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

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

| CommissionFile                Number | Registrant;                State of Incorporation;Address;                and Telephone                Number                                                                                                                                                                 | IRS                EmployerIdentification                No. |
|--------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------|
|                                 |                                                                                                                                                                                                                                                                          |                                                         |
| 1-3016                               | WISCONSIN                PUBLIC SERVICE CORPORATION(A                Wisconsin                Corporation)700                North                Adams StreetP.                O. Box                19001Green                Bay, WI                54307-9001800-450-7260 | 39-0715160                                                   |

| Preferred                Stock, Cumulative, $100 par value |
|------------------------------------------------------------|
|                                                       |
|                                                       | 5.00%                Series5.04%                Series | 5.08%                Series6.76%                Series |   |

----

| Yes                [                ]                                      No [X] |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Yes                [                ]                                      No [X] |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Yes                [X]                                      No [ ] |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Large                accelerated filer [  ] | Accelerated                filer [  ]         |
|-------------------------------------------------------|---------------------------------------------------------|
| Non-accelerated                filer [X]              | Smaller                reporting company [  ] |

| Yes  [  ]     No  [X] |
|------------------------------------------------------------------------------|

| State                the                aggregate market value of the voting andnon-voting                common                equity held by non-affiliates of the                Registrant. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                            |
| $0                as of June                30, 2007                                                                                                                                            |

| Number                of                shares outstanding of each classof                common stock, as of                February 28, 2008                                                                             |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                       |   |
| Common                Stock,                $4 par value, 23,896,962 shares.  Integrys Energy Group, Inc. is                the sole holder of Wisconsin Public Service Corporation Common                Stock. |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Page |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Forward-Looking                Statements                                                                                                                                         | 1                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| PART                I                                                                                                                                                                  | 2                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |
| ITEM                1.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | BUSINESS                                                                                                                                                                       | 2 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | GENERAL                                                                                                                | 2 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | REGULATED                ELECTRIC UTILITY                OPERATIONS                                                                                                                | 2 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Regulated                Electric Segment Operating Statistics |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Facilities |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Power                Purchase Agreements |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Fuel                Supply |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Regulatory                Matters |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Other                Matters |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | REGULATED                NATURAL GAS UTILITY                OPERATIONS                                                                                                                | 6 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Regulated                Natural Gas Segment Operating Statistics |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Facilities |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Natural                Gas                Supply |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Regulatory                Matters |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | Other                Matters |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | D.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | ENVIRONMENTAL                MATTERS                                                                                                                | 7 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | E.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | CAPITAL                REQUIREMENTS                                                                                                                | 7 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | F.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | EMPLOYEES                                                                                                                | 7 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | G.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | AVAILABLE                INFORMATION                                                                                                                | 8 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |
| ITEM                1A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | RISK                FACTORS                                                                                                                                                    | 9 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |
| ITEM                1B                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | UNRESOLVED                STAFF                COMMENTS                                                                                                                        | 11 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |
| ITEM                2.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | PROPERTIES                                                                                                                                                                     | 12 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |
| ITEM                3.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | LEGAL                PROCEEDINGS                                                                                                                                               | 14 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |
| ITEM                4.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | SUBMISSION                OF                MATTERS TO A VOTE OF SECURITY HOLDERS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 15 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |

----

| PART                II                                                                                                                                         | 15                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |
| ITEM                5.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | MARKET                FOR                WPSC'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES                OF                EQUITY SECURITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 15 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
| ITEM                6.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | SELECTED                FINANCIAL                DATA                                                                                                                                             | 16 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Wisconsin                Public Service Corporation Comparative Financial Statements and Financial                Statistics (2003 to 2007) | 16 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |
| ITEM                7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | MANAGEMENT'S                DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF                OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | 17 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Introduction |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Results                of                Operations |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Balance                Sheet |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Liquidity                and                Capital Resources |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Guarantees                and Off Balance Sheet Arrangements |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Critical                Accounting Policies |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Impact                of                Inflation |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |
| ITEM                7A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | QUANTITATIVE                AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | 38 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |
| ITEM                8.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | FINANCIAL                STATEMENTS AND SUPPLEMENTARY                DATA                                                                                                                         | 40 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Management                Report on Internal Control over Financial Reporting | 40 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Report                of                Independent Registered Public Accounting Firm on Internal Control                over                Financial Reporting | 41 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | C.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Consolidated                Statements of                Income                                                                                                                 | 43 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | D.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Consolidated                Balance                Sheets                                                                                                                 | 44 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | E.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Consolidated                Statements of                Capitalization                                                                                                                 | 45 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | F.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Consolidated                Statements of Common Shareholder's                Equity                                                                                                                 | 46 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | G.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Consolidated                Statements of Cash                Flows                                                                                                                 | 47 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | H.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        | Notes                to                Consolidated Financial                Statements                                                                                                                 | 48 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                1 | Summary                of                Significant Accounting                Policies                                                                                  | 48 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                2 | Fair                Value of                Financial                Instruments                                                                                  | 53 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                3 | Risk                Management                Activities                                                                                  | 53 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                4 | Property,                Plant and                Equipment                                                                                  | 54 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                5 | Acquisitions                and Sales of                Assets                                                                                  | 54 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                6 | Jointly-Owned                Utility                Facilities                                                                                  | 55 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                7 | Nuclear                Decommissioning                Trust                                                                                  | 56 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                8 | Regulatory                Assets And                Liabilities                                                                                  | 57 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                9 | Investments                in Affiliates, at Equity                Method                                                                                  | 58 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                10 | Goodwill                and                Other Intangible                Assets                                                                                  | 59 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                11 | Leases                                                                                  | 60 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                12 | Short-Term                Debt and Lines of                Credit                                                                                  | 60 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                13 | Long-Term                Debt                                                                                  | 61 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                14 | Asset                Retirement                Obligations                                                                                  | 61 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                15 | Income                Taxes                                                                                  | 62 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                16 | Commitments                and                Contingencies                                                                                  | 64 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                17 | Guarantees                                                                                  | 67 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                18 | Employee                Benefit                Plans                                                                                  | 68 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                19 | Preferred                Stock                                                                                  | 72 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                20 | Common                Equity                                                                                  | 73 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                21 | Stock-Based                Compensation                                                                                  | 73 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                22 | Regulatory                Environment                                                                                  | 74 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | Note                23 | Segments                of                Business                                                                                  | 77 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Note                24                                                                                                       | Quarterly                Financial Information                (Unaudited)                                                                                  | 79 |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Note                25                                                                                                       | Related                Party                Transactions                                                                                                   | 79 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | I.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | Report                of                Independent Registered Public Accounting Firm on Financial                Statements | 81                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| ITEM                9.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | CHANGES                IN                AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL                DISCLOSURE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            | 82                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |
| ITEM                9A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | CONTROLS                AND                PROCEDURES                                                                                                                                                | 82                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |
| ITEM                9B.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | OTHER                INFORMATION                                                                                                                                                                     | 82                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |
| PART                III                                                                                                                                         | 83                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |
| ITEM                10.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | DIRECTORS                AND                EXECUTIVE OFFICERS OF WISCONSIN PUBLIC SERVICE CORPORATION AS OF                JANUARY                1, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 83                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |
| ITEM                11.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | EXECUTIVE                COMPENSATION                                                                                                                                                                | 84                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Compensation                Discussion and Analysis                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| ITEM                12.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | SECURITY                OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                | 95                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Equity                Compensation Plan Information                                                                          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |
| ITEM                13.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | CERTAIN                RELATIONSHIPS AND RELATED                TRANSACTIONS                                                                                                                         | 96                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| ITEM                14.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | PRINCIPAL                FEES AND SERVICES PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING                FIRM                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 96                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |
| PART                IV                                                                                                                                          | 98                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |
| ITEM                15.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 | EXHIBITS                AND                FINANCIAL STATEMENT SCHEDULES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 98                                                                                                                           |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | Documents                Filed as Part of this Report                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                                                                         |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Consolidated                Financial Statements                                                                             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Financial                Statement Schedules                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | Listing                of                Exhibits                                                                            |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| SIGNATURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 104                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                                                                         |
| SCHEDULE                II - WISCONSIN PUBLIC SERVICE CORPORATION                VALUATION AND QUALIFYING ACCOUNTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      | 105                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| EXHIBITSFILED                HEREWITH                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   | 106                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

----

| Acronyms                Used in this Annual Report on Form 10-K |
|-----------------------------------------------------------------|
|                                                            |   |
| ATC                                                             | American                Transmission Company LLC |
| DOE                                                             | United                States                Department of Energy |
| DPC                                                             | Dairyland                Power Cooperative |
| EPA                                                             | United                States                Environmental Protection Agency |
| ESOP                                                            | Employee                Stock Ownership Plan |
| FASB                                                            | Financial                Accounting Standards Board |
| FERC                                                            | Federal                Energy Regulatory Commission |
| IBS                                                             | Integrys                Business Support, LLC |
| ICC                                                             | Illinois                Commerce Commission |
| IRS                                                             | United                States                Internal Revenue Service |
| MISO                                                            | Midwest                Independent Transmission System Operator |
| MPSC                                                            | Michigan                Public Service Commission |
| MPUC                                                            | Minnesota                Public Utility Commission |
| NYMEX                                                           | New                York                Mercantile Exchange |
| PEC                                                             | Peoples                Energy Corporation |
| PSCW                                                            | Public                Service Commission of Wisconsin |
| SEC                                                             | United                States                Securities and Exchange Commission |
| SFAS                                                            | Statement                of                Financial Accounting Standards |
| WDNR                                                            | Wisconsin                Department of Natural Resources |
| WPSC                                                            | Wisconsin                Public Service Corporation |
| WRPC                                                            | Wisconsin                River Power Company |

----

Forward-Looking        Statements

| ● | Revenues                  or                  expenses, |
|---------|---------------------------------------------------------|
| ● | Capital                  expenditure projections, and   |
| ● | Financing                  sources.                     |

| ● | Integrys                  Energy Group, the parent of WPSC, may be unable to achieve the                  forecasted                  synergies at its utility subsidiaries that are anticipated from                  its merger                  with PEC or it may take longer or cost more that expected to achieve                  these                  synergies;                                                                                                                                                                                                                                                                                   |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ● | Resolution                  of                  pending and future rate cases and negotiations (including the recovery                  of                  deferred costs) and other regulatory decisions;                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| ● | The                  impact of                  recent and future federal and state regulatory changes, including                  legislative and regulatory initiatives regarding deregulation and                  restructuring of the electric and natural gas utility industries                  and                  possible future initiatives to address concerns about global climate                  change, changes in environmental, tax and other laws and regulations                  to                  which WPSC and its subsidiary are subject, as well as changes in                  application of existing laws and regulations; |
| ● | Current                  and                  future litigation, regulatory investigations, proceedings or inquiries,                  including but not limited to, manufactured gas plant site cleanup                  and the                  contested case proceeding regarding the Weston 4 air                  permit;                                                                                                                                                                                                                                                                                                                             |
| ● | Resolution                  of                  audits or other tax disputes with the IRS, Wisconsin Department                  of                  Revenue, Michigan Department of Treasury and other tax                  authorities;                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ● | Available                  sources and costs of fuels and purchased power;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| ● | Investment                  performance of employee benefit plan assets;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| ● | Advances                  in                  technology;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ● | Effects                  of                  and changes in political, legal and economic conditions and developments                  in the United States;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| ● | Potential                  business strategies, including acquisitions, construction or disposition                  of assets or businesses, which cannot be assured to be completed                  timely or                  within budgets;                                                                                                                                                                                                                                                                                                                                                                                                            |
| ● | The                  direct or                  indirect effects of terrorist incidents, natural disasters or responses                  to                  such events;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| ● | The                  impacts                  of changing financial market conditions, credit ratings and interest                  rates                  on our financing efforts, and the risks associated with changing                  commodity                  prices (particularly natural gas and electricity);                                                                                                                                                                                                                                                                                                                                   |
| ● | Weather                  and                  other natural phenomena, in particular the effect of weather on                  natural                  gas and electricity sales;                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| ● | The                  effect of                  accounting pronouncements issued periodically by standard-setting                  bodies;                  and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| ● | Other                  factors                  discussed elsewhere herein and in other reports filed by us from                  time to                  time with the SEC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

----

ITEM        1.  BUSINESS

| Regulated                  Electric Segment OperatingStatistics                 |   |
|---------------------------------------------------------------------------------|--------|
|                                                                            |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Operating                  revenues                  (millions)                 |   |   |   |   |   |   |   |   |   |
| Residential                                                                     |   | $ | 340.8 |   |   | $ | 315.2 |   |   | $ | 319.4 |   |
| Commercial                  and                  industrial                     |   |   | 554.3 |   |   |   | 500.7 |   |   |   | 448.5 |   |
| Resale                  and                  other                              |   |   | 230.1 |   |   |   | 174.7 |   |   |   | 165.0 |   |
| Total                                                                           |   | $ | 1,125.2 |   |   | $ | 990.6 |   |   | $ | 932.9 |   |
| Kilowatt-hour                  sales                  (millions)                |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                                     |   |   | 2,895.7 |   |   |   | 2,871.1 |   |   |   | 2,850.3 |   |
| Commercial                  and                  industrial                     |   |   | 8,173.4 |   |   |   | 8,125.1 |   |   |   | 8,183.9 |   |
| Resale                  and                  other                              |   |   | 3,730.5 |   |   |   | 3,733.3 |   |   |   | 3,503.7 |   |
| Total                                                                           |   |   | 14,799.6 |   |   |   | 14,729.5 |   |   |   | 14,537.9 |   |
| Customers                  served (approximate, end                  of period) |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                                     |   |   | 378,300 |   |   |   | 374,900 |   |   |   | 378,000 |   |
| Commercial                  and                  industrial                     |   |   | 54,000 |   |   |   | 53,500 |   |   |   | 46,000 |   |
| Resale                  and                  other                              |   |   | 700 |   |   |   | 600 |   |   |   | 1,000 |   |
| Total                                                                           |   |   | 433,000 |   |   |   | 429,000 |   |   |   | 425,000 |   |

----

| Energy                  Source                                                                                                                              |   | 2007   |   |   | 2006   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Company-owned                  generating plants                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
|    Coal                                                                                                                                      |   |   |   |   |   | 52.4   | % |   |   |   |   |   | 57.3 | % |
|    Natural                  gas and fuel oil                                                                                                 |   |   |   |   |   | 2.2    | % |   |   |   |   |   | 1.4 | % |
|    Hydroelectric                                                                                                                             |   |   |   |   |   | 1.3    | % |   |   |   |   |   | 1.5 | % |
|    Wind                                                                                                                                      |   |   |   |   |   | 0.1    | % |   |   |   |   |   | 0.1 | % |
| Purchased                  power                                                                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Kewaunee                  (nuclear                                                                                                        |   |   | 19.3   | %      |   |   |   |   |   |   | 17.6 | % |   |   |   |   |
|    Fox                  Energy Center, LLC and Combined     Locks                  Energy Center, LLC (natural gas) |   |   | 3.4    | %      |   |   |   |   |   |   | 6.1 | % |   |   |   |   |
|    Hydroelectric                                                                                                                             |   |   | 2.4    | %      |   |   |   |   |   |   | 3.3 | % |   |   |   |   |
|    Other                  (including MISO)                                                                                                   |   |   | 18.9   | %      |   |   |   |   |   |   | 12.7 | % |   |   |   |   |
|      Total                  purchased power                                                                                        |   |   |   |   |   |   | 44.0 | % |   |   |   |   |   |   | 39.7 | % |

| Fuel                  Cost by Source (Per Million Btus) |   | 2007   |   |   | 2006   |   |
|--------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Coal                                                         |   | $      | 1.47   |   |   | $      | 1.30 |   |
| Natural                  gas                                 |   |   | 7.36   |   |   |   | 7.19 |   |
| Fuel                  oil                                    |   |   | 13.95  |   |   |   | 13.60 |   |

----

----

----

| Regulated                  Natural Gas Segment Operating Statistics |   |
|---------------------------------------------------------------------|--------|
|                                                                     |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Operating                  Revenues (millions)                      |   |  |   |   |  |   |   |  |   |
| Residential                                                         |   | $ | 277.7 |   |   | $ | 254.9 |   |   | $ | 291.9 |   |
| Commercial                  and industrial                          |   |   | 147.0 |   |   |   | 140.6 |   |   |   | 137.7 |   |
| Other                                                               |   |   | 46.3 |   |   |   | 48.3 |   |   |   | 92.4 |   |
| Total                                                               |   | $ | 471.0 |   |   | $ | 443.8 |   |   | $ | 522.0 |   |
| Therms                  Delivered (millions)                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                         |   |   | 239.4 |   |   |   | 217.0 |   |   |   | 241.6 |   |
| Commercial                  and industrial                          |   |   | 157.0 |   |   |   | 149.1 |   |   |   | 170.8 |   |
| Other                                                               |   |   | 47.1 |   |   |   | 27.6 |   |   |   | 70.8 |   |
| Total                  therm                  sales                 |   |   | 443.5 |   |   |   | 393.7 |   |   |   | 483.2 |   |
| Transportation                                                      |   |   | 344.5 |   |   |   | 332.2 |   |   |   | 344.0 |   |
| Total                                                               |   |   | 788.0 |   |   |   | 725.9 |   |   |   | 827.2 |   |
| Customers                  Served (approximate, end of period)      |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential                                                         |   |   | 285,600 |   |   |   | 283,600 |   |   |   | 279,300 |   |
| Commercial                  and industrial                          |   |   | 27,800 |   |   |   | 27,800 |   |   |   | 27,600 |   |
| Transportation                  customers                           |   |   | 600 |   |   |   | 600 |   |   |   | 600 |   |
| Total                                                               |   |   | 314,000 |   |   |   | 312,000 |   |   |   | 307,500 |   |

----

----

| · | Annual                  Report                  on Form 10-K; |
|--------|--------------------------------------------------------------------|
| · | Quarterly                  Reports on Form 10-Q;                   |
| · | Registration                  statements, including prospectuses;  |
| · | Current                  Reports on Form 8-K; and                  |
| · | Any                  amendments to these documents.                |

----

ITEM        1A

| · | Delays                  or                  difficulties in completing the integration of acquired companies                  or                  assets;             |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | Higher                  than                  expected costs or a need to allocate additional resources to manage                  unexpected operating difficulties; |
| · | Parameters                  imposed or delays caused by regulatory agencies;                                                                                          |
| · | Reliance                  on                  inaccurate assumptions in evaluating the expected benefits of a                  given                  acquisition;    |
| · | Inability                  to                  retain key employees or customers of acquired companies;                  and                                          |
| · | Assumption                  of                  liabilities not identified in the due diligence                  process.                                             |

| · | Fluctuating                  or unanticipated construction costs; |
|--------|-------------------------------------------------------------------|
| · | Supply                  delays;                                   |
| · | Legal                  claims;                  and               |
| · | Environmental                  regulation.                        |

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| · | Weather                  conditions, seasonality, and temperature extremes;                                                   |
|--------|-------------------------------------------------------------------------------------------------------------------------------|
| · | Fluctuations                  in economic activity and growth in our regulated service areas;                  and            |
| · | The                  amount of                  additional energy available from current or new                  competitors. |

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| · | Increase                  our                  borrowing costs;                                                                                                                        |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | Require                  us to                  pay a higher interest rate in future financings and possibly reduce                  the                  potential pool of creditors; |
| · | Increase                  our                  borrowing costs under certain of our existing credit facilities;                  and                                                   |
| · | Limit                  our                  access to the commercial paper                  market.                                                                                    |

ITEM        1B

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ITEM        2.

| Type                                                 | Name                                                    | Location                                            |    Fuel               |   | RatedCapacity(Megawatts) |    | (a)    |
|------------------------------------------------------|---------------------------------------------------------|-----------------------------------------------------|--------------------------------------|--------|--------------------------|---------|--------|
|                                                 |                                                    |                                                |                                 |   |                     |    |   |
| Steam                                                | Pulliam                  (4                  units)     | Green                  Bay,                  WI     | Coal                                 |   |                     | 325.0   |   | (c) |
|                                                 | Weston                  (3                  units)      | Wausau,                  WI                         | Coal                                 |   |                     | 473.0   |   | (d) |
|                                                 | Columbia                  Units 1 and 2            | Portage,                  WI                        | Coal                                 |   |                     | 351.9   |   | (b) |
|                                                 | Edgewater                  Unit 4                  | Sheboygan,                  WI                      | Coal                                 |   |                     | 101.6   |   | (b) |
| Total                  Steam                         |                                                    |                                                |                                 |   |                     | 1,251.5 |   |   |
|                                                 |                                                    |                                                |                                 |   |                     |    |   |   |
| Hydroelectric                                        | Alexander                                               | Lincoln                  County, WI                 | Hydro                                |   |                     | 2.2     |   |   |
|                                                 | Caldron                  Falls                          | Marinette                  County, WI               | Hydro                                |   |                     | 6.7     |   |   |
|                                                 | Castle                  Rock                            | Adams                  County,                  WI  | Hydro                                |   |                     | 9.0     |   | (b) |
|                                                 | Grand                  Rapids                           | Menominee                  County, WI               | Hydro                                |   |                     | 4.0     |   |   |
|                                                 | Grandfather                  Falls                      | Lincoln                  County, WI                 | Hydro                                |   |                     | 17.3    |   |   |
|                                                 | Hat                  Rapids                             | Oneida                  County,                  WI | Hydro                                |   |                     | 0.7     |   |   |
|                                                 | High                  Falls                             | Marinette                  County, WI               | Hydro                                |   |                     | 1.6     |   |   |
|                                                 | Jersey                                                  | Lincoln                  County, WI                 | Hydro                                |   |                     | 0.3     |   |   |
|                                                 | Johnson                  Falls                          | Marinette                  County, WI               | Hydro                                |   |                     | 1.0     |   |   |
|                                                 | Merrill                                                 | Lincoln                  County, WI                 | Hydro                                |   |                     | 1.0     |   |   |
|                                                 | Otter                  Rapids                           | Vilas                  County,                  WI  | Hydro                                |   |                     | 0.3     |   |   |
|                                                 | Peshtigo                                                | Marinette                  County, WI               | Hydro                                |   |                     | 0.3     |   |   |
|                                                 | Petenwell                                               | Adams                  County,                  WI  | Hydro                                |   |                     | 10.6    |   | (b) |
|                                                 | Potato                  Rapids                          | Marinette                  County, WI               | Hydro                                |   |                     | 0.4     |   |   |
|                                                 | Sandstone                  Rapids                       | Marinette                  County, WI               | Hydro                                |   |                     | 1.1     |   |   |
|                                                 | Tomahawk                                                | Lincoln                  County, WI                 | Hydro                                |   |                     | 2.4     |   |   |
|                                                 | Wausau                                                  | Marathon                  County, WI                | Hydro                                |   |                     | 3.0     |   |   |
| Total                  Hydroelectric                 |                                                    |                                                |                                 |   |                     | 61.9    |   |   |
|                                                 |                                                    |                                                |                                 |   |                     |    |   |   |
| Combustion                                           | De                  Pere Energy                  Center | De                  Pere,                  WI       | Natural                  Gas         |   |                     | 161.4   |   |   |
|   Turbine                  and             | Eagle                  River                            | Eagle                  River,                  WI   | Distillate                  Fuel Oil |   |                     | 4.2     |   |   |
|   Diesel                                   | Oneida                  Casino                          | Green                  Bay,                  WI     | Distillate                  Fuel Oil |   |                     | 3.5     |   |   |
|                                                 | Juneau                  #31                             | Adams                  County,                  WI  | Distillate                  Fuel Oil |   |                     | 6.7     |   | (b) |
|                                                 | West                  Marinette                  #31    | Marinette,                  WI                      | Natural                  Gas         |   |                     | 35.4    |   |   |
|                                                 | West                  Marinette                  #32    | Marinette,                  WI                      | Natural                  Gas         |   |                     | 35.5    |   |   |
|                                                 | West                  Marinette                  #33    | Marinette,                  WI                      | Natural                  Gas         |   |                     | 52.4    |   | (b) |
|                                                 | Weston                  #31                             | Marathon                  County, WI                | Natural                  Gas         |   |                     | 16.7    |   |   |
|                                                 | Weston                  #32                             | Marathon                  County, WI                | Natural                  Gas         |   |                     | 46.8    |   |   |
|                                                 | Pulliam                  #31                            | Green                  Bay,                  WI     | Natural                  Gas         |   |                     | 80.4    |   |   |
| Total                  Combustion Turbine and Diesel |                                                    |                                                |                                 |   | 443.0                    |    |   |
|                                                 |                                                    |                                                |                                 |   |                     |    |   |   |
| Wind                                                 | Lincoln                                                 | Kewaunee                  County, WI                | Wind                                 |   |                     | 1.0     |   |   |
|                                                 | Glenmore                  (2                  units)    | Brown                  County,                  WI  | Wind                                 |   |                     | -       |   |   |
| Total                  Wind                          |                                                    |                                                |                                 |   |                     | 1.0     |   |   |
|                                                 |                                                    |                                                |                                 |   |                     |    |   |   |
| Total                  System                        |                                                    |                                                |                                 |   |                     | 1,757.4 |   |   |

| (a) | Based                  on                  capacity ratings for July 2008.  As a result of continually                  reaching demand peaks in the summer months, primarily due to air                  conditioning demand, the summer period is the most relevant for                  capacity                  planning purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (b) | These                  facilities are jointly owned by WPSC and various other                  utilities.  Wisconsin Power and Light Company operates the                  Columbia and Edgewater units and WPSC holds a 31.8% ownership interest                  in                  these facilities.  WRPC owns and operates the Castle Rock,                  Petenwell and Juneau units, and WPSC holds a 50% ownership interest                  in                  WRPC.  WPSC operates the West Marinette 33 unit and holds a 68%                  ownership interest in the facility; Marshfield Electric and Water                  Department has a joint ownership in the rest.  The capacity                  indicated for each of these units is WPSC’s portion of total plant                  capacity based on its percent of ownership. |
| (c) | Pulliam                  Units                  3 and 4 were retired on December 31, 2007, and capacity ratings                  for these                  facilities are not included in the table above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| (d) | Weston                  4 is                  scheduled to be placed in service in the first quarter of 2008                  and                  therefore is not included in the table above.  WPSC’s 70%                  ownership in the facility will increase system rated capacity by                  359.8                  megawatts for a total system rated capacity of 2,117.2                  megawatts.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

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----

ITEM        3.

