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

                            FORM 10-K

          ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
             OF THE SECURITIES EXCHANGE ACT OF 1934

           For the Fiscal Year Ended December 31, 2000


 Commission    Registrant; State of Incorporation    IRS Employer
 File Number     Address; and Telephone Number     Identification No.
 -----------   ----------------------------------  ------------------


  001-01245     WISCONSIN ELECTRIC POWER COMPANY    39-0476280
                      (A Wisconsin Corporation)
                      231 West Michigan Street
                      P.O. Box 2046
                      Milwaukee, WI  53201
                      (414) 221-2345


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 the Registrant's
knowledge, in the definitive Information Statement incorporated
by reference in Part III of this Form 10-K or any amendment to
this Form 10-K.    [  ]

All of the common stock of Wisconsin Electric Power Company is
held by Wisconsin Energy Corporation.

Securities  Registered Pursuant to  Section 12(b) of the Act:

                            Name of Each Exchange
  Title of Each Class        on Which Registered
  -------------------       ---------------------

        None                         N/A


Securities Registered Pursuant to Section 12(g) of the Act:

     Serial Preferred Stock, 3.60% Series, $100 Par Value
     Six Per Cent.  Preferred Stock, $100 Par Value



Indicate the number of shares outstanding of each of the
Registrant's classes of common stock, as of the latest
practicable date (February 28, 2001):

Common Stock, $10 Par Value, 33,289,327 shares outstanding.
   Wisconsin Energy Corporation is the sole holder of
  Wisconsin Electric Power Company's Common Stock.

           Documents Incorporated by Reference
           -----------------------------------

Portions of Wisconsin Electric Power Company's definitive
Information Statement for its Annual Meeting of Stockholders, to
be held on April 27, 2001, are incorporated by reference into
Part III hereof.



<TABLE>
<CAPTION>
                         WISCONSIN ELECTRIC POWER COMPANY

               FORM 10-K REPORT FOR THE YEAR ENDED DECEMBER 31, 2000

                                 TABLE OF CONTENTS
                             -------------------------
<S>                                                                                  <C>
Item                                                                                 Page
----                                                                                 ----

                                      Part I
                                      ------

1.   Business...................................................................
       Introduction.............................................................
       Utility Operations.......................................................
         Electric Utility Operations............................................
           Electric Sales.......................................................
           Competition..........................................................
           Electric Supply......................................................
           Coal-Fired Generation................................................
           Nuclear Generation...................................................
           Hydroelectric Generation.............................................
           Natural Gas-Fired Generation.........................................
           Oil-Fired Generation.................................................
           Purchase Power Commitments...........................................
           Electric Transmission................................................
           Renewable Electric Energy............................................
         Gas Utility Operations.................................................
           Gas Deliveries.......................................................
           Competition..........................................................
           Gas Supply, Pipeline Capacity and Storage............................
         Steam Utility Operations...............................................
         Utility Rate Matters...................................................
       Regulation...............................................................
       Environmental Compliance.................................................
         Environmental Expenditures.............................................
         Solid Waste Landfills..................................................
         Coal-Ash Landfills.....................................................
         Manufactured Gas Plant Sites...........................................
         Air Quality............................................................
       Other....................................................................

2.   Properties.................................................................

3.   Legal Proceedings..........................................................
       Environmental Matters....................................................
       Utility Rate Matters.....................................................
       Other Matters............................................................

4.   Submission of Matters to a Vote of Security Holders........................

     Executive Officers of the Registrant.......................................

                                      Part II
                                      -------

5.   Market for Registrants' Common Equity and Related Stockholders Matter......

6.   Selected Financial Data....................................................
       Selected Financial and Statistical Data..................................
       Selected Quarterly Financial Data........................................
       Selected Operating Data..................................................

7.   Management's Discussion & Analysis of Financial Condition &
       Results of Operations....................................................
         Results of Operations..................................................
           Earnings.............................................................
             Electric Utility Revenues, Gross Margins and Sales.................
             Gas Utility Revenues, Gross Margins and Therm Deliveries...........
             Other Items........................................................
         Liquidity and Capital Resources........................................
           Cash Flows...........................................................
             Operating Activities...............................................
             Investing Activities...............................................
             Financing Activities...............................................
           Capital Resources and Requirements...................................
             Capital Resources..................................................
             Capital Requirements...............................................
         Factors Affecting Results, Liquidity and Capital Resources.............
           Outlook..............................................................
             Forecasts..........................................................
             Factors Affecting Forecasts........................................
           Investments, Mergers, and Asset Transfers............................
             Electric Generation................................................
             Energy Distribution................................................
           Rates and Regulatory Matters.........................................
             Wisconsin Jurisdiction.............................................
             Michigan Jurisdiction..............................................
           Industry Restructuring and Competition...............................
             Electric Utility Industry..........................................
             Natural Gas Utility Industry.......................................
           Electric System Reliability..........................................
           Nuclear Operations...................................................
           Legal Matters........................................................
           Environmental Matters................................................
           Market Risks.........................................................
           Accounting Developments..............................................
           Cautionary Factors...................................................
             Operating, Financial & Industry Factors............................
             Business Combination Factors.......................................

7A.  Quantitative and Qualitative Disclosures About Market Risk.................

8.   Financial Statements and Supplementary Data................................
       Income Statement.........................................................
       Statement of Cash Flows..................................................
       Balance Sheet............................................................
       Capitalization Statement.................................................
       Statement of Common Equity...............................................
       Notes to Financial Statements............................................
         Note A - Summary of Significant Accounting Policies....................
         Note B - American Transmission Company.................................
         Note C - Non-Recurring Charges.........................................
         Note D - Income Taxes..................................................
         Note E - Nuclear Operations............................................
         Note F - Long-Term Debt................................................
         Note G - Short-Term Debt...............................................
         Note H - Fair Value of Financial Instruments...........................
         Note I - Benefits......................................................
         Note J - Segment Reporting.............................................
         Note K - Commitments and Contingencies.................................
         Note L - Transactions with Associated Companies........................
       Report of Independent Accountants........................................

9.   Changes in & Disagreements with Accountants
       on Accounting and Financial Disclosure...................................

                                     Part III
                                     --------

10.  Directors and Executive Officers of the Registrant.........................

11.  Executive Compensation.....................................................

12.  Security Ownership of Certain Beneficial Owners and Management.............

13.  Certain Relationships and Related Transactions.............................

                                     Part IV
                                     -------

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

     Consents of Independent Accountants........................................

     Signatures.................................................................

     Exhibit Index..............................................................
</TABLE>



                             PART I
                             ------

ITEM 1.   BUSINESS

                          INTRODUCTION

Wisconsin Electric Power Company ("Wisconsin Electric" or the
"Company"), a wholly-owned subsidiary of Wisconsin Energy
Corporation ("Wisconsin Energy"), was incorporated in the state
of Wisconsin in 1896.  Wisconsin Electric is an electric, gas and
steam utility which serves over 1,000,000 electric customers in
Wisconsin and the Upper Peninsula of Michigan, over 400,000 gas
customers in Wisconsin and about 450 steam customers in metro
Milwaukee.  It maintains its principal executive offices in
Milwaukee, Wisconsin.

For further financial information about Wisconsin Electric's
business segments, see "Results of Operations" in Item 7 and
"Note J - Segment Reporting" in the Notes to Financial Statements
in Item 8 of this report.

ACQUISITION OF WICOR, INC.:   On April 26, 2000, Wisconsin Energy
acquired WICOR, Inc. ("WICOR"), the parent of Wisconsin Gas
Company ("Wisconsin Gas"), and is presently seeking authority
from the Public Service Commission of Wisconsin ("PSCW") to
transfer Wisconsin Electric's gas utility assets, together with
certain associated liabilities, to Wisconsin Gas in a tax free
exchange for an equity ownership by Wisconsin Electric in
Wisconsin Gas.  For additional information, see "Factors
Affecting Results, Liquidity and Capital Resources" in Item 7 of
this report.

CAUTIONARY FACTORS:   A number of forward-looking statements are
included in this document.  When used, the terms, "anticipate,"
"believe," "estimate," "expect," "objective," "plan," "possible,"
"potential," "project" and similar expressions are intended to
identify such forward-looking statements.  Forward-looking
statements are subject to certain risks, uncertainties and
assumptions which could cause actual results to differ materially
from those that are described, including factors described
throughout this document and in "Factors Affecting Results,
Liquidity and Capital Resources" in Item 7 of this report.


                       UTILITY OPERATIONS

ELECTRIC UTILITY OPERATIONS

The Company's electric utility operations consists of the
electric operations of Wisconsin Electric.  Wisconsin Electric,
which is the largest electric utility in the state of Wisconsin,
generates, distributes and sells electric energy in a territory
of approximately 12,000 square miles with a population estimated
at 2,300,000 in southeastern (including the metropolitan
Milwaukee area), east central and northern Wisconsin and in the
Upper Peninsula of Michigan.


Electric Sales

See "Selected Operating Data" in Item 6 of this report for
certain electric utility operating information by customer class
during the periods 1996 through 2000.

Wisconsin Electric is authorized to provide retail electric
service in designated territories in the state of Wisconsin, as
established by indeterminate permits, certificates of public
convenience and necessity, or boundary agreements with other
utilities, and in certain territories in the state of Michigan
pursuant to franchises granted by municipalities.  Wisconsin
Electric also sells wholesale electric power.

Electric energy sales by Wisconsin Electric to all classes of
customers totaled approximately 31.4 million megawatt hours
during 2000, a 2.5% increase over 1999.  Approximately
0.2 million of megawatt-hour sales during 2000 were to Edison
Sault Electric Company ("Edison Sault"), an affiliated electric
utility serving retail and wholesale customers in the Upper
Peninsula of Michigan.  There were approximately 1,027,000
electric customers at December 31, 2000, an increase of 2.1%
since December 31, 1999.

Electric energy sales are impacted by seasonal factors and
varying weather conditions from year-to-year.  Wisconsin
Electric, a summer peaking utility as a result of cooling load,
reached its all-time electric peak demand obligation of
5,974 megawatts on July 29, 1999.  During the years 2001 through
2005, Wisconsin Electric currently estimates that electric peak
demand obligation will grow at an annualized rate of 1.8% to
approximately 6,400 megawatts by the year 2005.

SALES TO LARGE ELECTRIC RETAIL CUSTOMERS:   Wisconsin Electric
provides electric utility service to a diversified base of
customers in such industries as mining, paper, foundry, food
products, machinery production as well as to large retail chains.
Cleveland-Cliffs, Inc. manages the Company's two largest retail
electric customers, the Empire and Tilden iron ore mines located
in the Upper Peninsula of Michigan.  Wisconsin Electric currently
has special negotiated power-sales contracts with the mines that
expire in 2007.  The combined electric energy sales to the two
mines accounted for 7.8%, 7.1% and 8.2% of the Company's total
electric utility energy sales during 2000, 1999 and 1998,
respectively.

SALES TO WHOLESALE CUSTOMERS:   During 2000, Wisconsin Electric
sold wholesale electric energy to five municipally owned systems,
two rural cooperatives and two municipal joint action agencies
located in the states of Wisconsin, Michigan and Illinois.
Wholesale electric energy sales by Wisconsin Electric were also
made to 43 other public utilities and power marketers throughout
the region under rates approved by the Federal Energy Regulatory
Commission.  Wholesale sales accounted for approximately 12.2% of
the Company's total electric energy sales and 7.2% of total
electric operating revenues during 2000 compared with 12.2% of
total electric energy sales and 6.9% of total electric operating
revenues during 1999.

ELECTRIC SYSTEM RELIABILITY MATTERS:   In spite of continued
tight regional electric supply, especially during episodes of hot
and humid weather, the Company had adequate capacity to meet all
of its firm electric load obligations during 2000 and expects to
have adequate capacity to meet all of its firm obligations during
2001.  However, the Company anticipates that the regional
electric energy supply will remain tight during 2001.  For
additional information, see "Factors Affecting Results, Liquidity
and Capital Resources" in Item 7 of this report.

"POWER THE FUTURE" STRATEGY:   Demand for electricity in the
state of Wisconsin is currently expected to outstrip supply by
4,000 megawatts by 2010.  Wisconsin Electric's electric load is
currently growing at approximately 100 to 150 megawatts per year.
In response, Wisconsin Energy announced an enhanced 10-year,
$7 billion strategy in February 2001 to improve the supply and
reliability of electricity in Wisconsin.  For additional
information, see "Factors Affecting Results, Liquidity and
Capital Resources" in Item 7 of this report.  As part of its
enhanced "Power the Future" strategy, Wisconsin Energy expects to
create a new non-utility energy subsidiary that would construct
and own 2,800 megawatts of new natural gas-fired and coal-fired
generating capacity in Wisconsin and that would be leased back to
Wisconsin Electric under 20- to 25-year contracts approved by the
PSCW.  Wisconsin Electric would operate and maintain the new
plants and would have the right to renegotiate the leases or
acquire the associated plants outright at market value at the end
of the lease contracts.  Implementation of the "Power the Future"
strategy is subject to a number of state and federal regulatory
approvals as well as the amendment of several state laws in
Wisconsin.


Competition

Driven by a combination of market forces, regulatory and
legislative initiatives and technological changes, the nation's
electric utility industry continues a trend towards restructuring
and increased competition.  However, given the current status of
restructuring initiatives in regulatory jurisdictions where the
Company primarily does business, the Company cannot predict the
ultimate timing or impact of a restructured electric industry on
its financial position or results of operations.  For additional
information, see "Factors Affecting Results, Liquidity and
Capital Resources" in Item 7 of this report.


Electric Supply

The table below indicates the Company's sources of electric
energy supply, including net generation by fuel type, for the
following years ended December 31.

<TABLE>
<CAPTION>
                            2001 (a)       2000          1999          1998
                            --------       ----          ----          ----
<S>                         <C>           <C>           <C>           <C>

Coal                         63.2%         64.2%         63.6%         63.4%
Nuclear                      24.5          23.3          22.0          18.3
Hydroelectric                 1.3           1.1           1.2           1.0
Natural Gas                   0.7           1.0           1.3           1.8
Oil and Other(b)              0.1           0.2           0.2           0.2
                            -----         -----         -----         -----
  Net Generation             89.8          89.8          88.3          84.7
Power Purchases              10.2          10.2          11.7          15.3
                            -----         -----         -----         -----
  Total                     100.0%        100.0%        100.0%        100.0%
                            =====         =====         =====         =====
<FN>
(a) Estimated assuming that there are no unforeseen contingencies such as
    unscheduled maintenance or repairs of the Company's generating
    facilities or of regional electric transmission facilities.  See
    "Factors Affecting Results, Liquidity and Capital Resources -
    Cautionary Factors" in Item 7 of this report.

(b) Includes generation by alternative renewable sources.
</FN>
</TABLE>


The Company's net generation totaled 29.6 million  megawatt-hours
during 2000 compared with 28.4 million megawatt hours during 1999
and 26.3 million megawatt hours during 1998.  Net generation has
increased in each of the past two years in large part due to
higher availability of Wisconsin Electric's Point Beach
Nuclear Plant.

Wisconsin Electric's average total fuel costs per million British
thermal units by fuel type for the years ended December 31 are
shown below.  As described in further detail in "Factors
Affecting Results, Liquidity and Capital Resources" in Item 7 of
this report, the price of natural gas (as well as oil) increased
significantly during 2000 as fuel supplies failed to keep up with
growing demand.

<TABLE>
<CAPTION>
                   2000      1999       1998
                   ----      ----       ----
<S>               <C>       <C>        <C>
Coal              $1.11     $1.10      $1.17
Nuclear            0.53      0.55       0.53
Natural Gas        5.08      2.82       2.74
Oil                5.27      3.57       3.70
</TABLE>


Coal-Fired Generation

COAL SUPPLY:   Wisconsin Electric diversifies the coal supply for
its power plants in the states of Wisconsin and Michigan by
purchasing from mines in northern and central Appalachia as well
as from various western mines.  During 2001, 99% of Wisconsin
Electric's projected coal requirements of 12.2 million tons will
be under contract.  Wisconsin Electric does not anticipate any
problem in procuring its remaining 2001 coal requirements through
short-term or spot purchases and inventory adjustments.

Following is a summary of the annual tonnage amounts for
Wisconsin Electric's principal long-term coal contracts by the
month and year in which the contracts expire.

<TABLE>
<CAPTION>
 Contract Expiration Date     Annual Tonnage
 ------------------------     --------------
        <S>                     <C>
        Dec. 2002               4,900,000
        Dec. 2003                 500,000
        Dec. 2005               3,200,000
        Dec. 2006               2,000,000
</TABLE>


As of the beginning of 2001, Wisconsin Electric had approximately
a 107-day supply of coal in inventory at its coal-fired
facilities.  The following summarizes the status of coal supply
for each of the coal-fired facilities that supply electricity to
Wisconsin Electric:

PLEASANT PRAIRIE POWER PLANT:   All of the estimated 2001 coal
requirements for this plant are presently under contract.

OAK CREEK POWER PLANT:   All of the estimated 2001 coal
requirements for this plant are presently under contract or
agreed upon in principle.

PRESQUE ISLE POWER PLANT:   Approximately 99% of the estimated
2001 coal requirements for this plant are presently under
contract.

EDGEWATER 5 GENERATING UNIT:   Coal for this unit, in which
Wisconsin Electric has a 25% interest, is purchased by the
majority owner of the facility, Wisconsin Power and Light
Company, a subsidiary of Alliant Energy Resources.

VALLEY AND PORT WASHINGTON POWER PLANTS:   Coal requirements for
these plants will be supplied in 2001 under existing contracts or
contracts that have been agreed upon in principle.

MILWAUKEE COUNTY POWER PLANT:   Coal for this facility is
purchased by Wisconsin Electric through annual spot purchases.

COAL DELIVERIES:   Approximately 80% of Wisconsin Electric's 2001
coal requirements are expected to be delivered by Wisconsin
Electric-owned unit trains.  The unit trains will transport coal
for the Oak Creek and Pleasant Prairie Power Plants from
Pennsylvania, New Mexico and Wyoming mines.  Coal from
Pennsylvania and Colorado mines is also transported via rail to
Lake Erie or Lake Michigan transfer docks and delivered to the
Valley and Port Washington Power Plants by lake vessels.  Coal
from central Appalachia is shipped via rail to Lake Erie transfer
docks and delivered to the Milwaukee County Power Plant by truck
once it arrives by lake vessel in Milwaukee.  Montana and Wyoming
coal for Presque Isle Power Plant is transported via rail to
Superior, Wisconsin, placed in dock storage and reloaded into
lake vessels for plant delivery.  Central Appalachian and
Colorado coal bound for Presque Isle Power Plant is shipped via
rail to Lake Erie and Lake Michigan (Chicago) coal transfer
docks, respectively, for lake vessel delivery to the plant.

ENVIRONMENTAL MATTERS:   For information regarding emission
restrictions, especially as they relate to coal-fired generating
facilities, see "Environmental Compliance" below.


Nuclear Generation

POINT BEACH NUCLEAR PLANT:   Wisconsin Electric owns two 510-
megawatt electric generating units at Point Beach Nuclear Plant
in Two Rivers, Wisconsin.  The United States Nuclear Regulatory
Commission operating licenses for Point Beach expire in October
2010 for Unit 1 and in March 2013 for Unit 2.  For additional
information concerning Point Beach, see "Factors Affecting
Results, Liquidity and Capital Resources" in Item 7 and "Note E -
Nuclear Operations" in Item 8 of this report.

NUCLEAR MANAGEMENT COMPANY:   In August 2000, the Nuclear
Management Company, LLC assumed operating responsibility for
Point Beach with the transfer of operating authority under its
operating licenses.  During 1999, the Company and the affiliates
of three other unaffiliated investor-owned utilities in the
region formed the Nuclear Management Company, which manages seven
nuclear generating units in the Midwest as of December 31, 2000.
Wisconsin Electric continues to own Point Beach and retains
exclusive rights to the energy generated by the plant as well as
financial responsibility for the safe operation, maintenance and
decommissioning of Point Beach.  For further information, see
"Factors Affecting Results, Liquidity and Capital Resources" in
Item 7 of this report.

NUCLEAR FUEL SUPPLY:   Wisconsin Electric purchases uranium
concentrates ("Yellowcake") and contracts for its conversion,
enrichment and fabrication.  Wisconsin Electric maintains title
to the nuclear fuel until fabricated fuel assemblies are
delivered to Point Beach, whereupon it is sold to and leased back
from the Wisconsin Electric Fuel Trust.  For further information
concerning this nuclear fuel lease, see "Note F - Long-Term Debt"
in Item 8 of this report.

URANIUM REQUIREMENTS:   Wisconsin Electric requires approximately
400,000 pounds of Yellowcake to refuel a generating unit at Point
Beach.  During 1998, Wisconsin Electric initiated staggered,
extended fuel cycles that are expected to average approximately
18 months in duration.  The supply of Yellowcake for these
refuelings is currently provided through one long-term contract,
amended in 2000, which supplies 100% of annual requirements under
these staggered, extended fuel cycles through 2007.

CONVERSION:   Wisconsin Electric has a long-term contract with a
provider of uranium conversion services to supply 75% of the
conversion requirements for the Point Beach reactors through
2004.  Wisconsin Electric has an additional long-term conversion
contract with a second conversion supplier to supply the
remaining 25% of Wisconsin Electric's annual conversion
requirements through 2004.

ENRICHMENT:   Wisconsin Electric effectively has one long-term
contract that provides for 100% of the required enrichment
services for the Point Beach reactors through the year 2006.

FABRICATION:   Fabrication of fuel assemblies from enriched
uranium for Point Beach is covered under a contract with
Westinghouse Electric Corporation for the balance of the plant's
current operating licenses.  During its fall 2000 refueling
outage, the first reload region of a new fuel design from
Westinghouse was loaded into Point Beach Unit 2.  The first
reload of the new fuel design in Unit 1 is scheduled for the
spring of 2001.  The new fuel design is expected to provide
additional safety margin and cost savings and to reduce the
number of discharged spent fuel assemblies over the remaining
operating license.

USED FUEL STORAGE & DISPOSAL:   For information concerning used
fuel storage and disposal issues, see "Factors Affecting Results,
Liquidity and Capital Resources" in Item 7 of this report.

NUCLEAR DECOMMISSIONING:   Wisconsin Electric provides for costs
associated with the eventual decommissioning of Point Beach
through the use of an external trust fund.  Payments to this
fund, together with investment earnings, brought the balance in
the trust fund at December 31, 2000 to approximately $613 million
compared with an estimated cost to decommission Point Beach of
$586 million in current dollars.  For additional information
regarding decommissioning, see "Note E - Nuclear Operations" in
Item 8 of this report.

NUCLEAR PLANT INSURANCE:   For information regarding nuclear
plant insurance, see "Note E - Nuclear Operations" in Item 8 of
this report.


Hydroelectric Generation

Wisconsin Electric's hydroelectric generating system consists of
fourteen operating plants with a total installed capacity of
approximately 89 megawatts and a dependable capability of
approximately 65 megawatts.  Of these fourteen plants, thirteen
are licensed by the Federal Energy Regulatory Commission.  The
fourteenth plant, with an installed generating capacity of
approximately 2 megawatts, does not require a license.  Of the
thirteen licensed plants, twelve plants, representing a total of
85 megawatts of installed capacity, have long-term licenses from
the Federal Energy Regulatory Commission, and one plant, the
Sturgeon project, will not be relicensed and is intended to be
removed.  In December of 2000, Wisconsin Electric sold a
fifteenth plant, with an installed generating capacity of
approximately 1 megawatt, to an independent party.


Natural Gas-Fired Generation

The Concord and Paris Combustion Turbine Power Plants, Germantown
Unit 5 and the Oak Creek combustion turbine use natural gas as
their primary fuel, with fuel oil as backup.  Natural gas is also
used for boiler ignition and flame stabilization purposes at the
Pleasant Prairie and Oak Creek Power Plants.  Gas for these
plants is purchased on the spot market from gas marketers and/or
producers and delivered on the local distribution system of
Wisconsin Electric's gas operations.

Wisconsin Electric also has a power purchase agreement with
Mirant (formerly Southern Energy, Inc.) where Wisconsin Electric
delivers fuel to their Neenah Power Plant and receives the
electric power produced, as discussed in "Purchase Power
Commitments" below.  This plant uses natural gas as its primary
fuel, with fuel oil as backup.  Wisconsin Electric supplies fuel
to Mirant's Neenah Power Plant utilizing the same procedures and
agreements that are used for Wisconsin Electric's facilities.

An interruptible balancing and storage agreement with ANR
Pipeline is intended to facilitate the variable gas usage pattern
of the combustion turbine plants.

Natural gas for the gas-fired boiler at the Milwaukee County
Power Plant and for boiler ignition and flame stabilization at
the Valley Power Plant is purchased under an agency agreement
with a gas marketing company.  The agent purchases natural gas
and arranges for interstate pipeline transportation to the local
gas distribution utility.  The local gas distribution utility
then transports Wisconsin Electric's gas to each plant under
interruptible tariffs.

Wisconsin Electric is the gas distribution utility for Concord,
Paris, Pleasant Prairie and Oak Creek Power Plants.  Wisconsin
Gas is the gas distribution utility for the Valley and Milwaukee
County Power Plants.  Both the Germantown Power Plant and
Mirant's Neenah Power Plant are directly connected to ANR
Pipeline, with no gas distribution utility involvement.

Firm gas transportation has been contracted for during the peak
summer period between the Joliet gas trading hub south of
Chicago, Illinois and Wisconsin Electric's power plant
interconnects.  A portion of Wisconsin Electric's gas
requirements will be purchased at the Joliet hub.


Oil-Fired Generation

Fuel oil is used for the combustion turbines at the Point Beach,
Germantown and Port Washington Power Plants.  It is also used for
boiler ignition and flame stabilization at the Presque Isle Power
Plant, as backup for ignition at the Pleasant Prairie Power Plant
and as a backup fuel for the natural gas-fired gas turbines
discussed above.  Fuel oil requirements are purchased under
partnering agreements with suppliers that assist Wisconsin
Electric with inventory tracking and oil market price trends.

Subject to various regulatory approvals, the four original
generating units at the Germantown Power Plant will be converted,
one unit per year from 2001 to 2004, to dual fuel (natural gas
and oil).  A fifth dual fuel combustion turbine began commercial
operation at Germantown Power Plant in 2000.


Purchase Power Commitments

To meet a portion of its anticipated increase in future electric
energy supply needs, Wisconsin Electric had entered into separate
long-term power purchase contracts with subsidiaries of
Cogentrix, Inc. and Southern Energy, Inc., now Mirant.  In
addition, in December 2000, Wisconsin Electric executed a power
purchase agreement with a subsidiary of the Calpine Corporation
for new capacity beginning in 2002.

The contract with LSP-Whitewater, LP, a subsidiary of Cogentrix,
Inc., for 236 megawatts of firm capacity from a gas-fired
cogeneration facility located in Whitewater, Wisconsin, does not
include any minimum energy requirements.  Wisconsin Electric
treats this power purchase contract as a capital lease.  For
additional information, see "Note F - Long-Term Debt" in Item 8
of this report.

Mirant's Neenah Power Plant began commercial operations in May
2000. The Neenah plant is a 300-megawatt gas turbine peaking
facility in the town of Neenah, Wisconsin.  The purchase power
agreement is similar in structure to arrangements commonly
referred to in the electric industry as a "tolling arrangement."
That is, Wisconsin Electric delivers fuel to the facility and
receives electric power.  Wisconsin Electric pays Mirant a "toll"
to convert Wisconsin Electric's fuel into the electric energy.
The output of the facility will be available for Wisconsin
Electric to dispatch during the eight-year term of the agreement
which ends in May 2008.

Wisconsin Electric's agreement with the Calpine Corporation calls
for new generating capacity to be constructed by a Calpine
subsidiary, with electric generating units in both northern
Illinois and in central Wisconsin, to supply power to Wisconsin
Electric.  Two 150-megawatt natural gas-fired turbine peaking
units will be  constructed, one each in  2002 and 2003, and one
225-megawatt natural gas-fired combined cycle facility is to be
constructed in 2004.  The agreement remains contingent for both
parties upon certain site related issues that are anticipated to
be resolved in 2001.  This power purchase agreement also is a
tolling agreement.  The output of each unit will be committed to
Wisconsin Electric for ten years from its start of commercial
operation.

Wisconsin Electric currently expects to utilize a combination of
new generating capacity identified in its "Power the Future"
proposal and purchase power commitments similar to the agreements
with Mirant and Calpine to meet its electric demand load growth.

