | PROPERTIES                                               
|       | A.                                                       
|       |                                                          
|       |                                                          
|       |                                                          
|       | B.                                                       
|       |                                                          
|3.     | LEGAL PROCEEDINGS                                        
|       |                                                          
|       |                                                          
|       |                                                          
|       |                                                          
|4.     | SUBMISSION OF MATTERS TO A VOTE OF
      SECURITY HOLDERS
|       |                                                          
|4A.    | DIRECTORS AND EXECUTIVE OFFICERS OF
      THE REGISTRANT 
|       | A.                                                       
|       | B.                                                       
|       |                                                          
|       |                                                          

|PART II |                                                                                            
|------- | -------------------------------------------------------------------------------------------
|        |                                                                                            
|5.      | MARKET FOR REGISTRANT'S COMMON EQUITY
      AND RELATED STOCKHOLDER MATTERS                
|        |                                                                                            
|        |                                                                                            
|        |                                                                                            
|        |                                                                                            
|6.      | SELECTED FINANCIAL DATA                                                                    
|        |                                                                                            
|        |                                                                                            
|        |                                                                                            
|7.      | MANAGEMENT'S DISCUSSION AND ANALYSIS
      OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|        |                                                                                            
|        |                                                                                            
|        |                                                                                            
|7A.     | QUALITATIVE AND QUANTITATIVE
      DISCLOSURES ABOUT MARKET RISK                           
|        |                                                                                            
|8.      | FINANCIAL STATEMENTS AND
      SUPPLEMENTARY DATA                                          
|        |                                                                                            
|        | WPS RESOURCES CORPORATION                                                                  
|        | A.                                                                                         
|        | B.                                                                                         
|        | C.                                                                                         
|        | D.                                                                                         
|        | E.                                                                                         
|        | F.                                                                                         
|        |                                                                                            
|        | WISCONSIN PUBLIC SERVICE CORPORATION                                                       
|        | G.                                                                                         
|        | H.                                                                                         
|        | I.                                                                                         
|        | J.                                                                                         
|        | K.                                                                                         
|        | L.                                                                                         
|        | M.                                                                                         
|        |                                                                                            
|9.      | CHANGE IN AND DISAGREEMENTS WITH
      ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE  

|         |                                                                                                                         |                                                   
|-------- | ----------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------
|         |                                                                                                                         |                                                   
|PART III |                                                                                                                        
|         |                                                                                                                         |                                                   
|10.      | DIRECTORS AND EXECUTIVE OFFICERS OF
      THE REGISTRANT                                                                | 112                                               
|         |                                                                                                                         |                                                   
|11.      | EXECUTIVE COMPENSATION                                                                                                  | 112                                               
|         |                                                                                                                         |                                                   
|12.      | SECURITY OWNERSHIP OF CERTAIN
      BENEFICIAL OWNERS AND MANAGEMENT                                                    | 112                                               
|         |                                                                                                                         |                                                   
|13.      | CERTAIN RELATIONSHIPS AND RELATED
      TRANSACTIONS                                                                    | 112                                               
|         |                                                                                                                         |                                                   
|         |                                                                                                                         |                                                   
|PART IV  |                                                                                                                        
|         |                                                                                                                         |                                                   
|14.      | EXHIBITS, FINANCIAL STATEMENT
      SCHEDULES AND REPORTS ON FORM 8-K                                                   | 113                                               
|         |                                                                                                                         |                                                   
|         | Description of Documents                                                                                                | 113                                               
|         | Signatures                                                                                                              | 122                                               
|         |                                                                                                                         |                                                   
|         | SCHEDULE I - CONDENSED PARENT COMPANY
      FINANCIAL STATEMENTS
       WPS RESOURCES CORPORATION (PARENT COMPANY ONLY) |                                                   
|         | A.                                                                                                                      | Report of Independent Public
      Accountants    
|         | B.                                                                                                                      | Statements of Income and Retained
      Earnings  
|         | C.                                                                                                                      | Balance Sheets                                    
|         | D.                                                                                                                      | Statements of Cash Flows                          
|         | E.                                                                                                                      | Notes to Parent Company Financial
      Statements
|         |                                                                                                                         |                                                   
|         |                                                                                                                         |                                                   

|EXHIBITS
|--------
|        
|2A-2    
|        
|2A-3    
|        
|2A-4    
|        
|3B-1    
|        
|3B-2    
|        
|10H-1   
|        
|10H-2   
|        
|10H-3   
|        
|10H-4   
|        
|10H-5   
|        
|10H-6   
|        
|10I-1   
|        
|10I-2   
|        
|10I-3   
|        
|10J-2   
|        
|12      
|        
|21      
|        
|23      
|        
|24      



> Part I

Item 1. BUSINESS

> GENERAL

WPS Resources Corporation

WPS Resources was incorporated in Wisconsin in 1993.
WPS Resources is a holding company for regulated utility and nonregulated
business units. Principal operating subsidiaries and their approximate
percentages of revenues and assets are:



|                                     | Percent ofRevenues | Percent of Net Income | Percent ofAssets
|------------------------------------ | ------------------ | --------------------- | ----------------
|                                     |                    |                       |                 
|Wisconsin Public Service Corporation | 43%                | 105%                  | 53%             
|Upper Peninsula Power Company        | 3%                 | 4%                    | 4%              
|WPS Energy Services, Inc.            | 49%                | 3%                    | 33%             
|WPS Power Development, Inc.          | 7%                 | 1%                    | 8%              
|WPS Resources Corporation            | -                  | -13%                  | 3%              

Wisconsin Public Service, WPS Energy Services, and WPS
Power Development are all Wisconsin corporations. Upper Peninsula Power is
a Michigan corporation. Wisconsin Public Service and Upper Peninsula Power
are regulated utilities.

Wisconsin Public Service Corporation

Wisconsin Public Service is a regulated electric and gas
utility serving an 11,000 square mile service territory in northeastern
Wisconsin and a portion of the Upper Peninsula of Michigan. In 2000,
Wisconsin Public Service served 395,063 electric retail customers and 235,470
gas retail customers. Wholesale electric service is provided to various
customers including municipal utilities, electric cooperatives, energy
marketers, other investor-owned utilities, and a municipal joint action agency.



|2000 Operating revenues were:
|-----------------------------
|                             
|State                        
|Customers                    
|Electric                     
|Gas                          

Upper Peninsula Power Company

Upper Peninsula Power is a regulated utility
providing electric service to a 4,500 square mile area of Michigan's
Upper Peninsula. Electric service was provided to 50,272 retail customers.
Wholesale electric service was provided to various municipal utilities, electric
cooperatives, and other investor-owned utilities. Total revenues consisted of
91% retail sales and 9% wholesale sales.

WPS Resources Capital Corporation

WPS Resources Capital Corporation was created in 1999
as an intermediate holding company for the nonregulated subsidiaries of
WPS Resources. WPS Resources Capital Corporation will provide the
equity for the nonregulated subsidiaries of WPS Resources. At the end of 2000,
WPS Resources Capital Corporation had total assets of $108.6 million,
consisting of its investments in WPS Energy Services and WPS Power
Development.

WPS Energy Services, Inc.

WPS Energy Services is a nonregulated subsidiary of
WPS Resources Capital Corporation. WPS Energy Services provides energy
and related products and services in the nonregulated energy market throughout
the Midwest and eastern United States. WPS Energy Services had revenues of
$955.6 million in 2000. Revenues in 2000 have risen significantly over 1999
due to growth in sales volume and the large increase in the cost of natural gas
experienced in 2000.

WPS Power Development,
Inc.

WPS Power Development is also a nonregulated
subsidiary of WPS Resources Capital Corporation. Energy-related services
provided by WPS Power Development include project development, engineering
and management services, and operations and maintenance services. WPS Power
Development currently owns, through subsidiaries, electric generation facilities
in Wisconsin, Maine, Pennsylvania, and New Brunswick, Canada. Synthetic
fuel processing and steam production facilities are located in Kentucky,
Arkansas and Oregon. WPS Power Development had revenues of
$128.1 million in 2000.

Forwarding-Looking Statements

Except for historical data and statements of current fact,
the information contained in this Annual Report constitutes forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934. Any references made to plans, goals, beliefs, or expectations in respect
to future events and conditions or to estimates are forward-looking statements.
We believe our expectations are based on reasonable assumptions. Forward-looking
statements are inherently uncertain and subject to risks. Such statements should
be viewed with caution. Actual results or experience could differ materially
from the forward-looking statements as a result of many factors. Forward-looking
statements in this report include, but are not limited to statements regarding:

> 1)   
>   expectations regarding future revenues,
>   2)    estimated future capital expenditures,
>   3)    the expected costs of purchased power in the future,
>   4)the costs
>   of decommissioning nuclear generating plants,
>   5)    future cleanup costs associated with gas plant sites, and
>   6)statements
>   in the Management Discussion and Analysis of 
>           Financial Condition and Results of
>   Operations regarding trends 
>           or estimates.

We cannot predict the
course of future events or anticipate the interaction of multiple factors beyond
our control and their effect on revenues, project timing and costs. Some risk
factors that could cause results different from any forward-looking statement
include:

> 1)    the speed and degree to which competition enters
>   the electric 
>           and natural gas industries,
>    2)    state and Federal legislation, regulation,
>   interpretation, or
>           enforcement,
>    3)    regulatory initiatives,
>    4)    economic climate,
>    5)    industrial, commercial, and residential growth,
>    6)    environmental regulation,
>    7)    weather,
>    8)    timing and extent of changes in commodity prices,
>    9)    interest rates,
>   10)    capital markets, and
>   11)    opportunities for expansion in nonregulated energy
>   markets.

We make no commitment to disclose any revisions to the
forward-looking statements as a result of, facts, events, or circumstances after
the date of this report.

B. ELECTRIC UTILITY MATTERS

Electric Operations

In Wisconsin, the largest communities served by Wisconsin
Public Service at the electric retail level are the cities of Green Bay,
Oshkosh, Wausau, and Stevens Point. In Michigan, the largest community served at
the electric retail level is the area of Houghton/Hancock, which is served by
Upper Peninsula Power.

Generating Capacity

In 2000, Wisconsin Public Service reached a firm net
design peak of 1,793 megawatts on the afternoon of August 31. The summer time
period is the most relevant for capacity planning purposes. Planned generation
capability for the 2000 summer period was 1,980 megawatts. Future supply
reserves are expected to meet the minimum 18% planning criteria for 2001 and
2002.

For additional information regarding our generation
facilities, see "UTILITY" in Part I, Item 2, PROPERTIES.

In 2000, Upper Peninsula Power purchased 89% of its
total energy requirements. Remaining energy requirements were supplied by
hydroelectric and combustion turbine facilities owned by Upper Peninsula
Power. During 2000, 65 megawatts of firm power were purchased from Wisconsin
Public Service. Upper Peninsula Power also purchased non-firm power from
Wisconsin Public Service and Alliant Energy Corporation among others. The
purchases from Wisconsin Public Service represented 75% of Upper Peninsula
Power's total energy requirements in 2000. Upper Peninsula Power has
contracted for 65 megawatts of capacity and energy from Wisconsin Public Service
for the years 2001 and 2002.

In 2000, Wisconsin Public Service purchased Consolidated
Water Power Company's ownership interest in Wisconsin River Power Company
increasing the ownership interest of Wisconsin Public Service from 33.1% to
66.88% of the outstanding capital stock of Wisconsin River Power. Wisconsin
River Power is the owner and operator of two dams and related hydroelectric
plants on the Wisconsin River having an aggregate installed capacity of
approximately 39 megawatts. The acquisition was effective January 1,
2001. Wisconsin Power and Light Company has an option to purchase 50% of the
additional capital stock of Wisconsin River Power acquired by Wisconsin Public
Service in 2000. Wisconsin Power and Light must file with the Securities and
Exchange Commission by March 31, 2001 to exercise this option. Upon exercise of
this option, Wisconsin Public Service and Wisconsin Power and Light would each
own 50% of Wisconsin River Power.

Kewaunee Nuclear Power Plant

General

The Kewaunee plant is a pressurized water reactor plant
with a nameplate capacity of 562 megawatts. Currently, it is jointly owned by
Wisconsin Public Service (41.2%), Wisconsin Power and Light (41.0%), and Madison
Gas and Electric Company (17.8%). WPS Resources owns a 20% interest in Nuclear
Management Company LLC, the plant's current operator. The plant's operating
license expires in 2013.

Future Ownership

On September 29, 1998, Wisconsin Public Service and
Madison Gas and Electric Company entered into an agreement to transfer Madison
Gas and Electric's 17.8% share of the Kewaunee plant to Wisconsin Public
Service. The closing of this agreement remains contingent upon approvals from
the Nuclear Regulatory Commission. After the transfer, Wisconsin Public Service
will have a 59% ownership interest in the plant. The remaining co-owner,
Wisconsin Power and Light Company, will retain its 41% ownership interest in the
plant.

Under the terms of the agreement, Wisconsin Public Service
will pay Madison Gas and Electric an amount equal to its depreciated book
value for its share of the Kewaunee plant at the ownership transfer date. The
ownership transfer date is contingent upon installation of new steam generators
at the Kewaunee Nuclear Plant. Shutdown of the plant for installation of the
steam generators is anticipated to be in the fall of 2001. Madison Gas and
Electric will not participate in the costs related to the installation. Madison
Gas and Electric will also provide to Wisconsin Public Service:

> 1)    its qualified decommissioning trust at the date of the
>   ownership change,
>   2)    a commitment to dedicate funds available in its
>   nonqualified trust for decommissioning, and
>   3)    a commitment to make annual decommissioning
>   contributions of  $8,091,000 through the year 2002.

These funds and contributions are expected to fully fund
Madison Gas and Electric's share of total expected plant decommissioning
costs.

Wisconsin Public Service will then assume responsibility
for 59% of the costs of decommissioning the plant. Madison Gas and Electric will
retain its obligation for its share of the costs for final disposal of spent
nuclear fuel created up to the time of ownership transfer. Madison Gas and
Electric will be provided with an option to purchase power from Wisconsin Public
Service, at a fixed price, for two years following the date of the ownership
transfer. The amount of potential power to be provided is approximately equal to
Madison Gas and Electric's current share of the power generated by the plant.

Steam Generator Replacement

On April 7, 1998, the Public Service Commission of
Wisconsin approved the Wisconsin Public Service application for replacement of
the two steam generators at the Kewaunee plant. The total cost of replacing the
steam generators is estimated to be approximately $120 million. After the
acquisition of Madison Gas and Electric's interest in the Kewaunee plant our
share of the cost is estimated to be $70.8 million. Madison Gas and Electric
will not be responsible for any portion of the costs of the steam generator as a
result of the change in ownership discussed above. Due to delays in the
manufacture of the new steam generators, the replacement is now planned for the
scheduled refueling outage in the fall of 2001 and is expected to take
approximately 60 days.

On April 21, 2000, the Kewaunee plant was shut down for
the scheduled spring 2000 refueling outage. The plant had operated continuously
since startup from the 1998 refueling outage for a total of 511 days. On
June 2, 2000, the plant returned to service from the 2000 planned
maintenance and refueling outage. Inspection of the plant's two steam generators
showed that the repairs made to the tubes in previous outages were holding up
well. A major overhaul was also performed on the main electrical generator. The
Kewaunee plant ended year 2000 with 206 days of continuous operation since
startup from the 2000 refueling outage.

Formation of Nuclear Management Company, LLC

On February 25, 1999, Northern States Power Company,
Wisconsin Electric Power Company, and Wisconsin Public Service announced the
formation of Nuclear Management Company. Subsequently, Alliant Energy also
became a participant in Nuclear Management Company. Combined, the four utilities
operate seven nuclear generating units at five locations for a combined
generating capacity of approximately 3,760 megawatts. This represents between
12% and 25% of the electricity generated by the individual utilities. In 2000
Consumers Power announced that it will join Nuclear Management Company upon the
receipt of regulatory approvals.

Nuclear Management Company was formed to sustain long-term
safety, optimize reliability, and improve the operational performance of the
individual nuclear generating plants. Overall plant operations will continue to
be staffed by the same plant personnel. The utilities will continue to own their
respective plants, be entitled to energy generated at the plants, and retain the
financial obligations for their safe operation, maintenance, and
decommissioning. Each of the current Nuclear Management Company participants has
received the required state and Federal regulatory approvals. All non-union
Kewaunee plant employees of Wisconsin Public Service were transferred to Nuclear
Management Company on January 1, 2001.

Plant Regulation

The Kewaunee plant has been implementing a plan over the
last several years to make improvements to plant processes and procedures.
Assessments performed by Nuclear Management Company and Kewaunee staff, the
Nuclear Regulatory Commission, the Institute of Nuclear Plant Operations, and
others have reinforced the need to continue this improvement.

In 2000, the Nuclear Regulatory Commission Revised
Oversight Process was issued which lowered the requirements defining when a
formal investigative process needed to be initiated at a nuclear plant. As a
result, processes at the Kewaunee plant need to be revised. The improvements
necessitated by the Nuclear Regulatory Commission Revised Oversight Process have
increased the urgency to implement process improvements currently underway at
the plant. In addressing these needed improvements, the Nuclear Regulatory
Commission acknowledged the safety record of the Kewaunee plant and its ability
to continue operations. However, management believes that the Kewaunee plant
must proceed with the current process improvement project to continue
operations.

In order to address the concerns raised by the Nuclear
Regulatory Commission, it is estimated that additional costs will be incurred in
2001 of $23.8 million over that requested in the most recent rate case filings
of Wisconsin Public Service and the other plant co-owners. The Wisconsin Public
Service share of the $23.8 million may be as much as $14 million. Nuclear
Management Company has requested approval of the Kewaunee co-owners to spend up
to $3.6 million to allow the Kewaunee plant staff to continue to address
these issues over the next three months while further definition of the project
is developed.

Additional incremental operating costs for these
improvements over the period of 2002 through 2005 are estimated to be $51.7
million and will be included in future rate requests of the Kewaunee co-owners.
The Kewaunee co-owners have submitted to the Public Service Commission of
Wisconsin a request for deferral of the 2001 and 2002 incremental costs
associated with this issue.

Total additional capital costs associated with these
improvements, over the 2001 through 2003 period are estimated to be $4.9
million.

Low-Level Radioactive Waste Storage



Depreciation and Decommissioning

In 1997, the Public Service Commission of Wisconsin
directed the owners of the Kewaunee plant to develop depreciation and
decommissioning cost projections based on full cost recovery of the estimated
obligation by the end of 2002. Previously, cost estimates had been based on full
collection of funds required for decommissioning by 2013, the year in which the
operating license expires. The order was prompted by uncertainty regarding the
expected useful life of the plant without steam generator replacement. This
method of recovery was discontinued on December 31, 2000 as a result of a recent
Public Service Commission of Wisconsin rate order for 2001 and 2002. This rate
order requires the investment in the new steam generators to be recovered using
the sum-of-the-years-digits depreciation method over an 8.5 year period
beginning with completion of the new steam generators installation. The
unrecovered plant investment at the end of 2000 will be recovered over a period
ending 8.5 years after the installation of the steam generators using a
straight-line remaining life depreciation methodology. The order further
provides for the funding period for decommissioning to be extended to the end of
2010.

At December 31, 2000, the net carrying amount of our
investment in Kewaunee was approximately $52.5 million. The current cost
for our share of the estimated costs to decommission Kewaunee is
$211.4 million. Wisconsin Public Service decommissioning trust assets at
December 31, 2000 totaled $207.2 million.

During 2000, $8.9 million of depreciation expense
related to unrecovered plant investment was recognized compared with
$8.3 million recognized in 1999. The 2000 decommissioning funding level was
$8.9 million compared with $9.2 million in 1999. Beginning in 2001,
the decommissioning funding level will be $2.6 million based on the
extension of the funding period.

Additional discussion of Kewaunee plant matters is
included in MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION and the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS,

FUEL SUPPLY

Electric Generation Mix

Wisconsin Public Service's electric generation mix for
2000 and 1999 was:



|               | 2000                 | 1999 
|-------------- | -------------------- | -----
|Energy Sources |                      |      
|               | Coal                 | 63.3%
|               | Purchased power      | 19.4%
|               | Nuclear              | 12.0%
|               | Natural gas/fuel oil | 3.4% 
|               | Hydro                | 1.9% 

Purchased power represents short-term energy purchases.

Fuel Costs

Wisconsin Public Service's fuel costs for
2000 and 1999 were:



|                                       | 2000        | 1999 
|-------------------------------------- | ----------- | -----
|Fuel Sources($ per million
      Btus) |             |      
|                                       | Coal        | $1.08
|                                       | Nuclear     | 0.45 
|                                       | Natural gas | 4.42 
|                                       | Fuel oil    | 6.46 
|                                       | Propane     | -    

Coal

Coal is the primary fuel source for Wisconsin Public
Service, most of which is from the Powder River Basin mines located in Wyoming
and Montana. Powder River Basin coal is very low in sulfur and meets the
standards of the 1990 Clean Air Act for 2001 and beyond. This coal has been
our least-cost coal source from any of the subbituminous coal-producing regions
in the United States.

Wisconsin Public Service continues to test alternative
coal sources for its Pulliam and Weston plants. Alternative sources could
provide more competitive market pricing and higher Btu content. Coal with higher
Btu content will increase generation output and provide flexibility in meeting
peak electric demands.

Wisconsin Public Service purchases most of the coal for
its wholly-owned plants and the jointly-owned Edgewater and Columbia plants
under relatively short-term contracts of up to three years duration.
Historically, Wisconsin Public Service has purchased the subbituminous coal
directly from the producer. For 2001 to 2003, approximately 23% of the coal
requirements for the wholly-owned plants and 8% for the jointly-owned plants
have been awarded to a marketer. One long-term contract covers approximately 24%
of total requirements and has take-or-pay obligations totaling
$89.2 million for the years 2001 through 2016.

Coal transportation for these plants is purchased under
contracts of up to five years duration. Over 90% of our coal transportation is
under competitive transportation agreements which are expected to continue to
contribute to competitive fuel costs. Union Pacific Railroad Company is the
exclusive provider of coal transportation for the jointly-owned Edgewater plant.
The plant operator, Wisconsin Power and Light, filed a complaint with the
Surface Transportation Board on December 30, 1999 claiming the tariff charged by
Union Pacific for unit train service between the Powder River Basin and the
Edgewater plant is unreasonably high. The Surface Transportation Board is
currently reviewing the complaint and is expected to issue a decision in the
latter portion of 2001.

See NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Note 13,
COMMITMENTS AND CONTINGENCIES regarding "Coal Contracts."

Nuclear Fuel Cycle

Wisconsin Public Service purchases uranium concentrates,
conversion services, enrichment services, and fabrication services for nuclear
fuel assemblies at the Kewaunee plant. Approximately 1/3 of the 121 fuel
assemblies are removed from the reactor every 18 months and replaced with new
assemblies. Removed assemblies are placed in storage at the plant site pending
permanent disposal by the United States Department of Energy.

Uranium concentrates, conversion services, and enrichment
services are purchased either on the spot market, through a bidding process, or
using existing contracts.

The uranium inventory policy of Wisconsin Public Service
requires that sufficient inventory be maintained for two reactor refuelings. As
of December 31, 2000, approximately 884,000 pounds of yellowcake (a
processed form of uranium ore), or its equivalent, were held in inventory for
the plant. Inventory includes uranium under contract.

Conversion services are complete for the nuclear fuel
reloads scheduled in 2001 and 2003.

A fixed quantity of enrichment services has been
contracted through the year 2004. Wisconsin Public Service has the option of
purchasing future enrichment services under an existing contract or purchasing
from the spot market.

Wisconsin Public Service has contracts in place for fuel
fabrication services for the next decade.

If, for any reason, the Kewaunee plant was forced to
suspend operations permanently, the maximum exposure related to fuel contracts
is not expected to exceed $6,500,000. The increased exposure is due to a new
long- term fuel fabrication contract with Westinghouse. No financial penalties
associated with the present uranium supply, conversion service, and enrichment
agreements exist. Uranium inventories could be sold on the spot market.

Spent Nuclear Fuel Disposal

The Federal government has the responsibility to dispose
of or permanently store spent nuclear fuel. Legislation is being considered on
the Federal level to provide for the establishment of an interim storage
facility.

In July 1996, the United States Court of Appeals for the
District of Columbia had ruled that the Department of Energy had an
unconditional obligation to begin accepting, transporting, and disposing of
spent nuclear fuel by January 31, 1998. Wisconsin Public Service has joined
other utilities in a motion to enforce the July 1996 ruling. On January 31,
1998, the United States Department of Energy failed to comply with its
obligation to begin removing spent nuclear fuel from plant sites as required by
the Nuclear Waste Policy Act of 1982. On May 5, 1998, the United States Court of
Appeals for the District of Columbia issued a decision denying the motion to
enforce the Court's 1996 mandate. The denial centered on the question of whether
the Department of Energy could properly use the Nuclear Waste Fund as a source
to pay damages. The Court also ruled that the question is not ready for review.
The Court indicated that compelling the Department of Energy to submit a
detailed program for disposing of spent fuel from utilities and declaring that
the utilities are relieved of their obligation to pay fees to the Nuclear Waste
Fund falls outside the scope of the Court's authority. The scope of the Court's
mandate was limited to defining the nature of the Department of Energy's
statutory obligations and did not extend to requiring the Department of Energy
to perform under its contracts with the utilities. Our current recourse is to
request reimbursement from the Department of Energy for expansion of disposal
facilities. Litigation on this issue continues in the industry and we continue
to monitor its progress.

Funding Decontamination and Decommissioning of Federal Facilities

A surcharge imposed by the Energy Policy Act of 1992
requires nuclear power companies to fund the decontamination and decommissioning
of Department of Energy facilities relating to the processing of nuclear fuel.
As a result, we are required to pay a surcharge for uranium enrichment services
purchased from the Federal government prior to October 23, 1992. On an inflation
adjusted basis, our portion of the obligation related to the Kewaunee plant is
approximately $600,000 per year through the year 2007. Madison Gas and Electric
has agreed to continue to pay its portion of this annual assessment after the
transfer of their ownership interest in the plant to Wisconsin Public Service.

Wisconsin Public Service and a number of other nuclear
power companies sued the Department of Energy in the United States Court of
Federal Claims seeking a refund of the previously paid decontamination and
decommissioning surcharge payments. This claim continues in the Court of Federal
Claims pending the settlement of other litigation. On August 13, 1998, 22
utilities filed a complaint in the U.S. District Court for the Southern District
of New York seeking a declaratory judgement that certain sections of the
Energy Policy Act are unconstitutional. As of December 2000, the Department of
Energy and the utilities continue legal proceedings in both the Court of Federal
Claims and the United States District Courts. No final rulings have been issued.

Formation of American Transmission Company

In 2000, Wisconsin Public Service along with Alliant
Energy, Madison Gas and Electric, Wisconsin Electric, and Wisconsin Public Power
Inc. formed American Transmission Company, LLC, as required by Wisconsin Act 9
to be eligible for holding company asset cap relief. American Transmission
Company is a regulated transmission company that will construct, operate,
maintain and expand transmission facilities in eastern Wisconsin, the Upper
Peninsula of Michigan, and a portion of Illinois. American Transmission Company
will provide service to all customers, in an effort to support an effective
competitive energy market. The member utilities transferred ownership of their
transmission assets to American Transmission Company on January 1, 2001 in
return for equity interests in the company. Wisconsin Public Service transferred
approximately $70.8 million of its transmission assets in exchange for a 12.1 %
equity interest in American Transmission Company. As provided by Wisconsin Act
9, as a result of transferring these transmission assets WPS Resources is no
longer subject to the asset cap limitation on nonregulated investments of the
Wisconsin Holding Company Act. Upper Peninsula Power intends to transfer its
transmission assets in exchange for an ownership interest in American
Transmission Company in the first half of 2001. American Transmission Company is
a member of the Midwest Independent System Operator.

Regulatory Matters in the Wisconsin Jurisdiction

Industry Restructuring

As was the case since 1997, electric reliability continued
to be the primary issue for the Public Service Commission of Wisconsin during
2000 and into 2001. Industry restructuring and retail generation open access
remain secondary issues in the state. The priorities of the Public Service
Commission of Wisconsin in 2000 were:

> 1) the completion of a Market Power study,
>   2) the completion of dockets and orders required to launch American
>   Transmission Company,
>   3) completion of dockets to allow utility membership in Midwest Independent
>   System Operator,
>   4) continuation of dockets to approve the construction of the Weston to
>   Arrowhead transmission line, and
>   5) completion of orders to transfer the responsibility of conservation,
>   load management, and public benefits from the utilities to the Wisconsin
>   Department of Administration with utility customer financing.

The hearings related to the Weston to Arrowhead
transmission line are anticipated to be completed in 2001. The Weston to
Arrowhead transmission line is a 250-mile 345-kilovolt transmission line from
Wausau, Wisconsin to Duluth, Minnesota to be constructed by Wisconsin Public
Service and Minnesota Power and Light Company. Wisconsin Public Service has an
option to transfer its portion of the construction project to the American
Transmission Company, for completion, in exchange for additional equity interest
in American Transmission Company. WPS Resources would continue to fund the
construction of the line by American Transmission Company. Commission
consideration of generation ownership and construction proposals from Wisconsin
Electric Power, Customer's First (a group of environmental and customer groups),
municipal utilities, and cooperative energy providers will also be addressed in
2001.

The Public Service Commission of Wisconsin hired a
consultant to perform a market power analysis for Wisconsin and the Upper
Peninsula of Michigan electric markets as part of the requirements of
Reliability 2000 legislation. The consultant completed a study of the market
conditions in Wisconsin, which was then published for comment. The Commission
received comments and in December of 2000 issued a "Report to the
Legislature on Horizontal Market Power in Wisconsin Electric Markets." The
Commission concludes that the study "provides a useful starting point for
the analysis of potential horizontal market power problems in Wisconsin."
The Commission concurred with numerous comments it received, including those of
Wisconsin Public Service, that complete and immediate wholesale and retail
deregulation as simulated in the study is not in the public interest, especially
in light of the developments in California. The Commission agreed with the
conclusions in the study that more transmission is needed and contracts between
generators and customers may be an effective form of market power mitigation.
Finally, the Commission indicated that horizontal market power issues are a
complex subject that will require further study before actions to mitigate
market power are considered.

Independent System Operator

The Midwest Independent System Operator plans to become
operational in the fall of 2001 after being granted status as a Regional
Transmission Organization by the Federal Energy Regulatory Commission after a
January 2001 compliance filing. As required by Wisconsin Act 9, Wisconsin Public
Service, Wisconsin Electric, Madison Gas and Electric, Northern States Power
Company - Wisconsin, and Wisconsin Power and Light have all filed and received
Public Service Commission of Wisconsin and Federal Energy Regulatory Commission
approval to join and have joined the Midwest Independent System Operator. During
2000, three major members of the Midwest Independent System Operator, Dynergy,
Commonwealth Edison, and Ameren, requested approval from the Federal Energy
Regulatory Commission to withdraw from Midwest Independent System Operator.
Other Midwest Independent System Operator members, including Wisconsin Public
Service, have filed notifications that they will withdraw from Midwest
Independent System Operator if one or more of the original three withdrawals are
approved. The withdrawal of Dynergy, Commonwealth Edison, and Ameren will reduce
the Midwest Independent System Operator region to Wisconsin and Minnesota,
reducing its service territory to a size insufficient to be an effective
Regional System Operator.

In addition to Midwest Independent System Operator another
organization, Alliance Regional Transmission Organization, has filed with the
Federal Energy Regulatory Commission for Regional Transmission Organization
status in the Midwest. Alliance is made up of a number of utilities serving
portions of Michigan, Ohio, Virginia, West Virginia, and a small portion of
Pennsylvania. The three companies requesting withdrawal from the Midwest
Independent System Operator have indicated a desire to join Alliance. The
Federal Energy Regulatory Commission is expected to take action on the
withdrawal requests in early 2001 as well as the requests for Regional
Transmission Organization status of Midwest Independent System Operator and
Alliance. Intervenors in this withdrawal case, including Wisconsin Public
Service, have suggested to the Federal Energy Regulatory Commission that the
Midwest Independent System Operator and Alliance should be required to merge and
provide one regional transmission organization for the Midwest. As a result, it
is likely that this will delay the operations date of the Midwest Independent
System Operator. Until a Midwest Regional Transmission Organization is
operational, the American Transmission Company will operate the eastern
Wisconsin transmission system.

Electric Supply Issues

The summer of 2000 was generally cooler than normal, thus
relieving much of the stress regarding reliability of the regional system that
was experienced in 1999. In preparation for the summer of 2000, Wisconsin Public
Service and other utilities in the state, in accordance with Act 9 filed
customer buyback tariffs which allow utilities to shed load during peak demand
periods for customers willing to sell back all or a portion of their supply.
Wisconsin Public Service developed and filed five tariffs, and the Public
Service Commission of Wisconsin approved four of them just prior to the summer
season. Wisconsin Public Service opened the closed commercial and industrial
direct load control program to more customer participation. In 2000, Wisconsin
Public Service leased a number of portable diesel generators and installed them
on various parts of the system for extra peaking capability.

Customer Rate Matters

In 2000, Wisconsin Public Service electric rates were 91%
of the state average for some residential rates, 82% for commercial rates, and
80% for large industrial rates.

In 2000, Wisconsin Public Service filed for an electric
rate increase effective for 2001. Wisconsin Public Service also filed for a
reopener for year 2002 with an additional increase of electric rates. Primary
reasons for the rate increase were the cost of improvements to the electric
transmission and generation infrastructure, improvements to the customer
information system and the facilities system, the continuation of the automated
meter reading installation project, and the cost of fuel and purchased power.

On December 21, 2000, the Commission issued its order in
this rate case providing Wisconsin Public Service with an electric increase of
$27.2 million, or 5.4%. The Commission did not order a reopener for the
year 2002 but indicated that Wisconsin Public Service could file for one if
needed. The Commission order approved the request of Wisconsin Public Service
for a return on equity of 12.1% and the continuation of the installation of the
automated meter reading system in the remainder of the Wisconsin Public Service
gas and electric system. The new rates became effective on January 1, 2001.

Regulatory Matters in the Michigan Jurisdiction

Industry Restructuring

On June 2, 2000, legislation was passed in Michigan,
providing all electric customers of investor-owned and cooperative utilities the
right to choose their generation supplier by January 1, 2002. This law is best
characterized as industry restructuring rather than deregulation, since it does
not deregulate generation service provided by the current utilities even after
January 1, 2002 when customers will be able to choose their electric supplier.

In addition to customer choice, the law includes a rate
reduction and freeze for utilities serving more than 200,000 customers in
Michigan, a mechanism to reduce market power in the Lower Peninsula of Michigan,
a requirement that a market power study of the market in the Upper Peninsula of
Michigan be conducted, stranded cost and transition cost recovery mechanisms, an
affiliate interest code of conduct, a customer education mechanism, and various
rules on customer and supplier business practices.

The Commission and the utilities have started the process
of developing the systems needed to implement the law. The Commission has opened
generic dockets on code of conduct, customer education, stranded cost recovery,
slamming and cramming protections, and bill disclosure of generation
environmental effects, and has opened individual cases for each utility to
develop the open access tariffs and business practices. Wisconsin Public Service
and Upper Peninsula Power are parties in all of these cases. Preliminary tariffs
are expected in the first quarter of 2001.

Customer Rate Matters

In 2000, Wisconsin Public Service continued to be the
lowest-cost provider of electric service in Michigan for all customer classes,
although one other Upper Peninsula utility has equally low rates for residential
and small commercial customers. Wisconsin Public Service rates were 72% of the
state average for residential rates, 73% for commercial rates, and 86% for large
industrial rates.

Wisconsin Public Service and Upper Peninsula Power each
have a one-for-one recovery mechanism for electric fuel and purchased power.
Although a number of utilities froze their one-for-one recovery mechanisms
during the 1990s, Wisconsin Public Service and Upper Peninsula Power did not
request a freeze. In the current volatile electric energy market, it is felt
that passing through these one-for-one costs of energy send the proper price
signals to customers. This also helps preserve the competitive markets that have
been developing in the state.



Regulatory Matters in the Federal Energy Regulatory Commission
Jurisdiction

Customer Rate Matters

Other than transmission open access tariff cases,
ancillary service rates, and adjustments for fuel buyouts, Wisconsin Public
Service has not had a full Federal Energy Regulatory Commission wholesale rate
case since 1987.

Open Access Transmission Tariff

Wisconsin Public Service turned over its transmission
system to American Transmission Company in exchange for an ownership share of
this single purpose transmission company based on the net book value of its
transmission assets on January 1, 2001. Wisconsin Public Service filed a new
transmission open access tariff with the Federal Energy Regulatory Commission as
part of this process to eliminate the Wisconsin Public Service transmission
provisions which are now a part of the American Transmission Company open access
transmission tariff. The remaining portions of the Wisconsin Public Service
tariff are the Upper Peninsula Power Company transmission tariff, ancillary
service provisions, and distribution service provisions of Wisconsin Public
Service. The Federal Energy Regulatory Commission accepted this tariff for
filing effective on January 1, 2001 subject to refund and set it for hearing. An
agreement in principle has been reached with intervenors which could settle this
case.

Wisconsin Public Service also filed for:

> 1) a new reactive ancillary service rate in this tariff which the Federal
>     Energy Regulatory Commission accepted and made effective on January 1,
>     2001, and
>     2) new style Regulation and Operating Reserve ancillary service rates
>     which the Federal Energy Regulatory Commission accepted and made effective
>     on July 1, 2000.

The Federal Energy Regulatory Commission accepted the
American Transmission Company's tariff and implemented it on January 1, 2001
subject to refund and set it for hearing. The Commission identified 4 issues
that were not approved as filed: a return on equity of 12.2%, recovery of
start-up costs, costs to be included in the rate formula, and the phase-in
mechanism. The prehearing for this case was held in January 2001. The Federal
Energy Regulatory Commission will hold hearings in October 2001 if the issues
are not settled prior to that date.

Regional Transmission Organizations

The Federal Energy Regulatory Commission Order 2000
required all jurisdictional utilities to submit a compliance filing by October
2000, indicating their plans for joining a Regional Transmission Organization or
the reasons that they have no plans to join. The Federal Energy Regulatory
Commission Order 2000 also required all existing organizations that plan to
become Federal Energy Regulatory Commission authorized Regional Transmission
Organizations to complete their compliance filings, matching the requirements of
the order, by January 16, 2001.