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ITEM        4.

|   | PART                  II |
|--------|--------------------------|

| ITEM                  5. | MARKET                  FOR WPSC'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER                  PURCHASES                  OF EQUITY SECURITIES |
|--------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                                     |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
|--------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
| ITEM                6.  SELECTED FINANCIAL DATA                |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
|                                                                     |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| WISCONSIN                PUBLIC SERVICE                CORPORATION       |   |
| COMPARATIVE                FINANCIAL STATEMENTS                AND       |   |
| FINANCIAL                STATISTICS (2003 TO                2007)        |   |
|                                                                     |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
|                                                                     |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| As                of or for Year Ended December                31        |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| (Millions,                except weather                information)     |   | 2007   |    |   | 2006   |   |    | 2005   |   |   | 2004    |   |   | 2003   |    |
|                                                                     |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| Operating                revenues                                        |   | $      | 1,596.1 |   |   | $      | 1,434.4 |   |   | $      | 1,454.9 |   |   | $      | 1,222.1 |   |   | $ | 1,129.1 |   |
| Earnings                on common                stock                   |   |   | 110.2   |   |   |   | 99.0    |   |   |   | 81.4    |   |   |   | 104.8   |   |   |   | 78.9 |   |
| Total                assets                                              |   |   | 3,017.6 |   |   |   | 2,956.6 |   |   |   | 2,686.5 |   |   |   | 2,768.6 |   |   |   | 2,577.7 |   |
| Long-term                debt (excluding current                portion) |   |   | 756.1   |   |   |   | 631.6   |   |   |   | 507.6   |   |   |   | 508.0   |   |   |   | 507.8 |   |
|                                                                     |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Weather                information                                       |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Cooling                degree                days                        |   |   | 634     |   |   |   | 521     |   |   |   | 649     |   |   |   | 328     |   |   |   | 351 |   |
| Cooling                degree days as a percent                of normal |   |   | 128.6   | %      |   |   | 110.1   | %      |   |   | 135.2   | %      |   |   | 66.7    | % |   |   | 72.2 | % |
| Heating                degree                days                        |   |   | 7,102   |   |   |   | 6,785   |   |   |   | 7,401   |   |   |   | 7,546   |   |   |   | 7,883 |   |
| Heating                degree days as a percent                of normal |   |   | 93.2    | %      |   |   | 88.5    | %      |   |   | 96.2    | %      |   |   | 97.6    | % |   |   | 102.2 | % |
|                                                                     |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |

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

| · | To                  help meet                  renewable energy requirements in Wisconsin, WPSC is negotiating                  a                  transaction to purchase a 99-megawatt wind generation facility                  to be                  constructed in Howard County, Iowa.                                                                                                                                                      |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | Construction                  of the 500-megawatt coal-fired Weston 4 base-load power plant located                  near Wausau, Wisconsin, is scheduled to be placed in service in                  the first                  quarter of 2008, and is jointly-owned with DPC.  WPSC holds 70%                  ownership interest in the Weston 4 facility.                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | WPSC                  continues to invest in environmental projects to improve air quality                  and                  meet the requirements set by environmental regulators.  Capital                  projects to construct and upgrade equipment to meet or exceed required                  environmental standards are planned each year.                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | WPSC                  continues to upgrade electric and natural gas distribution facilities,                  related systems, and processes to enhance safety, reliability,                  and value                  for customers and shareholders.  The Guardian II lateral                  project, approximately a $75 million project, is one example of the                  ongoing infrastructure development at WPSC. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | For                  more                  detailed information on WPSC's capital expenditure program see                  "Liquidity and                  Capital                  Resources, Capital Requirements,"                  below.                                                                                                                                                                                                      |

| · | Optimally                  sourcing work and combining resources to achieve best practices                  in order                  to achieve operational excellence and sustainable value for customers                  and                  Integrys Energy Group shareholders.  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | Integrys                  Business Support, LLC, a wholly owned service company of Integrys                  Energy                  Group, was formed to achieve a significant portion of the cost                  synergies                  anticipated from the merger of Integrys Energy Group with PEC through                  the                  consolidation and efficient delivery of various support services                  and to                  provide more consistent and transparent allocation of costs throughout                  Integrys Energy Group and its subsidiaries.  |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | Implementation                  of "Competitive Excellence" across WPSC.  Competitive Excellence                  utilizes Lean and Six Sigma principles and strives to eliminate                  work that                  does not provide value for customers.  This will create more                  efficient processes, improve the effectiveness of employees, and                  reduce                  costs.                                                                                                                                                                |

| · | Contract                  administration and formal project management tools to better manage                  the                  costs of our construction expenditure program.  These cost                  reduction initiatives will provide competitively priced energy                  and energy                  related services.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| · | NatureWise®,                  our renewable energy                  program, was selected as one of the top ten renewable energy programs                  in                  the United States for 2006 by the DOE's National Renewable Energy                  Laboratory.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| · | Manage                  operations to minimize the impact on the environment.  Our                  Weston 4 facility, scheduled to be placed in service in the first                  quarter                  of 2008, will be one of the most efficient electric generation                  units in                  the country with state-of-the-art environmental controls which                  will allow                  us to reduce the amount of emissions produced for each megawatt-hour                  of                  electricity that we generate.  We also expect to maintain or                  decrease the amount of greenhouse gases released per megawatt-hour                  generated, and support research and development initiatives that                  will                  enable further progress toward decreasing our carbon                  footprint. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| · | Effectively                  operating a mixed portfolio of generation assets and investing                  in new                  generation, like Weston 4, ensures continued reliability for our                  customers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |

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| (Millions)                                                 |   | 2007   |   |   | 2006   |   |   | 2005   |   |   | Change                  in2007                  over 2006 |   |   | Change                  in2006                  over 2005 |   |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|-----------------------------------------------------------|--------|--------|-----------------------------------------------------------|--------|
|                                                       |   |   |   |   |   |   |   |   |   |   |                                                      |   |   |                                                      |   |
| Earnings                  on                  common stock |   | $      | 110.2  |   |   | $      | 99.0   |   |   | $      | 81.4                                                      |   |   |                                                      | 11.3   | % |   |   | 21.6 | % |

| · | Fuel                  and                  purchased power costs were less than were recovered in rates during                  the                  year ended December 31, 2006, compared to fuel and purchased power                  costs that were more than were recovered in rates during the same                  period                  in 2005 (the under collection in 2005 was primarily due to the                  impact the                  2005 hurricanes had on natural gas prices), contributed an estimated                  $14 million after-tax year-over-year increase in                  earnings. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| · | A                  PSCW                  ruling, which disallowed recovery of costs that were deferred related                  to                  the 2004 Kewaunee nuclear plant outage as well as a portion of                  the loss on                  the Kewaunee sale, resulted in the write-off of $13.7 million of                  regulatory assets in 2005, which resulted in an after-tax reduction                  in                  earnings in 2005 of approximately $8 million (positive variance                  compared with 2006 earnings).                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| · | A                  retail                  electric rate increase had a positive year-over-year impact on                  earnings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| · | Unfavorable                  weather conditions in 2006, compared with 2005, had an estimated                  $9 million year-over-year negative after-tax impact on electric                  utility earnings.                                                                                                                                                                                                                                                                                                                                                                                                                      |

| · | Increased                  volumes due to colder weather conditions during the 2007 heating                  season.                        |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------|
| · | A                  natural gas                  rate increase effective January 12, 2007 also contributed to the                  increase. |

| · | Unfavorable                  weather conditions and customer conservation                  efforts. |
|--------|-----------------------------------------------------------------------------------------------------|

----

|                                                                                                      |   | Year                  Ended December 31, |     |   |   |   |     |   |   |
|-----------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------|----------|--------|--------|--------|----------|--------|--------|
|                                                                                                      |   | 2007                                          |     |   | 2006   |   |     | 2005   |   |   | Change                  in2007                  over 2006 |   |   | Change                  in2006                  over 2005 |   |
|                                                                                                      |   |                                          |     |   |   |   |     |   |   |   |   |   |   |   |   |
| Revenues                                                                                                  |   | $                                             | 1,125.2  |   |   | $      | 990.6    |   |   | $ | 932.9 |   |   |   | 13.6 | % |   |   | 6.2 | % |
| Fuel                  and                  purchased power costs                                          |   |                                          | 574.6    |   |   |   | 497.0    |   |   |   | 390.6 |   |   |   | 15.6 | % |   |   | 27.2 | % |
| Margins                                                                                                   |   |                                          | 550.6    |   |   |   | 493.6    |   |   |   | 542.3 |   |   |   | 11.5 | % |   |   | (9.0 | )% |
|                                                                                                      |   |                                          |     |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  and                  maintenance expense                                       |   |                                          | 283.5    |   |   |   | 229.2    |   |   |   | 321.6 |   |   |   | 23.7 | % |   |   | (28.7 | )% |
| Depreciation,                  amortization and   decommissioning                  expense |   |                                          | 74.4     |   |   |   | 73.2     |   |   |   | 115.4 |   |   |   | 1.6 | % |   |   | (36.6 | )% |
| Taxes                  other                  than income                                                 |   |                                          | 38.9     |   |   |   | 36.6     |   |   |   | 33.7 |   |   |   | 6.3 | % |   |   | 8.6 | % |
| Operating                  income                                                                         |   | $                                             | 153.8    |   |   | $      | 154.6    |   |   | $ | 71.6 |   |   |   | (0.5 | )% |   |   | 115.9 | % |
|                                                                                                      |   |                                          |     |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales                  in kilowatt-hours                                                                  |   |                                          |     |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Residential                                                                                         |   |                                          | 2,895.7  |   |   |   | 2,871.1  |   |   |   | 2,850.3 |   |   |   | 0.9 | % |   |   | 0.7 | % |
|  Commercial                  and industrial                                                          |   |                                          | 8,173.4  |   |   |   | 8,125.1  |   |   |   | 8,183.9 |   |   |   | 0.6 | % |   |   | (0.7 | )% |
|  Wholesale                                                                                           |   |                                          | 3,694.1  |   |   |   | 3,696.9  |   |   |   | 3,467.8 |   |   |   | (0.1 | )% |   |   | 6.6 | % |
|  Other                                                                                               |   |                                          | 36.4     |   |   |   | 36.4     |   |   |   | 35.9 |   |   |   | - |   |   |   | 1.4 | % |
|    Total                  sales in kilowatt-hours                                          |   |                                          | 14,799.6 |   |   |   | 14,729.5 |   |   |   | 14,537.9 |   |   |   | 0.5 | % |   |   | 1.3 | % |
|                                                                                                      |   |                                          |     |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weather                                                                                                   |   |                                          |     |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Heating                  degree days                                                                |   |                                          | 7,102    |   |   |   | 6,785    |   |   |   | 7,401 |   |   |   | 4.7 | % |   |   | (8.3 | )% |
|  Cooling                  degree days                                                                |   |                                          | 634      |   |   |   | 521      |   |   |   | 649 |   |   |   | 21.7 | % |   |   | (19.7 | )% |

| · | On                  January                  11, 2007, the Public Service Commission of Wisconsin issued a final                  written order authorizing a retail electric rate increase of                  $56.7 million (6.6%), effective January 12, 2007, for                  Wisconsin electric customers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| · | On                  a per-unit                  basis, fuel and purchased power costs were approximately 17% higher                  during                  the year ended December 31, 2007, compared with the same period in                  2006.  In addition, sales volumes increased 0.5%, primarily                  related to an increase in sales volumes to residential and commercial                  and                  industrial customers, driven by warmer weather during the cooling                  season                  and colder weather during the heating season (a portion of heating                  load is                  electric) in 2007, compared with 2006.  The increase in sales                  volumes related to weather was partially offset by an approximate                  2%                  decrease in weather normalized residential and commercial and industrial                  customer usage, driven by customer conservation resulting from                  higher                  energy costs and weaker general economic                  conditions. |

| · | An                  approved                  2006 electric rate increase for WPSC's retail electric customers                  and rate                  increases for WPSC's wholesale customers resulting from the formula                  rate                  mechanism in place for these customers.  See Note 22, "Regulatory                  Environment," for more information related to these rate                  increases. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |                                                                                                                                                                                                                                                          |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | Electric                  sales volumes increased 1.3%, primarily related to a 6.6% increase                  in                  sales volumes to wholesale customers due to higher demand and new                  wholesale contracts.                     |
|   |                                                                                                                                                                                                                                                          |
| · | Unfavorable                  weather conditions during both the heating and cooling seasons                  for the                  year ended December 31, 2006, compared with 2005, partially offset                  the increases discussed above. |

| · | WPSC's                  margin                  was positively impacted by the retail electric rate increases discussed                  above and by higher electric sales volumes to residential and commercial                  and industrial customers related to weather.  Favorable weather                  conditions during both the heating and cooling seasons positively                  impacted                  margin by an estimated $6.0 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| · | The                  year-over-year change in WPSC's margin was also positively impacted                  by a                  $16.2 million decrease in the 2006 margin related to the accrual of                  the refund to wholesale customers in 2006 of their portion of the                  Kewaunee                  nonqualified decommissioning trust fund. Pursuant to regulatory                  accounting, the decrease in the 2006 margin related to this refund                  was                  offset by a corresponding decrease in operating and maintenance                  expenses                  in 2006 and, therefore, did not have an impact on earnings.  No                  such accrual to wholesale customers occurred in 2007; however,                  the payment                  of the refund was made in 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| · | Partially                  offsetting the increase in WPSC's margin, fuel and purchased power                  costs                  were 3.7% higher than what was recovered in rates during the year                  ended                  December 31, 2007, compared with fuel and purchased power costs that                  were 10.5% less than what was recovered in rates during the same                  period in                  2006, driving a $14.4 million negative variance in WPSC's electric                  margin.  In 2007, fuel and purchased power prices were above                  what was projected in the rate case primarily due to higher than                  anticipated commodity costs and the market effects of unplanned                  plant                  outages.  On October 6, 2007, a lightning strike hit Weston                  3.  The unit returned to full service on January 14,                  2008.  The unscheduled outage did not have a significant impact                  on the electric utility margin as the Public Service Commission                  of                  Wisconsin approved deferral of unanticipated fuel and purchased                  power                  costs directly related to the outage.  The outage did, however,                  cause the price of purchased power from other sources to                  increase.  Excluding the additional purchased power which                  resulted from the Weston 3 outage, fuel and purchased power costs                  at WPSC                  increased 17% in 2007, compared to the same period in 2006, primarily                  related to the higher per-unit cost of fuel and purchased power                  required                  from the market to serve WPSC's                  customers. |

| · | The                  sale of                  the Kewaunee nuclear generation plant to Dominion Energy Kewaunee                  on                  July 5, 2005, and the related power purchase agreement had a negative                  impact on margin.  Excluding the $54.2 million increase in                  fixed payments made to Dominion Energy Kewaunee during the year                  ended                  December 31, 2006, WPSC's electric utility margin increased                  $5.5 million.  |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| · | The                  retail                  and wholesale electric rate increases discussed above had a favorable                  impact on WPSC's regulated electric                  margin.                                                                                                                                                                                                                                                                                                                                                               |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| · | WPSC's                  fuel                  and purchased power costs were less than were recovered in rates                  during                  the year ended December 31, 2006, compared with fuel and purchased                  power costs that were more than were recovered in rates during                  the same                  period in 2005 (the under collection in 2005 was primarily due                  to the                  impact 2005 hurricanes had on natural gas prices), which had an                  estimated                  $23 million positive year-over-year impact on                  margin.                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| · | WPSC's                  margin                  was also positively impacted by higher wholesale electric sales                  volumes,                  driven by higher demand from existing customers and new wholesale                  customer                  contracts.                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| · | The                  increase                  in WPSC's margin was partially offset by a $70.8 million decrease in                  2006 margin related to the refund to retail customers and the accrual                  for                  the refund to wholesale customers of a portion of the Kewaunee                  nonqualified decommissioning trust fund.  Pursuant to regulatory                  accounting, the decrease in margin related to this refund was offset                  by a                  corresponding decrease in operating and maintenance expense and,                  therefore, did not have an impact on earnings. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| · | Also,                  unfavorable weather conditions during the 2006 heating and cooling seasons                  negatively impacted margin by an estimated                  $14 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

| · | Regulated                  electric maintenance expenses increased $15.3 million, driven by                  longer than anticipated planned outages and a higher number of                  unplanned                  outages year-over-year (which included major overhauls planned                  at the                  Weston 2 and Weston 3 generation stations and the De Pere Energy                  Center, planned major turbine and generator work performed at the                  Pulliam                  electric generation station, and several unplanned outages at the                  Weston 3                  generation station).                                                                       |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| · | Regulated                  electric transmission expenses increased $14.2 million, primarily                  related to higher rates charged by MISO and ATC due to additional                  transmission investment.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| · | The                  regulated                  electric segment of WPSC was allocated external costs to achieve                  merger                  synergies (related to the merger of PEC with Integrys Energy Group)                  of                  $11.4 million for the year ended December 31,                  2007.                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| · | Amortization                  in 2006 of the regulatory liability recorded for WPSC's obligation                  to                  refund proceeds received from the liquidation of the Kewaunee nonqualified                  decommissioning trust fund to wholesale electric ratepayers contributed                  $16.2 million to the increase in operating and maintenance                  expense.  Pursuant to regulatory accounting, the 2006 increase                  in operating and maintenance expense related to this refund was                  offset by                  a corresponding increase in 2006 margin and, therefore, did not                  have an                  impact on earnings. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| · | Lower                  pension, post-retirement, and other employee benefit costs partially                  offset the above increase in regulated electric operating and maintenance                  expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
| · | An                  increase                  in depreciation expense related to continued capital investment                  at the                  electric utility, while the increase in taxes other than income                  reflected                  an increase in sales                  year-over-year.                                                                                                                                                                                                                                                                                                                                                                                                                        |

----

| · | Partial                  amortization of the regulatory liability recorded for WPSC's obligation                  to                  refund proceeds received from the liquidation of the Kewaunee nonqualified                  decommissioning trust fund to retail and wholesale electric ratepayers                  contributed $70.8 million to the decrease in operating expenses in                  2006, compared with 2005.  Pursuant to regulatory accounting,                  the decrease in operating expense related to this refund was offset                  by a                  corresponding decrease in margin.                                                                                                                                                                           |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | Operating                  and                  maintenance expense related to the Kewaunee nuclear plant decreased                  approximately $17 million, driven by the sale of this facility in                  July 2005.  The decrease in operating and maintenance expense                  related to Kewaunee did not have a significant impact on income                  available                  for common shareholders as WPSC is still purchasing the same amount                  of                  power from this facility as it obtained from it when WPSC owned                  a 59%                  interest in the plant.  The cost of the power is included as a                  component of utility cost of fuel, natural gas, and purchased                  power. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | As                  a result                  of the PSCW's disallowance of certain costs, WPSC incurred a                  $6.1 million charge in 2005 related to one-half the loss on the sale                  of Kewaunee, creating a corresponding year-over-year decrease in                  operating                  expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | Also,                  as                  disallowed by the PSCW, WPSC wrote-off $2.1 million in 2005 of                  previously deferred operating and maintenance expenses related                  to the 2004                  extended outage at Kewaunee, creating a corresponding year-over-year                  decrease in operating expenses.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | Salaries                  and                  employee benefits also decreased in part due to the sale of Kewaunee                  in                  2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | Partially                  offsetting the decrease in operating and maintenance expense, software                  amortization increased $7.2 million, driven by the late 2005                  implementation of a new customer billing system.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | Excluding                  Kewaunee, maintenance expenses at the electric utility segment                  were up                  $4.3 million.  Planned maintenance was required on certain                  combustion turbines, and maintenance expense related to electric                  distribution assets also increased.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | Electric                  transmission expense increased $3.3 million.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| · | The                  change in                  depreciation, amortization and decommissioning expense from 2005                  to 2006                  was primarily related to the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|   | ·                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Approximately                  $41 million of decommissioning expense was recorded during 2005,                  compared with no decommissioning expense recorded in 2006.  In                  2005, realized gains on decommissioning trust assets were substantially                  offset by decommissioning expense pursuant to regulatory practice                  (see                  analysis of "Miscellaneous Income" below). |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|   | ·                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | A                  $10.2 million decrease in depreciation expense resulting from the                  sale of Kewaunee in July 2005. Subsequent to the sale of Kewaunee,                  decommissioning expense is no longer recorded. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|   | ·                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | An                  increase                  in depreciation expense related to continued capital investment                  at the                  electric utility partially offset the overall decrease in depreciation                  and                  decommissioning expense. |

----

|                                                                |   | Year                  Ended December 31, |   |   |   |   |   |   |   |
|---------------------------------------------------------------------|--------|-----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                                                |   | 2007                                          |   |   | 2006   |   |   | 2005   |   |   | Change                  in2007                  over 2006 |   |   | Change                  in2006                  over 2005 |   |
|                                                                |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Revenues                                                            |   | $                                             | 471.0  |   |   | $      | 443.8  |   |   | $ | 522.0 |   |   |   | 6.1 | % |   |   | (15.0 | )% |
| Purchased                  natural gas costs                        |   |                                          | 322.2  |   |   |   | 319.8  |   |   |   | 397.4 |   |   |   | 0.8 | % |   |   | (19.5 | )% |
| Margins                                                             |   |                                          | 148.8  |   |   |   | 124.0  |   |   |   | 124.6 |   |   |   | 20.0 | % |   |   | (0.5 | )% |
|                                                                |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                  and                  maintenance expense |   |                                          | 68.8   |   |   |   | 65.1   |   |   |   | 69.4 |   |   |   | 5.7 | % |   |   | (6.2 | )% |
| Depreciation                  and amortization expense              |   |                                          | 22.1   |   |   |   | 22.6   |   |   |   | 19.5 |   |   |   | (2.2 | )% |   |   | 15.9 | % |
| Taxes                  other                  than income           |   |                                          | 6.5    |   |   |   | 6.9    |   |   |   | 6.1 |   |   |   | (5.8 | )% |   |   | 13.1 | % |
| Operating                  income                                   |   | $                                             | 51.4   |   |   | $      | 29.4   |   |   | $ | 29.6 |   |   |   | 74.8 | % |   |   | (0.7 | )% |
|                                                                |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Throughput                  in therms                               |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Residential                                                   |   |                                          | 239.4  |   |   |   | 217.0  |   |   |   | 241.6 |   |   |   | 10.3 | % |   |   | (10.2 | )% |
|  Commercial                  and industrial                    |   |                                          | 133.9  |   |   |   | 124.6  |   |   |   | 134.7 |   |   |   | 7.5 | % |   |   | (7.5 | )% |
|  Interruptible                                                 |   |                                          | 23.1   |   |   |   | 24.5   |   |   |   | 36.1 |   |   |   | (5.7 | )% |   |   | (32.1 | )% |
|  Interdepartmental                                             |   |                                          | 47.1   |   |   |   | 27.6   |   |   |   | 70.8 |   |   |   | 70.7 | % |   |   | (61.0 | )% |
|  Transport                                                     |   |                                          | 344.5  |   |   |   | 332.2  |   |   |   | 344.0 |   |   |   | 3.7 | % |   |   | (3.4 | )% |
|    Total                  sales in therms            |   |                                          | 788.0  |   |   |   | 725.9  |   |   |   | 827.2 |   |   |   | 8.6 | % |   |   | (12.2 | )% |
|                                                                |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weather                                                             |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Heating                  degree days                          |   |                                          | 7,102  |   |   |   | 6,785  |   |   |   | 7,401 |   |   |   | 4.7 | % |   |   | (8.3 | )% |

| · | On                  January                  11, 2007, the PSCW issued a final written order to WPSC authorizing                  a                  retail natural gas rate increase of $18.9 million (3.8%), effective                  January 12, 2007.  See Note 22, "Regulatory                  Environment," for more information related to the retail natural                  gas rate increase at WPSC.                                                                                                                                                                                                                                                                                                                                                                                |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| · | An                  8.6%                  increase in natural gas throughput volumes.  The increase in                  natural gas throughput volumes was driven by a 10.3% increase in                  residential volumes and a 70.7% increase in natural gas volumes                  sold to                  the electric utility.  The increase in sales volumes to                  residential customers was driven in part by colder year-over-year                  weather                  conditions during the 2007 heating season.  The increase in                  natural gas volumes sold to the electric utility was driven by                  an increase                  in the need for the electric utility to run its peaking generation                  units. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| · | Natural                  gas                  prices were 10.1% lower on a per-unit basis, compared to 2006,                  resulting                  in a decrease in natural gas utility revenue, which partially offset                  the                  overall increase in natural gas utility revenue at                  WPSC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |

----

| · | A                  12.2%                  decrease in natural gas throughput volumes, primarily related to                  a 61.0%                  decrease in natural gas throughput volumes sold to the electric                  utility                  for electric generation and a 9.2% decrease in throughput volumes                  to                  residential and commercial and industrial customers.  The                  decrease in throughput volumes to the electric utility resulted                  from a                  decrease in the need for the electric utility to run its natural                  gas-fired                  peaking generation units during the year ended December 31, 2006,                  compared with 2005, and from higher dispatch of these peaking generation                  units by MISO in 2005 for reliability purposes.  The decrease in                  throughput volumes to residential and commercial and industrial                  customers                  was driven by unfavorable weather conditions in 2006 compared with                  2005,                  as well as customer conservation efforts.  Particularly at the                  beginning of 2006, customers were taking measures to conserve energy                  as a                  result of the high natural gas prices in the first half of                  2006. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| · | In                  2006,                  natural gas prices were 1.4% lower on a per-unit basis, compared                  with                  2005, resulting from a large decline in the price of natural gas                  in the                  second half of 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| · | Partially                  offsetting the decrease in natural gas utility revenue was the                  2006                  natural gas rate increase (see Note 22, "Regulatory                  Environment," for more information related to this rate                  increase).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |

| · | The                  retail                  natural gas rate increase as discussed above.                                                                                                                                                                                                                                                                                                                                                             |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| · | An                  increase                  in throughput volumes to higher margin residential customers due                  in part                  to colder year-over-year weather conditions during the heating                  season.  The increase in throughput volumes sold to the electric                  utility did not have a significant impact on WPSC's natural gas                  utility                  margin. |

| · | A                  decrease in                  throughput volumes to higher margin residential and commercial                  and                  industrial customers was partially offset by the natural gas rate                  increase. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The                  change in                  operating and maintenance expense was primarily related to the                  allocation                  of $2.8 million of external costs to achieve merger synergies related                  to the merger of PEC with Integrys Energy                  Group. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| · | Operating                  and                  maintenance expenses decreased $4.3 million, driven by decreases in                  various employee benefit related expenses. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                 |
| · | The                  $3.1 million year-over-year increase in depreciation expense was                  driven by continued capital                  investment.                 |

|                                    |   | Year                  Ended December 31, |   |   |   |   |   |   |   |
|-----------------------------------------|--------|-----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                    |   | 2007                                          |   |   | 2006   |   |   | 2005   |   |   | Change2007                  over 2006 |   |   | Change2006                  over 2005 |   |
|                                    |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Miscellaneous                  income   |   | $                                             | 17.6   |   |   | $      | 15.8   |   |   | $ | 64.6 |   |   |   | 11.4 | % |   |   | (75.5 | %) |
| Interest                  expense       |   |                                          | (43.5  | )      |   |   | (40.4  | )      |   |   | (35.9 | ) |   |   | 7.7 | % |   |   | 12.5 | % |
| Other                  (expense) income |   | $                                             | (25.9  | )      |   | $      | (24.6  | )      |   | $ | 28.7 |   |   |   | 5.3 | % |   |   | - |   |

| · | An                  increase                  of $2.9 million due to an increase in interest income recognized                  related to the transmission facilities WPSC is funding on ATC's                  behalf                  pending the start-up of Weston 4.                                                                                                                                                                      |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| · | The                  increase                  was partially offset by a $1.3 million pre-tax gain recognized                  by WPSC                  through its ownership in WPS Investments, LLC (a consolidated subsidiary                  of Integrys Energy Group).  WPS Investments, LLC sold its                  one-third interest in Guardian Pipeline, LLC in the second quarter                  of                  2006. |

| · | Approximately                  $41 million of realized gains on nuclear decommissioning trust assets                  recorded during the year ended December 31, 2005.  Pursuant                  to regulatory practice, the increase in miscellaneous income related                  to                  these realized gains was offset by a corresponding increase in                  decommissioning expense in 2005. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| · | Pre-tax                  gains                  recognized on land sales decreased $2.0 million, from                  $4.6 million in 2005 to $2.6 million in 2006.                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| · | These                  decreases were partially offset by a $1.3 million pre-tax gain                  recognized by WPSC through its ownership in WPS Investments, LLC                  (a                  consolidated subsidiary of Integrys Energy                  Group).  WPS Investments, LLC sold its one-third interest                  in Guardian Pipeline, LLC in the second quarter of                  2006. |