In the normal course of business, Wisconsin Electric utilizes
contracts of various duration for the forward purchase of
electricity to meet load requirements in an economic manner and
when the anticipated market price for electric energy is below
Wisconsin Electric's expected incremental cost of generation.
Contracts of this nature are one of the power supply resources
Wisconsin Electric uses to meet its reliability requirements.


Electric Transmission

AMERICAN TRANSMISSION COMPANY:   Effective January 1, 2001,
Wisconsin Energy transferred all of the electric utility
transmission assets of Wisconsin Electric and Edison Sault to the
American Transmission Company LLC in exchange for equity
interests in this new company.  Joining the American Transmission
Company is consistent with the Federal Energy Regulatory
Commission's Order No. 2000, designed to foster competition,
efficiency and reliability in the electric industry.

The American Transmission Company is owned and governed by the
utilities that contributed facilities or capital in accordance
with 1999 Wisconsin Act 9.  Governance of the company also
includes outside directors not associated with the energy
business.  Stock of the corporate manager of the American
Transmission Company eventually may be offered for public
ownership.

The American Transmission Company's sole business is to provide
reliable, economic transmission service to all customers in a
fair and equitable manner.  Specifically, the American
Transmission Company plans, constructs, operates, maintains and
expands transmission facilities it owns to provide for adequate
and reliable transmission of electric power.  It is expected to
provide comparable service to all customers, including Wisconsin
Electric and Edison Sault, and to support effective competition
in energy markets without favoring any market participant.  The
American Transmission Company is regulated by the Federal Energy
Regulatory Commission for all rate terms and conditions of
service and is a transmission-owning member of the Midwest ISO.

Wisconsin Electric has contracted to provide, at cost, services
required by the American Transmission Company and which the
American Transmission Company is not able to provide itself at
the time of start-up.  Services include transmission line and
substation operation and maintenance, engineering, project, real
estate, environmental, supply chain, control center, accounting
and miscellaneous services.  The annual cost of the services is
estimated to be about $67 million in the first year of operation
declining to less than $3 million after three years.

For further information, see "Factors Affecting Results,
Liquidity and Capital Resources" in Item 7 of this report.


Renewable Electric Energy

A renewable portfolio standard that will require retail energy
providers in the state of Wisconsin, like Wisconsin Electric, to
obtain an increasing percentage of their energy supply from
renewable resources is also included under the provisions of 1999
Wisconsin Act 9.  Beginning in 2001, retail energy providers must
provide 0.5% of their Wisconsin retail electric sales from
renewable energy, with the percentage increasing to 2.2% by the
year 2011.  The Company's "Power the Future" proposal includes a
commitment to significantly increase the amount of renewable
generation utilized by the Company beyond that required by
Wisconsin law.

In May 1999, the PSCW approved Wisconsin Electric's request to
expand its "energy for tomorrowT" renewable energy program to
allow participation of virtually all of its firm load customers
in Wisconsin.  In November 1999, the Michigan Public Service
Commission approved Wisconsin Electric's request to offer the
"energy for tomorrow" renewable energy program to all of its
firm load customers in the state of Michigan.  The program
currently has over 11,000 participants.


GAS UTILITY OPERATIONS

The Company's gas utility operations consists of the gas
operations of Wisconsin Electric, which is authorized to provide
retail gas distribution service in designated territories in the
state of Wisconsin, as established by indeterminate permits,
certificates of public convenience and necessity, or boundary
agreements with other utilities.  Wisconsin Electric also
transports customer-owned gas.  Wisconsin Electric's gas utility
operates in four distinct service areas of about 3,800 square
miles in Wisconsin: west and south of the city of Milwaukee, the
Appleton area, the Prairie du Chien area and areas within Iron
and Vilas Counties with an estimated population of
approximately 1,200,000.

COMBINATION OF GAS UTILITY OPERATIONS:   On November 1, 2000,
Wisconsin Electric and Wisconsin Gas filed a joint application
with the PSCW for authority to transfer the physical gas utility
assets of Wisconsin Electric together with certain liabilities
associated with such assets, with a net book value of
approximately $365 million as of December 31, 2000, to Wisconsin
Gas in return for stock in Wisconsin Gas in a tax free
transaction.  Wisconsin Energy expects that the combined gas
operation will result in improved customer service and greater
synergies as a result of the WICOR acquisition.  The combined gas
operations would retain the name Wisconsin Gas Company and become
the 9th largest gas distribution company in the United States as
measured by delivery volumes.  Assuming that the PSCW approves
the transaction described above, Wisconsin Electric and Wisconsin
Gas expect to make a second filing in 2001 seeking authorization
to combine tariffs and rates.  This transaction is also subject
to the approval of the Securities and Exchange Commission under
the Public Utility Holding Act of 1935.


Gas Deliveries

The Company's gas utility business is highly seasonal,
particularly as to residential and commercial sales for space
heating purposes, with a substantial portion of its gas
deliveries occurring during the winter heating months.  Sales of
gas are also impacted by varying weather conditions from
year-to-year.

See "Selected Operating Data" in Item 6 of this report for
selected gas utility operating information by customer class
during the period 1996 through 2000.

Total gas therms delivered by Wisconsin Electric, including
customer-owned transported gas, were approximately 944.9 million
therms during 2000, a 0.1% increase compared with 1999.  At
December 31, 2000, Wisconsin Electric was transporting gas for
approximately 445 customers who choose to purchase gas directly
from other suppliers.  Transported gas accounted for
approximately 41% of total therms delivered by Wisconsin Electric
during 2000, 43% during 1999 and 46% during 1998.  Wisconsin
Electric had approximately 407,800 gas customers at December 31,
2000, an increase of approximately 2.3% since December 31, 1999.

Wisconsin Electric's maximum daily send-out during 2000 was
706,810 dekatherms on December 5, 2000.  A dekatherm is
equivalent to ten therms or one million British thermal units.

SALES TO LARGE GAS CUSTOMERS:   The Company provides gas utility
service to a diversified base of industrial customers who are
largely within its electric service territory.  Major industries
served include the paper, food products and fabricated metal
products industries.  The electric utility operations of
Wisconsin Electric is the Company's largest single gas customer.


Competition

Competition in varying degrees exists between natural gas and
other forms of energy available to consumers.  Many of the
Company's large commercial and industrial customers are dual-fuel
customers that are equipped to switch between natural gas and
alternate fuels.  The Company offers lower-priced interruptible
rates and transportation services for these customers to enable
them to reduce their energy costs and use gas rather than other
fuels.  Under gas transportation agreements, customers purchase
gas directly from gas marketers and arrange with interstate
pipelines and the Company to have the gas transported to the
facilities where it is used.  The Company earns substantially the
same margin (difference between revenue and cost of gas), whether
it sells and transports gas to customers or only transports
their gas.

The Company's future ability to maintain its present share of the
industrial dual-fuel market (the market that is equipped to use
gas or other fuels) depends on the success of the Company and
third-party gas marketers in obtaining long-term and short-term
supplies of natural gas at marketable prices and their success in
arranging or facilitating competitively-priced transportation
service for those customers that desire to buy their own gas
supplies.

Federal and state regulators continue to implement policies to
bring more competition to the gas industry.  For information
concerning proceedings by the PSCW to consider how its regulation
of gas distribution utilities should change to reflect the
changing competitive environment in the gas industry, see
"Factors Affecting Results, Liquidity and Capital Resources" in
Item 7 of this report.  While the gas utility distribution
function is expected to remain a heavily regulated, monopoly
function, the sales of the natural gas commodity and related
services are expected to become increasingly subject to
competition from third parties.  However, it remains uncertain if
and when the current economic disincentives for small customers
to choose an alternative gas commodity supplier may be removed
such that the Company begins to face competition for the sale of
gas to its smaller firm customers.


Gas Supply, Pipeline Capacity and Storage

The gas operations of Wisconsin Electric has been able to meet
its contractual obligations with both its suppliers and its
customers despite periods of severe cold and unseasonably warm
weather.

PIPELINE CAPACITY AND STORAGE:   Interstate pipelines serving
Wisconsin originate in three major gas producing areas of North
America:  the Oklahoma and Texas basins, the Gulf of Mexico and
western Canada.  The Company has contracted for long-term firm
capacity from each of these areas.  This strategy reflects
management's belief that overall supply security is enhanced by
geographic diversification of the supply portfolios and that
Canada represents an important long-term source of reliable,
competitively-priced gas.

Because of the daily and seasonal variations in gas usage in
Wisconsin, the Company has also contracted for substantial
underground storage capacity, primarily in Michigan.  Storage
enables the Company to manage significant changes in daily demand
and to optimize its overall gas supply and capacity costs.  In
summer, gas in excess of market demand is transported into the
storage fields, and in winter, gas is withdrawn from storage and
combined with gas purchased in or near the production areas
("flowing gas") to meet the increased winter market demand.  As a
result, the Company can contract for less long-line pipeline
capacity than would otherwise be necessary, and can purchase gas
on a more uniform daily basis from suppliers year-round.  Each of
these capabilities enables the Company to reduce its overall
costs.

The Company also maintains high deliverability storage in the mid-
continent and Southeast production areas, as well as in its
market area.  This storage capacity is designed to deliver gas
when other supplies cannot be delivered during extremely cold
weather in the producing areas, which can reduce long-line
supply.

The Company holds firm daily transportation and storage capacity
entitlements from pipelines and other service providers under
long-term contracts.

TERM GAS SUPPLY:   The gas operations of Wisconsin Electric has
contracts for firm supplies with terms in excess of 30 days with
more than 20 gas suppliers for gas produced in each of the three
producing areas discussed above.  The term contracts have varying
duration so that only a portion of the Company's firm gas supply
expires in any year.  Management believes that the volume of gas
under contract is sufficient to meet its forecasted firm peak day
demand.

SECONDARY MARKET TRANSACTIONS:   Capacity release is a mechanism
by which pipeline long-line and storage capacity and gas supplies
under contract can be resold in the secondary market.  Local
distribution companies, such as the gas operations of Wisconsin
Electric, must contract for capacity and supply sufficient to
meet the firm peak day demand of their customers.  Peak or near
peak demand days generally occur only a few times each year.
Capacity release facilitates higher utilization of contracted
capacity and supply during those times when the full contracted
capacity and supply are not needed by the utility, helping to
mitigate the fixed costs associated with maintaining peak levels
of capacity and gas supply.  Through pre-arranged agreements and
day-to-day electronic bulletin board postings, interested parties
can purchase this excess capacity and supply.  The proceeds from
these transactions are passed through to ratepayers, subject to
the incentive gas cost mechanism pursuant to which the Company
has an opportunity to share in the cost savings.  See "Factors
Affecting Results, Liquidity and Capital Resources - Rates and
Regulatory Matters" in Item 7 of this report for information on
the incentive gas cost recovery mechanism.  During 2000, the
Company continued its active participation in the capacity
release market.

SPOT MARKET GAS SUPPLY:   The gas operations of Wisconsin
Electric expects to continue to make gas purchases in the 30-day
spot market as price and other circumstances dictate.  The
Company has supply relationships with a number of sellers from
whom it purchases spot gas.

GUARDIAN PIPELINE:   In March 1999, WICOR announced the formation
of a joint venture, Guardian Pipeline, L.L.C., to construct the
Guardian interstate natural gas pipeline from the Joliet,
Illinois market hub to southeastern Wisconsin ("Guardian
Pipeline").  CMS Energy, a Dearborn, Michigan-based international
energy company, and a subsidiary of Xcel Energy, a Minneapolis-
based diversified energy company, are cosponsors of the project
with WICOR.  The three partners will have equal ownership
interests in the project.  On March 14, 2001, the Federal Energy
Regulatory Commission issued a certificate of public convenience
and necessity authorizing construction and operation of the
Guardian Pipeline.  The pipeline is scheduled to be in service in
November 2002.  The Guardian Pipeline is expected to serve
growing demand for natural gas in Wisconsin and Northern Illinois.


STEAM UTILITY OPERATIONS

Wisconsin Electric's steam utility generates, distributes and
sells steam supplied by its Valley and Milwaukee County Power
Plants.  Wisconsin Electric operates a district steam system in
downtown Milwaukee and the near south side of Milwaukee.  Steam
is supplied to this system from Wisconsin Electric's Valley Power
Plant, a coal-fired cogeneration facility.  Wisconsin Electric
also operates the steam production and distribution facilities of
the Milwaukee County Power Plant located on the Milwaukee County
Grounds in Wauwatosa, Wisconsin.

Annual sales of steam fluctuate from year to year based upon
system growth and variations in weather conditions.  During 2000,
the steam utility had $21.9 million of operating revenues from
the sale of 3,085 million pounds of steam compared with
$21.3 million of operating revenues from the sale of
2,914 million pounds of steam during 1999.  As of December 31,
2000, steam was used by 451 customers for processing, space
heating, domestic hot water and humidification compared with 450
customers at December 31, 1999.


UTILITY RATE MATTERS

See "Factors Affecting Results, Liquidity and Capital Resources -
Rates and Regulatory Matters" in Item 7 of this report.


                           REGULATION

Wisconsin Electric is subject to the regulation of the PSCW as to
retail electric, gas and steam rates in the state of Wisconsin,
standards of service, issuance of securities, construction of new
facilities, transactions with affiliates, levels of short-term
debt obligations, billing practices and other various matters.
Wisconsin Electric is subject to the regulation of the Michigan
Public Service Commission as to the various matters associated
with retail electric service in the state of Michigan as noted
above except as to issuance of securities, construction of
certain new facilities, levels of short-term debt obligations and
advance approval of transactions with affiliates.  Wisconsin
Electric's hydroelectric facilities are regulated by the Federal
Energy Regulatory Commission.  Wisconsin Electric is also subject
to regulation of the Federal Energy Regulatory Commission with
respect to wholesale power service, and accounting.

The following table compares the source of the Company's
operating revenues by regulatory jurisdiction for each of the
three years in the period ended December 31, 2000.

<TABLE>
<CAPTION>
                                               2000                  1999                  1998
                                           ------------          ------------          ------------
                                        Amount     Percent    Amount     Percent    Amount     Percent
                                        ------     -------    ------     -------    ------     -------
                                                            (Millions of Dollars)
<S>                                    <C>         <C>       <C>         <C>       <C>         <C>
Public Service Commission of Wisconsin
  Electric Utility - Retail            $1,517.7      69.5%   $1,465.7      72.7%   $1,434.3      73.3%
  Gas Utility - Retail                    399.7      18.3%      306.8      15.2%      295.9      15.1%
  Steam Utility - Retail                   21.9       1.0%       21.3       1.1%       20.5       1.0%
                                       --------     ------   --------     ------   --------     ------
    Total                               1,939.3      88.8%    1,793.8      89.0%    1,750.7      89.4%
Michigan Public Service Commission
  Electric Utility - Retail               118.0       5.4%      106.6       5.3%      109.5       5.6%
Federal Energy Regulatory Commission
  Electric Utility - Wholesale            127.7       5.8%      116.0       5.7%       97.6       5.0%
                                       --------     ------   --------     ------   --------     ------
Total Utility Operating Revenues       $2,185.0     100.0%   $2,016.4     100.0%   $1,957.8     100.0%
                                       ========     ======   ========     ======   ========     ======
</TABLE>


For information concerning the pending implementation of full
electric retail competition in the state of Michigan effective
January 1, 2002, see "Factors Affecting Results, Liquidity and
Capital Resources" in Item 7 of this report.

Operation and construction relating to Wisconsin Electric's Point
Beach Nuclear Plant facilities are subject to regulation by the
United States Nuclear Regulatory Commission.  Wisconsin
Electric's operations are also subject to regulations, where
applicable, of the United States Environmental Protection Agency
("EPA"), the Wisconsin Department of Natural Resources, the
Michigan Department of Natural Resources and the Michigan
Department of Environmental Quality.

ELECTRIC RELIABILITY LEGISLATION:   In 1998, the Wisconsin State
Legislature passed and the Governor of Wisconsin signed into law
1997 Wisconsin Act 204, intended to address concerns with
electric reliability in the state of Wisconsin.  The 1997
Wisconsin Act 204 included new requirements concerning market
power which utilities and their affiliates must meet in order to
construct generating facilities.  The requirements apply to
utility facilities in excess of 100 megawatts.  The PSCW is
currently engaged in a rule making proceeding involving the
applicability of Act 204 to utility affiliates seeking to
construct facilities in the state of Wisconsin.

PUBLIC BENEFITS:   Public benefits legislation was also included
in 1999 Wisconsin Act 9.  The law created new funding of
$44 million to be collected by utilities and remitted to the
Wisconsin Department of Administration.  The law also required
utilities to continue to collect the funds at existing levels for
low-income, conservation and environmental research and
development programs and to begin transferring the funds for
these programs to the Department of Administration.  The Company
implemented this change in October 2000.  The utilities'
traditional role of providing these programs is being shifted to
the Department of Administration, which will administer the funds
for a statewide public benefits program.  The new law also
requires utilities to provide a specified proportion of its
retail energy sales in programs such as Wisconsin Electric's
"energy for tomorrow" renewable energy program.

AFFILIATE INTEREST POLICIES DOCKET:   From late 1998 through
early 2000, the PSCW reviewed the policies on standards of
conduct governing diversification of activities that can be
performed within the utility and utility affiliates.  During
these proceedings, Wisconsin Electric took the position that
state policy should protect competition, not individual
competitors, and that customers should have the choice to use
either Wisconsin Electric or another vendor for these products
and services.  In April 2000, the PSCW issued an order which
allows utilities to continue to provide and sell products and
services other than core utility products as long as the related
costs are fully allocated and not subsidized by ratepayers.


                    ENVIRONMENTAL COMPLIANCE

Environmental Expenditures

Expenditures for environmental compliance and remediation issues
are included in anticipated capital expenditures described in
"Liquidity and Capital Resources" in Item 7 of this report.  For
discussion of additional environmental issues, see "Environmental
Matters" in Item 3 of this report.  For further information
concerning air quality standards and rulemaking initiated by the
EPA, including estimated costs of compliance, see "Factors
Affecting Results, Liquidity and Capital Resources" in Item 7 of
this report.

UTILITY ENERGY SEGMENT:   Compliance with federal, state and
local environmental protection requirements resulted in capital
expenditures by Wisconsin Electric of approximately $37 million
in 2000 compared with $44 million in 1999.  Expenditures incurred
during 2000 primarily included costs associated with the
installation of pollution abatement facilities at Wisconsin
Electric's power plants.  Such expenditures at Wisconsin Electric
are budgeted at approximately $59 million during 2001, reflecting
nitrogen oxide ("NOx") control equipment needed to comply with
ozone non-attainment rules promulgated by the Environmental
Protection Agency.

Operation, maintenance and depreciation expenses for Wisconsin
Electric's fly ash removal equipment and other environmental
protection systems are estimated to have been approximately
$41 million during 2000 and $37 million during 1999 and 1998.


Solid Waste Landfills

The Company provides for the disposal of non-ash related solid
wastes and hazardous wastes through licensed independent
contractors, but federal statutory provisions impose joint and
several liability on the generators of waste for certain cleanup
costs.  Remediation-related activity pertaining to specific sites
is discussed below.

GIDDINGS AND LEWIS, INC./CITY OF WEST ALLIS LAWSUIT:   In July
1999, a jury decided against Wisconsin Electric and awarded the
plaintiffs $4.5 million as actual damages and $100 million in
punitive damages in a lawsuit alleging that Wisconsin Electric
had placed contaminated wastes at two sites in the City of West
Allis, Wisconsin.  Wisconsin Electric is appealing the case.  For
additional information, see "Environmental Matters" in Item 3 and
"Note K - Commitments and Contingencies" in the Notes to
Financial Statements in Item 8 of this report.

MUSKEGO LANDFILL:   On January 2, 2001, three individuals filed
an action in the circuit court of Milwaukee County against Waste
Management of Wisconsin, Inc., Wisconsin Electric and others
alleging environmental contamination emanating from the Muskego
landfill in Muskego, Wisconsin.  The Muskego landfill was
operated by Waste Management and was classified as an EPA
Superfund Site.  The plaintiffs, who are adjacent landowners to
the site, are alleging that the defendants are liable on various
theories for groundwater contamination.  Plaintiffs are
requesting, inter alia, further remediation, damages for personal
injury, loss of property value and punitive damages.  Wisconsin
Electric is investigating the matter but believes that in 1996 it
entered into a buyout agreement as a De Minimis party with Waste
Management and nine other potentially responsible parties
("PRP's") concerning groundwater contamination on this site and
that the PRP's must therefore indemnify and defend Wisconsin
Electric in this action.

WEST AVENUE LANDFILL:   During 1996, Wisconsin Electric was
informed by the City of Waukesha that it has been identified as a
"responsible party" at a former Waukesha landfill which the city
will be remediating under Wisconsin state law.  The City of
Waukesha invoked a new statutory negotiation procedure to attempt
to obtain consensual agreement regarding responsible parties and
remediation cost sharing and hired a private environmental
allocation consultant to apportion cost shares in an attempt to
promote voluntary settlement.  The consultant issued a non-
binding final allocation report assigning a zero share of
responsibility to Wisconsin Electric.  Wisconsin Electric was
offered and accepted a De Minimis Party Settlement Agreement
releasing and indemnifying Wisconsin Electric from claims for
site liabilities in exchange for a settlement payment of $3,500.


Coal-Ash Landfills

Some early designed and constructed coal-ash landfills may allow
the release of low levels of constituents resulting in the need
for various levels of remediation.  Where Wisconsin Electric has
become aware of these conditions, efforts have been expended to
define the nature and extent of any release, and work has been
performed to address these conditions.  For additional
information, see "Note K - Commitments and Contingencies" in the
Notes to Financial Statements in Item 8 of this report.  Sites
currently undergoing remediation include:

HIGHWAY 59 LANDFILL:   In 1989, a sulfate plume was detected in
the groundwater beneath a Wisconsin Electric-owned former ash
landfill located in the Town of Waukesha, Wisconsin.  After
notifying the Wisconsin Department of Natural Resources,
Wisconsin Electric initiated a five-year expanded monitoring
program.  In July 1995, Wisconsin Electric prepared an
environmental contamination assessment of the landfill and
submitted the report to the Wisconsin Department of Natural
Resources.  Wisconsin Electric has petitioned the City of
Waukesha to extend city water service to residents of the Town of
Waukesha affected by contamination from the site.  The City
Council has agreed to extend service at Wisconsin Electric's
cost.  In addition to providing City water to affected residents,
Wisconsin Electric has completed excavation of saturated ash and
placement of a cap on the landfill, and will complete final
landscaping of the site in early 2001.  Total remediation of this
site is estimated to be $6 million.

KANSAS AVE. LANDFILL:   The Kansas Ave. site, located in the City
of St. Francis, Wisconsin, was a small landfill area used to
support the operations of Wisconsin Electric's former Lakeside
Power Plant.  Wisconsin Electric has entered into an agreement
with the Wisconsin Department of Natural Resources to place a
cover over the former ash landfill site.  Expenses associated
with a cover installation are expected to be minimal.  No
groundwater treatment is planned at this time.

OAK CREEK NORTH LANDFILL:   Groundwater impacts at this landfill,
located in the City of Oak Creek, Wisconsin, prompted Wisconsin
Electric to investigate, during 1998, the condition of the
existing cover and other conditions at the site.  Surface water
drainage improvements were implemented at this site during 1999
and 2000, which are expected to eliminate ash contact with water
and remove unwanted ponding of water near monitoring systems.
Future financial impacts to Wisconsin Electric are projected to
be minimal.

LAKESIDE LANDFILL:   During 2001, Wisconsin Electric expects to
begin investigation of property that was used primarily for coal
storage, fuel oil transport and coal ash disposal in support of
the former Lakeside Power Plant in St. Francis, Wisconsin.  Until
the investigation work has been completed and a remedial plan
developed, Wisconsin Electric cannot estimate any related
remediation costs.


Manufactured Gas Plant Sites

The Company is reviewing and addressing environmental conditions
at a number of former manufactured gas plant sites.  See
"Note K - Commitments and Contingencies" in the Notes to
Financial Statements in Item 8 of this report.


Air Quality

The 1990 amendments to the Federal Clean Air Act mandate
significant nationwide reductions in air emissions.  The most
significant sections of this law applicable to the country's
electric utilities are the acid rain and nonattainment
provisions.  The acid rain provisions limit SO2 and NOx emissions
in phases.  Phase I became effective in 1995 and Phase II became
effective during the year 2000.  The Company has met the
requirements of Phase I.  The Phase II requirements of the 1990
amendments to the Federal Clean Air Act are expected to have
minimal future impacts on the Company's utilities because of
existing cost effective compliance strategies and previous
actions taken.  Ozone nonattainment rules implemented by the
state of Wisconsin and ozone transport rules implemented by the
state of Michigan, both under authority of the Federal Clean Air
Act, will limit NOx emissions in phases over the next seven
years.

See "Factors Affecting Results, Liquidity and Capital Resources"
in Item 7 of this report for information concerning National
Ambient Air Quality Standards established during 1997 by the EPA
and ozone non-attainment rulemaking promulgated by the EPA
during 1998.


                              OTHER

RESEARCH AND DEVELOPMENT:   Research and development expenditures
by Wisconsin Electric amounted to $6.8 million during 2000,
$8.0 million during 1999 and $7.5 million during 1998.  Such
expenditures were primarily for improvement of service and
abatement of air and water pollution by the electric utility
operations.  Research and development activities include work
done by employees, consultants and contractors, plus sponsorship
of research by industry associations.

EMPLOYEES:    At December 31, 2000, Wisconsin Electric had 5,570
employees of which 5,402 were full time and 168 were part time.
As of December 31, 2000, 3,733 of Wisconsin Electric's employees
were represented under labor agreements.



ITEM 2.   PROPERTIES

The principal properties of Wisconsin Electric are owned in fee
except that the major portion of electric utility distribution
lines, steam utility distribution mains and gas utility
distribution mains and services are located, for the most part,
on or in streets and highways and on land owned by others.
Substantially all of Wisconsin Electric's utility plant is
subject to a first mortgage lien.

Effective January 1, 2001, Wisconsin Electric exited the electric
transmission business by contributing all of its transmission
assets to the American Transmission Company LLC in exchange for
equity interests in this new company.  For further information,
see "Factors Affecting Results, Liquidity and Capital Resources"
in Item 7 of this report.

Wisconsin Electric owns the following generating stations with
dependable capabilities as indicated.

<TABLE>
<CAPTION>
                                                                    Dependable Capability
                                                                       In Megawatts (a)
                                                      No. of        ---------------------
                                                    Generating     August         December
                Name                  Fuel            Units         2000            2000
                ----                  ----            -----         ----            ----
<S>                                  <C>               <C>          <C>            <C>
Steam Plants
  Point Beach                        Nuclear            2           1,012          1,022
  Oak Creek                          Coal               4           1,135          1,139
  Presque Isle                       Coal               9             617            617
  Pleasant Prairie                   Coal               2           1,200          1,210
  Port Washington                    Coal               4             320            320
  Valley                             Coal               2             267            227
  Edgewater 5 (b)                    Coal               1             102            102
  Milwaukee County                   Coal               3              11             11
                                                       --           -----          -----
Total Steam Plants                                     27           4,664          4,648
Hydro Plants (14 in number)                            37              63             67
Germantown Combustion Turbines (c)   Gas/Oil            5             345            345
Concord Combustion Turbines          Gas/Oil            4             376            376
Paris Combustion Turbines            Gas/Oil            4             388            388
Other Combustion Turbines & Diesel   Gas/Oil            6              55             62
                                                       --           -----          -----
    Total System                                       83           5,891          5,886
                                                       ==           =====          =====
<FN>
(a) Dependable capability is the net power output under average operating
    conditions with equipment in an average state of repair as of a given month
    in a given year.  Changing seasonal conditions are responsible for the
    different capabilities reported for the winter and summer periods in the
    above table.  The values were established by test and may change slightly
    from year to year.

(b) Wisconsin Electric has a 25% interest in Edgewater 5 Generating Unit, which
    is operated by Wisconsin Power and Light Company, an unaffiliated utility.

(c) During 2000, a fifth generating unit was added and inlet air coolers were
    installed on existing generating units at Germantown Power Plant,
    increasing the capacity of the plant and improving dependable capability
    during hot summer months.
</FN>
</TABLE>


At December 31, 2000, Wisconsin Electric was operating
approximately 21,900 pole-miles of overhead distribution lines
and 17,800 miles of underground distribution cable as well as
approximately 350 distribution substations and 243,900 line
transformers.