Wisconsin Public Service and Upper Peninsula Power joined
the Midwest Independent System Operator in June 2000. The Midwest Independent
System Operator intends to become a Federal Energy Regulatory Commission
Regional Transmission Organization. It filed in October 2001 indicating that
Wisconsin Public Service and Upper Peninsula Power, among others, were members
of the Midwest Independent System Operator and would be included in the Midwest
Independent System Operator January 16, 2001 compliance filing.

Hydroelectric Licenses

All the Federal Energy Regulatory Commission hydroelectric
facility licenses held by Wisconsin Public Service are current. With the
exception of the licenses for Bond Falls and Dead River, all hydroelectric
facility licenses held by Upper Peninsula Power are also current. The
Wisconsin River Power licenses for Petenwell and Castle Rock are pending.

In 1998, Upper Peninsula Power reached a settlement
agreement with federal and state agencies and special interest groups regarding
its Bond Falls license. Signing of the agreement, by all parties, occurred early
in 2000. The agreement is the basis for a new license from the Federal Energy
Regulatory Commission. Issuance of the new license is expected in 2001. The
license will have a term of 30 to 50 years from the date it is granted.

Licensing of the Dead River project is also progressing.
During 1999, long-term water power easements were obtained from adjacent
landowners providing flowage rights required by the Federal Energy Regulatory
Commission and the Clean Water Act. Issuance of the license is expected in 2001.
The license will have a 30 to 50-year term beginning in August 1991, the date
the Federal Energy Regulatory Commission claimed jurisdiction over the Dead
River project.

The Wisconsin River Power license application process for
the Petenwell and Castle Rock plants has been completed and receipt of new
licenses of 30 to 50-year terms are anticipated in mid 2001.

Other Matters

Research and Development

Electric research and development expenditures for
Wisconsin Public Service totaled $1.8 million for 2000, $1.7 million
for 1999, and $1.5 million for 1998. These expenditures were primarily
charged to electric operations.

Customer Segmentation

Twenty-nine paper mills account for 12% of Wisconsin
Public Service's electric revenues. There is no single customer, or small group
of customers, the loss of which would have a materially adverse effect on the
electric business of Wisconsin Public Service in the current regulatory
environment.

ELECTRIC OPERATING STATISTICS

WISCONSIN PUBLIC SERVICE CORPORATION

|                                         | 2000       | 1999       | 1998      
|---------------------------------------- | ---------- | ---------- | ----------
|Operating revenues (Thousands)           |            |            |           
|Residential and farm                     | $195,370   | $183,163   | $164,961  
|Small commercial and industrial          | 164,095    | 151,275    | 141,203   
|Large commercial and industrial          | 134,331    | 127,056    | 119,601   
|Resale and other                         | 82,155     | 66,428     | 61,575    
|Total                                    | $575,951   | $527,922   | $487,340  
|Kilowatt-hour sales (Thousands)          |            |            |           
|Residential and farm                     | 2,797,596  | 2,747,659  | 2,627,496 
|Small commercial and industrial          | 3,257,034  | 3,135,669  | 3,004,134 
|Large commercial and industrial          | 4,117,663  | 4,053,153  | 3,977,829 
|Resale and other                         | 2,234,624  | 1,983,667  | 1,990,705 
|Total                                    | 12,406,917 | 11,920,148 | 11,600,164
|Customers served (End of period)         |            |            |           
|Residential and farm                     | 351,440    | 345,962    | 339,881   
|Small commercial and industrial          | 42,570     | 41,394     | 40,247    
|Large commercial and industrial          | 225        | 220        | 211       
|Resale and other                         | 890        | 875        | 853       
|Total                                    | 395,125    | 388,451    | 381,192   
|Average kilowatt-hour price (Cents)      |            |            |           
|Residential and farm                     | 6.98       | 6.67       | 6.28      
|Small commercial and industrial          | 5.04       | 4.82       | 4.70      
|Large commercial and industrial          | 3.26       | 3.13       | 3.01      
|Production capacity (Summer - kilowatts) |            |            |           
|Steam                                    | 1,303,200  | 1,326,100  | 1,307,800 
|Nuclear                                  | 204,200    | 208,000    | 205,200   
|Hydraulic                                | 40,700     | 53,400     | 53,000    
|Combustion turbine                       | 386,200    | 382,736    | 206,340   
|Other                                    | 7,600      | 8,600      | 7,800     
|Purchased capacity                       | 14,900     | 14,900     | 14,750    
|Total system capacity                    | 1,956,800  | 1,993,736  | 1,794,890 
|Generation and purchases                 |            |            |           
|(Thousands of kilowatt-hours)            |            |            |           
|Steam                                    | 8,295,098  | 8,055,350  | 8,513,537 
|Nuclear                                  | 1,565,612  | 1,823,147  | 1,526,702 
|Hydraulic                                | 249,747    | 250,306    | 212,607   
|Purchases and other                      | 2,926,876  | 2,435,409  | 1,994,826 
|Total                                    | 13,037,333 | 12,564,212 | 12,247,672
|Steam fuel costs                         |            |            |           
|(Cents per million Btu)                  |            |            |           
|Fossil                                   | 109.990    | 109.101    | 105.353   
|Nuclear                                  | 45.241     | 45.298     | 41.565    
|Total                                    | 99.766     | 97.378     | 95.735    
|System peak - firm (kilowatts)           | 1,793,000  | 1,751,000  | 1,685,000 
|Annual load factor                       | 80.05%     | 77.71%     | 78.35%    
|                                         |            |            |           

ELECTRIC OPERATING STATISTICS

UPPER PENINSULA POWER COMPANY

|                                         | 2000    | 1999    | 1998   
|---------------------------------------- | ------- | ------- | -------
|Operating revenues (Thousands)           |         |         |        
|Residential and farm                     | $26,329 | $25,109 | $21,894
|Small commercial and industrial          | 20,968  | 19,035  | 16,688 
|Large commercial and industrial          | 10,830  | 10,809  | 9,773  
|Resale and other                         | 8,627   | 7,483   | 14,310 
|Total                                    | $66,754 | $62,436 | $62,665
|Kilowatt-hour sales (Thousands)          |         |         |        
|Residential and farm                     | 269,314 | 263,742 | 241,517
|Small commercial and industrial          | 259,445 | 239,698 | 223,282
|Large commercial and industrial          | 203,500 | 226,913 | 225,565
|Resale and other                         | 178,313 | 147,281 | 148,153
|Total                                    | 910,572 | 877,634 | 838,517
|Customers served (End of period)         |         |         |        
|Residential and farm                     | 44,460  | 43,309  | 42,783 
|Small commercial and industrial          | 5,446   | 5,304   | 5,286  
|Large commercial and industrial          | 12      | 9       | 9      
|Resale and other                         | 386     | 183     | 194    
|Total                                    | 50,304  | 48,805  | 48,272 
|Average kilowatt-hour price (Cents)      |         |         |        
|Residential and farm                     | 9.78    | 9.57    | 9.07   
|Small commercial and industrial          | 8.08    | 7.95    | 7.48   
|Large commercial and industrial          | 5.32    | 4.78    | 4.34   
|Production capacity (Summer - kilowatts) |         |         |        
|Steam                                    | 17,700  | 17,700  | 17,700 
|Hydraulic                                | 30,000  | 30,000  | 30,000 
|Combustion turbine                       | 55,000  | 55,000  | 55,000 
|Purchased capacity                       | 65,000  | 65,000  | 55,000 
|Total system capacity                    | 167,700 | 167,700 | 157,700
|Generation and purchases                 |         |         |        
|(Thousands of kilowatt-hours)            |         |         |        
|Steam                                    | 524     | (451)   | 4,029  
|Hydraulic                                | 104,144 | 126,146 | 97,988 
|Purchases and other                      | 890,156 | 846,088 | 845,426
|Total                                    | 994,824 | 971,783 | 947,443
|Steam fuel costs                         |         |         |        
|(Cents per million Btu)                  |         |         |        
|Fossil                                   | 933.630 | -       | 267.943
|System peak - firm (kilowatts)           | 146,100 | 149,300 | 137,000
|Annual load factor                       | 71.47%  | 68.65%  | 74.44% 
|                                         |         |         |        



C. GAS UTILITY MATTERS

Wisconsin Public Service Corporation's Gas Market

As of December 31, 2000, Wisconsin Public Service provided
natural gas distribution service to 230,174 customers in 225 municipalities in
northeastern and central Wisconsin, and 5,296 customers in and around the city
of Menominee, Michigan, for a total of 235,470 gas distribution customers. This
represents an increase of 5,565 customers, or 2.4%, compared to
December 31, 1999. The principal cities served include Green Bay, Oshkosh,
Sheboygan, Two Rivers, Marinette, Stevens Point, and Rhinelander, in
Wisconsin, and the city of Menominee in Michigan.

The gas distribution business of Wisconsin Public Service
has a significant seasonal component and is impacted by varying weather
conditions from year-to-year. In the calendar year 2000, 66.3% of its gas sales
and 59% of its total gas system throughput occurred during the five winter
months of November through March. Total gas throughput includes gas sales and
gas delivered for transportation customers. Competition with other forms of
energy exists in varying degrees, particularly for large commercial and
industrial customers who have the ability to switch between natural gas and
alternate fuels. Wisconsin Public Service offers interruptible gas sales and gas
transportation service for these customers to enable them to reduce their energy
costs through the use of natural gas. There are currently 368 gas transportation
customers on our system. These customers purchase their gas from other suppliers
and contract with Wisconsin Public Service to transport the gas from interstate
natural gas pipelines to their facilities. Additionally, 131 customers
still purchase their gas commodity directly from Wisconsin Public Service, but
have elected to do so on an interruptible basis. These customers continue to
switch from firm system supply to either interruptible system supply or
transportation service each year as the economics and service options become
attractive for them.

Gas operations also provide interruptible gas service to
Wisconsin Public Service electric operations for power generation in combustion
turbine peaking generators and for start-up, flame stabilization, and peaking
use at the Weston and Pulliam coal-fired plants. Wisconsin Public Service also
provides gas service to the 179-megawatt combustion turbine generation facility
owned and operated by De Pere Energy LLC, an affiliate of Calpine Corporation,
an independent power producer.

Gas sales for customer-owned power generation use are
provided on an interruptible basis, with the power plants maintaining alternate
fuel capability.

In 2000, Wisconsin Public Service began to provide interruptible gas supplies
to an 83-megawatt combustion turbine owned by Madison Gas and Electric.

Gas supply has been adequate in Wisconsin, with the only
significant constraints being created by the demand of generation peakers. The
cost of natural gas has increased four fold during the winter of 2000-2001 due
to tight supplies nationwide. Wisconsin Public Service gas customers have
absorbed the entire impact of these increases due to the purchased gas
adjustment clause, which allows Wisconsin Public Service to pass changes in gas
prices directly to customers.

Total gas deliveries in 2000 for Wisconsin Public Service,
including customer-owned gas transported, were 70,264,635 dekatherms, a 5.8%
increase over 1999. A dekatherm is equivalent to 10 therms or
1 million Btus of energy. Gas transported for end-user transport customers
made up approximately 41.9% or 29,454,364 dekatherms of natural gas delivered.

Peak day gas throughput for 2000 occurred on Wednesday,
December 6, 2000, with a total of 414,176 dekatherms total gas throughput at an
average Green Bay temperature of 9.2 degrees Fahrenheit. This compares with
the previously reported record gas system throughput of 432,928 dekatherms set
on February 2, 1996 at an average Green Bay temperature of -23.8
degrees Fahrenheit.

Gas Supply

General

Wisconsin Public Service manages a portfolio of gas supply
contracts, pipeline transportation services, and storage services designed to
meet its varying load pattern at the lowest reasonable cost.

Pipeline Capacity and Storage

The service territory of Wisconsin Public Service is
primarily served by a single interstate pipeline, ANR Pipeline Company.
Through ANR's system, Wisconsin Public Service directly or indirectly will
access North American natural gas supplies from these major gas-supply areas:

> 1) Oklahoma, the Texas panhandle, and western Kansas through ANR's
>   Southwest system,
>   2) the province of Alberta, Canada through the pipelines of NOVA to the
>   Alberta border, TransCanada Pipelines to Emerson, Manitoba, Viking Gas
>   Transmission to Marshfield, Wisconsin, and then into ANR's system, and
>   3) the Chicago area through ANR's Joliet Hub.

Wisconsin Public Service holds firm long-term
transportation capacity on the pipeline from each of these three supply areas
through November 2010. Wisconsin Public Service holds firm transportation
capacity with Viking Gas Transmission Company, to deliver gas on a firm basis
from its interconnection with TransCanada Pipelines at Emerson, in the Canadian
Province of Manitoba, to the interconnection with ANR at Marshfield,
Wisconsin. These Canadian gas suppliers hold firm capacity on TransCanada
Pipelines from Emerson back into the production areas in Alberta, Canada.

Because of the substantial daily and seasonal swings in
gas usage in our service territory, Wisconsin Public Service also has contracted
with ANR for firm underground storage capacity located in Michigan. There are no
known geological formations in Wisconsin capable of being developed into
underground storage facilities.

Besides providing the ability to manage significant
changes in daily gas demand, storage also provides the ability to purchase gas
from the production areas at high load factors, thus minimizing supply costs.
During the summer, gas purchased in excess of market demand is injected into
storage. During the winter, gas is withdrawn from storage and combined with gas
purchased in the production areas to meet the increased winter demand. Gas from
storage provides up to 55% of our supply on winter peak days, approximately 26%
of our winter sales volumes, and approximately 17% of our total annual sales
volumes. Our total firm storage capacity with ANR is 9.2 million
dekatherms.

For winter peak day needs, Wisconsin Public Service also
contracts with third-party suppliers for high deliverability storage in
production areas. This high deliverability storage service provides a back-up
supply of natural gas for our transportation contracts when other supplies
cannot be delivered due to production supply losses caused by extremely cold
weather in the production areas.

Supply Contracts

Wisconsin Public Service contracts for fixed-term firm
supplies with approximately 12 to 16 suppliers each year for gas produced in
each of the three production areas. Due to the current uncertainty regarding the
future role of gas utilities in continuing the gas supply function, Wisconsin
Public Service has continued to pursue contracting for domestic gas supplies for
terms of one year or less. This will minimize potential stranded gas supply
contract costs if retail gas deregulation should proceed quickly in Wisconsin.
Our supply portfolio, as of December 31, 2000, contained contracts with
remaining terms ranging from three months to three years.

Additional supplies are purchased on the monthly spot
market as required to supplement supplies from fixed term firm contracts.
Wisconsin Public Service has been an active spot market purchaser since 1985 and
has contracts in place with a number of suppliers of spot market gas.

Wisconsin Public Service will acquire the gas supply and
transportation contracts of Wisconsin Fuel and Light after the acquisition of
Wisconsin Fuel and Light is completed. Completion of this acquisition is
expected in April 2001. Because Wisconsin Public Service and Wisconsin Fuel and
Light hold similar gas supply and transportation contracts, the acquisition of
the Wisconsin Fuel and Light contracts is expected to have no significant impact
on the combined company's cost of gas.

Regulatory Matters in the Wisconsin Jurisdiction

Industry Restructuring

Little progress has been made on gas deregulation in
Wisconsin over the last year. The timing and details of implementation could
have an impact on Wisconsin Public Service because of potential stranded costs
associated with interstate pipeline capacity contracts. It is expected that the
Wisconsin Commission will allow for stranded cost recovery from customers or
direct assignment of stranded contracts should deregulation progress.

The Wisconsin Public Service rate order for 1999 and 2000
required a study to provide open access to gas suppliers for small commercial
customers in the next rate case. In the 2001-2002 rate application, Wisconsin
Public Service proposed to facilitate customer choice of natural gas suppliers
through the use of its new automated meter reading system. Wisconsin Public
Service began installation of the automated meter reading system on a test basis
in 1999. The 2001-2002 rate request proposed expansion to the rest of the system
in the 2001-2002 time period. This program was approved by the Commission to
provide customer choice of gas suppliers for commercial customers in the 20,000
to 75,000 therms per year customer class beginning November 1, 2001. Wisconsin
Public Service anticipates expanding this program to all customers as the
automated meter reading system is installed on the whole system.

Cost Recovery Mechanism

Wisconsin Public Service implemented a modified
one-for-one gas cost recovery mechanism in January 1999, in response to Public
Service Commission of Wisconsin requirements. This method allows for the
recovery of all gas supply costs provided those costs meet index-based
benchmarks and are not deemed imprudent. Under this method, Wisconsin Public
Service has been authorized to recover all gas commodity costs incurred to date.

Gas Supply Plan

On June 30, 2000, Wisconsin Public Service filed a
three-year gas supply plan with the Public Service Commission of Wisconsin
detailing its plans to purchase and transport the necessary gas supplies for the
period November 2000 through October 2003. The Gas Supply Plan was approved in
October 2000.

Customer Rates

On December 21, 2000, the Public Service Commission of
Wisconsin granted Wisconsin Public Service a $4.3 million, or 1.5%,
increase in its retail natural gas rates. The rates were effective
January 1, 2001. Wisconsin Public Service 2000 gas rates were very
competitive in Wisconsin. Rates were 98% of the state average for residential
rates and 77% of the state average for commercial and industrial rates.

Regulatory Matters in the Michigan Jurisdiction

Industry Restructuring

In Michigan, as in Wisconsin, the majority of the largest
gas customers have a choice of their natural gas commodity supplier. Gas
restructuring for smaller customers in Michigan has been in a pilot phase since
1998 when the three largest utilities in the state voluntarily initiated pilot
programs to offer choice of gas suppliers to all customer classes. These pilot
programs included frozen gas cost recovery mechanisms and are scheduled to
conclude in 2001 and 2002.

In 2000, the Michigan Public Service Commission staff
opened an informal docket to determine how best to continue the customer choice
of gas suppliers after the large-company pilot programs terminated. After
several rounds of comments, a consensus was reached regarding permanent customer
choice of gas suppliers for the largest utilities in the state. The Michigan
Public Service Commission and one of the three largest Michigan utilities have
agreed to implement the customer choice proposal developed. Approval for a
second utility is expected shortly.

Early in 2001, the Commission staff opened a similar
informal docket to move to a consensus on how to provide customer choice of
natural gas suppliers for all customer classes for medium-sized natural gas
utilities in the state. This does not include Wisconsin Public Service. The
process is to involve all interested parties and be completed in the third
quarter of 2001 with a consensus method to include the medium-sized utilities in
those offering customer choice of natural gas suppliers to all customers.

The small natural gas utilities in the state, including
Wisconsin Public Service, are to propose a customer choice program for all
customer classes when it is in the best interests of each utility and its
customers. There is no timetable for moving this process to the smaller
utilities in the state, such as Wisconsin Public Service, but we intend to
provide for customer choice of gas suppliers for all customers following our
automated meter reading system implementation in Michigan.

Gas Cost Recovery Plan

As required, on December 26, 2000, Wisconsin Public
Service filed a five-year Gas Cost Recovery Plan with the Michigan Public
Service Commission detailing its plan to purchase and transport the necessary
gas supplies for the April 2001 through March 2006 period. This Gas Cost
Recovery Plan is expected to be approved by the Michigan Public Service
Commission in May 2001.

Customer Rates

Wisconsin Public Service had some of the lowest natural
gas rates in Michigan during 2000. Its rates were 93% of the state average for
residential rates and 73% of the state average for commercial and industrial
rates.

Wisconsin Public Service has not had a natural gas rate
case in Michigan since 1986.

Regulatory Matters in the Federal Energy Regulatory Commission
Jurisdiction

The involvement of Wisconsin Public Service in federal
regulatory activities in the natural gas area has been through the Wisconsin
Distributor Group. This group is made up of several Wisconsin gas utilities.
Although members may file individual interventions, most interventions have been
done through the Wisconsin Distributor Group. Past successes in various Federal
Energy Regulatory Commission dockets have resulted in substantial refunds for
natural gas customers in Wisconsin as well as lower pipeline transportation
rates charged by ANR and Viking. Through its membership in the Wisconsin
Distributor Group, Wisconsin Public Service participated in a number of dockets
at the Federal Energy Regulatory Commission this past year.

Orders 637, 637-A, and 637-B are the culmination of the
Federal Energy Regulatory Commission's Notice of Proposed Rulemaking on the
Regulation of Short-term Natural Gas Transportation Services and the Notice of
Inquiry on the Regulation of Interstate Natural Gas Transportation Services.
Along with other parties, the Wisconsin Distributor Group requested
clarification from the Commission on various aspects of these orders. Overall,
these orders aligned with the Wisconsin Distributor Group's approach on various
topics. The Wisconsin Distributor Group is still pursuing the portion of the
order eliminating the right of first refusal for customers of pipelines that
have discounted rates. It is the position of the Wisconsin Distributor Group
that discounts may be the result of a small window of opportunity and do not
necessarily reflect ongoing competitive options. Therefore, customers with
discounts may still be subject to the market power of the pipeline and may still
need the regulatory protection offered by the right of first refusal.

Other dockets in which the Wisconsin Distributor Group has
participated relate to the compliance filings made by ANR Pipeline Company and
Viking Gas Transmission Company in response to Orders 637, 637-A, and 637-B.
These dockets are still being worked on by various parties and orders from the
Commission are not expected until late in 2001.

Also during the past year the Federal Energy Regulatory
Commission initiated Docket No. PL00-1-000, concerning natural gas
transportation policies needed to facilitate development of competitive natural
gas markets. The Commission scheduled a number of conferences to gather input
from natural gas industry participants. The Wisconsin Distributor Group attended
the first conference held in September 2000 concerning the liquidity of the
natural gas market.

On-going activities in which Wisconsin Public Service will
be participating as a member of the Wisconsin Distributor Group include the:

> 1) pipeline compliance filings made in response to Federal Energy
>   Regulatory Commission Orders 637, 637-A and 637-B,
>   2) the Federal Energy Regulatory Commission's continued efforts in Docket
>   No. PL00-1-000, concerning natural gas transportation policies needed to
>   facilitate development of competitive natural gas markets, and
>   3) continued monitoring of various dockets filed by ANR Pipeline Company
>   and Viking Gas Transmission Company at the Federal Energy Regulatory
>   Commission.

Merger Activity

Industry restructuring has been accompanied by merger
activity in the region, which could impact the competitive environment. During
2000, Wisconsin Public Service announced a merger with Wisconsin Fuel and Light,
a gas distribution company serving approximately 50,000 customers in the
Manitowoc and Wausau areas of Wisconsin. Hearings before the Public Service
Commission of Wisconsin were held in December 2000. It is anticipated that the
Public Service Commission of Wisconsin will approve this merger in March of
2001, and the merger will be implemented shortly thereafter. In 2000, Wisconsin
Fuel and Light had $56.6 million in revenues and $2.4 million in net
income. Wisconsin Fuel and Light has over 1,100 miles of gas mains and
approximately 120 employees.

GAS OPERATING STATISTICS

WISCONSIN PUBLIC SERVICE CORPORATION

|                                 | 2000     | 1999     | 1998    
|-------------------------------- | -------- | -------- | --------
|Operating revenues (Thousands)   |          |          |         
|Residential                      | $147,413 | $114,610 | $ 96,223
|Small commercial and industrial  | 28,912   | 21,922   | 19,333  
|Large commercial and industrial  | 64,766   | 43,980   | 37,482  
|Other                            | 23,428   | 11,009   | 12,073  
|Total                            | $264,519 | $191,521 | $165,111
|Therms delivered (Thousands)     |          |          |         
|Residential                      | 203,383  | 190,797  | 172,007 
|Small commercial and industrial  | 45,083   | 42,457   | 38,104  
|Large commercial and industrial  | 123,657  | 112,528  | 103,226 
|Other                            | 34,427   | 27,085   | 29,182  
|Total therm sales                | 406,550  | 372,867  | 342,519 
|Transportation                   | 294,544  | 289,748  | 265,573 
|Total                            | 701,094  | 662,615  | 608,092 
|Customers served (End of period) |          |          |         
|Residential                      | 213,976  | 208,975  | 203,665 
|Small commercial and industrial  | 18,285   | 17,647   | 17,656  
|Large commercial and industrial  | 2,840    | 2,952    | 2,454   
|Other                            | 1        | 1        | 1       
|Transportation customers         | 368      | 330      | 282     
|Total                            | 235,470  | 229,905  | 224,058 
|Average therm price (Cents)      |          |          |         
|Residential                      | 72.48    | 60.07    | 55.94   
|Small commercial and industrial  | 64.13    | 51.63    | 50.74   
|Large commercial and industrial  | 52.38    | 39.08    | 36.31   
|                                 |          |          |         

D. WPS POWER DEVELOPMENT, INC

WPS Power Development develops, owns, and operates
nonregulated electric generation facilities and provides services to the
electric power generation industry nationwide. Services include project
development, engineering and management services, and operation and maintenance
services. WPS Power Development has expertise in cogeneration, distributed
generation, generation from renewables, and generation plant repowering
projects. As of December 31, 2000, WPS Power Development had 163
employees, the majority of which are members of the International Brotherhood of
Electrical Workers Local 1600 Union.

WPS Power Development owns:

> two-thirds of the Stoneman Power Plant, a 53 megawatt coal-fired
>       merchant steam plant located in southwestern Wisconsin.
>     92 megawatts of hydro and fossil-fueled generation assets located in
>       northern Maine and New Brunswick, Canada,
>     the 460-megawatt coal-fired Sunbury Generation Station in
>       Pennsylvania,
>     the 30-megawatt Westwood Generating Station, which burns waste
>       anthracite coal material, i.e., culm, located in Pennsylvania,
>     two-thirds of a facility in Kentucky which produces synthetic fuel from
>       coal fines which can be burned in boilers,
>     steam boilers in Arkansas and Oregon, and
>     landfill and wood waste gas generating facilities in Wisconsin.

WPS Power Development reached agreement in 2000 with
Sierra Pacific Resources to acquire its 545-megawatt natural gas- and oil-fired
Tracy/Pinon Power Station. The sale of Tracy/Pinon, which is subject to approval
and review by various regulatory agencies, is expected to close some time in the
year 2001. Under the agreement, Sierra Pacific will buy energy and ancillary
services from WPS Power Development at agreed-upon prices, subject to a
collar, over an as yet undetermined time frame. After this period, energy sales
become subject to the Federal Energy Regulatory Commission generation tariff
until WPS Power Development receives approval of the Federal Energy
Regulatory Commission to apply market-based rates.

The annual coal requirements for WPS Power
Development owned plants is estimated at 1.2 million tons. Of this amount,
approximately 50% will be met through the burning of coal silt. In 2000,
WPS Power Development purchased all of its coal supplies on the spot
market. In 2001, WPS Power Development expects to supply approximately 60%
of its annual coal needs through annual coal contracts and its reserves of coal
and coal silt. WPS Power Development has approximately a 10 year reserve of coal
silt. The remaining coal requirements will be purchased through the spot market.
Various reserves of coal silt were acquired with the Sunbury power plant
acquisition.

In 2001, coal transportation for approximately 25% of
annual coal requirements will be supplied under a one-year contract with Norfolk
Southern Railroad.

All the Federal Energy Regulatory Commission hydroelectric
facility licenses held by WPS Power Development are current. The
33-megawatt hydroelectric facility owned in New Brunswick, Canada is not
subject to licensing.

Although identifiable price peaks do not occur at any
certain time of the year, WPS Power Development believes the nonregulated
energy market is subject to seasonal impacts. Generally in the summer months,
the demand for electric energy is high which increases the price at which energy
can be sold. In periods of high fuel consumption, generally the winter months,
the purchase price of coal and natural gas increases.

Equity and working capital requirements of WPS Power
Development are generally financed through the holding company,
WPS Resources. Project nonrecourse debt financing has been put in place for
the generation plants owned by WPS Power Development.

Of WPS Power Development's approximately 650
megawatts of existing capacity, fixed price contracts are in place to sell
approximately 350 megawatts. Of this, 250 megawatts are firm commitments. The
remainder of the energy production of WPS Power Development is sold on the
spot market.

Although WPS Power Development operates in the
nonregulated energy market, the existence of various long-term out-take
contracts entered into as part of the generation asset acquisition agreements
mitigates some of the impact of spot market competition.

WPS Power Development's synthetic coal facility was moved
successfully from Alabama to Kentucky, in 2000, and is producing coal briquettes
according to expectations. In order to realize optimum benefits from this
project, WPS Power Development intends to sell part of its interest in the
facility to realize the full economic potential of the project. This action has
been slowed due to issues currently being raised by the Internal Revenue Service
with respect to synthetic fuel projects in general. In 2000, WPS Power
Development recognized a deferred tax asset of approximately $11.0 million
reflecting tax credits from this project and a few other small projects that
will be carried forward to reduce the regular tax liability of WPS Resources in
future years. Current plans call for a closer match of the facility's production
levels with our ability to use the tax credits each year until WPS Power
Development sells a portion of the project.

WPS Power Development has reached an agreement to build
and operate a 50-megawatt electric cogeneration facility adjacent to a paper
manufacturing plant located in Combined Locks, Wisconsin. The natural gas-fired
combustion turbine, with a heat recovery boiler, will provide electricity to the
wholesale electric marketplace through WPS Energy Services. Process steam will
also be sold to the paper manufacturer. Construction of the facility is
estimated to cost less than $50 million with construction beginning in the
second quarter of 2001 and completion by year-end. WPS Power Development is
currently in the process of obtaining all necessary permits and regulatory
approvals. The facility will be owned by Combined Locks Energy Center, LLC, a
subsidiary of WPS Power Development.

The generation assets of WPS Power Development are
subject to regulations on sulfur dioxide and nitrogen oxide emissions similar to
those that apply to Wisconsin Public Service. In addition, the Sunbury
generation facilities of WPS Power Development are located in an ozone
non-attainment area. As a result, these generation facilities are subject to
additional restrictions on emissions of nitrogen oxide. WPS Power
Development has acquired emission credits sufficient to meet all emission
requirements through the year 2002. The Environmental Protection Agency may be
issuing tighter restrictions for 2003 and beyond. Although WPS Power
Development has emission credits for 2003, it is unknown whether these will be
sufficient to meet the, as yet undisclosed, new requirements of the
Environmental Protection Agency. It is estimated that WPS Power Development
will incur approximately $23 million in capital costs over the next three
years to address environmental regulations at its Sunbury facility.

E. WPS ENERGY SERVICES, INC.

WPS Energy Services is a diversified nonregulated
energy supply and services company with principal operations in Illinois, Maine,
Michigan, Ohio, and Wisconsin. WPS Energy Services operates in the retail
and wholesale nonregulated energy marketplace. Emphasis is on servicing
commercial, industrial, and wholesale customers in the northeast quadrant of the
United States. Wholesale products are provided on a nationwide basis.
WPS Energy Services provides individualized energy supply options and
strategies that allow customers to manage energy needs while capitalizing on
opportunities resulting from deregulation. WPS Energy Services provides
natural gas, electric, and alternate fuel products, real-time energy management
services, energy utilization consulting, and project management. WPS Energy
Services has 88 employees as of December 31, 2000.

During 2000, WPS Energy Services expanded its
operations in Maine to include retail electric service and was selected to be
the standard offer provider in northern Maine for a three-year period beginning
on March 1, 2001. WPS Energy Services also reached agreement with
WPS Power Development to purchase 50 megawatts of electric energy from
the Sunbury generation station for resale into the PJM energy market. In January
2001, WPS Energy Services contracted with Alternative Energy Inc. for
37 megawatts of electric supply from its biomass plant in Ashland, Maine.
WPS Energy Services also has contracted with its sister company,
WPS Power Development, for 50 megawatts of supply.

WPS Energy Services will be the majority owner in a
natural gas storage facility that it is developing in Michigan. The facility,
expected to be operational in 2001, will have a capacity of 3 billion cubic
feet of natural gas. This additional storage capacity will allow increased
supply reliability to customers in Michigan and greater flexibility in meeting
peak day energy requirements.

WPS Energy Services is actively involved in the
electric and gas commodities market. WPS Energy Services enters into market
transactions rather than specific purchase agreements to secure energy resources
in order to meet energy commitments. The majority of commitments to deliver
energy are addressed through long-term transactions and enhanced through spot
market purchases.

WPS Energy Services markets and uses its patented
energy management system called DENet. DENet provides customers the capability
to manage their energy consumption on a real-time basis and generate reports on
historical energy use through the Internet. DENet's flexibility allows a
customer to monitor utility and process parameters related to gas, electricity,
water, steam, temperature, and production output. WPS Energy Services uses DENet
to remotely control the operation of WPS Power Development plants through its
24-hour marketing desk. Employees in numerous locations have access to plant
operations through the system.

WPS Energy Services believes that its business, in
the aggregate, is not seasonal. Certain of its products do sell more heavily in
some seasons than in others. Sales of natural gas generally peak in the winter
months, while sales of electric energy generally peak in the summer months.

Capital requirements of WPS Energy
Services are financed through the holding company, WPS Resources.

Although WPS Energy Services is not dependent on any
one customer, a significant percentage of its retail sales volume is derived
from the paper and forest products industry. Management does not feel that this
situation poses any significant risk to the ongoing operation of WPS Energy
Services.

WPS Energy Services operates in nonregulated energy
markets. Its competitors consist of regulated utilities, large energy traders,
and other energy marketers. WPS Energy Services competes with other energy
providers on the basis of price, service, consumer convenience, performance, and
reputation.

WPS Energy Services is not directly
subject to any significant environmental regulations at this time.

See MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION for additional information regarding
nonregulated operations.

F. ENVIRONMENTAL MATTERS

WPS Resources and its subsidiaries are subject to federal,
state, and local regulations regarding environmental impacts of their operations
on air and water quality and solid waste. The application of federal and state
restrictions to protect the environment can involve review, certification, or
issuance of permits by various federal and state authorities, including the
United States Environmental Protection Agency and the various states'
environmental agencies, including the Wisconsin Department of Natural Resources.
These restrictions may limit, prevent, or substantially increase the cost of the
operation of generation facilities and may require substantial investments in
new equipment at existing installations. Such restrictions may require
substantial additional investments for new projects and may delay or prevent
completion of projects. We cannot forecast the effects of such regulation on our
generation, transmission, and other facilities or operations.

Wisconsin Public Service is subject to regulation by the
United States Environmental Protection Agency and the Wisconsin Department of
Natural Resources with respect to thermal and other discharges from its power
plants, into Lake Michigan and other waters of Wisconsin. Wastewater discharge
permits, with a term of five years, were re-issued by the Wisconsin Department
of Natural Resources for the Kewaunee plant in 2000. Applications for permit
renewals for Wisconsin Public Service's Pulliam and Weston generation facilities
were submitted in 2000. Revisions to state water quality rules under the Great
Lakes Initiative are not expected to result in any significant changes when
wastewater permits are reissued in 2001 for the Pulliam and Weston plants.
Wisconsin Public Service is not aware of any significant changes in future
operations at its jointly-owned plants at Columbia or Edgewater as a result of
the Great Lakes Initiative.

The ash disposal site for Upper Peninsula Power's
John H. Warden Station was closed in 1993. Subsequent groundwater testing
indicated elevated levels of boron and lithium. Supplemental remedial
investigations were performed and a revised remedial action plan was developed.
The plan was submitted to the Michigan Department of Environmental Quality for
approval in 1999. A liability of $1.5 million and a regulatory asset of $1.5
million have been recorded for estimated future expenditures associated with
this site. Upper Peninsula received an order permitting deferral of these
costs.

Other matters pertaining to the environment regarding gas
plant cleanup and air quality issues are discussed in Legal Proceedings,
Management's Discussion and Analysis of Financial Condition and Results of
Operations, and Note 13 to the Financial Statements.

G. CAPITAL REQUIREMENTS

WPS Resources and Wisconsin Public Service will make large
investments in capital assets. Construction expenditures are expected to be
approximately $486 million for the period 2001 through 2003. This includes
expenditures for the replacement of the Kewaunee plant steam generators,
investment in automated meter reading, and construction of a proposed
transmission line from Wausau, Wisconsin to Duluth, Minnesota. Other Wisconsin
Public Service capital requirements for the three-year period include Kewaunee
decommissioning trust fund contributions of $7.8 million.

Upper Peninsula Power will incur construction
expenditures of approximately $52 million for the period 2001 through 2003,
primarily for electric distribution improvements and repairs at hydro
facilities.

The $249.8 million purchase of the Tracy/Pinon
facilities, by WPS Power Development, may be financed with nonrecourse debt and
an equity infusion from WPS Resources. In addition, WPS Power Development
is committed to the development of the Combined Locks Energy Center, which is
not expected to exceed $50 million. There are no commitments for additional
acquisition expenditures for the nonregulated subsidiaries at this time. Future
nonregulated projects will be financed through nonrecourse project financings to
the extent possible.

WPS Resources uses internally generated funds and
short-term borrowing to temporarily satisfy its capital requirements.
WPS Resources may periodically issue additional long-term debt and common
stock to reduce short-term debt and maintain desired capitalization ratios.

WPS Resources filed a shelf registration with the
Securities and Exchange Commission, which allows the issuance of an aggregate of
$400 million of long-term debt and common stock. Long-term debt of
$150 million was issued under the shelf registration in November 1999 to
reduce short-term debt and provide equity infusions to subsidiaries. Wisconsin
Public Service also has a shelf registration providing additional debt capacity
of $52 million. In December 1999, we began to purchase shares of WPS
Resources common stock on the open market for the Stock Investment Plan. This
was discontinued in January 2001, when WPS Resources began issuing new shares
for the Stock Investment Plan.

WPS Resources anticipates issuing the
following additional debt and equity financing in 2001:

|Nonregulated Variable Rate Tax Exempt Bonds  | $ 20 - $ 28 million
|-------------------------------------------- | -------------------
|In the second quarter 2001                   |                    
|                                             |                    
|Common Stock                                 | $ 50 - $100 million
|In the
      second or third quarter of 2001 |                    
|                                             |                    
|Unsecured Debt                               | $100 - $150 million
|In the
      third quarter 2001              |                    
|                                             |                    
|Fading Lien Bonds - Wisconsin Public Service | $100 - $150 million
|In the
      third or fourth quarter of 2001 |                    

Specific forms of financing, amounts, and
timing may change due to the availability of projects, market conditions, and
other factors.

In addition, WPS Resources will issue approximately 1.8
million new shares of common stock in the first half of 2001 for completion of
the merger of Wisconsin Fuel and Light into Wisconsin Public Service.

See NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Note 13
regarding "Future Utility Expenditures."