----

| · | An                  increase                  in the average amount of both short-term and long-term debt outstanding                  and higher average short-term interest rates.  The increased                  borrowings were primarily utilized to fund the construction of                  Weston 4. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | An                  increase                  in the average amount of both short-term and long-term debt outstanding                  and higher average short-term interest rates.  During 2006,                  borrowings were primarily utilized to fund the construction of                  Weston 4. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                 |   | Year                  Ended December 31, |   |
|------------------------------------------------------|--------|-----------------------------------------------|--------|
|                                                 |   | 2007                                          |   |   | 2006 |   |   | 2005 |   |
|                                                 |   |                                          |   |   |   |   |   |   |   |
| Effective                  Tax                  Rate |   |                                          | 37.1   | % |   |   | 36.3 | % |   |   | 34.3 | % |

----

| ● | Capital                  expenditures in 2007 were $221.1 million, in part due to                  $100.3 million of capital expenditures related to the construction of                  Weston 4 and the purchase of unit trains for this facility,                  $13.3 million of capital expenditures incurred related to electric                  and gas service for new and existing customers, and $8.6 million                  related to the purchase of new line transformers. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| ● | Depreciation                  and amortization expense of $96.4 million in                  2007.                                                                                                                                                                                                                                                                                                                                                                                                             |

----

|                                                  |   | Years                  Ended December 31, |   |
|-------------------------------------------------------|--------|------------------------------------------------|--------|
| (Millions)                                            |   | 2007                                           |   |   | 2006 |   |   | 2005 |   |
| Electric                  utility                     |   | $                                              | 191.2  |   |   | $ | 268.4 |   |   | $ | 363.9 |   |
| Natural                  gas                  utility |   |                                           | 29.9   |   |   |   | 34.5 |   |   |   | 36.4 |   |
| WPSC                  Consolidated                    |   | $                                              | 221.1  |   |   | $ | 302.9 |   |   | $ | 400.3 |   |

----

| Credit                  Ratings                                                                                                                                                                                                                                                                         | Standard                  & Poor's | Moody's         |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------|-----------------|
|                     Issuer credit rating   First                  mortgage bonds   Senior                  secured debt                    Preferred stock                    Commercial paper                    Credit facility | AA+ABBB+A-2n/a                         | A1Aa3Aa3A3P-1A1 |

----

|                                                                                            |   |                  |    |   | Payments                  Due By Period |   |
|-------------------------------------------------------------------------------------------------|--------|-----------------------|---------|--------|-----------------------------------------|--------|
| Contractual                  ObligationsAs                  of December 31, 2007(Millions) |   | TotalAmountsCommitted |    |   | 2008                                    |   |   |   | 2009-2010 |   |   |   | 2011-2012 |   |   | 2013                  and Thereafter |   |
|                                                                                            |   |                  |    |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term                  debt principal and interest payments(1)                              |   | $                     | 1,196.9 |   |                                    | $      | 40.4 |   |   | $ | 80.8 |   |   | $ | 371.6 |   |   | $ | 704.1 |   |
| Operating                  lease obligations(2)                                                 |   |                  | 8.9     |   |                                    |   | 2.9 |   |   |   | 2.7 |   |   |   | 1.9 |   |   |   | 1.4 |   |
| Commodity                  purchase obligations                                                 |   |                  | 1,952.9 |   |                                    |   | 391.7 |   |   |   | 684.2 |   |   |   | 419.1 |   |   |   | 457.9 |   |
| Purchase                  orders(3)                                                             |   |                  | 216.0   |   |                                    |   | 216.0 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Minimum                  pension funding                                                        |   |                  | 308.0   |   |                                    |   | 27.1 |   |   |   | 53.3 |   |   |   | 40.0 |   |   |   | 187.6 |   |
| Total                  contractual cash obligations                                             |   | $                     | 3,682.7 |   |                                    | $      | 678.1 |   |   | $ | 821.0 |   |   | $ | 832.6 |   |   | $ | 1,351.0 |   |

|   | (1)                  Represents bonds issued, notes issued, and loans made to                  WPSC.  All principal obligations are recorded on the                  Consolidated Balance Sheet. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2)                  The costs of commodity purchase obligations are expected                  to be                  recovered in future customer rates. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3)                  Includes obligations related to normal business operations                  and                  large construction obligations, including 100% of Weston 4                  obligations.  The sale of a 30% interest in Weston 4 to DPC was                  completed in November 2005, but WPSC retains the legal obligation                  to                  initially remit payment to third parties for 100% of all construction                  costs incurred, 30% of which will subsequently be billed to DPC. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (Millions)                                                                              |   |   |   |
|-----------------------------------------------------------------------------------------|--------|--------|--------|
|    Environmental                  projects                               |   | $      | 300.4  |   |
|    Wind                  generation projects                             |   |   | 252.0  |   |
|    Electric                  and natural gas distribution projects       |   |   | 223.2  |   |
|    Natural                  gas laterals to connect to Guardian pipeline |   |   | 65.4   |   |
|    Weston                  4(1)                                          |   |   | 18.9   |   |
|    Other                  projects                                       |   |   | 131.9  |   |
| Total                  capital                  expenditures                            |   | $      | 991.8  |   |

|   | (1)                  As of December 31, 2007, WPSC has incurred a total cost of                  approximately $516 million related to its                  ownership    interest in the project.  WPSC                  has incurred approximately $77 million and expects to incur an                  additional $16 million related to the construction of the                  transmission facilities required to support Weston 4.  ATC will                  reimburse WPSC for these transmission facilities and related carrying                  costs (approximately $8 million in carrying costs) when Weston                  4 becomes                  operational.  Weston 4 is scheduled to be placed in service in                  the first quarter of 2008. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

| Actuarial                  Assumption(Millions,                  except percentages) |   | PercentChange                  inAssumption |   |   | Impact                  onProjectedBenefitObligation |   |   | Impact                  onPensionCost |   |
|--------------------------------------------------------------------------------------|--------|---------------------------------------------|--------|--------|------------------------------------------------------|--------|--------|---------------------------------------|--------|
| Discount                  rate                                                       |   |                                        | (0.5   | )      |                                                 | $      | 39.4   |                                  |   | $ | 0.8 |   |
| Discount                  rate                                                       |   |                                        | 0.5    |   |                                                 |   | (37.4  | )                                     |   |   | (2.0 | ) |
| Rate                  of                  return on plan assets                      |   |                                        | (0.5   | )      |                                                 |   | N/A    |                                  |   |   | 2.4 |   |
| Rate                  of                  return on plan assets                      |   |                                        | 0.5    |   |                                                 |   | N/A    |                                  |   |   | (2.4 | ) |

| Actuarial                  Assumption(Millions,                  except percentages) |   | Percent                  Change in Assumption |   |   | Impact                  on Postretirement Benefit Obligation |   |   | Impact                  on Postretirement Benefit Cost |   |
|--------------------------------------------------------------------------------------|--------|-----------------------------------------------|--------|--------|--------------------------------------------------------------|--------|--------|--------------------------------------------------------|--------|
| Discount                  rate                                                       |   |                                          | (0.5   | )      |                                                         | $      | 16.3   |                                                   |   | $ | 1.4 |   |
| Discount                  rate                                                       |   |                                          | 0.5    |   |                                                         |   | (15.1  | )                                                      |   |   | (1.2 | ) |
| Health                  care                  cost trend rate                        |   |                                          | (1.0   | )      |                                                         |   | (27.0  | )                                                      |   |   | (4.0 | ) |
| Health                  care                  cost trend rate                        |   |                                          | 1.0    |   |                                                         |   | 33.3   |                                                   |   |   | 4.4 |   |
| Rate                  of return                  on plan assets                      |   |                                          | (0.5   | )      |                                                         |   | N/A    |                                                   |   |   | 0.7 |   |
| Rate                  of return                  on plan assets                      |   |                                          | 0.5    |   |                                                         |   | N/A    |                                                   |   |   | (0.7 | ) |

----

----

ITEM        7A

----

----

A.  MANAGEMENT          REPORT ON INTERNAL CONTROL OVER FINANCIAL          REPORTING

----

B.  REPORT          OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING          FIRM

----

----

| ITEM                  8.  FINANCIAL                  STATEMENTS AND SUPPLEMENTARY DATA   |   |   |    |   |   |   |    |   |   |
|----------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
|                                                                                               |   |   |    |   |   |   |    |   |   |
| C. CONSOLIDATED                  STATEMENTS OF INCOME                                         |   |
|                                                                                               |   |   |    |   |   |   |    |   |   |
|                                                                                               |   |   |    |   |   |   |    |   |   |
| Year                  Ended December                  31                                           |   |   |    |   |   |   |    |   |   |
| (Millions)                                                                                         |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|                                                                                               |   |   |    |   |   |   |    |   |   |
| Operating                  revenues                                                                |   |   |    |   |   |   |    |   |   |
| Electric                                                                                           |   | $      | 1,125.1 |   |   | $      | 990.6   |   |   | $ | 932.9 |   |
| Natural                  gas                                                                       |   |   | 471.0   |   |   |   | 443.8   |   |   |   | 522.0 |   |
| Total                  operating                  revenues                                         |   |   | 1,596.1 |   |   |   | 1,434.4 |   |   |   | 1,454.9 |   |
|                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |
| Electric                  production                  fuels                                        |   |   | 162.6   |   |   |   | 142.6   |   |   |   | 188.0 |   |
| Purchased                  power                                                                   |   |   | 411.1   |   |   |   | 353.5   |   |   |   | 201.7 |   |
| Natural                  gas purchased for                  resale                                 |   |   | 322.2   |   |   |   | 319.8   |   |   |   | 397.4 |   |
| Operating                  and maintenance                  expenses                               |   |   | 352.3   |   |   |   | 294.2   |   |   |   | 393.2 |   |
| Depreciation                  and amortization                  expense                            |   |   | 96.4    |   |   |   | 95.8    |   |   |   | 134.9 |   |
| Taxes                  other than income                  taxes                                    |   |   | 45.5    |   |   |   | 43.5    |   |   |   | 39.8 |   |
| Operating                  income                                                                  |   |   | 206.0   |   |   |   | 185.0   |   |   |   | 99.9 |   |
|                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |
| Miscellaneous                  income                                                              |   |   | 17.6    |   |   |   | 15.8    |   |   |   | 64.6 |   |
| Interest                  expense                                                                  |   |   | (43.5   | )      |   |   | (40.4   | )      |   |   | (35.9 | ) |
| Other                  (expense)                  income                                           |   |   | (25.9   | )      |   |   | (24.6   | )      |   |   | 28.7 |   |
|                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |
| Income                  before                  taxes                                              |   |   | 180.1   |   |   |   | 160.4   |   |   |   | 128.6 |   |
| Provision                  for income                  taxes                                       |   |   | 66.8    |   |   |   | 58.3    |   |   |   | 44.1 |   |
| Net                  income                                                                        |   |   | 113.3   |   |   |   | 102.1   |   |   |   | 84.5 |   |
| Preferred                  stock dividend                  requirements                            |   |   | 3.1     |   |   |   | 3.1     |   |   |   | 3.1 |   |
| Earnings                  on common                  stock                                         |   | $      | 110.2   |   |   | $      | 99.0    |   |   | $ | 81.4 |   |
|                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |
| The                  accompanying notes are an                  integral part of these statements. |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                                                               |   |   |    |   |   |   |    |   |   |   |   |   |

----

| ITEM                  8.  FINANCIAL                  STATEMENTS AND SUPPLEMENTARY DATA                                             |   |   |    |   |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                                                                                         |   |   |    |   |   |   |
|          D.  CONSOLIDATED                  BALANCE                  SHEETS            |   |
|                                                                                                                                         |   |   |    |   |   |   |
| At                  December                  31                                                                                             |   |   |    |   |   |   |
| (Millions)                                                                                                                                   |   | 2007   |    |   | 2006   |   |
|                                                                                                                                         |   |   |    |   |   |   |
| Assets                                                                                                                                       |   |   |    |   |   |   |
| Cash                  and cash                  equivalents                                                                                  |   | $      | 4.1     |   |   | $      | 0.8 |   |
| Restricted                  cash                                                                                                             |   |   | -       |   |   |   | 22.0 |   |
| Accounts                  receivable, net of                  reserves of $4.0 and $7.0, respectively                                        |   |   | 254.8   |   |   |   | 170.1 |   |
| Receivables                  from related                  parties                                                                           |   |   | 14.6    |   |   |   | 18.9 |   |
| Accrued                  unbilled                  revenues                                                                                  |   |   | 72.0    |   |   |   | 60.0 |   |
| Inventories                                                                                                                                  |   |   | 81.4    |   |   |   | 102.3 |   |
| Assets                  from risk management                  activities                                                                     |   |   | 14.2    |   |   |   | 17.5 |   |
| Regulatory                  assets                                                                                                           |   |   | 49.3    |   |   |   | 8.7 |   |
| Materials                  and supplies, at average                  cost                                                                    |   |   | 24.3    |   |   |   | 24.5 |   |
| Prepaid                  federal income                  tax                                                                                 |   |   | 46.5    |   |   |   | 31.6 |   |
| Prepaid                  gross receipts                  tax                                                                                 |   |   | 34.9    |   |   |   | 34.1 |   |
| Other                  current                  assets                                                                                       |   |   | 7.2     |   |   |   | 13.2 |   |
| Current                  assets                                                                                                              |   |   | 603.3   |   |   |   | 503.7 |   |
|                                                                                                                                         |   |   |    |   |   |   |   |   |
| Property,                  plant, and equipment,                  net of accumulated depreciation of $1,071.2 and                  $1,046.0, |   |   |    |   |   |   |   |   |
|   respectively                                                                                                                     |   |   | 2,074.9 |   |   |   | 1,968.9 |   |
| Regulatory                  assets                                                                                                           |   |   | 172.8   |   |   |   | 290.3 |   |
| Receivables                  from related                  parties                                                                           |   |   | 48.2    |   |   |   | 56.4 |   |
| Other                                                                                                                                        |   |   | 118.4   |   |   |   | 137.3 |   |
| Total                  assets                                                                                                                |   | $      | 3,017.6 |   |   | $      | 2,956.6 |   |
|                                                                                                                                         |   |   |    |   |   |   |   |   |
| Liabilities                  and Shareholders'                  Equity                                                                       |   |   |    |   |   |   |   |   |
| Short-term                  debt                                                                                                             |   | $      | 60.7    |   |   | $      | 48.0 |   |
| Current                  portion of long-term                  debt                                                                          |   |   | -       |   |   |   | 22.0 |   |
| Accounts                  payable                                                                                                            |   |   | 186.0   |   |   |   | 178.1 |   |
| Payables                  to related                  parties                                                                                |   |   | 52.1    |   |   |   | 25.2 |   |
| Liabilities                  from risk management                  activities                                                                |   |   | 6.0     |   |   |   | 11.3 |   |
| Regulatory                  liabilities                                                                                                      |   |   | 21.9    |   |   |   | 14.5 |   |
| Other                  current                  liabilities                                                                                  |   |   | 73.7    |   |   |   | 56.5 |   |
| Current                  liabilities                                                                                                         |   |   | 400.4   |   |   |   | 355.6 |   |
|                                                                                                                                         |   |   |    |   |   |   |   |   |
| Long-term                  debt to                  parent                                                                                   |   |   | 10.5    |   |   |   | 11.0 |   |
| Long-term                  debt                                                                                                              |   |   | 745.6   |   |   |   | 620.6 |   |
| Deferred                  income                  taxes                                                                                      |   |   | 161.4   |   |   |   | 156.8 |   |
| Deferred                  investment tax                  credits                                                                            |   |   | 11.9    |   |   |   | 12.9 |   |
| Regulatory                  liabilities                                                                                                      |   |   | 252.9   |   |   |   | 272.0 |   |
| Environmental                  remediation                  liabilities                                                                      |   |   | 67.5    |   |   |   | 67.8 |   |
| Pension                  and postretirement benefit                  obligations                                                             |   |   | 68.6    |   |   |   | 186.5 |   |
| Payables                  to related                  parties                                                                                |   |   | 19.2    |   |   |   | 18.1 |   |
| Other                                                                                                                                        |   |   | 81.8    |   |   |   | 104.1 |   |
| Long-term                  liabilities                                                                                                       |   |   | 1,419.4 |   |   |   | 1,449.8 |   |
|                                                                                                                                         |   |   |    |   |   |   |   |   |
| Commitments                  and                  contingencies                                                                              |   |   |    |   |   |   |   |   |
|                                                                                                                                         |   |   |    |   |   |   |   |   |
| Preferred                  stock with no mandatory                  redemption                                                               |   |   | 51.2    |   |   |   | 51.2 |   |
| Common                  stock                  equity                                                                                        |   |   | 1,146.6 |   |   |   | 1,100.0 |   |
| Total                  liabilities and                  shareholders' equity                                                                 |   | $      | 3,017.6 |   |   | $      | 2,956.6 |   |
|                                                                                                                                         |   |   |    |   |   |   |   |   |
| The                  accompanying notes are an                  integral part of these statements.                                           |   |   |    |   |   |   |   |   |
|                                                                                                                                         |   |   |    |   |   |   |   |   |

----

| ITEM                  8. FINANCIAL STATEMENTS                  AND SUPPLEMENTARY DATA                                                                                                   |         |                                                    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|---------------------------------------------------------|
|                                                                                                                                                                                         |         |                                                    |   |   |   |   |   |
| E. CONSOLIDATED                  STATEMENTS OF CAPITALIZATION                                                                                                                           |         |
|                                                                                                                                                                                         |         |                                                    |   |   |   |   |   |
| At                  December                  31                                                                                                                                             |         |                                                    |   |   |   |   |   |
| (Millions,                  except share                  amounts)                                                                                                                           |         |                                                    | 2007 |   |   | 2006 |   |
|                                                                                                                                                                                         |         |                                                    |   |   |   |   |   |
| Common                  stock                  equity                                                                                                                                        |         |                                                    |   |   |   |   |   |
| Common                  stock, $4 par value,                  32,000,000 shares authorized,                                                                                                  |         |                                                    |   |   |   |   |
|  23,896,962                  shares                  outstanding                                                                                                                        |         |                                                    | $ | 95.6 |   |   | $ | 95.6 |   |
| Premium                  on capital                  stock                                                                                                                                   |         |                                                    |   | 713.8 |   |   |   | 685.1 |   |
| Accumulated                  other comprehensive                  loss                                                                                                                       |         |                                                    |   | - |   |   |   | (0.2 | ) |
| Retained                  earnings                                                                                                                                                           |         |                                                    |   | 337.2 |   |   |   | 319.5 |   |
| Total                  common stock                  equity                                                                                                                                  |         |                                                    |   | 1,146.6 |   |   |   | 1,100.0 |   |
|                                                                                                                                                                                         |         |                                                    |   |   |   |   |   |   |   |
| Preferred                  stock                                                                                                                                                             |         |                                                    |   |   |   |   |   |   |   |
| Cumulative,                  $100 par value,                  1,000,000 shares authorized                    with                  no mandatory redemption                  - |         |                                                    |   |   |   |   |   |   |
|                                                                                                                                                                                         | Series       | SharesOutstanding                                       |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                         | 5.00         | %      131,916            |   |   | 13.2 |   |   |   | 13.2 |   |
|                                                                                                                                                                                         | 5.04         | %        29,983 |   |   | 3.0 |   |   |   | 3.0 |   |
|                                                                                                                                                                                         | 5.08         | %        49,983 |   |   | 5.0 |   |   |   | 5.0 |   |
|                                                                                                                                                                                         | 6.76         | %      150,000            |   |   | 15.0 |   |   |   | 15.0 |   |
|                                                                                                                                                                                         | 6.88         | %      150,000            |   |   | 15.0 |   |   |   | 15.0 |   |
| Total                  preferred                  stock                                                                                                                                      |         |                                                    |   | 51.2 |   |   |   | 51.2 |   |
|                                                                                                                                                                                         |         |                                                    |   |   |   |   |   |   |   |   |
| Long-term                  debt to                  parent                                                                                                                                   |         |                                                    |   |   |   |   |   |   |   |
|                                                                                                                                                                                         | Series  | Year                  Due                               |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                         | 8.76         | %        2015   |   |   | 4.3 |   |   |   | 4.5 |   |
|                                                                                                                                                                                         | 7.35         | %        2016   |   |   | 6.2 |   |   |   | 6.5 |   |
| Total                  long-term debt to                  parent                                                                                                                             |         |                                                    |   | 10.5 |   |   |   | 11.0 |   |
|                                                                                                                                                                                         |         |                                                    |   |   |   |   |   |   |   |   |
| Long-term                  debt                                                                                                                                                              |         |                                                    |   |   |   |   |   |   |   |
| First                  mortgage                  bonds                                                                                                                                       |         |                                                    |   |   |   |   |   |   |   |
|                                                                                                                                                                                         | Series       |  Year                  Due                         |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                         | 6.90         | %        2013   |   |   | - |   |   |   | 22.0 |   |
|                                                                                                                                                                                         | 7.125        | %        2023   |   |   | 0.1 |   |   |   | 0.1 |   |
| Senior                  notes                                                                                                                                                                |         |                                                    |   |   |   |   |   |   |   |
|                                                                                                                                                                                         | Series       | Year                  Due                               |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                         | 6.125        | %        2011   |   |   | 150.0 |   |   |   | 150.0 |   |
|                                                                                                                                                                                         | 4.875        | %        2012   |   |   | 150.0 |   |   |   | 150.0 |   |
|                                                                                                                                                                                         | 3.95         | %        2013   |   |   | 22.0 |   |   |   | 22.0 |   |
|                                                                                                                                                                                         | 4.80         | %        2013   |   |   | 125.0 |   |   |   | 125.0 |   |
|                                                                                                                                                                                         | 5.65         | %        2017   |   |   | 125.0 |   |   |   | - |   |
|                                                                                                                                                                                         | 6.08         | %        2028   |   |   | 50.0 |   |   |   | 50.0 |   |
|                                                                                                                                                                                         | 5.55         | %        2036   |   |   | 125.0 |   |   |   | 125.0 |   |
| Total                  first mortgage bonds and                  senior notes                                                                                                                |         |                                                    |   | 747.1 |   |   |   | 644.1 |   |
| Unamortized                  discount on long-term                  debt, net                                                                                                                |         |                                                    |   | 1.5 |   |   |   | 1.5 |   |
| Total                                                                                                                                                                                        |         |                                                    |   | 745.6 |   |   |   | 642.6 |   |
| Current                  portion                                                                                                                                                             |         |                                                    |   | - |   |   |   | (22.0 | ) |
| Total                  long-term                  debt                                                                                                                                       |         |                                                    |   | 745.6 |   |   |   | 620.6 |   |
| Total                  capitalization                                                                                                                                                        |         |                                                    | $ | 1,953.9 |   |   | $ | 1,782.8 |   |
|                                                                                                                                                                                         |         |                                                    |   |   |   |   |   |   |   |   |
| The                  accompanying notes are an                  integral part of these statements.                                                                                           |         |                                                    |   |
|                                                                                                                                                                                         |         |                                                    |   |   |   |   |   |   |   |   |