As of December 31, 2000, Wisconsin Electric's gas distribution
system included approximately 8,200 miles of mains connected at
22 gate stations to the pipeline transmission systems of ANR
Pipeline Company, Natural Gas Pipeline Company of America,
Northern Natural Pipeline Company and Great Lakes Transmission
Company.  Wisconsin Electric has a liquefied natural gas storage
plant which converts and stores in liquefied form natural gas
received during periods of low consumption.  The liquefied
natural gas storage plant has a send-out capability of 70,000
dekatherms per day.  Wisconsin Electric also has propane air
systems for peaking purposes.  These propane air systems will
provide approximately 7,000 dekatherms per day of supply to the
system.

At December 31, 2000, the combined steam systems supplied by the
Valley and Milwaukee County Power Plants consisted of
approximately 43 miles of both high pressure and low pressure
steam piping, 8.8 miles of walkable tunnels and other pressure
regulating equipment.

Wisconsin Electric owns various office buildings and service
centers throughout its service area.



ITEM 3.   LEGAL PROCEEDINGS

                      ENVIRONMENTAL MATTERS

Wisconsin Electric is subject to federal, state and certain local
laws and regulations governing the environmental aspects of its
operations.  The Company believes that, perhaps with immaterial
exceptions, its existing facilities are in compliance with
applicable environmental requirements.

See "Environmental Compliance" in Item 1 of this report, which is
incorporated by reference herein, for a discussion of matters
related to certain solid waste and coal-ash landfills,
manufactured gas plant sites and air quality.

GIDDINGS & LEWIS, INC./CITY OF WEST ALLIS LAWSUIT:   See
"Note K - Commitments and Contingencies" in the Notes to
Financial Statements in Item 8 of this report for matters related
to a July 1999 jury verdict against Wisconsin Electric in a
lawsuit alleging that Wisconsin Electric had placed contaminated
wastes at two sites in the City of West Allis, Wisconsin.

Two shareholders have brought separate derivative proceedings in
Milwaukee County Circuit Court for alleged damages resulting from
the Giddings & Lewis/City of West Allis Lawsuit.  All of the
directors of Wisconsin Energy and Wisconsin Electric are named as
defendants in one of the derivative actions and a number of
individual employees, as well as the Chief Executive Officer of
Wisconsin Energy and Wisconsin Electric, are named as defendants
in the other.  In accordance with Wisconsin law, a special
committee of independent directors of Wisconsin Energy, based
upon an investigation of the allegations contained in both
lawsuits, concluded that the maintenance of these actions is not
in the best interests of the Company.  Accordingly Wisconsin
Energy has moved to dismiss the actions.  The matter is pending.


                      UTILITY RATE MATTERS

See "Factors Affecting Results, Liquidity and Capital Resources"
in Item 7 of this report for information concerning rate matters
in the jurisdictions where Wisconsin Electric does business.


                          OTHER MATTERS

USED NUCLEAR FUEL STORAGE & REMOVAL:   See "Factors Affecting
Results, Liquidity and Capital Resources" in Item 7 of this
report for information concerning the United States Department of
Energy's breach of a contract with Wisconsin Electric that
required the United States Department of Energy to begin
permanently removing spent nuclear fuel from Point Beach Nuclear
Plant by January 31, 1998.

STRAY VOLTAGE:   On July 11, 1996, the PSCW issued its final
order regarding the stray voltage policies of Wisconsin's
investor-owned utilities.  The order clarified the definition of
stray voltage, affirmed the level at which utility action is
required, and appropriately placed some of the responsibility for
this issue in the hands of the customer.  Additionally, the order
established a uniform stray voltage tariff which delineates
utility responsibility and provides for the recovery of costs
associated with unnecessary customer demanded services.  While
this action has been beneficial in Wisconsin Electric's efforts
to manage this controversial issue, it has not had a significant
impact on Wisconsin Electric's financial position or results of
operations.

In recent years, several actions by dairy farmers have been
commenced or claims made against Wisconsin Electric for loss of
milk production and other damages allegedly caused by stray
voltage resulting from the operation of its electrical system.
At the present time, four such actions are pending and one case
is on appeal.  Wisconsin Electric does not believe that these or
any other claims thus far made or threatened against Wisconsin
Electric by reason of stray voltage will result in any
substantial liability on its part.

ELECTROMAGNETIC FIELDS:   Claims have been made or threatened
against electric utilities across the country for bodily injury,
disease or other damages allegedly caused or aggravated by
exposure to electromagnetic fields associated with electric
transmission and distribution lines.  Results of scientific
studies conducted to date have not established the existence of a
causal connection between electromagnetic fields and any adverse
health affects.  Wisconsin Electric believes that its facilities
are constructed and operated in accordance with all applicable
legal requirements and standards.  Currently, there are no cases
pending or threatened against Wisconsin Electric.



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

No matters were submitted to a vote of Wisconsin Electric's
security holders during the fourth quarter of 2000.


EXECUTIVE OFFICERS OF THE REGISTRANT

The names, ages at December 31, 2000 and positions of the
executive officers of Wisconsin Electric are listed below along
with their business experience during the past five years.  All
officers are appointed until they resign, die or are removed
pursuant to the Bylaws.  There are no family relationships among
these officers, nor is there any agreement or understanding
between any officer and any other person pursuant to which the
officer was selected.


Richard A. Abdoo (56):  Chairman of the Board, President and
                        Chief Executive Officer of Wisconsin
                        Energy since 1991.  Chairman of the Board
                        and Chief Executive Officer of Wisconsin
                        Electric since 1990.  Chairman of the
                        Board and Director of WICOR and Wisconsin
                        Gas since April 2000.  Director of
                        Wisconsin Energy since 1988.  Director of
                        Wisconsin Electric since 1989.

Charles R. Cole (54):   Senior Vice President of Wisconsin
                        Electric since January 1, 2001.  Vice
                        President - Distribution Operations of
                        Wisconsin Electric from August 1999 to
                        December 2000.  Vice President - Customer
                        Services of Kansas City Power & Light
                        from 1995 to 1999.

Stephen P. Dickson      Controller of Wisconsin Energy and
(40):                   Wisconsin Electric since April 2000.
                        Controller of Wisconsin Gas since June
                        1998.  Director of Business Risk
                        Consulting Services of Arthur
                        Andersen LLP from 1997 to 1998.  Senior
                        Manager of Arthur Andersen LLP from 1995
                        to 1997.

Paul Donovan (53):      Senior Vice President and Chief Financial
                        Officer of Wisconsin Energy since August
                        1999, and of Wisconsin Electric and
                        Wisconsin Gas since July 2000.  Executive
                        Vice President and Chief Financial
                        Officer of Sundstrand Corporation from
                        1990  and 1998, respectively, to 1999.

Richard R. Grigg (52):  Senior Vice President of Wisconsin Energy
                        and WICOR since July 2000 and President
                        and Chief Operating Officer of Wisconsin
                        Electric since 1995.  Vice President of
                        Wisconsin Energy from 1995 to June 2000.
                        Chief Nuclear Officer of Wisconsin
                        Electric from December 1996 to March
                        1998.  Director of Wisconsin Energy since
                        1995.  Director of Wisconsin Electric
                        since 1994.

Larry Salustro (53):    Senior Vice President and General Counsel
                        of Wisconsin Energy, WICOR, Wisconsin
                        Electric and Wisconsin Gas since July
                        2000.  Vice President of Wisconsin
                        Electric from 1997 through June 2000.
                        Regional Vice President - Law and
                        Governmental Affairs with AT&T from 1995
                        to 1997.

Thomas F. Schrader      President of Wisconsin Gas since October
(51):                   2000.  Senior Vice President - Strategic
                        Process Integration of Wisconsin Electric
                        since April 2000.  Senior Vice President
                        of WICOR since August 2000 and Director
                        of WICOR since 1988.  Vice President of
                        WICOR from 1988 to 1997.  President and
                        Chief Operating Officer of WICOR and Vice
                        Chairman of its subsidiaries from 1997 to
                        2000.  President and Chief Executive
                        Officer of Wisconsin Gas from 1988 to
                        1997.

Georger E. Wardeberg    Vice Chairman of the Board of Wisconsin
(65):                   Energy, WICOR, Wisconsin Electric and
                        Wisconsin Gas and Director of Wisconsin
                        Energy and Wisconsin Electric since April
                        2000.  Director of WICOR and Wisconsin
                        Gas since 1992.  Chairman of the Board
                        and Chief Executive Officer of WICOR from
                        1997 to April 2000.

Certain executive officers also hold offices in Wisconsin
Energy's non-utility subsidiaries.



                             PART II
                             -------


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

Dividends declared on Wisconsin Electric Power Company's common
stock during the two most recent fiscal years are set forth
below.  With the exception of the third quarter of 2000,
dividends were paid entirely in cash.  Dividends were paid to
Wisconsin Electric's sole common stockholder, Wisconsin Energy
Corporation.

<TABLE>
<CAPTION>

  Quarter        2000          1999
  -------        ----          ----
<S>            <C>           <C>
First           $44.9         $44.9
Second           44.9          44.9
Third            44.9 (a)      44.9
Fourth           44.9          44.9
               ------        ------
Total          $179.6        $179.6
               ======        ======
<FN>
(a) During the third quarter of 2000, the Board of Directors
    approved that $1.0 million of the dividend be paid in a
    property dividend with the balance paid in cash.
</FN>
</TABLE>


In February 2001, to meet additional future anticipated capital
requirements and to maintain an appropriate capital structure,
Wisconsin Electric's Board of Directors authorized a quarterly
cash dividend, payable to Wisconsin Energy on March 1, 2001, of
$32.5 million ($130.0 million on an annualized basis), which was
reduced from prior quarterly dividends paid during 2000 of
$44.9 million (or $179.6 million on an annualized basis).

Various financing arrangements and regulatory requirements impose
certain restrictions on the ability of Wisconsin Electric to
transfer funds to Wisconsin Energy in the form of cash dividends,
loans or advances.  Under Wisconsin law, Wisconsin Electric is
prohibited from loaning funds, either directly or indirectly, to
Wisconsin Energy.



ITEM 6.   SELECTED FINANCIAL DATA

<TABLE>
<CAPTION>
                                   WISCONSIN ELECTRIC POWER COMPANY

                                SELECTED FINANCIAL AND STATISTICAL DATA

Financial                              2000           1999         1998         1997           1996
---------                              ----           ----         ----         ----           ----
<S>                                 <C>            <C>          <C>          <C>            <C>
Year Ended December 31
 Earnings available for
  common stockholder (Millions)(e)     $163.5 (a)     $211.9 (b)   $183.0       $69.4 (c)     $210.1

 Operating revenues (Millions)
  Electric                           $1,763.4       $1,688.3     $1,641.4    $1,412.1       $1,393.3
  Gas                                   399.7          306.8        295.9       355.2          364.9
  Steam                                  21.9           21.3         20.5        22.3           15.6
                                     --------       --------     --------    --------       --------
 Total operating revenues            $2,185.0       $2,016.4     $1,957.8    $1,789.6       $1,773.8
                                     ========       ========     ========    ========       ========
At December 31 (Millions)
 Total assets                        $5,025.1       $4,901.9     $4,608.9    $4,520.9       $4,384.2
 Long-term debt                      $1,679.6       $1,677.6     $1,512.5    $1,448.6       $1,371.4

 Utility Energy Statistics
 -------------------------
 Electric
  Megawatt-hours sold (Thousands)    31,398.8       30,619.9     29,475.2    27,671.8       27,560.4
  Customers (End of year)           1,026,691      1,006,013      988,929     978,835        968,735

 Gas
  Therms delivered (Millions)           944.9          944.1        922.8       980.7          936.9
  Customers (End of year)             407,761        398,508      388,478     376,732        367,275

 Steam
  Pounds sold (Millions)              3,085.2        2,913.9      2,773.1     3,160.6        2,704.6
  Customers (End of year)                 451            450          454         474            465
</TABLE>

<TABLE>
<CAPTION>
                             SELECTED QUARTERLY FINANCIAL DATA (Unaudited)

                                                           (Millions of Dollars) (d)
                                              ---------------------------------------------------
                                                      March                         June
                                               -------------------           -------------------
Three Months Ended                             2000           1999           2000           1999
------------------                             ----           ----           ----           ----
<S>                                           <C>            <C>           <C>             <C>
 Total operating revenues                     $540.8         $527.8          $496.9        $469.9
 Operating income                              121.4          106.2            91.4          98.9
 Earnings available for
  common stockholder (e)                        58.5           55.7            39.9          48.1

                                                    September                      December
                                               -------------------           -------------------
Three Months Ended                             2000           1999           2000           1999
------------------                             ----           ----           ----           ----
 Total operating revenues                      $532.7        $513.9          $614.6        $504.8
 Operating income                               122.6         123.5            58.5         118.5
 Earnings available for
  common stockholder (e)                         56.6          62.0             8.5 (a)      46.1 (b)

<FN>
(a) Includes net non-recurring costs, after tax, of $43.9 million related to
    severance benefits and other items.

(b) Includes non-recurring charges, after tax, of $10.8 million for the
    settlement of litigation.

(c) Includes non-recurring charges, after tax, of $13.1 million related to the
    terminated merger agreement with Northern States Power Company and
    $18.0 million related to the write-down of equipment.

(d) Quarterly results of operations are not directly comparable because of
    seasonal and other factors.  See Management's Discussion and Analysis of
    Financial Condition and Results of Operations.

(e) Earnings and dividends per share are not provided as all of Wisconsin
    Electric's common stock is held by Wisconsin Energy Corporation.
</FN>
</TABLE>

<TABLE>
<CAPTION>
                                   WISCONSIN ELECTRIC POWER COMPANY
                                       SELECTED OPERATING DATA

Year Ended December 31                     2000        1999         1998         1997         1996
                                           ----        ----         ----         ----         ----
<S>                                     <C>          <C>          <C>          <C>          <C>
        Electric Utility
        ----------------
Operating Revenues (Millions)
  Residential                              $597.2      $574.8       $571.4       $487.2       $494.1
  Small Commercial/Industrial               534.7       510.1        487.6        430.2        421.5
  Large Commercial/Industrial               464.9       451.2        450.1        402.7        383.1
  Other - Retail/Municipal                   58.3        51.2         51.2         55.3         56.3
  Resale - Utilities                         84.0        79.1         60.9         24.5         26.4
  Other Operating Revenues                   24.3        21.9         20.2         12.2         11.9
                                         --------    --------     --------     --------     --------
    Total Operating Revenues             $1,763.4    $1,688.3     $1,641.4     $1,412.1     $1,393.3
                                         ========    ========     ========     ========     ========

Megawatt-hour Sales (Thousands)
  Residential                             7,477.6     7,346.8      7,327.0      6,863.6      6,998.8
  Small Commercial/Industrial             8,287.5     8,028.2      7,612.4      7,433.1      7,204.7
  Large Commercial/Industrial            11,626.2    11,333.6     11,392.0     11,021.5     10,785.5
  Other - Retail/Municipal                1,527.3     1,314.0      1,287.2      1,412.6      1,477.0
  Resale - Utilities                      2,480.2     2,597.3      1,856.6        941.0      1,094.4
                                         --------    --------     --------     --------     --------
    Total Sales                          31,398.8    30,619.9     29,475.2     27,671.8     27,560.4
                                         ========    ========     ========     ========     ========

Number of Customers (Average)
  Residential                             916,028     897,333      886,635      876,776       867,917
  Small Commercial/Industrial              98,277      95,964       94,675       93,259        91,565
  Large Commercial/Industrial                 712         716          720          714           706
  Other                                     2,283       1,938        1,855        1,844         1,832
                                        ---------     -------      -------      -------     ---------
    Total Customers                     1,017,300     995,951      983,885      972,593       962,020
                                        =========     =======      =======      =======     =========

        Gas Utility
        -----------
Operating Revenues (Millions)
  Residential                              $244.3      $193.8       $176.5       $222.0       $218.8
  Commercial/Industrial                     132.0        95.1         87.9        113.6        108.1
  Interruptible                               5.3         5.3          7.1          9.0         11.5
                                           ------      ------       ------       ------       ------
    Total Retail Gas Sales                  381.6       294.2        271.5        344.6        338.4
  Transported Customer-Owned Gas             17.4        14.6         12.0         13.4         11.7
  Transported - Interdepartmental             1.5         1.8          2.5          3.1          3.1
  Other Operating Revenues                   (0.8)       (3.8)         9.9         (5.9)        11.7
                                           ------      ------       ------       ------       ------
    Total Operating Revenues               $399.7      $306.8       $295.9       $355.2       $364.9
                                           ======      ======       ======       ======       ======

Therms Delivered (Millions)
  Residential                               335.7       329.0        289.5        347.9        372.0
  Commercial/Industrial                     206.2       195.3        182.0        211.5        225.2
  Interruptible                              12.0        16.3         23.3         24.5         35.9
                                            -----       -----        -----        -----        -----
    Total Retail Gas Sales                  553.9       540.6        494.8        583.9        633.1
  Transported Customer-Owned Gas            349.9       347.9        349.4        387.2        292.6
  Transported - Interdepartmental            41.1        55.6         78.6          9.6         11.2
                                            -----       -----        -----        -----        -----
    Total Therms Delivered                  944.9       944.1        922.8        980.7        936.9
                                            =====       =====        =====        =====        =====

Number of Customers (Average)
  Residential                             369,210     360,084      347,747      339,002      330,153
  Commercial/Industrial                    33,275      32,594       31,586       30,594       29,936
  Interruptible                                33          89          146          170          190
  Transported Customer-Owned Gas              383         328          271          254          230
  Transported - Interdepartmental               6           6            6            7            8
                                          -------     -------      -------      -------      -------
    Total Customers                       402,907     393,101      379,756      370,027      360,517
                                          =======     =======      =======      =======      =======

     Degree Days (a)
     ---------------
  Heating (6,887 Normal)                    6,716       6,318        5,848        7,101        7,469
  Cooling (681 Normal)                        566         753          800          407          608

<FN>
(a) As measured at Mitchell International Airport in Milwaukee, Wisconsin.
    Normal degree days are based upon a twenty-year moving average.
</FN>
</TABLE>



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

Wisconsin Electric Power Company ("Wisconsin Electric" or the
"Company"), a wholly-owned subsidiary of Wisconsin Energy
Corporation ("Wisconsin Energy"), is engaged primarily in the
business of generating electricity and distributing electricity
and natural gas with operations in the states of Wisconsin and
Michigan.  During 2000, Wisconsin Energy performed a
comprehensive review of its portfolio of businesses and began
implementing, among others, the following general strategies that
will affect Wisconsin Electric over the next decade:

  *  ELECTRIC GENERATION:   Improve the supply of reasonably
     priced electric power in Wisconsin through the "Power the Future"
     strategy.

  *  ENERGY DISTRIBUTION:   Upgrade the Company's electric and
     gas utility distribution systems to increase reliability and
     enable economic expansion in Wisconsin through the "Power the
     Future" strategy and combine the gas operations and the customer
     service functions of its gas utilities to realize synergy savings
     and increase customer satisfaction.

For information concerning the "Power the Future" strategy, see
"Factors Affecting Results, Liquidity and Capital Resources"
below.


ACQUISITION OF WICOR, INC.:   On April 26, 2000, Wisconsin Energy
acquired WICOR, Inc. ("WICOR"), the parent of Wisconsin Gas
Company ("Wisconsin Gas"), and is presently seeking authority
from the Public Service Commission of Wisconsin ("PSCW") to
transfer Wisconsin Electric's gas utility assets, together with
certain associated liabilities, to Wisconsin Gas in a tax free
exchange for an equity ownership by Wisconsin Electric in
Wisconsin Gas.  For additional information, see "Factors
Affecting Results, Liquidity and Capital Resources" below.

CAUTIONARY FACTORS:   A number of forward-looking statements are
included in this document.  When used, the terms "anticipate,"
"believe," "estimate," "expect," "objective," "plan," "possible,"
"potential," "project" and similar expressions are intended to
identify forward-looking statements.  Forward-looking statements
are subject to certain risks, uncertainties and assumptions which
could cause actual results to differ materially from those that
are described, including the factors mentioned throughout this
document and below in "Cautionary Factors."


                      RESULTS OF OPERATIONS

EARNINGS

Earnings declined by $48.4 million during 2000 when compared with
1999 due in large part to non-recurring charges primarily
associated with the WICOR merger.  In December 2000, Wisconsin
Electric recorded non-recurring charges totaling $43.9 million,
after tax, including $34.3 million related to severance benefits
and other items and a one-time contribution of $9.6 million,
after tax, to the Wisconsin Energy Foundation to assist it in
becoming self-funded.  During 2000, Wisconsin Electric's earnings
before non-recurring items declined by $15.3 million due in large
part to higher fuel and purchased power expenses and cool summer
weather during 2000.

During 1999, earnings increased by $28.9 million when compared
with 1998 due in large part to increases in electric and gas
utility gross margins offset in part by a one time charge during
1999 related to the settlement of litigation.

<TABLE>
<CAPTION>
   Earnings Available
 for Common Stockholder                   2000      1999      1998
 ----------------------                   ----      ----      ----
                                           (Millions of Dollars)
<S>                                      <C>       <C>       <C>
Earnings Before Non-Recurring Items      $207.4    $222.7    $183.0
Non-Recurring Items                       (43.9)    (10.8)      -
                                         ------    ------    ------
  Net Earnings                           $163.5    $211.9    $183.0
                                         ======    ======    ======
</TABLE>


The following table summarizes Wisconsin Electric's earnings
during 2000, 1999 and 1998.

<TABLE>
<CAPTION>

 Wisconsin Electric Power Company              2000        1999        1998
----------------------------------             ----        ----        ----
                                                   (Millions of Dollars)
<S>                                          <C>         <C>         <C>
Gross Margin
  Electric (See below)                       $1,271.9    $1,249.4    $1,196.8
  Gas (See below)                               141.0       132.8       120.4
  Steam                                          15.7        15.2        15.1
                                             --------    --------    --------
      Gross Margin                            1,428.6     1,397.4     1,332.3
Other Operating Expenses
  Other Operation and Maintenance               696.1       649.5       662.1
  Depreciation, Decommissioning
    and Amortization                            272.7       234.2       225.7
  Property and Revenue Taxes                     65.9        66.6        60.9
                                             --------    --------    --------
      Operating Income                          393.9       447.1       383.6
Other Income (Deductions)                        (9.8)       (4.9)        8.0
Financing Costs                                 116.2       112.9       110.7
                                             --------    --------    --------
      Income Before Income Taxes                267.9       329.3       280.9
Income Taxes                                    103.2       116.2        96.7
Preferred Stock Dividend Requirement              1.2         1.2         1.2
                                             --------    --------    --------
Earnings Available for Common Stockholder      $163.5      $211.9      $183.0
                                             ========    ========    ========
</TABLE>


Electric Utility Revenues, Gross Margins and Sales

The following table compares Wisconsin Electric's electric
utility operating revenues and gross margin (total electric
utility operating revenues less fuel and purchased power
expenses) during 2000 with similar information for 1999 and 1998.

<TABLE>
<CAPTION>

Electric Utility Operations          2000          1999          1998
---------------------------          ----          ----          ----
                                            (Millions of Dollars)
<S>                                <C>           <C>           <C>
Electric Operating Revenues        $1,763.4      $1,688.3      $1,641.4
Fuel and Purchased Power
  Fuel                                325.3         299.1         303.0
  Purchased Power                     166.2         139.8         141.6
                                   --------      --------      --------
Total Fuel and Purchased Power        491.5         438.9         444.6
                                   --------      --------      --------
Gross Margin                       $1,271.9      $1,249.4      $1,196.8
                                   ========      ========      ========
</TABLE>


During 2000, Wisconsin Electric's total electric utility
operating revenues increased by $75.1 million or 4.4% compared
with 1999.  Wisconsin Electric attributes this growth mostly to
higher electric energy sales and rate increases during 2000.
Interim and final electric rate increases, that became effective
in early April 2000 and on August 30, 2000, respectively,
contributed approximately $22.1 million to the increase in
electric operating revenues.  For additional information
concerning these rate increases, see "Factors Affecting Results,
Liquidity and Capital Resources" below.  Fuel and purchased power
expenses increased by $52.6 million or 12.0% during 2000,
reflecting increased generation and significantly higher natural
gas prices.  Purchased power expenses also grew due to higher
fixed costs during 2000 associated with long-term purchased power
contracts.  To a certain extent, Wisconsin Electric was able to
limit the increase in fuel and purchased power costs during 2000
by changing its electric supply mix away from higher cost natural
gas-fired generation and power purchases to lower cost nuclear
and coal-fired generation.

Primarily due to an increase in total electric energy sales
during 1999, Wisconsin Energy's total electric utility operating
revenues increased by $46.9 million or 2.9% and gross margin
increased by $52.6 million or 4.4% when compared with 1998.

<TABLE>
<CAPTION>
                                        Operating Revenues                  Megawatt-Hour Sales
                                  -------------------------------     -------------------------------
  Electric Utility Operations      2000        1999        1998        2000        1999        1998
-------------------------------    ----        ----        ----        ----        ----        ----
                                       (Millions of Dollars)                    (Thousands)
<S>                              <C>         <C>          <C>        <C>         <C>         <C>
Customer Class
  Residential                      $597.2      $574.8      $571.4     7,477.6     7,346.8     7,327.0
  Small Commercial/Industrial       534.7       510.1       487.6     8,287.5     8,028.2     7,612.4
  Large Commercial/Industrial       464.9       451.2       450.1    11,626.2    11,333.6    11,392.0
  Other-Retail/Municipal             58.3        51.2        51.2     1,527.3     1,314.0     1,287.2
  Resale-Utilities                   84.0        79.1        60.9     2,480.2     2,597.3     1,856.6
  Other Operating Revenues           24.3        21.9        20.2        -           -           -
                                 --------    --------    --------    --------    --------    --------
Total                            $1,763.4    $1,688.3    $1,641.4    31,398.8    30,619.9    29,475.2
                                 ========    ========    ========    ========    ========    ========

Weather - Degree Days (a)
  Heating (6,887 Normal)                                                6,716       6,318       5,848
  Cooling (681 Normal)                                                    566         753         800
<FN>
(a) As measured at Mitchell International Airport in Milwaukee, Wisconsin,
    normal degree days are based upon a twenty-year moving average.
</FN>
</TABLE>


During 2000, total electric energy sales increased by
778.9 thousand megawatt-hours or 2.5% compared with 1999,  mostly
reflecting growth in the average number of residential, small
commercial/industrial and other retail/municipal customers and a
13.1% increase in sales to the Empire and Tilden iron ore mines,
Wisconsin Electric's two largest retail customers.  Excluding the
Empire and Tilden mines, total electric sales increased by 1.7%
and sales to the remaining large commercial/industrial customers
increased by 0.1% between the comparative periods.  Growth in the
average number of customers partially offset the effects of
cooler weather during the 2000 cooling season on total electric
energy sales and operating revenues.  As measured by cooling
degree days, 2000 was 24.8% cooler than 1999 and 16.9% cooler
than normal.

From August through mid-October 1999, the Empire and Tilden iron
ore mines were temporarily shut down.  As a result, electric
energy sales to the mines decreased 9.8% during 1999 compared to
1998.  Excluding the Empire and Tilden iron ore mines, total
electric energy sales increased by 5.1% during 1999 and sales to
the remaining large commercial/industrial customers increased by
2.0% when compared with 1998.  Sales for resale to other
utilities increased by 39.9% during 1999 primarily due to higher
opportunity sales.  When comparing 1999 electric sales with 1998,
summer cooling load due to weather was not a significant factor.
As measured by cooling degree days, 1999 was 5.9% cooler than
1998.  However, 1999 and 1998 were 10.6% and 17.5% warmer than
normal, respectively.


Gas Utility Revenues, Gross Margins and Therm Deliveries

The following table compares Wisconsin Electric's gas utility
operating revenues and its gross margin (total gas utility
operating revenues less cost of gas sold) during 2000 with
similar information for 1999 and 1998.  Gross margin is a better
performance indicator than revenues because changes in the cost
of gas sold flow through to revenue under gas cost recovery
mechanisms that do not impact gross margin.