H. EMPLOYEES

At December 31, 2000, WPS Resources and its
subsidiaries employed 3,030 people. Of this number, 2,568 were employed by
Wisconsin Public Service and 165 were employed by Upper Peninsula
Power, with the remainder employed by WPS Resources and its remaining
subsidiaries.

Of the Wisconsin Public Service employees, 2,044 were
electric utility employees and 524 were gas utility employees. Local 310 of the
International Union of Operating Engineers represents 1,246 of these employees.
The current collective bargaining agreement with Local 310 expires on
October 25, 2003.

Local 510 of the International Brotherhood of Electrical
Workers, AFL-CIO represents 126 employees of Upper Peninsula Power. The
current collective bargaining agreement with Local 510 expires on April 30,
2002.

Local 1600 of the International Brotherhood of Electrical
Workers, AFL-CIO represents approximately 104 employees at the Sunbury
generation station owned and operated by a subsidiary of WPS Power
Development. The current collective bargaining agreement with Local 1600 expires
on May 12, 2002.

ITEM 2. PROPERTIES

A. UTILITY

Wisconsin Public Service Facilities



|Type                                        | Name                          | Location      | Fuel                       | Rated
      Capacity (a)(Kilowatts)
|------------------------------------------- | ----------------------------- | ------------- | -------------------------- | -----------------------------------
|                                            |                               |               |                            |                                    
|Steam                                       | Pulliam                       | Green Bay, WI | Coal                       | 395,800 (b)                        
|                                            | Weston                        | Wausau, WI    | Coal and Gas               | 491,100 (c)                        
|                                            | Kewaunee                      | Kewaunee, WI  | Nuclear                    | 206,200 (d)                        
|                                            | Columbia -
       Units 1 & 2 | Portage, WI   | Coal                       | 342,000 (d)                        
|                                            | Edgewater
       Unit 4       | Sheboygan, WI | Coal                       | 105,800 (d)                        
|                                            |                               |               |                            | _________                          
|Total Steam                                 |                               |               |                            | 1,540,900                          
|                                            |                               |               |                            |                                    
|                                            |                               |               |                            |                                    
|Hydro                                       | Various
       (15 Plants)    |               |                            | 52,900 (e)                         
|Combustion
       Turbine and
       Diesel | Various
       (8 Plants)     |               | Gas, Oil, or
       Diesel | 381,340 (f)                        
|                                            |                               |               |                            | _________                          
|Total System                                |                               |               |                            | 1,975,140                          

> 

(a) Based on July 2001 capacity ratings.

(b) This plant has six units.

(c) This plant has three units. Two units burn only coal and the other unit
can burn coal or natural gas.

(d) These facilities are jointly-owned by Wisconsin Public Service, Wisconsin
Power and Light, and Madison Gas and Electric. Wisconsin Public Service operates
the Kewaunee plant. The Columbia and Edgewater units are operated by Wisconsin
Power and Light. The capacity indicated is our portion of total plant capacity
based on the percent of ownership. The Kewaunee plant's ownership is based on
the percent of ownership before the proposed acquisition of Madison Gas and
Electric's share of the plant in late 2001.

(e) Includes 12,400 kilowatts purchased from Wisconsin River Power.

(f) Wisconsin Public Service and Marshfield Electric and Water Department
jointly own 75,500 kilowatts of combustion turbine summer peaking capacity.
Wisconsin Public Service is the operator of these jointly-owned facilities.
Included is 174,700 kilowatts of summer rated capacity from the De Pere Energy
Center gas turbine in De Pere. Wisconsin Public Service accounts for the De Pere
Energy Center unit as a capital lease.

As of December 31, 2000, Wisconsin Public Service owned 57
transmission substations with a transformer capacity of 5,730,610
kilovolt-amperes, 110 distribution substations with a transformer capacity
of 3,205,810 kilovolt-amperes, 1,563 miles of electric transmission lines,
and 20,038 miles of electric distribution lines. Effective January 1, 2001, all
transmission property of Wisconsin Public Service was transferred to American
Transmission Company.

Gas properties include approximately 5,454 miles of main,
70 gate and city regulator stations, and 219,478 lateral services. All gas
facilities are located in Wisconsin except for distribution facilities in and
near the city of Menominee, Michigan.

Substantially all of our utility plant is subject to a
first mortgage lien.

Upper Peninsula Power Facilities

The following table summarizes information on the electric
generation facilities of Upper Peninsula Power:

|Type               | Name                         | Location                         | Fuel          | Rated
      Capacity (a)(Kilowatts)
|------------------ | ---------------------------- | -------------------------------- | ------------- | -----------------------------------
|                   |                              |                                  |               |                                    
|Steam              | Warden (b)                   | L'Anse, MI                       | Coal/Gas      | 17,700                             
|                   |                              |                                  |               |                                    
|Hydro              | Various
       (9 plants)(c) |                                  | Hydro         | 37,910                             
|                   |                              |                                  |               |                                    
|Combustion Turbine | Portage
      Gladstone      | Houghton, MI
      Gladstone, MI | Oil
      Oil | 27,500
      27,500                
|                   |                              |                                  |               | _______                            
|Total System       |                              |                                  |               | 110,610                            

> (a) Based on winter-rated capacity.
>   (b) The J. H. Warden station is capable of burning any combination of gas
>   and/or coal. The station was taken out of service on January 1, 1994 and is in
>   standby or inactive reserve status.
>   (c) Included in the nine hydro plants are Escanaba 1, Escanaba 3, and Boney
>   Falls, which generate a total of 7,850 kilowatts. All energy produced at these
>   facilities is sold directly to a paper industry customer located in Escanaba,
>   Michigan.

Upper Peninsula Power owns 802 miles of electric
transmission and 2,753 miles of electric distribution lines.

Substantially all of Upper Peninsula Power's utility
plant is subject to a first mortgage lien.

B. NONREGULATED

The following table summarizes information on the electric
generation facilities of WPS Power Development, including jointly-owned
facilities:

|Type                                        | Name                                                            | Location                                                                                       | Fuel                                           | Rated
      Capacity (a)(Kilowatts)                                               
|------------------------------------------- | --------------------------------------------------------------- | ---------------------------------------------------------------------------------------------- | ---------------------------------------------- | ----------------------------------------------------------------------------------
|                                            |                                                                 |                                                                                                |                                                |                                                                                   
|Steam                                       | Stoneman
      Caribou
      Sunbury
      Westwood
      Wyman | Cassville, WI
      Northern Maine
      Shamokin Dam, PA
      Tremont, PA
      Yarmouth, ME | Coal
      Oil
      Coal
      Culm
      Oil | 55,000 (a)
          23,000
         425,000
          30,000
          21,000 (b)
|                                            |                                                                 |                                                                                                |                                                |                                                                                   
|Hydro                                       | Squa Pan
      Caribou
      Tinker                             | Northern Maine
      Northern Maine
      New Brunswick,
      Canada                          | Hydro
      Hydro
      Hydro                  | 1,400
             900
          33,500                                           
|                                            |                                                                 |                                                                                                |                                                |                                                                                   
|Combustion
       Turbine and
       Diesel | Various
       (6 Plants)                                       |                                                                                                | Gas, Oil,
       or Diesel                     | 70,400                                                                            
|                                            |                                                                 |                                                                                                |                                                | _______                                                                           
|Total System                                |                                                                 |                                                                                                |                                                | 660,200                                                                           

> (a)    The Stoneman facility is owned by Mid-American Power,
>   LLC. PDI Stoneman, Inc. (a wholly-owned subsidiary of WPS Power
>   Development, Inc.) and B. M. Stoneman, Inc., (a wholly-owned
>   subsidiary of Burns and McDonnell) own 66-2/3% and 33-1/3%, respectively, of
>   Mid-American Power, LLC.
>   (b)    WPS Power Development owns a 3.3455% interest in the
>   Wyman plant. The plant is an 619-megawatt oil-fired facility.

ITEM 3. LEGAL PROCEEDINGS

Spent Nuclear Fuel Disposal

See the section titled Spent Nuclear Fuel Disposal under
Part I, Item 1B, ELECTRIC UTILITY MATTERS, Fuel Supply, for a description
of various proceedings relating to spent nuclear fuel.

Funding Decontamination and Decommissioning of Federal Facilities

See the section titled Funding Decontamination and
Decommissioning of Federal Facilities under Part I, Item 1B, ELECTRIC UTILITY
MATTERS, Fuel Supply, for a description of various proceedings relating to
decontamination and decommissioning liabilities.

Environmental

On December 14, 2000, Wisconsin Public Service received a
request for information from the United States Environmental Protection Agency
under Section 114 of the Clean Air Act seeking information on the electric
generating facilities owned and operated by Wisconsin Public Service. A response
to the information request was filed with the Environmental Protection Agency on
January 16, 2001, which included information regarding projects and work
performed at the Weston and J.P. Pulliam power plants, from 1975 to the present
costing $250,000 or more. In situations involving other electric generating
facilities (not owned or operated by Wisconsin Public Service), the
Environmental Protection Agency has initiated enforcement actions relating to
work performed on utility boilers. As set forth in the response to the
Section 114 request projects costing $250,000 or more have been undertaken
by Wisconsin Public Service for the facilities subject to the Section 114
request. To date, no claims have been made against Wisconsin Public Service. The
Environmental Protection Agency is in the process of reviewing the information
provided by Wisconsin Public Service.

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

No matters were submitted to a vote of common stockholders
during the fourth quarter of the fiscal year. The merger of Wisconsin Public
Service and Wisconsin Fuel and Light was approved by the preferred stockholders
of Wisconsin Public Service in December 2000.

ITEM 4A. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information about outside directors is
included in our proxy statement for the Annual Meeting of Shareholders of
WPS Resources which is scheduled to be held on May 3, 2001.

|A. EXECUTIVE OFFICERS OF
      WPS RESOURCES CORPORATION
|--------------------------------------------------------
|                                                        

|Name and Age         |    | Current Position and BusinessExperience During Past Five Year        | EffectiveDate
|-------------------- | -- | -------------------------------------------------------------------- | -------------
|                     |    |                                                                      |              
|                     |    |                                                                      |              
|Larry L. Weyers      | 55 | Chairman,
      President, and Chief Executive Officer               | 02-12-98     
|                     |    | President and
      Chief Executive Officer                          | 05-01-97     
|                     |    | President and
      Chief Operating Officer                          | 01-01-96     
|                     |    |                                                                      |              
|Patrick D. Schrickel | 56 | Executive
      Vice President                                       | 12-29-96     
|                     |    | Vice
      President                                                 | 12-09-93     
|                     |    |                                                                      |              
|Daniel P. Bittner    | 57 | Senior Vice
      President and Chief Financial Officer              | 10-17-99     
|                     |    | Vice
      President and Chief Financial Officer                     | 05-01-97     
|                     |    | Vice
      President                                                 | 12-29-96     
|                     |    | Senior Vice
      President-Customer Service                         | 05-09-94*    
|                     |    |                                                                      |              
|Thomas P. Meinz      | 54 | Senior Vice
      President-Public Affairs                           | 12-24-00     
|                     |    | Vice
      President-Public Affairs                                  | 02-12-98     
|                     |    | Vice
      President-Power Supply and Engineering                    | 02-23-97*    
|                     |    | Power Supply
      and Engineering Executive                         | 01-14-96*    
|                     |    | Senior
      Corporate Planning Executive                            | 05-09-94*    
|                     |    |                                                                      |              
|Phillip M. Mikulsky  | 52 | Senior Vice
      President-Development                              | 02-12-98     
|                     |    | Vice
      President-Development                                     | 09-01-95     
|                     |    |                                                                      |              
|Bradley W. Andress   | 46 | Vice
      President-Marketing                                       | 01-09-00     
|                     |    | Vice
      President-Marketing                                       | 09-01-98*    
|                     |    | Vice
      President-Marketing, Lund Holding
       International    | 10-28-95     
|                     |    | Vice
      President-Sales, Plastics Inc, Division 
       of Newell | 11-01-94     
|                     |    |                                                                      |              
|Ralph G. Baeten      | 57 | Vice
      President-Treasurer                                       | 10-17-99     
|                     |    | Treasurer                                                            | 12-09-93     
|                     |    |                                                                      |              
|Diane L. Ford        | 47 | Vice
      President-Controller and Chief Accounting
       Officer  | 07-11-99     
|                     |    | Controller
      and Chief Accounting Officer                        | 05-01-97     
|                     |    | Controller                                                           | 12-15-93     
|                     |    |                                                                      |              
|Richard E. James     | 47 | Vice
      President-Corporate Planning                              | 12-29-96     
|                     |    | Vice
      President-Corporate Planning                              | 08-01-95*    
|                     |    |                                                                      |              
|Neal A. Siikarla     | 53 | Vice
      President                                                 | 06-01-98     
|                     |    | Treasurer,
      Northern States Power - Wisconsin                   | 06-01-92     
|                     |    |                                                                      |              
|Bernard J. Treml     | 51 | Vice
      President-Human Resources                                 | 02-12-98     
|                     |    | Vice
      President-Human Resources                                 | 05-09-94*    
|                     |    |                                                                      |              
|Glen R. Schwalbach   | 55 | Assistant
      Vice President-Corporate Planning                    | 12-29-96     
|                     |    | Assistant
      Vice President-Corporate Planning                    | 07-28-96*    
|                     |    | Assistant
      Vice President-Gas Engineering and
       Supply     | 06-01-90*    
|                     |    |                                                                      |              
|Barth J. Wolf        | 43 | Secretary and
      Manager-Legal Services                           | 09-19-99     
|                     |    | Assistant
      Secretary and Manager-Legal Services                 | 07-12-98     
|                     |    | Manager-Legal
      and Risk Management                              | 05-19-96*    
|                     |    | Administrator-Risk
      Management                                  | 03-01-92*    
|                     |    |                                                                      |              
|George R. Wiesner    | 43 | Assistant
      Controller                                           | 12-15-96     
|                     |    | Director-Financial
      Accounting ESI/PDI                          | 08-25-96*    
|                     |    | Financial
      Reporting Supervisor                                 | 05-01-87*    

* Identifies experience with Wisconsin Public Service
Corporation. All officers listed above are also officers of Wisconsin Public
Service with the exception of Bradley W. Andress, Phillip M. Mikulsky, Richard
E. James, Neal A. Siikarla, Glen R. Schwalbach, and George R. Wiesner.



|B. EXECUTIVE OFFICERS OF WISCONSIN PUBLIC SERVICE
      CORPORATION
|-------------------------------------------------------------------
|                                                                   

|Name and Age         |    | Current Position and BusinessExperience During Past Five Year     | EffectiveDate
|-------------------- | -- | ----------------------------------------------------------------- | -------------
|                     |    |                                                                   |              
|                     |    |                                                                   |              
|Larry L. Weyers      | 55 | Chairman and Chief Executive Officer                              | 02-12-98     
|                     |    | President and Chief Executive Officer                             | 05-04-97     
|                     |    | President and Chief Operating Officer                             | 01-01-96     
|                     |    |                                                                   |              
|Patrick D. Schrickel | 56 | President and Chief Operating Officer                             | 02-12-98     
|                     |    | Executive Vice President                                          | 12-29-96     
|                     |    | Senior Vice
      President-Finance and Corporate
       Services | 05-09-94     
|                     |    |                                                                   |              
|Daniel P. Bittner    | 57 | Senior Vice
      President and Chief Financial
       Officer    | 10-17-99     
|                     |    | Senior Vice
      President-Finance                               | 05-17-98     
|                     |    | Senior Vice President-Finance and CorporateServices               | 12-29-96     
|                     |    | Senior Vice President-Customer Service                            | 05-09-94     
|                     |    |                                                                   |              
|Thomas P. Meinz      | 54 | Senior Vice President-Public Affairs                              | 12-24-00     
|                     |    | Vice President-Public Affairs                                     | 02-12-98     
|                     |    | Vice President-Power Supply and Engineering                       | 02-23-97     
|                     |    | Power Supply and Engineering Executive                            | 01-14-96     
|                     |    | Senior Corporate Planning Executive                               | 05-09-94     
|                     |    |                                                                   |              
|Ralph G. Baeten      | 57 | Vice President-Treasurer                                          | 08-01-95     
|                     |    |                                                                   |              
|Lawrence T. Borgard  | 39 | Vice President-Transmission and Engineering                       | 07-23-00     
|                     |    | Vice President-Transmission                                       | 07-11-99     
|                     |    | General Manager-Transmission                                      | 04-05-98     
|                     |    | Manager-Transmission Planning & Operations                        | 04-06-97     
|                     |    | Regulatory Compliance Supervisor                                  | 09-08-96     
|                     |    | Transmission Planning Engineer                                    | 02-11-96     
|                     |    | Electrical Engineer                                               | 11-01-89     
|                     |    |                                                                   |              
|Diane L. Ford        | 47 | Vice President-Controller                                         | 07-11-99     
|                     |    | Controller                                                        | 03-01-92     
|                     |    |                                                                   |              
|Wayne J. Peterson    | 42 | Vice President-Distribution and Customer Service                  | 02-12-98     
|                     |    | Assistant Vice President-Customer Service                         | 02-23-97     
|                     |    | Manager-System Operations                                         | 10-01-95     
|                     |    |                                                                   |              
|Bernard J. Treml     | 51 | Vice President-Human Resources                                    | 05-09-94     
|                     |    |                                                                   |              
|David W. Harpole     | 45 | Assistant Vice President-Energy Supply                            | 11-12-00     
|                     |    | Manager-Corporate Services                                        | 04-19-98*    
|                     |    | Manager-Power Plant Design and Construction                       | 03-10-96*    
|                     |    | Manager-Power Plant Design and Construction                       | 07-01-95     
|                     |    |                                                                   |              
|Barth J. Wolf        | 43 | Secretary and Manager-Legal Services                              | 09-19-99     
|                     |    | Assistant
      Secretary and Manager-Legal Services              | 07-12-98     
|                     |    | Manager-Legal
      and Risk Management                           | 05-19-96     
|                     |    | Administrator-Risk
      Management                               | 03-01-92     

|* Identifies experience
      with WPS Resources Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|NOTE: All ages are as of
      December 31, 2000. None of the executives listed above are related by
      blood, marriage, or adoption to any of the other officers listed or to any
      director of the Registrant. Each officer shall hold office until his or
      her successor has been duly elected and qualified, or until his or her
      death, resignation, disqualification, or removal.
      In 2000, Charles A. Schrock, left his position as Senior Vice
      President-Energy Supply of Wisconsin Public Service Corporation to become
      an officer in Nuclear Management Company, LLC. Mark L. Marchi,
      Vice President-Nuclear, passed away in 2000.

PART II

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

WPS Resources Corporation Common Stock Two-Year
Comparison



|                |                         |            
|--------------- | ----------------------- | -----------
|Share Data      | Dividends
    Per Share | Price Range
|High            | Low                    
|                |                         |            
|2000            |                         |            
|1st
    Quarter | $
    .505              | 26-11/16   
|2nd
    Quarter | .505                    | 32-1/4     
|3rd
    Quarter | .515                    | 33-1/4     
|4th
    Quarter | .515                    | 39         
|Total           | $2.04                   |            
|                |                         |            
|1999            |                         |            
|1st
    Quarter | $
    .495              | 35-3/4     
|2nd
    Quarter | .495                    | 32-1/4     
|3rd
    Quarter | .505                    | 30-11/16   
|4th
    Quarter | .505                    | 29-1/16    
|Total           | $2.00                   |            

Dividend Restrictions

WPS Resources' principal subsidiary, Wisconsin Public
Service, is restricted by a Public Service Commission of Wisconsin order
limiting the payment of normal common stock dividends to no more than 109% of
the previous year's common stock dividend, without prior notice to the Wisconsin
Commission. Special dividends may be declared in order to maintain Wisconsin
Public Service's common equity levels consistent with those allowed by the
Public Service Commission of Wisconsin. Wisconsin law prohibits Wisconsin Public
Service from making loans to WPS Resources and its nonregulated
subsidiaries and guaranteeing their obligations.

At December 31, 2000, WPS Resources had
$347.6 million of retained earnings available for dividends.

Upper Peninsula Power's indentures relating to first
mortgage bonds contain certain limitations on the payment of cash dividends on
common stock. Under the most restrictive of these provisions, approximately
$4.1 million of consolidated retained earnings were available at December
31, 2000, for the payment of common stock cash dividends by Upper Peninsula
Power.

Common Stock

|Listed: New York Stock Exchange |                                                                         
|------------------------------- | ------------------------------------------------------------------------
|                                |                                                                         
|Ticker Symbol: WPS              |                                                                         
|                                |                                                                         
|Transfer Agent and Registrar:   | Firstar Bank, N.A.
      P. O. Box 2077
      Milwaukee, Wisconsin 53201

As of December 31, 2000, there were 24,029 common stock
shareholders of record.

|ITEM 6. SELECTED FINANCIAL DATA                                                                    |            |            |            |                  |                 
|-------------------------------------------------------------------------------------------------- | ---------- | ---------- | ---------- | ---------------- | ----------------
|                                                                                                   |            |            |            |                  |                 
|WPS RESOURCES CORPORATION                                                                          |            |            |            |                  |                 
|COMPARATIVE FINANCIAL STATEMENTS AND
              FINANCIAL STATISTICS (1996 TO 2000)             |           
|                                                                                                  
|                                                                                                   |            |            |            |                  |                 
|                                                                                                   |            |            |            |                  |                 
|Year
      Ended December 31 
      (Thousands, except share amounts)                              | 2000       | 1999       | 1998       | 1997             | 1996            
|                                                                                                   |            |            |            |                  |                 
|Total
      operating revenues                                                                     | $1,951,574 | $1,098,540 | $1,063,736 | $ 
      935,837 | $ 
      916,449
|                                                                                                   |            |            |            |                  |                 
|Net
      income                                                                                   | 66,993     | 59,565     | 46,631     | 55,809           | 52,885          
|                                                                                                   |            |            |            |                  |                 
|Total
      assets                                                                                 | 2,816,141  | 1,816,548  | 1,510,387  | 1,435,804        | 1,463,316       
|                                                                                                   |            |            |            |                  |                 
|Preferred
      stock of subsidiaries                                                              | 51,168     | 51,193     | 51,200     | 51,645           | 51,656          
|                                                                                                   |            |            |            |                  |                 
|Long-term
      debt                                                                               | 709,972    | 634,502    | 393,037    | 347,015          | 349,054         
|                                                                                                   |            |            |            |                  |                 
|Shares
      of common stock less treasury stock   and
      shares in deferred compensation trust |            |            |            |                  |                 
|                                                                                                   |            |            |            |                 
|Outstanding
      at December 31                                                                   | 26,409     | 26,780     | 26,502     | 26,518           | 26,537          
|Average                                                                                            | 26,463     | 26,644     | 26,511     | 26,527           | 26,545          
|                                                                                                   |            |            |            |                  |                 
|Basic
      and diluted earnings per average share of common stock                                 | $2.53      | $2.24      | $1.76      | $2.10            | $1.99           
|                                                                                                   |            |            |            |                  |                 
|Dividend
      per share of common stock                                                           | 2.04       | 2.00       | 1.96       | 1.92             | 1.88            
|                                                                                                   |            |            |            |                  |                 
|Stock
      price                                                                                  | $36-13/16  | $25-1/8    | $35-1/4    | $33-13/16        | $28-1/2         
|Book
      value per share                                                                         | $20.55     | $20.03     | $19.52     | $19.56           | $19.24          
|Return
      on average equity                                                                     | 12.4%      | 11.3%      | 9.0%       | 10.8%            | 10.3%           
|Number
      of common stock shareholders                                                          | 24,029     | 25,020     | 26,319     | 27,369           | 27,922          
|Number
      of employees                                                                          | 3,030      | 2,900      | 2,673      | 2,902            | 3,032           
|                                                                                                   |            |            |            |                  |                 



|ITEM 6. SELECTED FINANCIAL DATA            |         |         |        
|------------------------------------------ | ------- | ------- | -------
|                                           |         |         |        
|WISCONSIN PUBLIC SERVICE CORPORATION       |         |         |        
|COMPARATIVE FINANCIAL STATEMENTS AND       |         |         |        
|FINANCIAL STATISTICS (1998 TO 2000)        |         |         |        
|                                           |         |         |        
|                                           |         |         |        
|(Millions)                                 | 2000    | 1999    | 1998   
|                                           |         |         |        
|Operating revenues                         | $840.5  | $719.4  | $652.5 
|Earnings on common stock                   | 70.4    | 67.1    | 54.1   
|Total assets (at December 31)              | 1,503.2 | 1,409.9 | 1,267.6
|Long-term debt, net (at December 31)       | 370.0   | 373.1   | 304.0  
|                                           |         |         |        
|Coverage                                   |         |         |        
|Times interest earned before income taxes  | 4.40    | 4.71    | 4.48   
|Times interest earned after income taxes   | 3.20    | 3.41    | 3.29   
|Times interest and preferred dividends     |         |         |        
|earned after income taxes                  | 2.93    | 3.08    | 2.93   
|                                           |         |         |        
|Weather information                        |         |         |        
|Cooling degree days                        | 330     | 481     | 519    
|Cooling degree days as a percent of normal | 70.7%   | 103.0%  | 107.0% 
|Heating degree days                        | 7,841   | 7,273   | 6,530  
|Heating degree days as a percent of normal | 98.2%   | 91.7%   | 82.4%  
|                                           |         |         |        

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

RESULTS OF OPERATIONS - WPS RESOURCES CORPORATION

WPS Resources Corporation is a holding company. Our
wholly-owned subsidiaries include two regulated utilities, Wisconsin Public
Service Corporation and Upper Peninsula Power Company. Another wholly-owned
subsidiary, WPS Resources Capital Corporation, is a holding company for our
nonregulated businesses including WPS Energy Services, Inc. and
WPS Power Development, Inc.

2000 Compared with 1999

WPS Resources Corporation Overview

WPS Resources' 2000 and 1999 results of operations are
shown in the following chart:

|WPS Resources' Results(Millions, except share amounts) | 2000     | 1999     | Change
|------------------------------------------------------ | -------- | -------- | ------
|                                                       |          |          |       
|Consolidated operating revenues                        | $1,951.6 | $1,098.3 | 78%   
|Net income                                             | 67.0     | 59.6     | 12%   
|Basic and diluted earnings per share                   | $2.53    | $2.24    | 13%   

The substantial revenue growth was largely due to
increased gas and electric sales at WPS Energy Services and increased sales
at WPS Power Development as we acquire additional customers and expand into
new markets. Part of the increase in revenues was a result of the record high
unit cost of natural gas experienced in 2000. Gas cost per therm was 43% higher
in 2000 than in 1999. The high unit cost of gas is reflected in both revenues
and cost of sales, thus having little impact on margin.

The increase in net income and earnings per share was the
result of higher electric and gas utility margins and increases in
WPS Energy Services' electric and gas margins. Additionally, a higher
margin on operating activities along with additional tax credits received at
WPS Power Development contributed to higher income. Partially offsetting
these factors were increases in operating and interest expenses, coupled with
costs associated with an electric energy contract entered into by
WPS Resources as a hedge against potential summer energy price spikes.

Overview of Utility Operations

Utility operations include the electric utility operations
at Wisconsin Public Service and Upper Peninsula Power, and the gas utility
operations at Wisconsin Public Service. Net income from electric utility
operations was $60.7 million in 2000 compared with $56.1 million in
1999. Net income from gas utility operations was $11.6 million in 2000 and
$11.2 million in 1999. The primary reasons for higher utility net income
were a Wisconsin retail electric rate increase and increased gas sales volumes
as the result of winter weather that was 8% colder in 2000 than in 1999.

Electric Utility Operations

The consolidated electric utility margin represents
electric revenue less cost of sales exclusive of intercompany transactions. Our
consolidated electric utility margin increased $29.7 million, or 8%,
primarily due to a 4.6% Wisconsin retail electric rate increase at
Wisconsin Public Service which became effective on January 1, 2000.
This rate increase was primarily intended to recover additional fuel and
purchased power costs for the year. The 2000 electric rate increase also took
into account the expected gain on the sale of utility assets which is discussed
under "Other Electric and Gas Utility Expenses/Income."

|Electric Utility Results (Thousands) | 2000       | 1999       | 1998      
|------------------------------------ | ---------- | ---------- | ----------
|                                     |            |            |           
|Revenues                             | $623,786   | $582,471   | $543,260  
|Fuel and purchased power             | 198,980    | 187,399    | 167,256   
|Margin                               | $424,806   | $395,072   | $376,004  
|                                     |            |            |           
|Sales in kilowatt-hours              | 12,565,011 | 12,503,487 | 12,172,432

Although our consolidated kilowatt-hour sales were only
slightly up, partially due to a 31% cooler summer in 2000 than in 1999,
consolidated revenues increased 7% due to the Wisconsin retail electric rate
increase at Wisconsin Public Service.

Our consolidated fuel expense increased
$15.7 million, or 14%, due to increased production at Wisconsin Public
Service's fossil-fueled and combustion turbine generation plants. In addition,
the average cost of generation at the combustion turbine plants increased 90%
largely as a result of a higher unit cost of natural gas. Generation costs at
the Kewaunee Nuclear Power Plant decreased 14% in 2000 due to its scheduled
outage for refueling and maintenance in the second quarter of 2000. A similar
outage did not occur in 1999. The Kewaunee plant was off-line beginning
April 22, 2000 and returned to power on June 2, 2000. During the
scheduled outage, nuclear generation was replaced with additional fossil fuel
and combustion turbine generation and additional purchased power. Wisconsin
Public Service is the operator and 41.2% owner of the Kewaunee plant. Our
consolidated purchased power expense decreased $4.1 million, however,
largely due to a 5% decrease in the cost per kilowatt-hour of power purchases
made by Wisconsin Public Service in 2000 compared with 1999.

The Public Service Commission of Wisconsin allows
Wisconsin Public Service the opportunity to adjust prospectively the amount
billed to Wisconsin retail customers for fuel and purchased power if costs fall
outside a specified range. Wisconsin Public Service is required to file an
application to adjust rates either higher or lower when costs are plus or minus
2% from forecasted costs on an annualized basis. Annual 2000 fuel costs were
within this 2% window and, accordingly, no adjustment was initiated.

Gas Utility Operations

The consolidated gas utility margin represents gas
revenues less purchases exclusive of intercompany transactions. The gas utility
margin at Wisconsin Public Service increased $5.4 million, or 7%, in
2000 due to an increase in therm sales.

|Gas Utility Results (Thousands) | 2000     | 1999     | 1998    
|------------------------------- | -------- | -------- | --------
|                                |          |          |         
|Revenues                        | $264,519 | $191,521 | $165,111
|Purchase costs                  | 185,143  | 117,582  | 104,608 
|Margin                          | $ 79,376 | $ 73,939 | $ 60,503
|                                |          |          |         
|Sales in therms                 | 701,094  | 662,615  | 608,029 

Winter weather was a factor for Wisconsin Public Service's
gas operations in 2000. Weather was 8% colder in 2000 than in 1999; however,
weather was 2% warmer than normal in 2000. Wisconsin Public Service's gas
revenues increased $73.0 million, or 38%, as the result of a 43% increase
in the average unit cost of natural gas coupled with a 6% increase in overall
therm sales.

Wisconsin Public Service's gas purchase costs increased
$67.6 million, or 57%. This increase resulted from a higher average unit
cost of natural gas and higher gas volumes purchased of 10%. The higher unit
cost of natural gas is reflected in both revenues and gas purchases, thus having
little impact on margin.

Under current regulatory practice, the Public Service
Commission of Wisconsin and the Michigan Public Service Commission allow
Wisconsin Public Service to pass changes in the cost of gas on to customers
through a purchased gas adjustment clause.

Other Electric and Gas Utility Expenses/Income

Utility operation and maintenance expenses increased
$22.3 million. Electric utility operation and maintenance expenses
increased $18.4 million primarily due to costs associated with the
scheduled outage and other maintenance activities at the Kewaunee plant.

Higher earnings of $6.2 million on the Kewaunee
plant's nuclear decommissioning fund resulted in increased other income at
Wisconsin Public Service in 2000. Due to regulatory practices, this higher
income was offset by increased depreciation and decommissioning expense. Other
income at Wisconsin Public Service also included a gain of $3.8 million on
the sale of a combustion turbine which Wisconsin Public Service constructed for
another Wisconsin utility. The Public Service Commission of Wisconsin considered
this gain in the Wisconsin retail electric rate adjustment which was effective
January 1, 2000.

Overview of Nonutility and Nonregulated Operations

Nonutility operations refer to the activities of
Wisconsin Public Service and Upper Peninsula Power which do not fall under
utility regulation. Nonregulated operations consist of the gas, electric, and
other sales at WPS Energy Services, a diversified energy supply and
services company and the operations of WPS Power Development, an electric
generation asset development company. Nonregulated operations also include those
of WPS Resources and WPS Resources Capital as holding companies and
other nonregulated companies.

WPS Energy Services' net income improved to
$1.7 million in 2000 compared with a loss of $3.5 million in 1999.
Income at WPS Power Development also improved. WPS Power Development's
net income was $0.9 million in 2000 compared with a loss of
$3.8 million in 1999.

Other nonutility and nonregulated operations experienced a
loss of $7.9 million in 2000 compared with a loss of $0.5 million in
1999. The increased loss was primarily due to additional interest expense,
increased operating expenses, and a cost of $3.8 million for an electric
energy contract entered into by WPS Resources in 2000 as a hedge against
potential summer energy price spikes.

Overview of WPS Energy Services

WPS Energy Services' principal business involves
nonregulated gas sales. Revenues at WPS Energy Services grew to
$955.6 million in 2000 compared with $292.2 million in 1999, an
increase of 227%. This increase was the result of additional gas and electric
sales volumes coupled with a higher unit cost of natural gas. The higher unit
cost of gas is also reflected in cost of sales, thus having little impact on
margin. Income increased $5.2 million in 2000 due to a larger increase in
electric and gas margins than in the related other operating expenses.

WPS Energy Services' Margins

The consolidated nonregulated gas margin represents
nonregulated gas revenues less nonregulated gas cost of sales exclusive of
intercompany transactions. The nonregulated gas margin at WPS Energy
Services increased $6.7 million largely due to increased sales volumes.

|WPS Energy Services Gas Results (Thousands) | 2000     | 1999     | 1998    
|------------------------------------------- | -------- | -------- | --------
|                                            |          |          |         
|Nonregulated gas revenues                   | $919,448 | $288,020 | $330,046
|Nonregulated gas cost of sales              | 908,103  | 283,409  | 326,060 
|Margin                                      | $ 11,345 | $  4,611 | $  3,986

Gas revenues at WPS Energy Services more than tripled
in 2000 compared with 1999. This increase was due to sales volumes that doubled
as the result of additional sales in the wholesale market and general business
growth. In addition, a large portion of the increase was due to a higher unit
cost of natural gas in 2000.

WPS Energy Services' gas cost of sales tripled due to
additional gas purchases coupled with a higher unit cost of natural gas.

Electric margins at WPS Energy Services increased
$4.2 million in 2000. Electric revenues at WPS Energy Services were
$33.8 million in 2000 and $3.4 million in 1999. This increase in
revenue resulted from additional electric sales in Pennsylvania and Maine
associated with the WPS Power Development assets that were acquired in the
second and fourth quarters of 1999. Electric purchases increased
$26.2 million due to additional sales volumes.

WPS Energy Services' Other Expenses

Other operating expenses at WPS Energy Services
increased $4.2 million, or 42%, primarily due to greater payroll and other
operational costs associated with business expansion.

Overview of WPS Power Development

Income at WPS Power Development was $0.9 million in
2000 compared with a loss of $3.8 million in 1999. The increase in income
was primarily due to a higher margin on operating activities and additional tax
credits. Partially offsetting these factors were higher operating and interest
expenses.

Tax credits at WPS Power Development increased
approximately $16.7 million in 2000. A portion of these tax credits,
subject to the limitations of the alternative minimum tax provisions, were used
to reduce our current income tax liability. Approximately $11 million of these
tax credits have been carried forward to reduce our tax liability in future
years.

A large portion of the tax credits at WPS Power
Development relate to the operations of the ECO #12 synthetic fuel operation.
Production at ECO #12 was higher than anticipated in 2000 despite the physical
relocation of the project from Alabama to Kentucky during 2000. ECO #12 was
taken out of operation in April 2000 to prepare for relocation, and
WPS Power Development began operation of the facilities in the new location
on September 1, 2000. In order to receive optimum benefits from this project,
WPS Power Development intends to sell part of its interest in ECO #12. This
action has been slowed due to issues currently being raised by the Internal
Revenue Service with respect to synthetic fuel projects in general. The current
plans call for a closer match of the facility's production level with our
ability to use the tax credits that are available for the current year until a
sale of a portion of the project is finalized.

In addition, WPS Power Development reversed
$0.9 million of previously recorded losses in the first quarter of 2000 as
a result of an equity contribution to the ECO #12 synthetic fuel project by the
minority owner. Prior to this transaction, WPS Power Development had been
recording 100% of the operating losses of this project because the minority
owner's equity had been reduced to zero; however, it was only allocated 66.7% of
the tax credits. Through an agreement with the minority owner, WPS Power
Development is receiving 100% of the tax credits and operating results from the
project until the minority owner is able to contribute further capital to fund
its share of the operating costs.

WPS Power Development's Margin on Operating Activities and Other Expenses

WPS Power Development experienced an increase of
$17.2 million in its margin on operating activities in 2000. This increase
was largely due to the operation of the electric generation facilities acquired
in Maine and Canada in the second quarter of 1999 and those in Pennsylvania in
the fourth quarter of 1999. Other operating expenses at WPS Power
Development increased $27.2 million in 2000 due to maintenance and higher
production costs at its generation plants in Pennsylvania. Costs associated with
the investigation and start-up of new projects at WPS Power Development
also increased in 2000. Higher interest expense of $6.3 million in 2000 was
largely due to nonrecourse debt put in place to finance the plant acquisitions.

Additional costs at the Sunbury generation plant in
Pennsylvania lowered results at WPS Power Development, particularly in the
fourth quarter of 2000. This included higher production costs, higher
maintenance costs (both planned and accelerated) and increased costs of
replacement power while the plant was undergoing maintenance. The decision was
made to move some maintenance scheduled in future years into 2000 to coincide
with other plant downtime. The accelerated maintenance at the Sunbury plant
should enhance availability in 2001 and future years.