----

| ITEM                  8. FINANCIAL STATEMENTS                  AND SUPPLEMENTARY DATA                       |   |          |   |   |   |   |    |   |   |   |
|------------------------------------------------------------------------------------------------------------------|--------|---------------|--------|--------|--------|--------|---------|--------|--------|--------|
|                                                                                                             |   |          |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
| F. CONSOLIDATED                  STATEMENTS OF COMMON SHAREHOLDER'S EQUITY                                  |   |
|                                                                                                             |   |          |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                             |   |          |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                             |   |          |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                             |   |          |   |   |   |   |    |   |   |   |   |   |   |   |   |   | Accumulated |   |
|                                                                                                             |   |          |   |   |   |   |    |   |   |   | Capital                  in |   |   |   |   |   | Other |   |
|                                                                                                             |   | Comprehensive |   |   |   |   |    | Common |   |   | Excess                  of |   |   | Retained |   |   | Comprehensive |   |
| (Millions)                                                                                                       |   | Income        |   |   | Total  |   |    | Stock  |   |   | Par                  Value |   |   | Earnings |   |   | Income                  /                  (Loss) |   |
|                                                                                                             |   |          |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at December 31,                  2004                                                   |   |          | -      |   |   | $      | 899.7   |   |   | $      | 95.6 |   |   | $ | 516.0 |   |   | $ | 308.8 |   |   | $ | (20.7 | ) |
| Earnings                  on common                  stock                                                       |   | $             | 81.4   |   |   |   | 81.4    |   |   |   | - |   |   |   | - |   |   |   | 81.4 |   |   |   | - |   |
| Other                  comprehensive income -                  minimum pension liability (net of taxes of $11.3) |   |          | 16.9   |   |   |   | 16.9    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 16.9 |   |
| Comprehensive                  income                                                                            |   | $             | 98.3   |   |   |   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net                  equity infusions from                  parent                                               |   |          | -      |   |   |   | 75.0    |   |   |   | - |   |   |   | 75.0 |   |   |   | - |   |   |   | - |   |
| Dividends                  to                  parent                                                            |   |          | -      |   |   |   | (81.0   | )      |   |   | - |   |   |   | - |   |   |   | (81.0 | ) |   |   | - |   |
| Other                                                                                                            |   |          | -      |   |   |   | 4.5     |   |   |   | - |   |   |   | 4.8 |   |   |   | (0.3 | ) |   |   | - |   |
|                                                                                                             |   |          |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at December 31,                  2005                                                   |   |          | -      |   |   | $      | 996.5   |   |   | $      | 95.6 |   |   | $ | 595.8 |   |   | $ | 308.9 |   |   | $ | (3.8 | ) |
| Earnings                  on common                  stock                                                       |   | $             | 99.0   |   |   |   | 99.0    |   |   |   | - |   |   |   | - |   |   |   | 99.0 |   |   |   | - |   |
| Other                  comprehensive income -                  minimum pension liability (net of taxes of $2.5)  |   |          | 3.8    |   |   |   | 3.8     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3.8 |   |
| Comprehensive                  income                                                                            |   | $             | 102.8  |   |   |   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net                  equity infusions from                  parent                                               |   |          | -      |   |   |   | 85.0    |   |   |   | - |   |   |   | 85.0 |   |   |   | - |   |   |   | - |   |
| Dividends                  to                  parent                                                            |   |          | -      |   |   |   | (88.0   | )      |   |   | - |   |   |   | - |   |   |   | (88.0 | ) |   |   | - |   |
| Adjustments                  to initially apply                  SFAS No. 158 (net of taxes of $0.1)             |   |          | -      |   |   |   | (0.2    | )      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (0.2 | ) |
| Other                                                                                                            |   |          | -      |   |   |   | 3.9     |   |   |   | - |   |   |   | 4.3 |   |   |   | (0.4 | ) |   |   | - |   |
|                                                                                                             |   |          |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at December 31,                  2006                                                   |   |          | -      |   |   | $      | 1,100.0 |   |   | $      | 95.6 |   |   | $ | 685.1 |   |   | $ | 319.5 |   |   | $ | (0.2 | ) |
| Earnings                  on common                  stock                                                       |   | $             | 110.2  |   |   |   | 110.2   |   |   |   | - |   |   |   | - |   |   |   | 110.2 |   |   |   | - |   |
| Comprehensive                  income                                                                            |   | $             | 110.2  |   |   |   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Net                  equity infusions from                  parent                                               |   |          | -      |   |   |   | 25.0    |   |   |   | - |   |   |   | 25.0 |   |   |   | - |   |   |   | - |   |
| Dividends                  to                  parent                                                            |   |          | -      |   |   |   | (91.2   | )      |   |   | - |   |   |   | - |   |   |   | (91.2 | ) |   |   | - |   |
| Adjustments                  to SFAS No. 158 (net                  of taxes of $0.1)                             |   |          | -      |   |   |   | 0.2     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 0.2 |   |
| Other                                                                                                            |   |          | -      |   |   |   | 2.4     |   |   |   | - |   |   |   | 3.7 |   |   |   | (1.3 | ) |   |   | - |   |
|                                                                                                             |   |          |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                  at December 31,                  2007                                                   |   |          | -      |   |   | $      | 1,146.6 |   |   | $      | 95.6 |   |   | $ | 713.8 |   |   | $ | 337.2 |   |   | $ | - |   |
|                                                                                                             |   |          |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                             |   |          |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The                  accompanying notes are an                  integral part of these statements.               |   |          |   |   |   |   |    |   |   |   |   |   |   |   |
|                                                                                                             |   |          |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                                     |   |   |   |   |   |   |   |   |   |
|----------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| ITEM                  8.   FINANCIAL                  STATEMENTS AND SUPPLEMENTARY DATA   |   |   |   |   |   |   |   |   |   |
|                                                                                                     |   |   |   |   |   |   |   |   |   |
| G. CONSOLIDATED                  STATEMENTS OF CASH FLOWS                                           |   |
|                                                                                                     |   |   |   |   |   |   |   |   |   |
| Year                  Ended December                  31                                                 |   |   |   |   |   |   |   |   |   |
| (Millions)                                                                                               |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|                                                                                                     |   |   |   |   |   |   |   |   |   |
| Cash                  flows from operating                  activities:                                  |   |   |   |   |   |   |   |   |   |
| Net                  income                                                                              |   | $      | 113.3  |   |   | $      | 102.1  |   |   | $ | 84.5 |   |
|                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjustments                  to reconcile net                  income to net cash from                   |   |   |   |   |   |   |   |   |   |   |   |   |
|   operating                  activities                  -                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                  and                  amortization                                          |   |   | 96.4   |   |   |   | 95.8   |   |   |   | 134.9 |   |
| Gain                  on nuclear decommissioning                  trust                                  |   |   | -      |   |   |   | -      |   |   |   | (15.7 | ) |
| Recovery                  (deferral) of Kewaunee                  outage expenses                        |   |   | 18.0   |   |   |   | 9.5    |   |   |   | (49.2 | ) |
| Refund                  of non-qualified                  decommissioning fund                           |   |   | (70.6  | )      |   |   | (54.5  | )      |   |   | - |   |
| Deferral                  of Weston 3 outage                  expenses                                   |   |   | (22.7  | )      |   |   | -      |   |   |   | - |   |
| Recoveries                  and refunds of other                  regulatory assets and liabilities      |   |   | 32.1   |   |   |   | 27.0   |   |   |   | 26.0 |   |
| Deferred                  income                  taxes                                                  |   |   | 22.5   |   |   |   | 21.4   |   |   |   | (16.4 | ) |
| Investment                  tax credit                  restored                                         |   |   | (1.0   | )      |   |   | (0.7   | )      |   |   | (1.6 | ) |
| Allowance                  for equity funds used                  during construction                    |   |   | (1.2   | )      |   |   | (0.7   | )      |   |   | (1.5 | ) |
| Equity                  income, net of                  dividends                                        |   |   | (3.2   | )      |   |   | (2.2   | )      |   |   | (12.5 | ) |
| Pension                  expense                                                                         |   |   | 19.8   |   |   |   | 26.7   |   |   |   | 25.2 |   |
| Postretirement                  expense                                                                  |   |   | 4.8    |   |   |   | 10.3   |   |   |   | 13.6 |   |
| Pension                  and postretirement                  funding                                     |   |   | (33.5  | )      |   |   | (43.2  | )      |   |   | (28.6 | ) |
| Assumption                  of pension and post                  retirement liabilities of MERC and MGUC |   |   | -      |   |   |   | 33.6   |   |   |   | - |   |
| Other,                  net                                                                              |   |   | (0.7   | )      |   |   | 3.7    |   |   |   | (26.2 | ) |
| Changes                  in                  -                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Customer                  and other                  receivables                                         |   |   | (18.6  | )      |   |   | (5.4   | )      |   |   | (66.9 | ) |
| Accrued                  unbilled                  revenues                                              |   |   | (12.0  | )      |   |   | 18.1   |   |   |   | (9.7 | ) |
| Inventories                                                                                              |   |   | 20.9   |   |   |   | (2.2   | )      |   |   | (23.1 | ) |
| Prepaid                  federal income                  taxes                                           |   |   | (14.9  | )      |   |   | (14.0  | )      |   |   | (13.2 | ) |
| Miscellaneous                  assets                                                                    |   |   | 5.8    |   |   |   | (13.6  | )      |   |   | (6.0 | ) |
| Accounts                  payable                                                                        |   |   | 24.8   |   |   |   | (2.7   | )      |   |   | 68.7 |   |
| Accrued                  taxes                                                                           |   |   | 2.3    |   |   |   | 0.5    |   |   |   | 0.8 |   |
| Miscellaneous                  current and accrued                  liabilities                          |   |   | (8.1   | )      |   |   | 7.9    |   |   |   | 4.4 |   |
| Net                  cash provided by operating                  activities                              |   |   | 174.2  |   |   |   | 217.4  |   |   |   | 87.5 |   |
|                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows from investing                  activities:                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital                  expenditures                                                                    |   |   | (221.1 | )      |   |   | (302.9 | )      |   |   | (400.3 | ) |
| Restricted                  cash for repayment of                  long-term debt                        |   |   | 22.0   |   |   |   | (22.0  | )      |   |   | - |   |
| Transmission                  interconnection                                                            |   |   | (23.9  | )      |   |   | (11.6  | )      |   |   | (6.3 | ) |
| Proceeds                  from the sale of Kewaunee                  power plant                         |   |   | -      |   |   |   | -      |   |   |   | 112.5 |   |
| Proceeds                  from the sale of partial                  interest in Weston 4 power plant     |   |   | -      |   |   |   | -      |   |   |   | 95.1 |   |
| Proceeds                  from the liquidation of                  non-qualified decommissioning trust   |   |   | -      |   |   |   | -      |   |   |   | 127.1 |   |
| Purchases                  of nuclear                  decommissioning trust investments                 |   |   | -      |   |   |   | -      |   |   |   | (18.6 | ) |
| Sales                  of nuclear decommissioning                  trust investments                     |   |   | -      |   |   |   | -      |   |   |   | 18.6 |   |
| Other                                                                                                    |   |   | 6.0    |   |   |   | 15.3   |   |   |   | 7.4 |   |
| Net                  cash used for investing                  activities                                 |   |   | (217.0 | )      |   |   | (321.2 | )      |   |   | (64.5 | ) |
|                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                  flows from financing                  activities:                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-term                  debt -                  net                                                  |   |   | 12.7   |   |   |   | (37.0  | )      |   |   | (16.0 | ) |
| Issuance                  of long-term                  debt                                             |   |   | 125.0  |   |   |   | 147.0  |   |   |   | - |   |
| Payments                  of long-term                  debt                                             |   |   | (22.5  | )      |   |   | (0.5   | )      |   |   | (0.4 | ) |
| Net                  equity contributions from                  parent                                   |   |   | 25.0   |   |   |   | 85.0   |   |   |   | 75.0 |   |
| Dividends                  to                  parent                                                    |   |   | (91.2  | )      |   |   | (88.0  | )      |   |   | (81.0 | ) |
| Preferred                  stock                  dividends                                              |   |   | (3.1   | )      |   |   | (3.1   | )      |   |   | (3.1 | ) |
| Other                                                                                                    |   |   | 0.2    |   |   |   | (1.3   | )      |   |   | 1.5 |   |
| Net                  cash provided by (used for)                  financing activities                   |   |   | 46.1   |   |   |   | 102.1  |   |   |   | (24.0 | ) |
| Net                  change in cash and                  equivalents                                     |   |   | 3.3    |   |   |   | (1.7   | )      |   |   | (1.0 | ) |
| Cash                  and equivalents at beginning                  of year                              |   |   | 0.8    |   |   |   | 2.5    |   |   |   | 3.5 |   |
| Cash                  and equivalents at end of                  year                                    |   | $      | 4.1    |   |   | $      | 0.8    |   |   | $ | 2.5 |   |
|                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| The                  accompanying notes are an                  integral part of these statements.       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |

----

H.  NOTES        TO CONSOLIDATED FINANCIAL        STATEMENTS

| (Millions)                                                   |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|--------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                         |   |   |   |   |   |   |   |   |   |
| Cash                  paid for                  interest     |   | $      | 37.6   |   |   | $      | 32.4   |   |   | $ | 30.4 |   |
| Cash                  paid for                  income taxes |   |   | 30.8   |   |   |   | 37.2   |   |   |   | 45.3 |   |

| (Millions)                                                                                    |   | 2007 |   |   | 2006   |   |   | 2005   |   |
|-----------------------------------------------------------------------------------------------|--------|------|--------|--------|--------|--------|--------|--------|--------|
| Weston                  4                  construction costs funded through accounts payable |   | $    | 26.1   |   |   | $      | 32.0   |   |   | $ | 33.7 |   |

----

----

| Annual                  Utility Composite Depreciation Rates |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|--------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                         |   |   |   |   |   |   |   |   |   |
| WPSC–                  Electric                        |   |   | 3.35   | %      |   |   | 3.36   | %      |   |   | 3.65 | % |
| WPSC–                  Natural Gas                     |   |   | 3.52   | %      |   |   | 3.57   | %      |   |   | 3.61 | % |

----

----

----

| (Millions)                                                  |   | 2007                 |   |   | 2006      |   |
|-------------------------------------------------------------|--------|----------------------|--------|--------|-----------|--------|
|                                                        |   | Carrying Amount |   |   | FairValue |   |   | Carrying Amount |   |   | FairValue |   |
|                                                        |   |                 |   |   |      |   |   |   |   |   |   |   |
| Cash                  and cash                  equivalents |   | $                    | 4.1    |   |      | $      | 4.1 |   |   | $ | 0.8 |   |   | $ | 0.8 |   |
| Restricted                  cash                            |   |                 | -      |   |      |   | - |   |   |   | 22.0 |   |   |   | 22.0 |   |
| Accounts                  receivable - net                  |   |                 | 254.8  |   |      |   | 254.8 |   |   |   | 170.1 |   |   |   | 170.1 |   |
| Accounts                  payable                           |   |                 | 186.0  |   |      |   | 186.0 |   |   |   | 178.1 |   |   |   | 178.1 |   |
| Notes                  payable                              |   |                 | 10.0   |   |      |   | 10.0 |   |   |   | 10.0 |   |   |   | 10.0 |   |
| Commercial                  paper                           |   |                 | 50.7   |   |      |   | 50.7 |   |   |   | 38.0 |   |   |   | 38.0 |   |
| Long-term                  debt                             |   |                 | 745.6  |   |      |   | 765.2 |   |   |   | 642.6 |   |   |   | 642.7 |   |
| Preferred                  stock                            |   |                 | 51.2   |   |      |   | 49.6 |   |   |   | 51.2 |   |   |   | 48.8 |   |
| Risk                  management assets – net         |   |                 | 8.2    |   |      |   | 8.2 |   |   |   | 5.3 |   |   |   | 5.3 |   |

|                                                       |   | Assets |   |   | Liabilities |   |
|------------------------------------------------------------|--------|--------|--------|--------|-------------|--------|
| (Millions)                                                 |   | 2007   |   |   | 2006        |   |   | 2007 |   |   | 2006 |   |
|   Commodity                  contracts           |   | $      | 1.2    |   |        | $      | 3.8 |   |   | $ | 1.6 |   |   | $ | 10.2 |   |
|   Financial                  transmission rights |   |   | 13.0   |   |        |   | 13.7 |   |   |   | 4.4 |   |   |   | 2.0 |   |
| Total                                                      |   | $      | 14.2   |   |        | $      | 17.5 |   |   | $ | 6.0 |   |   | $ | 12.2 |   |
| Balance                  Sheet Presentation                |   |   |   |   |        |   |   |   |   |   |   |   |   |   |   |   |
| Current                                                    |   | $      | 14.2   |   |        | $      | 17.5 |   |   | $ | 6.0 |   |   | $ | 11.3 |   |
| Other                  long-term                           |   |   | -      |   |        |   | - |   |   |   | - |   |   |   | 0.9 |   |
| Total                                                      |   | $      | 14.2   |   |        | $      | 17.5 |   |   | $ | 6.0 |   |   | $ | 12.2 |   |

----

| (Millions)                                                 |   | 2007   |    |   | 2006   |   |
|------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Electric                  utility                          |   | $      | 2,032.9 |   |   | $      | 1,983.1 |   |
| Natural                  gas                  utility      |   |   | 576.8   |   |   |   | 575.7 |   |
| Total                  utility                  plant      |   |   | 2,609.7 |   |   |   | 2,558.8 |   |
| Less:  Accumulated                  depreciation |   |   | 1,064.8 |   |   |   | 1,040.1 |   |
| Net                                                        |   |   | 1,544.9 |   |   |   | 1,518.7 |   |
| Construction                  in progress                  |   |   | 520.7   |   |   |   | 440.4 |   |
| Net                  utility                  plant        |   | $      | 2,065.6 |   |   | $      | 1,959.1 |   |
|                                                       |   |   |    |   |   |   |   |   |
| Nonutility                  plant                          |   |   | 15.7    |   |   |   | 15.7 |   |
| Less:  Accumulated                  depreciation |   |   | 6.4     |   |   |   | 5.9 |   |
| Net                  nonutility plant                      |   |   | 9.3     |   |   |   | 9.8 |   |
| Total                  property, plant, and equipment      |   | $      | 2,074.9 |   |   | $      | 1,968.9 |   |

----

| (Millions)                                                 |   | July                  5, 2005 |   |
|------------------------------------------------------------|--------|-------------------------------|--------|
|                                                       |   |                          |   |
| Qualified                  decommissioning trust fund      |   | $                             | 243.6  |   |
| Other                  utility                  plant, net |   |                          | 165.4  |   |
| Other                  current                  assets     |   |                          | 5.5    |   |
| Total                  assets                              |   | $                             | 414.5  |   |
|                                                       |   |                          |   |   |
| Regulatory                  liabilities                    |   | $                             | (72.1  | ) |
| Accounts                  payable                          |   |                          | 2.5    |   |
| Asset                  retirement obligations              |   |                          | 376.4  |   |
| Total                  liabilities                         |   | $                             | 306.8  |   |

| (Millions,                  except for percentages and megawatts)     |   | West                  MarinetteUnit                  No. 33 |   |   | Columbia                  EnergyCenter |   |   | EdgewaterUnit                  No. 4 |   |
|-----------------------------------------------------------------------|--------|------------------------------------------------------------------|--------|--------|----------------------------------------|--------|--------|-------------------------------------------|--------|
| Ownership                                                             |   |                                                             | 68.0   | %      |                                   |   | 31.8   | %                                         |   |   | 31.8 | % |
| WPSC's                  share of plant nameplate capacity (megawatts) |   |                                                             | 56.8   |   |                                   |   | 335.2  |                                      |   |   | 105.0 |   |
| Utility                  plant in service                             |   | $                                                                | 18.6   |   |                                   | $      | 157.5  |                                      |   | $ | 33.3 |   |
| Accumulated                  depreciation                             |   | $                                                                | 9.2    |   |                                   | $      | 98.7   |                                      |   | $ | 21.3 |   |
| In-service                  date                                      |   | 1993                                                             |   |   | 1975                  and 1978         |   |   | 1969                                      |   |

----

----

| (Millions)                                                                          |   | 2007   |   |   | 2006   |   |
|-------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                                |   |   |   |   |   |   |
| Regulatory                  assets                                                  |   |   |   |   |   |   |
| Environmental                  remediation costs (net of insurance recoveries)      |   | $      | 70.0   |   |   | $      | 74.8 |   |
| De                  Pere                  Energy Center                             |   |   | 38.2   |   |   |   | 40.5 |   |
| Nuclear                  costs                                                      |   |   | 34.7   |   |   |   | 45.3 |   |
| Weston                  3                  lightning strike                         |   |   | 22.7   |   |   |   | - |   |
| MISO                  costs                                                         |   |   | 19.1   |   |   |   | 20.8 |   |
| Pension                  and                  post-retirement benefit related items |   |   | 10.9   |   |   |   | 69.6 |   |
| Derivatives                                                                         |   |   | 6.4    |   |   |   | 12.2 |   |
| Reserve                  for                  uncollectible accounts                |   |   | 4.0    |   |   |   | 7.0 |   |
| Asset                  retirement obligations                                       |   |   | 4.0    |   |   |   | 3.6 |   |
| Energy                  recoveries                                                  |   |   | 3.4    |   |   |   | 8.7 |   |
| Reduced                  coal                  deliveries                           |   |   | 3.0    |   |   |   | 6.6 |   |
| Income                  tax                  related items                          |   |   | 1.2    |   |   |   | 4.6 |   |
| Other                                                                               |   |   | 4.5    |   |   |   | 5.3 |   |
| Total                                                                               |   | $      | 222.1  |   |   | $      | 299.0 |   |
| Balance                  Sheet Presentation                                         |   |   |   |   |   |   |   |   |
| Current                                                                             |   | $      | 49.3   |   |   | $      | 8.7 |   |
| Long-term                                                                           |   |   | 172.8  |   |   |   | 290.3 |   |
| Total                                                                               |   | $      | 222.1  |   |   | $      | 299.0 |   |
|                                                                                |   |   |   |   |   |   |   |   |
| Regulatory                  liabilities                                             |   |   |   |   |   |   |   |   |
| Cost                  of                  removal reserve                           |   | $      | 193.1  |   |   | $      | 185.5 |   |
| Pension                  and                  post-retirement benefit related items |   |   | 50.8   |   |   |   | - |   |
| Derivatives                                                                         |   |   | 13.3   |   |   |   | 15.5 |   |
| ATC                  and MISO                  refunds                              |   |   | 5.3    |   |   |   | 4.2 |   |
| Income                  tax                  related items                          |   |   | 4.3    |   |   |   | 5.1 |   |
| Energy                  refunds                                                     |   |   | 1.9    |   |   |   | 14.5 |   |
| Non-qualified                  decommissioning trust                                |   |   | 1.3    |   |   |   | 55.9 |   |
| Other                                                                               |   |   | 4.8    |   |   |   | 5.8 |   |
| Total                                                                               |   | $      | 274.8  |   |   | $      | 286.5 |   |
| Balance                  Sheet Presentation                                         |   |   |   |   |   |   |   |   |
| Current                                                                             |   | $      | 21.9   |   |   | $      | 14.5 |   |
| Long-term                                                                           |   |   | 252.9  |   |   |   | 272.0 |   |
| Total                                                                               |   | $      | 274.8  |   |   | $      | 286.5 |   |

----

| (Millions)                                                                        |   | 2007   |   |   | 2006   |   |
|-----------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| ATC                  (through ownership in WPS                  Investments, LLC) |   | $      | 51.3   |   |   | $      | 49.1 |   |
| WRPC                                                                              |   |   | 9.8    |   |   |   | 8.9 |   |
| Other                                                                             |   |   | 0.8    |   |   |   | 0.5 |   |
| Investments                  in affiliates, at equity method                      |   | $      | 61.9   |   |   | $      | 58.5 |   |

| (Millions)                                                                     |   | 2007 |   |   | 2006   |   |   | 2005   |   |
|--------------------------------------------------------------------------------|--------|------|--------|--------|--------|--------|--------|--------|--------|
| Charges                  to                  ATC for services and construction |   | $    | 96.1   |   |   | $      | 124.1  |   |   | $ | 70.2 |   |
| Network                  transmission service costs provided by ATC            |   | $    | 73.3   |   |   | $      | 59.4   |   |   | $ | 50.8 |   |

----

| (Millions)                                                                             |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|----------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Revenues                  from                  services provided to WRPC              |   | $      | 1.0    |   |   | $      | 1.5    |   |   | $ | 0.7 |   |
| Purchases                  of                  energy from WRPC                        |   |   | 4.7    |   |   |   | 4.1    |   |   |   | 4.3 |   |
| Net                  proceeds                  from WRPC sales of energy into the MISO |   |   | 6.0    |   |   |   | 4.2    |   |   |   | 3.1 |   |

| (Millions)                                                    |   | 2007   |    |   | 2006   |   |    | 2005   |   |
|---------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| Income                  statement data                        |   |   |    |   |   |   |    |   |   |
| Revenues                                                      |   | $      | 415.6   |   |   | $      | 347.5   |   |   | $ | 303.3 |   |
| Operating                  expenses                           |   |   | 203.9   |   |   |   | 184.3   |   |   |   | 171.9 |   |
| Other                  expense                                |   |   | 54.2    |   |   |   | 34.9    |   |   |   | 25.1 |   |
| Net                  income                                   |   | $      | 157.5   |   |   | $      | 128.3   |   |   | $ | 106.3 |   |
|                                                          |   |   |    |   |   |   |    |   |   |   |   |   |
| WPSC's                  equity                  in net income |   | $      | 10.4    |   |   | $      | 11.0    |   |   | $ | 12.0 |   |
|                                                          |   |   |    |   |   |   |    |   |   |   |   |   |
| Balance                  sheet data                           |   |   |    |   |   |   |    |   |   |   |   |   |
| Current                  assets                               |   | $      | 52.3    |   |   | $      | 36.2    |   |   | $ | 34.0 |   |
| Non-current                  assets                           |   |   | 2,207.8 |   |   |   | 1,872.4 |   |   |   | 1,530.5 |   |
| Total                  assets                                 |   | $      | 2,260.1 |   |   | $      | 1,908.6 |   |   | $ | 1,564.5 |   |
|                                                          |   |   |    |   |   |   |    |   |   |   |   |   |
| Current                  liabilities                          |   | $      | 317.7   |   |   | $      | 306.4   |   |   | $ | 142.5 |   |
| Long-term                  debt                               |   |   | 899.1   |   |   |   | 648.9   |   |   |   | 648.6 |   |
| Other                  non-current liabilities                |   |   | 111.1   |   |   |   | 128.2   |   |   |   | 102.4 |   |
| Shareholders'                  equity                         |   |   | 932.2   |   |   |   | 825.1   |   |   |   | 671.0 |   |
| Total                  liabilities and shareholders' equity   |   | $      | 2,260.1 |   |   | $      | 1,908.6 |   |   | $ | 1,564.5 |   |

----

| Year                  ending December 31 |   |   |   |
|-----------------------------------------------|--------|--------|--------|
| (Millions)                                    |   |   |   |
|                                          |   |   |   |
| 2008                                          |   | $      | 2.9    |   |
| 2009                                          |   |   | 1.5    |   |
| 2010                                          |   |   | 1.2    |   |
| 2011                                          |   |   | 1.0    |   |
| 2012                                          |   |   | 0.9    |   |
| Later                  years                  |   |   | 1.4    |   |
| Total                  payments               |   | $      | 8.9    |   |

| (Millions)                                                                          | Maturity |   | 12/31/2007 |   |   | 12/31/2006 |   |
|-------------------------------------------------------------------------------------|----------|--------|------------|--------|--------|------------|--------|
| Credit                  agreements and revolving notes                              |     |   |       |   |   |       |   |
|    Revolving                  credit facility(1)                     | 6/02/10  |   | $          | 115.0  |   |       | $      | 115.0 |   |
|    Revolving                  short-term notes payable(2)            | 5/13/08  |   |       | 10.0   |   |       |   | 10.0 |   |
| Total                  short-term credit capacity                                   |     |   |       | 125.0  |   |       |   | 125.0 |   |
|                                                                                |     |   |       |   |   |       |   |   |   |
| Less:                                                                               |     |   |       |   |   |       |   |   |   |
| Letters                  of                  credit issued inside credit facilities |     |   |       | 3.8    |   |       |   | 3.8 |   |
| Loans                  outstanding under the credit agreements                      |     |   |       | 10.0   |   |       |   | 10.0 |   |
| Commercial                  paper outstanding                                       |     |   |       | 50.7   |   |       |   | 38.0 |   |
| Available                  capacity under existing agreements                       |     |   | $          | 60.5   |   |       | $      | 73.2 |   |

|   | (1)                  Provides backup for WPSC's commercial paper borrowing program. |
|--------|-------------------------------------------------------------------------------------|

| (Millions,                  except for percentages)                    |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Commercial                  paper outstanding                          |   | $      | 50.7   |   |   | $      | 38.0   |   |   | $ | 75.0 |   |
| Average                  discount rate on outstanding commercial paper |   |   | 5.65   | %      |   |   | 5.47   | %      |   |   | 4.54 | % |
| Short-term                  notes payable outstanding                  |   | $      | 10.0   |   |   | $      | 10.0   |   |   | $ | 10.0 |   |
| Average                  interest rate on short-term notes payable     |   |   | 5.20   | %      |   |   | 5.30   | %      |   |   | 4.32 | % |
| Maximum                  amount of short-term debt                     |   | $      | 121.2  |   |   | $      | 121.2  |   |   | $ | 121.0 |   |
| Average                  amount of short-term debt                     |   | $      | 55.9   |   |   | $      | 85.8   |   |   | $ | 69.9 |   |
| Average                  interest rate on short-term debt              |   |   | 5.51   | %      |   |   | 5.15   | %      |   |   | 3.22 | % |