<TABLE>
<CAPTION>

   Gas Utility Operations           2000            1999          1998
---------------------------         ----            ----          ----
                                            (Millions of Dollars)
<S>                                 <C>            <C>           <C>
Gas Operating Revenues              $399.7         $306.8        $295.9
Cost of Gas Sold                     258.7          174.0         175.5
                                    ------         ------        ------
Gross Margin                        $141.0         $132.8        $120.4
                                    ======         ======        ======
</TABLE>


During 2000, Wisconsin Electric's total gas utility operating
revenues increased by $92.9 million or 30.3% while gross margin
increased by $8.2 million or 6.2% when compared with 1999.
Significantly higher natural gas prices mostly contributed to the
increase in total gas utility operating revenues.  Because
changes in the cost of natural gas purchased at market prices
were included in customer rates through the gas cost recovery
mechanism, gas operating revenues changed by approximately the
same amount as the cost of gas sold and gross margin was
unaffected by such changes.  Interim and final retail gas rate
increases, that became effective in early April 2000 and on
August 30, 2000, respectively, along with a weather-related
increase in higher margin residential and commercial/industrial
retail gas sales during the fourth quarter of 2000, contributed
to the increase in operating revenues and gross margin during
2000.  For additional information concerning the rate increases,
see "Factors Affecting Results, Liquidity and Capital Resources"
below.  A decrease in revenues from interdepartmental therm
deliveries to Wisconsin Electric's natural gas-fired electric
generating facilities during 2000 partially offset the increases
in gas utility operating revenues and gross margin noted above.

Due in large part to increased retail gas sales during 1999,
especially to higher margin residential and commercial/industrial
customers, Wisconsin Electric's gross margin increased by
$12.4 million or 10.3% compared with 1998.  In spite of the
increase in retail gas sales, however, the cost of gas sold
decreased by 0.9% during 1999 due to a decrease in the price of
purchased gas.

<TABLE>
<CAPTION>
                                        Operating Revenues                   Therm Deliveries
                                  ------------------------------       -----------------------------
     Gas Utility Operations       2000         1999        1998        2000        1999        1998
-------------------------------   ----         ----        ----        ----        ----        ----
                                       (Millions of Dollars)                     (Millions)
<S>                               <C>         <C>         <C>          <C>         <C>         <C>
Customer Class
 Residential                      $244.3      $193.8      $176.5       335.7       329.0       289.5
 Commercial/Industrial             132.0        95.1        87.9       206.2       195.3       182.0
 Interruptible                       5.3         5.3         7.1        12.0        16.3        23.3
                                  ------      ------      ------       -----       -----       -----
   Total Retail Gas Sales          381.6       294.2       271.5       553.9       540.6       494.8
 Transported Customer-Owned Gas     17.4        14.6        12.0       349.9       347.9       349.4
 Transported-Interdepartmental       1.5         1.8         2.5        41.1        55.6        78.6
 Other Operating Revenues           (0.8)       (3.8)        9.9         -           -           -
                                  ------      ------      ------       -----       -----       -----
Total                             $399.7      $306.8      $295.9       944.9       944.1       922.8
                                  ======      ======      ======       =====       =====       =====

Weather - Degree Days (a)
 Heating (6,887 Normal)                                                6,716       6,318       5,848
<FN>
(a) As measured at Mitchell International Airport in Milwaukee, Wisconsin,
    normal degree days are based upon a twenty-year moving average.
</FN>
</TABLE>


Other Items

OTHER OPERATION AND MAINTENANCE EXPENSES:   Other operation and
maintenance expenses increased by $46.6 million during 2000 when
compared with 1999.  The most significant change in other
operation and maintenance expenses between the comparative
periods resulted from $52.7 million of pre-tax non-recurring
charges associated with the WICOR merger including severance,
benefits and other items.  Increased other operation and
maintenance expenses during 2000 were also attributable to
$14.8 million of higher non-fuel fossil generation expenses and
$9.0 million of higher electric distribution expenses offset in
part by an $8.8 million decline in nuclear non-fuel expenses and
a $9.9 million decline in customer service expenses.

Non-fuel fossil generation expenses increased during 2000
primarily due to differences in the scope and timing of scheduled
maintenance outages for various generating facilities.  Electric
distribution expenses were higher due in large part to increased
forestry and maintenance activity.  During 2000, nuclear non-fuel
expenses were lower as a result of continued progress on various
performance improvement initiatives.  Between the comparative
periods, customer service expenses were lower primarily due to a
change in the period over which conservation expenses are being
amortized.

During 1999, other operation and maintenance expenses decreased
by $12.6 million when compared with 1998.  The most significant
changes in other operation and maintenance expenses between the
comparative periods include a $28.0 million decrease in nuclear
non-fuel expenses partially offset by a $4.9 million increase in
administrative and general expenses, a $2.9 million increase in
electric transmission expenses, a $2.2 million increase in
payroll taxes and a $2.1 million increase in non-fuel fossil
generation expenses.  Nuclear non-fuel expenses decreased as a
result of progress on various performance improvement
initiatives, while administrative and general expenses increased
mostly due to higher employee benefits paid and to increased
staffing, which also increased payroll taxes.  Electric
transmission expenses increased primarily due to higher purchased
power transmission fees during 1999, and non-fuel fossil
generation expenses increased as a result of an increase in the
number of maintenance outages early in 1999 at Wisconsin
Electric's fossil-fuel power plants in anticipation of higher
electric demand during the summer of 1999.

DEPRECIATION, DECOMMISSIONING AND AMORTIZATION EXPENSES:
Depreciation, decommissioning and amortization expenses were
$38.5 million higher during 2000 compared with 1999.  Pursuant to
a 1998 rate order for the 1998/1999 test year, Wisconsin Electric
was amortizing pre-1991 contributions in aid of construction.
This amortization, which was completed as of December 31, 1999,
had the effect of reducing depreciation expense by $22.8 million
during 1999.  Higher average depreciable property during 2000
also contributed to an increase in depreciation expense.

Primarily due to an increase in average depreciable property,
Wisconsin Electric's depreciation, decommissioning and
amortization expenses increased by $8.5 million during 1999 when
compared with 1998.

OTHER INCOME AND DEDUCTIONS:   Other income and deductions was
$4.9 million lower when comparing 2000 with 1999 and
$12.9 million lower when comparing 1999 with 1998.  The change
during 2000 primarily reflects increased contributions to the
Wisconsin Energy Foundation during the fourth quarter of 2000.
In 1999, Wisconsin Electric made a one-time $18.0 million pre-tax
litigation settlement payment that was offset in part by a
$6.1 million gain on the sale of certain properties.

INCOME TAXES:   The effective income tax rate increased during
2000 due in large part to the end of amortization of pre-1991
contributions in aid of construction as described above.


                 LIQUIDITY AND CAPITAL RESOURCES

CASH FLOWS

The following table summarizes Wisconsin Electric's cash flows
during 2000, 1999 and 1998:

<TABLE>
<CAPTION>
Wisconsin Electric Power Company     2000      1999      1998
--------------------------------     ----      ----      ----
                                      (Millions of Dollars)
<S>                                 <C>        <C>       <C>
Cash Provided by (Used in):
  Operating Activities              $572.7     $335.3    $481.8
  Investing Activities              (419.3)    (393.1)   (364.8)
  Financing Activities              (192.7)      93.5    (112.9)
</TABLE>


Operating Activities

During 2000, cash provided by operating activities increased by
$237.4 million compared with 1999, reflecting a $110 million
contested liability payment made during the fourth quarter of
1999 in the Giddings & Lewis Inc./City of West Allis lawsuit,
changes in working capital requirements and reduced tax payments
during 2000 as well as increased non-cash charges for
depreciation and amortization offset in part by decreased non-
cash charges for net deferred income taxes.

Cash provided by operating activities decreased by $146.5 million
during 1999 compared with 1998, reflecting the $110 million
contested liability payment in the Giddings & Lewis Inc./City of
West Allis lawsuit noted above and changes in working capital
requirements, offset in part by increased non-cash charges for
depreciation and amortization and for net deferred income taxes.

During 2000, cash from operations provided for approximately 163%
and 112% of the Company's capital expenditure requirements before
and after the payment of common dividends, respectively, compared
with 97% and 45%, respectively, during 1999 and 147% and 92%,
respectively, during 1998.  During 1999 and 1998, Wisconsin
Energy used net borrowings as well as a capital contribution from
Wisconsin Energy during 1999 to supplement the funding of its
capital requirements.


Investing Activities

For the year ended December 31, 2000, Wisconsin Electric spent
$419.3 million in investing activities including $352.5 million
for the acquisition or construction of new or improved
facilities, $41.6 million for the acquisition of nuclear fuel and
$17.6 million of payments to the nuclear decommissioning trust
fund for the eventual decommissioning of Point Beach Nuclear Plant.


Financing Activities

During 2000, Wisconsin Electric used $192.7 million of net cash
in its financing activities consisting primarily of the payment
of $178.6 million of dividends to Wisconsin Energy.


CAPITAL RESOURCES AND REQUIREMENTS

Capital Resources

Wisconsin Electric currently expects cash from operations to
provide about 125% of the Company's capital expenditure
requirements during 2001 before the payment of common dividends.
In February 2001, to meet additional future anticipated capital
requirements and to maintain an appropriate capital structure,
Wisconsin Electric's Board of Directors authorized a quarterly
cash dividend, payable to Wisconsin Energy on March 1, 2001, of
$32.5 million ($130.0 million on an annualized basis), which was
reduced from prior quarterly dividends paid during 2000 of
$44.9 million (or $179.6 million on an annualized basis).  In
addition, Wisconsin Electric anticipates receiving approximately
$105 million of cash distributions from the American Transmission
Company LLC during the first half of 2001.  Beyond 2001,
Wisconsin Electric expects to meet its capital requirements
through internally generated funds supplemented, when required,
through the issuance of capital market securities.

The Company has access to outside capital markets and has been
able to generate funds internally and externally to meet its
capital requirements.  Wisconsin Electric's ability to attract
the necessary financial capital at reasonable terms is critical
to the Company's overall strategic plan.  Wisconsin Electric
believes that it has adequate capacity to fund its operations for
the foreseeable future through its borrowing arrangements and
internally generated cash.

On December 31, 2000, Wisconsin Electric had $128 million of
available unused lines of bank credit.  Wisconsin Electric has
historically used these lines primarily to support its
outstanding commercial paper and other short-term borrowings.

The following table shows Wisconsin Electric's capitalization
structure at December 31:

<TABLE>
<CAPTION>
Capitalization Structure                  2000                          1999
------------------------         ---------------------         ----------------------
                                                (Millions of Dollars)
<S>                              <C>            <C>            <C>            <C>
Common Equity                    $1,864.8        48.3%         $1,880.9        48.4%
Preferred Stock                      30.4         0.8%             30.4         0.8%
Long-Term Debt (including
  current maturities)             1,707.7        44.2%          1,708.4        44.0%
Short-Term Debt                     257.0         6.7%            264.7         6.8%
                                 --------       ------         --------       ------
    Total                        $3,859.9       100.0%         $3,884.4       100.0%
                                 ========       ======         ========       ======
</TABLE>


Access to capital markets at a reasonable cost is determined in
large part by credit quality.  In conjunction with Wisconsin
Energy's issuance of $1 billion of unsecured senior notes in
March 2001, Standard & Poors Corporation ("S&P") maintained its
negative outlook for Wisconsin Energy and its subsidiaries,
including Wisconsin Electric.  Moody's Investors Service
("Moody's") and Fitch reaffirmed their ratings of the securities
of Wisconsin Electric.  Moody's outlook remains stable for
Wisconsin Electric.  The following table summarizes the current
ratings of the securities of Wisconsin Electric by S&P, Moody's
and Fitch.

<TABLE>
<CAPTION>

Wisconsin Electric Power Company           S&P          Moody's         Fitch
--------------------------------           ---          -------         -----
<S>                                        <C>            <C>            <C>
Commercial Paper                           A-1+           P-1            F1+
Senior Secured Debt                        AA-            Aa2            AA
Unsecured Debt                             A+             Aa3            AA-
Preferred Stock                            A              aa3            AA-
</TABLE>


These ratings provide a significant degree of flexibility in
obtaining funds on competitive terms and reflect the views of the
rating agencies.  Any rating can be revised upward or downward or
withdrawn at any time by a rating agency if it decides the
circumstances warrant that change.  Each rating should be
evaluated independently of any other rating.  An explanation of
the significance of these ratings may be obtained from each
rating agency.  Such ratings are not a recommendation to buy,
sell or hold securities, but rather an indication of
creditworthiness.


Capital Requirements

Total capital expenditures, excluding the purchase of nuclear
fuel, are currently estimated to be approximately $395 million
during 2001.  Due to changing environmental and other regulations
such as air quality standards or electric reliability
initiatives, future long-term capital requirements may vary from
recent capital requirements.  Wisconsin Electric currently
expects capital expenditures, excluding the purchase of nuclear
fuel, to be between approximately $340 million and $400 million
per year during the next five years.  These forward-looking
estimated capital expenditures include costs for upgrades to
Wisconsin Electric's existing electric generating capacity and
its electric and gas utility distribution systems contemplated
under the "Power the Future" strategy.


   FACTORS AFFECTING RESULTS, LIQUIDITY AND CAPITAL RESOURCES

OUTLOOK

The following forecasts are forward-looking statements subject to
certain risks, uncertainties and assumptions.  Actual results may
vary materially.  Factors that could cause actual results to
differ materially include, but are not limited to: general
economic conditions; business, competitive and regulatory
conditions in the deregulating and consolidating energy industry,
in general, and in the Company's utility service territories;
availability of the Company's generating facilities; changes in
purchased power costs and supply availability; changes in coal or
natural gas prices and supply availability; unusual weather;
regulatory decisions; obtaining the necessary regulatory
approvals and investment capital to implement the growth
strategy; the timing and extent of realization of anticipated
synergy benefits from the WICOR merger; disposition of legal
proceedings; and other factors referred to under "Market Risks"
and "Cautionary Factors" below.


Forecasts

ELECTRIC SALES:   Assuming moderate growth in the economy of its
electric utility service territories and normal weather, the
Company presently anticipates its total retail and municipal
electric kilowatt-hour sales to grow at a compound annual rate of
2.5% over the five-year period ending December 31, 2005.

GAS DELIVERIES:   Assuming moderate growth in the economy of its
gas utility service territories and normal weather, the Company
currently forecasts total therm deliveries of natural gas to grow
at a compound annual rate of approximately 1.9% over the five-
year period ending December 31, 2005.


Factors Affecting Forecasts

GAS COSTS:   The cost of natural gas rose approximately 325%
during 2000, affecting Wisconsin Electric's electric and gas
utility operations.  Based upon December closing prices for
natural gas futures on the New York Mercantile Exchange, the cost
of gas increased from $2.344 per decatherm in January 2000 to
$9.978 per decatherm in January 2001.  Based upon February
closing prices, the cost of gas increased from $2.603 per
decatherm in March 2000 to $4.998 per decatherm in March 2001, an
increase of approximately 90%.

Gas costs have increased significantly because the supply of gas
in recent years has not kept pace with the demand for natural
gas, which has grown throughout the United States as a result of
increased reliance on natural gas-fired electric generating
facilities and colder winter weather in late 2000.  Wisconsin
Electric expects that demand for natural gas will remain high
into the foreseeable future and that significant price relief
will not occur until additional natural gas is added to the
nation's energy supply mix over a period of several years.

Higher gas costs increase the working capital requirements of the
Company, result in higher gross receipts taxes in the state of
Wisconsin and expose the Company to greater risks of accounts
receivable write-offs.

As a result of gas cost recovery mechanisms, the gas distribution
operations of Wisconsin Electric receive dollar for dollar pass
through on most of the cost of natural gas.  However, increased
natural gas costs increase the risk that customers will switch to
alternative fuel sources, which could reduce future gas margins.

The electric operations of Wisconsin Electric burns natural gas
in several of its peaker power plants or as a supplemental fuel
at several coal-fired plants, and the cost of purchased power is
tied to the cost of natural gas in many instances.  As described
below, Wisconsin Electric bears significant regulatory risk for
the recovery of fuel costs related to electric generation and
purchased power that are higher than the base rate established in
its rate structure.

RECOVERY OF FUEL AND PURCHASED POWER COSTS:   The electric
operations of Wisconsin Electric operate under a fuel cost
adjustment clause for its fuel and purchased power costs
associated with the generation and delivery of electricity.  This
clause establishes a base rate for fuel and purchased power, and
Wisconsin Electric assumes the risks and benefits of fuel cost
variances that are within 3% of the base rate.  For 2000 and
1998, actual Wisconsin Electric fuel and purchased power costs
exceeded base costs by $25.9 million and $11.3 million,
respectively.  For 1999, actual Wisconsin Electric fuel and
purchased power costs were $1.5 million less than base costs.
For 2001, the 3% range is plus or minus approximately
$14 million.  If actual fuel and purchased power costs exceed the
3% window, Wisconsin Electric has the opportunity to make a
filing with the Public Service Commission of Wisconsin ("PSCW")
to establish new base fuel costs prospectively and adjust rates
accordingly.  This procedure is subject to normal PSCW hearings
and the regulatory process but is limited to only fuel costs.  If
costs are less than the 3% window, the rate is reduced
immediately.  The base fuel rates include, among other things,
assumptions regarding the availability of the Company's
generating assets, including Point Beach Nuclear Plant, and the
cost of natural gas and purchased power.  As described in further
detail below in "Rates and Regulatory Matters," Wisconsin
Electric implemented an interim fuel adjustment surcharge in
February 2001 under this procedure.

In December 2000, the PSCW initiated a review of fuel rules and
solicited comments from Wisconsin utilities.  The Company has
submitted comments to the PSCW which seek to minimize or
eliminate risks associated with fuel costs.  It is expected that
the PSCW will modify existing fuel rules during the latter part
of 2001.  Any permanent changes to the fuel rules will require
Wisconsin legislative approval.

WEATHER:   The rates of Wisconsin Electric are set by the PSCW
based upon weather which approximates 20-year averages.  Electric
revenues are sensitive to the summer cooling season, and to some
extent, to the winter heating season.  Gas revenues are sensitive
to the winter heating season.  A summary of actual weather
information for 2000, 1999 and 1998 as measured by degree-days
may be found above in "Results of Operations."

INTEREST RATES:   The Company has approximately $257.0 million of
variable rate short-term debt and $165.4 million of variable rate
long-term debt outstanding as of December 31, 2000.  Changes in
future interest rates will have an impact on future interest
expense.

INFLATION:   The Company continues to monitor the impact of
inflation in order to minimize its effects in future years
through pricing strategies, productivity improvements and cost
reductions.  With expectations of low-to-moderate inflation,
Wisconsin Electric does not believe the impact of inflation will
have a material effect on its future results of operations.


INVESTMENTS, MERGERS AND ASSET TRANSFERS

Electric Generation

"POWER THE FUTURE" STRATEGY:   In late February 2001, Wisconsin
Energy announced enhancements to a 10-year, $7 billion strategy,
originally proposed in September 2000, that would improve the
supply and reliability of electricity in Wisconsin and that is
expected to improve the Company's financial results.  The "Power
the Future" strategy is needed to meet growing load and ensure a
diverse fuel mix while keeping electricity prices reasonable.
Demand for electricity in the state of Wisconsin is currently
expected to outstrip supply by 4,000 megawatts by 2010.
Wisconsin Electric's load is growing at approximately 100-
150 megawatts per year.  "Power the Future" adds new coal
capacity to the power portfolio and allows Wisconsin Electric to
maintain roughly the same fuel mix as today.  A mix of coal and
gas capacity is expected to save customers over $1.6 billion
(over the life of the plants and estimating future natural gas
costs) compared to the alternative all-gas scenario.

As part of its "Power the Future" strategy, Wisconsin Energy
would invest in the following over the next ten years:

  *  Approximately $3 billion in at least 2,800 megawatts of new
     natural gas-fired and coal-fired generating capacity;

  *  Approximately $1.3 billion in existing electric generating
     assets; and

  *  Approximately $2.7 billion in new and existing electric
     utility distribution system assets and other capital projects.


Wisconsin Energy anticipates creating a new non-utility energy
subsidiary that would construct and own the new generating
capacity noted above.  Under the enhanced "Power the Future"
strategy, Wisconsin Electric would sign 20 to 25-year leases for
each facility, approved by the PSCW, and would operate and
maintain the new plants as part of the lease agreements.  At the
end of the original contracts, Wisconsin Electric would have the
right to renegotiate and continue the leases, or acquire the
associated plants outright, at market value.  Smaller investor-
owned or municipal utilities, cooperatives and power marketing
associations would have some opportunity to expand or extend
wholesale power purchases from Wisconsin Electric as a result of
the additional electric generating capacity included in the
proposal.

Implementation of the "Power the Future" strategy is subject to a
number of state and federal regulatory approvals as well as the
amendment of several state laws in Wisconsin.  In late February
2001, Wisconsin Energy filed its enhanced "Power the Future"
proposal with the PSCW.  The enhanced "Power the Future" proposal
has benefited from a broad coalition of support including
customer groups, public power, municipal and cooperative
utilities and smaller investor-owned utilities in Wisconsin.
Depending upon the response of the PSCW to this preliminary
filing, Wisconsin Energy anticipates filing detailed plans later
in 2001.  Wisconsin Energy anticipates obtaining the capital
necessary to finance and execute this strategy from a combination
of internal and external sources.


Energy Distribution

ACQUISITION OF WICOR, INC:   On April 26, 2000, Wisconsin Energy
acquired WICOR, Inc.  The business combination was accounted for
as a purchase.

WICOR was a diversified utility holding company with consolidated
total assets of approximately $1.1 billion at December 31, 1999
in utility and non-utility energy subsidiaries as well as in pump
manufacturing subsidiaries.  Following the merger, WICOR and its
subsidiaries, including Wisconsin Gas Company, the largest
natural gas distribution public utility in Wisconsin, became
subsidiaries of Wisconsin Energy.  Wisconsin Energy intends to
continue the primary business operations of WICOR.  Wisconsin
Energy has integrated the gas operations of Wisconsin Electric
and Wisconsin Gas as well as many corporate support areas and
expects to integrate customer billing systems in the third
quarter of 2001.

On November 1, 2000, Wisconsin Electric and Wisconsin Gas filed
an application with the PSCW for authority to transfer Wisconsin
Electric's gas utility assets, together with certain associated
liabilities, to Wisconsin Gas in a tax free exchange for an
equity ownership by Wisconsin Electric in Wisconsin Gas.  The
matter is pending.  This transaction is also subject to the
approval of the Securities and Exchange Commission under the
Public Utility Holding Act of 1935.  For additional information,
see "Note A - Summary of Significant Accounting Policies" in the
Notes to Financial Statements.

Assuming timely realization of estimated synergies from the
merger, Wisconsin Energy expects the merger to begin contributing
approximately $35 million to annual pre-tax earnings during 2001.
Synergies are expected from lower expenses for the cost of gas,
materials and services through enhanced purchasing power, through
elimination of duplication through attrition, and through sharing
of resources.  Additional synergies are anticipated from the
logical consolidation of common functions over time as well as
from such areas as insurance and regulatory costs and legal,
audit and consulting fees.

The PSCW approved the WICOR merger in March 2000.  As described
in further detail below in "Rates and Regulatory Matters," the
PSCW's order provided for a qualified five-year rate freeze for
Wisconsin Electric's and Wisconsin Gas' natural gas, electric and
steam utility services beginning January 1, 2001.  In its order,
the commission found that it was reasonable to allow the
utilities to retain synergy savings associated with the merger
during the 5-year rate restriction period.

AMERICAN TRANSMISSION COMPANY LLC:   During 2000, Wisconsin
Electric and Edison Sault Electric Company ("Edison Sault"), an
affiliate of Wisconsin Electric, agreed to join the American
Transmission Company LLC by transferring all of its electric
utility transmission assets in exchange for an equity interest in
the new company.  Transfer of Wisconsin Electric's electric
transmission assets, with a net book value of approximately
$222 million, became effective on January 1, 2001.  During the
first half of 2001, the American Transmission Company is expected
to issue debt and to distribute cash to Wisconsin Electric in an
amount equal to approximately 50% of the net book value of the
assets originally transferred.  Joining the American Transmission
Company is consistent with the Federal Energy Regulatory
Commission's Order No. 2000, designed to foster competition,
efficiency and reliability in the electric industry.

Wisconsin Electric expects to receive earnings contributions from
the American Transmission Company in proportion to its ownership
share.  The Company anticipates that transfer of its electric
transmission assets to the American Transmission Company will be
earnings neutral subject to future rate recovery of any related
deferred charges.


RATES AND REGULATORY MATTERS

The Public Service Commission of Wisconsin regulates retail
electric, natural gas, steam and water rates in the state of
Wisconsin, while the Federal Energy Regulatory Commission
regulates wholesale power, electric transmission and interstate
gas transportation service rates.  The Michigan Public Service
Commission regulates retail electric rates in the state of
Michigan.


Wisconsin Jurisdiction

WICOR MERGER ORDER:   As a condition of its March 2000 approval
of the WICOR acquisition, the PSCW ordered a qualified five-year
freezing of rates for Wisconsin Electric's electric, natural gas
and steam utility services and for natural gas rates at Wisconsin
Gas that were in effect on January 1, 2001.  The Company may seek
biennial rate reviews during the five-year rate restriction
period limited to changes in revenue requirements as a result of:

  *  Governmental mandates;

  *  Abnormal levels of capital additions required to maintain or
     improve reliable electric service; or

  *  Major gas lateral projects associated with approved natural
     gas pipeline construction projects.


To the extent that natural gas rates and rules need to be
modified during the integration of the gas operations of
Wisconsin Electric and Wisconsin Gas, the Company's total gas
revenue requirements are to remain revenue neutral under the
merger order.  In its order, the PSCW found that electric fuel
cost adjustment procedures as well as gas cost recovery
mechanisms would not be subject to the five-year rate restriction
period and that it was reasonable to allow the Company to retain
synergy savings associated with the merger.  A full rate review
will be required by the PSCW at the end of the five-year rate
restriction period.

The table below summarizes the anticipated annualized revenue
impact of recent rate changes, primarily in the Wisconsin
jurisdiction, authorized by regulatory commissions for Wisconsin
Electric's electric, natural gas and steam utilities.

<TABLE>
<CAPTION>
                                        Annualized                    Authorized
                                         Revenue         Percent       Return on
                                         Increase        Change         Common       Effective
Service - Wisconsin Electric            (Decrease)      in Rates        Equity          Date
----------------------------            ----------      --------      ----------     ---------
                                        (Millions)         (%)            (%)
<S>                                        <C>            <C>            <C>           <C>
Fuel electric, WI (a)                      $37.8           2.5%           -            2/09/01
Fuel electric, MI                            1.0           2.4%           -            1/01/01
Retail electric, WI                         27.5           1.8%          12.2%         1/01/01
Retail electric, WI (b)                     36.5           2.5%          12.2%         8/30/00
Retail gas (b)                               8.0           2.1%          12.2%         8/30/00
Retail electric, WI (b)                     25.2           1.7%          12.2%         4/11/00
Retail gas (b)                              11.6           3.3%          12.2%         4/11/00
Fuel electric, WI                           (7.8)         (0.5%)          -            5/01/99
Retail electric, MI                          2.1           6.0%          11.0%         4/13/99
Retail electric, WI (c)                    160.2          12.7%          12.2%         5/01/98
Retail gas (c)                              18.5           5.4%          12.2%         5/01/98
Steam heating (c)                            1.2           9.3%          12.2%         5/01/98
Retail electric, WI (c)                    134.9          10.7%          12.2%         1/01/98
Retail gas (c)                              18.5           5.5%          12.2%         1/01/98
Steam heating (c)                            0.8           6.3%          12.2%         1/01/98
Fuel electric, WI (d)                       11.9           1.0%           -            1/01/98
<FN>
(a) The February 9, 2001 order is an interim order subject to refund pending
    the outcome of a full review of fuel costs by the PSCW.  A final order is
    expected in May 2001.

(b) The April 11, 2000 order was an interim order that was effective until the
    August 30, 2000 final order was received from the PSCW.  The final
    August 30, 2000 order superseded the April 11, 2000 interim order.

(c) The January 1, 1998 order was an interim order that was effective until the
    May 1, 1998 final order was received from the PSCW.  The final May 1, 1998
    order superseded the January 1, 1998 interim order.

(d) A final order from the PSCW, dated December 23, 1997, authorized a total
    increase in fuel revenue of $27.2 million less $15.3 million previously
    collected through an interim order during 1997.
</FN>
</TABLE>


On March 23, 2000, the PSCW approved Wisconsin Electric's request
for interim price increases related to the 2000/2001 biennial
period, authorizing a $25.2 million (1.7%) increase for electric
operations and an $11.6 million (3.3%) increase for gas
operations.  The interim increase, which was subject to potential
refund, became effective April 11, 2000.  Rates in the interim
order were based upon a 12.2% return on common equity.