1999 Compared with 1998

WPS Resources Corporation Overview

WPS Resources' 1999 and 1998 results of operations are
shown in the following chart:

|WPS Resources' Results(Millions, except share amounts) | 1999     | 1998     | Change
|------------------------------------------------------ | -------- | -------- | ------
|                                                       |          |          |       
|Consolidated operating revenues                        | $1,098.5 | $1,063.7 | 3%    
|Net income                                             | 59.6     | 46.6     | 28%   
|Basic and diluted earnings per share                   | $2.24    | $1.76    | 27%   

The primary reasons for the higher earnings were increased
sales volumes at Wisconsin Public Service coupled with the implementation
of new Wisconsin retail electric and gas rates and the elimination of net
trading losses at WPS Energy Services.

Overview of Utility Operations

Net income from electric utility operations was
$56.1 million in 1999 and $50.5 million in 1998. Net income from gas
utility operations was $11.2 million in 1999 and $5.9 million in 1998.
The primary reasons for higher utility net income were increased sales
volumes coupled with the implementation of new Wisconsin retail electric and gas
rates.

Electric Utility Operations

Our consolidated electric utility margin increased
$19.1 million. This increase was due to increased sales volumes at
Wisconsin Public Service coupled with the January 15, 1999
implementation of new Wisconsin retail electric rates. The Public Service
Commission of Wisconsin authorized a 6.3% increase in electric rates.

Our consolidated electric utility revenues increased
$39.2 million primarily due to the electric rate increase at
Wisconsin Public Service. A 3% increase in overall kilowatt-hour
sales at Wisconsin Public Service also contributed to higher electric
revenues. Included in 1998 electric revenues, but not in 1999 electric revenues,
were surcharge revenues at Wisconsin Public Service of $3.8 million
related to the recovery of the deferred costs for the Kewaunee plant's 1997
steam generator repairs.

Our consolidated fuel expense increased $3.0 million
as a result of increased generation requirements at Wisconsin Public
Service's combustion turbine and nuclear generation plants in 1999. Partially
offsetting this factor was a decrease in production at Wisconsin Public
Service's coal-fired generation plants as a result of both scheduled and
unscheduled maintenance activities.

Our consolidated purchased power requirements increased
$17.2 million primarily due to additional purchase requirements at both
Wisconsin Public Service and Upper Peninsula Power in 1999. Purchase
requirements increased 20% at Wisconsin Public Service due to the lack of
production at its coal-fired generation plants during the time they were
off-line for maintenance in 1999. In addition, the cost of purchases was 13%
higher in 1999 than in 1998.

Annual 1999 fuel costs at December 31, 1999 were
within the 2% fuel window authorized by the Public Service Commission of
Wisconsin and, accordingly, no adjustment was made to electric rates for 1999
fuel costs.

Gas Utility Operations

The consolidated gas utility margin represents gas
revenues less purchases exclusive of intercompany transactions. The gas utility
margin at Wisconsin Public Service increased $13.4 million in 1999.
This increase was primarily due to the implementation of a Public Service
Commission of Wisconsin rate order which authorized a 5.1% increase in Wisconsin
retail gas rates and to an increase in therm sales.

Wisconsin Public Service's gas operating revenues
increased $26.4 million. This increase was due to the implementation of new
Wisconsin retail gas rates and a 9% increase in overall therm sales as a result
of colder weather in 1999. Although the winter weather was 11% colder in 1999
than in 1998, it was still 8% warmer than normal.

Gas utility revenues in 1998 were reduced by
$7.5 million for refunds from ANR Pipeline Company which were passed
on to Wisconsin Public Service's customers. Gas purchase costs in 1998 were
likewise reduced as this $7.5 million refund was credited to gas expense.

Wisconsin Public Service's gas purchase costs increased
$13.0 million due to increased sales and to a higher unit cost of natural
gas.

Other Electric and Gas Utility Expenses/Income

Other utility operating expenses at Wisconsin Public
Service increased $12.6 million primarily due to higher customer service
expenses of $5.1 million related to conservation expenditures, and higher
pension costs of $3.4 million due to a change in the assumptions used to
calculate this expense. Also contributing to increased operating expenses were
higher medical benefit expenses of $1.2 million and higher electric
distribution expenses of $1.2 million.

Maintenance expense at Wisconsin Public Service
increased $7.2 million primarily due to additional costs of
$8.0 million at its coal-fired generation plants and $1.6 million at
its other power generation plants for both scheduled and unscheduled maintenance
activities. Offsetting these costs was a decrease in maintenance expense of
$8.5 million at the Kewaunee plant. A scheduled refueling outage at
the Kewaunee plant in 1998 caused 1998 nuclear maintenance expenses to be
higher. In addition, $3.8 million in deferred costs for the
Kewaunee plant's 1997 steam generator repairs were recognized in 1998.
Maintenance of overhead distribution lines increased $4.7 million in 1999
due to additional tree trimming, line clearance, and storm damage repairs.

Overview of Nonutility and Nonregulated Operations

WPS Energy Services experienced a loss of
$3.5 million in 1999 compared with a loss of $6.9 million in 1998.
Losses at WPS Power Development were $3.8 million in 1999 and
$2.4 million in 1998. Although margins on nonregulated energy sales
continued to grow, losses were experienced due to operating expenses associated
with new facilities, market expansion, and the pursuit of additional projects.
Nonutility operations in 1999 included a one-time special dividend of
$0.5 million. This special dividend was related to a land sale from an
investment held at Wisconsin Public Service. Nonregulated earnings in 1998
included a one-time dividend of $2.0 million received by WPS Resources
from a venture capital investment.

Overview of WPS Energy Services, Inc.

Revenues at WPS Energy Services were
$292.2 million in 1999 compared with $351.3 million in 1998, a
decrease of 17%. The revenue decrease was attributable to a combination of lower
overall natural gas prices experienced in 1999, and a deliberate change in the
wholesale product mix. WPS Energy Services experienced an improvement in
operating results, reducing net losses by 49% in 1999. The primary reason for
the decrease in losses was the elimination of trading losses that occurred in
1998. WPS Energy Services implemented a deliberate shift in focus within
its trading unit to emphasize capturing present opportunities in the market
rather than taking a position in anticipation of a future market movement. While
not without risk, this lower-risk approach did yield gains in 1999.
WPS Energy Services also experienced an increase in total gas margin due to
improved gas procurement operations and processes, and an increased emphasis on
creation of wholesale products providing greater value, thus higher margin, to
customers in the wholesale marketplace. Partially offsetting these factors was a
one-time pretax write-down of $0.7 million related to an investment in a
gas production field.

WPS Energy Services' Margins

Gas margins at WPS Energy Services increased
$0.6 million in 1999. Gas revenues decreased $42.0 million and gas
cost of sales decreased $42.6 million as the result of lower overall
natural gas market prices and an increased emphasis on higher quality and
lower-risk wholesale products rather than a large volume of wholesale
transactions with lower margins. Improvements in gas procurement processes also
contributed to lower cost of sales.

Electric margins remained fairly stable. Electric revenues
decreased $17.1 million as the result of WPS Energy Services' efforts
to focus participation in the wholesale electric markets where transactions were
based on physical generation assets controlled by an affiliate of
WPS Resources.

WPS Energy Services' Other Expenses

Other operating expenses at WPS Energy Services
increased $1.0 million primarily due to costs of $0.7 million
associated with entering into expanded retail customer-choice programs. Improved
processes and strategies emphasizing reduced risk at WPS Energy Services
resulted in a gas trading gain in 1999 compared with gas trading losses of
$4.9 million in 1998. Essentially no electric trading losses were
experienced in 1999 compared with a $1.2 million loss in 1998.

Overview of WPS Power Development

The increase in losses in 1999 at WPS Power
Development was primarily due to additional costs incurred for the development
and operation of newly acquired facilities and the evaluation of new projects.

WPS Power Development experienced an increase of
$9.5 million in its margin on operating generation facilities in 1999. This
increase was due to the operation of the electric generation assets acquired in
Maine and Canada on June 8, 1999, and in Pennsylvania on November 1,
1999. Other operating expenses at WPS Power Development increased
$10.5 million largely due to operating expenses related to the electric
generation assets acquired during 1999. Higher operating expenses at the ECO #12
synthetic fuel operation also contributed to the increase. Partially offsetting
increased expenses at ECO #12 was the benefit of tax credits received for
these operations. Although ECO #12 experienced problems with materials and
customers in the early part of 1999, these problems were resolved and sales
increased significantly. Additional costs related to the pursuit and development
of new projects also contributed to higher operating expenses at WPS Power
Development in 1999.

Overview of Other Nonutility and Nonregulated Operations

A one-time dividend of $0.5 million was received by
Wisconsin Public Service in 1999 related to a land sale from an investment.
This dividend represented a one cent per share increase to earnings for 1999.

A one-time dividend of $2.0 million was received by
WPS Resources in 1998 from a venture capital investment. This dividend
represented a four cents per share increase in earnings for 1998.

BALANCE SHEET - WPS RESOURCES CORPORATION

2000 Compared With 1999

As the result of WPS Energy Services marking to market its
energy contracts and gas in storage in 2000, our balance sheet grew by
approximately $660.0 million. The mark-to-market accounting is reflected in
both assets and liabilities from risk management activities and the gas in
storage inventory account.

Customer and other receivables increased
$185.5 million as the result of additional sales volumes at both
WPS Energy Services and Wisconsin Public Service. The higher unit cost of
natural gas experienced, especially in December of 2000, also contributed
to the increased receivables balance. Likewise, accounts payable increased
$230.9 million largely due to the additional sales volumes and the higher
unit cost of natural gas.

Long-term debt increased $76.1 million as the result
of WPS Power Development obtaining nonrecourse financing related to the
Sunbury generation plant in the second quarter of 2000. Commercial paper
increased $39.7 million largely to finance capital needs.

FINANCIAL CONDITION - WPS RESOURCES CORPORATION

Investments and Financing

Special common stock dividends of $50.0 million were
paid by Wisconsin Public Service to WPS Resources in 2000. Equity infusions
of $75.0 million were made by WPS Resources to Wisconsin Public
Service in 2000. The special dividends and equity infusions allowed Wisconsin
Public Service's average equity capitalization and its capitalization ratio for
ratemaking to remain near target levels as established by the Public Service
Commission of Wisconsin in its 1999 rate order.

Cash requirements exceeded internally generated funds by
$107.5 million in 2000. Short-term borrowings through commercial paper
increased $39.7 million. Long-term debt increased $76.1 million mainly
due to the issuance of $83.7 million of nonrecourse debt related to the
Sunbury generation plant. The Sunbury plant was originally financed with
short-term debt. Our pretax interest coverage, including nonrecourse debt, was
2.27 times for the 12 months ended December 31, 2000. See the table below
for WPS Resources' credit ratings.

|Credit Ratings                       | Standard & Poor's | Moody's
|------------------------------------ | ----------------- | -------
|                                     |                   |        
|WPS Resources Corporation            |                   |        
|Senior unsecured debt                | AA                | Aa3    
|Commercial paper                     | A1+               | P1     
|Trust preferred securities           | A+                | aa3    
|                                     |                   |        
|Wisconsin Public Service Corporation |                   |        
|Bonds                                | AA+               | Aa1    
|Preferred stock                      | AA                | aa2    
|Commercial paper                     | A1+               | P1     

We normally use internally-generated funds and short-term
borrowing to satisfy most of our capital requirements. We seek nonrecourse debt
for funding nonregulated acquisitions. We may periodically issue additional
long-term debt and common stock to reduce short-term debt, maintain desired
capitalization ratios, and fund future growth.

The specific forms of financing, amounts, and timing will
depend on the availability of projects, market conditions, and other factors.

In October 1999, we filed a shelf registration with the
Securities and Exchange Commission which allowed the issuance of
$400.0 million in the aggregate of public long-term debt and common stock.
Long-term debt of $150.0 million has been issued under the shelf
registration. Wisconsin Public Service has a shelf registration which provides
$52.0 million of remaining debt financing capacity. During 2000, we
repurchased $10.5 million of common stock for our stock option plan and
other corporate purposes including our employee stock ownership plan. Effective
January 2001, we began issuing new shares of common stock for our Stock
Investment Plan and for some of our stock-based employee benefit plans.

Wisconsin Public Service makes large investments in
capital assets. Construction expenditures for Wisconsin Public Service are
expected to be approximately $486.0 million in the aggregate for the 2001
through 2003 period. This includes expenditures for replacement of the Kewaunee
plant's steam generators. In addition, other capital requirements for Wisconsin
Public Service for the three-year period include contributions of approximately
$7.8 million to the Kewaunee plant's decommissioning trust fund.

Upper Peninsula Power is expected to incur construction
expenditures of about $52.0 million in the aggregate for the period 2001
through 2003, primarily for electric distribution improvements and repairs at
hydro facilities.

In April 2000, Sunbury Generation, LLC, a
subsidiary of WPS Power Development, obtained $83.7 million of
nonrecourse financing which is secured by the Sunbury generation plant.
Sunbury Holdings, LLC, a subsidiary of WPS Power Development, financed its
purchase of CinCap VI, LLC with internally generated funds from WPS Resources.

We anticipate issuing the following additional debt and
equity financing in 2001:

|By                       | Timeframe            | Form of Financing                    | Amount             
|------------------------ | -------------------- | ------------------------------------ | -------------------
|Nonregulated             | Second quarter       | Variable rate
      tax exempt bonds | $ 20 - $ 28 million
|WPS Resources            | Second/third quarter | Common stock                         | $ 50 - $100 million
|Wisconsin Public Service | Third quarter        | Fading lien bonds                    | $100 - $150 million
|WPS Resources            | Third/fourth quarter | Unsecured debt                       | $100 - $150 million

Specific forms of financing, amounts, and timing may
change due to the availability of projects, market conditions, and other
factors.

Electric Reliability

WPS Resources purchased a 50-megawatt fixed-price
physical electric energy contract for the months of June, July, and August of
2000. The contract allowed for the purchase of electricity at a fixed price, and
the sale of that electricity at a floating or market-based price shortly before
delivery. The contract was intended for earnings protection against summer
energy price spikes in the event of a loss of generation units. The summer of
2000 was extremely mild, and we did not experience any of the anticipated energy
price spikes. As a result, WPS Resources incurred a cost of
$3.8 million under the electric energy contract.

Regulatory

On December 21, 2000, Wisconsin Public Service
received an order from the Public Service Commission of Wisconsin authorizing a
5.4% increase in retail electric rates and a 1.5% increase in retail gas rates
for 2001 and 2002. A 12.1% return on equity was approved. The new rates were
implemented on January 1, 2001. The Public Service Commission of Wisconsin
did not approve a 2002 rate reopener but acknowledged that pursuant to statutes,
Wisconsin Public Service may request a reopener at any time.

On October 13, 2000, Upper Peninsula Power filed a
$5.7 million rate increase with the Michigan Public Service Commission. A
final rate order should be issued in 2001. Upper Peninsula Power has not
experienced a rate increase since 1994.

Merger with Wisconsin Fuel and Light Company

On July 13, 2000, we signed a merger agreement with
Wisconsin Fuel and Light Company. Under the agreement, Wisconsin Fuel and
Light shareholders will receive 1.73 shares of WPS Resources' common
stock for each share of Wisconsin Fuel and Light's common stock. The
exchange ratio will be adjusted if, at the time of closing the transaction, the
market price of WPS Resources' common stock exceeds $33.96 per share or is
less than $27.79 per share. The market price is defined as the average of the
closing price of WPS Resources' common stock during the ten trading days
ending three days immediately preceding the effective date of the merger. The
merger remains subject to (i) approval by the Public Service Commission of
Wisconsin; (ii) receipt of an opinion of counsel that the exchange of stock
qualifies as a tax-free transaction; and (iii) the satisfaction of various other
conditions.

A majority of the outstanding preferred shareholders of
Wisconsin Public Service approved the merger, allowing Wisconsin Fuel and
Light to merge into Wisconsin Public Service. A majority of the Wisconsin Fuel
and Light shareholders approved the merger in November of 2000. The merger will
be accounted for under the purchase method of accounting and is expected to be
completed in April of 2001.

Acquisition of Generation Facilities

Sunbury Holdings, LLC, a subsidiary of WPS Power
Development, purchased CinCap VI, LLC on September 1, 2000. CinCap VI
is the owner of the 30-megawatt Westwood generation facility located in
Pennsylvania. As of January 1, 2001, CinCap VI, LLC changed its name
to WPS Westwood Generation, LLC.

On October 27, 2000, Sierra Pacific Power Company agreed
to sell its Tracy/Pinon Power Station located near Reno, Nevada to
WPS Power Development. The 545-megawatt facility consists of several
natural gas and oil-fired generation units and includes a coal gasification
project that had been co-funded by the United States Department of Energy.
The arrangement includes a temporary purchase power agreement to sell the power
generated by Tracy/Pinon to Sierra Pacific. The purchase price of
$249.8 million is subject to taxes and other adjustments at closing.
Closing is expected to occur sometime in 2001. We expect to finance a portion of
this purchase with non-recourse debt.

WPS Power Development reached an agreement to build
and operate a 50-megawatt electric cogeneration facility in Combined Locks,
Wisconsin. The facility will provide electricity to wholesale customers through
WPS Energy Services. Construction of the facility is expected to begin in
the second quarter of 2001 with completion by the end of 2001.

TRENDS - WPS RESOURCES CORPORATION

Regulatory Standards

Wisconsin Public Service and Upper Peninsula
Power follow Statement of Financial Accounting Standards No. 71,
"Accounting for the Effects of Certain Types of Regulation," and their
financial statements reflect the effects of the different ratemaking principles
followed by the various jurisdictions regulating each utility. For
Wisconsin Public Service these include the Public Service Commission
of Wisconsin, 90% of revenues; the Michigan Public Service Commission, 2% of
revenues; and the Federal Energy Regulatory Commission, 8% of revenues. In
addition, the Kewaunee plant is regulated by the Nuclear Regulatory Commission.
Environmental matters are primarily governed by the United States
Environmental Protection Agency and the Wisconsin Department of Natural
Resources.

Impact of New Accounting Standard

We adopted Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities,"
on January 1, 2001. This statement requires derivative instruments to be
recorded at their fair value as assets or liabilities on the balance sheet.
Changes in the derivative's fair value are to be recognized currently in
earnings unless specific hedge accounting criteria are met.

We concluded that the majority of contracts at our utility
subsidiaries and at WPS Power Development for the purchase, sale, and storage of
natural gas, electricity, coal, and nuclear fuel do not meet the definition of a
derivative as defined under Statement No. 133. The majority of such contracts,
therefore, are not subject to the accounting requirements of Statement No. 133.
Wisconsin Public Service entered into a limited number of commodity contracts
that meet the definition of a derivative. We believe that any gains or losses
resulting from the settlement of these contracts will be collected from, or
refunded to, retail customers. Derivative assets and liabilities that are
recorded as a result of these derivative contracts will be offset with
corresponding regulatory assets and liabilities. A limited number of other
derivative contracts were designated as fair value hedges. Future changes in the
fair value of these derivative contracts will be recognized in earnings with
offsetting changes in the value of the hedged item also recorded in earnings. At
January 1, 2001, Wisconsin Public Service recorded a derivative asset and an
offsetting regulatory liability of approximately $17 million. The cumulative
effect on income was not significant.

WPS Energy Services uses derivative financial and
commodity instruments to reduce market risk associated with changing prices of
natural gas and electricity sold to customers at firm prices. WPS Energy
Services also utilizes derivatives to manage market risk associated with
anticipated energy purchases as well as trading activities. Primarily as a
result of a change in strategic focus that resulted in a shift in customer mix,
WPS Energy Services, in applying Emerging Issues Task Force Issue 98-10,
"Accounting for Contracts Involved in Energy Trading and Risk Management
Activities," concluded in the first quarter of 2000 that its energy
contracts were trading contracts. Accordingly, WPS Energy Services recorded its
energy contracts at fair value on the balance sheet, with changes in fair value
recognized in earnings. Because WPS Energy Services marks to market its energy
trading contracts in accordance with Issue 98-10 and does not anticipate
designating any derivative contracts as hedges for accounting purposes, the
adoption of Statement No. 133 is not expected to have a material impact at WPS
Energy Services.

Electric Utility Restructuring - Wisconsin

Electric reliability continues to be the primary issue for
the Public Service Commission of Wisconsin. In 1999, Wisconsin enacted the
Reliability 2000 Act which addressed asset cap relief provisions, the transfer
of transmission assets into a state-wide transmission company, targets for
retail electric sales from renewable resources, and ratepayer funding of public
benefits spending. The priorities of the Public Service Commission of Wisconsin
in 2000 included:

> a market power study;
>     formation of American Transmission Company, LLC;
>     utility membership in Midwest Independent System Operator;
>     the proposed transmission line between Weston, Wisconsin and Duluth,
>       Minnesota; and
>     ratepayer financing of public benefit spending and transferring
>       responsibility for conservation, load management, and public benefits to
>       the Wisconsin Department of Administration.

Market Power Study

A consultant performed a market power analysis of
Wisconsin's and the Upper Peninsula of Michigan's electric markets for the
Public Service Commission of Wisconsin. As a result of the analysis, the
Commission concluded that complete and immediate deregulation is not in the best
interest of the public, especially given the recent developments in California.
The Commission agreed that more transmission capacity is needed and contracts
between electric generators and customers may mitigate market power issues.
Additionally, the Commission concluded that complex horizontal market power
issues will require further study before actions to mitigate market power are
considered.

Transmission

On January 1, 2001, all of the investor-owned utilities in
eastern Wisconsin, including Wisconsin Public Service, transferred their
transmission assets to and became owners of American Transmission Company. By
joining American Transmission Company, the utilities became eligible for relief
from the holding company system asset cap limitation on nonregulated
investments. Until a Regional Transmission Operator is operational, American
Transmission Company will own and operate the eastern Wisconsin transmission
system. Wisconsin Public Service transferred transmission assets with a net book
value of approximately $60 million to $70 million to American Transmission
Company for an approximate 12% ownership interest. The ownership interest will
fluctuate as additional assets are contributed or more companies join American
Transmission Company. We expect income under equity accounting for the
investment in American Transmission Company to be similar to Wisconsin Public
Service's current earnings on its transmission assets.

Final approval of the proposed transmission line between
Weston, Wisconsin and Duluth, Minnesota is expected in 2001. This project will
be transferred to American Transmission Company upon completion of hearings with
the Public Service Commission of Wisconsin. The hearings are expected to be
completed in the first quarter of 2001. WPS Resources will be funding the equity
portion of this transmission project and receiving additional ownership interest
in American Transmission Company.

Electric Utility Restructuring - Michigan

In June 2000, legislation was enacted which provides
electric customers the right to choose their generation supplier by
January 1, 2002. Wisconsin Public Service, Upper Peninsula Power, the
Michigan Public Service Commission, and other utilities are developing systems
to accommodate the new law, develop open access tariffs, and implement business
practices. Preliminary tariffs are expected in the first quarter of 2001.

Gas Utility Restructuring - Wisconsin

In its 2001-2002 Wisconsin retail rate application,
Wisconsin Public Service proposed to facilitate customer choice of natural gas
suppliers through the use of its new automated meter reading system. The
proposal was approved by the Public Service Commission of Wisconsin and will
provide customer choice of gas suppliers for commercial customers beginning on
November 1, 2001. This program will be expanded to all customers as the
automated meter reading system is installed system-wide.

Gas Utility Restructuring - Michigan

The majority of Michigan's largest gas customers are
allowed to choose their natural gas commodity supplier. Gas restructuring for
smaller customers remains in a pilot phase. The smaller Michigan natural gas
utilities, including Wisconsin Public Service, are to propose a customer choice
program for all customer classes when it is in the best interests of each
utility and its customers. Wisconsin Public Service intends to provide customer
choice to its Michigan customers following the implementation of its automated
meter reading system in that state.

Utility Restructuring - Federal Energy Regulatory Commission

Wisconsin Public Service transferred its electric
transmission assets to American Transmission Company on January 1, 2001 in
exchange for an ownership interest in the company. American Transmission Company
implemented new Federal Energy Regulatory Commission tariffs, subject to refund,
on January 1, 2001.

Wisconsin Public Service and Upper Peninsula Power joined
the Midwest Independent System Operator in June of 2000. The Midwest Independent
System Operator filed to become a Regional Transmission Organization in October
of 2000.

Environmental

Wisconsin Public Service continues to investigate the
environmental cleanup of eight manufactured gas plant sites. The cleanup of the
Stevens Point manufactured gas plant site has been substantially completed
with monitoring of the site continuing. Costs of this cleanup were within the
range expected for this site. Future undiscounted investigation and cleanup
costs for the remaining seven sites is estimated to be in the range of
$35.7 million to $42.2 million. These estimates may be adjusted in the
future contingent upon remedial technology, regulatory requirements, and the
assessment of natural resources damages.

Wisconsin Public Service currently has a
$37.4 million liability recorded for gas plant cleanup with an offsetting
regulatory asset (deferred charge). Management believes that cleanup costs net
of insurance recoveries, but not the carrying costs associated with the cleanup
expenditures, will be recoverable in current and future customer rates.
Wisconsin Public Service has received $12.6 million in insurance
recoveries which have been recorded as a reduction in the regulatory asset.

The state of Wisconsin developed a nitrogen oxide
reduction plan for Wisconsin's ozone non-attainment area in southern Wisconsin.
The nitrogen oxide reductions begin in 2003, and the requirements are gradually
increased through 2007. This reduction plan affects Edgewater Unit 4. Wisconsin
Public Service owns 31.8% of this unit. A compliance plan for Edgewater Unit 4
was initiated in 2000. The plan includes a combination of combustion
optimization and emission trading at a potential cost of approximately $5.0
million. The state of Wisconsin is also seeking voluntary reductions from units
outside the ozone non-attainment area which may lead to additional expenditures
for nitrogen oxide reductions at other units. Wisconsin Public Service is
participating in voluntary efforts to reduce nitrogen oxide levels at the
Columbia Energy Center. Wisconsin Public Service owns 31.8% of Columbia. The
Public Service Commission of Wisconsin has approved recovery of the costs
associated with nitrogen oxide compliance.

The Wisconsin Department of Natural Resources initiated a
rulemaking effort aimed at the control of mercury emissions. Coal-fired
generation plants are likely to be the target of this effort. A draft of the
rule has not been released and the effect on Wisconsin Public Service is not yet
known. If restrictive limits are adopted, the costs could be significant.

On November 3, 1999, the Environmental Protection Agency
announced that it was pursuing an enforcement initiative against seven
utilities, or their subsidiaries, located in the Midwest and the South as well
as the Tennessee Valley Authority. The enforcement initiative alleges that the
utilities may have undertaken projects at certain coal-fired generation plants
in violation of the Clean Air Act. The Environmental Protection Agency is
seeking penalties and the installation of additional pollution-control equipment
at these plants.

As a continuation of this initiative, the Environmental
Protection Agency requested, on December 14, 2000, that Wisconsin Public
Service provide information related to projects undertaken at its Pulliam and
Weston plants. This information was submitted on January 6, 2001. Wisconsin
Power and Light Company, the operator of units co-owned with Wisconsin Public
Service, also submitted information related to projects undertaken at the
Columbia and Edgewater plants.

The Sunbury plant, acquired by WPS Power Development
in November 1999, currently purchases emission allowances to comply with
air regulations. Additional technology may be required by 2003 in order to
comply with nitrogen oxide standards. Expenditures for this technology could be
significant.

Kewaunee Nuclear Power Plant

On September 29, 1998, Wisconsin Public Service and
Madison Gas and Electric Company entered into an agreement pursuant to
which Wisconsin Public Service will acquire Madison Gas and Electric's 17.8%
share of the Kewaunee plant. This agreement, the closing of which is contingent
upon Nuclear Regulatory Commission approval and steam generator replacement
scheduled for the fall of 2001, will result in Wisconsin Public Service's
ownership interest in the Kewaunee plant increasing to 59%.

On January 1, 2001, Wisconsin Public Service's
administrative employees at the Kewaunee plant transferred to Nuclear Management
Company, LLC. As a result of these employees leaving the Wisconsin Public
Service benefit plans, a curtailment loss of $8.7 million was experienced.
The majority of the curtailment loss was deferred as a regulatory asset. A
settlement gain is anticipated in 2001 as withdrawals are made. The majority of
the settlement gain will be recorded as a regulatory liability.

Wisconsin Public Service anticipates a significant
increase in Kewaunee operating costs in 2001 due to expenditures related to
Nuclear Regulatory Commission compliance requirements and is seeking regulatory
approval to defer all incremental costs for recovery in the next rate
proceeding.

IMPACT OF INFLATION

Our financial statements are prepared in accordance with
accounting principles generally accepted in the United States and report
operating results in terms of historic cost. The statements provide a
reasonable, objective, and quantifiable statement of financial results; but they
do not evaluate the impact of inflation. Under rate treatment prescribed by
utility regulatory commissions, Wisconsin Public Service's and Upper Peninsula
Power's projected operating costs are recoverable in revenues. Because rate
forecasting assumes inflation, most of the inflationary effects on normal
operating costs are recoverable in rates. However, in these forecasts, Wisconsin
Public Service and Upper Peninsula Power are only allowed to recover the
historic cost of plant via depreciation.

RESULTS OF OPERATIONS - WISCONSIN PUBLIC SERVICE
CORPORATION

Wisconsin Public Service Corporation is a regulated
electric and gas utility. Electric operations accounted for approximately 69% of
2000 revenues, while gas operations contributed 31% to 2000 revenues.

2000 Compared with 1999

Overview

Wisconsin Public Service's 2000 and 1999 results of
operations are shown in the following chart:

|Wisconsin Public Service's Results (Millions) | 2000   | 1999   | Change
|--------------------------------------------- | ------ | ------ | ------
|                                              |        |        |       
|Operating revenues                            | $840.5 | $719.4 | 17%   
|Net income                                    | 70.4   | 67.1   | 5%    

Net income from electric utility operations was
$58.2 million in 2000 compared with $54.1 million in 1999. Net income
from gas utility operations was $11.6 million in 2000 and
$11.2 million in 1999. The primary reason for higher utility net income was
a Wisconsin retail electric rate increase and increased gas sales volumes as the
result of winter weather that was 8% colder in 2000 than in 1999.

Electric Utility Operations

Wisconsin Public Service's electric utility margin
increased $27.4 million, or 8%, primarily due to a 4.6% Wisconsin retail
electric rate increase which became effective on January 1, 2000. This rate
increase was primarily intended to recover additional fuel and purchased power
costs for the year. The 2000 electric rate increase also took into account the
expected gain on the sale of utility assets which is discussed under "Other
Electric and Gas Utility Expenses/Income."

|Electric Utility Results (Thousands) | 2000       | 1999       | 1998      
|------------------------------------ | ---------- | ---------- | ----------
|                                     |            |            |           
|Revenues                             | $575,951   | $527,922   | $487,340  
|Fuel and purchased power             | 191,148    | 170,560    | 152,783   
|Margin                               | $384,803   | $357,362   | $334,557  
|                                     |            |            |           
|Sales in kilowatt-hours              | 12,406,917 | 11,920,148 | 11,600,164

Electric utility revenues increased $48.0 million, or
9%, due to a 4% increase in overall sales volume coupled with the Wisconsin
retail electric rate increase. Sales volumes increased in spite of summer
weather that was 31% cooler in 2000 than in 1999.

Fuel expense increased $15.4 million, or 14%, due to
increased production at Wisconsin Public Service's fossil-fueled and
combustion turbine generation plants. In addition, the average cost of
generation at the combustion turbine plants increased 90% largely as a result of
a higher unit cost of natural gas. Generation costs at the Kewaunee Nuclear
Power Plant decreased 14% in 2000 due to its scheduled outage for refueling and
maintenance in the second quarter of 2000. A similar outage did not occur in
1999. The Kewaunee plant was off-line beginning April 22, 2000 and returned to
power on June 2, 2000. During the scheduled outage, nuclear generation was
replaced with additional fossil fuel and combustion turbine generation and
additional purchased power. Wisconsin Public Service is the operator and 41.2%
owner of the Kewaunee plant. Purchased power expense decreased
$5.2 million, however, largely due to a 5% decrease in the cost per
kilowatt-hour of power purchases made by Wisconsin Public Service in 2000
compared with 1999.

The Public Service Commission of Wisconsin allows
Wisconsin Public Service to adjust prospectively the amount billed to
Wisconsin retail customers for fuel and purchased power if costs fall outside a
specified range. Wisconsin Public Service is required to file an
application to adjust rates either higher or lower when costs are plus or minus
2% from forecasted costs on an annualized basis. Annual 2000 fuel costs at
December 31, 2000 were within this 2% window and, accordingly, no
adjustment was initiated.

Gas Utility Operations

Wisconsin Public Service's gas utility margin increased
$5.4 million, or 7%, in 2000. This increase was primarily due to an
increase in therm sales.

|Gas Utility Results (Thousands) | 2000     | 1999     | 1998    
|------------------------------- | -------- | -------- | --------
|                                |          |          |         
|Revenues                        | $264,519 | $191,521 | $165,111
|Purchase costs                  | 185,143  | 117,582  | 104,608 
|Margin                          | $ 79,376 | $ 73,939 | $ 60,503
|                                |          |          |         
|Sales in therms                 | 701,094  | 662,615  | 608,029 

Winter weather was a factor for gas operations in 2000.
Weather was 8% colder in 2000 than in 1999; however, weather was 2% warmer than
normal in 2000. Gas revenues increased $73.0 million, or 38%, as the result
of a 43% increase in the average unit cost of natural gas coupled with a 6%
increase in overall therm sales.

Gas purchase costs increased $67.6 million, or 57%.
This increase resulted from a higher average unit cost of natural gas and higher
gas volumes purchased of 10%. The higher unit cost of natural gas is reflected
in both revenues and gas purchases, thus having little impact on margin.

Under current regulatory practice, the Public Service
Commission of Wisconsin and the Michigan Public Service Commission allow
Wisconsin Public Service to pass changes in the cost of gas on to customers
through a purchased gas adjustment clause.

Other Electric and Gas Utility Expenses/Income

Utility operation and maintenance expenses increased
$20.6 million. Electric utility operation and maintenance expenses
increased $16.6 million primarily due to costs associated with the
scheduled outage and other maintenance activities at the Kewaunee plant.

Higher earnings of $6.2 million on the Kewaunee plant's
nuclear decommissioning fund resulted in increased other income in 2000. Due to
regulatory practices, this higher income was offset by increased depreciation
and decommissioning expense. Other income also included a gain of
$3.8 million on the sale of a combustion turbine which Wisconsin Public
Service constructed for another Wisconsin utility. The Public Service Commission
of Wisconsin considered this gain in the Wisconsin retail electric rate
adjustment which was effective January 1, 2000.

1999 Compared with 1998

Overview

Wisconsin Public Service's 1999 and 1998 results of
operations are shown in the following chart:

|Wisconsin Public Service's Results (Millions) | 1999   | 1998   | Change
|--------------------------------------------- | ------ | ------ | ------
|                                              |        |        |       
|Operating revenues                            | $719.4 | $652.5 | 10%   
|Net income                                    | 67.1   | 54.1   | 24%   

Net income from electric utility operations was
$54.1 million in 1999 and $47.0 million in 1998. Net income from gas
utility operations was $11.2 million in 1999 and $5.9 million in 1998.
The primary reasons for higher utility net income were increased sales
volumes coupled with the implementation of new Wisconsin retail electric and gas
rates.

Electric Utility Operations

The electric utility margin increased $22.8 million
in 1999 due to increased sales volumes coupled with the January 15, 1999
implementation of new Wisconsin retail electric rates. The Public Service
Commission of Wisconsin authorized a 6.3% increase in electric rates.

Electric utility revenues increased $40.6 million
primarily due to the electric rate increase. A 3% increase in overall
kilowatt-hour sales also contributed to higher electric revenues. Included in
1998 electric revenues, but not in 1999 electric revenues, were surcharge
revenues of $3.8 million related to the recovery of the deferred costs for
the Kewaunee plant's 1997 steam generator repairs.

Fuel expense increased $2.7 million as a result of
increased generation requirements at the combustion turbine and nuclear
generation plants in 1999. Partially offsetting this factor was a decrease in
production at the coal-fired generation plants as a result of both scheduled and
unscheduled maintenance activities.

Purchased power requirements increased $15.1 million
primarily due to additional purchase requirements. Purchase requirements
increased 20% due to the lack of production at its coal-fired generation plants
during the time they were off-line for maintenance in 1999. In addition, the
cost of purchases was 13% higher in 1999 than in 1998.

Annual 1999 fuel costs at December 31, 1999 were
within the 2% fuel window and, accordingly, no adjustment was made to electric
rates for 1999 fuel costs.

Gas Utility Operations

The gas utility margin increased $13.4 million in
1999. This increase was primarily due to the implementation of a
Public Service Commission of Wisconsin rate order which authorized a 5.1%
increase in Wisconsin retail gas rates and to an increase in therm sales.

Gas operating revenues increased $26.4 million. This
increase was due to the implementation of new Wisconsin retail gas rates and a
9% increase in overall therm sales as a result of colder weather in 1999.
Although the winter weather was 11% colder in 1999 than in 1998, it was still 8%
warmer than normal.

Gas utility revenues in 1998 were reduced by
$7.5 million for refunds from ANR Pipeline Company which were passed
on to Wisconsin Public Service's customers. Gas purchase costs in 1998 were
likewise reduced as this $7.5 million refund was credited to gas expense.

Gas purchase costs increased $13.0 million due to
increased sales and to a higher unit cost of natural gas.

Other Electric and Gas Utility Expenses/Income

Utility operating expenses increased $12.6 million
primarily due to higher customer service expenses of $5.1 million related
to conservation expenditures, and higher pension costs of $3.4 million due
to a change in the assumptions used to calculate this expense. Also contributing
to increased operating expenses were higher medical benefit expenses of
$1.2 million and higher electric distribution expenses of
$1.2 million.

Maintenance expense increased $7.2 million primarily
due to additional costs of $8.0 million at the coal-fired generation plants
and $1.6 million at the other power generation plants for both scheduled
and unscheduled maintenance activities. Offsetting these costs was a decrease in
maintenance expense of $8.5 million at the Kewaunee plant. A scheduled
refueling outage at the Kewaunee plant in 1998 caused 1998 nuclear maintenance
expenses to be higher. In addition, $3.8 million in deferred costs for the
Kewaunee plant's 1997 steam generator repairs were recognized in 1998.
Maintenance of overhead distribution lines increased $4.7 million in 1999
due to additional tree trimming, line clearance, and storm damage repairs.

Overview of Other Nonutility Operations

A one-time dividend of $0.5 million was received in
1999 related to a land sale from an investment. This dividend represented a one
cent per share increase to earnings for 1999.