----

| Year                  ending December 31 (Millions) |   |   |   |
|---------------------------------------------------------------|--------|--------|--------|
|                                                          |   |   |   |
| 2008                                                          |   | $      | -      |   |
| 2009                                                          |   |   | -      |   |
| 2010                                                          |   |   | -      |   |
| 2011                                                          |   |   | 150.0  |   |
| 2012                                                          |   |   | 150.0  |   |
| Later                  years                                  |   |   | 447.1  |   |
| Total                  payments                               |   | $      | 747.1  |   |

----

| (Millions)                                                              |   |   |   |
|-------------------------------------------------------------------------|--------|--------|--------|
| Asset                  retirement obligations at December 31, 2004 |   | $      | 364.4  |   |
| Accretion                                                               |   |   | 12.4   |   |
| Asset                  retirement obligation transferred to Dominion    |   |   | (376.4 | ) |
| Adoption                  of                  Interpretation No. 47     |   |   | 7.3    |   |
| Asset                  retirement obligations at December 31, 2005 |   |   | 7.7    |   |
| Accretion                                                               |   |   | 0.4    |   |
| Asset                  retirement obligations at December 31, 2006 |   |   | 8.1    |   |
| Accretion                                                               |   |   | 0.5    |   |
| Asset                  retirement obligations at December 31, 2007      |   | $      | 8.6    |   |

| (Millions)                                                                                                 |   | 2007   |   |   | 2006   |   |
|------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Deferred                  tax assets:                                                                      |   |   |   |   |   |   |
|                                                                                                       |   |   |   |   |   |   |
| Plant                  related                                                                             |   | $      | 35.6   |   |   | $      | 44.5 |   |
| Employee                  benefits                                                                         |   |   | 42.8   |   |   |   | 37.2 |   |
| Regulatory                  deferrals                                                                      |   |   | -      |   |   |   | 27.6 |   |
| Deferred                  income and deductions                                                            |   |   | 2.5    |   |   |   | 3.4 |   |
| Other                                                                                                      |   |   | 1.8    |   |   |   | 1.0 |   |
| Total                  deferred tax assets                                                                 |   |   | 82.7   |   |   |   | 113.7 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Deferred                  tax liabilities:                                                                 |   |   |   |   |   |   |   |   |
| Plant                  related                                                                             |   |   | 222.0  |   |   |   | 229.3 |   |
| Regulatory                  deferrals                                                                      |   |   | 30.6   |   |   |   | 32.0 |   |
| Deferred                  income and deductions                                                            |   |   | 3.7    |   |   |   | 3.7 |   |
| Other                                                                                                      |   |   | 0.7    |   |   |   | 0.4 |   |
| Total                  deferred tax liabilities                                                            |   |   | 257.0  |   |   |   | 265.4 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Consolidated                  Balance Sheet Presentation:                                                  |   |   |   |   |   |   |   |   |
| Current                  deferred tax assets - included in other current assets                            |   |   | -      |   |   |   | 5.1 |   |
| Current                  deferred tax liabilities - included in other current                  liabilities |   |   | (12.9  | )      |   |   | - |   |
| Long-term                  deferred tax liabilities                                                        |   |   | (161.4 | )      |   |   | (156.8 | ) |
| Net                  deferred                  tax liabilities                                             |   | $      | (174.3 | )      |   | $      | (151.7 | ) |

----

| (Millions,                  except for percentages)              |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                                             |   | Rate   |   |   | Amount |   |   | Rate   |   |   | Amount |   |   | Rate |   |   | Amount |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Statutory                  federal income tax                    |   |   | 35.0   | %      |   | $      | 63.0   |   |   |   | 35.0 | % |   | $ | 56.1 |   |   |   | 35.0 | % |   | $ | 45.0 |   |
| State                  income                  taxes, net        |   |   | 4.9    |   |   |   | 8.9    |   |   |   | 5.1 |   |   |   | 8.1 |   |   |   | 5.3 |   |   |   | 6.8 |   |
| Unrecognized                  tax benefits                       |   |   | (0.6   | )      |   |   | (1.0   | )      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Plant                  related                                   |   |   | -      |   |   |   | -      |   |   |   | - |   |   |   | 0.1 |   |   |   | 0.6 |   |   |   | 0.8 |   |
| Benefits                  and                  compensation      |   |   | (1.9   | )      |   |   | (3.4   | )      |   |   | (2.5 | ) |   |   | (4.1 | ) |   |   | (3.1 | ) |   |   | (4.0 | ) |
| Investment                  Tax                  Credit          |   |   | (0.5   | )      |   |   | (1.0   | )      |   |   | (0.4 | ) |   |   | (0.7 | ) |   |   | (1.2 | ) |   |   | (1.6 | ) |
| Federal                  tax                  credits            |   |   | (0.2   | )      |   |   | (0.4   | )      |   |   | (0.2 | ) |   |   | (0.3 | ) |   |   | (0.2 | ) |   |   | (0.3 | ) |
| Other                  differences, net                          |   |   | 0.4    |   |   |   | 0.7    |   |   |   | (0.7 | ) |   |   | (0.9 | ) |   |   | (2.1 | ) |   |   | (2.6 | ) |
| Effective                  income tax                            |   |   | 37.1   | %      |   | $      | 66.8   |   |   |   | 36.3 | % |   | $ | 58.3 |   |   |   | 34.3 | % |   | $ | 44.1 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current                  provision                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal                                                          |   |   |   |   |   | $      | 37.1   |   |   |   |   |   |   | $ | 31.0 |   |   |   |   |   |   | $ | 49.9 |   |
| State                                                            |   |   |   |   |   |   | 8.4    |   |   |   |   |   |   |   | 6.6 |   |   |   |   |   |   |   | 12.2 |   |
| Total                  current provision                         |   |   |   |   |   |   | 45.5   |   |   |   |   |   |   |   | 37.6 |   |   |   |   |   |   |   | 62.1 |   |
|                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred                  provision                              |   |   |   |   |   |   | 22.5   |   |   |   |   |   |   |   | 21.4 |   |   |   |   |   |   |   | (16.4 | ) |
| Unrecognized                  tax benefits                       |   |   |   |   |   |   | (1.0   | )      |   |   |   |   |   |   | - |   |   |   |   |   |   |   | - |   |
| Interest                                                         |   |   |   |   |   |   | 0.8    |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   | - |   |
| Penalties                                                        |   |   |   |   |   |   | -      |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   | - |   |
| Investment                  tax                  credit restored |   |   |   |   |   |   | (1.0   | )      |   |   |   |   |   |   | (0.7 | ) |   |   |   |   |   |   | (1.6 | ) |
| Total                  income tax expense                        |   |   |   |   |   | $      | 66.8   |   |   |   |   |   |   | $ | 58.3 |   |   |   |   |   |   | $ | 44.1 |   |

| (Millions)                                                                           |   | Unrecognized                  Tax Benefits |   |
|--------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                                                 |   |                                       |   |
| Balance                  at                  January 1, 2007                         |   | $                                          | 3.5    |   |
|   Increase                  related to tax positions taken in prior years  |   |                                       | 0.2    |   |
|   Decrease                  related to tax positions taken in prior years  |   |                                       | (0.4   | ) |
|   Increase                  related to tax positions taken in current year |   |                                       | 0.2    |   |
|   Decrease                  related to settlements with tax authorities    |   |                                       | (2.7   | ) |
| Balance                  at                  December 31, 2007                       |   | $                                          | 0.8    |   |

----

| ● | Wisconsin                  Department of Revenue – WPSC has agreed to statute extensions for tax                  years covering 1996-2002. |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | IRS–                  Integrys Energy Group (formerly WPS Resources Corporation) and                  consolidated subsidiaries have an agreed to audit report and closing                  statement for an IRS examination of the 2002 and 2003 tax                  years. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ● | IRS–                  Integrys Energy Group (formerly WPS Resources Corporation) and                  consolidated subsidiaries have settled all issues for 2004 and                  2005.                                                                                   |

| ● | Wisconsin                  Department of Revenue – WPSC has an open examination for the 1996-2005 tax                  years. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| Outstanding                  Guarantees (Millions)  |   | 2007   |   |   | 2006   |   |
|-----------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Standby                  letters of credit          |   | $      | 3.9    |   |   | $      | 3.9 |   |
| Other                  guarantees                   |   |   | 7.9    |   |   |   | 10.2 |   |
|    Total                  guarantees |   | $      | 11.8   |   |   | $      | 14.1 |   |

----

| ·   | A                  guarantee                  issued by WPSC to indemnify a third party for exposures related                  to the                  construction of utility assets.  This amount is not reflected on                  WPSC's Consolidated Balance Sheet, as this agreement was entered                  into                  prior to the effective date of FASB Interpretation                  No. 45.  The maximum exposure related to this guarantee was                  $3.8 million at December 31, 2007, and $4.9 million at                  December 31, 2006. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A                  liability                  related to WPSC's agreement to indemnify Dominion for certain costs                  arising from the resolution of design bases documentation issues                  incurred                  prior to Kewaunee's scheduled maintenance period in 2009.  As of                  December 31, 2007, WPSC had paid $4.8 million to Dominion                  related to this guarantee, reducing the liability to                  $4.1 million.  The liability recorded for this guarantee                  was $5.3 million at December 31,                  2006. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Closure                  of                  the defined benefit pension plans to non-union new hires, effective                  as of                  January 1, 2008; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A                  freeze in                  defined benefit pension service accruals for non-union employees,                  effective as of January 1, 2013; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | A                  freeze in                  compensation amounts used for determining defined benefit pension                  amounts                  for non-union employees, effective as of January 1,                  2018; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Revised                  eligibility requirements for retiree medical benefits for employees                  hired                  on or after January 1, 2008, and the introduction, beginning in                  2013, of                  an annual premium reduction credit for employees retiring after                  December                  31, 2012; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Closure                  of                  the retiree dental and life benefit programs to all new hires,                  effective                  January 1, 2008, and elimination of these benefits for any existing                  employees retiring after December 31,                  2012. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                      |   | Pension                  Benefits |   |   | Other                  Benefits |   |
|-----------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|--------|---------------------------------|--------|
| (Millions)                                                                                                |   | 2007                              |   |   | 2006                            |   |   | 2005 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Reconciliation                  of benefit obligation(qualified                  and non-qualified plans) |   |                              |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligation                  at                  January 1                                                 |   | $                                 | 784.8  |   |                            | $      | 726.2 |   |   | $ | 718.9 |   |   | $ | 292.1 |   |   | $ | 286.9 |   |   | $ | 294.7 |   |
| Service                  cost                                                                             |   |                              | 24.0   |   |                            |   | 24.2 |   |   |   | 23.9 |   |   |   | 6.8 |   |   |   | 7.1 |   |   |   | 8.0 |   |
| Interest                  cost                                                                            |   |                              | 45.4   |   |                            |   | 42.0 |   |   |   | 40.2 |   |   |   | 16.5 |   |   |   | 17.3 |   |   |   | 16.5 |   |
| Plan                  amendments                                                                          |   |                              | -      |   |                            |   | - |   |   |   | - |   |   |   | (21.4 | ) |   |   | - |   |   |   | - |   |
| Plan                  curtailment                                                                         |   |                              | (0.7   | )      |                            |   | - |   |   |   | - |   |   |   | (0.6 | ) |   |   | - |   |   |   | - |   |
| Plan                  spin off                  - Kewaunee sale                                           |   |                              | -      |   |                            |   | - |   |   |   | (25.7 | ) |   |   | - |   |   |   | - |   |   |   | (13.3 | ) |
| Plan                  acquisitions - MGUC and MERC                                                        |   |                              | -      |   |                            |   | 59.5 |   |   |   | - |   |   |   | - |   |   |   | 23.0 |   |   |   | - |   |
| Actuarial                  (gain) loss -                  net                                             |   |                              | (62.1  | )      |                            |   | (19.3 | ) |   |   | 8.2 |   |   |   | (32.8 | ) |   |   | (33.1 | ) |   |   | (9.6 | ) |
| Benefit                  payments                                                                         |   |                              | (44.4  | )      |                            |   | (47.8 | ) |   |   | (39.3 | ) |   |   | (11.3 | ) |   |   | (10.2 | ) |   |   | (9.4 | ) |
| Federal                  subsidy on benefits paid                                                         |   |                              | -      |   |                            |   | - |   |   |   | - |   |   |   | 1.1 |   |   |   | 1.1 |   |   |   | - |   |
| Obligation                  at                  December 31                                          |   | $                                 | 747.0  |   |                            | $      | 784.8 |   |   | $ | 726.2 |   |   | $ | 250.4 |   |   | $ | 292.1 |   |   | $ | 286.9 |   |
|                                                                                                      |   |                              |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reconciliation                  of fair value of plan assets (qualified plans)                            |   |                              |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair                  value of                  plan assets at January 1                                  |   | $                                 | 674.0  |   |                            | $      | 583.0 |   |   | $ | 588.9 |   |   | $ | 212.8 |   |   | $ | 183.0 |   |   | $ | 170.9 |   |
| Actual                  return                  on plan assets                                            |   |                              | 47.7   |   |                            |   | 67.3 |   |   |   | 39.7 |   |   |   | 14.1 |   |   |   | 16.5 |   |   |   | 11.3 |   |
| Employer                  contributions                                                                   |   |                              | 25.4   |   |                            |   | 25.3 |   |   |   | 8.2 |   |   |   | 8.1 |   |   |   | 17.9 |   |   |   | 20.4 |   |
| Plan                  spin off                  - Kewaunee sale                                           |   |                              | -      |   |                            |   | - |   |   |   | (15.5 | ) |   |   | - |   |   |   | - |   |   |   | (10.4 | ) |
| Plan                  acquisitions - MGUC and MERC                                                        |   |                              | 0.2    |   |                            |   | 45.0 |   |   |   | - |   |   |   | - |   |   |   | 5.4 |   |   |   | - |   |
| Benefit                  payments                                                                         |   |                              | (42.8  | )      |                            |   | (46.6 | ) |   |   | (38.3 | ) |   |   | (11.2 | ) |   |   | (10.0 | ) |   |   | (9.2 | ) |
| Fair                  value of                  plan assets atDecember 31                            |   | $                                 | 704.5  |   |                            | $      | 674.0 |   |   | $ | 583.0 |   |   | $ | 223.8 |   |   | $ | 212.8 |   |   | $ | 183.0 |   |

|                                    |   | Pension                  Benefits |   |   | Other                  Benefits |   |
|-----------------------------------------|--------|-----------------------------------|--------|--------|---------------------------------|--------|
| (Millions)                              |   | 2007                              |   |   | 2006                            |   |   | 2007 |   |   | 2006 |   |
| Noncurrent                  assets      |   | $                                 | -      |   |                            | $      | - |   |   | $ | 2.6 |   |   | $ | - |   |
| Current                  liabilities    |   |                              | 2.9    |   |                            |   | 3.4 |   |   |   | 0.2 |   |   |   | 0.2 |   |
| Noncurrent                  liabilities |   |                              | 39.6   |   |                            |   | 107.4 |   |   |   | 29.0 |   |   |   | 79.1 |   |
| Net                  liability          |   | $                                 | 42.5   |   |                            | $      | 110.8 |   |   | $ | 26.6 |   |   | $ | 79.3 |   |

----

|                                                        |   | December 31, |   |
|-------------------------------------------------------------|--------|-------------------|--------|
| (Millions)                                                  |   | 2007              |   |   | 2006 |   |
| Projected                  benefit obligation               |   | $                 | 35.7   |   |   | $ | 31.8 |   |
| Accumulated                  benefit obligation             |   |              | 32.9   |   |   |   | 29.7 |   |
| Fair                  value of                  plan assets |   |              | -      |   |   |   | - |   |

|                                                          |   | Pension                  Benefits |   |   | Other                  Benefits |   |
|---------------------------------------------------------------|--------|-----------------------------------|--------|--------|---------------------------------|--------|
| (Millions)                                                    |   | 2007                              |   |   | 2006                            |   |   | 2007 |   |   | 2006 |   |
| Regulatory                  assets                            |   |                              |   |   |                            |   |   |   |   |   |   |   |
| Net                  actuarial                  loss (gain)   |   | $                                 | (20.4  | )      |                            | $      | 37.5 |   |   | $ | (15.5 | ) |   | $ | 12.0 |   |
| Prior                  service                  cost (credit) |   |                              | 26.3   |   |                            |   | 30.9 |   |   |   | (31.4 | ) |   |   | (13.1 | ) |
| Transition                  obligation                        |   |                              | -      |   |                            |   | - |   |   |   | 1.1 |   |   |   | 2.3 |   |
|                                                          |   | $                                 | 5.9    |   |                            | $      | 68.4 |   |   | $ | (45.8 | ) |   | $ | 1.2 |   |

|                                                         |   | Pension                  Benefits |   |   | Other                  Benefits |   |
|--------------------------------------------------------------|--------|-----------------------------------|--------|--------|---------------------------------|--------|
| (Millions)                                                   |   | 2007                              |   |   | 2006                            |   |   | 2005 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Net                  periodic benefit cost                   |   |                              |   |   |                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service                  cost                                |   | $                                 | 18.0   |   |                            | $      | 18.4 |   |   | $ | 19.3 |   |   | $ | 6.1 |   |   | $ | 6.5 |   |   | $ | 7.5 |   |
| Interest                  cost                               |   |                              | 34.4   |   |                            |   | 32.8 |   |   |   | 33.5 |   |   |   | 13.2 |   |   |   | 14.2 |   |   |   | 15.0 |   |
| Expected                  return on plan assets              |   |                              | (40.2  | )      |                            |   | (36.1 | ) |   |   | (38.4 | ) |   |   | (13.2 | ) |   |   | (12.8 | ) |   |   | (12.1 | ) |
| Amortization                  of transition obligation       |   |                              | -      |   |                            |   | 0.2 |   |   |   | 0.2 |   |   |   | 0.3 |   |   |   | 0.4 |   |   |   | 0.4 |   |
| Amortization                  of prior service cost (credit) |   |                              | 4.6    |   |                            |   | 4.7 |   |   |   | 4.8 |   |   |   | (2.3 | ) |   |   | (1.9 | ) |   |   | (1.9 | ) |
| Amortization                  of net loss                    |   |                              | 3.0    |   |                            |   | 6.7 |   |   |   | 5.8 |   |   |   | 0.8 |   |   |   | 3.9 |   |   |   | 4.7 |   |
| Curtailment                  gain                            |   |                              | -      |   |                            |   | - |   |   |   | - |   |   |   | (0.1 | ) |   |   | - |   |   |   | - |   |
| Net                  periodic                  benefit cost  |   | $                                 | 19.8   |   |                            | $      | 26.7 |   |   | $ | 25.2 |   |   | $ | 4.8 |   |   | $ | 10.3 |   |   | $ | 13.6 |   |

|                                                                          |   | Pension                  Benefits |   |   | Other                  Benefits |   |
|-------------------------------------------------------------------------------|--------|-----------------------------------|--------|--------|---------------------------------|--------|
|                                                                          |   | 2007                              |   |   | 2006                            |   |   | 2005 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Discount                  rate                  for benefit obligations       |   |                              | 6.40   | %      |                            |   | 5.87 | % |   |   | 5.65 | % |   |   | 6.50 | % |   |   | 5.87 | % |   |   | 5.65 | % |
| Discount                  rate                  for net periodic benefit cost |   |                              | 5.87   | %      |                            |   | 5.65 | % |   |   | 5.75 | % |   |   | 5.87 | % |   |   | 5.65 | % |   |   | 5.75 | % |
| Expected                  return on assets                                    |   |                              | 8.50   | %      |                            |   | 8.50 | % |   |   | 8.50 | % |   |   | 8.50 | % |   |   | 8.50 | % |   |   | 8.50 | % |
| Rate                  of                  compensation increase               |   |                              | 5.50   | %      |                            |   | 5.50 | % |   |   | 5.50 | % |   |   | - |   |   |   | - |   |   |   | - |   |

----

|                                                            |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|-----------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Assumed                  medical cost trend rate (under age 65) |   |   | 8.0    | %      |   |   | 9.0    | %      |   |   | 10.0 | % |
| Ultimate                  trend rate                            |   |   | 5.0    | %      |   |   | 5.0    | %      |   |   | 5.0 | % |
| Ultimate                  trend rate reached in                 |   | 2010   |   |   | 2010   |   |   | 2010   |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Assumed                  medical cost trend rate (over age 65)  |   |   | 10.0   | %      |   |   | 11.0   | %      |   |   | 12.0 | % |
| Ultimate                  trend rate                            |   |   | 6.5    | %      |   |   | 6.5    | %      |   |   | 6.5 | % |
| Ultimate                  trend rate reached in                 |   | 2011   |   |   | 2011   |   |   | 2011   |   |
|                                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Assumed                  dental cost trend rate                 |   |   | 5.0    | %      |   |   | 5.0    | %      |   |   | 5.0 | % |

| (Millions)                                                                                                                                                         |   | 1%                  Increase |   |   | 1%                  Decrease |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|--------|--------|------------------------------|--------|
| Effect                  on                  total of service and interest cost components of net periodic                  postretirement health care benefit cost |   | $                            | 2.9    |   |                         | $      | (2.6 | ) |
| Effect                  on the                  health care component of theaccumulated                  postretirement benefit obligation                         |   | $                            | 26.5   |   |                         | $      | (21.5 | ) |

|                               |   | Pension                  Plan Assets at December 31, |   |   | Postretirement                  Plan Assets at December 31, |   |
|------------------------------------|--------|-----------------------------------------------------------|--------|--------|------------------------------------------------------------------|--------|
| Asset                  category    |   | 2007                                                      |   |   | 2006                                                             |   |   | 2007 |   |   | 2006 |   |
| Equity                  securities |   |                                                      | 59     | %      |                                                             |   | 60 | % |   |   | 62 | % |   |   | 61 | % |
| Debt                  securities   |   |                                                      | 35     | %      |                                                             |   | 35 | % |   |   | 38 | % |   |   | 39 | % |
| Real                  estate       |   |                                                      | 6      | %      |                                                             |   | 5 | % |   |   | 0 | % |   |   | 0 | % |
| Total                              |   |                                                      | 100    | %      |                                                             |   | 100 | % |   |   | 100 | % |   |   | 100 | % |

----

| (Millions) |   | Pension                  Benefits |   |   | Other                  Benefits |   |   | Federal                  Subsidies |   |
|------------|--------|-----------------------------------|--------|--------|---------------------------------|--------|--------|------------------------------------|--------|
| 2008       |   |                              | 46.4   |   |                            |   | 13.2   |                               |   |   | 1.1 |   |
| 2009       |   |                              | 47.5   |   |                            |   | 14.2   |                               |   |   | 1.2 |   |
| 2010       |   |                              | 51.3   |   |                            |   | 15.1   |                               |   |   | 1.3 |   |
| 2011       |   |                              | 51.7   |   |                            |   | 16.1   |                               |   |   | 1.4 |   |
| 2012       |   |                              | 54.4   |   |                            |   | 16.8   |                               |   |   | 1.5 |   |
| 2013-2017  |   |                              | 312.9  |   |                            |   | 95.2   |                               |   |   | 8.4 |   |

|                                              |   |   |   |   | 2007                                |   |    | 2006                            |   |
|---------------------------------------------------|--------|--------|--------|--------|-------------------------------------|--------|---------|---------------------------------|--------|
| (Millions,                  except share amounts) |   | Series |   |   | Shares                  Outstanding |   |    | Carrying                  Value |   |   | Shares                  Outstanding |   |   | Carrying                  Value |   |
|                                              |   |   | 5.00   | %      |                                |   | 131,916 |                            |   | $ | 13.2 |   |   |   | 131,916 |   |   | $ | 13.2 |   |
|                                              |   |   | 5.04   | %      |                                |   | 29,983  |                            |   |   | 3.0 |   |   |   | 29,983 |   |   |   | 3.0 |   |
|                                              |   |   | 5.08   | %      |                                |   | 49,983  |                            |   |   | 5.0 |   |   |   | 49,983 |   |   |   | 5.0 |   |
|                                              |   |   | 6.76   | %      |                                |   | 150,000 |                            |   |   | 15.0 |   |   |   | 150,000 |   |   |   | 15.0 |   |
|                                              |   |   | 6.88   | %      |                                |   | 150,000 |                            |   |   | 15.0 |   |   |   | 150,000 |   |   |   | 15.0 |   |
| Total                                             |   |   |   |   |                                |   | 511,882 |                            |   | $ | 51.2 |   |   |   | 511,882 |   |   | $ | 51.2 |   |

----

----

|                                         |   | 2007                     |   |   | 2006                     |   |   | 2005                     |   |
|----------------------------------------------|--------|--------------------------|--------|--------|--------------------------|--------|--------|--------------------------|--------|
| Weighted-average                  fair value |   | $                        | 7.80   |   |                     | $      | 6.04   |                     |   | $ | 4.40 |   |
| Expected                  term               |   | 7                  years |   |   | 6                  years |   |   | 6                  years |   |
| Risk-free                  interest rate     |   |                     | 4.65   | %      |                     |   | 4.42   | %                        |   |   | 4.38 | % |
| Expected                  dividend yield     |   |                     | 4.50   | %      |                     |   | 4.90   | %                        |   |   | 4.73 | % |
| Expected                  volatility         |   |                     | 17     | %      |                     |   | 17     | %                        |   |   | 12 | % |

|                                     |   | 2007                     |   |   | 2006                     |   |
|------------------------------------------|--------|--------------------------|--------|--------|--------------------------|--------|
| Expected                  term           |   | 3                  years |   |   | 3                  years |   |
| Risk-free                  interest rate |   |                     | 4.71   | %      |                     |   | 4.74 | % |
| Expected                  dividend yield |   |                     | 4.50   | %      |                     |   | 4.90 | % |
| Expected                  volatility     |   |                     | 14.50  | %      |                     |   | 14.40 | % |