On August 30, 2000, the PSCW issued its final order in the
2000/2001 pricing proposal.  The final order authorized a
$36.5 million (2.5%) increase for electric operations (or
$11.3 million higher than authorized in the interim order) as
well as an $8 million (2.1%) increase for gas operations (or
$3.6 million lower than authorized in the interim order).
Wisconsin Electric has refunded to gas customers revenues that
resulted from the difference in gas rates between the interim and
final orders.  In its August 30, 2000 final order, the PSCW
authorized a second $27.5 million (1.8%) increase for electric
operations effective January 1, 2001.  Rates in the final order
were based upon a 12.2% return on common equity.

Wisconsin Electric filed a petition for a rehearing of the final
order with the PSCW to reconsider the revenue increase for gas
operations.  On November 9, 2000, the PSCW denied Wisconsin
Electric's petition.  On November 14, 2000, Wisconsin Electric
filed a petition for judicial review with the Milwaukee County
Circuit Court seeking its review of the PSCW's decision.  The
court has set a briefing schedule with final briefs due on
May 5, 2001.

In its final order related to the 2000/2001 biennial period, the
PSCW authorized recovery of revenue requirements for, among other
things, electric reliability and safety construction expenditures
as well as for nitrogen oxide ("NOx") remediation expenditures.
Revenue requirements for electric reliability and safety
construction expenditures are subject to refund at the end of
2001 to the extent that actual expenditures are less than
forecasted expenditures included in the final order.  In March
2000, the PSCW had previously authorized all Wisconsin utilities
to depreciate NOx  emission reduction costs over an accelerated
10-year recovery period.  Due to the uncertainty regarding the
level and timing of these expenditures, the PSCW, in its final
order, required Wisconsin Electric to establish escrow accounting
for revenue requirement components associated with NOx
expenditures.  Depending upon Wisconsin Electric's actual NOx
remediation expenditures during the 2000/2001 biennial period,
any over or under-spent balances at the end of 2001 in the NOx
escrow account will need to be addressed in future rate making
activities.

FUEL COST ADJUSTMENT PROCEDURE:   As noted above, Wisconsin
Electric operates under a fuel cost adjustment clause for its
fuel and purchased power costs associated with the generation and
delivery of electricity.  On December 8, 2000, Wisconsin Electric
submitted an application with the PSCW seeking a $51.4 million
increase in rates in it's Wisconsin jurisdiction to recover
increased cost of fuel and purchased power in 2001 on an
expedited basis to be effective February 1, 2001.  Wisconsin
Electric revised it's projected fuel cost shortfall on
January 10, 2001 to reflect  updated natural gas cost projections
for 2001.  This update resulted in a request for an additional
$11.1 million in 2001, bringing the total requested increase to
$62.5 million.  Hearings on this matter were held on January 17,
2001.  On February 9, 2001, the PSCW issued an interim order
authorizing a $37.8 million increase in rates for 2001 fuel costs
subject to refund pending the outcome of a full review of fuel
costs.  Hearings on the final phase of the case have been
scheduled for March 23 and April 2, 2001.  A final order in this
case is expected in early spring 2001.

GAS COST RECOVERY MECHANISM:   As a result of the acquisition of
WICOR by Wisconsin Energy, the PSCW required similar gas cost
recovery mechanisms ("GCRM") for the gas operations of Wisconsin
Electric and for Wisconsin Gas.  In recent years, Wisconsin
Electric has operated under a modified dollar for dollar GCRM,
which includes after the fact prudence reviews by the PSCW, while
the Wisconsin Gas GCRM includes an incentive mechanism that
provides an opportunity for Wisconsin Gas to increase or decrease
earnings within certain limited ranges as a result of gas
acquisition activities and transportation costs.  For both
companies, the majority of gas costs are passed through to
customers under their existing gas cost recovery mechanisms.

In February 2001, the PSCW issued separate orders to Wisconsin
Electric and to Wisconsin Gas authorizing a similar GCRM for each
company.  These new GCRMs, which are effective April 1, 2001, are
similar to the existing GCRM at Wisconsin Gas.  Under the new
GCRMs, gas costs will be passed directly to customers through a
purchased gas adjustment clause.  However, both companies will
have the opportunity to increase or decrease earnings by up to
approximately 2.5% of their total annual gas costs based upon how
closely actual gas commodity and capacity costs compare to
benchmarks established by the PSCW.


Michigan Jurisdiction

In mid-November 2000, Wisconsin Electric submitted an application
with the Michigan Public Service Commission requesting an
electric retail rate increase of $3.7 million (9.4%) on an
annualized basis.  Hearings on this rate relief request are
scheduled for April of 2001 with a final order anticipated to be
issued in August of 2001.

FUEL COST ADJUSTMENT PROCEDURE:   In September 2000, Wisconsin
Electric submitted applications with the Michigan Public Service
Commission requesting reinstatement on January 1, 2001 of its
Power Supply Cost Recovery ("PSCR") mechanism.  On January 1,
2001, Wisconsin Electric self-implemented a PSCR factor of
1.41 mills per kilowatt-hour and expects to collect approximately
$1 million of PSCR revenue during 2001.  Hearings on Wisconsin
Electric's application are anticipated in the second quarter of
2001.  PSCR revenues collected during 2001 are subject to a true-
up hearing procedure in 2002.


INDUSTRY RESTRUCTURING AND COMPETITION

Electric Utility Industry

Driven by a combination of market forces, regulatory and
legislative initiatives and technological changes, the nation's
electric industry continues a trend towards restructuring and
increased competition.  In the region, the state of Illinois has
passed legislation that introduced retail electric choice for
large customers in 1999 and introduces choice for all retail
customers by May 2002.  As described in further detail below,
full retail electric choice is scheduled to be introduced in the
state of Michigan in January 2002.  Congress continues to
evaluate restructuring proposals at the federal level.  However,
recent severe electric supply constraints and a resulting rise in
the cost of electricity in California has revitalized public
debate in Wisconsin concerning deregulation.  Given the current
status of restructuring initiatives in regulatory jurisdictions
where the Company primarily does business, the Company cannot
predict the ultimate timing or impact of a restructured electric
industry on its financial position or results of operations.

RESTRUCTURING IN WISCONSIN:   Due to many factors, including
relatively competitive electric rates charged by the state's
electric utilities, Wisconsin is proceeding with restructuring of
the electric utility industry at a much slower pace than many
other states in the United States.  Instead, the PSCW has been
focussed in recent years on electric reliability infrastructure
issues for the state of Wisconsin such as:

  *  Improvements to existing and addition of new electric
     transmission lines in the state;

  *  Addition of new generating capacity in the state;

  *  Modifications to the regulatory process to facilitate
     development of merchant generating plants;

  *  Development of a regional independent electric transmission
     system operator; and

  *  The previously described formation of a statewide
     transmission company, the American Transmission Company LLC,
     which became operational January 1, 2001.


The PSCW continues to maintain the position that the question of
whether to implement electric retail competition in Wisconsin
should ultimately be decided by the Wisconsin legislature.  No
such legislation has been introduced in Wisconsin to date.

RESTRUCTURING IN MICHIGAN:   In June 2000, the Governor of the
state of Michigan signed the "Customer Choice and Electric
Reliability Act" into law empowering the Michigan Public Service
Commission to enforce implementation of prior electric retail
access plans.  In effect, the new law provides that all Michigan
retail customers of investor-owned utilities will have the
ability to choose their electric power producer as of
January 1, 2002.

As directed by the Michigan Public Service Commission, Wisconsin
Electric jointly submitted a customer choice implementation plan
with its affiliate, Edison Sault, in October 2000 and updated the
filing in February 2001.  Such plan envisions certain additional
filings in June 2001 including proposed unbundled rates.  During
2000, revenues in the state of Michigan from Wisconsin Electric's
electric retail customers were approximately $118 million,
representing 5.4% of total operating revenues and 6.7% of total
electric utility operating revenues.  The Empire and Tilden iron
ore mines, Wisconsin Electric's two largest retail customers, are
located in the Upper Peninsula of Michigan.  These mines, from
which Wisconsin Electric received approximately $74 million of
electric utility operating revenues during 2000, will not be
subject to Michigan's customer choice plan until special
negotiated power sales contracts between Wisconsin Electric and
the mines expire in 2007.  Wisconsin Electric and Edison Sault
believe that their power supply costs are and will be competitive
when the customer choice program commences in January of 2002.
In addition, alternative electric suppliers will use the
companies' electric distribution systems under unbundled
effective rates.


Natural Gas Utility Industry

RESTRUCTURING IN WISCONSIN:   The PSCW has instituted generic
proceedings to consider how its regulation of gas distribution
utilities should change to reflect the changing competitive
environment in the natural gas industry.  To date, the commission
has made a policy decision to deregulate the sale of natural gas
in customer segments with workably competitive market choices and
has adopted standards for transactions between a utility and its
gas marketing affiliates.  However, work on deregulation of the
gas distribution industry by the PSCW is presently on hold.
Currently, Wisconsin Electric is unable to predict the impact of
potential future deregulation on the Company's results of
operations or financial position.


ELECTRIC SYSTEM RELIABILITY

Wisconsin Electric had adequate capacity to meet all of its firm
electric load obligations during 2000.  Public appeals for
conservation were not required, nor was there the need to
interrupt or curtail service to non-firm customers who
participate in load management programs in exchange for
discounted rates.  All of Wisconsin Electric's generating plants
performed well during the hottest periods of the summer and all
power purchase commitments under firm contract were received.

Wisconsin Electric expects to have adequate capacity to meet all
of its firm load obligations during 2001.  However, the Company
anticipates that the regional electric energy supply will remain
tight into the foreseeable future.  As a result of this, or of
extremely hot weather along with unexpected equipment
unavailability, Wisconsin Electric could be required to call upon
load management procedures during 2001 as it has in past years.

Wisconsin Electric is proceeding with several long-term measures
to enhance the reliability of its own system, including
participation in the "Power the Future" strategy discussed above.


NUCLEAR OPERATIONS

POINT BEACH NUCLEAR PLANT:   Wisconsin Electric owns two 510-
megawatt electric generating units at Point Beach Nuclear Plant
in Two Rivers, Wisconsin.  During 2000, 1999, and 1998, Point
Beach provided 23%, 22% and 18% of Wisconsin Electric's net
electric energy supply, respectively.  The United States Nuclear
Regulatory Commission operating licenses for Point Beach expire
in October 2010 for Unit 1 and in March 2013 for Unit 2.

As a result of various performance improvement initiatives,
Wisconsin Electric's total nuclear operation and maintenance
expenses, excluding fuel and benefit overheads, decreased from
$156 million during 1998 to $128 million during 1999 and
$119 million during 2000.  Unplanned shutdowns or power
reductions of Point Beach Units 1 or 2 may occur from time to
time as Wisconsin Electric continues to perform reviews of
facility design and to implement further improvement initiatives.

In July 2000, Wisconsin Electric's senior management authorized
the commencement of initial design work for the power uprate of
both units at Point Beach.  Subject to approval by the PSCW, the
project is scheduled to be completed by May 2004 and is expected
to add approximately 76 megawatts of electrical output to
Point Beach.

Wisconsin Electric has formed an operating license renewal team
which is expected to complete a technical and economic evaluation
of license renewal by mid-2002.  Based upon the results of this
evaluation and subject to approval by executive management and by
the boards of directors of Wisconsin Electric and Wisconsin
Energy in the second half of 2002, Wisconsin Electric will
determine whether to seek appropriate regulatory approvals,
including submittal of an application to the Nuclear Regulatory
Commission, for an extension of the operating licenses for Point
Beach Nuclear Plant for a period of up to 20 years.

NUCLEAR MANAGEMENT COMPANY:   During 1999, WEC Nuclear
Corporation, a subsidiary of Wisconsin Energy, Northern States
Power Company (now Xcel Energy), WPS Nuclear Corporation (a
subsidiary of WPS Resources Corporation) and an affiliate of
Alliant Energy Resources announced the formation of the Nuclear
Management Company, LLC ("NMC").  In November 2000, Consumers
Energy signed an agreement to become a full partner in the NMC.
Assuming that Consumers Energy receives requisite regulatory
approvals to transfer its operating licenses to the NMC during
2001, the NMC will operate a total of eight nuclear generating
units at six sites in the states of Wisconsin, Minnesota,
Michigan and Iowa with a total combined generating capacity of
about 4,500 megawatts.

During 2000, the four original participants in the NMC received
all necessary regulatory approvals, and the NMC assumed operating
responsibility in August 2000 for Point Beach Nuclear Plant with
the transfer of operating authority under its operating licenses.
Each NMC participant continues to own its respective nuclear
generating units and retains exclusive rights to the energy
generated as well as financial responsibility for the safe
operation, maintenance and decommissioning of its respective
plants.

On September 7, 2000, the NMC announced the combination of the
operations of Point Beach with Kewaunee Nuclear Power Plant into
a "virtual 3-unit site."  Kewaunee Nuclear Power Plant, owned by
two other participants in the NMC, is located about five miles
from Point Beach.  Support functions including training,
engineering, assessment, business and site services have been
combined under this new management structure.

USED NUCLEAR FUEL STORAGE AND DISPOSAL:   During 1995, Wisconsin
Electric completed construction of a facility at Point Beach for
the temporary dry storage of up to 48 canisters containing used
nuclear fuel.  During 2000, Wisconsin Electric finished loading
the last of twelve canisters originally authorized by the PSCW.
On March 13, 2001, the PSCW approved a May 2000 application for
authority to load additional temporary used fuel dry storage
containers beyond the twelve that were originally authorized.
The application requested authorization for sufficient additional
containers, at a cost of up to approximately $46 million, to
operate Point Beach Units 1 and 2 to the end of their current
operating licenses, but not to exceed the original 48-canister
capacity of the facility.  The PSCW's decision is expected to be
finalized in an order to be issued in the second quarter of 2001.

Temporary storage alternatives at Point Beach are necessary until
the United States Department of Energy takes ownership of and
permanently removes the used fuel as mandated by the Nuclear
Waste Policy Act of 1982, as amended in 1987 (the "Waste Act").
Effective January 31, 1998, the Department of Energy failed to
meet its contractual obligation to begin removing used fuel from
Point Beach, a responsibility for which Wisconsin Electric has
paid a total of $170.8 million as of December 31, 2000.  The
Department of Energy has indicated that it does not expect a
permanent used fuel repository to be available any earlier than
2010.  It is not possible, at this time, to predict with
certainty when the Department of Energy will actually begin
accepting used nuclear fuel.

On August 13, 2000, the United States Court of Appeals for the
Federal Circuit ruled in a lawsuit brought by Maine Yankee and
Northern States Power Company that the Department of Energy's
failure to begin performance by January 31, 1998 constituted a
breach in the Standard Contract, providing clear grounds for
filing complaints in the Court of Federal Claims.  Consequently,
Wisconsin Electric filed a complaint on November 16, 2000 against
the Department of Energy in the Court of Federal Claims.  The
matter is pending.  As of August 2000, Wisconsin Electric has
incurred damages in excess of $35 million, which it seeks to
recover from the Department of Energy.  Damages will continue to
accrue, and, accordingly, Wisconsin Electric expects to seek to
recover all of its damages in this lawsuit.

During 2000, President Clinton vetoed legislation that would have
required the Department of Energy to establish a temporary used
fuel repository in the state of Nevada until a permanent
repository is available and to begin taking ownership from
utilities and removing used fuel as required by the Waste Act.
The Senate and the House failed to override the President's veto.
Wisconsin Electric is unable to predict whether similar
legislation might be reintroduced and passed during 2001 or
whether the new administration might support and sign such
legislation.


LEGAL MATTERS

GIDDINGS & LEWIS INC./CITY OF WEST ALLIS LAWSUIT:   In July 1999,
a jury issued a verdict against Wisconsin Electric awarding the
plaintiffs $4.5 million in compensatory damages and $100 million
in punitive damages in an action alleging that Wisconsin Electric
had deposited contaminated wastes at two sites in West Allis,
Wisconsin owned by the plaintiffs.  Internal investigations lead
Wisconsin Electric to believe that it was not the source of this
waste.  In December 1999, in order to stop the post-judgment
accrual of interest at 12% during the pendency of an appeal,
Wisconsin Electric tendered a contested liability payment of
$110 million, which is part of Deferred Charges and Other Assets
- Other on the Consolidated Balance Sheet, to the Milwaukee
County Clerk of Circuit Court representing the amount of the
verdict and accrued interest.  In further post-trial proceedings,
the Circuit Court Judge issued a ruling during 2000 related to
representations made by Wisconsin Electric during trial, imposing
sanctions against Wisconsin Electric.  Wisconsin Electric is
appealing the judgment entered on the jury's verdict as well as
the Judge's ruling on the sanctions matter.

As further developments, two shareholders filed separate
shareholder derivative proceedings in Milwaukee County Circuit
Court during 2000 for alleged injuries to shareholders resulting
from this litigation.  The two lawsuits have been consolidated
for pre-trial purposes.  The matter is pending.

In the opinion of management, based in part on the advice of
legal counsel, the jury verdict was not supported by the evidence
or the law and the unprecedented award of punitive damages of
this magnitude was unwarranted and should therefore be reversed
or substantially reduced on appeal.  Management also believes
that the sanctions imposed by the Judge were not supported by the
evidence or the law.  As such, Wisconsin Electric has not
established a reserve for potential damages from this suit.  For
further information, see "Note K - Commitments and Contingencies"
in the Notes to Financial Statements.

WISCONSIN INTERNATIONAL ELECTRIC POWER LITIGATION:   During 1999,
Wisconsin Electric and Wisconsin International Electric
Power, Ltd. reached settlement of litigation brought by Wisconsin
International Electric Power against Wisconsin Electric claiming
that Wisconsin Electric had breached contractual duties allegedly
owed to the plaintiff relating to development of an electric
generating plant at Subic Bay in the Philippines.  While
Wisconsin Electric does not believe that it breached any
contractual duties allegedly owed to the plaintiff, Wisconsin
Electric paid Wisconsin International Electric Power, Ltd.
$18.0 million ($10.8 million after tax) in November 1999 to
settle the case, and the plaintiff's claims were dismissed with
prejudice.


ENVIRONMENTAL MATTERS

Consistent with other companies in the energy industry, Wisconsin
Electric faces potentially significant ongoing environmental
compliance and remediation challenges related to current and past
operations.  Specific environmental issues affecting the Company
include but are not limited to (1) air emissions such as carbon
dioxide ("CO2"), sulfur dioxide ("SO2"), nitrogen oxide ("NOx"),
small particulates and mercury, (2) disposal of combustion by-
products such as fly ash, (3) remediation of former manufactured
gas plant sites, (4) disposal of used nuclear fuel, and (5) the
eventual decommissioning of nuclear power plants.  Wisconsin
Electric is currently pursuing a proactive strategy to manage its
environmental issues including (1) substitution of new and
cleaner generating facilities for older facilities as part of the
"Power the Future" strategy, (2) development of additional
sources of renewable electric energy supply, (3) participation in
regional initiatives to reduce the emissions of NOx from the
Company's fossil fuel-fired generating facilities,
(4) participation in voluntary programs with the Wisconsin
Department of Natural Resources and the United States
Environmental Protection Agency to reduce overall emissions,
including mercury, from Wisconsin Electric's coal-fired power
plants, (5) recycling of ash from coal-fired generating units and
(6) the voluntary clean-up of former manufactured gas plant
sites.  For further information concerning disposal of used
nuclear fuel and nuclear power plant decommissioning, see
"Nuclear Operations" above and "Note E - Nuclear Operations" in
the Notes to Financial Statements, respectively.

NATIONAL AMBIENT AIR QUALITY STANDARDS:   In July 1997, the
United States Environmental Protection Agency revised the
National Ambient Air Quality Standards for ozone and particulate
matter.  Although specific emission control requirements are not
yet defined and despite legal challenges to these standards that
will impact compliance requirements and timing, Wisconsin
Electric believes that the revised standards will likely require
significant reductions in SO2 and NOx emissions from coal-fired
generating facilities.  If these new standards withstand ongoing
legal challenges, Wisconsin Electric expects that reductions
needed to achieve compliance with the ozone attainment standards
will be implemented in stages from 2004 through 2012, beginning
with the ozone transport reductions described below.  Reductions
associated with the new particulate matter standards will likely
be implemented in stages after the year 2010 and extending to the
year 2017.  Beyond the cost estimates identified below, Wisconsin
Electric is currently unable to estimate the impact of the
revised air quality standards on its future liquidity, financial
condition or results of operation.

OZONE NON-ATTAINMENT RULEMAKING:   In October 1998, the
Environmental Protection Agency promulgated ozone transport rules
to address transport of NOx and ozone into ozone non-attainment
areas in the eastern half of the United States.  The rules would
have required electric utilities in 22 eastern states and the
District of Columbia, including the state of Wisconsin, to
significantly reduce NOx emissions by May 1, 2003.  A court
decision on these challenges was issued in March 2000 excluding
the state of Wisconsin but continuing to include southern
Michigan as one of 19 states in a region east of the Mississippi
River that would remain subject to the October 1998 rules.
Further appeals are ongoing.

Independent of any court decisions, Wisconsin and some other
states in the Lake Michigan region have concluded rulemakings
that require utilities, including Wisconsin Electric, to reduce
NOx emissions as part of separate, existing 1-hour ozone
attainment demonstration rules required by the Environmental
Protection Agency for the Lake Michigan region's severe non-
attainment areas.

Wisconsin Electric is working with a variety of stakeholders to
provide input to the plan under development by the state of
Michigan.  Wisconsin's rule is already in effect.  Wisconsin
Electric is evaluating various NOx control techniques under
various regulatory scenarios to develop a least cost compliance
plan and currently expects to incur total capital costs of
$150 million to $200 million and annual operation and maintenance
costs of $2 million to $4 million during the period 2001 through
2004 to comply with such a plan.  Wisconsin Electric believes
that compliance with the NOx emission reductions required by
Wisconsin's non-attainment rules will substantially mitigate
costs to comply with the Environmental Protection Agency's July
1997 revisions to the ozone National Ambient Air Quality
Standards discussed above.

In January 2000, the PSCW approved Wisconsin Electric's
comprehensive plan to meet the Environmental Protection Agency
regulations, permitting recovery in rates of NOx emission
reduction costs over an accelerated 10-year recovery period and
requiring that these costs be separately itemized on customer
bills.

MANUFACTURED GAS PLANT SITES:   Wisconsin Electric is voluntarily
reviewing and addressing environmental conditions at a number of
former manufactured gas plant sites.  For further information,
see "Note K - Commitments and Contingencies" in the Notes to
Financial Statements.

ASH LANDFILL SITES:   Wisconsin Electric aggressively seeks
environmentally acceptable, beneficial uses for its combustion
byproducts.  However, combustion byproducts have been, and to
some degree continue to be, disposed in company-owned, licensed
landfills.  Some early designed and constructed landfills may
allow the release of low levels of constituents resulting in the
need for various levels of remediation.  Where Wisconsin Electric
has become aware of these conditions, efforts have been expended
to define the nature and extent of any release, and work has been
performed to address these conditions.  The costs of these
efforts are included in the environmental operating and
maintenance costs of Wisconsin Electric.


MARKET RISKS

The Company is potentially exposed to market risk due to changes
in interest rates, the return on marketable securities and the
market price of electricity as well as to changes in fuel costs
incurred to generate electricity and in the cost of gas for its
gas operations.  Exposure to interest rate changes relates to the
Company's short and long-term debt as well as its preferred
equity obligations, while exposure to fluctuations in the return
on marketable securities relates to debt and equity security
investments held in various trust funds.  Exposure to electricity
market price risk relates to forward activities taken to manage
the supply of and demand for electric energy.  Exposure to fuel
and gas cost variations relates to the supply of and demand for
coal, uranium, natural gas and fuel oil.  For additional
information concerning risk factors, including market risks, see
"Cautionary Factors" below.

INTEREST RATE RISK:   The Company has various short-term
borrowing arrangements to provide working capital and general
corporate funds.  The level of borrowings under such arrangements
vary from period to period, depending upon, among other factors,
capital investments.  Future short-term interest expense and
payments will reflect both future short-term interest rates and
borrowing levels.

As of December 31, 2000, the Company had approximately
$257.0 million of short-term debt outstanding with a weighted
average interest rate of 6.58%, representing approximately
$16.9 million of annual pre-tax interest expense.  A 1/8 percent
change in effective interest rates would increase or decrease
annual interest expense by approximately $0.3 million.

The table below provides information about the long-term
financial instruments that were held by the Company at
December 31, 2000 and that are sensitive to changes in interest
rates.  For long-term debt, the table presents anticipated
principal cash flows by maturity date and the related annualized
average interest rate of the maturing long-term debt.  The
annualized average interest rate on the variable rate long-term
debt was estimated based upon a weighted average interest rate at
December 31, 2000.

<TABLE>
<CAPTION>
                                              Expected Maturity Date                          Fair Value
     Wisconsin Electric           ----------------------------------------------                as of
        Power Company             2001   2002     2003   2004     2005    Thereafter   Total   12/31/00
----------------------------      ----   ----     ----   ----     ----    ----------   -----  ----------
                                                          (Millions of Dollars)
<S>                               <C>    <C>      <C>    <C>      <C>     <C>       <C>       <C>
Fixed Rate Long-Term Debt          $1.9  $151.9    $1.9  $141.9    $1.9   $1,049.3  $1,348.8  $1,308.5
   Average Interest Rate          7.50%  6.64%    7.50%  7.25%    7.50%      7.23%     7.17%

Variable Rate Long-Term Debt        -       -       -       -       -       $165.4    $165.4    $165.4
   Average Interest Rate            -       -       -       -       -        4.81%     4.81%

Preferred Stock Not Subject to
 Mandatory Redemption               -       -       -       -       -         -        $30.4     $15.4
  Average Dividend Rate             -       -       -       -       -         -         4.0%
</TABLE>


MARKETABLE SECURITIES RETURN RISK:   The Company funds its
pension, other postretirement benefit and nuclear decommissioning
obligations through various trust funds, which in turn invest in
debt and equity securities.  Changes in the market price of the
assets in these trust funds can affect pension, other
postretirement benefit and nuclear decommissioning expenses in
future periods. Future annuity payments to these trust funds can
be affected by changes in the market price of the trust fund
assets.  Wisconsin Electric expects that the risk of expense and
annuity payment variations as a result of changes in the market
price of trust fund assets would be mitigated in part through
future rate actions by the Company's various utility regulators.

At December 31, 2000, the Company had the following total trust
fund assets at fair value, primarily consisting of publicly
traded debt and equity security investments.

<TABLE>
<CAPTION>
Wisconsin Electric Power Company             Millions of Dollars
--------------------------------             -------------------
<S>                                                <C>
Pension trust funds                                $873.2
Nuclear decommissioning trust fund                  613.3
Other postretirement benefits trust funds            79.4
</TABLE>


COMMODITY PRICE RISK:   In the normal course of business,
Wisconsin Electric utilizes contracts of various duration for the
forward sale and purchase of electricity.  This is done to
effectively manage utilization of available generating capacity
and energy during periods when available power resources are
expected to exceed the requirements of the Company's obligations.
This practice may also include forward contracts for the purchase
of power during periods when the anticipated market price of
electric energy is below expected incremental power production
costs.  The Company manages its fuel and gas supply costs through
a portfolio of short and long-term procurement contracts with
various suppliers.

Wisconsin Electric's retail fuel cost adjustment procedure in
Wisconsin mitigates some of the risk of fuel cost price
fluctuation.  On a prospective basis, if cumulative fuel and
purchased power costs for electric utility operations deviate
from a prescribed range when compared to the costs projected in
the most recent retail rate proceeding, retail electric rates may
be adjusted.  For its gas utility operations, the gas cost
recovery mechanism in Wisconsin currently mitigates most of
Wisconsin Electric's risk of gas cost variations.

For additional information concerning the electric utility fuel
cost adjustment procedure and the natural gas utilities' gas cost
recovery mechanisms, see "Rates and Regulatory Matters" above.


ACCOUNTING DEVELOPMENTS

NEW PRONOUNCEMENTS:   Statement of Financial Accounting Standards
No. 133, Accounting for Derivative Instruments and Hedging
Activities ("FAS 133"), is effective for fiscal years beginning
after June 15, 2000.  The Company will adopt this statement
effective January 1, 2001, which will have an insignificant
impact on net income and other comprehensive income.  For further
information, see "Note A - Summary of Significant Accounting
Policies" in the Notes to Financial Statements.