BALANCE SHEET - WISCONSIN PUBLIC SERVICE

2000 Compared With 1999

Net utility plant increased $45.9 million as the
result of general business growth, implementation of the automated meter reading
system, and additional funding and favorable returns in the nuclear
decommissioning trusts. Customer and other receivables increased
$21.1 million as the result of additional sales volumes. The higher unit
cost of natural gas experienced, especially in December of 2000, also
contributed to the increased receivables balance. Likewise, accrued utility
revenues increased $20.7 million and accounts payable increased
$44.1 million largely due to the additional sales volumes and the higher
unit cost of natural gas. Commercial paper increased $20.0 million largely
to finance capital needs.

FINANCIAL CONDITION - WISCONSIN PUBLIC SERVICE

Investments and Financing

Special common stock dividends of $50.0 million were
paid by Wisconsin Public Service to WPS Resources in 2000. Equity infusions
of $75.0 million were made by WPS Resources to Wisconsin Public
Service in 2000. The special dividends and equity infusions allowed Wisconsin
Public Service's average equity capitalization and its capitalization ratio for
ratemaking to remain near target levels as established by the Public Service
Commission of Wisconsin in its 1999 rate order.

Cash requirements exceeded internally generated funds by
$44.6 million in 2000. Short-term borrowings through commercial paper
increased $20.0 million in addition to the net equity infusions. Pretax
interest coverage was 4.40 times for the 12 months ended December 31,
2000. See the table below for Wisconsin Public Service's credit ratings.

|Credit Ratings                       | Standard & Poor's | Moody's
|------------------------------------ | ----------------- | -------
|                                     |                   |        
|Wisconsin Public Service Corporation |                   |        
|Bonds                                | AA+               | Aa1    
|Preferred stock                      | AA                | aa2    
|Commercial paper                     | A1+               | P1     

We normally use internally-generated funds and short-term
borrowing to satisfy most of our capital requirements. We may periodically issue
additional long-term debt to reduce short-term debt and to maintain desired
capitalization ratios. Equity infusions will be made as necessary to maintain
the equity capitalization ratio as allowed by the Public Service Commission of
Wisconsin in its recent rate proceeding.

The specific forms of financing, amounts, and timing will
depend on the availability of projects, market conditions, and other factors.
However, up to $150.0 million of fading lien bonds may be issued in 2001.

Wisconsin Public Service makes large investments in
capital assets. Construction expenditures are expected to be approximately
$486.0 million in the aggregate for the 2001 through 2003 period. This
includes expenditures for the replacement of the Kewaunee plant's steam
generators. In addition, other capital requirements for the three-year period
include contributions of approximately $7.8 million to the Kewaunee plant's
decommissioning trust fund.

Regulatory

On December 21, 2000, Wisconsin Public Service
received an order from the Public Service Commission of Wisconsin authorizing a
5.4% increase in retail electric rates and a 1.5% increase in retail gas rates
for 2001. A 12.1% return on equity was approved. The new rates were implemented
on January 1, 2001. The Public Service Commission of Wisconsin did not
approve a 2002 rate reopener but acknowledged that pursuant to statutes,
Wisconsin Public Service may request a reopener at any time.

Merger with Wisconsin Fuel and Light Company

On July 13, 2000, WPS Resources signed a merger
agreement with Wisconsin Fuel and Light Company. Under the agreement,
Wisconsin Fuel and Light shareholders will receive 1.73 shares of
WPS Resources' common stock for each share of Wisconsin Fuel and
Light's common stock. The exchange ratio will be adjusted if, at the time of
closing the transaction, the market price of WPS Resources' common stock
exceeds $33.96 per share or is less than $27.79 per share. The market price
is defined as the average of the closing price of WPS Resources' common
stock during the ten trading days ending three days immediately preceding the
effective date of the merger. The merger remains subject to (i) approval by the
Public Service Commission of Wisconsin; (ii) receipt of an opinion of
counsel that the exchange of stock qualifies as a tax-free transaction; and
(iii) the satisfaction of various other conditions.

A majority of the outstanding preferred shareholders of
Wisconsin Public Service approved the merger, allowing Wisconsin Fuel and Light
to merge into Wisconsin Public Service. A majority of the Wisconsin Fuel and
Light shareholders approved the merger in November of 2000. The merger will be
accounted for under the purchase method of accounting and is expected to be
completed in April of 2001.

ITEM 7A. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risks

WPS Resources has potential market risk exposure
related to interest rate risk, equity return and principal preservation risk,
and commodity price risk. There currently is no material exposure due to foreign
currency risk. Our exposure to interest rate risk relates primarily to ongoing
short-term financing and a long-term debt financing at WPS Power
Development. Exposure to equity return and principal preservation risk results
from various debt and equity security investments in our employee benefit and
nuclear decommissioning trust funds. Exposure to commodity price risk exists
with respect to the price of coal, uranium, electricity, natural gas, and fuel
oil. WPS Resources has risk management policies in place to monitor and
assist in controlling these market risks and uses derivative instruments to
manage some of these exposures.

Interest Rate Risk

WPS Resources generally issues commercial paper,
subject to varying interest rates, for short-term borrowing. The fluctuation of
interest rates will have an impact on interest expense related to this
short-term borrowing. We manage interest rate exposure by continually monitoring
the effects of market changes on interest rates. The amount of commercial paper
outstanding was $119.6 million and $79.9 million at December 31, 2000 and
December 31 1999, respectively. A change in interest rates of 100 basis points
would have affected annual interest expense on this commercial paper by
approximately $1.2 million in 2000 and $0.8 million in 1999. Wisconsin Public
Service also has outstanding a $10 million master note that is subject to a
variable interest rate adjusted daily. WPS Resources is not exposed to
changes in interest rates on most of its long-term debt until such debt matures
and may be refinanced at the then applicable rates.

Sunbury Generation, LLC, a nonregulated subsidiary of
WPS Resources, had an outstanding balance of approximately $79.1 million on
a variable rate nonrecourse loan at December 31, 2000. Sunbury Generation
utilized interest rate swaps to fix the interest rate for 50% of the loan
beginning in May of 2000 and continuing through March of 2018. In January of
2001, Sunbury Generation used an interest rate swap to fix the interest rate for
the remaining 50% of the loan beginning April 1, 2001. A change in interest
rates of 100 basis points would have affected annual interest expense in
2000 on the loan by approximately $0.4 million. WPS Resources
currently does not employ any other interest rate swaps.

Mid-American Power, LLC, a nonregulated subsidiary of
WPS Resources, currently has an outstanding balance of approximately $11
million on a variable rate loan. The interest rate is adjusted quarterly. A
change in interest rates of 100 basis points would have affected annual interest
expense on the loan by approximately $0.1 million.

Equity Return and Principal Preservation Risk

WPS Resources currently funds its liabilities related
to employee benefits and nuclear decommissioning through various trust funds.
These funds are managed by various investment managers and hold investments in
debt and equity securities. Changes in the market value of these investments can
have an impact on the future expenses related to these liabilities. The pension
liability is adequately funded and under normal market conditions future
required contributions to the plan are unlikely. Changes in the market value of
investments related to other employee benefits or nuclear decommissioning could
impact future contributions. WPS Resources monitors the trust fund
portfolios by benchmarking the performance of the investments against certain
security indices. All decommissioning costs and most of the employee benefit
costs relate to WPS Resources' regulated utilities. The majority of these
costs are reflected in customers' rates, mitigating any equity return and
principal preservation risk on these

Commodity Price Risk

Exposure to commodity price risk exists with respect to
the price of coal, uranium, electricity, natural gas, and fuel oil.
WPS Resources and its affiliates employ established policies and procedures
to reduce the market risk associated with changing commodity prices, including
utilizing various types of commodity and financial instruments. Management
actively monitors commodity price risk exposure across all of its subsidiaries.
WPS Resources engages in minimal price risk management activities at its
regulated utility operations because much of this risk exposure is recoverable
through customer rates.

WPS Energy Services uses derivative financial and
commodity instruments to reduce market risk associated with the changing prices
of natural gas and electricity sold at firm prices to customers. WPS Energy
Services also uses derivatives to manage market risk associated with anticipated
energy purchases, as well as trading activities. Derivatives may include, but
are not limited to, futures and forward contracts, basis swap agreements, and
call and put options. For purposes of risk management disclosure, all of
WPS Energy Services' activities including all of its energy commodity
purchase and sale contracts and its gas in storage inventory are classified as
trading.

WPS Power Development uses derivative commodity
instruments in connection with the sale of its generated power. For purposes of
risk management disclosure, all of WPS Power Development's activities are
classified as non-trading.

Value-at-Risk

To measure commodity price risk exposure,
WPS Resources performs a value-at-risk (VaR) analysis on third party
exposures.

VaR is used to describe a probabilistic approach to
managing the exposure to market risk. The VaR amount represents the potential
change in fair value that could occur from adverse changes in market factors
within a given confidence level if an instrument or portfolio is held for a
specified time period. VaR models are relatively sophisticated. However, the
quantitative risk information is limited by the parameters established in
creating the model. The instruments being utilized may have features that may
trigger a potential loss in excess of the calculated amount if the changes in
the underlying commodity price exceed the confidence level of the model used.
VaR is not necessarily indicative of actual results which may occur.

At WPS Resources, VaR is estimated using a
delta-normal approximation based on a one-day holding period and a 95%
confidence level. The delta-normal approximation is based on the assumption that
changes in the value of the portfolio over short time periods, such as one day,
are normally distributed. It does not take into account higher order risk
exposures, so it may not provide a good approximation of the risk in a portfolio
with substantial option positions. We utilized a delta-normal approximation
because our portfolio has limited exposure to optionality. In 2000, we switched
from a tabular presentation of quantitative risk disclosure to a VaR
presentation, because we believe VaR is a more effective risk monitoring tool.

Our VaR amount for trading activities was calculated to be
$0.4 million at December 31, 2000 compared to $0.3 million at
December 31, 1999. Our VaR amount for non-trading activities was calculated to
be $4.4 million and $1.2 million at December 31, 2000 and
December 31, 1999, respectively. However, a significant portion of the VaR
amount related to non-trading activities is mitigated by WPS Power
Development's generating capabilities, which are excluded from the VaR
calculation.

For the year ended December 31, 2000, the average, high,
and low VaR amounts for trading activities were $0.3 million,
$0.4 million, and $0.2 million, respectively. The average, high, and
low VaR amounts over the same reporting period for non-trading activities were
$2.2 million, $4.4 million, and $1.1 million, respectively. The
average, high, and low amounts were computed using the VaR amounts at the
beginning of the reporting period and the four quarter-end amounts.

Foreign Currency Exchange Rate Risk

We are exposed to foreign currency risk primarily through
the purchase and sale of gas in Canada by one of our nonregulated subsidiaries.
This risk is currently immaterial. As the exposure increases, we expect to hedge
a majority of the risk through the use of various financial instruments.



|ITEM 8.
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                    
|---------------------------------------------------------------------------------------------
|                                                                                             
|WPS RESOURCES CORPORATION                                                                    
|                                                                                             
|A.
      CONSOLIDATED STATEMENTS OF INCOME, COMPREHENSIVE INCOME, AND RETAINED
      EARNINGS
|                                                                                             
|                                                                                             
|                                                                                             
|Year Ended December 31 (Thousands,
      except share amounts)                               
|                                                                                             
|Operating revenues                                                                           
|Electric utility                                                                             
|Gas utility                                                                                  
|Nonregulated gas                                                                             
|Nonregulated electric and other                                                              
|Total operating revenues                                                                     
|                                                                                             
|Operating expenses                                                                           
|Utility electric production fuels                                                            
|Utility purchased power                                                                      
|Utility gas purchased for resale                                                             
|Nonregulated gas cost of sales                                                               
|Nonregulated electric and other cost of
      sales                                          
|Other operating expenses                                                                     
|Maintenance                                                                                  
|Depreciation and decommissioning                                                             
|Taxes other than income                                                                      
|Total operating expenses                                                                     
|Operating income                                                                             
|Other income                                                                                 
|Allowance for equity funds used during
      construction                                    
|Other, net                                                                                   
|Total other income                                                                           
|Income before interest expense                                                               
|Interest on long-term debt                                                                   
|Other interest                                                                               
|Allowance for borrowed funds used during
      construction                                  
|Total interest expense                                                                       
|                                                                                             
|Distributions - preferred securities of
      subsidiary trust                               
|                                                                                             
|Income before income taxes                                                                   
|Income taxes                                                                                 
|Minority interest                                                                            
|Preferred stock dividends of subsidiaries                                                    
|Net income                                                                                   
|                                                                                             
|Other comprehensive income                                                                   
|                                                                                             
|Comprehensive income                                                                         
|                                                                                             
|Retained earnings at beginning of year                                                       
|Cash dividends on common stock                                                               
|Retained earnings at end of year                                                             
|                                                                                             
|Average shares of common stock                                                               
|Basic and diluted earnings per average
      share of common stock                           
|Dividend per share of common stock                                                           
|                                                                                             
|                                                                                             
|The
      accompanying notes are an integral part of these statements.                       



|ITEM 8.
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA             
|----------------------------------------------------------------------
|                                                                      
|WPS RESOURCES CORPORATION                                             
|                                                                      
|B. CONSOLIDATED BALANCE SHEETS                                        
|                                                                      
|                                                                      
|                                                                      
|Assets                                                                
|At
      December 31(Thousands)                                       
|Utility
      plant                                                   
|Electric                                                              
|Gas                                                                   
|Property
      under capital lease                                    
|Total                                                                 
|Less -
      Accumulated depreciation and decommissioning             
|Net                                                                   
|Nuclear
      decommissioning trusts                                  
|Construction
      in progress                                        
|Nuclear
      fuel, less accumulated amortization                     
|Net
      utility plant                                               
|                                                                      
|Current
      assets                                                  
|Cash and
      equivalents                                            
|Customer
      and other receivables, net of reserves of $4,205       
|at December 31, 2000 and $2,676 at December 31, 1999                  
|Accrued
      utility revenues                                        
|Fossil
      fuel, at average cost                                    
|Gas in
      storage                                                  
|Materials
      and supplies, at average cost                         
|Assets
      from risk management activities                          
|Prepayments
      and other                                           
|Total
      current assets                                            
|                                                                      
|Regulatory
      assets                                               
|Nonutility
      and nonregulated plant, net of accumulated           
|depreciation of $13,341 at December 31, 2000                          
|and $8,189 at December 31, 1999                                       
|Pension
      assets                                                  
|Investments
      and other assets                                    
|Total                                                                 
|                                                                      
|                                                                      
|ITEM 8.
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA             
|                                                                      
|WPS RESOURCES CORPORATION                                             
|                                                                      
|B. CONSOLIDATED BALANCE SHEETS (CONTINUED)                            
|                                                                      
|                                                                      
|                                                                      
|Capitalization
      and Liabilities                                  
|At
      December 31 (Thousands)                                      
|Capitalization                                                        
|Common
      stock equity                                             
|Preferred
      stock of subsidiary with no mandatory redemption      
|Company-obligated
      mandatorily redeemable trust preferred        
|securities
      of subsidiary trust holding solely WPS Resources     
|7.00%
      subordinated debentures                                   
|Long-term
      capital lease obligation                              
|Long-term
      debt                                                  
|Total
      capitalization                                            
|                                                                      
|Current
      liabilities                                             
|Current
      portion of long-term debt and capital lease obligation  
|Notes
      payable                                                   
|Commercial
      paper                                                
|Accounts
      payable                                                
|Accrued
      taxes                                                   
|Accrued
      interest                                                
|Liabilities
      from risk management activities                     
|Other                                                                 
|Total
      current liabilities                                       
|                                                                      
|Long-term
      liabilities and deferred credits                      
|Accumulated
      deferred income taxes                               
|Accumulated
      deferred investment tax credits                     
|Regulatory
      liabilities                                          
|Environmental
      remediation liabilities                           
|Postretirement
      liabilities                                      
|Other
      long-term liabilities                                     
|Total
      long-term liabilities and deferred credits                
|                                                                      
|Commitments
      and contingencies (See Note 13)                     
|Total                                                                 
|                                                                      
|                                                                      
|The
      accompanying notes are an integral part of these statements.



|ITEM 8.
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                 |                  |                 
|------------------------------------------------------------------------- | ---------------- | ----------------
|                                                                          |                  |                 
|WPS RESOURCES CORPORATION                                                 |                  |                 
|                                                                          |                  |                 
|C. CONSOLIDATED STATEMENTS OF CAPITALIZATION                             
|                                                                          |                  |                 
|At
      December 31(Thousands, except share amounts)                     | 2000             | 1999            
|                                                                          |                  |                 
|Common
      stock equity                                                 |                  |                 
|Common
      stock, $1 par value, 100,000,000 shares authorized;          |                  |                 
|26,851,034 shares outstanding at December 31, 2000 and                    |                  |                 
|26,851,045 shares outstanding at December 31, 1999                        | $  
      26,851 | $  
      26,851
|Premium
      on capital stock                                            | 172,451          | 172,108         
|Retained
      earnings                                                   | 354,756          | 341,701         
|Treasury
      stock, 336,385 shares at average                           |                  |                 
|cost of $24.23 at December 31, 2000                                       | (8,149)          | -               
|Shares
      in deferred compensation trust; 105,179 shares at an average |                 
|cost of $29.78 per share at December 31, 2000 and 71,097 shares           |                 
|at an average cost of $30.04 per share at December 31, 1999               | (3,132)          | (2,136)         
|Employee
      Stock Ownership Plan loan guarantees                       | -                | (2,224)         
|Total
      common stock equity                                           | 542,777          | 536,300         
|                                                                          |                  |                 
|Preferred
      stock - Wisconsin Public Service Corporation              |                  |                 
|Cumulative,
      $100 par value, 1,000,000 shares authorized;            |                  |                 
|with no mandatory redemption                                              |                  |                 
|Shares Outstanding                                                        |                  |                 
|Series     2000     1999                                                  |                  |                 
|5.00%    131,720   131,950                                                | 13,172           | 13,195          
|5.04%     29,980    29,980                                                | 2,998            | 2,998           
|5.08%     49,980    50,000                                                | 4,998            | 5,000           
|6.76%    150,000   150,000                                                | 15,000           | 15,000          
|6.88%    150,000   150,000                                                | 15,000           | 15,000          
|Total
      preferred stock of subsidiary with no mandatory redemption    | 51,168           | 51,193          
|                                                                          |                  |                 
|Company-obligated
      mandatorily redeemable trust                      |                  |                 
|preferred securities of subsidiary trust                                  |                  |                 
|holding solely WPS Resources 7.00% subordinated debentures                | 50,000           | 50,000          
|                                                                          |                  |                 
|Capital
      lease obligation - Wisconsin Public Service Corporation     | 73,585           | 74,004          
|Less
      current portion                                                | (630)            | (419)           
|Long-term
      capital lease obligation                                  | 72,955           | 73,585          
|                                                                          |                  |                 
|Long-term
      debt                                                      |                  |                 
|First
      mortgage bonds - Wisconsin Public Service Corporation         |                  |                 
|Series     Year Due                                                       |                  |                 
|7.30%      2002                                                           | 50,000           | 50,000          
|6.80%      2003                                                           | 50,000           | 50,000          
|6-1/8%     2005                                                           | 9,075            | 9,075           
|6.90%      2013                                                           | 22,000           | 22,000          
|8.80%      2021                                                           | 53,100           | 53,100          
|7-1/8%     2023                                                           | 50,000           | 50,000          
|6.08%      2028                                                           | 50,000           | 50,000          
|First
      mortgage bonds - Upper Peninsula Power Company                |                  |                 
|Series     Year Due                                                       |                  |                 
|7.94%      2003                                                           | 15,000           | 15,000          
|10.0%      2008                                                           | 3,000            | 4,800           
|9.32%      2021                                                           | 18,000           | 18,000          
|Unsecured
      senior notes - WPS Resources Corporation                  |                  |                 
|Series     Year Due                                                       |                  |                 
|7.00%      2009                                                           | 150,000          | 150,000         
|Employee
      Stock Ownership Plan loan guarantees                       | -                | 2,224           
|Term
      loans - nonrecourse, secured by nonregulated assets            | 102,742          | 24,000          
|Notes
      payable to bank, secured by nonregulated plant                | 19,342           | 11,136          
|Senior
      secured note                                                 | 3,542            | 3,722           
|Other
      long-term debt                                                | 119              | 142             
|Total                                                                     | 595,920          | 513,199         
|Unamortized
      discount and premium on bonds and debt securities, net  | (1,222)          | (1,339)         
|Total
      long-term debt                                                | 594,698          | 511,860         
|Less
      current portion                                                | (7,681)          | (943)           
|Net
      long-term debt                                                  | 587,017          | 510,917         
|Total
      capitalization                                                | $1,303,917       | $1,221,995      
|                                                                          |                  |                 
|The
      accompanying notes are an integral part of these statements.    |                 



|ITEM 8.
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                 
|----------------------------------------------------------------------------------------------------------
|                                                                                                          
|WPS RESOURCES CORPORATION                                                                                 
|                                                                                                          
|D. CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                  
|                                                                                                          
|Year
      Ended December 31 (Thousands)                                                                  
|                                                                                                          
|Cash
      flows from operating activities                                                                
|Net
      income                                                                                          
|                                                                                                          
|Adjustments
      to reconcile net income to net cash from                                                
|operating activities                                                                                      
|Depreciation
      and decommissioning                                                                    
|Gain on
      nuclear decommissioning trust                                                               
|Amortization
      of nuclear fuel and other                                                              
|Deferred
      income taxes                                                                               
|Investment
      tax credit restored                                                                      
|Allowance
      for equity funds used during construction                                                 
|Gain on
      sale of property                                                                            
|Pension
      income                                                                                      
|Postretirement
      funding                                                                              
|Unrealized
      gains and losses on nonregulated energy contracts                                        
|Other,
      net                                                                                          
|                                                                                                          
|Changes
      in                                                                                          
|Customer
      and other receivables                                                                      
|Accrued
      utility revenues                                                                            
|Fossil
      fuel inventory                                                                               
|Gas in
      storage                                                                                      
|Miscellaneous
      assets                                                                                
|Accounts
      payable                                                                                    
|Accrued
      taxes                                                                                       
|Miscellaneous
      current and accrued liabilities                                                       
|Net cash
      from operating activities                                                                  
|                                                                                                          
|Cash
      flows from (used for) investing activities                                                     
|Construction
      of utility plant and nuclear fuel expenditures                                         
|Construction
      of nonregulated plant                                                                  
|Purchase
      of other property and equipment                                                            
|Decommissioning
      funding                                                                             
|Proceeds
      from sale of property                                                                      
|Other                                                                                                     
|Net cash
      used for investing activities                                                              
|                                                                                                          
|Cash
      flows from (used for) financing activities                                                     
|Issuance
      of notes payable                                                                           
|Redemption
      of notes payable                                                                         
|Issuance
      of other long-term debt                                                                    
|Redemption
      of other long-term debt                                                                  
|Issuance
      of mandatorily redeemable trust preferred securities                                       
|Issuance
      of commercial paper                                                                        
|Redemption
      of commercial paper                                                                      
|Cash
      dividends on common stock                                                                      
|Issuance
      of common stock                                                                            
|Purchase
      of treasury and deferred compensation shares                                               
|Other                                                                                                     
|Net cash
      from financing activities                                                                  
|Net
      increase (decrease) in cash and equivalents                                                     
|Cash and
      equivalents at beginning of year                                                           
|Cash and
      equivalents at end of year                                                                 
|                                                                                                          
|Cash
      paid during year for                                                                           
|Interest,
      less amount capitalized                                                                   
|Income
      taxes                                                                                        
|Preferred
      stock dividends of subsidiary                                                             
|                                                                                                          
|Supplemental
      schedule of noncash investing and financing activities for 1999 only
      (thousands):
|1. A
      capital lease obligation of $74,130 was incurred when Wisconsin Public
      Service           
|entered into a long-term lease agreement for utility plant assets.                                        
|2. Net
      cash surrender value of a key executive life insurance policy of $11,787                     
|was transferred from Wisconsin Public Service to WPS Resources.                                           
|3.
      Nonutility assets of $121 were transferred from Wisconsin Public Service
      to WPS Resources. 
|                                                                                                          
|The
      accompanying notes are an integral part of these statements.                                    
|                                                                                                          



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

WPS RESOURCES CORPORATION

E. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Nature of Operations--WPS Resources
Corporation is a holding company. Our primary wholly-owned subsidiary,
Wisconsin Public Service Corporation, is an electric and gas utility.
Wisconsin Public Service supplies and distributes electric power and
natural gas in its franchised service territory in northeastern Wisconsin and an
adjacent portion of the Upper Peninsula of Michigan. Our other wholly-owned
utility subsidiary, Upper Peninsula Power Company, is an electric utility.
Upper Peninsula Power supplies and distributes electric energy in the
Upper Peninsula of Michigan. Another wholly-owned subsidiary,
WPS Resources Capital Corporation, is a holding company for our
nonregulated businesses, WPS Energy Services, Inc. and WPS Power Development,
Inc. WPS Energy Services is a diversified energy supply and services
company. WPS Power Development develops, owns and operates, through its own
subsidiaries, electric generation projects.

The term "utility" refers to the regulated
activities of Wisconsin Public Service and Upper Peninsula Power,
while the term "nonutility" refers to the activities of
Wisconsin Public Service and Upper Peninsula Power which are not
regulated. The term "nonregulated" refers to activities other than
those of Wisconsin Public Service and Upper Peninsula Power.

(b) Use of Estimates--We prepare our financial
statements in conformity with accounting principles generally accepted in the
United States. We make estimates and assumptions that affect reported amounts.
These estimates and assumptions include assets, liabilities, the disclosure of
contingent assets and liabilities at the date of the financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Actual results may differ from those estimates.

(c) Accounting for Price Risk Management--Effective
January 1, 2001, WPS Resources adopted the Financial Accounting Standards
Board's Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities," (Statement No. 133) as
amended by Statements of Financial Accounting Standards Nos. 137 and 138.
Statement No. 133 normalizes accounting and financial reporting standards for
forward contracts, futures, options, and other derivative instruments, and
related hedging activities. Statement No. 133 requires, in part, that we
report all derivative instruments on the balance sheet as assets or liabilities
at their fair value. The treatment of subsequent changes in fair value are
recorded currently in earnings unless certain hedge accounting criteria are met
or if the derivatives are subject to the provisions of Statement of Financial
Accounting Standards No. 71, "Accounting for the Effects of Certain Types
of Regulation" (Statement 71).

Although all of WPS Resources' subsidiaries adopted
Statement No. 133, instruments utilized by WPS Energy Services in connection
with price risk management activities are accounted for using the mark-to-market
method of accounting as prescribed by the Emerging Issues Task Force Issue
98-10, "Accounting for Contracts Involved in Energy Trading and Risk
Management Activities." In the first quarter of 2000, WPS Energy Services
classified all of its unaffiliated energy contracts and gas in storage as
trading operations. Under the mark-to-market method of accounting, the
unrealized gains and losses on these contracts are recorded as Price Risk
Management Assets and Liabilities on the balance sheet. Changes in the market
value of these assets and liabilities and gas in storage are recorded in
operations on the income statement and result primarily from changes in the
valuation of the portfolio of contracts, newly originated transactions, and the
timing of settlement relative to the receipt of cash for certain contracts. The
market prices used to value these transactions reflect management's best
estimate considering various factors including exchange and over-the-counter
market closing quotations, time value, and volatility factors underlying the
commitments. Contracts entered into with other subsidiaries at WPS Resources and
the related hedged commitments are not classified as trading contracts and
continue to be accounted for at cost.

(d) Income Taxes--We account for income taxes using
the liability method as prescribed by Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes." Under the
liability method, deferred income tax liabilities are established for all
temporary differences in the book and tax basis of assets and liabilities based
upon enacted tax laws and rates applicable to the periods in which the taxes
become payable.

(e) Property, Plant, and Equipment--Utility
plant is stated at the original cost of construction which includes an allowance
for funds used during construction. The cost of renewals and betterments of
units of property (as distinguished from minor items of property) is capitalized
as an addition to the utility plant accounts. Except for land, no gain or loss
is recognized in connection with ordinary retirements of utility property units.
The utility charges the cost of units of property retired, sold, or otherwise
disposed of, plus removal, less salvage, to the accumulated provision for
depreciation. Maintenance, repair, replacement, and renewal costs associated
with items not qualifying as units of property are part of operating expenses.

We capitalize certain costs related to software developed
or obtained for internal use and amortize those costs to operating expense over
the estimated useful life of the related software.

Nonutility property interest capitalization takes place
during construction and gain and loss recognition occurs in connection with
retirements. Nonregulated property, plant, and equipment are capitalized at
original cost. Significant additions or improvements that extend asset lives are
capitalized, while repairs and maintenance are charged to expense as incurred.

(f) Allowance for Funds Used During Construction--Approximately
50% of Wisconsin Public Service's retail jurisdictional construction
work in progress expenditures are subject to allowance for funds used during
construction. The Public Service Commission of Wisconsin is allowing accrual of
allowance for funds used during construction on 100% of the Kewaunee plant's
steam generator replacement project. For 2000, Wisconsin Public Service's retail
rate allowance for funds used during construction was approximately 10.6%.
Historically, Upper Peninsula Power's construction work in progress
expenditures have not been subject to retail jurisdictional allowance for funds
used during construction due to their small dollar amounts. We expect larger
projects to occur in the future that will be subject to retail jurisdictional
allowance for funds used during construction.

Wholesale jurisdictional electric allowance for funds used
during construction is recorded on Wisconsin Public Service's and
Upper Peninsula Power's construction work in progress at debt and equity
percentages specified in the Federal Energy Regulatory Commission's Uniform
System of Accounts. For 2000, the allowance for funds used during construction
wholesale rate was approximately 7.4% for Wisconsin Public Service and 8.9%
for Upper Peninsula Power.

(g) Leases--Wisconsin Public Service
accounts for the agreement to purchase power from De Pere Energy Center, LLC as
a capital lease. On June 14, 1999, Wisconsin Public Service
recorded a leased asset and a lease obligation equal to the present value of the
minimum lease payments. The leased asset is depreciated over 25 years, the life
of the contract.

(h) Depreciation--We record straight-line
depreciation expense over the estimated useful life of utility property and
include amounts for estimated removal and salvage. Depreciation rates for
Wisconsin Public Service were approved by the Public Service
Commission of Wisconsin effective January 1, 1999.

Depreciation rates for Upper Peninsula Power were
approved by the Michigan Public Service Commission on January 1,
1994 and remain in effect through 2001. A new depreciation study will be filed
with the Michigan Public Service Commission in early 2001. A final rate
order is expected in 2001.

Depreciation for the Kewaunee plant is being accrued based
on a 1997 Public Service Commission of Wisconsin order. The order allows for
full cost recovery by the end of 2002. The Public Service Commission of
Wisconsin rate order that became effective on January 1, 2001 includes
a change in the methodology for the Kewaunee plant after the steam generators
have been replaced. Under this order, existing net plant at
January 1, 2001 will be recovered using a straight-line remaining life
method, with full recovery to be realized by the end of April 2010. The
cost of new steam generators, estimated to be in service by November 2001,
will be recovered over an 8-1/2 year period using the sum-of-years-digits method
of depreciation.

Depreciation expense also includes accruals for nuclear
decommissioning. These accruals are not included in the annual composite rates
shown below. An explanation of this item is included in Note 1(j).



|Annual Utility Composite Depreciation Rates | 2000  | 1999  | 1998 
|------------------------------------------- | ----- | ----- | -----
|                                            |       |       |      
|Electric                                    | 3.52% | 3.46% | 3.52%
|Gas                                         | 3.26% | 3.23% | 3.26%

Other nonutility property is depreciated using
straight-line depreciation. Asset lives range from 3 to 20 years.

Our nonregulated subsidiaries compute depreciation using
the straight-line method over the following estimated useful lives:

> Structures
>         15 to 40 yearsEquipment
>         5 to 35 yearsVehicles
>         5 yearsLeasehold improvements
>         Life of the lease

(i) Nuclear Fuel--The quantity of heat produced for
the generation of electric energy by the Kewaunee plant is the basis for the
amortization of the costs of nuclear fuel to electric production fuel expense
including an amount for ultimate disposal. Recovery of these costs occurs
currently from customers in rates. The ultimate storage of fuel is handled by
the United States Department of Energy pursuant to a contract required by the
Nuclear Waste Act of 1982. The Department of Energy receives quarterly payments
for the storage of fuel based on generation. Spent nuclear fuel storage space is
provided at the Kewaunee plant on an interim basis. Expenses associated with
interim spent fuel storage at the Kewaunee plant are recognized as current
operating costs. With minor plant modifications planned for 2001, the Kewaunee
plant should have sufficient fuel storage capacity until the end of its useful
life in 2013. At December 31, 2000, the accumulated provision for
nuclear fuel totaled $167.7 million compared with $162.7 million at
December 31, 1999.

(j) Nuclear Decommissioning--Our share of nuclear
decommissioning costs to date has been accrued over the estimated service life
of the Kewaunee plant, recovered currently from customers in rates, and
deposited in external trusts. Such costs totaled $8.9 million in 2000, $9.2
million in 1999, and $17.2 million in 1998. The 1998-2000 funding levels
used a recovery period ending in 2002 as described in Note 1(h),
Depreciation. Beginning in 2001, the Public Service Commission of Wisconsin has
authorized use of a funding period ending in 2010. As a result of this
extension, the contributions for 2001 will be $2.6 million.

Based on the standard cost escalation assumptions required
by a July 1994 Public Service Commission of Wisconsin order, the
undiscounted amount of Wisconsin Public Service's share of decommissioning costs
forecasted to be expended between the years 2013 and 2043 is $675.2 million
under the revised funding plan which became effective in 1999. In developing the
funding plan, a long-term after-tax earnings rate of approximately 5.3% was
assumed.

Wisconsin Public Service's share of the Kewaunee plant
decommissioning based on a 41.2% ownership interest is estimated to be $211.4
million in current dollars based on a site-specific study. The study, which was
performed in 1998, uses immediate dismantlement as the method of decommissioning
and assumes shutdown in 2013. As of December 31, 2000, the market
value of the external nuclear decommissioning trusts totaled
$207.2 million.

Depreciation expense includes future decommissioning costs
collected in customer rates and an offsetting charge for earnings from external
trusts. As of December 31, 2000, the accumulated provision for
depreciation and decommissioning included accumulated provisions for
decommissioning totaling $207.2 million. Realized trust earnings totaled
$10.8 million in 2000, $4.6 million in 1999, and $3.3 million in
1998. Unrealized gains, net of tax, in external trusts are reflected as an
increase to the decommissioning reserve, since decommissioning expense will be
recognized as the gains are realized, in accordance with regulatory
requirements.

Investments in the nuclear decommissioning trusts are
recorded at market value. Investments at December 31, 2000, consisted
of 51.4% equity securities and 48.6% fixed income securities. The investments
classified as utility plant are presented net of related income tax effects on
unrealized gains and represent the amount of assets available to accomplish
decommissioning. The nonqualified trust investments designated to pay income
taxes when unrealized gains become realized are classified as other assets. An
offsetting regulatory liability reflects the expected reduction in future rates
as unrealized gains in the nonqualified trust are realized. Information
regarding the cost and market value of the external nuclear decommissioning
trusts is set forth below:

|2000 Security Type (Thousands) | Market   | Cost     | Unrealized Gain (Loss)
|------------------------------ | -------- | -------- | ----------------------
|                               |          |          |                       
|Fixed income                   | $100,702 | $ 98,898 | $ 1,804               
|Equity                         | 106,522  | 61,959   | 44,563                
|Balance at December 31         | $207,224 | $160,857 | $46,367               
|                               |          |          |                       
|                               |          |          |                       
|1999 Security Type (Thousands) | Market   | Cost     | Unrealized Gain (Loss)
|                               |          |          |                       
|Fixed income                   | $ 77,156 | $ 78,394 | $(1,238)              
|Equity                         | 120,896  | 62,861   | 58,035                
|Balance at December 31         | $198,052 | $141,255 | $56,797               

(k) Cash and Equivalents--We consider short-term
investments with an original maturity of three months or less to be cash
equivalents.

(l) Revenue and Customer Receivables--We accrue
estimated amounts for electric and gas service rendered but not billed.
Approximately 8.8% of our total revenue is from companies in the paper products
industry.

Wisconsin Public Service and
Upper Peninsula Power use automatic fuel adjustment clauses for the Federal
Energy Regulatory Commission wholesale-electric and the
Michigan Public Service Commission retail-electric portions of the
business.

The Wisconsin retail-electric portion of
Wisconsin Public Service's business uses a "cost variance
range" approach, based on a specific estimated fuel cost for the forecast
year. If Wisconsin Public Service's actual fuel costs fall outside this
range, a hearing can be held resulting in an adjustment to future rates.

The Public Service Commission of Wisconsin has
approved a modified one-for-one gas cost recovery plan for
Wisconsin Public Service. Implementation of the modified one-for-one
gas cost recovery plan began in January 1999. This plan allows
Wisconsin Public Service to pass changes in the cost of gas purchased
from its suppliers on to system gas customers, subject to regulatory review.

Billings to Upper Peninsula Power's customers under
the Michigan Public Service Commission's jurisdiction include base rate
charges and a power supply cost recovery factor. Upper Peninsula Power
receives Michigan Public Service Commission approval each year to
recover projected power supply costs by establishment of power supply cost
recovery factors. Annually the Michigan Public Service Commission reconciles
these factors to actual costs and permits 100% recovery of allowed power supply
costs. Upper Peninsula Power defers any over or under recovery on the
balance sheet. The deferrals are relieved with additional billings or refunds.

Wisconsin Public Service and
Upper Peninsula Power are required to provide service and grant credit to
customers within their service territories. The two companies continually review
their customers' credit-worthiness and obtain deposits or refund deposits
accordingly. Wisconsin Public Service is precluded from discontinuing
service to residential customers during certain periods of the year.

At WPS Power Development, electric power revenues related
to fixed-price contracts are recognized at the lower of amounts billable under
the contract or an amount equal to volume of the capacity made available or the
energy delivered during the period multiplied by the estimated average revenue
per kilowatt-hour per the term of the contract.

Under floating-price contracts, electric power revenues
are recognized when capacity is provided or energy is delivered.

WPS Energy Services accrues revenues in the month that
energy is delivered and/or services are rendered.