----

| ·   | WPSC                  will not                  have a base rate increase for natural gas or electric service prior                  to                  January 1, 2009.  WPSC was allowed to adjust rates for                  changes in purchased power costs as well as fuel costs related                  to electric                  generation due to changes in the NYMEX natural gas futures prices,                  coal                  prices, and transportation costs for coal.  WPSC made this fuel                  and purchased power cost filing on August 14, 2007, requesting                  an increase                  of $33.3 million (3.6%).  The August 14, 2007 fuel and                  purchased power cost filing included recovery of the increased                  electric                  transmission costs and recovery of deferred MISO Day 2 costs over                  three                  years.  The PSCW granted a proposed increase effective January                  16, 2008 which reflected updated fuel and purchased power cost                  information.  The final rate order issued on January 15, 2008                  allowed for a $23 million (2.5%) retail electric rate increase                  and                  included recovery of deferred 2005 and 2006 MISO Day 2 costs over                  a                  one-year period and increased transmission                  costs. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | WPSC                  was                  required to seek approval for the formation of a service company                  within                  120 days of the closing of the merger.  On June 8, 2007,                  Integrys Energy Group and its regulated utilities filed applications                  with                  the Illinois Commerce Commission (ICC), PSCW, Minnesota Public                  Utility                  Commission (MPUC), and MPSC seeking the necessary regulatory approvals                  or                  waivers associated with the formation and operation of the service                  company.  All required regulatory approvals were received and                  Integrys Business Support, LLC became an operational centralized                  service                  company on January 1, 2008. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | WPSC                  will not                  recover merger related transaction costs. Recovery of merger related                  transition costs in 2009 and later years will be limited to the                  verified                  synergy savings in those years. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | WPSC                  will                  hold ratepayers harmless from any increase in interest and preferred                  stock                  costs attributable to nonutility activities, provided that the                  authorized                  capital structure is consistent with the authorized                  costs. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | WPSC                  will not                  pay dividends to Integrys Energy Group in an amount greater than                  103% of                  the prior year's dividend. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | The                  PSCW                  ruled that WPSC's Wisconsin customers were entitled to be refunded                  approximately 85% of the proceeds over a two-year period beginning                  on                  January 1, 2006. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                  MPSC                  ruled that WPSC's Michigan customers were entitled to be refunded                  approximately 2% of the proceeds over a 60-month period, beginning                  in the                  third quarter of 2005.  Subsequently, the MPSC issued an order                  authorizing WPSC to amortize the approximately $2 million remaining                  balance of the refund simultaneously with the amortization of                  approximately $2 million of the 2005 power supply under collections                  from January 2007 through July                  2010. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                  FERC                  ruled that WPSC's wholesale customers were entitled to be refunded                  the                  remaining 13% of the proceeds.  A refund of approximately                  $3 million was made to one customer in the second quarter of 2006,                  which was offset by approximately $1 million related to both the loss                  WPSC recorded on the sale of Kewaunee and costs incurred related                  to the                  2005 Kewaunee outage. Pursuant to the FERC order settlement received                  on                  August 14, 2007, WPSC completed lump-sum payments to the remaining                  FERC                  customers of approximately $16 million (including interest),                  representing their contributions to the nonqualified decommissioning                  trust                  fund during the period in which they received service from                  WPSC.  The settlement also required these FERC customers to make                  two separate lump-sum payments to WPSC with respect to the loss                  from the                  sale of Kewaunee and the 2005 Kewaunee power outage.  Payments                  made to WPSC total approximately $1 million and $8 million,                  respectively, and were netted against the $16 million refund due to                  these customers. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                    |   |                                 |    |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
|-------------------------------------------------------------------------|--------|--------------------------------------|---------|--------|----------------------------------------|--------|--------|--------------|--------|--------|----------|--------|--------|-------------------------------------------|--------|--------|------------------|--------|
| Segments                  of Business                                   |   |                                 |    |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
| (Millions)                                                              |   |                                 |    |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
|                                                                    |   | Regulated                  Utilities |    |   |                                   |   |   |         |   |   |     |   |
| 2007                                                                    |   | ElectricUtility(1)                   |    |   | Natural                  GasUtility(1) |   |   | TotalUtility |   |   | Other(2) |   |   | Reconciling                  Eliminations |   |   | WPSCConsolidated |   |
|                                                                    |   |                                 |    |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
| Income                  Statement                                       |   |                                 |    |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
| Operating                  revenues                                     |   | $                                    | 1,125.2 |   |                                   | $      | 471.0  |         |   | $      | 1,596.2  |   |   | $                                         | 1.3    |   |             |   | (1.4 | ) |   | $ | 1,596.1 |   |
| Depreciation                                                            |   |                                 | 74.4    |   |                                   |   | 22.1   |         |   |   | 96.5     |   |   |                                      | 0.4    |   |             |   | (0.5 | ) |   |   | 96.4 |   |
| Other                  income, excluding                  taxes         |   |                                 | 6.2     |   |                                   |   | 0.4    |         |   |   | 6.6      |   |   |                                      | 11.0   |   |             |   | - |   |   |   | 17.6 |   |
| Interest                  expense                                       |   |                                 | 29.5    |   |                                   |   | 11.1   |         |   |   | 40.6     |   |   |                                      | 2.9    |   |             |   | - |   |   |   | 43.5 |   |
| Income                  taxes                                           |   |                                 | 48.2    |   |                                   |   | 16.7   |         |   |   | 64.9     |   |   |                                      | 1.9    |   |             |   | - |   |   |   | 66.8 |   |
| Preferred                  stock dividend                  requirements |   |                                 | 2.2     |   |                                   |   | 0.9    |         |   |   | 3.1      |   |   |                                      | -      |   |             |   | - |   |   |   | 3.1 |   |
| Earnings                  on common stock                               |   |                                 | 80.1    |   |                                   |   | 23.1   |         |   |   | 103.2    |   |   |                                      | 7.0    |   |             |   | - |   |   |   | 110.2 |   |
| Total                  assets                                           |   |                                 | 2,279.9 |   |                                   |   | 623.4  |         |   |   | 2,903.3  |   |   |                                      | 114.3  |   |             |   | - |   |   |   | 3,017.6 |   |
| Cash                  expenditures for long-lived assets                |   |                                 | 191.2   |   |                                   |   | 29.9   |         |   |   | 221.1    |   |   |                                      | -      |   |             |   | - |   |   |   | 221.1 |   |

| (1)   | Includes                  only                  utility operations. |
|-----------------|---------------------------------------------------------------------|

| (2)   | Nonutility                  operations are included in the Other                  column. |
|-----------------|-------------------------------------------------------------------------------------------|

|                                                                    |   |                                 |    |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
|-------------------------------------------------------------------------|--------|--------------------------------------|---------|--------|----------------------------------------|--------|--------|--------------|--------|--------|----------|--------|--------|-------------------------------------------|--------|--------|------------------|--------|
| Segments                  of Business                                   |   |                                 |    |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
| (Millions)                                                              |   |                                 |    |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
|                                                                    |   | Regulated                  Utilities |    |   |                                   |   |   |         |   |   |     |   |
| 2006                                                                    |   | ElectricUtility(1)                   |    |   | Natural                  GasUtility(1) |   |   | TotalUtility |   |   | Other(2) |   |   | Reconciling                  Eliminations |   |   | WPSCConsolidated |   |
|                                                                    |   |                                 |    |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
| Income                  Statement                                       |   |                                 |    |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
| Operating                  revenues                                     |   | $                                    | 990.6   |   |                                   | $      | 443.8  |         |   | $      | 1,434.4  |   |   | $                                         | 1.4    |   |             |   | (1.4 | ) |   | $ | 1,434.4 |   |
| Depreciation                                                            |   |                                 | 73.2    |   |                                   |   | 22.6   |         |   |   | 95.8     |   |   |                                      | 0.5    |   |             |   | (0.5 | ) |   |   | 95.8 |   |
| Other                  income, excluding                  taxes         |   |                                 | 2.6     |   |                                   |   | 0.4    |         |   |   | 3.0      |   |   |                                      | 12.8   |   |             |   | - |   |   |   | 15.8 |   |
| Interest                  expense                                       |   |                                 | 26.9    |   |                                   |   | 10.4   |         |   |   | 37.3     |   |   |                                      | 3.1    |   |             |   | - |   |   |   | 40.4 |   |
| Income                  taxes                                           |   |                                 | 46.9    |   |                                   |   | 8.8    |         |   |   | 55.7     |   |   |                                      | 2.6    |   |             |   | - |   |   |   | 58.3 |   |
| Preferred                  stock dividend                  requirements |   |                                 | 2.1     |   |                                   |   | 1.0    |         |   |   | 3.1      |   |   |                                      | -      |   |             |   | - |   |   |   | 3.1 |   |
| Earnings                  on common stock                               |   |                                 | 81.3    |   |                                   |   | 9.6    |         |   |   | 90.9     |   |   |                                      | 8.1    |   |             |   | - |   |   |   | 99.0 |   |
| Total                  assets                                           |   |                                 | 2,179.2 |   |                                   |   | 661.2  |         |   |   | 2,840.4  |   |   |                                      | 116.2  |   |             |   | - |   |   |   | 2,956.6 |   |
| Cash                  expenditures for long-lived assets                |   |                                 | 268.4   |   |                                   |   | 34.5   |         |   |   | 302.9    |   |   |                                      | -      |   |             |   | - |   |   |   | 302.9 |   |

| (1)   | Includes                  only                  utility operations. |
|-----------------|---------------------------------------------------------------------|

| (2)   | Nonutility                  operations are included in the Other                  column. |
|-----------------|-------------------------------------------------------------------------------------------|

|                                                                    |   |                                 |   |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
|-------------------------------------------------------------------------|--------|--------------------------------------|--------|--------|----------------------------------------|--------|--------|--------------|--------|--------|----------|--------|--------|-------------------------------------------|--------|--------|------------------|--------|
| Segments                  of Business                                   |   |                                 |   |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
| (Millions)                                                              |   |                                 |   |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
|                                                                    |   | Regulated                  Utilities |   |   |                                   |   |   |         |   |   |     |   |
| 2005                                                                    |   | ElectricUtility(1)                   |   |   | Natural                  GasUtility(1) |   |   | TotalUtility |   |   | Other(2) |   |   | Reconciling                  Eliminations |   |   | WPSCConsolidated |   |
|                                                                    |   |                                 |   |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
| Income                  Statement                                       |   |                                 |   |   |                                   |   |   |         |   |   |     |   |   |                                      |   |   |             |   |
| Operating                  revenues                                     |   | $                                    | 932.9  |   |                                   | $      | 522.0  |         |   | $      | 1,454.9  |   |   | $                                         | 1.4    |   |             |   | (1.4 | ) |   | $ | 1,454.9 |   |
| Depreciation                  and                  decommissioning      |   |                                 | 115.4  |   |                                   |   | 19.5   |         |   |   | 134.9    |   |   |                                      | 0.5    |   |             |   | (0.5 | ) |   |   | 134.9 |   |
| Other                  income, excluding                  taxes         |   |                                 | 51.8   |   |                                   |   | 0.7    |         |   |   | 52.5     |   |   |                                      | 12.1   |   |             |   | - |   |   |   | 64.6 |   |
| Interest                  expense                                       |   |                                 | 24.6   |   |                                   |   | 8.7    |         |   |   | 33.3     |   |   |                                      | 2.6    |   |             |   | - |   |   |   | 35.9 |   |
| Income                  taxes                                           |   |                                 | 36.1   |   |                                   |   | 7.3    |         |   |   | 43.4     |   |   |                                      | 0.7    |   |             |   | - |   |   |   | 44.1 |   |
| Preferred                  stock dividend                  requirements |   |                                 | 2.0    |   |                                   |   | 1.1    |         |   |   | 3.1      |   |   |                                      | -      |   |             |   | - |   |   |   | 3.1 |   |
| Earnings                  on common stock                               |   |                                 | 60.7   |   |                                   |   | 13.2   |         |   |   | 73.9     |   |   |                                      | 7.5    |   |             |   | - |   |   |   | 81.4 |   |
| Cash                  expenditures for long-lived assets                |   |                                 | 363.9  |   |                                   |   | 36.4   |         |   |   | 400.3    |   |   |                                      | -      |   |             |   | - |   |   |   | 400.3 |   |

| (1)   | Includes                  only                  utility operations. |
|-----------------|---------------------------------------------------------------------|

| (2)   | Nonutility                  operations are included in the Other                  column. |
|-----------------|-------------------------------------------------------------------------------------------|

----

| (Millions)                                                 |   | Three                  Months Ended |
|------------------------------------------------------------|--------|-------------------------------------|
|                                                       |   | 2007                                |
|                                                       |   |                                | March  |   |   | June  |   |   | September  |   |   |   | December  |   |   |   | Total  |   |
| Operating                  revenues                        |   | $                                   | 459.6 |   | $ | 353.5 |   | $ | 365.8 |   |   | $ | 417.2 |   |   | $ | 1,596.1 |   |
| Operating                  income                          |   |                                | 60.5 |   |   | 28.9 |   |   | 61.5 |   |   |   | 55.1 |   |   |   | 206.0 |   |
| Earnings                  on                  common stock |   |                                | 32.2 |   |   | 13.8 |   |   | 33.6 |   |   |   | 30.6 |   |   |   | 110.2 |   |
|                                                       |   |                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                       |   | 2006                                |
|                                                       |   |                                | March  |   |   | June  |   |   | September  |   |   |   | December  |   |   |   | Total  |   |
| Operating                  revenues                        |   | $                                   | 422.4 |   | $ | 306.9 |   | $ | 335.1 |   |   | $ | 370.0 |   |   | $ | 1,434.4 |   |
| Operating                  income                          |   |                                | 48.9 |   |   | 42.8 |   |   | 52.4 |   |   |   | 40.9 |   |   |   | 185.0 |   |
| Earnings                  on                  common stock |   |                                | 26.2 |   |   | 25.1 |   |   | 26.2 |   |   |   | 21.5 |   |   |   | 99.0 |   |

| (Millions)                                                              |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|-------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| UPPCO                                                                   |   |   |   |   |   |   |   |   |   |
|     Electric                  purchase from WPSC    |   | $      | 43.0   |   |   | $      | 40.6   |   |   | $ | 33.5 |   |
|     Electric                  sale to WPSC          |   |   | -      |   |   |   | 0.8    |   |   |   | 28.0 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Integrys                  Energy Services                               |   |   |   |   |   |   |   |   |   |   |   |   |
|     Natural                  gas purchase from WPSC |   |   | 5.2    |   |   |   | 11.8   |   |   |   | 9.0 |   |
|     Natural                  gas sale to WPSC       |   |   | 3.2    |   |   |   | 7.3    |   |   |   | 13.6 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| WPS                  Leasing                  (1)                       |   |   |   |   |   |   |   |   |   |   |   |   |
|     Notes                  Payable                  |   |   | 10.5   |   |   |   | 11.0   |   |   |   | 11.5 |   |
|     Related                  Interest Income        |   |   | 0.9    |   |   |   | 0.9    |   |   |   | 1.0 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Intercompany                  benefit costs (2)                         |   |   |   |   |   |   |   |   |   |   |   |   |
|     Intercompany                  receivable        |   |   | 48.7   |   |   |   | 58.6   |   |   |   | 1.7 |   |
|     Intercompany                  payables          |   |   | 7.1    |   |   |   | 3.5    |   |   |   | - |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Intercompany                  income taxes (3)                          |   |   |   |   |   |   |   |   |   |   |   |   |
|     Intercompany                  payables          |   |   | 13.9   |   |   |   | 16.1   |   |   |   | 19.1 |   |
|                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  from                  WPS Investments (4)       |   |   | 8.7    |   |   |   | 9.3    |   |   |   | 7.6 |   |

| (1) | WPS Leasing                  is a consolidated subsidiary of WPSC with a note payable to WPSC's                  parent                  company, Integrys Energy Group. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | With                  the                  exception of UPPCO, MGUC, and MERC's Supplemental Employee Retirement                  Plans, the liabilities related to the qualified and non-qualified                  pension                  plans and the postretirement plans of Integrys Energy Group are                  recorded                  on WPSC's Consolidated Balance Sheets. The net periodic benefit                  cost                  associated with the plans and the portions of the funded status                  not yet                  recognized in income are allocated among Integrys Energy Group's                  subsidiaries. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (3) | Integrys                  Energy Group and its consolidated subsidiaries file a consolidated                  federal                  income tax return. The tax allocated to each subsidiary is the                  tax it                  would have paid had it filed a separate return for the tax year. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | WPS Investments                  is a consolidated subsidiary of Integrys Energy Group that is jointly                  owned by Integrys Energy Group, WPSC, and UPPCO.  At                  December 31, 2007, WPSC had a 15.85% interest in WPS Investments                  accounted for under the equity method.  WPSC's ownership                  interests have continued to decrease as additional equity contributions                  are made by Integrys Energy Group to WPS Investments. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

I.  REPORT        OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON        FINANCIAL STATEMENTS

----

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

ITEM          9A.  

ITEM          9B

----

| ITEM                    10. | DIRECTORS                    AND EXECUTIVE OFFICERS OF WISCONSIN PUBLIC SERVICE CORPORATION                    AS OF                    JANUARY 1, 2008 |
|-----------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                    and Age                           | Position                    and BusinessExperience                    During Past Five Years | EffectiveDate                                                                                                                                                                                                                                                                               |
|-----------------------------------------------------------|----------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                      |                                                                                         |                                                                                                                                                                                                                                                                                        |   |
| Lawrence                    T.                    Borgard | 46                                                                                           | President                    and                    Chief Operating Officer - Integrys Gas Group and Director of                    WPSC                                                                                                                                                    | 02-21-07 |
|                                                      |                                                                                         | President                    and                    Chief Operating Officer - Integrys Gas Group                                                                                                                                                                                            | 12-16-07 |
|                                                      |                                                                                         | President                    and                    Chief Operating Officer - Energy Delivery                                                                                                                                                                                               | 08-15-04 |
|                                                      |                                                                                         | Vice                    President                    - Distribution and Customer Service                                                                                                                                                                                                    | 11-25-01 |
|                                                      |                                                                                         |                                                                                                                                                                                                                                                                                        |   |
| Phillip                    M.                    Mikulsky | 59                                                                                           | Executive                    Vice                    President and Chief Development Officer at Integrys Energy Group                    and                    Director of WPSC                                                                                                            | 02-21-07 |
|                                                      |                                                                                         | Executive                    Vice                    President – Development at Integrys Energy Group                                                                                                                                                                                 | 09-12-04 |
|                                                      |                                                                                         | Senior                    Vice                    President – Development at Integrys Energy Group                                                                                                                                                                                    | 02-12-98 |
|                                                      |                                                                                         |                                                                                                                                                                                                                                                                                        |   |
| Thomas                    P.                    Meinz     | 61                                                                                           | Executive                    Vice                    President - External Affairs of Integrys Energy Group and Director                    of                    WPSC                                                                                                                       | 02-21-07 |
|                                                      |                                                                                         | Executive                    Vice                    President - Public Affairs                                                                                                                                                                                                             | 09-12-04 |
|                                                      |                                                                                         | Senior                    Vice                    President - Public Affairs                                                                                                                                                                                                                | 1-07-01 |
|                                                      |                                                                                         |                                                                                                                                                                                                                                                                                        |   |
| Thomas                    A.                    Nardi     | 53                                                                                           | President                    of                    IBS and Director of WPSC                                                                                                                                                                                                                 | 06-06-07 |
|                                                      |                                                                                         | Executive                    Vice                    President and Chief Financial Officer of PEC, PGL and NSGSenior                    Vice                    President and Chief Financial Officer of PEC, PGL and NSG and                    Director of                    PGL and NSG | 08-01-05 10-01-01 |
|                                                      |                                                                                         |                                                                                                                                                                                                                                                                                        |   |
| Desiree                    G.                    Rogers   | 48                                                                                           | President                    of                    PGL and NSG and Director of WPSC                                                                                                                                                                                                         | 02-21-07 |
|                                                      |                                                                                         | President                    and                    Director of PGL and NSGSenior                    Vice                    President of PGL and NSG                                                                                                                                       | 07-08-0410-01-01 |
|                                                      |                                                                                         |                                                                                                                                                                                                                                                                                        |   |
| Larry                    L.                    Weyers     | 62                                                                                           | President                    and                    Chief Executive Officer of Integrys Energy Group and Chairman                    and Director                    of WPSC                                                                                                                | 02-21-07 |
|                                                      |                                                                                         | Chairman,                    President and Chief Executive Officer                                                                                                                                                                                                                          | 12-31-06 |
|                                                      |                                                                                         | Chairman                    and                    Chief Executive Officer                                                                                                                                                                                                                  | 08-15-04 |
|                                                      |                                                                                         | Chairman,                    President and Chief Executive Officer                                                                                                                                                                                                                          | 04-14-02 |
|                                                      |                                                                                         | Chairman                    and                    Chief Executive Officer                                                                                                                                                                                                                  | 02-12-98 |
|                                                      |                                                                                         |                                                                                                                                                                                                                                                                                        |   |
| Charles                    A.                    Schrock  | 54                                                                                           | President                    and                    Director of WPSC                                                                                                                                                                                                                        | 02-21-07 |
|                                                      |                                                                                         | President                    and                    Chief Operating Officer - Generation                                                                                                                                                                                                    | 08-15-04 |
|                                                      |                                                                                         | Senior                    Vice                    President of WPS Resources Corporation                                                                                                                                                                                               | 09-14-03 |
|                                                      |                                                                                         | President                    of                    WPS Power Development, Inc.                                                                                                                                                                                                         | 11-11-01 |
|                                                      |                                                                                         |                                                                                                                                                                                                                                                                                        |   |
| Joseph                    P.                    O'Leary   | 53                                                                                           | Senior                    Vice                    President and Chief Financial Officer of Integrys Energy Group                    and WPSC                    and Director of WPSC                                                                                                        | 02-21-07 |
|                                                      |                                                                                         | Senior                    Vice                    President and Chief Financial Officer                                                                                                                                                                                                     | 06-04-01 |
|                                                      |                                                                                         |                                                                                                                                                                                                                                                                                        |   |
| Diane                    L.                    Ford       | 54                                                                                           | Vice                    President                    and Corporate Controller of Integrys Energy Group and WPSC                                                                                                                                                                             | 02-21-07 |
|                                                      |                                                                                         | Vice                    President                    - Controller and Chief Accounting Officer                                                                                                                                                                                              | 07-11-99 |
|                                                      |                                                                                         |                                                                                                                                                                                                                                                                                        |   |
| Bradley                    A.                    Johnson  | 53                                                                                           | Vice                    President                    and Treasurer of Integrys Energy Group and Treasurer of                    WPSC                                                                                                                                                        | 02-21-07 |
|                                                      |                                                                                         | Vice                    President                    and Treasurer                                                                                                                                                                                                                          | 07-18-04 |
|                                                      |                                                                                         | Treasurer                                                                                                                                                                                                                                                                                   | 06-23-02 |
|                                                      |                                                                                         | Assistant                    Treasurer                                                                                                                                                                                                                                                      | 04-01-01 |

----

|                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                           |     |
|-----------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| Barth                    J.                    Wolf | 50                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | Vice                    President                    - Chief Legal Officer, and Secretary of Integrys Energy Group                    and                    Secretary of WPSC | 07-31-07 |
|                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Vice                    President                    - Legal Services and Chief Compliance Officer of IBS                                                                      | 02-21-07 |
|                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Secretary                    and                    Manager - Legal Services                                                                                                   | 09-19-99 |
|                                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| NOTE:                                               | All                    ages are                    as of December 31, 2007.  None of the executives listed                    above are related by blood, marriage, or adoption to any of the                    other                    officers listed or to any director of the Registrant.  Each                    officer holds office until his or her successor has been duly                    elected and                    qualified, or until his or her death, resignation, disqualification,                    or                    removal. |

ITEM          11. 