REGULATORY ACCOUNTING:   Wisconsin Electric operates under rates
established by state and federal regulatory commissions which are
designed to recover the cost of service and provide a reasonable
return to investors.  Developing competitive pressures in the
utility industry may result in future utility prices which are
based upon factors other than the traditional original cost of
investment.  In such a situation, continued deferral of certain
regulatory asset and liability amounts on the utilities' books,
as allowed under Statement of Financial Accounting Standards
No. 71, Accounting for the Effects of Certain Types of Regulation
("FAS 71"), may no longer be appropriate and the unamortized
regulatory assets net of the regulatory liabilities would be
recorded as an extraordinary after-tax non-cash charge to
earnings.  Such a charge could be material.  The Company
continually reviews the applicability of FAS 71 and has
determined that it is currently appropriate to continue following
FAS 71.  At this time, the Company is unable to predict whether
any adjustments to regulatory assets and liabilities will occur
in the future.  See "Note A - Summary of Significant Accounting
Policies" in the Notes to Financial Statements for additional
information.


CAUTIONARY FACTORS

This report and other documents or oral presentations contain or
may contain forward-looking statements made by or on behalf of
Wisconsin Electric.  Such statements are based upon management's
current expectations and are subject to risks and uncertainties
that could cause Wisconsin Electric's actual results to differ
materially from those contemplated in the statements.  Readers
are cautioned not to place undue reliance on the forward-looking
statements.  When used in written documents or oral
presentations, the terms "anticipate," "believe," "estimate,"
"expect," "objective," "plan," "possible," "potential," "project"
and similar expressions are intended to identify forward-looking
statements.  In addition to the assumptions and other factors
referred to specifically in connection with such statements,
factors that could cause Wisconsin Electric's actual results to
differ materially from those contemplated in any forward-looking
statements include, among others, the following.


Operating, Financial and Industry Factors

  *  Factors affecting utility operations such as unusual weather
     conditions; catastrophic weather-related damage; availability of
     electric generating facilities; unscheduled generation outages,
     or unplanned maintenance or repairs; unanticipated changes in
     fossil fuel, nuclear fuel, purchased power, gas supply or water
     supply costs or availability due to higher demand, shortages,
     transportation problems or other developments; nonperformance by
     electric energy or natural gas suppliers under existing power
     purchase or gas supply contracts; nuclear or environmental
     incidents; resolution of used nuclear fuel storage and disposal
     issues; electric transmission or gas pipeline system constraints;
     unanticipated organizational structure or key personnel changes;
     collective bargaining agreements with union employees or work
     stoppages; inflation rates; or demographic and economic factors
     affecting utility service territories or operating environment.

  *  Regulatory factors such as unanticipated changes in rate-
     setting policies or procedures; unanticipated changes in
     regulatory accounting policies and practices; industry
     restructuring initiatives; transmission system operation and/or
     administration initiatives; recovery of costs of previous
     investments made under traditional regulation; required approvals
     for new construction; changes in the United States Nuclear
     Regulatory Commission's regulations related to Point Beach
     Nuclear Plant; changes in the United States Environmental
     Protection Agency's regulations as well as regulations from the
     Wisconsin or Michigan Departments of Natural Resources related to
     emissions from fossil fuel power plants; or the siting approval
     process for new generation and transmission facilities.

  *  The rapidly changing and increasingly competitive electric
     and gas utility environment as market-based forces replace strict
     industry regulation and other competitors enter the electric and
     gas markets resulting in increased wholesale and retail
     competition.

  *  Consolidation of the industry as a result of the combination
     and acquisition of utilities in the Midwest, nationally and
     globally.

  *  Changes in social attitudes regarding the utility and power
     industries.

  *  Customer business conditions including demand for their
     products or services and supply of labor and material used in
     creating their products and services.

  *  The cost and other effects of legal and administrative
     proceedings, settlements, investigations and claims, and changes
     in those matters, including the final outcome of the Giddings &
     Lewis, Inc./City of West Allis lawsuit against Wisconsin
     Electric.

  *  Factors affecting the availability or cost of capital such
     as: changes in interest rates; the Company's capitalization
     structure; market perceptions of the utility industry or the
     Company; or security ratings.

  *  Federal, state or local legislative factors such as changes
     in tax laws or rates; changes in trade, monetary and fiscal
     policies, laws and regulations; electric and gas industry
     restructuring initiatives; or changes in environmental laws and
     regulations.

  *  Authoritative generally accepted accounting principle or
     policy changes from such standard setting bodies as the Financial
     Accounting Standards Board and the Securities and Exchange
     Commission.

  *  Unanticipated technological developments that result in
     competitive disadvantages and create the potential for impairment
     of existing assets.

  *  Factors which impede execution of Wisconsin Energy's "Power
     the Future" strategy announced in September 2000 and revised in
     February 2001, including receipt of necessary state and federal
     regulatory approvals and amendment of applicable laws in the
     state of Wisconsin, and obtaining the investment capital from
     outside sources necessary to implement the strategy.

  *  Other business or investment considerations that may be
     disclosed from time to time in Wisconsin Electric's Securities
     and Exchange Commission filings or in other publicly disseminated
     written documents.


Business Combination Factors

  *  Unanticipated costs or difficulties related to the
     integration of the businesses of Wisconsin Energy and WICOR.

  *  Unanticipated financing or other consequences resulting from
     the additional short-term debt issued to fund the acquisition of
     WICOR.

  *  Unexpected difficulties or delays in realizing anticipated
     net cost savings or unanticipated effects of the qualified five-
     year electric and gas rate freeze ordered by the PSCW as a
     condition of approval of the merger.


Wisconsin Electric undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise.



ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES
           ABOUT MARKET RISK

See "Factors Affecting Results, Liquidity and Capital Resources -
Market Risks" in Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operations in this report for
information concerning potential market risks to which Wisconsin
Electric is exposed due to changes in interest rates, the return
on marketable equity securities and the price of commodities.




ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

<TABLE>
<CAPTION>
                                   WISCONSIN ELECTRIC POWER COMPANY

                                           INCOME STATEMENT

                                        Year Ended December 31

                                                  2000               1999                 1998
                                               ----------         ----------           ----------
                                                            (Millions of Dollars)
<S>                                             <C>                 <C>                 <C>
Operating Revenues
  Electric                                      $1,763.4            $1,688.3            $1,641.4
  Gas                                              399.7               306.8               295.9
  Steam                                             21.9                21.3                20.5
                                                --------            --------            --------
     Total Operating Revenues                    2,185.0             2,016.4             1,957.8

Operating Expenses
  Fuel and purchased power                         497.7               445.0               450.0
  Cost of gas sold                                 258.7               174.0               175.5
  Other operation and maintenance                  696.1               649.5               662.1
  Depreciation, decommissioning
    and amortization                               272.7               234.2               225.7
  Property and revenue taxes                        65.9                66.6                60.9
                                                --------            --------            --------
     Total Operating Expenses                    1,791.1             1,569.3             1,574.2
                                                --------            --------            --------
Operating Income                                   393.9               447.1               383.6

Other Income and Deductions
  Interest income                                    4.0                 7.5                 8.4
  Allowance for other funds
    used during construction                         2.6                 3.8                 2.9
  Other                                            (16.4)              (16.2)               (3.3)
                                                --------            --------            --------
     Total Other Income and Deductions              (9.8)               (4.9)                8.0

Financing Costs
  Interest expense                                 117.5               114.7               112.2
  Allowance for borrowed funds
    used during construction                        (1.3)               (1.8)               (1.5)
                                                --------            --------            --------
     Total Financing Costs                         116.2               112.9               110.7
                                                --------            --------            --------
Income Before Income Taxes                         267.9               329.3               280.9

Income Taxes                                       103.2               116.2                96.7
                                                --------            --------            --------
Net Income                                         164.7               213.1               184.2

Preferred Stock Dividend Requirement                 1.2                 1.2                 1.2
                                                --------            --------            --------

Earnings Available for Common
  Stockholder                                     $163.5              $211.9              $183.0
                                                ========            ========            ========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>

<TABLE>
<CAPTION>
                                   WISCONSIN ELECTRIC POWER COMPANY

                                        STATEMENT OF CASH FLOWS

                                        Year Ended December 31

                                                    2000                1999                1998
                                                 ----------          ----------          ----------
                                                              (Millions of Dollars)
<S>                                              <C>                   <C>                 <C>
Operating Activities
  Net income                                       $164.7              $213.1              $184.2
  Reconciliation to cash
    Depreciation, decommissioning
      and amortization                              287.3               265.6               257.2
    Nuclear fuel expense amortization                27.4                25.8                18.9
    Deferred income taxes, net                       (5.9)               33.7                 0.8
    Investment tax credit, net                       (4.5)               (4.3)               (3.4)
    Allowance for other funds
      used during construction                       (2.6)               (3.8)               (2.9)
    Change in - Accounts receivable and
                  accrued revenues                  (95.7)               (3.9)              (14.7)
                Inventories                          (0.2)                0.8                (0.8)
                Other current assets                 31.1               (46.5)               (5.2)
                Accounts payable                     86.4               (42.4)               26.7
                Other current liabilities            42.8                (1.7)              (14.3)
    Other                                            41.9              (101.1)               35.3
                                                 --------              ------              ------
Cash Provided by Operating Activities               572.7               335.3               481.8

Investing Activities
  Capital expenditures                             (352.5)             (346.4)             (328.5)
  Allowance for borrowed funds
    used during construction                         (1.3)               (1.8)               (1.5)
  Nuclear fuel                                      (41.6)              (18.6)              (17.5)
  Nuclear decommissioning funding                   (17.6)              (17.7)              (15.5)
  Other                                              (6.3)               (8.6)               (1.8)
                                                 --------              ------              ------
Cash Used in Investing Activities                  (419.3)             (393.1)             (364.8)

Financing Activities
  Issuance of long-term debt                         25.0               179.6               169.4
  Retirement of long-term debt                      (30.2)             (100.7)              (78.8)
  Change in short-term debt                          (7.7)               45.4               (23.3)
  Stockholder capital contribution                    -                 150.0                 -
  Dividends paid on common stock                   (178.6)             (179.6)             (179.0)
  Dividends paid on preferred stock                  (1.2)               (1.2)               (1.2)
                                                 --------              ------              ------
Cash Provided by (Used in)
  Financing Activities                             (192.7)               93.5              (112.9)
                                                 --------              ------              ------
Change in Cash and Cash Equivalents                 (39.3)               35.7                 4.1

Cash and Cash Equivalents at
  Beginning of Year                                  49.9                14.2                10.1
                                                 --------              ------              ------
Cash and Cash Equivalents at
  End of Year                                       $10.6               $49.9               $14.2
                                                 ========              ======              ======
Supplemental Information - Cash Paid For
  Interest (net of amount capitalized)             $137.8              $131.2              $125.3
  Income taxes                                       59.7               117.9               106.6
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>

<TABLE>
<CAPTION>
                            WISCONSIN ELECTRIC POWER COMPANY

                                      BALANCE SHEET

                                       December 31

           ASSETS                                        2000                1999
           ------                                      --------            --------
                                                           (Millions of Dollars)
<S>                                                    <C>                 <C>
Property, Plant and Equipment
  Electric                                             $5,300.7            $5,070.2
  Gas                                                     578.2               552.4
  Steam                                                    64.4                63.5
  Common                                                  372.9               391.8
  Other property                                            7.3                 7.6
                                                       --------            --------
                                                        6,323.5             6,085.5
  Accumulated depreciation                             (3,339.2)           (3,189.9)
                                                       --------            --------
                                                        2,984.3             2,895.6
  Construction work in progress                           106.8                99.0
  Leased facilities, net                                  121.7               127.3
  Nuclear fuel, net                                        93.1                83.4
                                                       --------            --------
     Net Property, Plant and Equipment                  3,305.9             3,205.3

Investments
 Nuclear decommissioning trust fund                       613.3               625.7
 Other                                                     28.9                38.1
                                                       --------            --------
     Total Investments                                    642.2               663.8

Current Assets
  Cash and cash equivalents                                10.6                49.9
  Accounts receivable, net of allowance for
    doubtful accounts of $19.7 and $17.5                  232.7               166.6
  Accrued revenues                                        163.0               133.4
  Materials, supplies and inventories                     197.4               197.2
  Prepayments                                              71.5                98.0
  Deferred income taxes                                    32.5                37.5
  Other                                                     1.2                 0.8
                                                       --------            --------
     Total Current Assets                                 708.9               683.4

Deferred Charges and Other Assets
  Deferred regulatory assets                              232.0               215.1
  Other                                                   136.1               134.3
                                                       --------            --------
     Total Deferred Charges and Other Assets              368.1               349.4
                                                       --------            --------
Total Assets                                           $5,025.1            $4,901.9
                                                       ========            ========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>

<TABLE>
<CAPTION>
                            WISCONSIN ELECTRIC POWER COMPANY

                                      BALANCE SHEET

                                       December 31

    CAPITALIZATION AND LIABILITIES                       2000                1999
    ------------------------------                     --------            --------
                                                           (Millions of Dollars)
<S>                                                    <C>                 <C>
Capitalization (See Capitalization Statement)
  Common equity                                        $1,864.8            $1,880.9
  Preferred stock                                          30.4                30.4
  Long-term debt                                        1,679.6             1,677.6
                                                       --------            --------
     Total Capitalization                               3,574.8             3,588.9


Current Liabilities
  Long-term debt due currently                             28.1                30.8
  Notes payable                                           257.0               264.7
  Accounts payable                                        213.5               127.1
  Payroll and vacation accrued                             39.0                35.5
  Taxes accrued - income and other                         26.6                31.8
  Interest accrued                                         18.8                18.8
  Other                                                    84.2                39.7
                                                       --------            --------
     Total Current Liabilities                            667.2               548.4

Deferred Credits and Other Liabilities
  Accumulated deferred income taxes                       466.1               459.3
  Accumulated deferred investment tax credits              74.7                79.2
  Deferred regulatory liabilities                         123.6               124.0
  Other                                                   118.7               102.1
                                                       --------            --------
     Total Deferred Credits and Other Liabilities         783.1               764.6

Commitments and Contingencies (Note K)                      -                   -
                                                       --------            --------

Total Capitalization and Liabilities                   $5,025.1            $4,901.9
<FN>                                                   ========            ========
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>

<TABLE>
<CAPTION>
                                   WISCONSIN ELECTRIC POWER COMPANY

                                       CAPITALIZATION STATEMENT

                                              December 31

                                                                             2000           1999
                                                                           --------       --------
                                                                             (Millions of Dollars)
<S>                                                                         <C>           <C>
Common Equity (See Statement of Common Equity)
  Common stock - $10 par value; authorized
    65,000,000 shares; outstanding - 33,289,327 shares                       $332.9         $332.9
  Other paid in capital                                                       530.7          530.7
  Retained earnings                                                         1,001.2        1,017.3
                                                                            -------       --------
            Total Common Equity                                             1,864.8        1,880.9

Preferred Stock
  Six Per Cent. Preferred Stock - $100 par value;
    authorized 45,000 shares; outstanding - 44,498 shares                       4.4            4.4
  Serial preferred stock -
    $100 par value; authorized 2,286,500 shares; 3.60% Series
      redeemable at $101 per share; outstanding - 260,000 shares               26.0           26.0
    $25 par value; authorized 5,000,000 shares; none outstanding                -              -
                                                                            -------       --------
            Total Preferred Stock                                              30.4           30.4

Long-Term Debt
  First mortgage bonds -        7-1/4% due 2004                               140.0          140.0
                                7-1/8% due 2016                               100.0          100.0
                                6.85% due 2021                                  9.0            9.0
                                7-3/4% due 2023                               100.0          100.0
                                7.05% due 2024                                 60.0           60.0
                                9-1/8% due 2024                                 3.4            3.4
                                8-3/8% due 2026                               100.0          100.0
                                7.70% due 2027                                200.0          200.0

  Debentures (unsecured) -      6-5/8% due 2002                               150.0          150.0
                                6-5/8% due 2006                               200.0          200.0
                                9.47% due 2006                                  4.2            4.9
                                8-1/4% due 2022                                25.0           25.0
                                6-1/2% due 2028                               150.0          150.0
                                6-7/8% due 2095                               100.0          100.0

  Notes (unsecured) -           6.36% effective rate due 2006                   7.2            8.4
                                4.75% variable rate due 2006 (a)                1.0            1.0
                                4.75% variable rate due 2015 (a)               17.4           17.4
                                4.90% variable rate due 2016 (a)               67.0           67.0
                                4.75% variable rate due 2030 (a)               80.0           80.0

Obligations under capital leases                                              215.5          215.9
Unamortized discount                                                          (22.0)         (23.6)
Long-term debt due currently                                                  (28.1)         (30.8)
                                                                           --------       --------
            Total Long-Term Debt                                            1,679.6        1,677.6
                                                                           --------       --------
Total Capitalization                                                       $3,574.8       $3,588.9
                                                                           ========       ========
<FN>
The accompanying notes are an integral part of these financial statements.

(a) Variable interest rate as of December 31, 2000.
</FN>
</TABLE>

<TABLE>
<CAPTION>
                                   WISCONSIN ELECTRIC POWER COMPANY

                                      STATEMENT OF COMMON EQUITY


                                                 Common Stock
                                             --------------------
                                                          $10 Par    Other Paid   Retained
                                             Shares        Value     In Capital   Earnings     Total
                                             ------       -------    ----------   --------     -----
                                                                     (Millions of Dollars)

<S>                                        <C>            <C>          <C>       <C>         <C>
Balance - December 31, 1997                33,289,327     $332.9       $380.7      $981.0    $1,694.6


Net income                                                                          184.2       184.2
Cash dividends
  Common stock                                                                     (179.0)     (179.0)
  Preferred stock                                                                    (1.2)       (1.2)
                                           ----------     ------       ------    --------    --------
Balance - December 31, 1998                33,289,327      332.9        380.7       985.0     1,698.6


Net income                                                                          213.1       213.1
Cash dividends
  Common stock                                                                     (179.6)     (179.6)
  Preferred stock                                                                    (1.2)       (1.2)
Stockholder capital contribution                                        150.0                   150.0
                                           ----------     ------       ------    --------    --------
Balance - December 31, 1999                33,289,327      332.9        530.7     1,017.3     1,880.9


Net income                                                                          164.7       164.7
Property dividend - common stock                                                     (1.0)       (1.0)
Cash dividends
  Common stock                                                                     (178.6)     (178.6)
  Preferred stock                                                                    (1.2)       (1.2)
                                           ----------     ------       ------    --------    --------
Balance - December 31, 2000                33,289,327     $332.9       $530.7    $1,001.2    $1,864.8
                                           ==========     ======       ======    ========    ========
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>


                WISCONSIN ELECTRIC POWER COMPANY

                 NOTES TO FINANCIAL STATEMENTS

A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL:   The accounting records of Wisconsin Electric Power
Company ("Wisconsin Electric" or the "Company") are maintained as
prescribed by the Federal Energy Regulatory Commission, modified
for requirements of the Public Service Commission of Wisconsin.

On April 26, 2000, Wisconsin Energy Corporation, the parent
company of Wisconsin Electric, acquired WICOR, Inc. in a business
combination that was accounted for as a purchase.  WICOR was a
diversified utility holding company with utility and non-utility
energy subsidiaries as well as pump manufacturing subsidiaries.
Following the merger, WICOR and its subsidiaries, including
Wisconsin Gas Company ("Wisconsin Gas"), the largest natural gas
distribution public utility in Wisconsin, became subsidiaries of
Wisconsin Energy.  Wisconsin Energy has integrated the gas
operations of Wisconsin Electric and Wisconsin Gas as well as
many corporate support areas and expects to integrate customer
billing systems in the third quarter of 2001.  On November 1,
2000, Wisconsin Electric and Wisconsin Gas filed an application
with the PSCW for authority to transfer Wisconsin Electric's gas
utility assets together with certain identified liabilities
associated with such assets (with a net book value of
approximately $365 million as of December 31, 2000) to Wisconsin
Gas in a tax free exchange for shares of Wisconsin Gas which have
a fair value equal to the fair value of the assets transferred
and represent at least 80% of the total combined voting power of
all classes of stock that is entitled to vote.  The matter is
pending.

The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of certain assets and liabilities and disclosure of contingent
assets and liabilities at the date of financial statements and
the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those
estimates.

RECLASSIFICATIONS:   Certain prior year financial statement
amounts have been reclassified to conform to their current year
presentation.  These reclassifications had no effect on net
income.

REVENUES:   Revenues are recognized on the accrual basis and
include estimated amounts for service rendered but not billed.

Wisconsin Electric's electric rates include base amounts for
estimated fuel and purchased power costs.  The Company can
request recovery of fuel and purchased power costs prospectively
from retail electric customers in the Wisconsin jurisdiction
through its rate review process with the Public Service
Commission of Wisconsin ("PSCW") and in interim fuel cost
hearings when such annualized costs are more than 3% higher than
the forecasted costs used to establish rates.  Wisconsin
Electric's retail gas rates include monthly adjustments which
permit the recovery or refund of actual purchased gas costs
incurred.

PROPERTY AND DEPRECIATION:   Property is recorded at cost.
Additions to and significant replacements of property are charged
to property, plant and equipment at cost; minor items are charged
to maintenance expense.  Cost includes material, labor and
capitalized interest or allowance for funds used during
construction.  The cost of depreciable utility property, together
with removal cost less salvage, is charged to accumulated
depreciation when property is retired.  Common plant is allocated
to electric, gas and steam utility plant in rate proceedings.

Depreciation expense is accrued at straight line rates over the
estimated useful lives of the assets.

Utility depreciation rates are certified by the state regulatory
commissions and include estimates for salvage and removal costs.
Depreciation as a percent of average depreciable utility plant
was 4.5% in 2000 and 4.1% in 1999 and 1998.  Nuclear plant
decommissioning costs are accrued and included in depreciation
expense (see Note E).  General plant and software are amortized
over periods approved by the state regulatory commissions.

ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION:   Allowance for
funds used during construction is included in utility plant
accounts and represents the cost of borrowed funds used during
plant construction and a return on stockholders' capital used for
construction purposes.  On the Income Statement, the cost of
borrowed funds (before income taxes) is a reduction of interest
expense and the return on stockholder's capital is an item of non-
cash other income.

As approved by the PSCW, Wisconsin Electric's allowance for funds
used during construction was capitalized during the following
periods on 50% of construction work in progress at the following
rates:

     *  September 1, 2000 - December 31, 2000     10.18%
     *  June 1, 1998 - August 31, 2000            10.21%
     *  January 1, 1998 - May 31, 1998            10.29%


MATERIALS, SUPPLIES AND INVENTORIES:   Inventory at December 31,
2000 and 1999 consists of:

<TABLE>
<CAPTION>

       Materials,
Supplies and Inventories        2000           1999
------------------------        ----           ----
                               (Millions of Dollars)
<S>                            <C>            <C>
Fossil Fuel                     $78.2          $87.9
Gas in Storage                   36.6           29.8
Materials and Supplies           82.6           79.5
                               ------         ------
  Total                        $197.4         $197.2
                               ======         ======
</TABLE>


Substantially all fossil fuel, materials and supplies and gas in
storage inventories are priced using the weighted average method
of accounting.

LONG-LIVED ASSETS:   Wisconsin Electric reviews the carrying
value of long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount may
not be recoverable.  An impairment would be determined based upon
a comparison of the undiscounted future operating cash flows
anticipated to be generated during the remaining life of the long-
lived assets to the carrying value.  Measurement of any
impairment loss would be based upon discounted operating cash
flows.

REGULATORY ACCOUNTING:   Wisconsin Electric accounts for its
regulated operations in accordance with Statement of Financial
Accounting Standards No. 71, Accounting for the Effects of
Certain Types of Regulation.  This statement sets forth the
application of generally accepted accounting principles to those
companies whose rates are determined by an independent third-
party regulator.  The economic effects of regulation can result
in regulated companies recording costs that have been or are
expected to be allowed in the ratemaking process in a period
different from the period in which the costs would be charged to
expense by an unregulated enterprise.  When this occurs, costs
are deferred as assets in the balance sheet (regulatory assets)
and recorded as expenses in the periods when those same amounts
are reflected in rates.  Additionally, regulators can impose
liabilities upon a regulated company for amounts previously
collected from customers and for amounts that are expected to be
refunded to customers (regulatory liabilities).

Deferred regulatory assets and liabilities at December 31
consist of:

<TABLE>
<CAPTION>

Deferred Regulatory Assets and Liabilities       2000                1999
------------------------------------------       ----                ----
                                                  (Millions of Dollars)
<S>                                             <C>                 <C>
Deferred Regulatory Assets
  Deferred income taxes                         $148.4              $155.1
  Purchase power commitment                       30.6                22.1
  Lightweight aggregate plant                     19.7                 -
  Department of Energy assessments                18.5                21.1
  Deferred nuclear costs                           8.3                11.8
  Other                                            6.5                 5.0
                                                ------              ------
Total Deferred Regulatory Assets                $232.0              $215.1
                                                ======              ======

Deferred Regulatory Liabilities
  Deferred income taxes                         $110.2              $117.0
  Tax and interest refunds                        10.2                 2.3
  Other                                            3.2                 4.7
                                                ------              ------
Total Deferred Regulatory Liabilities           $123.6              $124.0
                                                ======              ======
</TABLE>


During 2000, Wisconsin Electric discontinued operation of its
lightweight aggregate plant at Oak Creek Power Plant.  As
authorized by the PSCW, Wisconsin Electric transferred the
associated remaining undepreciated plant balance of $19.7 million
on December 31, 2000 to a deferred regulatory asset account,
which will be amortized on a straight line basis over the five-
year period ending December 31, 2005.

STATEMENT OF CASH FLOWS:   Cash and cash equivalents include
marketable debt securities acquired three months or less from
maturity.  In 1999, Wisconsin Electric recorded a $110 million
cash payment, included in Operating Activities - Other, related
to a contested July 1999 jury verdict (see Note K).

RESTRICTIONS:   Various financing arrangements and regulatory
requirements impose certain restrictions on the ability of
Wisconsin Electric to transfer funds to Wisconsin Energy in the
form of cash dividends, loans or advances.  Under Wisconsin law,
Wisconsin Electric is prohibited from loaning funds, either
directly or indirectly, to Wisconsin Energy.

NEW ACCOUNTING PRONOUNCEMENTS:   In June 1998, the Financial
Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities ("FAS 133"), which has been
amended by FAS 137, Accounting for Derivative Instruments and
Hedging Activities - Deferral of the Effective Date of FAS 133,
an amendment of FAS 133, and by FAS 138, Accounting for Certain
Derivative Instruments and Certain Hedging Activities, an
amendment of FAS 133.  FAS 133 requires that every derivative
instrument be recorded on the balance sheet as 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.

FAS 133, as amended, is effective for fiscal years beginning
after June 15, 2000 and must be applied to: (1) derivative
instruments; and (2) certain derivative instruments embedded in
hybrid contracts that were issued, acquired or substantively
modified after December 31, 1998.  Wisconsin Electric has
identified a limited number of commodity contracts that meet the
definition of a derivative under FAS 133 in its electric and
natural gas utility operations.  These contracts are used to
manage the Company's exposure to commodity price rate volatility.

The adoption of FAS 133, as amended, on January 1, 2001, was
insignificant to the income statement and to other comprehensive
income.  Wisconsin Electric believes that its electric capacity
contracts qualify for the normal purchase and sale exception
under FAS 133, and therefore are not considered derivative
instruments.  The Financial Accounting Standards Board is
currently reviewing a proposal that would allow electric capacity
option contracts to qualify for the normal purchase and sale
exception.  The Financial Accounting Standards Board's final
conclusion may impact the Company's ongoing application of FAS
133 related to its electric capacity contracts.

Following initial adoption of FAS 133, changes in the net value
of the effective portion of derivatives qualifying as cash flow
hedges are recorded, net of tax, in other comprehensive income.
The ineffective portion of the derivative's change in fair value
is required to be recognized in earnings immediately.

The fair value of the derivative investments is determined by
reference to quoted market prices of listed contracts, published
quotations or quotations from independent parties.  In the
absence thereof, the Company utilizes mathematical models based
on current and historical data.


B - AMERICAN TRANSMISSION COMPANY

In 2000, Wisconsin Electric agreed to join the American
Transmission Company LLC by transferring its electric utility
transmission assets in exchange for an equity interest in this
new company.  Transfer of these electric transmission system
assets, with a net book value of approximately $222 million,
became effective on January 1, 2001.  During the first half of
2001, the American Transmission Company LLC is expected to issue
debt and distribute cash to Wisconsin Electric in an amount equal
to approximately 50% of the net book value of the assets
transferred.