(m) Gas in Storage--Average cost is used to value
gas in storage used for non-trading activities. Gas in storage used for trading
activities is recorded at fair market value. Approximately 67% of the total gas
in storage at December 31, 2000 was recorded at fair market value. In 1999,
none of the gas in storage was recorded at fair market value.

(n) Regulatory Assets and Liabilities--Wisconsin Public Service
and Upper Peninsula Power are subject to the provisions of Statement No.
71. Regulatory assets represent probable future revenue associated with certain
incurred costs. Revenue will be recovered from customers through the ratemaking
process. Regulatory liabilities represent amounts that are refundable in future
customer rates.

(o) Stock Options--We issue options under our stock
option plans and account for them using the intrinsic value based method
described in Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" (Opinion 25). The intrinsic value based method
only records compensation expense for the excess of the quoted market price of
the stock at the measurement date over the amount an employee must pay to
acquire the stock.

(p) Investments and Other Assets--WPS Resources
follows cost, equity, and consolidation methods of accounting for its
investments. Unless circumstances are present that lead to a different
conclusion, the following criteria are used to determine which method of
accounting is applied. The cost method of accounting is used for investments
where WPS Resources owns less than 20% of the voting stock of the company,
unless other evidence indicates we have significant influence over the operating
and financial policies of the investee. If more than 20% of the voting stock is
owned, we use the equity method of accounting. This decision is made presuming
we have significant influence. When we own 50% or more of the voting stock, the
subsidiary is consolidated into our financial statements, unless our control is
temporary. All significant intercompany transactions and accounts are
eliminated. If a minority owner's equity is reduced to zero, it is our policy to
record 100% of the subsidiary's losses until the minority owner makes capital
contributions or commitments to fund its share of the operating costs.

(q) Reclassifications--We reclassified certain
prior year financial statement amounts to conform to current year presentation.

(r) Retirement of Debt--Amortization of gains or
losses resulting from the settlement of long-term utility debt obligations
occurred concurrently with rate recovery as required by regulators.

NOTE 2--JOINTLY-OWNED UTILITY FACILITIES

Information regarding Wisconsin Public Service's
share of major jointly-owned electric-generating facilities in service at
December 31, 2000 is set forth below:

|(Thousands, except for percentages) | West 
      Marinette Unit No. 33 | Columbia Energy Center | Edgewater Unit No. 4 | Kewaunee Nuclear Power Plant
|----------------------------------- | --------------------------------- | ---------------------- | -------------------- | ----------------------------
|                                    |                                   |                        |                      |                             
|Ownership                           | 68.0%                             | 31.8%                  | 31.8%                | 41.2%                       
|Plant capacity (Megawatts)          | 77.0                              | 322.6                  | 105.8                | 205.2                       
|Utility plant in service            | $17,497                           | $118,663               | $22,695              | $135,861                    
|Accumulated depreciation            | $ 5,169                           | $ 73,141               | $14,697              | $115,131                    
|In-service date                     | 1993                              | 1975 and 1978          | 1969                 | 1974                        

Wisconsin Public Service's share of direct
expenses for these plants is included in the corresponding operating expenses in
the consolidated statements of income. Wisconsin Public Service has
supplied its own financing for all jointly-owned projects.

Our ownership of the Kewaunee plant could change based on
commitments we have made. See Note 13 for additional information.

NOTE 3--CAPITAL LEASE

In June 1999, Phase I of a 25-year power purchase
contract with De Pere Energy Center, LLC became effective. We have
accounted for the contract as a capital lease. In Phase I, an initial asset and
corresponding obligation were recorded at $74.1 million. The asset and
obligation represent the present value of minimum lease payments. Excluded from
the payments are executory costs such as insurance, maintenance, and taxes. When
the contract expires in 2024, Wisconsin Public Service may renew the
contract for two additional five-year periods with proper notice. We are
amortizing the leased asset on a straight-line basis over the original 25-year
term of the contract. The following is a schedule of future minimum lease
payments, excluding executory costs, under the De Pere Energy Center
capital lease:

|Year ending December 31(Thousands)          |         
|------------------------------------------- | --------
|                                            |         
|2001                                        | $  5,048
|2002                                        | 5,234   
|2003                                        | 5,426   
|2004                                        | 5,625   
|2005                                        | 5,831   
|Later years                                 | 102,550 
|Net minimum lease payments                  | 129,714 
|Less: Amount representing interest          | (56,129)
|Present value of net minimum lease payments | $ 73,585



NOTE 4--SHORT-TERM DEBT AND LINES OF CREDIT

To provide short-term borrowing flexibility and security
for commercial paper outstanding, WPS Resources and its subsidiaries
maintain bank lines of credit. These lines of credit require a fee.

The information in the table below relates to short-term
debt and lines of credit for the years indicated:

|(Thousands, except for
      percentages)                   | 2000     | 1999     | 1998    
|----------------------------------------------------------- | -------- | -------- | --------
|As of end of year                                           |          |          |         
|Commercial paper outstanding                                | $119,557 | $ 79,855 | $ 47,590
|Average discount rate on outstanding
      commercial paper | 6.63%    | 6.55%    | 4.84%   
|Short-term notes payable outstanding                        | $ 10,000 | $ 10,403 | $ 12,703
|Average interest rate on short-term
      notes payable     | 6.73%    | 8.10%    | 5.88%   
|Available (unused) lines of credit                          | $132,000 | $127,000 | $ 62,102
|                                                            |          |          |         
|For the year                                                |          |          |         
|Maximum amount of short-term debt                           | $139,548 | $218,545 | $102,033
|Average amount of short-term debt                           | $ 65,558 | $ 68,620 | $ 50,939
|Average interest rate on short-term
      debt              | 6.39%    | 5.34%    | 5.93%   



NOTE 5--LONG-TERM DEBT

At our utility subsidiaries, plant assets secure first
mortgage bonds. In December 1998, Wisconsin Public Service issued
$50.0 million of 6.08% senior notes due in 2028 secured by a pledge of first
mortgage bonds. The 1998 notes become unsecured if
Wisconsin Public Service retires all of its outstanding first mortgage
bonds.

WPS Resources and Wisconsin Public Service
are not required to make sinking fund payments on outstanding debt.
Upper Peninsula Power, however, is required to make bond sinking fund
payments for its outstanding first mortgage bonds.

A schedule of all debt payments, including bond maturities
and excluding capital lease payments, for WPS Resources is as follows:



|Year ending December 31(Thousands) |         
|---------------------------------- | --------
|                                   |         
|2001                               | $  7,681
|2002                               | 55,834  
|2003                               | 82,118  
|2004                               | 15,104  
|2005                               | 16,403  
|Future years                       | 418,780 
|Total payments                     | $595,920



WPS New England Generation, Inc. and
WPS Canada Generation, Inc., subsidiaries of WPS Power Development,
make semiannual installment payments on a $24.0 million nonrecourse term loan
obtained in 1999 for financing the purchase of generation assets in Maine. The
assets purchased secure the loan.

In April 2000, Sunbury Generation, LLC, an indirect
subsidiary of WPS Power Development, obtained $83.7 million of nonrecourse
financing that is secured by the Sunbury generation plant. Quarterly payments
will be made in relation to this financing.

As of December 31, 2000, WPS Power Development
drew $11.0 million against its revolving credit note of $12.5 million,
which is secured by the assets of the Stoneman plant. The note, which is
guaranteed by WPS Resources, is due in 2003.



NOTE 6--COMPANY-OBLIGATED MANDATORILY REDEEMABLE TRUST PREFERRED SECURITIES

On July 30, 1998, WPSR Capital Trust I, a Delaware
business trust, issued $50.0 million of trust preferred securities to the
public. WPS Resources owns all of the outstanding trust common securities
of the Trust, and the only asset of the Trust is $51.5 million of subordinated
debentures that we issued. The debentures are due on June 30, 2038 and bear
interest at 7% per year. The terms and interest payments on the debentures
correspond to the terms and distributions on the trust preferred securities. We
have consolidated the preferred securities of the Trust into our financial
statements. We reflect the interest payments on the debentures as
"Distributions - preferred securities of subsidiary trust." These
payments are tax deductible by WPS Resources.

We may defer interest payments on the debentures for up to
20 consecutive quarters. This would require the deferral of distributions
on the trust preferred securities as well. If we would defer interest payments,
interest and distributions would continue to accrue. We would also accrue
compounding interest on the deferred amounts. We may redeem all or part of the
debentures after July 30, 2003. This would require the Trust to redeem an
equal amount of trust securities at face value plus any accrued interest and
unpaid distributions. We entered into a limited guarantee of payment of
distributions, redemption payments, and liquidation payments with respect to the
trust preferred securities. This guarantee, together with our obligations under
the debentures, and under other related documents, provides a full and
unconditional guarantee by us of amounts due on the outstanding trust preferred
securities.

NOTE 7--COMMON EQUITY

During 2000, we purchased common stock on the open market
to meet annual requirements of our Stock Investment Plan. We also purchased
stock on the open market in connection with our stock-based employee benefit
plans. Effective January 2001, we began issuing new stock for our Stock
Investment Plan and for some of our stock-based employee benefit plans.

In December 1996, we adopted a Shareholder Rights
Plan. The plan is designed to enhance the ability of the Board of Directors to
protect shareholders and the company if efforts are made to gain control of our
company in a manner that is not in our best interests or the best interests of
our shareholders. The plan gives our existing shareholders, under certain
circumstances, the right to purchase stock at a discounted price. The rights
expire on December 11, 2006.

At December 31, 2000, we had $347.6 million of
retained earnings available for dividends.

Earnings per share is computed by dividing net income
available for the period by the weighted average number of shares of common
stock outstanding during the period. Diluted earnings per share is computed by
dividing net income available for the period by the weighted average number of
shares of common stock outstanding during the period adjusted for the exercise
and/or conversion of all potentially dilutive securities. Such dilutive items
include in-the-money stock options and deferred compensation plan shares. The
calculation of diluted earnings per share for the years shown excludes deferred
compensation plan shares that had an anti-dilutive effect. The following table
reconciles the computation of basic and diluted earnings per share:

|Reconciliation of Earnings Per Share(Thousands, except share amounts) |         |         |        
|--------------------------------------------------------------------- | ------- | ------- | -------
|2000                                                                  | 1999    | 1998   
|Net income                                                            | $66,993 | $59,565 | $46,631
|                                                                      |         |         |        
|Basic weighted average shares                                         | 26,463  | 26,644  | 26,511 
|Incremental issuable shares                                           | 11      | -       | 10     
|Diluted weighted average shares                                       | 26,474  | 26,644  | 26,521 
|                                                                      |         |         |        
|Basic earnings per share                                              | $2.53   | $2.24   | $1.76  
|Diluted earnings per share                                            | $2.53   | $2.24   | $1.76  



NOTE 8--STOCK OPTION PLANS

In 1999, shareholders approved the WPS Resources
Corporation 1999 Stock Option Plan for certain management personnel. In December
1999, the Board of Directors approved the WPS Resources Corporation 1999
Non-Employee Directors Stock Option Plan. Opinion 25 and related interpretations
are used to account for these plans. Accordingly, no compensation costs have
been recognized for these plans in 2000 or 1999. Had compensation cost been
determined consistent with Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 123 "Accounting for Stock Based
Compensation," net income and earnings per share would have been reduced to
the pro forma amounts indicated below:



|(Thousands, except per share amounts) | 2000    | 1999    | 1998   
|------------------------------------- | ------- | ------- | -------
|Net income                            |         |         |        
|As reported                           | $66,993 | $59,565 | $46,631
|Pro forma                             | 66,830  | 56,450  | 46,631 
|                                      |         |         |        
|Basic earnings per share              |         |         |        
|As reported                           | $2.53   | $2.24   | $1.76  
|Pro forma                             | 2.53    | 2.23    | 1.76   
|                                      |         |         |        
|Diluted earnings per share            |         |         |        
|As reported                           | $2.53   | $2.24   | $1.76  
|Pro forma                             | 2.52    | 2.23    | 1.76   

Under the provisions of the WPS Resources Corporation 1999
Stock Option Plan (Employee Plan), the number of options granted may not exceed
1.5 million and no single employee can be granted options for more than 0.4
million shares during any five-year period. Options are granted by the
Compensation and Nominating Committee of the Board of Directors and may be
granted at any time. No options may be granted after
February 10, 2004, under this plan. All options have a ten-year life.
The exercise price of each option is equal to the fair market value of the stock
on the date the option was granted. Options were granted on May 6, 1999,
March 13, 2000, and December 14, 2000 having exercise prices of
$29.875, $23.1875, and $34.75, respectively. One-fourth of the options granted
will become vested and exercisable each year following the year of grant on the
anniversary date of the grant.

Under the provisions of the WPS Resources Corporation 1999
Non-Employee Directors Stock Option Plan (Director Plan), the number of options
granted under the plan may not exceed 100,000. Options are granted at the
discretion of the Board of Directors. No options may be granted under this plan
after December 31, 2008. All options have a ten-year life, but may not
be exercised until one year after the date of grant. Options granted under this
plan are immediately vested. The exercise price of each option is equal to the
fair market value of the stock on the date the options were granted. Options
were granted on December 9, 1999 and February 10, 2000, with
exercise prices of $25.4375 and $25.6875, respectively.

The number of shares subject to each option plan and each
outstanding option, and option exercise prices are subject to adjustment in the
event of any stock split, stock dividend, or other transaction affecting our
outstanding common stock.

The fair value of each option grant is estimated on the
date of grant using the Black-Scholes option pricing model assuming:

|                         | WPS Resources
      2000Stock Option Plan | WPS Resources 2000
      Non-Employee DirectorsStock Option Plan
|------------------------ | ----------------------------------------- | ----------------------------------------------------------------
|                         |                                           |                                                                 
|Annual dividend yield    |                                           |                                                                 
|May 6, 1999              | 6.63%                                     |                                                                 
|December 31, 1999        |                                           | 7.94%                                                           
|March 13, 2000           | 8.71%                                     |                                                                 
|December 14, 2000        | 5.93%                                     |                                                                 
|                         |                                           |                                                                 
|Expected volatility      |                                           |                                                                 
|May 6, 1999              | 14.00%                                    |                                                                 
|December 31, 1999        |                                           | 14.90%                                                          
|March 13, 2000           | 15.50%                                    |                                                                 
|December 14, 2000        | 20.40%                                    |                                                                 
|                         |                                           |                                                                 
|Risk-free interest rate  |                                           |                                                                 
|May 6, 1999              | 5.52%                                     |                                                                 
|December 31, 1999        |                                           | 6.14%                                                           
|March 13, 2000           | 6.36%                                     |                                                                 
|December 14, 2000        | 5.23%                                     |                                                                 
|                         |                                           |                                                                 
|Expected life (in years) | 10                                        | 10                                                              

A summary of the status of the stock option plans as of
December 31, 2000 is presented below:

|Options                                                        | Shares                  | Weighted-Average Exercise Price
|-------------------------------------------------------------- | ----------------------- | -------------------------------
|                                                               |                         |                                
|Options outstanding at beginning of year                       |                         |                                
|Employee plan                                                  | 478,000                 | $29.8750                       
|Director plan                                                  | 21,000                  | 25.4375                        
|Granted                                                        |                         |                                
|Employee plan                                                  | 244,416                 | 32.9997                        
|Director plan                                                  | 3,000                   | 25.6875                        
|Exercised                                                      | -                       | -                              
|Forfeited                                                      | -                       | -                              
|Outstanding at end of year                                     |                         |                                
|Employee plan                                                  | 722,416                 | 30.9322                        
|Director plan                                                  | 24,000                  | 25.4688                        
|Options exercisable at year-end                                |                         |                                
|Employee plan                                                  | 119,500                 | 29.8750                        
|Director plan                                                  | 21,000                  | 25.4375                        
|Weighted-average fair value of options granted during the year
|Employee plan
        Director plan                            | $3.87
            $1.08

A summary of the status of the stock option plans as of
December 31, 1999 is presented below:

|Options                                                        | Shares                  | Weighted-Average Exercise Price
|-------------------------------------------------------------- | ----------------------- | -------------------------------
|                                                               |                         |                                
|Options outstanding at beginning of year                       | -                       | $      -                       
|Granted                                                        |                         |                                
|Employee plan                                                  | 478,000                 | 29.8750                        
|Director plan                                                  | 21,000                  | 25.4375                        
|Exercised                                                      | -                       | -                              
|Forfeited                                                      | -                       | -                              
|Outstanding at end of year                                     |                         |                                
|Employee plan                                                  | 478,000                 | 29.8750                        
|Director plan                                                  | 21,000                  | 25.4375                        
|Options exercisable at year-end                                | -                       | -                              
|Weighted-average fair value of options granted during the year
|Employee plan
        Director plan                            | $2.04
            $1.38

The 722,416 options outstanding for the Employee Plan have
exercise prices between $23.1875 and $34.7500 and are summarized below:

|Options Outstanding |                                          |                                
|------------------- | ---------------------------------------- | -------------------------------
|Exerciseprices      | Options outstanding at December 31, 2000 | Weighted average exercise price
|                    |                                          |                                
|$23.1875            | 37,000                                   | $23.1875                       
|29.8750             | 478,000                                  | 29.8750                        
|34.7500             | 207,416                                  | 34.7500                        

The 119,500 stock options exercisable under the Employee
Plan all have an exercise price of $29.8750 and a remaining life of 9 years.

The Director Plan has 24,000 options outstanding at
year-end. All options have an exercise price of approximately $25.50 with a
remaining contractual life of approximately 9 years. A total of 21,000 of these
options are exercisable at year-end, with an exercise price of $25.4375 and a
remaining contractual life of 9 years.

NOTE 9--FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used to
estimate the fair value of each class of financial instruments for which it is
practicable to estimate such value:

Cash, Short-Term Investments, Energy Conservation Loans,
Notes Payable, and Outstanding Commercial Paper: The carrying amount
approximates fair value due to the short maturity of those investments and
obligations.

Nuclear Decommissioning Trusts: The value of nuclear
decommissioning trust investments is recorded at market value, net of taxes
payable on unrealized gains and losses.

Long-Term Debt, Preferred Stock, and Employee Stock
Ownership Plan Loan Guarantees: The fair value of long-term debt, preferred
stock, and Employee Stock Ownership Plan loan guarantees are estimated based on
the quoted market price for the same or similar issues or on the current rates
offered to WPS Resources for debt of the same remaining maturity.

The estimated fair values of our financial instruments as
of December 31 were:

|(Thousands)                                          | 2000            | 1999      
|---------------------------------------------------- | --------------- | ----------
|                                                     | Carrying Amount | Fair Value
|                                                     |                 |           
|Cash and cash equivalents                            | $  2,789        | $ 12,789  
|Energy conservation loans                            | 3,509           | 3,509     
|Nuclear decommissioning trusts -
      utility plant | 207,224         | 207,224   
|Nuclear decommissioning trusts -
      other assets  | 18,338          | 18,338    
|Notes payable                                        | 10,000          | 10,000    
|Commercial paper                                     | 119,557         | 119,557   
|Employee Stock Ownership Plan
      loan guarantees  | -               | -         
|Trust preferred securities                           | 50,000          | 49,000    
|Long-term debt                                       | 595,920         | 601,912   
|Preferred stock                                      | 51,168          | 41,902    
|Electric and gas commodity
      instruments         | 16,987          | 16,987    



NOTE 10--PRICE RISK MANAGEMENT ACTIVITIES

In June 1998, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities." Statement of Financial
Accounting Standards No. 138, "Accounting for Certain Derivative
Instruments and Certain Hedging Activities" amended this statement in June
15, 2000. WPS Resources adopted the statements as of
January 1, 2001. Statement No. 133 requires that every derivative
instrument be recorded on the balance sheet as either an asset or liability
measured at its fair value and that changes in the derivative's fair value be
recognized currently in earnings unless specific hedge accounting criteria are
met.

WPS Resources has concluded that at its utility
subsidiaries and WPS Power Development the majority of its contracts for
the purchase, sale, and storage of natural gas, electricity, coal, and nuclear
fuel do not meet the definition of a derivative. Therefore, the majority of such
contracts at January 1, 2001 are not subject to the accounting
requirements of the new statement. Wisconsin Public Service has entered into a
limited number of commodity contracts to service its customers that meet the
definition of a derivative under Statement No. 133. Most of these contracts
are gas purchase agreements with minimal fixed commodity price components.
Management believes any gains or losses resulting from the eventual settlement
of the gas purchase agreements will be collected from or refunded to customers
under our utilities' tariffs with the Public Service Commission of Wisconsin and
Michigan Public Service Commission. The derivative amounts to be recorded as a
result of these contracts will be offset with a corresponding regulatory asset
and liability pursuant to Statement No. 71. A limited number of other financial
derivative instruments are used to mitigate commodity price risk related to fuel
oil held in inventory. WPS Resources has designated these instruments as fair
value hedges of the inventory. Future changes in the fair market values of these
derivatives will be recorded directly in earnings with offsetting changes in the
value of the inventory also recorded directly in earnings. As of January 1,
2001, we have recorded a derivative asset and a regulatory liability of
approximately $17 million related to our utility subsidiaries. The cumulative
effect on income was not significant.

WPS Energy Services uses derivative financial and
commodity instruments to reduce market risk associated with changing prices of
natural gas and electricity sold at firm prices to customers. WPS Energy
Services also utilizes derivatives to manage market risk associated with
anticipated energy purchases as well as trading activities. Derivatives may
include futures and forward contracts, price swap agreements, and call and put
options. As a result of changes in strategic focus that resulted in a shift in
customer mix, WPS Energy Services in applying Emerging Issues Task Force Issue
98-10, "Accounting for Contracts Involved in Energy Trading and Risk
Management Activities" (Issue 98-10) concluded in the first quarter of 2000
that all of its activities should be classified as trading activities. Issue
98-10 requires energy trading contracts to be recorded at fair value on the
balance sheet, with changes in fair value included in earnings. Because WPS
Energy Services marks to market its energy trading contracts in accordance with
Issue 98-10 and does not anticipate designating any derivative contracts as
hedges for accounting purposes, the adoption of Statement No. 133 is not
expected to have a material impact at WPS Energy Services.



NOTE 11--EMPLOYEE BENEFIT PLANS

WPS Resources has non-contributory retirement plans
covering substantially all employees under which the company may make annual
contributions to an irrevocable trust. We established the plans to provide
retired employees, who meet conditions relating to age and length of service,
with a monthly payment. Wisconsin Public Service administers and maintains the
plans. These plans are fully funded and no contributions were made to them in
2000, 1999, or 1998.

WPS Resources also currently offers medical, dental, and
life insurance benefits to employees and their dependents. We expense these
items for active employees as incurred. We fund benefits for retirees through
irrevocable trusts as allowed for income tax purposes. Wisconsin Public Service
and Upper Peninsula Power expensed and recovered through customer rates the net
periodic benefit cost. Our nonregulated subsidiaries expensed funded amounts.
Our non-administrative plan is a collectively bargained plan and, therefore, is
tax exempt. The investments in the trust covering administrative employees are
subject to federal unrelated business income taxes at a 39.6% tax rate.

All pension costs and postretirement plan costs are
accounted for under Statements of Financial Accounting Standards Nos. 87 and
106, "Employers' Accounting for Pensions" and "Employers'
Accounting for Postretirement Benefits Other Than Pensions," respectively.
The standards require the company to accrue the cost of these benefits as
expense over the period in which the employee renders service. The transition
obligation for current and future retirees is recognized over 20 years beginning
in 1993.

The following tables provide a reconciliation of the
changes in the plan's benefit obligations and fair value of assets over the
three one-year periods ending December 31, 2000, 1999, and 1998, and a
statement of the funded status as of December 31 for each year:

|(Thousands)                                                 | 2000      | 1999      | 1998     
|----------------------------------------------------------- | --------- | --------- | ---------
|                                                            |           |           |          
|Reconciliation of benefit obligation
      - pension       
|Obligation at January 1                                     | $396,651  | $399,364  | $350,669 
|Service cost                                                | 10,216    | 10,904    | 9,014    
|Interest cost                                               | 31,492    | 27,524    | 25,264   
|Plan amendments                                             | 56,552    | 3,956     | 5,762    
|Actuarial (gain) loss                                       | 2,224     | (31,515)  | 26,085   
|Acquisitions                                                | -         | 4,863     | -        
|Benefit payments                                            | (19,429)  | (18,445)  | (17,430) 
|Curtailments                                                | 7,182     | -         | -        
|Obligation at December 31                                   | $484,888  | $396,651  | $399,364 
|                                                            |           |           |          
|Reconciliation of fair value of plan
      assets - pension
|Fair value of plan assets at January
      1                | $654,251  | $610,483  | $537,756 
|Actual return on plan assets                                | 41,243    | 57,984    | 89,618   
|Employer contributions                                      | -         | -         | 539      
|Acquisitions                                                | -         | 4,229     | -        
|Benefit payments                                            | (19,429)  | (18,445)  | (17,430) 
|Fair value of plan assets at December
      31              | $676,065  | $654,251  | $610,483 
|                                                            |           |           |          
|Funded status at December 31                                | $191,177  | $257,599  | $211,119 
|Unrecognized transition (asset)
      obligation            | (6,097)   | (9,890)   | (13,467) 
|Unrecognized prior-service cost                             | 64,377    | 21,242    | 19,336   
|Unrecognized (gain) loss                                    | (186,465) | (204,057) | (156,972)
|Net prepaid benefit cost                                    | $ 62,992  | $ 64,894  | $ 60,016 
|                                                            |           |           |          
|(Thousands)                                                 | 2000      | 1999      | 1998     
|                                                           
|Reconciliation of benefit obligation
      - other         
|Obligation at January 1                                     | $135,211  | $138,815  | $127,705 
|Service cost                                                | 2,757     | 4,632     | 3,874    
|Interest cost                                               | 7,769     | 9,410     | 9,126    
|Plan amendments                                             | (16,755)  | -         | -        
|Actuarial (gain) loss                                       | (19,026)  | (13,835)  | 2,599    
|Acquisitions adjustments                                    | (1,323)   | 2,174     | -        
|Benefit payments                                            | (6,033)   | (5,985)   | (4,489)  
|Obligation at December 31                                   | $102,600  | $135,211  | $138,815 
|                                                            |           |           |          
|Reconciliation of fair value of plan
      assets - other  
|Fair value of plan assets at January
      1                | $149,742  | $139,841  | $121,930 
|Actual return on plan assets                                | 7,872     | 15,226    | 21,161   
|Employer contributions                                      | 715       | 660       | 1,239    
|Benefit payments                                            | (6,033)   | (5,985)   | (4,489)  
|Fair value of plan assets at December
      31              | $152,296  | $149,742  | $139,841 
|                                                            |           |           |          
|Funded status at December 31                                | $ 49,696  | $ 14,530  | $ 1,026  
|Unrecognized transition (asset)
      obligation            | 15,724    | 36,605    | 39,434   
|Unrecognized prior-service cost                             | (14,107)  | 3,935     | 4,259    
|Unrecognized (gain) loss                                    | (96,906)  | (104,989) | (87,011) 
|Net accrued benefit liability                               | $(45,593) | $(49,919) | $(42,292)





|(Thousands)                                  | 2000     | 1999     | 1998    
|-------------------------------------------- | -------- | -------- | --------
|                                             |          |          |         
|Net periodic benefit cost - pension          |          |          |         
|Service cost                                 | $ 10,216 | $ 10,904 | $  9,014
|Interest cost                                | 31,492   | 27,524   | 25,264  
|Expected return on plan assets               | (46,331) | (42,414) | (38,282)
|Amortization of transition asset             | (3,576)  | (3,576)  | (3,576) 
|Amortization of prior-service cost           | 4,661    | 2,050    | 1,950   
|Amortization of net loss                     | (2,688)  | -        | (507)   
|Net periodic benefit cost                    | $(6,226) | $(5,512) | $(6,137)
|Curtailment loss                             | 8,756    | -        | -       
|Regulatory asset offset                      | (8,121)  | -        | -       
|Net periodic benefit cost after curtailments | $(5,591) | $(5,512) | $(6,137)
|                                             |          |          |         
|Net periodic benefit cost - other            |          |          |         
|Service cost                                 | $  2,757 | $  4,632 | $  3,874
|Interest cost                                | 7,769    | 9,410    | 9,126   
|Expected return on plan assets               | (9,289)  | (8,302)  | (7,356) 
|Amortization of transition obligation        | 1,804    | 2,828    | 2,852   
|Amortization of prior-service cost           | (700)    | 324      | 324     
|Amortization of net gain                     | (4,646)  | (2,780)  | (2,692) 
|Net periodic benefit cost                    | $(2,305) | $ 6,112  | $ 6,128 



The assumptions used in measuring WPS Resources' benefit
obligation are shown in the following table:

|                                                               | 2000  | 1999  | 1998 
|-------------------------------------------------------------- | ----- | ----- | -----
|Weighted average assumptions as of
      December 31 - pension |       |       |      
|Discount rate                                                  | 7.50% | 7.50% | 6.75%
|Expected return on plan assets                                 | 8.75% | 8.75% | 8.75%
|Rate of compensation increase                                  | 5.50% | 5.50% | 5.50%
|                                                               |       |       |      
|Weighted average assumptions as of
      December 31 - other   |       |       |      
|Discount rate                                                  | 7.50% | 7.50% | 6.75%
|Expected return on plan assets                                 | 8.75% | 8.75% | 8.75%

For 2000, we assumed health care cost trend rates of 7%,
decreasing to 5% by the year 2006. Assumed health care cost trend rates have a
significant effect on the amounts reported for the health care plans. A 1%
change in assumed health care cost trend rates would have the following effects:

|(Thousands)                                                                                                                 | 1% Increase | 1% Decrease
|--------------------------------------------------------------------------------------------------------------------------- | ----------- | -----------
|                                                                                                                            |             |            
|Effect on total of service and interest cost
      components of net periodic postretirement
      health care benefit cost | $ 1,348     | $ (1,243)  
|Effect on the health care component of the
      accumulated postretirement benefit obligation                              | $14,364     | $(11,682)  

Wisconsin Public Service has an Employee Stock
Ownership Plan and Trust that held 1,868,859 shares of WPS Resources common
stock (market value of approximately $68.8 million) at December 31,
2000. The Employee Stock Ownership Plan also had a loan guaranteed by
Wisconsin Public Service and secured by common stock which was paid off in
June of 2000. The company had been paying principal and interest on the loan
using contributions from Wisconsin Public Service and dividends on our
common stock held by the Employee Stock Ownership Plan. The Employee Stock
Ownership Plan allocated shares to participants as the loan was repaid. Tax
benefits from dividends paid to the Employee Stock Ownership Plan are recognized
as a reduction in Wisconsin Public Service's cost of providing service
to customers. The Public Service Commission of Wisconsin has allowed
Wisconsin Public Service to include in cost of service an additional
employer contribution to the plan. The net effect of the tax benefits and of the
employer contribution is an approximately equal sharing of the tax benefits of
the program between customers and employees.

NOTE 12--INCOME TAXES

WPS Resources is refunding to customers taxes provided in
prior years at rates greater than current rates prospectively as the temporary
differences reverse. The regulatory liability for these refunds totaled
$25.2 million as of December 31, 2000 and $29.1 million as of
December 31, 1999, respectively.

We recognized a deferred tax asset of approximately $11.0
million for tax credits that will be carried forward to reduce the regular tax
liability in future years. In addition, as of December 31, 2000 and 1999,
we had the following significant temporary differences that created deferred tax
assets and liabilities:

|(Thousands)                               | 2000     | 1999    
|----------------------------------------- | -------- | --------
|                                          |          |         
|Deferred tax assets                       |          |         
|Plant related                             | $ 72,088 | $ 72,077
|Customer advances                         | 12,423   | 11,512  
|Capital losses/state net operating losses | 6,520    | 3,368   
|Deferred tax credit carry forward         | 11,016   | -       
|Environmental cleanup                     | 3,337    | 3,835   
|Employee benefits                         | 35,007   | 32,486  
|Other                                     | 1,677    | 5,131   
|Total                                     | $142,068 | $128,409
|                                          |          |         
|Deferred tax liabilities                  |          |         
|Plant related                             | $200,251 | $201,826
|Demand-side management expenditures       | 4,688    | 7,043   
|Employee benefits                         | 31,288   | 26,442  
|Other                                     | 6,304    | 4,190   
|Total                                     | $242,531 | $239,501
|                                          |          |         
|Net deferred tax liabilities              | $100,463 | $111,092

We are amortizing p

|(Thousands, except for
      percentages)                                     | 2000   | 1999     | 1998 
|----------------------------------------------------------------------------- | ------ | -------- | -----
|                                                                              | Rate   | Amount   | Rate 
|                                                                              |        |          |      
|Statutory federal income tax                                                  | 35.0%  | $26,637  | 35.0%
|State income taxes, net                                                       | 5.5    | 4,162    | 5.0  
|Investment tax credit restored                                                | (2.3)  | (1,785)  | (1.9)
|Rate
      difference on reversal of
        income tax temporary differences | (2.1)  | (1,584)  | (1.6)
|Dividends paid to  Employee Stock Ownership
      Plan                        | (0.9)  | (648)    | (1.5)
|Federal tax credits                                                           | (24.1) | (18,324) | (1.6)
|Other differences, net                                                        | (3.2)  | (2,453)  | (1.2)
|Effective income tax                                                          | 7.9%   | $ 6,005  | 32.2%
|                                                                              |        |          |      
|Current provision                                                             |        |          |      
|Federal                                                                       |        | $ 5,938  |      
|State                                                                         |        | 8,569    |      
|Total current provision                                                       |        | 14,507   |      
|Deferred benefit                                                              |        | (6,717)  |      
|Investment tax credit restored, net                                           |        | (1,785)  |      
|Total income tax expense                                                      |        | $ 6,005  |      



NOTE 13--COMMITMENTS AND CONTINGENCIES

Coal Contracts

To ensure a reliable, low-cost supply of coal,
Wisconsin Public Service entered into a long-term contract that has
take-or-pay obligations totaling $89.2 million from 2001 through 2016. The
obligations are subject to force majeure provisions which provide
Wisconsin Public Service other options if the specified coal does not
meet emission limits that may be mandated in future legislation. We believe that
any amounts paid under the take-or-pay obligations described above would be
considered costs of service subject to recovery in customer rates.

Purchased Power

Wisconsin Public Service has several take-or-pay
contracts for either capacity or energy related to purchased power. These
contracts total $87.2 million through April 2003. We expect to recover
these costs in future customer rates.

Long-Term Power Supply

In November 1995, Wisconsin Public Service
signed a 25-year agreement to purchase power from De Pere Energy Center, LLC, an
independent power producer, that built a cogeneration facility and is selling
electrical power to Wisconsin Public Service. Phase I of the project went
into operation in June of 1999 and is accounted for as a capital lease.
Phase II is currently projected to be operational within five years of the start
of Phase I. When Phase II becomes operational, Wisconsin Public Service
will record an additional utility plant asset of approximately
$80.0 million. See Note 3, Capital Lease, for more detail.

Natural Gas Costs

Wisconsin Public Service has natural gas supply
and transportation contracts that require total estimated demand payments of
$72.9 million through October 2010.

Wisconsin Public Service will acquire the natural gas
supply and transportation contracts from Wisconsin Fuel and Light Company when
the acquisition of Wisconsin Fuel and Light is completed. We expect the
acquisition to be completed in April of 2001. Because Wisconsin Public Service
and Wisconsin Fuel and Light hold similar natural gas supply and
transportation contracts, the acquisition of the Wisconsin Fuel and Light
contracts is expected to have no significant impact on Wisconsin Public
Service's cost of natural gas.

Nuclear Liability

The Price Anderson Act ensures that funds will be
available to pay for public liability claims arising out of a nuclear incident.
This Act may require Wisconsin Public Service to pay up to a maximum of
$36.3 million per incident. The payments will not exceed $4.1 million
per incident in a given calendar year. These amounts represent
Wisconsin Public Service's 41.2% ownership in the Kewaunee plant.

After Wisconsin Public Service acquires Madison Gas and
Electric's share of the Kewaunee plant, our ownership will be 59%; and thus our
liabilities will increase accordingly. The maximum liability per incident will
be $52.0 million with payments not to exceed $5.9 million per incident in a
given calendar year.

Nuclear Plant Operation

On September 29, 1998,
Wisconsin Public Service and Madison Gas and Electric entered into an
agreement pursuant to which Wisconsin Public Service will acquire, at
Madison Gas and Electric's book value on the date of acquisition, Madison Gas
and Electric's 17.8% share of the Kewaunee plant including Madison Gas and
Electric's decommissioning trust assets held in their qualified trust fund.
Wisconsin Public Service will also assume Madison Gas and Electric's share of
the decommissioning obligation to the extent such obligation may exceed the
funds available within Madison Gas and Electric's nonqualified trust fund at the
time of decommissioning. This agreement, the closing of which remains contingent
upon Nuclear Regulatory Commission approval and steam generator replacement
scheduled for the fall of 2001, will result in Wisconsin Public Service's
ownership interest in the Kewaunee plant increasing to 59%.

The net book value of Wisconsin Public Service's
share of the Kewaunee plant at December 31, 2000 is
$52.5 million. In addition, the current cost of
Wisconsin Public Service's share of the estimated costs to
decommission the Kewaunee plant, assuming early retirement, exceeds the trust
assets at December 31, 2000 by $4.2 million. On
January 3, 1997, the Public Service Commission of Wisconsin
accepted Wisconsin Public Service's recommendation to accelerate
recovery of the Wisconsin retail portion of both the current undepreciated plant
balance and the unfunded decommissioning costs over a six-year period, 1997
through 2002. This method of recovery ended on December 31, 2000, as a
result of a recent Public Service Commission of Wisconsin rate order in Docket
6690-UR-112 authorizing new rates for 2001. This rate order includes a change in
methodology for recovery of the Kewaunee plant investment. Under the new rates,
the investment in the new steam generators will be recovered using the
sum-of-the-years-digits depreciation method with an 8.5 year remaining life
after installation. The unrecovered plant investment at the end of 2000 will be
recovered over a period ending 8.5 years after the installation of the
steam generators using a straight-line remaining life depreciation methodology.
Also under the 2001 rate order, the funding period for decommissioning was
extended to the end of 2010.

Transmission Assets

During 2000,Wisconsin Public Service committed
to transfer all its transmission assets to American Transmission Company LLC.
This transfer occurred on January 1, 2001 at the net book value of the
assets. WPS Investments, LLC, a wholly-owned subsidiary of Wisconsin Public
Service, will hold the resulting investment in American Transmission Company and
use the equity method of accounting.