----

|                                                               |   | Payout                    Levels(as                    a percent of adjustedgross                    base                    salary) |   |   | Measurement                    Weightings(as                    a percent of total                    payout) |   |
|--------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------|--------|
| Named                    Executive Officer                         |   | Threshold                                                                                                                            |   |   | Target                                                                                                        |   |   | Superior |   |   | Net                    Income |   |   | Operational                    Measures |   |
| Charles                    A.                    Schrock (3)  |   |                                                                                                                                 | 22.5   |   |                                                                                                          |   | 45 |   |   |   | 90 |   |   |   | 2550 | (1)(2) |   |   | 25 | (1) |
|                                                               |   |                                                                                                                                 |   |   |                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diane                    L.                    Ford                |   |                                                                                                                                 | 22.5   |   |                                                                                                          |   | 45 |   |   |   | 90 |   |   |   | 75 | (1) |   |   | 25 | (1) |
| Barth                    J. Wolf                    (3)            |   |                                                                                                                                 | 22.5   |   |                                                                                                          |   | 45 |   |   |   | 90 |   |   |   | 75 | (1) |   |   | 25 | (1) |
| Bradley                    A.                    Johnson           |   |                                                                                                                                 | 20     |   |                                                                                                          |   | 40 |   |   |   | 80 |   |   |   | 75 | (1) |   |   | 25 | (1) |

| (1)   | Integrys                    Energy Group |
|-----------------|------------------------------------------|

| (2)   | WPSC |
|-----------------|------|

| (3)   | Mr.                    Schrock                    and Mr. Wolf were also subject to modifiers that could increase                    or                    decrease normal calculated payout levels by up to 50%.  For Mr.                    Schrock the modifier was predicated on synergy savings resulting                    from the                    Peoples Energy merger, and for Mr. Wolf the modifier was predicated                    on                    Integrys Business Support, LLC timely obtaining required regulatory                    approvals and reasonable treatment from four state commissions                    and                    business unit satisfaction of service                    levels. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Named                    Executive Officer               |   | Annual                    Percentage Credit Earned in 2007 |   |   | Accumulated                    Total Service Credits Earned as ofDecember 31,                    2007 |   |
|----------------------------------------------------------|--------|------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------------------------|--------|
| Charles                    A.                    Schrock |   |                                                       | 15     | %      |                                                                                                       |   | 439 | % |
| Diane                    L.                    Ford      |   |                                                       | 15     | %      |                                                                                                       |   | 496 | % |
| Barth                    J.                    Wolf      |   |                                                       | 12     | %      |                                                                                                       |   | 286 | % |
| Bradley                    A.                    Johnson |   |                                                       | 15     | %      |                                                                                                       |   | 423 | % |

----

| Named                    Executive Officer               |   | Life                    Insurance Coverage ($) |    |
|----------------------------------------------------------|--------|------------------------------------------------|---------|
| Charles                    A.                    Schrock |   |                                           | 945,000 |   |
| Diane                    L.                    Ford      |   |                                           | 500,000 |   |
| Barth                    J.                    Wolf      |   |                                           | 871,000 |   |
| Bradley                    A.                    Johnson |   |                                           | 720,000 |   |

----

| Name                    andPrincipal                    Position                                                                                                                     | Year     | Salary                    ($)(1) | Bonus($)    | Stock                    Awards ($)(2) | Option                    Awards ($)(3) | Non-Equity                    Incentive Plan Compensa-tion($)(4) | Change                    in Pension Value and Nonqualified Deferred Compensa-tion Earnings                    ($)(5) | All                    Other Compensation(6) | Total($)       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|----------------------------------|-------------|----------------------------------------|-----------------------------------------|------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------|----------------------------------------------|----------------|
| (a)                                                                                                                                                                                  | (b)      | (c)                              | (d)         | (e)                                    | (f)                                     | (g)                                                              | (h)                                                                                                                   | (i)                                          | (j)            |
| Charles                    A.                    Schrock    President                                                                                            | 20072006 | 295,481263,700                   | 2,750-      | 158,79395,204                          | 142,74486,477                           | 183,87523,510                                                    |     95,956103,399                                                                                 | 16,56716,091                                 | 896,166588,381 |
|                                                                                                                                                                                 |     |                             |        |                                   |                                    |                                                             |                                                                                                                  |                                         |           |
| Diane                    L.                    Ford   Vice                    President   and                    Corporate   Controller | 2007     | 231,288                          |  2,100 |   84,194                     | 68,856                                  | 123,929                                                          | 74,968                                                                                                                | 14,714                                       | 600,049        |
|                                                                                                                                                                                 |     |                             |        |                                   |                                    |                                                             |                                                                                                                  |                                         |           |
| Barth                    J.                    Wolf    Secretary                                                                                                 | 2007     | 233,038                          | 1,950       | 50,210                                 | 32,259                                  | 171,571                                                          | 44,886                                                                                                                | 15,202                                       | 549,116        |
|                                                                                                                                                                                 |     |                             |        |                                   |                                    |                                                             |                                                                                                                  |                                         |           |
| Bradley                    A.                    Johnson    Treasurer                                                                                            | 2007     | 220,327                          | 1,950       | 58,847                                 | 45,595                                  | 104,915                                                          | 74,088                                                                                                                | 14,893                                       | 520,615        |

| (1)   | Includes                    amounts deferred into the Deferred Compensation Plan.  See the                    Nonqualified Deferred Compensation table for more                    information. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Amounts                    shown                    in column (e) reflect the dollar value of the compensation cost                    of all                    outstanding stock awards recognized over the requisite service                    period,                    computed in accordance with SFAS No. 123(R).  For information                    regarding assumptions made in valuing stock awards see Note 21,                    "Stock Based                    Compensation." |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Amounts                    shown                    in column (f) reflect the dollar value of the compensation cost                    of all                    outstanding option awards recognized over the requisite service                    period,                    computed in accordance with SFAS No. 123(R).  For information                    regarding assumptions made in valuing stock option awards see                    Note 21,                    "Stock Based                    Compensation." |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Non-equity                    incentive compensation is payable annually in the first quarter                    of the                    next fiscal year following the year in which it was earned, and                    may be                    deferred at the election of the named executive                    officer.  Payment is calculated based on the measurement                    outcomes and as a percent of adjusted gross earnings from the                    company for                    services performed during the payroll year.  Various                    extraordinary payments and the prior year payout are excluded                    in the                    calculation. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | The                    calculation of above-market earnings on non-qualified deferred                    compensation is based on the difference between 120% of the applicable                    federal long-term rate (AFR) and the rate of return received                    on Reserve                    Accounts A and B.  Provided below are the actual rates of return                    used in the calculation: |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Time                    Period                 | AFR                         120% | Res                    A - Daily | Res                    B - Daily |
|------------------------------------------------|----------------------------------|----------------------------------|----------------------------------|
| October                    2006 - March 2007   | 6.04%                            | 11.2459%                         | 8.0029%                          |
| April                    2007 - September 2007 | 5.78%                            | 11.6024%                         | 8.2604%                          |
| October                    2007 - March 2008   | 5.86%                            |   5.8555%              | 5.8273%                          |

----

| (6)   | Reflects                    life                    insurance premiums and imputed income from the life insurance                    benefit, tax                    reimbursements, ESOP matching contributions (see below), restricted                    stock                    dividends, and perquisites.  Perquisites include payments for                    executive physicals.  For perquisites related to Mr. O' Leary,                    see the Proxy Statement under the caption "Executive Compensation–                    Summary Compensation Table." |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Named                    Executive Officer               |   | ESOP                    ($) |   |
|----------------------------------------------------------|--------|-----------------------------|--------|
| Charles                    A.                    Schrock |   |                        | 10,909 |   |
| Diane                    L.                    Ford      |   |                        | 10,267 |   |
| Barth                    J.                    Wolf      |   |                        | 10,836 |   |
| Bradley                    A.                    Johnson |   |                        | 9,243  |   |

| Name                                                     | Grant                    Date | Estimated                    Future Payouts Under Non-Equity Incentive Plan AwardsAnnual                    Incentive Plan (1) | Estimated                    Future Payouts Under Equity Incentive Plan AwardsPerformance                    Share Program | All                    Other Stock Awards:  Number of Shares of Stock or Units                    (#)Restricted                    Stock Program | All                    Other Option Awards:  Number of Securities Underlying Options                    (#)Stock                    Option Program | Exercise                    or Base Price Option Awards ($/Sh) | Grant                    Date Fair Value of Stock and Option Awards($)                    (2) |
|----------------------------------------------------------|-------------------------------|--------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------|-----------------------------------------------------------------------------------------------|
| Threshold                    ($)                         | Target($)                     | Maximum                    ($)                                                                                                 | Threshold                    (#)                                                                                           | Target                    (#)                                                                                                                              | Maximum                    (#)                                                                                                                               |
| (a)                                                      | (b)                           | (c)                                                                                                                            | (d)                                                                                                                        | (e)                                                                                                                                                        | (f)                                                                                                                                                          | (g)                                                            | (h)                                                                                           | (i) | (j) | (k) | (l) |
| Charles                    A.                    Schrock | 2007                          | 67,500                                                                                                                         | 135,000                                                                                                                    | 270,000                                                                                                                                                    |                                                                                                                                                         |                                                           |                                                                                          |   |   |   |   |
| 5/17/07                                                  |                          |                                                                                                                           |                                                                                                                       | 177                                                                                                                                                        | 354                                                                                                                                                          | 708                                                            |                                                                                          |   |   | 18,450 |
| 5/17/07                                                  |                          |                                                                                                                           |                                                                                                                       |                                                                                                                                                       |                                                                                                                                                         |                                                           | 133                                                                                           |   |   | 7,800 |
| 5/17/07                                                  |                          |                                                                                                                           |                                                                                                                       |                                                                                                                                                       |                                                                                                                                                         |                                                           |                                                                                          | 2,050 | 58.65 | 15,990 |
| Diane                    L.                    Ford      | 2007                          | 52,875                                                                                                                         | 105,750                                                                                                                    | 211,500                                                                                                                                                    |                                                                                                                                                         |                                                           |                                                                                          |   |   |   |   |
| 5/17/07                                                  |                          |                                                                                                                           |                                                                                                                       | 269                                                                                                                                                        | 539                                                                                                                                                          | 1,078                                                          |                                                                                          |   |   | 28,093 |
| 5/17/07                                                  |                          |                                                                                                                           |                                                                                                                       |                                                                                                                                                       |                                                                                                                                                         |                                                           | 199                                                                                           |   |   | 11,671 |
| 5/17/07                                                  |                          |                                                                                                                           |                                                                                                                       |                                                                                                                                                       |                                                                                                                                                         |                                                           |                                                                                          | 3,119 | 58.65 | 24,328 |
| Barth                    J.                    Wolf      | 2007                          | 58,500                                                                                                                         | 117,000                                                                                                                    | 234,000                                                                                                                                                    |                                                                                                                                                         |                                                           |                                                                                          |   |   |   |   |
| 5/17/07                                                  |                          |                                                                                                                           |                                                                                                                       | 256                                                                                                                                                        | 513                                                                                                                                                          | 1,026                                                          |                                                                                          |   |   | 26,738 |
| 5/17/07                                                  |                          |                                                                                                                           |                                                                                                                       |                                                                                                                                                       |                                                                                                                                                         |                                                           | 189                                                                                           |   |   | 11,085 |
| 5/17/07                                                  |                          |                                                                                                                           |                                                                                                                       |                                                                                                                                                       |                                                                                                                                                         |                                                           |                                                                                          | 2,967 | 58.65 | 23,143 |
| Bradley                    A.                    Johnson | 2007                          | 45,000                                                                                                                         | 90,000                                                                                                                     | 180,000                                                                                                                                                    |                                                                                                                                                         |                                                           |                                                                                          |   |   |   |   |
| 5/17/07                                                  |                          |                                                                                                                           |                                                                                                                       | 265                                                                                                                                                        | 530                                                                                                                                                          | 1,060                                                          |                                                                                          |   |   | 27,624 |
| 5/17/07                                                  |                          |                                                                                                                           |                                                                                                                       |                                                                                                                                                       |                                                                                                                                                         |                                                           | 196                                                                                           |   |   | 11,495 |
| 5/17/07                                                  |                          |                                                                                                                           |                                                                                                                       |                                                                                                                                                       |                                                                                                                                                         |                                                           |                                                                                          | 3,071 | 58.65 | 23,954 |

| (1)   | Based                    on 2007                    Executive Incentive Plan payout percentages.  See description of                    Short-Term Incentive Compensation in the Proxy                    Statement. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Performance                    shares are valued at target payout using the value derived from                    a Monte                    Carlo simulation.  Restricted stock is valued at $58.65, the                    closing stock price on the grant date.  Stock options are valued                    at $7.80 on an accounting expense basis based on a binomial lattice                    model                    calculation. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Name                                                                                  | Options                    Awards (1)                                                   | Stock                    Awards (2)                                                                                                            |
|---------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------|
| Number                    of securities underlying unexercised options (#)Exercisable | Number                    of securities underlying unexercised options (#)Unexercisable | Equity                    incentive plan awards:  Number of securities underlying                    unexercised unearned options(#) | Option                    exercise price($) | Option                    expiration date | Number                    of shares or units of stock thathave                    not vested (#) | Market                    value of shares or units of stock thathave                    not vested($) | Equity                    incentive plan awards: Number of unearned shares, unitsor                    other rights that have not vested (#) (3) | Equity                    incentive plan awards:  Market or payout value of unearned                    shares, units or other rights that have not vested ($)                    (3) |
| (a)                                                                                   | (b)                                                                                     | (c)                                                                                                                                            | (d) | (e) | (f) | (g) | (h) | (i) | (j) |
| Charles                    A. Schrock                                                 | 16,59916,96714,40412,0006,7933,587-                                                     | ---4,0006,79210,7612,050                                                                                                                       | ------- | 34.0937.9644.7348.1154.8552.7358.65 | 12/13/201112/12/201212/10/201312/08/201412/07/201512/07/201605/17/2017 | 655 | 33,857 | 5,962 | 308,176 |
| Diane                    L. Ford                                                      | 6,2446,3826,3325,5754,0182,283-                                                         | ---1,8584,0186,8473,119                                                                                                                        | ------- | 34.0937.9644.7348.1154.8552.7358.65 | 12/13/201112/12/201212/10/201312/08/201412/07/201512/07/201605/17/2017 | 532 | 27,499 | 3,703 | 191,408 |
| Barth                    J. Wolf                                                      | 2,5304,1194,4633,8673,2461,696-                                                         | ---1,2893,2455,0872,967                                                                                                                        | ------- | 34.0937.9644.7348.1154.8552.7358.65 | 12/13/201112/12/201212/10/201312/08/201412/07/201512/07/201605/17/2017 | 436 | 22,537 | 2,893 | 149,539 |
| Bradley                    A. Johnson                                                 | 2,4494,5774,5543,2461,908-                                                              | --1,5173,2455,7223,071                                                                                                                         | ------ | 37.9644.7348.1154.8552.7358.65 | 12/12/201212/10/201312/08/201412/07/201512/07/201605/17/2017 | 473 | 24,449 | 3,127 | 161,635 |

| Grant                    Date | Full                    Vesting Date | Expiration                    Date |
|-------------------------------|--------------------------------------|------------------------------------|
| 02/11/1999                    | 02/11/2003                           | 02/11/2009                         |
| 03/13/2000                    | 03/13/2004                           | 03/13/2010                         |
| 12/14/2000                    | 12/14/2004                           | 12/14/2010                         |
| 12/13/2001                    | 12/13/2005                           | 12/13/2011                         |
| 12/12/2002                    | 12/12/2006                           | 12/12/2012                         |
| 12/10/2003                    | 12/10/2007                           | 12/10/2013                         |
| 12/08/2004                    | 12/08/2008                           | 12/08/2014                         |
| 12/07/2005                    | 12/07/2009                           | 12/07/2015                         |
| 12/07/2006                    | 12/07/2010                           | 12/07/2016                         |
| 5/17/2007                     |   05/17/2011               |   05/17/2017             |

| (2)   | Integrys                    Energy Group stock price on December 31, 2007 was                    $51.69. |
|-----------------|---------------------------------------------------------------------------------------------------------------|

| (3)   | Included                    in                    columns (i) and (j) above are the performance shares that may still                    be paid out as of December 31, 2007.   Subsequent to                    December 31, 2007, no payout occurred on performance shares for the                    performance period of 2005-2007 because total shareholder return                    results                    were below threshold requirements.  The number of unearned                    performance shares attributable to each named executive officer                    as a                    result of the threshold requirements not being achieved, along                    with the                    corresponding market value of such shares, is as                    follows: |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Named                    Executive Officer               |   | #                    UnearnedShares |   |   | Market                    or payout value ofunearned                    shares ($) |   |
|----------------------------------------------------------|--------|-------------------------------------|--------|--------|------------------------------------------------------------------------------------|--------|
| Charles                    A.                    Schrock |   |                                | 1,862  |   |                                                                               |   | 96,247 |   |
| Diane                    L.                    Ford      |   |                                | 865    |   |                                                                               |   | 44,712 |   |
| Barth                    J.                    Wolf      |   |                                | 600    |   |                                                                               |   | 31,014 |   |
| Bradley                    A.                    Johnson |   |                                | 707    |   |                                                                               |   | 36,545 |   |

----

| Name                                                         | Option                    Awards                  | Stock                    Awards                    (1)                        |
|--------------------------------------------------------------|---------------------------------------------------|-------------------------------------------------------------------------------|
| Number                    of shares acquired on exercise (#) | Value                    realized on exercise ($) | Number                    ofshares                    acquired on vesting (#) | Value                    realized on vesting ($) |
| (a)                                                          | (b)                                               | (c)                                                                           | (d) | (e) |
| Charles                    A.                    Schrock     | 11,500                                            | 323,323                                                                       | 174 | 9,065 |
| Diane                    L.                    Ford          | 5,830                                             | 135,164                                                                       | 110 | 5,731 |
| Barth                    J.                    Wolf          | -                                                 | -                                                                             | 82 | 4,272 |
| Bradley                    A.                    Johnson     | -                                                 | -                                                                             | 93 | 4,845 |

| (1)   | No                    payout was                    made on performance shares for 2007 based on total shareholder                    return for                    the performance period ending 12/31/07.  These performance                    shares had a performance period of                    2005-2007. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                                                     | Plan                    Name(1)    | Number                    of years of credited service(#) | Present                    value of accumulated benefits($)(2) | Payments                    during last fiscal year($) |
|----------------------------------------------------------|------------------------------------|-----------------------------------------------------------|----------------------------------------------------------------|--------------------------------------------------------|
| (a)                                                      | (b)                                | (c)                                                       | (d)                                                            | (e)                                                    |
| Charles                    A.                    Schrock | Retirement                    Plan | 28                                                        | 880,846                                                        | -                                                      |
| Restoration                    Plan                      | 28                                 | 435,608                                                   | -                                                              |
| SERP                                                     | 28                                 | 346,189                                                   | -                                                              |
| Total                                                    |                               | 1,662,643                                                 | -                                                              |
|                                                     |                               |                                                      |                                                           |                                                   |
| Diane                    L.                    Ford      | Retirement                    Plan | 32                                                        | 862,742                                                        | -                                                      |
| Restoration                    Plan                      | 32                                 | 275,811                                                   | -                                                              |
| SERP                                                     | 32                                 | 150,012                                                   | -                                                              |
| Total                                                    |                               | 1,288,565                                                 | -                                                              |
|                                                     |                               |                                                      |                                                           |                                                   |
| Barth                    J.                    Wolf      | Retirement                    Plan | 19                                                        | 444,103                                                        | -                                                      |
| Restoration                    Plan                      | 19                                 | 102,694                                                   | -                                                              |
| Total                                                    |                               | 546,797                                                   | -                                                              |
|                                                     |                               |                                                      |                                                           |                                                   |
| Bradley                    A.                    Johnson | Retirement                    Plan | 28                                                        | 609,870                                                        | -                                                      |
| Restoration                    Plan                      | 28                                 | 259,449                                                   | -                                                              |
| SERP                                                     | 28                                 | 230,186                                                   | -                                                              |
| Total                                                    |                               | 1,099,505                                                 | -                                                              |

----

| (1)  | For                    a                    description of the material terms and conditions of the above                    named plans,                    see the Proxy Statement under the caption "Executive Compensation–                    Compensation Discussion and Analysis – Key Components of the Executive                    Compensation Program." |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Full                    years of                    credited service only.  Actual plan benefits are calculated                    taking into account full and fractional years of credited                    service. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Change                    in                    pension value during 2007 and present value of accumulated benefit                    at                    year-end: |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Name                                                     | Executive                    Contributions in last fiscal year($)(1) | Registrant                    contributions in last fiscal year($)(1) | Aggregate                    earnings in last fiscal year($)(2) | Aggregate                    withdrawal/distributions                    ($) | Aggregate                    balance at last fiscal year end ($)(3) |
|----------------------------------------------------------|----------------------------------------------------------------------|-----------------------------------------------------------------------|-----------------------------------------------------------------|------------------------------------------------------------------------------|---------------------------------------------------------------------|
| (a)                                                      | (b)                                                                  | (c)                                                                   | (d)                                                             | (e)                                                                          | (f)                                                                 |
| Charles                    A.                    Schrock | 44,475                                                               | 726                                                                   | 28,572                                                          | -                                                                            | 1,156,239                                                           |
| Diane                    L.                    Ford      | 37,738                                                               | 733                                                                   | 39,408                                                          | -                                                                            | 1,005,910                                                           |
| Barth                    J.                    Wolf      | 25,780                                                               | 611                                                                   | 7,508                                                           | -                                                                            | 501,208                                                             |
| Bradley                    A.                    Johnson | 47,248                                                               | 1,931                                                                 | 26,068                                                          | -                                                                            | 793,991                                                             |

| (1)   | Deferrals                    into                    the Deferred Compensation Plan were made from compensation earned                    in 2007                    and are reported in column (c) of the Summary Compensation Table,                    with the                    exception of equity and non-equity incentive plan compensation                    earned in                    2006, but paid out and deferred in 2007.  These amounts are as                    follows: |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                                                     | 2006                    Annual Incentive Plan | 2006                    Annual Incentive Plan 5% Premium | 2007                    Performance Share                    Payout |
|----------------------------------------------------------|-----------------------------------------------|----------------------------------------------------------|---------------------------------------------------------------------|
| Charles                    A.                    Schrock | 19,366                                        | 726                                                      | -                                                                   |
| Diane                    L.                    Ford      | 13,957                                        | 0                                                        | -                                                                   |
| Barth                    J.                    Wolf      | 8,856                                         | 443                                                      | -                                                                   |
| Bradley                    A.                    Johnson | 11,853                                        | 148                                                      | -                                                                   |

| (2)  | Above                    market                    earnings received on Reserve Accounts A and B are reported in                    column (h)                    of the Summary Compensation Table. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)  | The                    aggregate                    balance includes amounts shown in footnote (1) and the above                    market                    earnings on Reserve Accounts A and B, which are included in column                    (h) of                    the Summary Compensation Table. |
|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name                                                     | Aggregate                    earnings for Reserve Ain                    lastfiscal                    year ($) | Aggregate                    earnings for Reserve Bin                    lastfiscal                    year ($) | Aggregate                    earnings for Mutual Funds in lastfiscal                    year ($) | Aggregate                    earnings for company stock in last fiscal year ($) | Aggregate                    earningsin                    last fiscalyear                    ($) |
|----------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|
| Charles                    A.                    Schrock | 17,654                                                                                                          | 973                                                                                                             | 6,496                                                                                            | 3,449                                                                           | 28,572                                                                                            |
| Diane                    L.                    Ford      | 10,165                                                                                                          | 11,632                                                                                                          | 15,523                                                                                           | 2,088                                                                           | 39,408                                                                                            |
| Barth                    J.                    Wolf      | -                                                                                                               | 5,549                                                                                                           | 317                                                                                              | 1,642                                                                           | 7,508                                                                                             |
| Bradley                    A.                    Johnson | 4,802                                                                                                           | 19,244                                                                                                          | -                                                                                                | 2,022                                                                           | 26,068                                                                                            |

----

| Type                    of Termination                        | Charles                    A. Schrock | Diane                    L.Ford | Barth                    J.Wolf | Bradley                    A. Johnson |
|---------------------------------------------------------------|---------------------------------------|---------------------------------|---------------------------------|---------------------------------------|
| Change                    In                    Control (CIC) | 2,342,654                             | 1,703,878                       | 1,106,027                       | 1,627,177                             |

----

| ITEM                    12. | SECURITY                    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT |
|-----------------------------|-----------------------------------------------------------------------------------|

|                                                                                                                                                          |   | Amount                    and Nature of Shares Beneficially Owned February                    1, 2008 |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------|
| Name                    and Title                                                                                                                             |   | Aggregate                    Number of Shares Beneficially Owned (1)                                       | Number                    of Shares Subject to Stock Options | Percent                    of Shares |
| Lawrence                    T.                    Borgard , Director                                                                                          |   | 55,891                                                                                                     | 33,515 | * |
| Phillip                    M.                    Mikulsky, Director (1)                                                                                       |   | 169,077                                                                                                    | 131,943 | * |
| Thomas                    P.                    Meinz, Director                                                                                               |   | 81,032                                                                                                     | 60,684 | * |
| Thomas                    A.                    Nardi, Director                                                                                               |   | 47,348                                                                                                     | 15,345 | * |
| Desiree                    G.                    Rogers, Director                                                                                             |   | 31,683                                                                                                     | 13,860 | * |
| Larry                    L.                    Weyers, Director                                                                                               |   | 420,009                                                                                                    | 371,580 | * |
| Joseph                    P.                    O'Leary    Senior                    Vice President, Chief Financial Officer and Director |   | 95,548                                                                                                     | 82,460 | * |
| Charles                    A.                    Schrock    President                    and Director                                     |   | 86,533                                                                                                     | 70,350 | * |
| Diane                    L.                    Ford   Vice                    President and Corporate Controller                               |   | 41,796                                                                                                     | 30,834 | * |
| Barth                    J.                    Wolf    Secretary                                                                          |   | 25,241                                                                                                     | 19,921 | * |
| Bradley                    A.                    Johnson    Treasurer                                                                     |   | 26,300                                                                                                     | 16,734 | * |
| All                    11                    directors and executive officers as a group (2)                                                                  |   | 1,080,458                                                                                                  | 847,226 | 1.4%* |

|   |  * | Less                    than 1%                    of Integrys Energy Group outstanding shares of common stock |
|--------|---------|----------------------------------------------------------------------------------------------------------------|

|   | (1) | Includes                    7,501                    shares owned in a joint trust with spouse. |
|--------|-----|-------------------------------------------------------------------------------------------------|

|   | (2) | Aggregate                    Number of Shares Beneficially Owned includes shares of common                    stock held                    in the Employee Stock Ownership Plan and Trust, the WPSC Deferred                    Compensation Trust, and all stock options, which are exercisable                    within 60                    days of February 1, 2008. Each director or officer has sole voting                    and                    investment power with respect to the shares reported, unless                    otherwise                    noted. No voting or investment power exists related to the stock                    options                    reported until exercised. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

ITEM          13.

| ITEM                    14. | PRINCIPAL                    FEES AND SERVICES PAID TO INDEPENDENT REGISTERED PUBLIC ACCOUNTING                    FIRM |
|-----------------------------|-------------------------------------------------------------------------------------------------------------------------|

| Fees                                                         |   | 2007   |    |   | 2006   |   |
|--------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Audit                    Fees                    (a)         |   | $      | 772,532 |   |   | $      | 803,045 |   |
| Audit                    Related                    Fees (b) |   |   | 83,470  |   |   |   | 75,300 |   |
| All                    Other                    Fees (c)     |   |   | 2,065   |   |   |   | 3,150 |   |
| Total                    Fees                                |   | $      | 858,067 |   |   | $      | 881,495 |   |

| a)   | Audit                    Fees. Consists of                    aggregate fees for services provided to WPSC by Deloitte & Touche LLP                    for the audits of the annual consolidated financial statements,                    reviews of                    the interim condensed consolidated financial statements included                    in                    quarterly reports and audits of the effectiveness of, and management's                    assessment of the effectiveness of, internal control over financial                    reporting.  Audit fees also include services that are normally                    provided by Deloitte & Touche in connection with statutory and                    regulatory filings or engagements, including comfort letters,                    consents and                    other services related to SEC matters, and consultations arising                    during                    the course of the audits and reviews concerning financial accounting                    and                    reporting standards. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b)   | Audit                    Related Fees.                    Consists of fees billed for assurance and related services                    that are                    reasonably related to the performance of the audit or review                    of the                    consolidated financial statements or internal control over financial                    reporting and are not reported under "Audit Fees."  These                    services include employee benefit plan audits, accounting consultations                    in                    connection with potential transactions, due diligence projects,                    and                    consultations concerning financial accounting and reporting                    standards. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c)   | All                    Other Fees.                    Consists of other fees for services provided to WPSC by Deloitte&                    Touche LLP for products and services other than the services                    reported                    above.  All Other Fees are for software licensing and training                    provided in 2007 and 2006.  The nature of the software license                    fees, which include support, learning services, and training                    have been                    deemed to be permissible non-attest                    services. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| ITEM                    15. | EXHIBITS                    AND FINANCIAL STATEMENT SCHEDULES |
|-----------------------------|---------------------------------------------------------------|

| Documents                    filed as part of this report: |
|------------------------------------------------------------|
|                                                       |   |
| (1)                                                        | Consolidated                    Financial Statements included in Part II at Item 8                    above: |
|                                                       |   |
|                                                       | Description | Pages                    in                    10-K |
|                                                       |   |   |
|                                                       | Consolidated                    Statements of Income for the three years ended December 31, 2007,                    2006, and 2005 | 43 |
|                                                       |   |
|                                                       | Consolidated                    Balance Sheets as of December 31, 2007 and 2006 | 44 |
|                                                       |   |
|                                                       | Consolidated                    Statements of Capitalization as of December 31, 2007 and                    2006 | 45 |
|                                                       |   |
|                                                       | Consolidated                    Statements of Common Shareholder's Equity for the three years                    ended                    December 31, 2007, 2006, and 2005 | 46 |
|                                                       |   |
|                                                       | Consolidated                    Statements of Cash Flows for the three years ended December 31, 2007,                    2006, and 2005 | 47 |
|                                                       |   |
|                                                       | Notes                    to                    Consolidated Financial Statements | 48 |
|                                                       |   |   |
|                                                       | Report                    of                    Independent Registered Public Accounting Firm | 81 |
|                                                       |   |   |
| (2)                                                        | Financial                    Statement Schedules.The                    following                    financial statement schedules are included in Part IV of this                    report.  Schedules not included herein have been omitted because                    they are not applicable or the required information is shown                    in the                    financial statements or notes thereto. |
|                                                       |   |
|                                                       | Description | Pages                    in                    10-K |
|                                                       |   |   |
|                                                       | Schedule                    II                    WPSC Valuation and Qualifying Accounts | 105 |
|                                                       |   |   |
| (3)                                                        | Listing                    of                    all exhibits, including those incorporated by reference. |