C - NON-RECURRING CHARGES

During the fourth quarter of 2000, Wisconsin Electric recorded
charges totaling $43.9 million after tax.  Of this, $34.3 million
was related to severance benefits and other items.  In connection
with the WICOR merger, approximately 170 employees are to receive
severance benefits under severance agreements and enhanced
retirement initiatives.  As of December 31, 2000, approximately
$7.4 million of severance benefits remained as an outstanding
liability on the balance sheet.  In addition, Wisconsin Electric
made a contribution of $9.6 million after tax to the Wisconsin
Energy Foundation to assist it in becoming self funded.

During 1999, Wisconsin Electric reached agreement in the
settlement of litigation related to the development of an
electric generating plant in the Philippines at a cost of
$10.8 million after tax.


D - INCOME TAXES

Wisconsin Electric follows the liability method in accounting for
income taxes as prescribed by Statement of Financial Accounting
Standards No. 109, Accounting for Income Taxes ("FAS 109").
FAS 109 requires the recording of deferred assets and liabilities
to recognize the expected future tax consequences of events that
have been reflected in Wisconsin Electric's financial statements
or tax returns and the adjustment of deferred tax balances to
reflect tax rate changes.

The following table is a summary of income tax expense for each
of the years ended December 31:

<TABLE>
<CAPTION>
    Income Tax Expense                2000          1999           1998
    ------------------                ----          ----           ----
                                           (Millions of Dollars)
<S>                                  <C>            <C>             <C>
Current tax expense                  $113.6         $86.8          $99.3
Deferred income taxes, net             (5.9)         33.7            0.8
Investment tax credit, net             (4.5)         (4.3)          (3.4)
                                     ------        ------          -----
  Total Tax Expense                  $103.2        $116.2          $96.7
                                     ======        ======          =====
</TABLE>


The provision for income taxes for each of the years ended
December 31 differs from the amount of income tax determined by
applying the applicable U.S. statutory federal income tax rate to
income before income taxes as a result of the following:

<TABLE>
<CAPTION>
                                     2000                      1999                      1998
                            ---------------------     ---------------------     ---------------------
                                        Effective                 Effective                 Effective
  Income Tax Expense        Amount      Tax Rate      Amount      Tax Rate      Amount      Tax Rate
  ------------------        ------      ---------     ------      ---------     ------      ---------
                                                      (Millions of Dollars)
<S>                        <C>            <C>        <C>            <C>         <C>           <C>
Expected tax at
 statutory federal
 tax rates                  $93.8         35.0%      $115.2         35.0%       $98.3         35.0%
State income taxes
 net of federal
 tax benefit                 14.4          5.4%        16.1          4.9%        13.5          4.8%
Investment tax
 credit restored             (4.5)        (1.7%)       (4.5)        (1.4%)       (4.7)        (1.7%)
Flowback of prior
 contributions in aid
 of construction              -            -           (8.1)        (2.5%)       (8.0)        (2.9%)
Other, net                   (0.5)        (0.2%)       (2.5)        (0.8%)       (2.4)        (0.9%)
                           ------         -----      ------         -----       -----         -----
    Total Tax Expense      $103.2         38.5%      $116.2         35.2%       $96.7         34.3%
                           ======         =====      ======         =====       =====         =====
</TABLE>


The components of FAS 109 deferred income taxes classified as net
current assets and net long-term liabilities at December 31 are
as follows:

<TABLE>
<CAPTION>
                                     Current Assets (Liabilities)   Long-Term Liabilities (Assets)
                                     ----------------------------   ------------------------------
    Deferred Income Taxes                 2000           1999            2000          1999
    ---------------------                 ----           ----            ----          ----
                                                         (Millions of Dollars)
<S>                                      <C>            <C>             <C>           <C>
Property-related                         $ -            $ -             $564.5        $562.7
Construction advances                      -              -              (65.5)        (60.9)
Decommissioning trust                      -              -              (52.9)        (44.2)
Contested liability payment                -              -               43.8          43.8
Uncollectible account expense              7.0            6.6              -             -
Employee benefits
  and compensation                         9.5            8.4            (17.4)        (33.2)
Asset impairment charge                   10.8           12.1              -             -
Other                                      5.2           10.4             (6.4)         (8.9)
                                         -----          -----           ------        ------
    Total Deferred Income Taxes          $32.5          $37.5           $466.1        $459.3
                                         =====          =====           ======        ======
</TABLE>


Wisconsin Electric has also recorded deferred regulatory assets
and liabilities representing the future expected impact of
deferred taxes on utility revenues (see Note A).


E - NUCLEAR OPERATIONS

POINT BEACH NUCLEAR PLANT:   Wisconsin Electric owns two 510-
megawatt electric generating units at Point Beach Nuclear Plant
in Two Rivers, Wisconsin.  Point Beach Nuclear Plant is operated
by the Nuclear Management Company, a company that, as of
December 31, 2000, manages seven nuclear generating units in the
Midwest owned by four different companies in the region.
Wisconsin Electric currently expects the two units at Point Beach
to operate to the end of their operating licenses, which expire
in October 2010 for Unit 1 and in March 2013 for Unit 2.

In 1997, the PSCW authorized Wisconsin Electric to defer certain
nuclear non-fuel operation and maintenance costs in excess of
those included in 1997 rates.  As a result, Wisconsin Electric
deferred $18 million during 1997.  During 1998, the PSCW
authorized a five-year recovery in the electric retail
jurisdiction in the state of Wisconsin of the excess 1997 nuclear
non-fuel operation and maintenance costs, and Wisconsin Electric
began amortizing the $18 million of deferred costs on a straight
line basis over the five year recovery period.  As of
December 31, 2000, $8.3 million of deferred costs remain on the
Balance Sheet in Deferred Charges and Other Assets - Deferred
Regulatory Assets (see Note A).

NUCLEAR INSURANCE:   The Price-Anderson Act as amended and
extended to August 1, 2002, currently limits the total public
liability for damages arising from a nuclear incident at a
nuclear power plant to approximately $9.5 billion, of which
$200 million is covered by liability insurance purchased from
private sources.  The remaining $9.3 billion is covered by an
industry retrospective loss sharing plan whereby in the event of
a nuclear incident resulting in damages exceeding the private
insurance coverage, each owner of a nuclear plant would be
assessed a deferred premium of up to $88.1 million per reactor
(Wisconsin Electric owns two) with a limit of $10 million per
reactor within one calendar year.  As the owner of Point Beach,
Wisconsin Electric would be obligated to pay its proportionate
share of any such assessment.

Wisconsin Electric participated in an industry-wide insurance
program, with an aggregate limit of $200 million which covered
radiation injury claims of nuclear workers first employed after
1987.  This program was replaced with a new program (which has no
retrospective assessment provisions) at the end of 1997.
However, the discovery period for claims covered under the former
program remains open until the end of 2007 for those few former
insureds who no longer need to participate in the new,
replacement program.  If claims in excess of the funds available
under the old program develop, Wisconsin Electric would be
assessed up to a maximum of approximately $6.3 million.

Wisconsin Electric, through its membership in Nuclear Electric
Insurance Limited ("NEIL"), carries decontamination, property
damage and decommissioning shortfall insurance covering losses of
up to $1.5 billion at Point Beach.  Under policies issued by
NEIL, the insured member is liable for a retrospective premium
adjustment in the event of catastrophic losses exceeding the full
financial resources of NEIL.  Wisconsin Electric's maximum
retrospective liability under its policies is $7.8 million.

Wisconsin Electric also maintains insurance with NEIL covering
business interruption and extra expenses during any prolonged
accidental outage at Point Beach, where such outage is caused by
accidental property damage from radioactive contamination or
other risks of direct physical loss.  Wisconsin Electric's
maximum retrospective liability under this policy is
$3.8 million.

It should not be assumed that, in the event of a major nuclear
incident, any insurance or statutory limitation of liability
would protect Wisconsin Electric from material adverse impact.

NUCLEAR DECOMMISSIONING:   Nuclear decommissioning costs are
included in depreciation expense under an external sinking fund
method as these costs are recovered through rates over the
expected service lives of the generating units.  Decommissioning
expenses of $17.6 million, $17.7 million and $15.5 million were
accrued during 2000, 1999 and 1998, respectively, under this
method.

Decommissioning costs collected through rates are deposited into
the nuclear decommissioning trust fund and also included in
accumulated depreciation.  As a result, these funds do not add to
the cash flows available for general corporate purposes.
Earnings on the fund balance accumulate in the nuclear
decommissioning trust fund and in accumulated depreciation as
part of the decommissioning liability.

It is expected that the annual payments to the nuclear
decommissioning trust fund along with related earnings will
provide sufficient funds at the time of decommissioning.
Wisconsin Electric believes it is probable that any shortfall in
funding would be recoverable in utility rates.

The estimated cost to decommission the plant in 2000 dollars is
$586 million based upon a site specific decommissioning cost
study completed in 1998, and includes additional costs from prior
estimates for work management by an independent decommissioning
general contractor.  Assuming plant shutdown at the expiration of
the current operating licenses, prompt dismantlement and annual
escalation of costs at specific inflation factors established by
the PSCW, it is projected that approximately $1.9 billion will be
spent over a thirty-three year period, beginning in 2010, to
decommission the plant.

Following is a summary at December 31 of the Nuclear
Decommissioning Trust Fund balance, stated at fair value, which
is equal to the accrued decommissioning liability balance
included in accumulated depreciation.

<TABLE>
<CAPTION>

Nuclear Decommissioning Trust Fund            2000           1999
----------------------------------            ----           ----
                                             (Millions of Dollars)
<S>                                          <C>            <C>
Total funding and realized net earnings      $408.1         $357.7
Unrealized gains, net                         205.2          268.0
                                             ------         ------
  Total                                      $613.3         $625.7
                                             ======         ======
</TABLE>


As required by Statement of Financial Accounting Standards
No. 115, Accounting for Certain Investments in Debt and Equity
Securities, Wisconsin Electric's debt and equity security
investments in the Nuclear Decommissioning Trust Fund are
classified as available for sale.  Gains and losses on the fund
were determined on the basis of specific identification; net
unrealized holding gains on the fund were recorded as part of the
fund and as part of accumulated depreciation.

DECONTAMINATION AND DECOMMISSIONING FUND:   The Energy Policy Act
of 1992 established a Uranium Enrichment Decontamination and
Decommissioning Fund ("D&D Fund") for the United States
Department of Energy's nuclear fuel enrichment facilities.
Deposits to the D&D Fund are derived in part from special
assessments on utilities using enrichment services.  As of
December 31, 2000, Wisconsin Electric has recorded its remaining
estimated liability equal to projected special assessments of
$16.1 million.  A corresponding deferred regulatory asset is
detailed in Note A.  The deferred regulatory asset will be
amortized to nuclear fuel expense and included in utility rates
over the next seven years ending in 2007.


F - LONG-TERM DEBT

FIRST MORTGAGE BONDS, DEBENTURES AND NOTES:   At December 31,
2000, the maturities and sinking fund requirements through 2005
for the aggregate amount of long-term debt outstanding (excluding
obligations under capital leases) were:

<TABLE>
<CAPTION>
                    (Millions of Dollars)
<S>                     <C>
2001                    $    1.9
2002                       151.9
2003                         1.9
2004                       141.9
2005                         1.9
Thereafter               1,214.7
                        --------
    Total               $1,514.2
                        ========
</TABLE>


Sinking fund requirements for the years 2001 through 2005,
included in the preceding table, are $9.5 million.  Substantially
all of Wisconsin Electric's utility plant is subject to a first
mortgage lien.

Long-term debt premium or discount and expense of issuance are
amortized by the straight line method over the lives of the debt
issues and included as interest expense.

In December 1999, Wisconsin Electric issued $150 million of 6-
5/8% debentures due 2002.  Proceeds from the issue were added to
Wisconsin Electric's general funds and were used to reduce short-
term borrowings and for other general corporate purposes.

OBLIGATIONS UNDER CAPITAL LEASES:   To meet a portion of its
electric energy supply needs, Wisconsin Electric entered into a
long-term power purchase contract with an unaffiliated
independent power producer.  The contract, for 236 megawatts of
firm capacity from a gas-fired cogeneration facility, includes no
minimum energy requirements.  When the contract expires in 2022,
Wisconsin Electric may, at its option and with proper notice,
renew for another ten years or purchase the generating facility
at fair value or allow the contract to expire.  Wisconsin
Electric treats this contract as a capital lease.  The leased
facility and corresponding obligation under capital lease were
recorded at the estimated fair value of the plant's electric
generating facilities.  The leased facility is being amortized on
a straight line basis over the original 25-year term of the
contract.

Imputed interest costs on the capitalized purchase power
obligation were $23.9 million, $23.4 million and $22.9 million
during 2000, 1999 and 1998, respectively, and total amortization
costs of the leased facilities were $5.7 million per year during
1998 through 2000.  The long-term power purchase contract is
treated as an operating lease for rate-making purposes.  As a
result, the difference between the minimum lease payments and the
sum of the imputed interest and amortization costs are recorded
as a deferred regulatory asset (see Note A).  Due to the timing
of the minimum lease payments, Wisconsin Electric expects the
regulatory asset to increase to approximately $78.5 million by
the year 2009 and the total obligation under capital lease to
increase to $160.2 million by the year 2005 before each is
reduced over the remaining life of the contract.  The minimum
lease payments are classified as purchased power expense on the
Income Statement.  Interest expense on the purchase power
obligation, included in purchased power expense, was
$21.0 million, $20.4 million and $20.3 million during 2000, 1999
and 1998, respectively.

Wisconsin Electric has a nuclear fuel leasing arrangement with
Wisconsin Electric Fuel Trust ("Trust") which is treated as a
capital lease.  The nuclear fuel is leased and amortized to fuel
expense for a period of 60 months or until the removal of the
fuel from the reactor, if earlier.  Lease payments include
charges for the cost of fuel burned, financing costs and
management fees.  In the event Wisconsin Electric or the Trust
terminates the lease, the Trust would recover its unamortized
cost of nuclear fuel from Wisconsin Electric.  Under the lease
terms, Wisconsin Electric is in effect the ultimate guarantor of
the Trust's commercial paper and line of credit borrowings
financing the investment in nuclear fuel.  Interest expense on
the nuclear fuel lease, included in fuel expense, was
$3.9 million, $3.5 million and $3.1 million during 2000, 1999 and
1998, respectively.

Following is a summary of Wisconsin Electric's capitalized leased
facilities and nuclear fuel at December 31.

<TABLE>
<CAPTION>
          Capital Lease Assets                   2000           1999
----------------------------------------         ----           ----
                                                (Millions of Dollars)
<S>                                             <C>            <C>
Leased Facilities
  Long-term purchase power commitment           $140.3         $140.3
  Accumulated amortization                       (18.6)         (13.0)
                                                ------         ------
Total Leased Facilities                         $121.7         $127.3
                                                ======         ======
Nuclear Fuel
  Under capital lease                           $121.4         $112.6
  Accumulated amortization                       (63.1)         (51.8)
  In process/stock                                34.8           22.6
                                                ------         ------
Total Nuclear Fuel                               $93.1          $83.4
                                                ======         ======
</TABLE>


Future minimum lease payments under the capital leases and the
present value of the net minimum lease payments as of
December 31, 2000 are as follows:

<TABLE>
<CAPTION>
                                                        Purchase
                                                         Power         Nuclear
         Capital Lease Obligations                     Commitment     Fuel Lease        Total
-------------------------------------------            ----------     ----------        -----
                                                                 (Millions of Dollars)
<S>                                                     <C>             <C>            <C>
  2001                                                   $26.0          $29.0           $55.0
  2002                                                    26.9           22.5            49.4
  2003                                                    28.0           11.4            39.4
  2004                                                    29.0            4.3            33.3
  2005                                                    30.1            1.9            32.0
  Later Years                                            501.1            -             501.1
                                                        ------          -----          ------
Total Minimum Lease Payments                             641.1           69.1           710.2
Less: Estimated Executory Costs                         (132.2)           -            (132.2)
                                                        ------          -----          ------
Net Minimum Lease Payments                               508.9           69.1           578.0
Less: Interest                                          (356.6)          (5.9)         (362.5)
                                                        ------          -----          ------
Present Value of Net Minimum Lease Payments              152.3           63.2           215.5
Less: Due Currently                                        -            (26.2)          (26.2)
                                                        ------          -----          ------
                                                        $152.3          $37.0          $189.3
                                                        ======          =====          ======
</TABLE>


G - SHORT-TERM DEBT

Short-term notes payable balances and their corresponding
weighted-average interest rates at December 31 consist of:

<TABLE>
<CAPTION>
                                                 2000                          1999
                                         ----------------------        ----------------------
                                                       Interest                      Interest
      Short-Term Debt                    Balance         Rate          Balance         Rate
---------------------------              -------       --------        -------       --------
                                                       (Millions of Dollars)
<S>                                      <C>             <C>           <C>             <C>
Banks                                     $50.0          6.49%          $50.4          6.30%
Commercial paper                          207.0          6.60%          214.3          6.21%
                                         ------                        ------
                                         $257.0          6.58%         $264.7          6.23%
                                         ======                        ======
</TABLE>


At December 31, 2000, Wisconsin Electric had $128.0 million of
available unused lines of bank credit primarily in support of
commercial paper.  In support of various informal lines of credit
from banks, Wisconsin Electric has agreed to maintain
unrestricted compensating balances or to pay commitment fees;
neither the compensating balances nor the commitment fees are
significant.


H - FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amount and estimated fair value of certain of
Wisconsin Electric's recorded financial instruments at
December 31 are as follows:

<TABLE>
<CAPTION>
                                                 2000                          1999
                                         ---------------------         ---------------------
                                         Carrying         Fair         Carrying         Fair
    Financial Instruments                 Amount         Value          Amount         Value
-----------------------------            --------        -----         --------        -----
                                                       (Millions of Dollars)
<S>                                      <C>            <C>            <C>            <C>
Nuclear decommissioning trust fund        $613.3         $613.3         $625.7         $625.7
Preferred stock - redemption required       30.4           15.4           30.4           18.0
Long-term debt including
  current portion                        1,514.2        1,473.9        1,516.1        1,443.8
</TABLE>


The carrying value of cash and cash equivalents, net accounts
receivable, accounts payable and short-term borrowings
approximates fair value due to the short maturities of these
instruments.  The nuclear decommissioning trust fund is carried
at fair value as reported by the trustee (see Note E).  The fair
value of Wisconsin Electric's preferred stock - redemption
required is estimated based upon the quoted market value for the
same or similar issues.  The fair value of Wisconsin Electric's
long-term debt, including the current portion of long-term debt
but excluding capitalized leases, is estimated based upon quoted
market value for the same or similar issues or upon the quoted
market prices of U.S. Treasury issues having a similar term to
maturity, adjusted for the issuing company's bond rating and the
present value of future cash flows.


I - BENEFITS

PENSIONS AND OTHER POSTRETIREMENT BENEFITS:   Wisconsin Electric
provides defined benefit pension and other postretirement benefit
plans to employees.  The status of these plans, including a
reconciliation of benefit obligations, a reconciliation of plan
assets and the funded status of the plans follows.

<TABLE>
<CAPTION>
                                                                         Other Postretirement
                                             Pension Benefits                  Benefits
                                           -------------------           --------------------
      Status of Benefit Plans              2000           1999           2000           1999
-----------------------------------        ----           ----           ----           ----
                                                        (Millions of Dollars)
<S>                                       <C>            <C>            <C>           <C>
Change in Benefit Obligation
  Benefit Obligation at January 1         $749.8         $737.0         $192.3         $178.8
    Service cost                            14.4           15.6            4.2            3.3
    Interest cost                           55.3           49.2           14.4           12.4
    Plan participants' contributions         -              -              5.3            5.1
    Plan amendments                          4.6            -            (29.7)           -
    Actuarial (gain) loss                    0.2           (4.4)           2.2            7.8
    Special termination benefits             1.2            -              -              -
    Benefits paid                          (52.0)         (47.6)         (15.3)         (15.1)
                                          ------         ------         ------        -------
  Benefit Obligation at December 31       $773.5         $749.8         $173.4         $192.3

Change in Plan Assets
  Fair Value at January 1                 $915.2         $828.5          $82.3          $68.9
    Actual return on plan assets             8.4          134.5           (1.7)          13.0
    Employer contributions                   1.6            1.3            8.8           10.4
    Plan participants' contributions         -              -              5.3            5.1
    Plan merger                              -             (1.5)           -              -
    Benefits paid                          (52.0)         (47.6)         (15.3)         (15.1)
                                          ------         ------         ------        -------
  Fair Value at December 31               $873.2         $915.2          $79.4          $82.3
                                          ------         ------         ------        -------
Funded Status of Plans
  Funded status at December 31             $99.7         $165.4         ($94.0)       ($110.0)
  Unrecognized
    Net actuarial (gain) loss             (123.9)        (182.9)           8.5            5.6
    Prior service cost                      29.6           28.0            0.3            2.4
    Net transition obligation (asset)       (9.0)         (11.2)          26.6           59.6
                                          ------         ------         ------        -------
  Net Asset (Accrued Benefit Cost)         ($3.6)         ($0.7)        ($58.6)        ($42.4)
                                          ======         ======         ======        =======
</TABLE>


The components of net periodic pension and other postretirement
benefit costs as well as the weighted-average assumptions used in
accounting for the plans include the following:

<TABLE>
<CAPTION>                                                                  Other Postretirement
                                         Pension Benefits                        Benefits
                                   -----------------------------       -----------------------------
Benefit Plan Cost Components       2000        1999        1998        2000        1999        1998
----------------------------       ----        ----        ----        ----        ----        ----
                                                        (Millions of Dollars)
<S>                               <C>         <C>         <C>         <C>         <C>         <C>
Net Periodic Benefit Cost
 Service cost                     $14.4       $15.6       $12.9        $4.2        $3.3        $2.7
 Interest cost                     55.3        49.2        47.7        14.4        12.4        11.8
 Expected return on plan assets   (68.4)      (62.4)      (56.8)       (7.0)       (5.8)       (5.0)
 Amortization of
  Transition obligation (asset)    (2.2)       (2.2)       (2.2)        4.6         4.6         4.6
  Prior service cost                3.9         3.1         3.1         0.1         0.2         0.2
  Actuarial loss (gain)             0.5         0.6         0.6        (0.2)        0.1        (0.3)
  Terminations/curtailment          1.2         -           -           8.8         -           -
                                  -----       -----       -----       -----       -----       -----
Net Periodic Benefit Cost          $4.7        $3.9        $5.3       $24.9       $14.8       $14.0
                                  =====       =====       =====       =====       =====       =====
Weighted-Average Assumptions
  at December 31 (%)
 Discount rate                     7.5         7.5         6.75        7.5         7.5         6.75
 Expected return on plan assets    9.0         9.0         9.0         9.0         9.0         9.0
 Rate of compensation increase   4.5 to      4.75 to     4.75 to     4.5 to      4.75 to     4.75 to
                                   5.0         5.0         5.0         5.0         5.0         5.0
</TABLE>


PENSION PLANS:   Pension plan assets, the majority of which are
equity securities, are held by pension trusts.  Other pension
plan assets include corporate and government bonds and real
estate.  In the opinion of the Company, current pension trust
assets and amounts which are expected to be paid to the trusts in
the future will be adequate to meet pension payment obligations
to current and future retirees.

Commencing November 1, 1992, pension costs or credits for
Wisconsin Electric has been calculated in accordance with FAS 87,
Employers' Accounting for Pensions, and are recoverable from
utility customers.  Prior to this date, pension costs were
recoverable in rates as funded.

Open Window benefits were offered to certain participants in the
Wisconsin Electric Retirement Account Plan.  This benefit
enhancement resulted in a one-time FAS 88 cost.

OTHER POSTRETIREMENT BENEFITS PLANS:   Wisconsin Electric uses
Employees' Benefit Trusts to fund a major portion of other
postretirement benefits for its employees.  The majority of the
trusts' assets are mutual funds or commingled indexed funds.

Effective January 1, 1992, postretirement benefit costs have been
calculated in accordance with FAS 106, Employers' Accounting for
Postretirement Benefits Other Than Pensions, and are recoverable
from the utility customers of Wisconsin Electric.

In 2000, the benefit attribution period was modified for the
Wisconsin Electric Postretirement medical plans to equal the 10
years of service following the later of age at hire or age 45.
This change resulted in a "negative" plan amendment and a "plan
curtailment".

The assumed health care cost trend rate for 2001 is at 9% for all
plan participants decreasing gradually to 5% in 2005 and
thereafter.  Assumed health care cost trend rates have a
significant effect on the amounts reported for health care plans.

A one-percentage-point change in assumed health care cost trend
rates would have the following effects:

<TABLE>
<CAPTION>
                                                            1% Increase         1% Decrease
                                                            -----------         -----------
                                                                (Millions of Dollars)
<S>                                                           <C>                <C>
Effect on
  Postretirement benefit obligation                           $15.7              ($13.9)
  Total of service and interest cost components                 2.2                (1.9)
</TABLE>


SAVINGS PLANS:   Wisconsin Electric sponsors savings plans which
allow employees to contribute a portion of their pretax and/or
after tax income in accordance with plan-specified guidelines.
Matching contributions under these plans charged to expense
amounted to $9.0 million, $8.7 million and $7.2 million during
2000, 1999 and 1998, respectively.


J - SEGMENT REPORTING

Wisconsin Electric, a wholly-owned subsidiary of Wisconsin Energy
Corporation, has organized its operating segments according to
how it is currently regulated.  Wisconsin Electric's reportable
operating segments include electric, natural gas and steam
utility segments.  The accounting policies of the reportable
operating segments are the same as those described in Note A.

The electric utility engages in the generation, transmission,
distribution and sale of electric energy in southeastern
(including metropolitan Milwaukee), east central and northern
Wisconsin and in the Upper Peninsula of Michigan.  The natural
gas utility is responsible for the purchase, distribution and
sale of natural gas to retail customers and the transportation of
customer-owned natural gas in four service areas in southeastern,
east central, western, and northern Wisconsin.  The steam utility
produces, distributes and sells steam to space heating and
processing customers in the Milwaukee, Wisconsin area.

Summarized financial information concerning Wisconsin Electric's
reportable operating segments for each of the years ended
December 31, 2000, 1999 and 1998 is shown in the following table.

<TABLE>
<CAPTION>
                                     Reportable Operating Segments
                               ----------------------------------------
        Year Ended             Electric           Gas           Steam       Other (a)        Total
   -------------------         --------           ---           -----       ---------        -----
                                                        (Millions of Dollars)
<S>                            <C>              <C>            <C>            <C>         <C>
   December 31, 2000
   -----------------
Operating Revenues (b)         $1,763.4         $399.7          $21.9        $  -          $2,185.0
Depreciation,
Decommissioning
  and Amortization                239.5           30.0            3.2           -             272.7
Operating Income (c)              368.9           23.2            1.8           -             393.9
Capital Expenditures              318.9           32.1            1.2           0.3           352.5
Total Assets (d)                4,163.1          445.3           48.0         368.7         5,025.1

   December 31, 1999
   -----------------
Operating Revenues (b)         $1,688.3         $306.8          $21.3        $  -          $2,016.4
Depreciation,
Decommissioning
  and Amortization                207.9           23.7            2.6           -             234.2
Operating Income (c)              412.9           31.7            2.5           -             447.1
Capital Expenditures              313.7           31.7            1.3          (0.3)          346.4
Total Assets (d)                4,179.3          427.2           47.6         247.8         4,901.9

   December 31, 1998
   -----------------
Operating Revenues (b)         $1,641.4         $295.9          $20.5        $  -          $1,957.8
Depreciation,
Decommissioning
  and Amortization                199.8           23.3            2.6           -             225.7
Operating Income (c)              360.0           20.3            3.3           -             383.6
Capital Expenditures              283.4           43.5            1.6           -             328.5
Total Assets (d)                4,087.4          421.9           48.4          51.2         4,608.9

<FN>
(a) Primarily other property and investments, materials and supplies and
    deferred charges.

(b) Wisconsin Electric accounts for intersegment revenues at a tariff rate
    established by the Public Service Commission of Wisconsin.  Intersegment
    revenues are not material.

(c) Interest income and interest expense are not included in segment
    operating income.

(d) Common utility plant is allocated t electric, gas and steam to determine
    segment assets (see Note A).
</FN>
</TABLE>


K - COMMITMENTS AND CONTINGENCIES

CAPITAL EXPENDITURES:   Certain commitments have been made in
connection with 2001 capital expenditures.  During 2001, total
capital expenditures are estimated to be approximately
$395 million of which approximately $355 million, excluding the
purchase of nuclear fuel, is attributable to electric operations,
$35 million is attributable to gas operations and $5 million is
attributable to steam operations.