Clean Air Regulations

Early compliance with the federal Clean Air Act has
generated surplus sulfur dioxide allowances. We will consider the sale of any
allowances available in excess of our own needs. The Wisconsin Commission has
ordered that profits from the sale of allowances be passed on to customers.

On December 24, 1998, Wisconsin Public Service joined
other parties in a petition challenging the Environmental Protection Agency's
regulations that required Wisconsin to prepare and submit a nitrogen oxide
implementation plan. On January 22, 1999, the State of Wisconsin intervened in
the litigation and challenged the geographic scope of the rule and the required
timing for implementation of nitrogen oxide controls within the state. The
United States Court of Appeals for the District of Columbia heard arguments on
November 9, 1999. On March 3, 2000, the Court held that the Environmental
Protection Agency's nitrogen oxide state implementation plan was not
appropriately issued to the State of Wisconsin and vacated the rule for the
State of Wisconsin.

However, under another part of the Clean Air Act, the
State of Wisconsin developed a nitrogen oxide reduction plan for Wisconsin's
ozone non-attainment area in southern Wisconsin. The nitrogen oxide reductions
begin in 2003 and are gradually increased through 2007. This plan affects
Edgewater Unit 4. A compliance plan for this unit was started in 2000 and may
include a combination of combustion optimization and emission trading at a cost
of about $5 million. The state rule also seeks voluntary reductions from utility
units outside the ozone non-attainment area, which may lead to additional
expenditures for nitrogen oxide reductions at other units. Wisconsin Public
Service is participating in voluntary efforts to reduce nitrogen oxide levels at
the Columbia Energy Center. Wisconsin Public Service owns 31.8% of Columbia. The
Public Service Commission of Wisconsin has approved recovery of the costs
associated with nitrogen oxide compliance.

Recent air quality modeling by the Wisconsin Department of
Natural Resources revealed that Weston Units 1 and 2 contribute to a modeled
deviation from the sulfur dioxide ambient air quality standard. Wisconsin Public
Service and the Wisconsin Department of Natural Resources developed a plan to
eliminate the model deviation by extending the existing stacks at Weston
Units 1 and 2 by 55 feet and limiting the sulfur content of the fuel to
1.2 lb/mm Btu. The cost of the stack extension is about $0.86 million. The
current and projected fuel meets the sulfur content limit. The Environmental
Protection Agency is reviewing this plan.

On November 3, 1999, the Environmental Protection Agency
announced that it was pursuing an enforcement initiative against seven
utilities, or their subsidiaries, located in the Midwest and the South as well
as the Tennessee Valley Authority. The enforcement initiative alleges that the
utilities may have undertaken projects at certain coal-fired generation plants
in violation of the Clean Air Act. The Environmental Protection Agency is
seeking penalties and the installation of additional pollution control
equipment.

As a continuation of this initiative, the Environmental
Protection Agency requested on December 14, 2000 that Wisconsin Public Service
Corporation provide information pursuant to Section 114 of the Clean Air Act
relating to projects undertaken at the Pulliam and Weston plants. The
information was submitted on January 16, 2001. Wisconsin Power and Light
Company, the operator of units jointly-owned with Wisconsin Public Service, also
submitted information related to projects undertaken at the Columbia and
Edgewater plants.

The Wisconsin Department of Natural Resources has
initiated a rulemaking effort aimed at the control of mercury emissions. Coal
burning power plants are likely to be the target of this regulatory effort. A
draft of the rule has not been released, and as such, the effect on Wisconsin
Public Service is unknown. However, if restrictive limits are adopted, the costs
could be significant.

WPS Power Development acquired 30 years of emission
allowances as a result of the acquisition of Sunbury Generation, LLC in
November 1999. The purchase of WPS Westwood Generation, LLC in
September 2000 also resulted in acquiring 30 years of emission allowances.
A consistent valuation across vintage years is being utilized to allocate the
cost of these allowances. The cost assigned to these allowances is being charged
to expense as the allowances are used. The Sunbury plant also purchases
incremental emission allowances on the open market to comply with air
regulations. Additional technology may be required by 2003 in order to comply
with nitrogen oxide standards. Expenditures for this technology could be
significant.

Manufactured Gas Plant Remediation

Wisconsin Public Service continues to
investigate the environmental cleanup of eight manufactured gas plant sites. The
cleanup of Wisconsin Public Service's Stevens Point manufactured gas plant
site is complete with monitoring of the site continuing. Costs of this cleanup
were within the range expected for this site. Cleanup began at both of the
Sheboygan sites in November 2000 and is expected to be completed by June 2001.
To-date costs are at expected levels. Wisconsin Public Service estimates future
undiscounted investigation and cleanup costs to be $35.7 million to
$42.2 million. These estimates may be adjusted in the future contingent
upon remediation technology, regulatory requirements, and the assessment of
natural resources damages.

Wisconsin Public Service currently has a $37.4 million
liability recorded for cleanup with an offsetting regulatory asset (deferred
charge). We expect to recover cleanup costs net of insurance recoveries in
current and future customer rates. Carrying costs associated with the cleanup
expenditures will not be recoverable. Wisconsin Public Service has received
$12.6 million in insurance recoveries that we recorded as a reduction to
the regulatory asset.

Future Utility Expenditures

We estimate utility plant construction expenditures at
Wisconsin Public Service for 2001 to be approximately $179.7 million
and construction expenditures at Upper Peninsula Power for 2001 to be
approximately $28.7 million. Wisconsin Public Service estimates
demand-side management expenditures to be $19.9 million in 2001. In addition,
recovery of previously deferred demand-side management expenditures of $11.9
million from customers will occur through 2002.



NOTE 14--ACQUISITIONS AND OTHER INVESTMENTS

On December 31, 2000, Wisconsin Public Service
increased its ownership in Wisconsin River Power Company to two-thirds by
purchasing an additional one-third interest from Consolidated Water Power
Company. The purchase price was at net book value of Wisconsin River Power at
August 31, 2000. In addition, one-third of the net proceeds from the sale
of Wisconsin River Power's real estate and wood products over a 12-year period
will be payable to Consolidated Water Power. In 2001, Wisconsin Power and Light
has the option to purchase one-half of our newly purchased one-third share of
Wisconsin River Power. Exercise of this option would result in Wisconsin Public
Service and Wisconsin Power and Light each owning one-half of Wisconsin River
Power, but Wisconsin Public Service would remain the operator of the facility.

Along with Wisconsin Public Service, we entered into a
merger agreement with Wisconsin Fuel and Light on July 13, 2000. Under
the agreement, Wisconsin Fuel and Light shareholders will receive 1.73 shares of
WPS Resources' common stock for each share of Wisconsin Fuel and Light's
common stock. The exchange ratio will be adjusted if, at the time of closing the
transaction, the market price of WPS Resources' common stock exceeds $33.96 per
share or is less than $27.79 per share. The market price is defined as the
average of the closing price of WPS Resources' common stock during the ten
trading days ending three days immediately preceding the effective date of the
merger.

A majority of the outstanding preferred shareholders of
Wisconsin Public Service approved the merger, allowing Wisconsin Fuel and
Light to merge into Wisconsin Public Service. In November 2000, a majority
of the outstanding common shareholders of Wisconsin Fuel and Light approved the
plan of merger. We will account for the merger using the purchase method of
accounting, and we expect to complete it in April of 2001.

WPS Power Development reached an agreement with Sierra
Pacific Power Company in October 2000 to purchase their 545-megawatt Tracy/Pinon
Power Station. The facility consists of natural gas and oil-fired generation
units and a coal gasification project that had been co-funded by the
United States Department of Energy. Regulatory approval is still
needed to complete the purchase. The purchase price of $249.8 million is subject
to taxes and other adjustments at closing. We expect to close the purchase in
2001 and to finance a portion of the purchase with nonrecourse debt. Included
with the purchase is a temporary purchase power agreement to sell the power
generated by Tracy/Pinon to Sierra Pacific.

Also in 2000, WPS Power Development's subsidiary, Sunbury
Holdings, LLC, purchased CinCap VI, LLC from Cinergy Capital and Trading, Inc.
CinCap VI owns the 30-megawatt Westwood generation facility located in
Pennsylvania. As of January 1, 2001, CinCap VI changed its name to WPS Westwood
Generation, LLC.

At WPS Energy Services, the price paid in excess of fair
value for the purchase of retail gas contracts acquired in 1999 is being
amortized over a five-year period.



NOTE 15--INVESTMENTS AND OTHER ASSETS



|WPS Resources' Investments and Other Assets(Thousands) | 2000     | 1999    
|------------------------------------------------------ | -------- | --------
|                                                       |          |         
|Emissions allowances                                   | $ 42,363 | $ 38,791
|Investments in other companies                         | 19,294   | 12,420  
|Nuclear decommissioning trusts                         | 18,338   | 19,129  
|Key executive life insurance                           | 14,996   | 11,787  
|Unamortized debt expense                               | 4,081    | 5,156   
|Edgewater and Columbia deposits                        | 3,190    | 3,144   
|Notes receivable from unaffiliated companies           | 6,869    | 6,973   
|Deferred financing costs                               | 3,712    | -       
|Other                                                  | *13,759  | *9,857  
|Total                                                  | $126,602 | $107,257

* Contains items that are less than 5% of the total investments and other
assets.

Emission allowances are related to WPS Power Development's
ownership of the Westwood and Sunbury generation facilities. The emission
allowances extend 29 years into the future and are expensed as used by each
facility.



NOTE 16--REGULATORY ENVIRONMENT

Wisconsin Public Service received a rate order
in the Wisconsin jurisdiction effective January 1, 2001. The impact is an
estimated $27.2 million increase in electric revenues and an estimated
$4.3 million increase in gas revenues on an annual basis. The new rates are
effective for 2001 and 2002. The Public Service Commission of Wisconsin
authorized a 12.1% return on Wisconsin Public Service's equity for 2001 and
2002. A 2002 rate reopener was not approved by the Public Service Commission of
Wisconsin, but the Commission did acknowledge that pursuant to statutes
Wisconsin Public Service may request a reopener at any time.

On October 13, 2000, Upper Peninsula Power filed
a $5.7 million rate increase with the Michigan Public Service Commission. A
final rate order is expected in 2001.



Note 17--REGULATORY ASSETS AND LIABILITIES





|WPS Resources Regulatory Assets/Liabilities(Thousands)              | 2000    | 1999   
|------------------------------------------------------------------- | ------- | -------
|                                                                    |         |        
|Regulatory assets                                                   |         |        
|Demand-side management expenditures                                 | $20,734 | $23,862
|Environmental remediation costs
      (net of insurance recoveries) | 30,503  | 30,942 
|Funding for enrichment facilities                                   | 4,122   | 4,579  
|Pension curtailment loss                                            | 8,121   | -      
|Other                                                               | 11,099  | 11,107 
|Total                                                               | $74,579 | $70,490
|                                                                    |         |        
|Regulatory liabilities                                              |         |        
|Income tax related items                                            | $25,171 | $29,080
|Unrealized gain on decommissioning trust                            | 18,338  | 19,129 
|Kewaunee deferred revenue                                           | -       | 2,819  
|De Pere Energy Center deferred revenue                              | -       | 3,263  
|Deferred gain on emission allowance sales                           | 2,921   | 3,705  
|Interest from tax refunds                                           | 3,811   | 3,730  
|Other                                                               | 400     | 2,422  
|Total                                                               | $50,641 | $64,148

Our utility subsidiaries are recovering their regulatory
assets and returning their regulatory liabilities through rates charged to
customers based on specific ratemaking decisions or precedent for each item.
Except for amounts expended for environmental costs, Wisconsin Public
Service is recovering carrying costs for all regulatory assets.
Upper Peninsula Power may recover carrying costs on environmental
regulatory assets. Based on prior and current rate treatment for such costs, we
believe it is probable that Wisconsin Public Service and
Upper Peninsula Power will continue to recover from customers the
regulatory assets described above.

See Notes 11 and 12 for specific information on pension
and income tax related regulatory liabilities. See Note 13 for information on
environmental remediation deferred costs.



NOTE 18--SEGMENTS OF BUSINESS

We manage our reportable segments separately due to their
different operating and regulatory environments. Our principal business segments
are the regulated electric utility operations of Wisconsin Public Service
and Upper Peninsula Power and the regulated gas utility operations of
Wisconsin Public Service. Our other reportable segments include
WPS Energy Services and WPS Power Development. WPS Energy
Services is a diversified energy supply and services company, and WPS Power
Development is an electric generation asset development company. Nonutility
operations and subsidiaries of WPS Resources not already mentioned are included
in the Other column. The tables below present information for the respective
years pertaining to our operations segmented by lines of business.

|Segments of Business (Thousands)                      |                    
|----------------------------------------------------- | -------------------
|                                                      | Regulated Utilities
|2000                                                  | ElectricUtility*   
|                                                      |                    
|Income Statement                                      |                    
|Operating
       revenues                             | $ 642,705          
|Depreciation and
       decommissioning               | 82,439             
|Other income
       (expense)                         | 18,154             
|Interest expense                                      | 27,258             
|Income taxes                                          | 33,597             
|Net income (loss)                                     | 60,653             
|Balance Sheet                                         |                    
|Total assets                                          | 1,239,003          
|Cash expenditures
       for long-lived
       assets | 137,947            

* Includes only utility operations.
Nonutility operations are included in the Other column.



|Segments of Business (Thousands)                      |                    
|----------------------------------------------------- | -------------------
|                                                      | Regulated Utilities
|1999                                                  | ElectricUtility*   
|                                                      |                    
|Income Statement                                      |                    
|Operating revenues                                    | $ 590,359          
|Depreciation and decommissioning                      | 70,898             
|Other income (expense)                                | 7,232              
|Interest expense                                      | 23,965             
|Income taxes                                          | 32,040             
|Net income (loss)                                     | 56,083             
|Balance Sheet                                         |                    
|Total assets                                          | 1,247,859          
|Cash expenditures
       for long-lived
       assets | 120,929            

* Includes only utility operations.
Nonutility operations are included in the Other column.



|Segments of Business (Thousands)                      |                        
|----------------------------------------------------- | -----------------------
|                                                      | Regulated Utilities    
|1998                                                  | Electric
      Utility*
|                                                      |                        
|Income Statement                                      |                        
|Operating Revenues                                    | $ 550,004              
|Depreciation and Decommissioning                      | 75,974                 
|Other income (expense)                                | 5,461                  
|Interest expense                                      | 22,820                 
|Income taxes                                          | 27,534                 
|Net income (loss)                                     | 50,488                 
|Balance Sheet                                         |                        
|Total assets                                          | 1,117,438              
|Cash expenditures
       for long-lived
       assets | 75,589                 

* Includes only utility operations.
Nonutility operations are included in the Other column.



NOTE 19--QUARTERLY FINANCIAL INFORMATION (Unaudited)

|(Thousands, except for share
      amounts)    | Three Months Ended
|---------------------------------------------- | ------------------
|                                               | 2000              
|                                               | March             
|Operating revenues                             | $398,849          
|Net income                                     | $ 29,232          
|Average number of shares of common
      stock | 26,634            
|Basic and diluted earnings per share           | $1.10             
|                                               |                   
|                                               | 1999              
|                                               | March             
|Operating revenues                             | $329,834          
|Net income                                     | $ 22,752          
|Average number of shares of common
      stock | 26,520            
|Basic and diluted earnings per share           | $0.86             

Because of various factors, which affect
the utility business, the quarterly results of operations are not necessarily
comparable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

WPS RESOURCES CORPORATION

F. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of WPS Resources Corporation:

We have audited the accompanying consolidated balance sheets and consolidated
statements of capitalization of WPS Resources Corporation (a Wisconsin
corporation) and subsidiaries as of December 31, 2000 and 1999, and the
related consolidated statements of income, comprehensive income, and retained
earnings and cash flows for each of the three years in the period ended December
31, 2000. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
WPS Resources Corporation and subsidiaries as of December 31, 2000 and
1999, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States.



> /s/ Arthur Andersen LLP
> 
> Arthur Andersen LLP



Milwaukee, Wisconsin
January 25, 2001



|ITEM 8.
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                             |         |                |         |                |       |         
|----------------------------------------------------------------------------------------------------- | ------- | -------------- | ------- | -------------- | ----- | --------
|                                                                                                      |         |                |         |                |       |         
|WISCONSIN PUBLIC SERVICE CORPORATION                                                                  |         |                |         |                |       |         
|                                                                                                      |         |                |         |                |       |         
|G.
      CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME                                   |         |               
|                                                                                                      |         |                |         |                |       |         
|                                                                                                      |         |                |         |                |       |         
|Year
      Ended December 31 (Thousands)                                                              |         | 2000           |         | 1999           |       | 1998    
|                                                                                                      |         |                |         |                |       |         
|Operating
      revenues                                                                              |         |                |         |                |       |         
|Electric                                                                                              |         | $575,951       |         | $527,922       |       | $487,340
|Gas                                                                                                   |         | 264,519        |         | 191,521        |       | 165,111 
|Total
      operating revenues                                                                        |         | 840,470        |         | 719,443        |       | 652,451 
|Operating
      expenses                                                                              |         |                |         |                |       |         
|Electric
      production fuels                                                                       |         | 128,538        |         | 113,170        |       | 110,443 
|Purchased
      power                                                                                 |         | 62,610         |         | 57,390         |       | 42,340  
|Gas
      purchased for resale                                                                        |         | 185,143        |         | 117,582        |       | 104,608 
|Other
      operating expenses                                                                        |         | 160,698        |         | 150,822        |       | 138,232 
|Maintenance                                                                                           |         | 67,354         |         | 56,650         |       | 49,425  
|Depreciation
      and decommissioning                                                                |         | 85,288         |         | 73,163         |       | 78,206  
|Federal
      income taxes                                                                            |         | 31,447         |         | 30,154         |       | 23,642  
|Investment
      tax credit restored                                                                  |         | (1,605)        |         | (1,608)        |       | (1,742) 
|State
      income taxes                                                                              |         | 8,758          |         | 8,752          |       | 7,291   
|Gross
      receipts tax and other                                                                    |         | 28,083         |         | 26,414         |       | 26,403  
|Total
      operating expense                                                                         |         | 756,314        |         | 632,489        |       | 578,848 
|Operating
      income                                                                                |         | 84,156         |         | 86,954         |       | 73,603  
|Other
      income and (deductions)                                                                   |         |                |         |                |       |         
|Allowance
      for equity funds used during construction                                             |         | 1,712          |         | 719            |       | 173     
|Other,
      net                                                                                      |         | 17,970         |         | 7,888          |       | 6,765   
|Income
      taxes                                                                                    |         | (1,452)        |         | (805)          |       | (331)   
|Total
      other income                                                                              |         | 18,230         |         | 7,802          |       | 6,607   
|Income
      before interest expense                                                                  |         | 102,386        |         | 94,756         |       | 80,210  
|Interest
      expense                                                                                |         |                |         |                |       |         
|Interest
      on long-term debt                                                                      |         | 21,833         |         | 21,855         |       | 20,400  
|Other
      interest                                                                                  |         | 9,824          |         | 5,560          |       | 2,801   
|Allowance
      for borrowed funds used during construction                                           | (2,752) |                | (2,874) |                | (177)
|Total
      interest expense                                                                          |         | 28,905         |         | 24,541         |       | 23,024  
|Net
      income                                                                                      |         | 73,481         |         | 70,215         |       | 57,186  
|Preferred
      stock dividend requirements                                                           |         | 3,111          |         | 3,111          |       | 3,111   
|Earnings
      on common stock                                                                        |         | 70,370         |         | 67,104         |       | 54,075  
|Other
      comprehensive income                                                                      |         | -              |         | -              |       | -       
|Comprehensive
      income                                                                            |         | $
      70,370 |         | $
      67,104 |       | $54,075 
|                                                                                                      |         |                |         |                |       |         
|The
      accompanying WPS Resources Corporation and Wisconsin Public Service
      Corporation notes
|are an
      integral part of these statements.                                                       |         |                |         |                |       |         



|ITEM 8.
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                       |                  |                 
|----------------------------------------------------------------------------------------------- | ---------------- | ----------------
|                                                                                                |                  |                 
|WISCONSIN PUBLIC SERVICE CORPORATION                                                            |                  |                 
|                                                                                                |                  |                 
|H.
      CONSOLIDATED BALANCE SHEETS                                                           
|                                                                                                |                  |                 
|Assets                                                                                          |                  |                 
|At
      December 31 (Thousands)                                                                | 2000             | 1999            
|Utility
      plant                                                                             |                  |                 
|Electric                                                                                        | $1,698,843       | $1,611,543      
|Gas                                                                                             | 302,942          | 285,048         
|Property
      under capital lease                                                              | 74,130           | 74,130          
|Total                                                                                           | 2,075,915        | 1,970,721       
|Less -
      Accumulated depreciation and decommissioning                                       | 1,268,949        | 1,202,725       
|Total                                                                                           | 806,966          | 767,996         
|Nuclear
      decommissioning trusts                                                            | 207,224          | 198,052         
|Construction
      in progress                                                                  | 64,593           | 67,831          
|Nuclear
      fuel, less accumulated amortization                                               | 16,040           | 15,007          
|Net
      utility plant                                                                         | 1,094,823        | 1,048,886       
|                                                                                                |                  |                 
|Current
      assets                                                                            |                  |                 
|Cash and
      equivalents                                                                      | 4,375            | 3,428           
|Customer
      and other receivables, net of reserves of $3,367                                 |                  |                 
|at December 31, 2000 and $2,455 at December 31, 1999                                            | 92,058           | 70,940          
|Accrued
      utility revenues                                                                  | 56,826           | 36,132          
|Fossil
      fuel, at average cost                                                              | 11,223           | 15,134          
|Gas in
      storage, at average cost                                                           | 21,682           | 18,776          
|Materials
      and supplies, at average cost                                                   | 22,241           | 21,302          
|Prepayments
      and other                                                                     | 23,020           | 20,734          
|Total
      current assets                                                                      | 231,425          | 186,446         
|                                                                                                |                  |                 
|Regulatory
      assets                                                                         | 72,367           | 68,169          
|Nonutility
      plant, net of accumulated depreciation of $174                                 |                  |                 
|at December 31, 2000 and $138 at December 31, 1999                                              | 1,168            | 1,294           
|Pension
      assets                                                                            | 62,992           | 65,622          
|Investments
      and other assets                                                              | 40,471           | 39,468          
|Total                                                                                           | $1,503,246       | $1,409,885      
|                                                                                                |                  |                 
|                                                                                                |                  |                 
|ITEM 8.
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                       |                  |                 
|                                                                                                |                  |                 
|WISCONSIN PUBLIC SERVICE CORPORATION                                                            |                  |                 
|                                                                                                |                  |                 
|H.
      CONSOLIDATED BALANCE SHEETS (CONTINUED)                                               
|                                                                                                |                  |                 
|                                                                                                |                  |                 
|Capitalization
      and Liabilities                                                            |                  |                 
|At
      December 31 (Thousands)                                                                | 2000             | 1999            
|Capitalization                                                                                  |                  |                 
|Common
      stock equity                                                                       | $ 
      567,757 | $ 
      525,128
|Preferred
      stock with no mandatory redemption                                              | 51,188           | 51,193          
|Capital
      lease obligation                                                                  | 72,955           | 73,585          
|Long-term
      debt to parent                                                                  | 13,476           | 13,780          
|Long-term
      debt                                                                            | 283,594          | 285,783         
|Total
      capitalization                                                                      | 988,970          | 949,469         
|                                                                                                |                  |                 
|Current
      liabilities                                                                       |                  |                 
|Current
      portion of capital lease obligation                                               | 630              | 419             
|Note
      payable                                                                              | 10,000           | 10,000          
|Commercial
      paper                                                                          | 60,000           | 40,000          
|Accounts
      payable                                                                          | 96,728           | 52,654          
|Accrued
      interest and taxes                                                                | 12,389           | 12,819          
|Other                                                                                           | 14,776           | 13,118          
|Total
      current liabilities                                                                 | 194,523          | 129,010         
|                                                                                                |                  |                 
|Long-term
      liabilities and deferred credits                                                |                  |                 
|Accumulated
      deferred income taxes                                                         | 109,024          | 107,516         
|Accumulated
      deferred investment tax credits                                               | 21,946           | 23,551          
|Regulatory
      liabilities                                                                    | 42,729           | 56,728          
|Environmental
      remediation liability                                                       | 37,367           | 38,632          
|Postretirement
      liabilities                                                                | 47,267           | 49,643          
|Other
      long-term liabilities                                                               | 61,420           | 55,336          
|Total
      long-term liabilities and deferred credits                                          | 319,753          | 331,406         
|                                                                                                |                  |                 
|Commitments
      and contingencies (See Note 13)                                               |                  |                 
|Total                                                                                           | $1,503,246       | $1,409,885      
|                                                                                                |                  |                 
|The
      accompanying WPS Resources Corporation and Wisconsin Public Service
      Corporation
|notes
      are an integral part of these statements.                                           |                  |                 
|                                                                                                |                  |                 



|ITEM 8.
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                             |  |                |  |               
|----------------------------------------------------------------------------------------------------- |  | -------------- |  | --------------
|                                                                                                      |  |                |  |               
|WISCONSIN PUBLIC SERVICE CORPORATION                                                                  |  |                |  |               
|                                                                                                      |  |                |  |               
|I.
      CONSOLIDATED STATEMENTS OF CAPITALIZATION                                                   
|                                                                                                      |  |                |  |               
|At
      December 31 (Thousands, except share amounts)                                                |  | 2000           |  | 1999          
|                                                                                                      |  |                |  |               
|Common
      stock equity                                                                             |  |                |  |               
|Common
      stock                                                                                    |  | $
      95,588 |  | $
      95,588
|Premium
      on capital stock                                                                        |  | 242,877        |  | 167,842       
|Retained
      earnings                                                                               |  | 229,292        |  | 263,922       
|Employee
      Stock Ownership Plan loan guarantees                                                   |  | -              |  | (2,224)       
|Total
      common stock equity                                                                       |  | 567,757        |  | 525,128       
|                                                                                                      |  |                |  |               
|Preferred
      stock                                                                                 |  |                |  |               
|Cumulative,
      $100 par value, 1,000,000 shares authorized                                         |  |                | 
|with no mandatory redemption -                                                                        |  |                |  |               
|Shares Outstanding                                                                                    |  |                |  |               
|Series     2000     
      1999                                                                       |  |                |  |               
|5.00%    131,920   131,950                                                                            |  | 13,192         |  | 13,195        
|5.04%     29,980    29,980                                                                            |  | 2,998          |  | 2,998         
|5.08%     49,980    50,000                                                                            |  | 4,998          |  | 5,000         
|6.76%    150,000   150,000                                                                            |  | 15,000         |  | 15,000        
|6.88%    150,000   150,000                                                                            |  | 15,000         |  | 15,000        
|Total
      preferred stock                                                                           |  | 51,188         |  | 51,193        
|                                                                                                      |  |                |  |               
|Capital
      lease obligation                                                                        |  | 73,585         |  | 74,004        
|Less
      current portion                                                                            |  | (630)          |  | (419)         
|Net
      capital lease obligation                                                                    |  | 72,955         |  | 73,585        
|                                                                                                      |  |                |  |               
|Long-term
      debt to parent                                                                        |  |                |  |               
|Series     Year Due                                                                                   |  |                |  |               
|8.76%        2015                                                                                     |  | 5,567          |  | 5,693         
|7.35%        2016                                                                                     |  | 7,909          |  | 8,087         
|Total
      long-term debt to parent                                                                  |  | 13,476         |  | 13,780        
|                                                                                                      |  |                |  |               
|Long-term
      debt                                                                                  |  |                |  |               
|First
      mortgage bonds                                                                            |  |                |  |               
|Series     Year Due                                                                                   |  |                |  |               
|7.30%        2002                                                                                     |  | 50,000         |  | 50,000        
|6.80%        2003                                                                                     |  | 50,000         |  | 50,000        
|6-1/8%       2005                                                                                     |  | 9,075          |  | 9,075         
|6.90%        2013                                                                                     |  | 22,000         |  | 22,000        
|8.80%        2021                                                                                     |  | 53,100         |  | 53,100        
|7-1/8%       2023                                                                                     |  | 50,000         |  | 50,000        
|6.08%        2028                                                                                     |  | 50,000         |  | 50,000        
|Total                                                                                                 |  | 284,175        |  | 284,175       
|Unamortized
      discount and premium on bonds, net                                                  |  | (700)          |  | (758)         
|Total
      first mortgage bonds                                                                      |  | 283,475        |  | 283,417       
|Employee
      Stock Ownership Plan loan guarantees                                                   |  | -              |  | 2,224         
|Other
      long-term debt                                                                            |  | 119            |  | 142           
|Total
      long-term debt                                                                            |  | 283,594        |  | 285,783       
|Total
      capitalization                                                                            |  | $988,970       |  | $949,469      
|                                                                                                      |  |                |  |               
|The
      accompanying WPS Resources Corporation and Wisconsin Public Service
      Corporation notes
|are an
      integral part of these statements.                                                       |  |                |  |               
|                                                                                                      |  |                |  |               

|ITEM 8.
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                 
|----------------------------------------------------------------------------------------------------------
|                                                                                                          
|WISCONSIN PUBLIC SERVICE CORPORATION                                                                      
|                                                                                                          
|J.
      CONSOLIDATED STATEMENTS OF CASH FLOWS                                                            
|                                                                                                          
|Year
      Ended December 31(Thousands)                                                                   
|                                                                                                          
|Cash
      flows from operating activities:                                                               
|Net
      income                                                                                          
|                                                                                                          
|Adjustments
      to reconcile net income to net cash from                                                
|operating
      activities -                                                                              
|Depreciation
      and decommissioning                                                                    
|Gain on
      nuclear decommissioning trust                                                               
|Amortization
      of nuclear fuel and other                                                              
|Deferred
      income taxes                                                                               
|Investment
      tax credit restored                                                                      
|Allowance
      for equity funds used during construction                                                 
|Gain on
      sale of property                                                                            
|Pension
      income                                                                                      
|Postretirement
      funding                                                                              
|Other,
      net                                                                                          
|Changes
      in -                                                                                        
|Customer
      and other receivables                                                                      
|Accrued
      utility revenues                                                                            
|Fossil
      fuel inventory                                                                               
|Gas in
      storage                                                                                      
|Miscellaneous
      assets                                                                                
|Accounts
      payable                                                                                    
|Miscellaneous
      current and accrued liabilities                                                       
|Accrued
      taxes                                                                                       
|Gas
      refunds                                                                                         
|Net cash
      from operating activities                                                                  
|                                                                                                          
|Cash
      flows from (used for) investing activities:                                                    
|Construction
      of utility plant and nuclear fuel expenditures                                         
|Decommissioning
      funding                                                                             
|Purchase
      of other property and equipment                                                            
|Proceeds
      from sale of property                                                                      
|Other                                                                                                     
|Net cash
      used for investing activities                                                              
|                                                                                                          
|Cash
      flows from (used for) financing activities:                                                    
|Redemption
      of long-term debt                                                                        
|Proceeds
      from issuance of long-term debt                                                            
|Proceeds
      from issuance of commercial paper                                                          
|Redemptions
      of commercial paper                                                                     
|Equity
      infusion from parent                                                                         
|Preferred
      stock dividends                                                                           
|Dividends
      to parent                                                                                 
|Other                                                                                                     
|Net cash
      used for financing activities                                                              
|Net
      increase (decrease) in cash and equivalents                                                     
|Cash and
      equivalents at beginning of year                                                           
|Cash and
      equivalents at end of year                                                                 
|                                                                                                          
|Cash
      paid during year for:                                                                          
|Interest,
      less amount capitalized                                                                   
|Income
      taxes                                                                                        
|                                                                                                          
|Supplemental
      schedule of noncash investing and financing activities for 1999 only
      (thousands):
|1. A
      capital lease obligation of $74,130 was incurred when Wisconsin Public
      Service           
|entered into a long-term lease agreement for utility plant assets.                                        
|2. Net
      cash surrender value of a key executive life insurance policy of $11,787                     
|was transferred from Wisconsin Public Service to WPS Resources.                                           
|3.
      Nonutility assets of $121 were transferred from Wisconsin Public Service
      to WPS Resources  
|                                                                                                          
|The
      accompanying WPS Resources Corporation and Wisconsin Public Service
      Corporation notes     
|are an
      integral part of these statements.                                                           
|                                                                                                          
|                                                                                                          

|ITEM 8.
      FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                       |          |          |         
|----------------------------------------------------------------------------------------------- | -------- | -------- | --------
|                                                                                                |          |          |         
|WISCONSIN PUBLIC SERVICE CORPORATION                                                            |          |          |         
|                                                                                                |          |          |         
|K.
      CONSOLIDATED STATEMENTS OF RETAINED EARNINGS                                          
|                                                                                                |          |          |         
|                                                                                                |          |          |         
|                                                                                                |          |          |         
|Year
      Ended December 31 (Thousands)                                                        | 2000     | 1999     | 1998    
|                                                                                                |          |          |         
|Balance
      at beginning of year                                                              | $263,922 | $284,726 | $297,489
|Add -
      Net income                                                                          | 73,481   | 70,215   | 57,186  
|                                                                                                | 337,403  | 354,941  | 354,675 
|Deduct -                                                                                        |          |          |         
|Cash
      dividends declared on preferred stock                                                |          |          |         
|5.00% Series ($5.00 per share)                                                                  | 660      | 660      | 660     
|5.04% Series ($5.04 per share)                                                                  | 151      | 151      | 151     
|5.08% Series ($5.08 per share)                                                                  | 254      | 254      | 254     
|6.76% Series ($6.76 per share)                                                                  | 1,014    | 1,014    | 1,014   
|6.88% Series ($6.88 per share)                                                                  | 1,032    | 1,032    | 1,032   
|Dividend
      to parent                                                                        | 105,000  | 87,908   | 66,838  
|                                                                                                | 108,111  | 91,019   | 69,949  
|Balance
      at end of year                                                                    | $229,292 | $263,922 | $284,726
|                                                                                                |          |          |         
|The
      accompanying WPS Resources Corporation and Wisconsin Public Service
      Corporation
|notes
      are an integral part of these statements.                                           |          |          |         

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

WISCONSIN PUBLIC SERVICE CORPORATION

L. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following are supplemental notes to the WPS Resources
Corporation financial statements and should be read in conjunction with WPS
Resources consolidated financial statements and the related notes.

NOTE 1--SHORT-TERM DEBT AND LINES OF CREDIT

To provide short-term borrowing flexibility and
security for commercial paper outstanding, Wisconsin Public Service maintains
bank lines of credit. These lines of credit require a fee.

The information in the table below relates to short-term
debt and lines of credit for the years indicated:

|(Thousands, except for
      percentages)                   | 2000    | 1999    | 1998   
|----------------------------------------------------------- | ------- | ------- | -------
|                                                            |         |         |        
|As of end of year                                           |         |         |        
|Commercial paper outstanding                                | $60,000 | $40,000 | $25,000
|Average discount rate on outstanding
      commercial paper | 6.62%   | 6.50%   | 5.10%  
|Short-term notes payable outstanding                        | $10,000 | $10,000 | $10,000
|Average interest rate on short-term
      notes payable     | 6.73%   | 6.43%   | 5.58%  
|Available (unused) lines of credit                          | $65,000 | $30,000 | $ 5,000
|                                                            |         |         |        
|For the year                                                |         |         |        
|Maximum amount of short-term debt                           | $73,000 | $54,000 | $49,000
|Average amount of short-term debt                           | $44,809 | $29,049 | $20,099
|Average interest rate on short-term
      debt              | 6.51%   | 5.27%   | 5.50%  

NOTE 2--LONG-TERM DEBT



Wisconsin Public Service has no sinking fund
payment requirements on its outstanding debt. A schedule of all debt payments
including bond maturities is as follows:



|Year ending December 31 (Thousands) |         
|----------------------------------- | --------
|                                    |         
|2001                                | $      -
|2002                                | 50,023  
|2003                                | 50,023  
|2004                                | 23      
|2005                                | 9,098   
|Future years                        | 175,127 
|Total payments                      | $284,294



NOTE 3--COMMON EQUITY

Wisconsin Public Service is restricted by a
Public Service Commission of Wisconsin order to paying normal common stock
dividends of no more than 109% of the previous year's common stock dividend
without the Public Service Commission of Wisconsin's approval. The company
may declare special dividends in order to maintain utility common equity levels
consistent with those allowed by the regulators. Wisconsin law prohibits
Wisconsin Public Service from making loans to or guaranteeing
obligations of WPS Resources or its other subsidiaries.

During 2000, Wisconsin Public Service received equity
infusions of $75 million from WPS Resources.
Wisconsin Public Service paid special common dividends of
$50 million to WPS Resources in 2000. The equity infusions and special
dividends allowed Wisconsin Public Service's average equity
capitalization ratio for ratemaking to remain near target levels as established
by the Public Service Commission of Wisconsin in its most recent rate
order.



NOTE 4--FAIR VALUE OF FINANCIAL INSTRUMENTS



Cash, Short-Term Investments, Energy Conservation Loans,
Notes Payable, and Outstanding Commercial Paper: The carrying amount
approximates fair value due to the short maturity of those investments and
obligations.

Nuclear Decommissioning Trusts: The value of nuclear
decommissioning trust investments is recorded at market value.

Long-Term Debt, Preferred Stock, and Employee Stock
Ownership Plan Loan Guarantees: The fair value of long-term debt, preferred
stock, and Employee Stock Ownership Plan loan guarantees is estimated based on
the quoted market price for the same or similar issues or on the current rates
offered to Wisconsin Public Service for debt of the same remaining
maturity.