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| ExhibitNumber | Description                    of                    Documents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|---------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 2.1*          | Asset                    Contribution Agreement between ATC and Wisconsin Electric Power                    Company,                    Wisconsin Power and Light Company, WPSC, Madison Gas & Electric Co.,                    Edison Sault Electric Company, South Beloit Water, Gas and Electric                    Company, dated as of December 15, 2000.  (Incorporated by                    reference to Exhibit 2A-3 to Integrys Energy Group's and WPSC's                    Form 10-K                    for the year ended December 31, 2000.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 3.1           | Articles                    of                    Incorporation of WPSC as effective May 26, 1972 and amended through                    May                    31, 1988 (Incorporated by reference to Exhibit 3A to Form 10-K                    for the                    year ended December 31, 1991); Articles of Amendment to Articles of                    Incorporation dated June 9, 1993. (Incorporated by reference                    to Exhibit 3                    to Form 8-K filed June 10, 1993.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 3.2           | By-Laws                    of                    WPSC, as amended through February 21, 2007.  (Incorporated by                    reference to Exhibit 3.6 to WPSC's Form 8-K filed February 27,                    2007.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|          |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| 4.1           | First                    Mortgage and Deed of Trust, dated as of January 1, 1941 from                    WPSC to U.S.                    Bank National Association (successor to First Wisconsin Trust                    Company),                    Trustee (Incorporated by reference to Exhibit 7.01 - File No.                    2-7229);                    Supplemental Indenture, dated as of November 1, 1947 (Incorporated by                    reference to Exhibit 7.02 - File No. 2-7602); Supplemental Indenture,                    dated as of November 1, 1950 (Incorporated by reference to Exhibit                    4.04 -                    File No. 2-10174); Supplemental Indenture, dated as of May 1,                    1953                    (Incorporated by reference to Exhibit 4.03 - File No. 2-10716);                    Supplemental Indenture, dated as of October 1, 1954 (Incorporated                    by                    reference to Exhibit 4.03 - File No. 2-13572); Supplemental                    Indenture, dated as of December 1, 1957 (Incorporated by reference to                    Exhibit 4.03 - File No. 2-14527); Supplemental Indenture, dated as of                    October 1, 1963 (Incorporated by reference to Exhibit 2.02B -                    File No. 2-65710); Supplemental Indenture, dated as of June 1, 1964                    (Incorporated by reference to Exhibit 2.02B - File No. 2-65710);                    Supplemental Indenture, dated as of November 1, 1967 (Incorporated                    by                    reference to Exhibit 2.02B - File No. 2-65710); Supplemental                    Indenture,                    dated as of April 1, 1969 (Incorporated by reference to Exhibit                    2.02B -                    File No. 2-65710); Fifteenth Supplemental Indenture, dated as                    of May 1,                    1971 (Incorporated by reference to Exhibit 2.02B - File No. 2-65710);                    Sixteenth Supplemental Indenture, dated as of August 1, 1973                    (Incorporated by reference to Exhibit 2.02B - File No. 2-65710);                    Seventeenth Supplemental Indenture, dated as of September 1,                    1973                    (Incorporated by reference to Exhibit 2.02B - File No. 2-65710);                    Eighteenth Supplemental Indenture, dated as of October 1, 1975                    (Incorporated by reference to Exhibit 2.02B - File No. 2-65710);                    Nineteenth Supplemental Indenture, dated as of February 1, 1977                    (Incorporated by reference to Exhibit 2.02B - File No. 2-65710);                    Twentieth Supplemental Indenture, dated as of July 15, 1980 (Incorporated                    by reference to Exhibit 4B to Form 10-K for the year ended                    December 31, 1980); Twenty-First Supplemental Indenture, dated as of                    December 1, 1980 (Incorporated by reference to Exhibit 4B to                    Form 10-K for the year ended December 31, 1980); Twenty-Second                    Supplemental Indenture dated as of April 1, 1981 (Incorporated                    by                    reference to Exhibit 4B to Form 10-K for the year ended December 31,                    1981); Twenty-Third Supplemental Indenture, dated as of February                    1, 1984                    (Incorporated by reference to Exhibit 4B to Form 10-K for the                    year ended                    December 31, 1983); Twenty-Fourth Supplemental Indenture, dated as of                    March 15, 1984 (Incorporated by reference to Exhibit 1 to Form                    10-Q for                    the quarter ended June 30, 1984); Twenty-Fifth Supplemental                    Indenture, dated as of October 1, 1985 (Incorporated by reference                    to                    Exhibit 1 to Form 10-Q for the quarter ended September 30,                    1985); Twenty-Sixth Supplemental Indenture, dated as of December 1,                    1987 (Incorporated by reference to Exhibit 4A-1 to Form 10-K                    for the year                    ended December 31, 1987); Twenty-Seventh Supplemental Indenture,                    dated as of September 1, 1991 (Incorporated by reference to Exhibit                    4 to                    Form 8-K filed September 18, 1991); Twenty-Eighth Supplemental                    Indenture,                    dated as of July 1, 1992 (Incorporated by reference to Exhibit                    4B - File                    No. 33-51428); Twenty-Ninth Supplemental Indenture, dated as                    of |

----

|   | October                    1,                    1992 (Incorporated by reference to Exhibit 4 to Form 8-K filed                    October 22,                    1992); Thirtieth Supplemental Indenture, dated as of February                    1, 1993                    (Incorporated by reference to Exhibit 4 to Form 8-K filed                    January 27, 1993); Thirty-First Supplemental Indenture, dated as of                    July 1, 1993 (Incorporated by reference to Exhibit 4 to Form                    8-K filed                    July 7, 1993); Thirty-Second Supplemental Indenture, dated as of                    November 1, 1993 (Incorporated by reference to Exhibit 4 to                    Form 10-Q for the quarter ended September 30, 1993); Thirty-Third                    Supplemental Indenture, dated as of December 1, 1998 (Incorporated by                    reference to Exhibit 4D to Form 8-K filed December 18, 1998);                    Thirty-Fourth Supplemental Indenture, dated as of August 1, 2001                    (Incorporated by reference to Exhibit 4D to Form 8-K filed August                    24,                    2001); Thirty-Fifth Supplemental Indenture, dated as of December 1,                    2002 (Incorporated by reference to Exhibit 4D to Form 8-K filed                    December 16, 2002); Thirty-Sixth Supplemental Indenture, dated as of                    December 8, 2003 (Incorporated by reference to Exhibit 4.2 to Form                    8-K filed December 9, 2003); Thirty-Seventh Supplemental Indenture,                    dated as of December 1, 2006 (Incorporated by reference to Exhibit                    4.2 to Form 8-K filed November 30, 2006); Thirty-Eighth Supplemental                    Indenture, dated as of August 1, 2006 (Incorporated by reference                    to                    Exhibit 4.1 to Form 10-K for the year ended December 31, 2006) and                    Thirty-Ninth Supplemental Indenture, dated as of November 1,                    2007                    (Incorporated by reference to Exhibit 4.2 to Form 8-K filed November                    16,                    2007).  All references to periodic reports are to those of WPSC                    (File No. 1-3016).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.2    | Indenture,                      dated as of December 1, 1998, between WPSC and U.S. Bank National                      Association (successor to Firstar Bank Milwaukee, N.A., National                      Association) (Incorporated by reference to Exhibit 4A to Form                      8-K filed                      December 18, 1998); First Supplemental Indenture, dated as of                      December 1, 1998 between WPSC and Firstar Bank Milwaukee, N.A.,                      National Association (Incorporated by reference to Exhibit                      4C to Form 8-K                      filed December 18, 1998); Second Supplemental Indenture, dated as of                      August 1, 2001 between WPSC and Firstar Bank, National Association                      (Incorporated by reference to Exhibit 4C of Form 8-K filed                      August 24,                      2001); Third Supplemental Indenture, dated as of December 1, 2002                      between WPSC and U.S. Bank National Association (Incorporated                      by reference                      to Exhibit 4C of Form 8-K filed December 16, 2002); Fourth                      Supplemental Indenture, dated as of December 8, 2003, by and between                      WPSC and U.S. Bank National Association (successor to Firstar Bank,                      National Association and Firstar Bank Milwaukee, N.A., National                      Association)  (Incorporated by reference to Exhibit 4.1 to Form                      8-K filed December 9, 2003); Fifth Supplemental Indenture, dated as                      of December 1, 2006, by and between WPSC and U.S. Bank National                      Association (successor to Firstar Bank, National Association                      and Firstar                      Bank Milwaukee, N.A., National Association)  (Incorporated by                      reference to Exhibit 4.1 to Form 8-K filed November 30, 2006); Sixth                      Supplemental Indenture, dated as of December 1, 2006, by and between                      WPSC and U.S. Bank National Association (successor to Firstar Bank,                      National Association and Firstar Bank Milwaukee, N.A., National                      Association) (Incorporated by reference to Exhibit 4.2 to Form                      10-K for                      the year ended December 31, 2006); and Seventh Supplemental                      Indenture, dated as of November 1, 2007, by and between WPSC and                      U.S. Bank National Association (successor to Firstar Bank, National                      Association and Firstar Bank Milwaukee, N.A., National Association)                      (Incorporated by reference to Exhibit 4.1 to Form 8-K filed                      November 16,                      2007). References to periodic reports are to those of WPSC                      (File No.                      1-3016) |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.1   | Joint                      Power                      Supply Agreement among WPSC, Wisconsin Power and Light Company,                      and                      Madison Gas and Electric Company, dated February 2,                      1967.  (Incorporated by reference to Exhibit 4.09 in File                      No. 2-27308.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| 10.2   | Joint                      Power                      Supply Agreement (Exclusive of Exhibits) among WPSC, Wisconsin                      Power and                      Light Company, and Madison Gas and Electric Company dated July 26,                      1973.  (Incorporated by reference to Exhibit 5.04A in File                      No. 2-48781.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

----

|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
|------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.3*                      # | Joint                      Plant                      Agreement by and between WPSC and Dairyland Power Cooperative,                      dated as of                      November 23, 2004.  (Incorporated by reference to Exhibit 10.19                      to Integrys Energy Group's and WPSC's Form 10-K for the year                      ended                      December 31, 2004.)                                                                                                                                                                                                                                                                                                                    |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.4                         | Basic                      Generating Agreement, Unit 4, Edgewater Generating Station,                      dated June 5,                      1967, between Wisconsin Power and Light Company and                      WPSC.  (Incorporated by reference to Exhibit 4.10 in File No.                      2-27308.)                                                                                                                                                                                                                                                                                                                                                                                                     |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.5                         | Agreement                      for                      Construction and Operation of Edgewater 5 Generating Unit,                      dated                      February 24, 1983, between Wisconsin Power and Light Company,                      Wisconsin Electric Power Company, and WPSC.  (Incorporated by                      reference to Exhibit 10C-1 to WPSC's Form 10-K for the year ended                      December 31, 1983.)                                                                                                                                                                                                                                                       |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.6                         | Amendment                      No.                      1 to Agreement for Construction and Operation of Edgewater                      5 Generating                      Unit, dated December 1, 1988.  (Incorporated by reference                      to Exhibit 10C-2 to WPSC's Form 10-K for the year ended December 31,                      1988.)                                                                                                                                                                                                                                                                                                                                                      |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.7                         | Revised                      Agreement for Construction and Operation of Columbia Generating                      Plant                      among WPSC, Wisconsin Power and Light Company, and Madison                      Gas and                      Electric Company, dated July 26, 1973.  (Incorporated by                      reference to Exhibit 5.07 in File No. 2-48781.)                                                                                                                                                                                                                                                                                                                                  |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.8+                        | Form                      of Key                      Executive Employment and Severance Agreement entered into between                      Integrys                      Energy Group and each of the following:  Diane L. Ford,                      David W. Harpole, Bradley A. Johnson, Thomas P. Meinz,                      Barbara A. Nick, Joseph P. O'Leary,                      Charles A. Schrock, Bernard J. Treml, and Barth J.                      Wolf.  (Incorporated by reference to Exhibit 10.9 to Integrys                      Energy Group's and WPSC's Form 10-K for the year ended December 31,                      2002.) |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.9+                        | Form                      of                      Integrys Energy Group Performance Stock Right Agreement. (Incorporated                      by                      reference to Exhibit 10.2 to Integrys Energy Group's and WPSC's                      Form 8-K                      filed December 13, 2005.)                                                                                                                                                                                                                                                                                                                                                                                                            |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.10+                       | Form                      of                      Integrys Energy Group 2007 Omnibus Incentive Compensation Plan                      Performance                      Stock Right Agreement approved May 17, 2007.  (Incorporated by                      reference to Exhibit 10.5 to Integrys Energy Group's Form 10-K                      for the                      year ended December 31, 2007 [File No. 1-11337].)                                                                                                                                                                                                                                                                                       |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.11+                       | Form                      of                      Integrys Energy Group 2007 Omnibus Incentive Compensation Plan                      Performance                      Stock Right Agreement approved February 14, 2008.  (Incorporated                      by reference to Exhibit 10.6 to Integrys Energy Group's Form                      10-K for the                      year ended December 31, 2007 [File No. 1-11337].)                                                                                                                                                                                                                                                                                  |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.12+                       | Form                      of                      Integrys Energy Group 2005 Omnibus Incentive Compensation Plan                      Restricted                      Stock Award Agreement.  (Incorporated by reference                      to  Exhibit 10.1 to Integrys Energy Group Form 8-K filed                      December 13, 2006)                                                                                                                                                                                                                                                                                                                                                            |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.13+                       | Form                      of                      Integrys Energy Group 2007 Omnibus Incentive Compensation Plan                      Restricted                      Stock Award Agreement approved May 17, 2007.  (Incorporated by                      reference to Exhibit 10.8 to Integrys Energy Group's Form 10-K                      for the                      year ended December 31, 2007 [File No. 1-11337].)                                                                                                                                                                                                                                                                                        |
|                         |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| 10.14+                       | Form                      of                      Integrys Energy Group 2007 Omnibus Incentive Compensation Plan                      Restricted                      Stock Award Agreement approved February 14, 2008. (Incorporated                      by                      reference to Exhibit 10.9 to Integrys Energy Group's Form 10-K                      for the                      year ended December 31, 2007 [File No.                      1-11337].)                                                                                                                                                                                                                                                    |

----

| 10.15+ | Form                      of                      Integrys Energy Group 2007 Omnibus Incentive Compensation Plan                      NonQualified Stock Option Agreement approved May 17,                      2007.  (Incorporated by reference to Exhibit 10.10 to Integrys                      Energy Group's Form 10-K for the year ended December 31, 2007 [File                      No. 1-11337].)                                                                                                                                                                                                                                                                                                                                                                                                            |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.16+ | Form                      of                      Integrys Energy Group 2007 Omnibus Incentive Compensation Plan                      NonQualified Stock Option Agreement approved February 14, 2008.                      (Incorporated by reference to Exhibit 10.11 to Integrys Energy                      Group's                      Form 10-K for the year ended December 31, 2007 [File No.                      1-11337].)                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.17+ | Integrys                      Energy Group 1999 Stock Option Plan.  (Incorporated by reference                      to Exhibit 10-2 in Integrys Energy Group's Form 10-Q for the                      quarter ended                      June 30, 1999, filed August 11, 1999.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.18+ | Integrys                      Energy Group Deferred Compensation Plan as Amended and Restated                      Effective                      April 1, 2008. (Incorporated by reference to Exhibit 10.14                      to Integrys                      Energy Group's Form 10-K for the year ended December 31, 2007 [File                      No. 1-11337].)                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.19+ | Integrys                      Energy Group 2001 Omnibus Incentive Compensation                      Plan.  (Incorporated by reference to Exhibit 10.16 to Integrys                      Energy Group's and WPSC's Form 10-K for the year ended December 31,                      2005, filed February 28, 2006.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.20+ | Integrys                      Energy Group, Inc. 2005 Omnibus Incentive Compensation                      Plan.  (Incorporated by reference to Exhibit 10.2 to Integrys                      Energy Group's and WPSC's Form 10-Q filed August 4,                      2005.)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.21+ | Integrys                      Energy Group, Inc. 2007 Omnibus Incentive Compensation                      Plan.  (Incorporated by reference to Exhibit 10.17 to Integrys                      Energy Group's Form 10-K for the year ended December 31, 2007 [File                      No. 1-11337].)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 10.22  | Five                      Year                      Credit Agreement among Wisconsin Public Service Corporation,                      as Borrower,                      The Lenders Identified Herein, U.S. Bank National Association,                      as                      Syndication Agent, Wells Fargo Bank National Association, as                      Co-Documentation Agent, JPMorgan Chase Bank, N.A., as Co-Documentation                      Agent, UBS Securities LLC, as Co-Documentation Agent, Citibank,                      N.A., as                      Administrative Agent and Citigroup Global Markets, Inc. and                      U.S. Bank                      National Association, as Co-Lead Arrangers and Book Managers                      dated as of                      June 2, 2005. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 12.1   | WPSC                      Ratio of                      Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges                      and                      Preferred Dividends.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 21     | Subsidiaries                      of WPSC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 23.1   | Consent                      of                      Independent Registered Public Accounting Firm for WPSC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 24     | Powers                      of                      Attorney.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 31.1   | Certification                      of Principal Executive Officer Pursuant to Section 302 of the                      Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the                      Securities                      Exchange Act of 1934 for WPSC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 31.2   | Certification                      of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley                      Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange                      Act of                      1934 for WPSC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| 32.1   | Written                      Statement of the Principal Executive Officer and Chief Financial                      Officer                      Pursuant to 18 U.S.C. Section 1350 for                      WPSC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |

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|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 99     | Proxy                      Statement for Integrys Energy Group's 2008 Annual Meeting of                      Shareholders.                      [To be filed with the SEC under Regulation 14A within 120 days after                      December 31, 2007; except to the extent specifically incorporated by                      reference, the Proxy Statement for the 2008 Annual Meeting                      of Shareholders                      shall not be deemed to be filed with the SEC as part of this                      Annual Report                      on Form 10-K.] |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| *      | Schedules                      and                      exhibits to this document are not filed therewith.  The                      registrant agrees to furnish supplementally a copy of any such                      schedule or                      exhibit to the SEC upon request.                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| +      | A                      management                      contract or compensatory plan or arrangement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| #      | Portions                      of                      this exhibit have been redacted and are subject to a confidential                      treatment request filed with the Secretary of SEC pursuant                      to Rule 24b-2                      under the Securities and Exchange Act of 1934, as amended.  The                      redacted material was filed separately with the                      SEC.                                                                                                                                                               |

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SIGNATURES

|   |   | WISCONSIN                    PUBLIC SERVICE CORPORATION |
|--------|--------|---------------------------------------------------------|
|   |
|   |   |                                                    | (Registrant) |
|   |   |                                                    |   |
|   |   | By:                                                     | /s/                    Charles A. Schrock |
|   |   |                                                    | Charles                    A.                    SchrockPresident |

| Signature                                                                                                                                                                                                                                                                                                                                      | Title                                                                                                                          | Date                                                    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                           |                                                                                                                           |                                                    |
| Lawrence                    T.                    Borgard*                                                                                                                                                                                                                                                                                     | Director                                                                                                                       |                                                    |
| Phillip                    M.                    Mikulsky*                                                                                                                                                                                                                                                                                     | Director                                                                                                                       |                                                    |
| Thomas                    P.                    Meinz*                                                                                                                                                                                                                                                                                         | Director                                                                                                                       |                                                    |
| Thomas                    A.                    Nardi*                                                                                                                                                                                                                                                                                         | Director                                                                                                                       |                                                    |
| Joseph                    P.                    O'Leary*                                                                                                                                                                                                                                                                                       | Director                                                                                                                       |                                                    |
| Desiree                    G.                    Rogers*                                                                                                                                                                                                                                                                                       | Director                                                                                                                       |                                                    |
| Charles                    A.                    Schrock*                                                                                                                                                                                                                                                                                      | Director                                                                                                                       |                                                    |
| Larry                    L.                    Weyers*                                                                                                                                                                                                                                                                                         | Director                    and                    Chairman                                                                    |                                                    |
|                                                                                                                                                                                                                                                                                                                                           |                                                                                                                           |                                                    |
| /s/                    Charles A.                    Schrock                                                                                                                                                                                                                                                                                   | President                    and                    Director(principal                    executive officer)                   | February                    28,                    2008 |
| Charles                    A.                    Schrock                                                                                                                                                                                                                                                                                       |                                                                                                                           |                                                    |
|                                                                                                                                                                                                                                                                                                                                           |                                                                                                                           |                                                    |
| /s/                    Joseph P.                    O'Leary                                                                                                                                                                                                                                                                                    | Senior                    Vice President, Chief Financial Officer and Director(principal                    financial officer) | February                    28,                    2008 |
| Joseph                    P.                    O'Leary                                                                                                                                                                                                                                                                                        |                                                                                                                           |                                                    |
|                                                                                                                                                                                                                                                                                                                                           |                                                                                                                           |                                                    |
| /s/                    Diane L.                    Ford                                                                                                                                                                                                                                                                                        | Vice                    President and Corporate Controller(principal                    accounting officer)                    | February                    28,                    2008 |
| Diane                    L.                    Ford                                                                                                                                                                                                                                                                                            |                                                                                                                           |                                                    |
|                                                                                                                                                                                                                                                                                                                                           |                                                                                                                           |                                                    |
|                                                                                                                                                                                                                                                                                                                                           |                                                                                                                           |                                                    |
|                                                                                                                                                                                                                                                                                                                                           |                                                                                                                           |                                                    |
| *By: /s/                    Diane L. Ford                                                 |                                                                                                                           |                                                    |
|         Diane                    L. Ford                                                                                                                                                                                                                                                               | Attorney-in-Fact                                                                                                               | February                    28,                    2008 |

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| SCHEDULE                      II                                                                                         |   |                              |   |                            |   |                              |   |
|--------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|---------------------------------|--------|-----------------------------------|--------|
| WISCONSIN                      PUBLIC SERVICE                      CORPORATION                                           |   |                              |   |                            |
| VALUATION                      AND QUALIFYING                      ACCOUNTS                                              |   |                              |   |                            |
|                                                                                                                     |   |                              |   |                            |   |                              |   |   |
|                                                                                                                     |   |                              |   |                            |   |                              |   |   |
| Allowance                      for Doubtful                      Accounts                                                |
| Years                      Ended December 31, 2007,                      2006, and 2005                                  |
| (In                      millions)                                                                                       |
|                                                                                                                     |   |                              |   |                            |   |                              |   |   |
|                                                                                                                     |   |                              |   |                            |   |                              |   |   |
|                                                                                                                     |   | Balance                      at   |   | Additions                       |   |                              |   |   |
|                                                                                                                     |   | Beginning                      of |   | Charged                      to |   |                              |   | Balance                      at |
| Fiscal                      Year                                                                                         |   | Year                              |   | Expense                         |   | Reductions                      * |   | End                      of                      Year |
|                                                                                                                     |   |                              |   |                            |   |                              |   |   |
| 2005                                                                                                                     |   | $5.5                              |   | $6.2                            |   | $3.2                              |   | $8.5 |
|                                                                                                                     |   |                              |   |                            |   |                              |   |   |
| 2006                                                                                                                     |   | $8.5                              |   | $7.7                            |   | $9.2                              |   | $7.0 |
|                                                                                                                     |   |                              |   |                            |   |                              |   |   |
| 2007                                                                                                                     |   | $7.0                              |   | $7.8                            |   | $10.8                             |   | $4.0 |
|                                                                                                                     |   |                              |   |                            |   |                              |   |   |
|                                                                                                                     |   |                              |   |                            |   |                              |   |   |
| *  Represents                      amounts                      written off to the reserve, net of recoveries. |   |                              |
|                                                                                                                     |   |                              |   |                            |   |                              |   |   |

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| EXHIBITS                    FILED HEREWITH |
|--------------------------------------------|
|                                       |   |
| 10.22                                      | Five                    Year                    Credit Agreement among Wisconsin Public Service Corporation,                    as Borrower,                    The Lenders Identified Herein, U.S. Bank National Association,                    as                    Syndication Agent, Wells Fargo Bank National Association, as                    Co-Documentation Agent, JPMorgan Chase Bank, N.A., as Co-Documentation                    Agent, UBS Securities LLC, as Co-Documentation Agent, Citibank,                    N.A., as                    Administrative Agent and Citigroup Global Markets, Inc. and U.S.                    Bank                    National Association, as Co-Lead Arrangers and Book Managers                    dated as of                    June 2, 2005. |
|                                       |   |
| 12.1                                       | WPSC                    Ratio of                    Earnings to Fixed Charges and Ratio of Earnings to Fixed Charges                    and                    Preferred Dividends |
|                                       |   |
| 21                                         | Subsidiaries                    of WPSC |
|                                       |   |
| 23.1                                       | Consent                    of                    Independent Registered Public Accounting Firm for WPSC |
|                                       |   |
| 24                                         | Powers                    of                    Attorney |
|                                       |   |
| 31.1                                       | Certification                    of Principal Executive Officer Pursuant to Section 302 of the                    Sarbanes-Oxley Act and Rule 13a-14(a) or 15d-14(a) under the                    Securities                    Exchange Act of 1934 for WPSC |
|                                       |   |
| 31.2                                       | Certification                    of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley                    Act and Rule 13a-14(a) or 15d-14(a) under the Securities Exchange                    Act of                    1934 for WPSC |
|                                       |   |
| 32.1                                       | Written                    Statement of the Principal Executive Officer and Chief Financial                    Officer                    Pursuant to 18 U.S.C. Section 1350 for WPSC |
|                                       |   |

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