GIDDINGS & LEWIS, INC./CITY OF WEST ALLIS LAWSUIT:   In July
1999, a jury issued a verdict against Wisconsin Electric awarding
the plaintiffs, Giddings & Lewis, Inc., Kearney & Trecker
Corporation, now a part of Giddings & Lewis, and the City of West
Allis, $4.5 million in compensatory damages and $100 million in
punitive damages in an action alleging that Wisconsin Electric
had deposited cyanide contaminated wood chips in 1959 at two
sites in West Allis, Wisconsin owned by the plaintiffs.  Internal
investigations lead Wisconsin Electric to believe that it was not
the source of this waste.  Environmental remediation at both
sites was completed several years ago, with the current owners
paying for disposal of materials found on their respective
portions of the sites.

In December 1999, in order to stop the post-judgment accrual of
interest at 12% during the pendency of the appeal, Wisconsin
Electric tendered a contested liability payment of $110 million,
which is part of Deferred Charges and Other Assets - Other on the
Balance Sheet, to the Milwaukee County Clerk of Circuit Court
representing the amount of the verdict and accrued interest.
Under Wisconsin law, the plaintiffs are liable to Wisconsin
Electric upon reversal or reduction of the judgment for the
applicable amount of the funds tendered with interest.

In further post-trial proceedings, the plaintiffs filed with the
Circuit Court a motion for sanctions based upon representations
made by Wisconsin Electric during trial that Wisconsin Electric
had no insurance coverage for the punitive damage award.  On
April 27, 2000, the Circuit Court Judge issued a ruling on the
matter, imposing the following sanctions against Wisconsin
Electric: (i) "judgment in the alternative" as a sanction,
thereby finding an alternative basis upon which to sustain the
$104.5 million verdict returned by the jury; (ii) a bar against
Wisconsin Electric pursuing insurance coverage for the punitive
damage portion of the verdict; and (iii) a requirement that
Wisconsin Electric pay the plaintiffs' costs relating to the
sanctions matter.  In addition to appealing the judgment entered
on the jury's verdict, Wisconsin Electric is appealing the
Judge's ruling on the sanctions matter.

In the opinion of management, based in part on the advice of
legal counsel, the jury verdict was not supported by the evidence
or the law and the unprecedented award of punitive damages of
this magnitude was unwarranted and should therefore be reversed
or substantially reduced on appeal.  Management also believes
that the sanctions imposed by the Judge were not supported by the
evidence or the law.  As such, Wisconsin Electric has not
established a reserve for potential damages from this suit.

As further developments, two shareholders filed separate
shareholder derivative proceedings in Milwaukee County Circuit
Court in August and September 2000 for alleged injuries to
shareholders resulting from the Giddings & Lewis/City of West
Allis litigation.  The two lawsuits have been consolidated for
pre-trial purposes.  In accordance with Wisconsin law, a special
committee of independent directors of Wisconsin Energy conducted
an investigation into the allegations contained in the lawsuits
and concluded that the maintenance of the two actions is not in
the best interest of the Company.  As a result, Wisconsin Energy
moved to dismiss the actions, which is pending before the court.

ENVIRONMENTAL MATTERS:   Wisconsin Electric periodically reviews
its reserves for remediation costs as evidence becomes available
indicating that its remediation liability has changed.  Given
current information, including the following, management believes
that future costs in excess of the amounts accrued and/or
disclosed on all presently known and quantifiable environmental
contingencies will not be material to the Company's financial
position or results of operations.

During 2000, Wisconsin Electric expanded a voluntary program of
comprehensive environmental remediation planning for former
manufactured gas plant sites and coal-ash disposal sites.
Wisconsin Electric has performed a preliminary assessment of
twenty-one sites, including eleven manufactured gas plant sites
discussed below, and expects to conduct additional investigations
during 2001 as well as to begin discussions with the Wisconsin
Department of Natural Resources as necessary.  At this time,
Wisconsin Electric cannot estimate future remediation costs
associated with these sites beyond those described below.

MANUFACTURED GAS PLANT SITES:   Included as part of its voluntary
program noted above, Wisconsin Electric continues to investigate
the remediation of former manufactured gas plant sites and
currently estimates that future costs for detailed site
investigation and remediation of its eleven sites will be
$25 million to $40 million over the next ten years.  Actual costs
are uncertain pending the results of further site specific
investigations and the selection of site specific remediation.

Wisconsin Electric has begun remediation activities at former
manufactured gas plant sites in the Cities of Burlington and
Kenosha, Wisconsin and expects to begin remediation at sites in
Fort Atkinson and Waukesha, Wisconsin in 2001.  Remediation of
these sites is anticipated to be accomplished at an aggregate
cost of between $5 million and $6 million.  In Wisconsin
Electric's February 13, 1997 Rate Order, the PSCW amplified its
position on the recovery of manufactured gas plant site
remediation costs.  It reiterated its position that such costs
should be deferred and amortized and recovered, without carrying
costs, in future rate cases.  Since the timing and recovery of
remediation costs will be affected by the biennial rate case
cycle, the timing and magnitude of remediation expenditures, and
their recovery, may be affected.

ASH LANDFILL SITES:   Wisconsin Electric aggressively seeks
environmentally acceptable, beneficial uses for its combustion by-
products.  However, such coal-ash by-products have been, and to
some degree, continue to be disposed in company-owned, licensed
landfills.  Some early designed and constructed landfills may
allow the release of low levels of constituents resulting in the
need for various levels of remediation.  Where Wisconsin Electric
has become aware of these conditions, efforts have been expended
to define the nature and extent of any release, and work has been
performed to address these conditions.  The costs of these
efforts are included in the environmental operating and
maintenance costs of Wisconsin Electric.  During 2000, the
Company incurred $2.9 million in coal-ash remediation expenses
and expects to incur $3.0 million in 2001.


L - TRANSACTIONS WITH ASSOCIATED COMPANIES

Managerial, financial, accounting, legal, data processing and
other services may be rendered between associated companies and
are billed in accordance with service agreements approved by the
Public Service Commission of Wisconsin.  Wisconsin Electric
received stockholder capital contributions from Wisconsin Energy
of $150 million in 1999.  Intercompany sales, accounts receivable
and accounts payable are all immaterial.



                REPORT OF INDEPENDENT ACCOUNTANTS


To the Board of Directors and the
     Stockholder of Wisconsin Electric Power Company

In our opinion, the financial statements listed in the index
appearing under Item 14(a)(1) present fairly, in all material
respects, the financial position of Wisconsin Electric Power
Company at 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 of America.
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 of these statements in accordance with auditing
standards generally accepted in the United States of America,
which 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, assessing the accounting principles
used and significant estimates made by management, and evaluating
the overall financial statement presentation.  We believe that
our audits provide a reasonable basis for our opinion.

/s/PRICEWATERHOUSECOOPERS LLP
-----------------------------
PricewaterhouseCoopers LLP

Milwaukee, Wisconsin
February 6, 2001



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

Information regarding a change in accountants was previously
reported in a Current Report on Form 8-K dated as of
March 8, 2001.



                            PART III
                            --------

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information under "Election of Directors" and "Section 16(a)
Beneficial Ownership Reporting Compliance" in Wisconsin
Electric's definitive Information Statement for its Annual
Meeting of Stockholders to be held April 27, 2001 (the "2001
Annual Meeting Information Statement") is incorporated herein by
reference.  Also see "Executive Officers of the Registrant" in
Part I of this report.



ITEM 11.   EXECUTIVE COMPENSATION

The information under "Compensation of the Board of Directors,"
"Executive Officers' Compensation," "Employment and Severance
Arrangements" and "Retirement Plans" in the 2001 Annual Meeting
Information Statement is incorporated herein by reference.



ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT

All of Wisconsin Electric's Common Stock (100% of such class) is
owned by its parent company, Wisconsin Energy Corporation,
231 West Michigan Street, P.O. Box 2949, Milwaukee, Wisconsin
53201.  The directors, director nominees and executive officers
of Wisconsin Electric do not own any of the voting securities of
Wisconsin Electric.  The information concerning their beneficial
ownership of Wisconsin Energy Corporation stock set forth under
"Stock Ownership of Directors, Nominees and Executive Officers"
in the 2001 Annual Meeting Information Statement is incorporated
herein by reference.



ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information under "Certain Related Transactions" in the 2001
Annual Meeting Information Statement is incorporated herein by
reference.



                             PART IV
                             -------

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

(a) 1.   FINANCIAL STATEMENTS AND REPORTS OF INDEPENDENT
         ACCOUNTANTS INCLUDED IN PART II OF THIS REPORT

    Income Statement for the three years ended
      December 31, 2000.

    Statement of Cash Flows for the three years ended
      December 31, 2000.

    Balance Sheet at December 31, 2000 and 1999.

    Capitalization Statement at December 31, 2000 and 1999.

    Statement of Common Equity for the three years ended
      December 31, 2000.

    Notes to Financial Statements.

    Report of Independent Accountants.


     2.   FINANCIAL STATEMENT SCHEDULES INCLUDED IN PART IV OF
          THIS REPORT

    Financial statement schedules are omitted because of the
    absence of conditions under which they are required or
    because the required information is given in the financial
    statements or notes thereto.


     3.   EXHIBITS AND EXHIBIT INDEX

    See the Exhibit Index included as the last part of this
    report, which is incorporated herein by reference.  Each
    management contract and compensatory plan or arrangement
    required to be filed as an exhibit to this report is
    identified in the Exhibit Index by two asterisks (**)
    following the description of the exhibit.


(b)       REPORTS ON FORM 8-K

    No Current Reports on Form 8-K were filed by Wisconsin Energy
    during the quarter ended December 31, 2000.

    A Current Report on Form 8-K dated as of March 8, 2001 was
    filed by Wisconsin Electric on March 15, 2001 to report a
    change in accountants.



               CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in the
Prospectuses constituting part of the Registration Statement on
Form S-3 (No. 333-40319) of Wisconsin Electric Power Company of
our report dated February 6, 2001 relating to the financial
statements, which appears in this Form 10-K.

/s/PRICEWATERHOUSECOOPERS LLP
-----------------------------
PricewaterhouseCoopers LLP

Milwaukee, Wisconsin
March 29, 2001




<TABLE>
<CAPTION>
                                             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, therunto duly authorized.
<S>                                               <C>
                                                     WISCONSIN ELECTRIC POWER COMPANY

                                                  By /s/RICHARD A. ABDOO
                                                     ----------------------------------------
Date:  March 29, 2001                                Richard A. Abdoo, Chairman of the Board,
                                                     President and Chief Executive Officer

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

/s/RICHARD A. ABDOO                                          March 29, 2001
--------------------------------------------------
Richard A. Abdoo, Chairman of the Board,
Chief Executive Officer and Director-
Principal Executive Officer

/s/RICHARD R. GRIGG                                          March 29, 2001
--------------------------------------------------
Richard R. Grigg, President, Chief Operating
Officer and Director

/s/PAUL DONOVAN                                              March 29, 2001
--------------------------------------------------
Paul Donovan, Senior Vice President and Chief
Financial Officer - Principal Financial Officer

/s/STEPHEN P. DICKSON                                        March 29, 2001
--------------------------------------------------
Stephen P. Dickson, Controller -
Principal Accounting Officer

/s/JOHN F. AHEARNE                                           March 29, 2001
--------------------------------------------------
John F. Ahearne, Director

/s/JOHN F. BERGSTROM                                         March 29, 2001
--------------------------------------------------
John F. Bergstrom, Director

/s/BARBARA L. BOWLES                                         March 29, 2001
--------------------------------------------------
Barbara L. Bowles, Director

/s/ROBERT A. CORNOG                                          March 29, 2001
--------------------------------------------------
Robert A. Cornog, Director

/s/WILLIE D. DAVIS                                           March 29, 2001
--------------------------------------------------
Willie D. Davis, Director

/s/FREDRICK P. STRATTON, JR.                                 March 29, 2001
--------------------------------------------------
Fredrick P. Stratton, Jr., Director

/s/GEORGE E. WARDEBERG                                       March 29, 2001
--------------------------------------------------
George E. Wardeberg, Director
</TABLE>




                WISCONSIN ELECTRIC POWER COMPANY
                 (Commission File No. 001-01245)

                          EXHIBIT INDEX
                               to
                   Annual Report on Form 10-K
              For the year ended December 31, 2000

The following exhibits are filed with or incorporated by
reference in the report with respect to Wisconsin Electric.  (An
asterisk (*) indicates incorporation by reference pursuant to
Exchange Act Rule 12b-32.)


Number                        Exhibit
------   ----------------------------------------------------

  3      Articles of Incorporation and Bylaws

         3.1 *   Restated Articles of Incorporation of
                 Wisconsin Electric Power Company, as
                 amended and restated effective
                 January 10, 1995.  (Exhibit (3)-1 to
                 Wisconsin Electric's Annual Report of
                 Form 10-K for the year ended
                 December 31, 1994, File No. 1-1245.)

         3.2 *   Bylaws of Wisconsin Electric, as amended to
                 May 1, 2000. (Exhibit 3.1 to Wisconsin
                 Electric's Quarterly Report on Form 10-Q
                 for the quarter ended March 31, 2000).


  4      Instruments defining the rights of security
         holders, including indentures

         4.1 *   Reference is made to Article III of the
                 Restated Articles of Incorporation.
                 (Exhibits 3.1 herein.)

         Mortgage, Indenture, Supplemental Indenture or
         Securities Resolutions:

         4.2 *   Mortgage and Deed of Trust of Wisconsin
                 Electric, dated October 28, 1938 (Exhibit B-
                 1 under File No. 2-4340.)

         4.3 *   Second Supplemental Indenture of Wisconsin
                 Electric, dated June 1, 1946 (Exhibit 7-C
                 under File No. 2-6422.)

         4.4 *   Third Supplemental Indenture of Wisconsin
                 Electric, dated March 1, 1949 (Exhibit 7-C
                 under File No. 2-8456.)

         4.5 *   Fourth Supplemental Indenture of Wisconsin
                 Electric, dated June 1, 1950 (Exhibit 7-D
                 under File No. 2-8456.)

         4.6 *   Fifth Supplemental Indenture of Wisconsin
                 Electric, dated May 1, 1952 (Exhibit 4-G
                 under File No. 2-9588.)

         4.7 *   Sixth Supplemental Indenture of Wisconsin
                 Electric, dated May 1, 1954 (Exhibit 4-H
                 under File No. 2-10846.)

         4.8 *   Seventh Supplemental Indenture of Wisconsin
                 Electric, dated April 15, 1956 (Exhibit 4-I
                 under File No. 2-12400.)

         4.9 *   Eighth Supplemental Indenture of Wisconsin
                 Electric, dated April 1, 1958 (Exhibit 2-I
                 under File No. 2-13937.)

         4.10 *  Ninth Supplemental Indenture of Wisconsin
                 Electric, dated November 15, 1960
                 (Exhibit 2-J under File No. 2-17087.)

         4.11 *  Tenth Supplemental Indenture of Wisconsin
                 Electric, dated November 1, 1966 (Exhibit 2-
                 K under File No. 2-25593.)

         4.12 *  Eleventh Supplemental Indenture of
                 Wisconsin Electric, dated November 15, 1967
                 (Exhibit 2-L under File No. 2-27504.)

         4.13 *  Twelfth Supplemental Indenture of Wisconsin
                 Electric, dated May 15, 1968 (Exhibit 2-M
                 under File No. 2-28799.)

         4.14 *  Thirteenth Supplemental Indenture of
                 Wisconsin Electric, dated May 15, 1969
                 (Exhibit 2-N under File No. 2-32629.)

         4.15 *  Fourteenth Supplemental Indenture of
                 Wisconsin Electric, dated November 1, 1969
                 (Exhibit 2-O under File No. 2-34942.)

         4.16 *  Fifteenth Supplemental Indenture of
                 Wisconsin Electric, dated July 15, 1976
                 (Exhibit 2-P under File No. 2-54211.)

         4.17 *  Sixteenth Supplemental Indenture of
                 Wisconsin Electric, dated January 1, 1978
                 (Exhibit 2-Q under File No. 2-61220.)

         4.18 *  Seventeenth Supplemental Indenture of
                 Wisconsin Electric, dated May 1, 1978
                 (Exhibit 2-R under File No. 2-61220.)

         4.19 *  Eighteenth Supplemental Indenture of
                 Wisconsin Electric, dated May 15, 1978
                 (Exhibit 2-S under File No. 2-61220.)

         4.20 *  Nineteenth Supplemental Indenture of
                 Wisconsin Electric, dated August 1, 1979
                 (Exhibit (a)2(a) under File No. 1-1245,
                 9/30/79 Wisconsin Electric Form 10-Q.)

         4.21 *  Twentieth Supplemental Indenture of
                 Wisconsin Electric, dated November 15, 1979
                 (Exhibit (a)2(a) under File No. 1-1245,
                 12/31/79 Wisconsin Electric Form 10-K.)

         4.22 *  Twenty-First Supplemental Indenture of
                 Wisconsin Electric, dated April 15, 1980
                 (Exhibit (4)-21 under File No. 2-69488.)

         4.23 *  Twenty-Second Supplemental Indenture of
                 Wisconsin Electric, dated December 1, 1980
                 (Exhibit (4)-1 under File No. 1-1245,
                 12/31/80 Wisconsin Electric Form 10-K.)

         4.24 *  Twenty-Third Supplemental Indenture of
                 Wisconsin Electric, dated September 15,
                 1985 (Exhibit (4)-1 under File No. 1-1245,
                 9/30/85 Wisconsin Electric Form 10-Q.)

         4.25 *  Twenty-Fourth Supplemental Indenture of
                 Wisconsin Electric, dated September 15,
                 1985 (Exhibit (4)-1 under File No. 1-1245,
                 9/30/85 Wisconsin Electric Form 10-Q.)

         4.26 *  Twenty-Fifth Supplemental Indenture of
                 Wisconsin Electric, dated December 15, 1986
                 (Exhibit (4)-25 under File No. 1-1245,
                 12/31/86 Wisconsin Electric Form 10-K.)

         4.27 *  Twenty-Sixth Supplemental Indenture of
                 Wisconsin Electric, dated January 1, 1988
                 (Exhibit 4 under File No. 1-1245, 1/26/88
                 Wisconsin Electric Form 8-K.)

         4.28 *  Twenty-Seventh Supplemental Indenture of
                 Wisconsin Electric, dated April 15, 1988
                 (Exhibit 4 under File No. 1-1245, 3/31/88
                 Wisconsin Electric Form 10-Q.)

         4.29 *  Twenty-Eighth Supplemental Indenture of
                 Wisconsin Electric, dated September 1, 1989
                 (Exhibit 4 under File No. 1-1245, 9/30/89
                 Wisconsin Electric Form 10-Q.)

         4.30 *  Twenty-Ninth Supplemental Indenture of
                 Wisconsin Electric, dated October 1, 1991
                 (Exhibit 4-1 under File No. 1-1245,
                 12/31/91 Wisconsin Electric Form 10-K.)

         4.31 *  Thirtieth Supplemental Indenture of
                 Wisconsin Electric, dated December 1, 1991
                 (Exhibit 4-2 under File No. 1-1245,
                 12/31/91 Wisconsin Electric Form 10-K.)

         4.32 *  Thirty-First Supplemental Indenture of
                 Wisconsin Electric, dated August 1, 1992
                 (Exhibit 4-1 under File No. 1-1245, 6/30/92
                 Wisconsin Electric Form 10-Q.)

         4.33 *  Thirty-Second Supplemental Indenture of
                 Wisconsin Electric, dated August 1, 1992
                 (Exhibit 4-2 under File No. 1-1245, 6/30/92
                 Wisconsin Electric Form 10-Q.)

         4.34 *  Thirty-Third Supplemental Indenture of
                 Wisconsin Electric, dated October 1, 1992
                 (Exhibit 4-1 under File No. 1-1245, 9/30/92
                 Wisconsin Electric Form 10-Q.)

         4.35 *  Thirty-Fourth Supplemental Indenture of
                 Wisconsin Electric, dated November 1, 1992
                 (Exhibit 4-2 under File No. 1-1245, 9/30/92
                 Wisconsin Electric Form 10-Q.)

         4.36 *  Thirty-Fifth Supplemental Indenture of
                 Wisconsin Electric, dated December 15, 1992
                 (Exhibit 4-1 under File No. 1-1245,
                 12/31/92 Wisconsin Electric Form 10-K.)

         4.37 *  Thirty-Sixth Supplemental Indenture of
                 Wisconsin Electric, dated January 15, 1993
                 (Exhibit 4-2 under File No. 1-1245,
                 12/31/92 Wisconsin Electric Form 10-K.)

         4.38 *  Thirty-Seventh Supplemental Indenture of
                 Wisconsin Electric, dated March 15, 1993
                 (Exhibit 4-3 under File No. 1-1245,
                 12/31/92 Wisconsin Electric Form 10-K.)

         4.39 *  Thirty-Eighth Supplemental Indenture of
                 Wisconsin Electric, dated August 1, 1993
                 (Exhibit (4)-1 under File No. 1-1245,
                 6/30/93 Wisconsin Electric Form 10-Q.)

         4.40 *  Thirty-Ninth Supplemental Indenture of
                 Wisconsin Electric, dated September 15,
                 1993 (Exhibit (4)-1 under File No. 1-1245,
                 9/30/93 Wisconsin Electric Form 10-Q.)

         4.41 *  Fortieth Supplemental Indenture of
                 Wisconsin Electric, dated January 1, 1996
                 (Exhibit (4)-1 under File No. 1-1245,
                 1/1/96 Wisconsin Electric Form 8-K.)

         4.42 *  Indenture for Debt Securities of Wisconsin
                 Electric (the "Wisconsin Electric
                 Indenture"), dated December 1, 1995
                 (Exhibit (4)-1 under File No. 1-1245,
                 12/31/95 Wisconsin Electric Form 10-K.)

         4.43 *  Securities Resolution No. 1 of Wisconsin
                 Electric under the Wisconsin Electric
                 Indenture, dated December 5, 1995
                 (Exhibit (4)-2 under File No. 1-1245,
                 12/31/95 Wisconsin Electric Form 10-K.)

         4.44 *  Securities Resolution No. 2 of Wisconsin
                 Electric under the Wisconsin Electric
                 Indenture, dated November 12, 1996
                 (Exhibit 4.44 under File No. 1-9057,
                 12/31/96 Wisconsin Energy Corporation
                 Form 10-K.)

         4.45 *  Securities Resolution No. 3 of Wisconsin
                 Electric under the Wisconsin Electric
                 Indenture, dated May 27, 1998  (Exhibit (4)-
                 1 under File No. 1-1245, 6/30/98 Wisconsin
                 Electric Form 10-Q.)

         4.46 *  Securities Resolution No. 4 of Wisconsin
                 Electric under the Wisconsin Electric
                 Indenture, dated November 30, 1999

                 Certain agreements and instruments with
                 respect to long-term debt not exceeding
                 10 percent of the total assets of the
                 Registrant and its subsidiaries on a
                 consolidated basis have been omitted as
                 permitted by related instructions.  The
                 Registrant agrees pursuant to
                 Item 601(b)(4) of Regulation S-K to furnish
                 to the Securities and Exchange Commission,
                 upon request, a copy of all such agreements
                 and instruments.


 10      Material Contracts

         10.1 *  Non-Qualified Trust Agreement by and
                 between Wisconsin Energy Corporation and
                 The Northern Trust Company dated
                 December 1, 2000, regarding trust
                 established to provide a source of funds to
                 assist in meeting of the liabilities under
                 various nonqualified deferred compensation
                 plans made between Wisconsin Energy
                 Corporation or its subsidiaries and various
                 plan participants.  (Exhibit 10.2 to
                 Wisconsin Energy's Annual Report on Form 10-
                 K for the year ended December 31, 2000,
                 File No. 001-09057.)**  See Note.

         10.2 *  Supplemental Benefits Agreement between
                 Wisconsin Energy Corporation and Richard A.
                 Abdoo dated November 21, 1994, as amended
                 by an April 26, 1995 letter agreement.
                 (Exhibit 10.1 to Wisconsin Energy
                 Corporation's 6/30/95 Form 10-Q.) **
                 See Note.

         10.3 *  Amended and Restated Wisconsin Energy
                 Corporation Special Executive Severance
                 Policy, effective April 26, 2000.
                 (Exhibit 10.3 to Wisconsin Energy
                 Corporation's 3/31/2000 Form 10-Q.)
                 **  See Note.

         10.4 *  Service Agreement dated January 1, 1987,
                 between Wisconsin Electric, Wisconsin
                 Energy Corporation and other non-utility
                 affiliated companies.  (Exhibit (10)(a) to
                 Wisconsin Electric's Current Report on
                 Form 8-K dated January 2, 1987 in File
                 No. 1-1245.)

         10.5*   Employment arrangement with Charles R.
                 Cole, effective August 1, 1999.
                 (Exhibit 10.3 to Wisconsin Energy's Annual
                 Report on Form 10-K for the year ended
                 December 31, 2000, File No. 001-09057.)**
                 See Note.

         10.6*   Employment arrangement with Larry Salustro,
                 effective December 12, 1997.  (Exhibit 10.7
                 to Wisconsin Energy's Annual Report on
                 Form 10-K for the year ended December 31,
                 2000, File No. 001-09057.)**  See Note.

         10.7*   Service Agreement, dated April 25, 2000,
                 between Wisconsin Electric Power Company
                 and Wisconsin Gas Company.  (Exhibit 10.32
                 to Wisconsin Energy's Annual Report on
                 Form 10-K for the year ended December 31,
                 2000, File No. 001-09057.)

         10.8*   Service Agreement, dated December 29, 2000,
                 between Wisconsin Electric Power Company
                 and American Transmission Company LLC.
                 (Exhibit 10.33 to Wisconsin Energy's Annual
                 Report on Form 10-K for the year ended
                 December 31, 2000, File No. 001-09057.)

         10.9*   Senior Officer Change in Control,
                 Severance, Special Pension, and Non-Compete
                 Agreement between Wisconsin Energy
                 Corporation and Paul Donovan effective
                 November 8, 2000.  (Exhibit 10.1 to
                 Wisconsin Energy Corporation's 9/30/00
                 Form 10-Q, File No. 001-09057.)**  See
                 Note.

         10.10*  Employment agreement with George E.
                 Wardeberg as Vice Chairmen of the Board of
                 Directors of Wisconsin Energy Corporation,
                 effective April 26, 2000.  (Exhibit 10.2(a)
                 to Wisconsin Energy Corporation's 3/31/2000
                 Form 10-Q, File No. 001-09057.)**  See
                 Note.

         10.11*  Non-Qualified Stock Option Agreement with
                 George E. Wardeberg, dated April 26, 2000,
                 granted pursuant to the Employment
                 Agreement.  (Exhibit 10.2(b) to Wisconsin
                 Energy Corporation's 3/31/2000 Form 10-Q,
                 File No. 001-09057.)**  See Note.

         10.12*  Senior Officer Change in Control, Severance
                 and Non-Compete Agreement between Wisconsin
                 Energy Corporation and Richard R. Grigg
                 effective January 29, 2001.  (Exhibit 10.20
                 to Wisconsin Energy's Annual Report on
                 Form 10-K for the year ended December 31,
                 2000, File No. 001-09057.)**See Note.

         10.13*  Form of Deferred Compensation Agreements
                 between Wisconsin Gas Company and certain
                 of its executive officers (Incorporated by
                 reference to WICOR, Inc.'s Annual Report on
                 Form 10-K for 1990 (File No. 001-
                 079511).)**See Note.

         10.14*  Form of amendment to the Deferred
                 Compensation Agreement between Wisconsin
                 Gas Company and Thomas F. Schrader
                 (Incorporated by reference to Exhibit 10.1
                 to WICOR, Inc.'s Quarterly Report on
                 Form 10-Q dated November 12, 1999 (File
                 No. 001-07951).)**See Note.

         Note:  Two asterisks (**) identify management
         contracts and executive compensation plans or
         arrangements required to be filed as exhibits
         pursuant to Item 14(c) of Form 10-K.  Certain
         compensatory plans in which directors or
         executive officers of Wisconsin Electric are
         eligible to participate are not filed as
         Wisconsin Electric exhibits in reliance on the
         exclusion in Item 601(b)(10)(iii)(B)(6) of
         Regulation S-K.


 21      Subsidiaries of the registrant

         21.1    Subsidiaries of Wisconsin Electric Power
                 Company


 23      Consents of experts and counsel

         23.1    PricewaterhouseCoopers LLP - Milwaukee, WI
                 Consent of Independent Accountants
                 appearing in this Annual Report on
                 Form 10-K for the year ended
                 December 31, 2000.