The estimated fair values of Wisconsin Public Service's
financial instruments as of December 31 were:

|(Thousands)                                          | 2000            | 1999       
|---------------------------------------------------- | --------------- | -----------
|                                                     | Carrying Amount | Fair  Value
|                                                     |                 |            
|Cash and cash equivalents                            | $  4,375        | $  4,375   
|Energy conservation loans                            | 3,509           | 3,509      
|Nuclear decommissioning trusts -
      utility plant | 207,224         | 207,224    
|Nuclear decommissioning trusts -
      other assets  | 18,338          | 18,338     
|Notes payable                                        | 10,000          | 10,000     
|Commercial paper                                     | 60,000          | 60,000     
|Employee Stock Ownership Plan loan
      guarantees  | -               | -          
|Long-term debt                                       | 284,294         | 286,892    
|Preferred stock                                      | 51,188          | 41,915     



NOTE 5--INCOME TAXES



As of December 31, 2000 and 1999, Wisconsin Public
Service had the following significant temporary differences that created
deferred tax assets and liabilities:

|(Thousands)                               | 2000     | 1999    
|----------------------------------------- | -------- | --------
|                                          |          |         
|Deferred tax assets                       |          |         
|Plant related                             | $ 67,244 | $ 68,848
|Customer advances                         | 11,304   | 10,592  
|Capital losses/state net operating losses | -        | -       
|Environmental cleanup                     | 3,337    | 3,835   
|Employee benefits                         | 30,984   | 30,500  
|Other                                     | 1,877    | 2,602   
|Total                                     | $114,746 | $116,377
|                                          |          |         
|Deferred tax liabilities                  |          |         
|Plant related                             | $183,419 | $188,796
|Demand-side management expenditures       | 4,688    | 7,043   
|Employee benefits                         | 31,288   | 26,442  
|Other                                     | 4,375    | 1,612   
|Total                                     | $223,770 | $223,893
|                                          |          |         
|Net deferred tax liabilities              | $109,024 | $107,516



|(Thousands, except for
      percentages)                             | 2000  | 1999    | 1998 
|--------------------------------------------------------------------- | ----- | ------- | -----
|                                                                      | Rate  | Amount  | Rate 
|                                                                      |       |         |      
|Statutory federal income tax                                          | 35.0% | $39,700 | 35.0%
|State income taxes, net                                               | 5.5   | 6,282   | 5.3  
|Investment tax credit restored                                        | (1.4) | (1,605) | (1.5)
|Rate difference on reversal of income
      tax temporary differences | (1.3) | (1,503) | (1.7)
|Dividends paid to
      Employee Stock Ownership Plan                 | (0.6) | (648)   | (1.2)
|Federal tax credits                                                   | (0.3) | (295)   | (0.1)
|Other differences, net                                                | (1.6) | (1,879) | (0.6)
|Effective income tax                                                  | 35.3% | $40,052 | 35.2%
|                                                                      |       |         |      
|Current provision                                                     |       |         |      
|Federal                                                               |       | $35,998 |      
|State                                                                 |       | 8,552   |      
|Total current provision                                               |       | 44,550  |      
|Deferred benefit                                                      |       | (2,893) |      
|Investment tax credit restored, net                                   |       | (1,605) |      
|Total income tax expense                                              |       | $40,052 |      



NOTE 6--REGULATORY ASSETS AND LIABILITIES







|(Thousands)                                                         | 2000    | 1999   
|------------------------------------------------------------------- | ------- | -------
|                                                                    |         |        
|Regulatory assets                                                   |         |        
|Demand-side management expenditures                                 | $20,734 | $23,862
|Environmental remediation costs
      (net of insurance recoveries) | 29,003  | 29,017 
|Funding for enrichment facilities                                   | 4,122   | 4,579  
|Pension curtailment loss                                            | 8,121   | -      
|Other                                                               | 10,387  | 10,711 
|Total                                                               | $72,367 | $68,169
|                                                                    |         |        
|Regulatory liabilities                                              |         |        
|Income tax related items                                            | $17,259 | $21,660
|Unrealized gain on decommissioning trust                            | 18,338  | 19,129 
|Kewaunee deferred revenue                                           | -       | 2,819  
|De Pere Energy Center deferred revenue                              | -       | 3,263  
|Deferred gain on emission allowance sales                           | 2,921   | 3,705  
|Interest from tax refunds                                           | 3,811   | 3,730  
|Other                                                               | 400     | 2,422  
|Total                                                               | $42,729 | $56,728



NOTE 7--SEGMENTS OF BUSINESS

Wisconsin
Public Service manages its reportable segments separately due to their different
operating and regulatory environments. Its principal business segments are the
regulated electric utility operations and the regulated gas utility operations.
The tables below present information for the respective years pertaining to the
operations of Wisconsin Public Service segmented by lines of business.



|Segments of Business (Thousands)          |                     |             
|----------------------------------------- | ------------------- | ------------
|                                          | Regulated Utilities |             
|2000                                      | Electric  Utility   | Gas  Utility
|                                          |                     |             
|Income Statement                          |                     |             
|Operating revenues                        | $  575,951          | $264,519    
|Depreciation and
      decommissioning    | 76,394              | 8,894       
|Other income                              | 18,119              | 56          
|Interest expense                          | 22,907              | 4,813       
|Income taxes                              | 32,712              | 7,615       
|Net income                                | 58,196              | 11,577      
|Balance Sheet                             |                     |             
|Total assets                              | 1,112,418           | 305,491     
|Cash expenditures for long-lived   assets | 129,011             | 21,528      

* Nonutility operations are included in the
Other column.



|Segments of Business (Thousands)                |                    
|----------------------------------------------- | -------------------
|                                                | Regulated Utilities
|1999                                            | Electric  Utility  
|                                                |                    
|Income Statement                                |                    
|Operating revenues                              | $  527,922         
|Depreciation and
      decommissioning          | 64,947             
|Other income                                    | 6,530              
|Interest expense                                | 19,726             
|Income taxes                                    | 30,719             
|Net income                                      | 54,117             
|Balance Sheet                                   |                    
|Total assets                                    | 1,122,703          
|Cash expenditures for
      long-lived   assets | 114,041            

* Nonutility operations are included in the
Other column.



|Segments of Business (Thousands)                |                    
|----------------------------------------------- | -------------------
|                                                | Regulated Utilities
|1998                                            | Electric  Utility  
|                                                |                    
|Income Statement                                |                    
|Operating revenues                              | $487,340           
|Depreciation and
      decommissioning          | 70,455             
|Other income                                    | 5,783              
|Interest expense                                | 18,441             
|Income taxes                                    | 25,502             
|Net income                                      | 46,973             
|Balance Sheet                                   |                    
|Total assets                                    | 990,260            
|Cash expenditures for
      long-lived   assets | 70,399             

* Nonutility operations are included in the
Other column.



NOTE 8--QUARTERLY FINANCIAL INFORMATION (Unaudited)

|(Thousands)              | Three Months Ended
|------------------------ | ------------------
|                         | 2000              
|                         | March             
|                         |                   
|Operating revenues       | $217,107          
|Earnings on common stock | $ 27,285          
|                         |                   
|                         | 1999              
|                         | March             
|                         |                   
|Operating revenues       | $195,836          
|Earnings on common stock | $ 23,377          

Because of various factors, which affect
the utility business, the quarterly results of operations are not necessarily
comparable.



NOTE 9--RELATED PARTY TRANSACTIONS

Wisconsin Public Service enters into transactions with
Upper Peninsula Power and WPS Energy Services, which are both wholly-owned
subsidiaries of WPS Resources. During 2000, Wisconsin Public Service recorded
revenue of $20.6 million from electric sales to Upper Peninsula Power and $0.9
million from gas sales to WPS Energy Services. In addition, Wisconsin
Public Service purchased $5.7 million of gas from WPS Energy Services. During
1999, we recorded revenue of $8.3 million from electric sales to Upper Peninsula
Power and $2.8 million from gas sales to WPS Energy Services. Wisconsin
Public Service also purchased $1.5 million of gas from WPS Energy Services. For
1998, we recorded revenue of $6.4 million from electric sales to Upper Peninsula
Power and $1.8 million from gas sales to WPS Energy Services. Wisconsin
Public Service also purchased $0.6 million of gas from WPS Energy Services.



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

WISCONSIN PUBLIC SERVICE
CORPORATION

M. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS



To the Board of Directors of Wisconsin Public Service Corporation:

We have audited the accompanying consolidated balance
sheets and consolidated statements of capitalization of Wisconsin Public Service
Corporation (a Wisconsin corporation) and subsidiaries as of December 31,
2000 and 1999, and the related consolidated statements of income, comprehensive
income, and retained earnings and cash flows for each of the three years in the
period ended December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing
standards generally accepted in the United States. Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements
referred to above present fairly, in all material respects, the financial
position of Wisconsin Public Service Corporation and subsidiaries as of December
31, 2000 and 1999, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States.



> /s/ Arthur Andersen LLP
>             Arthur Andersen LLP



Milwaukee, Wisconsin
January 25, 2001

ITEM 9. CHANGE IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND               
FINANCIAL DISCLOSURE

None.





PART III



ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information regarding the directors of WPS Resources and
those Class A directors seeking re-election can be found in our March 19,
2001 Proxy Statement. Such information is incorporated by reference as if fully
set forth herein.

Information regarding our executive officers, which is not
included in our Proxy Statement, can be found in this document.



ITEM 11. EXECUTIVE COMPENSATION

Information required under Item 11 regarding compensation
paid by WPS Resources to its Chief Executive Officer and its other
executive officers can be found in our March 19, 2001 Proxy Statement, which is
incorporated by reference as if fully set forth herein.



ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information concerning principal securities holders and
the security holdings of our management can be found in our March 19, 2001
Proxy Statement, which is incorporated by reference as if fully set forth
herein.



ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

There have been no transactions since the beginning of
fiscal year 2000, or any currently proposed transactions, or series of similar
transactions, to which WPS Resources or any of its subsidiaries was or is to be
party to in which the amount exceeds $60,000 and in which any director,
executive officer, any nominee for election as a director, any security holder
owning of record or beneficially more than 5% of the Common Stock of WPS
Resources, or any member of the immediate family of any of the foregoing persons
had or will have a direct material interest.



PART IV

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

|(a) | Documents filed as part of this
      report:                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                              
|(1) | Consolidated Financial Statements
      included in Part II at Item 8 above:                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                              
|    | Description                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                              
|    | WPS Resources Corporation                                                                                                                                                                                                                                                                                    
|    | Consolidated Statements of Income,
      Comprehensive Income, and Retained Earnings for the three years ended
      December 31, 2000, 1999, and 1998                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                              
|    | Consolidated Balance Sheets as of
      December 31, 2000 and 1999                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                              
|    | Consolidated Statements of
      Capitalization as of December 31, 2000 and 1999                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                              
|    | Consolidated Statements of Cash Flows
      for the three years ended December 31, 2000, 1999, and 1998                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                              
|    | Notes to Consolidated Financial
      Statements                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                              
|    | Report of Independent Public
      Accountants                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                              
|    | Wisconsin Public Service Corporation                                                                                                                                                                                                                                                                         
|    | Consolidated Statements of Income and
      Comprehensive Income for the three years ended December 31, 2000, 1999,
      and 1998                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                              
|    | Consolidated Balance Sheets as of
      December 31, 2000 and 1999                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                              
|    | Consolidated Statements of
      Capitalization as of December 31, 2000 and 1999                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                              
|    | Consolidated Statements of Cash Flows
      for the three years ended December 31, 2000, 1999, and 1998                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                              
|    | Consolidated Statements of Retained
      Earnings for the three years ended December 31, 2000, 1999, and 1998                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                              
|    | Notes to Consolidated Financial
      Statements                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                              
|    | Report of Independent Public
      Accountants                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                              
|(2) | Financial statement schedules.
      The following financial statement schedules are included in Part IV of
      this report. Schedules not included herein have been omitted because they
      are not applicable or the required information is shown in the financial
      statements or notes thereto.
|    |                                                                                                                                                                                                                                                                                                              
|    | Description                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                              
|    | Schedule I - Condensed Parent Company
      Only Financial Statements                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                              
|    | A.                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                              
|    | B.                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                              
|    | C.                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                              
|    | D.                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                              
|    | E.                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                              
|(3) | Listing of all exhibits, including
      those incorporated by reference.                                                                                                                                                                                                                                    

|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ExhibitNumber | Description of Documents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2*            | Asset Purchase Agreement Among Maine Public Service Company, Maine and
      New Brunswick Electrical Power Company, Limited and WPS Power Development,
      Inc. dated as of July 7, 1998. (Incorporated by reference to Exhibit 2 to
      Form 10-K for the year ended December 31, 1998.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2A-1*         | Asset Purchase Agreement By and Among PPL, Inc., PP&L Resources,
      Inc., Lady Jane Collieries, Inc. and Sunbury Holdings, LLC, dated as of
      May 1, 1999. (Incorporated by reference to Exhibit 2A to Form 10-K for the
      year ended December 31, 1999.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2A-2*         | Asset Sale Agreement Between Sierra Pacific Power Company and
      WPS Northern Nevada, LLC for the Tracy/Pinon Asset Bundle, dated as
      of October 25, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2A-3*         | Asset Contribution Agreement between American Transmission Company LLC
      and Wisconsin Electric Power Company, Wisconsin Power and Light Company,
      Wisconsin Public Service Corp, Madison Gas & Electric Co., Edison
      Sault Electric Company, South Beloit Water, Gas and Electric Company,
      dated as of December 15, 2000.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|2A-4*         | Operating Agreement of American Transmission Company LLC dated as of
      January 1, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|3A-1          | Restated Articles of Incorporation of WPS Resources Corporation.
      (Incorporated by reference to Appendix B to Amendment No. 1 to the
      Company's Registration Statement on Form S-4, filed February 28, 1994
      [Reg. No. 33-52199]).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|3A-2          | Articles of Incorporation of Wisconsin Public Service Corporation as
      effective May 26, 1972 and amended through May 31, 1988 (Incorporated by
      reference to Exhibit 3A to Form 10-K for the year ended December 31,
      1991); Articles of Amendment to Articles of Incorporation dated June 9,
      1993 (Incorporated by reference to Exhibit 3 to Form 8-K filed June 10,
      1993).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|3B-1          | By-Laws of WPS Resources Corporation as in effect February 8, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|3B-2          | By-Laws of Wisconsin Public Service Corporation as in effect February
      8, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4A            | Copy of Rights Agreement, dated December 12, 1996 between
      WPS Resources Corporation and Firstar Trust Company (Incorporated by
      reference to Exhibit 4.1 to Form 8-A filed December 13, 1996 [File
      No.1-11337]).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4B            | Copy of First Mortgage and Deed of Trust, dated as of January 1,
      1941 from Wisconsin Public Service Corporation to First Wisconsin
      Trust Company, Trustee (Incorporated by reference to Exhibit 7.01
      - File No. 2-7229); Supplemental Indenture, dated as of
      November 1, 1947 (Incorporated by reference to Exhibit 7.02
      - File No. 2-7602); Supplemental Indenture, dated as of
      November 1, 1950 (Incorporated by reference to Exhibit 4.04
      - File No. 2-10174); Supplemental Indenture, dated as of May 1,
      1953 (Incorporated by reference to Exhibit 4.03 - File No.
      2-10716); Supplemental Indenture, dated as of October 1, 1954
      (Incorporated by reference to Exhibit 4.03 - File No. 2-13572);
      Supplemental Indenture, dated as of December 1, 1957 (Incorporated by
      reference to Exhibit 4.03 - File No. 2-14527); Supplemental
      Indenture, dated as of October 1, 1963 (Incorporated by reference to
      Exhibit 2.02B - File No. 2-65710); Supplemental Indenture, dated as
      of June 1, 1964 (Incorporated by reference to Exhibit 2.02B - File No.
      2-65710); Supplemental Indenture, dated as of November 1, 1967
      (Incorporated by reference to Exhibit 2.02B - File No. 2-65710);
      Supplemental Indenture, dated as of April 1, 1969 (Incorporated by
      reference to Exhibit 2.02B - File No. 2-65710); Fifteenth Supplemental
      Indenture, dated as of May 1, 1971 (Incorporated by reference to Exhibit
      2.02B - File No. 2-65710); Sixteenth Supplemental Indenture, dated as
      of August 1, 1973 (Incorporated by reference to Exhibit 2.02B - File
      No. 2-65710); Seventeenth Supplemental Indenture, dated as of September 1,
      1973 (Incorporated by reference to Exhibit 2.02B - File No. 2-65710);
      Eighteenth Supplemental Indenture, dated as of October 1, 1975
      (Incorporated by reference to Exhibit 2.02B - File No. 2-65710);
      Nineteenth Supplemental Indenture, dated as of February 1, 1977
      (Incorporated by reference to Exhibit 2.02B - File No. 2-65710);
      Twentieth Supplemental Indenture, dated as of July 15, 1980 (Incorporated
      by reference to Exhibit 4B to Form 10-K for the year ended
      December 31, 1980); Twenty-First Supplemental Indenture, dated as of
      December 1, 1980 (Incorporated by reference to Exhibit 4B to
      Form 10-K for the year ended December 31, 1980); Twenty-Second
      Supplemental Indenture dated as of April 1, 1981 (Incorporated by
      reference to Exhibit 4B to Form 10-K for the year ended December 31,
      1981); Twenty-Third Supplemental Indenture, dated as of February 1, 1984
      (Incorporated by reference to Exhibit 4B to Form 10-K for the year ended
      December 31, 1983); Twenty-Fourth Supplemental Indenture, dated as of
      March 15, 1984 (Incorporated by reference to Exhibit 1 to Form 10-Q for
      the quarter ended June 30, 1984); Twenty-Fifth Supplemental
      Indenture, dated as of October 1, 1985 (Incorporated by reference to
      Exhibit 1 to Form 10-Q for the quarter ended September 30,
      1985); Twenty-Sixth Supplemental Indenture, dated as of December 1, 1987
      (Incorporated by reference to Exhibit 4A-1 to Form 10-K for the year ended
      December 31, 1987); Twenty-Seventh Supplemental Indenture, dated as of
      September 1, 1991 (Incorporated by reference to Exhibit 4 to Form 8-K
      filed September 18, 1991); Twenty-Eighth Supplemental Indenture, dated as
      of July 1, 1992 (Incorporated by reference to Exhibit 4B - File No.
      33-51428); Twenty-Ninth Supplemental Indenture, dated as of October 1,
      1992 (Incorporated by reference to Exhibit 4 to Form 8-K filed October 22,
      1992); Thirtieth Supplemental Indenture, dated as of February 1, 1993
      (Incorporated by reference to Exhibit 4 to Form 8-K filed
      January 27, 1993); Thirty-First Supplemental Indenture, dated as of
      July 1, 1993 (Incorporated by reference to Exhibit 4 to Form 8-K filed
      July 7, 1993); Thirty-Second Supplemental Indenture, dated as of
      November 1, 1993 (Incorporated by reference to Exhibit 4 to
      Form 10-Q for the quarter ended September 30, 1993); Thirty-Third
      Supplemental Indenture, dated as of December 1, 1998 (Incorporated by
      reference to Exhibit 4D to Form 8-K filed December 18, 1998). All
      references to periodic reports are to those of Wisconsin Public Service
      Corporation (File No. 1-3016).
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4C            | Amended and Restated Declaration of Trust of WPS Resources Capital
      Trust I dated as of July 30, 1998 among WPS Resources Corporation as
      sponsor, State Street Bank and Trust Company as Administrative Trustee,
      First Union Trust Company, National Association, as Delaware Trustee, and
      Daniel P. Bittner and Ralph G. Baeten, as Administrative
      Trustees (Incorporated by reference to Exhibit 4.1 to Form 8-K filed
      August 6, 1998) (File No. 1-11337).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4D            | Indenture dated as of July 30, 1998, between WPS Resources Corporation
      and State Street Bank and Trust Company, as trustee (Incorporated by
      reference to Exhibit 4.2 to Form 8-K filed August 6, 1998); First
      Supplemental Indenture dated as of July 30, 1998, between WPS Resources
      Corporation and State Street Bank and Trust Company, as trustee
      (Incorporated by reference to Exhibit 4.3 to Form 8-K filed August 6,
      1998). References to periodic reports are to those of WPS Resources
      Corporation. (File No. 1-11337).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4E            | Trust Preferred Securities Guarantee Agreement dated as of
      July 30, 1998, between WPS Resources Corporation and State Street
      Bank and Trust Company, guarantee trustee (Incorporated by reference to
      Exhibit 4.4 to Form 8-K filed August 6, 1998) (File No. 1-11337).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4F            | Indenture, dated as of December 1, 1998, between Wisconsin Public
      Service Corporation and Firstar Bank Milwaukee, N.A., National Association
      (Incorporated by reference to Exhibit 4A to Form 8-K filed December 18,
      1998); First Supplemental Indenture, dated as of December 1, 1998 between
      Wisconsin Public Service Corporation and Firstar Bank Milwaukee, N.A.,
      National Association (Incorporated by reference to Exhibit 4C to Form 8-K
      filed December 18, 1998). References to periodic reports are to those of
      Wisconsin Public Service Corporation. (File No. 1-03016).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|4G            | First Supplemental Indenture, dated as of November 1, 1999 between WPS
      Resources Corporation and Firstar Bank, National Association and Form of
      7.00% Note Due November 1, 2009. (Incorporated by reference to Exhibit 4A
      of Form 8-K filed November 12, 1999. (File No. 1-11337)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10A           | Copy of Joint Power Supply Agreement among Wisconsin Public Service
      Corporation, Wisconsin Power and Light Company, and Madison Gas and
      Electric Company, dated February 2, 1967 (Incorporated by reference to
      Exhibit 4.09 in File No. 2-27308).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10B           | Copy of Joint Power Supply Agreement (Exclusive of Exhibits) among
      Wisconsin Public Service Corporation, Wisconsin Power and Light Company,
      and Madison Gas and Electric Company dated July 26, 1973
      (Incorporated by reference to Exhibit 5.04A in File No. 2-48781).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10C           | Settlement and Ownership Transfer Agreement dated September 29, 1998
      between Wisconsin Public Service Corporation and Madison Gas and Electric
      Company (Incorporated by reference to Exhibit 99-2 to Form 8-K/A filed
      March 2, 1999) (File No. 1-03016).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10D-1         | Copy of Basic Generating Agreement, Unit 4, Edgewater Generating
      Station, dated June 5, 1967, between Wisconsin Power and Light Company and
      Wisconsin Public Service Corporation (Incorporated by reference to Exhibit
      4.10 in File No. 2-27308).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10D-2         | Copy of Agreement for Construction and Operation of Edgewater 5
      Generating Unit, dated February 24, 1983, between Wisconsin Power and
      Light Company, Wisconsin Electric Power Company, and Wisconsin Public
      Service Corporation (Incorporated by reference to Exhibit 10C-1 to
      Form 10-K of Wisconsin Public Service Corporation for the year ended
      December 31, 1983 [File No. 1-3016]).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10D-3         | Amendment No. 1 to Agreement for Construction and Operation of
      Edgewater 5 Generating Unit, dated December 1, 1988 (Incorporated by
      reference to Exhibit 10C-2 to Form 10-K of Wisconsin Public Service
      Corporation for the year ended December 31, 1988 [File
      No. 1-3016]).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10E           | Copy of revised Agreement for Construction and Operation of Columbia
      Generating Plant among Wisconsin Public Service Corporation, Wisconsin
      Power and Light Company, and Madison Gas and Electric Company, dated July
      26, 1973 (Incorporated by reference to Exhibit 5.07 in File No. 2-48781).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10G-1         | Copy of Power Purchase Agreement Between De Pere Energy LLC and
      Wisconsin Public Service Corporation dated November 8, 1995 and amended by
      a Letter Agreement dated February 18, 1997. (Incorporated by reference to
      Exhibit 10F-1 to the Form 10-K for the year ended December 31, 1997
      [File No. 1-3016]).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10H-1         | Copy of Amendment to Key Executive Employment and Severance Agreement
      entered into between WPS Resources Corporation and each of the following:
      Daniel P. Bittner, Phillip M. Mikulsky, Patrick D. Schrickel,
      and Larry L. Weyers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10H-2         | Copy of Amendment to Key Executive Employment and Severance Agreement
      entered into between WPS Resources Corporation and each of the following:
      Ralph G. Baeten, Diane L. Ford, Richard E. James, Thomas P.
      Meinz, Wayne J. Peterson, Charles A. Schrock, and
      Bernard J. Treml.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10H-3         | WPS Resources Corporation Deferred Compensation Plan to be effective
      January 1, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10H-4         | WPS Resources Corporation 2001 Omnibus Incentive Compensation Plan to
      be effective January 1, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10H-5         | WPS Resources Corporation Non-Employee Director Deferred Compensation
      and Deferred Stock Unit Plan to be effective January 1, 2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10H-6         | WPS Resources Corporation Short-Term Variable Pay Plan effective
      January 1, 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10H-7         | Copy of WPS Resources 1999 Stock Option Plan effective May 6, 1999
      (Incorporated by reference to Exhibit 10-2 in the Form 10-Q for the
      quarter ended June 30, 1999, filed August 11, 1999. [File No.
      [1-1337])                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10H-8         | WPS Resources Corporation 1999 Non-Employee Directors Stock Option Plan
      (Incorporated by reference to Exhibit 4.2 in Form S-8 December 21,
      1999. [File No. 333-93193])                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10H-9         | Copy of the amended and restated WPS Resources Corporation Deferred
      Compensation Plan for executives and non-employee directors, effective
      March 1,1999. (Incorporated by reference to Exhibit 10H-1 to Form 10-K for
      the year ended December 31, 1999)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10I-1         | Equity Contribution Agreement Between WPS Resources Corporation and
      WPS Northern Nevada, LLC, dated October 25, 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10I-2         | Guaranty Agreement Between WPS Resources Corporation and
      WPS Northern Nevada, LLC, dated October 25, 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10I-3*        | Transitional Power Purchase Agreement By and Between Sierra Pacific
      Power Company and WPS Northern Nevada, LLC, dated October 25, 2000                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|10J-1         | Term Loan Agreement, dated as of November 5, 1999 among PDI
      New England, Inc., PDI Canada, Inc., and Bayerische Landesbank
      Girozentrale. (Incorporated by reference to Exhibit 4H to Form 10-K for
      the year ended December 31, 1999.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
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|10J-2*        | Credit Agreement dated as of April 14, 2000 among Sunbury
      Generation, LLC, as Borrower, Bayerische Landesbank Girozentrale, Cayman
      Islands Branch, as WC Lender, the Term Lenders Party Hereto From Time
      to Time and Bayerische Landesbank Girozentrale, New York Branch, as
      Administrative Agent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|12            | WPS Resources Corporation Ratio of Earnings to Fixed Charges and Ratio
      of Earnings to Fixed Charges and Preferred Dividends                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|21            | Subsidiaries of the Registrant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|23            | Consent of Independent Public Accountants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|24            | Powers of Attorney                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

|LISTING OF EXHIBITS ATTACHED
|----------------------------
|                            
|Exhibit Number              
|                            
|2A-2*                       
|                            
|2A-3*                       
|                            
|2A-4*                       
|                            
|3B-1                        
|                            
|3B-2                        
|                            
|10H-1                       
|                            
|10H-2                       
|                            
|10H-3                       
|                            
|10H-4                       
|                            
|10H-5                       
|                            
|10H-6                       
|                            
|10I-1                       
|                            
|10I-2                       
|                            
|10I-3*                      
|                            
|10J-2*                      
|                            
|12                          
|                            
|21                          
|                            
|23                          
|                            
|24                          
|                            
|*                           
|                            
|(b)                         
|                            
|                            
|                            
|                            
|                            
|                            
|                            
|                            
|                            
|                            
|                            
|                            
|                            
|                            
|                            
|                            



SIGNATURES

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

WPS RESOURCES CORPORATION
and
WISCONSIN PUBLIC SERVICE CORPORATION

(Registrants)





|/s/ L. L. Weyers                                                                                         
|---------------------------------------------------------------------------------------------------------
|L. L. Weyers
      Chairman, President, and
      Chief Executive Officer
      WPS Resources Corporation



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

|Signature                     | Title                                    | Date             
|----------------------------- | ---------------------------------------- | -----------------
|                              |                                          |                  
|A. Dean Arganbright           | Director                                 | February 27, 2001
|Michael S. Ariens             | Director                                 |                  
|Richard A. Bemis              | Director                                 |                  
|Robert C. Gallagher           | Director                                 |                  
|Kathryn M. Hasselblad-Pascale | Director                                 | /s/ L. L. Weyers 
|James L. Kemerling            | Director                                 | L. L. Weyers     
|John C. Meng                  | Director                                 | Attorney-in Fact 
|                              |                                          |                  
|                              |                                          |                  
|/s/ L. L. Weyers              | Principal Executive Officer and Director |                  
|L. L. Weyers                  |                                          |                  
|                              |                                          |                  
|                              |                                          |                  
|                              |                                          |                  
|/s/ D. P. Bittner             | Principal Financial Officer              |                  
|D. P. Bittner                 |                                          |                  
|                              |                                          |                  
|                              |                                          |                  
|                              |                                          |                  
|/s/ D. L. Ford                | Principal Accounting Officer             |                  
|D. L. Ford                    |                                          |                  





SCHEDULE I - CONDENSED
PARENT COMPANY FINANCIAL STATEMENTS
WPS RESOURCES CORPORATION (PARENT COMPANY ONLY)

A. REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SCHEDULE I - CONDENSED PARENT COMPANY
ONLY FINANCIAL STATEMENTS



To the Board of Directors of WPS Resources Corporation:

We have audited in accordance with auditing standards
generally accepted in the United States, the consolidated financial statements
of WPS Resources Corporation included in this Form 10-K, and have issued
our report thereon dated January 25, 2001. Our audit was made for the
purpose of forming an opinion on the basic consolidated financial statements
taken as a whole. Supplemental Schedule I is the responsibility of the Company's
management and is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not a part of the basic consolidated
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic consolidated financial statements
and, in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic consolidated financial
statements taken as a whole.

> /s/ Arthur Andersen LLP
>             ARTHUR ANDERSEN LLP







Milwaukee, Wisconsin
January 25, 2001



|SCHEDULE
      I - CONDENSED                                   |           |           |          
|-------------------------------------------------------------- | --------- | --------- | ---------
|PARENT
      COMPANY FINANCIAL STATEMENTS                      |           |           |          
|WPS
      RESOURCES CORPORATION (PARENT COMPANY ONLY)          |           |           |          
|                                                               |           |           |          
|B. STATEMENTS OF INCOME AND RETAINED EARNINGS                 
|                                                               |           |           |          
|                                                               |           |           |          
|Year
      Ended December 31 (Thousands)                       | 2000      | 1999      | 1998     
|                                                               |           |           |          
|Income                                                         |           |           |          
|Dividends
      from subsidiaries in excess of equity earnings | ($33,522) | ($30,128) | ($26,752)
|Dividends
      from subsidiaries                              | 109,340   | 91,883    | 75,370   
|Income
      from subsidiaries                                 | 75,818    | 61,755    | 48,618   
|Investment
      income and other                              | 8,711     | 5,144     | 4,516    
|                                                               |           |           |          
|Total
      income                                             | 84,529    | 66,899    | 53,134   
|                                                               |           |           |          
|                                                               |           |           |          
|Operating
      expenses                                       | 8,759     | 2,642     | 4,557    
|Income
      before interest expense and income taxes          | 75,770    | 64,257    | 48,577   
|Interest
      expense                                         | 15,553    | 7,066     | 2,914    
|Income
      before income taxes                               | 60,217    | 57,191    | 45,663   
|Income
      taxes                                             | (6,776)   | (2,374)   | (968)    
|Net
      Income                                               | 66,993    | 59,565    | 46,631   
|                                                               |           |           |          
|Retained
      earnings, beginning of year                     | 341,701   | 335,154   | 339,508  
|Common
      stock dividend                                    | (53,938)  | (53,018)  | (50,985) 
|                                                               |           |           |          
|Retained
      earnings, end of year                           | $354,756  | $341,701  | $335,154 
|                                                               |           |           |          



|SCHEDULE
      I - CONDENSED                                          |                |               
|--------------------------------------------------------------------- | -------------- | --------------
|PARENT
      COMPANY FINANCIAL STATEMENTS                             |                |               
|WPS
      RESOURCES CORPORATION (PARENT COMPANY ONLY)                 |                |               
|                                                                      |                |               
|C. BALANCE SHEETS                                                    
|                                                                      |                |               
|                                                                      |                |               
|At
      December 31 (Thousands)                                      | 2000           | 1999          
|Assets                                                                |                |               
|Current
      assets                                                  |                |               
|Cash and
      equivalents                                            | $ 
      3,010 | $     
      -
|Accounts
      receivable - affiliates                                | 2,170          | 1,165         
|Other
      receivables                                               | 1,960          | 987           
|Notes
      receivable - affiliates (See Note 1)                      | 34,312         | 125,190       
|Total
      current assets                                            | 41,452         | 127,342       
|                                                                      |                |               
|Long-term
      notes receivable - affiliates (See Note 2)            | 20,976         | 8,811         
|                                                                      |                |               
|Investments
      in subsidiaries, at equity                          |                |               
|Wisconsin
      Public Service Corporation                            | 567,757        | 525,128       
|WPS
      Resources Capital Corporation                               | 108,583        | 59,093        
|Upper
      Peninsula Power Company                                   | 40,581         | 38,924        
|Other                                                                 | 5,144          | 6,207         
|Total
      investments in subsidiaries, at equity                    | 722,065        | 629,352       
|                                                                      |                |               
|Net
      equipment                                                   | 822            | 860           
|Other
      investments                                               | 21,644         | 18,617        
|Deferred
      income taxes                                           | 1,930          | 543           
|                                                                      |                |               
|Total
      assets                                                    | $808,889       | $785,525      
|                                                                      |                |               
|                                                                      |                |               
|Liabilities
      and Capitalization                                  |                |               
|Current
      liabilities                                             |                |               
|Commercial
      paper                                                | $
      59,557 | $
      39,855
|Accounts
      payable - affiliates                                   | 654            | 549           
|Accounts
      payable                                                | 817            | 5,045         
|Dividends
      payable                                               | 1,143          | 861           
|Other                                                                 | 2,963          | 1,996         
|Total
      current liabilities                                       | 65,134         | 48,306        
|                                                                      |                |               
|Capitalization                                                        |                |               
|Common
      stock, $1 par value, 100,000,000 shares                  |                |               
|authorized; 26,851,034 shares outstanding at                          |                |               
|December 31, 2000 and 26,851,045 shares                               |                |               
|outstanding at December 31, 1999                                      | 26,851         | 26,851        
|Premium
      on capital stock                                        | 172,451        | 172,108       
|Retained
      earnings                                               | 354,756        | 341,701       
|Employee
      Stock Ownership Plan loan guarantees                   | -              | (2,224)       
|Treasury
      shares                                                 | (8,149)        | -             
|Shares
      in deferred compensation trust                           | (3,132)        | (2,136)       
|Total
      common stock equity                                       | 542,777        | 536,300       
|Unsecured
      senior note, net of unamortized discount (See Note 3) | 149,478        | 149,419       
|Advances
      from affiliates                                        | 51,500         | 51,500        
|Total
      capitalization                                            | 743,755        | 737,219       
|                                                                      |                |               
|                                                                      |                |               
|Total
      liabilities and capitalization                            | $808,889       | $785,525      



|SCHEDULE
      I - CONDENSED                                       |                |                        |                       
|------------------------------------------------------------------ | -------------- | ---------------------- | ----------------------
|PARENT
      COMPANY FINANCIAL STATEMENTS                          |                |                        |                       
|WPS
      RESOURCES CORPORATION (PARENT COMPANY ONLY)              |                |                        |                       
|                                                                   |                |                        |                       
|D. STATEMENTS OF CASH FLOWS                                       
|                                                                   |                |                        |                       
|                                                                   |                |                        |                       
|Year
      Ended December 31 (Thousands)                           | 2000           | 1999                   | 1998                  
|                                                                   |                |                        |                       
|Operating                                                          |                |                        |                       
|Net
      income                                                   | $
      66,993 | $  
      59,565       | $  
      46,631      
|                                                                   |                |                        |                       
|Add
      dividends from subsidiaries in excess of equity earnings | 33,522         | 18,211                 | 26,752                
|Deferred
      income taxes                                        | (1,387)        | (374)                  | (124)                 
|Other -
      net                                                  | 3,441          | 7                      | (17)                  
|                                                                   |                |                        |                       
|Changes
      in other items                                       |                |                        |                       
|Receivables                                                        | (1,873)        | 572                    | (1,542)               
|Accounts
      payable                                             | (4,228)        | 3,447                  | (4,855)               
|Other                                                              | (501)          | 1,922                  | 295                   
|Net cash
      - operating                                         | 95,967         | 83,350                 | 67,140                
|                                                                   |                |                        |                       
|Investing                                                          |                |                        |                       
|Notes
      receivable - affiliates                                | 78,713         | (93,372)               | (20,181)              
|Capital
      contributions - affiliates                           | (124,008)      | (108,554)              | (62,340)              
|Investments
      - other                                          | (4,663)        | (1,941)                | (1,968)               
|Net cash
      - investing                                         | (49,958)       | (203,867)              | (84,489)              
|                                                                   |                |                        |                       
|Financing                                                          |                |                        |                       
|Proceeds
      from short-term debt                                | -              | 34,250                 | 196,050               
|Payments
      on short-term debt                                  | -              | (36,650)               | (193,650)             
|Proceeds
      from commercial paper                               | 388,401        | 1,258,095              | 1,867,287             
|Payments
      on commercial paper                                 | (368,699)      | (1,240,830)            | (1,849,903)           
|Proceeds
      from intercompany debt                              | -              | -                      | 50,000                
|Proceeds
      from long-term debt                                 | -              | 149,412                | -                     
|Purchase
      of deferred compensation stock                      | (10,505)       | (631)                  | (554)                 
|Proceeds
      from issuance of common stock                       | -              | 8,970                  | -                     
|Common
      stock dividends                                       | (53,938)       | (53,018)               | (50,985)              
|Financing
      - other                                            | 1,742          | -                      | -                     
|Net cash
      - financing                                         | (42,999)       | 119,598                | 18,245                
|                                                                   |                |                        |                       
|Net
      change in cash                                           | 3,010          | (919)                  | 896                   
|Cash,
      beginning of period                                    | -              | 919                    | 23                    
|Cash,
      end of period                                          | $ 
      3,010 | $ 
           
      0 | $ 
         
      919
|                                                                   |                |                        |                       
|Supplemental
      disclosure of significant noncash transactions: |               
|WPS
      Resources received noncash dividends of $11,917          |                |                       
|from its
      subsidiaries in the form of investments and         |                |                       
|real
      property.                                               |                |                        |                       



SCHEDULE I - CONDENSED
PARENT COMPANY FINANCIAL STATEMENTS
WPS RESOURCES CORPORATION (PARENT COMPANY ONLY)

E. NOTES TO PARENT COMPANY FINANCIAL STATEMENTS

The following are supplemental notes to the
WPS Resources Corporation (parent company only) financial statements and
should be read in conjunction with our consolidated financial statements and the
related notes.

|SUPPLEMENTAL NOTES
|------------------
|                  
|Note 1            
|                  
|Note 2            
|                  
|Note 3            
|                  
|Note 4            

>