Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

    Yes [X]    No [  ]

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act).

    Yes [X]    No [  ]

The aggregate market value of the common stock of Wisconsin Energy Corporation held by non-affiliates was approximately $3.4 billion based upon the reported last sale price of such securities as of June 30, 2003.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date (January 31, 2004):

Portions of Wisconsin Energy Corporation's definitive Proxy Statement for its Annual Meeting of Stockholders, to be held on May 5, 2004, are incorporated by reference into Part III hereof.

Wisconsin Energy Corporation was incorporated in the state of Wisconsin in 1981 and became a diversified holding company in 1986. We maintain our principal executive offices in Milwaukee, Wisconsin. Unless qualified by their context when used in this document, the terms Wisconsin Energy, the Company, Our, Us or We refer to the holding company and all of its subsidiaries.

We conduct our operations primarily in three operating segments: a utility energy segment, a non-utility energy segment and a manufacturing segment. Our primary subsidiaries are Wisconsin Electric Power Company (Wisconsin Electric), Wisconsin Gas Company (Wisconsin Gas) and WICOR Industries, LLC, formerly WICOR Industries, Inc., (WICOR Industries).

Non-Utility Energy Segment:   Our non-utility energy segment consists of W.E. Power, LLC (We Power) and Wisvest Corporation (Wisvest). We Power was formed in 2001 to design, construct, own, finance and lease the new generating capacity included in our Power the Future strategy. See Item 7 for more information on Power the Future. Wisvest owns and has investments in electric generating facilities and other energy-related entities and assets. We are in the process of reducing the operations of Wisvest.

Manufacturing Segment:   Our manufacturing segment consists of WICOR Industries, an intermediary holding company, and its three primary subsidiaries: Sta-Rite Industries, LLC (Sta-Rite), SHURflo, LLC (SHURflo) and Hypro, LLC (Hypro), which are manufacturers of pumps, water treatment products and fluid handling equipment with manufacturing, sales and distribution facilities in the United States and several other countries. In February 2004, we announced that we reached an agreement to sell this segment to Pentair, Inc. for $850 million and the assumption of approximately $25 million of debt. Subject to regulatory approvals, we expect the sale to close during the second or third quarter of 2004. For further information about the sale see "Capital Resources" in Item 7.

Power the Future Strategy:   In late February 2001, we filed a petition with the Public Service Commission of Wisconsin (PSCW) starting the regulatory review process for a 10-year strategy, originally proposed in September 2000, to improve the supply and reliability of electricity in Wisconsin. As part of our Power the Future strategy, we are: (1) investing in new natural gas-based and coal-based electric generating facilities, (2) upgrading Wisconsin Electric's existing electric generating facilities and (3) investing in upgrades of our existing energy distribution system. Also as part of this strategy, we announced and began implementing plans to divest non-core assets and operations, primarily in our non-utility energy segment and our non-utility real estate operations. Implementation of the Power the Future strategy is subject to a number of state and federal regulatory approvals. Additional information concerning Power the Future ma y be found below under "Non-Utility Energy Segment" and "Environmental Compliance" as well as in Item 7.

For further financial information about our business segments, see "Results of Operations" in Item 7 and "Note Q -- Segment Reporting" in the Notes to Consolidated Financial Statements in Item 8.

We have through our Internet website www.WisconsinEnergy.com available free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after we electronically file this material with, or furnish it to, the Securities and Exchange Commission (SEC).

Cautionary Factors:   Certain statements contained herein are "Forward-Looking Statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-Looking Statements may be identified by reference to a future period or periods or by the use of forward looking terminology such as "may," "intends," "anticipates," "believes," "estimates," "expects," "forecasts," "objectives," "plans," "possible," "potential," "project" or similar terms or variations of these terms. Actual results may differ materially from those set forth in Forward-Looking Statements as a result of certain risks and uncertainties, including but not limited to, changes in political and economic conditions, equity and bond market fluctuations, varying weather conditions, governmental regulation and supervision, as well as other risks and uncertainties detailed from time to time in our filings with the SEC, including factors described throughout this document and in "Factors Affecting Results, Liquidity and Capital Resources" in Item 7.

Our electric utility operations consist of the electric operations of Wisconsin Electric and Edison Sault. Wisconsin Electric, which is the largest electric utility in the state of Wisconsin, generates, distributes and sells electric energy in a territory in southeastern (including the metropolitan Milwaukee area), east central and northern Wisconsin and in the Upper Peninsula of Michigan. Edison Sault generates, distributes and sells electric energy in a territory in the eastern Upper Peninsula of Michigan.

See "Consolidated Selected Utility Operating Data" in Item 6 for certain electric utility operating information by customer class during the period 1999 through 2003.

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

Electric energy sales by Wisconsin Electric to all classes of customers totaled approximately 30.7 million megawatt hours (mwh) during 2003, a 1.1% increase from 2002. Approximately 0.4 million of megawatt-hour sales during 2003 were to Edison Sault. Wisconsin Electric had approximately 1,068,000 electric customers at December 31, 2003, an increase of 1.1% since December 31, 2002.

Edison Sault:   Edison Sault is authorized to provide retail electric service in certain territories in the state of Michigan pursuant to franchises granted by municipalities. Edison Sault also provides wholesale electric service under contract with one rural cooperative.

Electric energy sales by Edison Sault to all classes of customers totaled approximately 0.9 million and 0.8 million megawatt hours during 2003 and 2002, respectively. No significant megawatt-hour sales during 2003 were to Wisconsin Electric. Edison Sault had approximately 22,000 electric customers at December 31, 2003 and December 31, 2002.

Sales To Large Electric Retail Customers:   Wisconsin Electric provides electric utility service to a diversified base of customers in such industries as mining, paper, foundry, food products and machinery production, as well as to large retail chains. Edison Sault provides electric service to industrial accounts in the paper, crude oil pipeline and limestone quarry industries as well as to several state and federal government facilities.

Our largest retail electric customers are two iron ore mines located in the Upper Peninsula of Michigan. Wisconsin Electric currently has special negotiated power-sales contracts with these mines that expire in 2007. The combined

electric energy sales to the two mines accounted for 7.1% and 6.4% of our total electric utility energy sales during 2003 and 2002, respectively.

Sales to Wholesale Customers:   During 2003, Wisconsin Electric sold wholesale electric energy to three municipally owned systems, two rural cooperatives and two municipal joint action agencies located in the states of Wisconsin, Michigan and Illinois. Wholesale electric energy sales by Wisconsin Electric were also made to 34 other public utilities and power marketers throughout the region under rates approved by the Federal Energy Regulatory Commission (FERC). Edison Sault sold wholesale electric energy to one rural cooperative during 2003. Wholesale sales accounted for approximately 8.9% of our total electric energy sales and 4.6% of total electric operating revenues during 2003 compared with 8.2% of total electric energy sales and 4.2% of total electric operating revenues during 2002.

Electric System Reliability Matters:   Electric energy sales are impacted by seasonal factors and varying weather conditions from year-to-year. A summer peaking utility as a result of cooling load, we reached our all-time electric peak demand obligation of 6,376 megawatts on August 21, 2003. The summer period is the most relevant period for capacity planning purposes for us. Wisconsin Electric is a member of the MAIN reliability council. MAIN guidelines direct members to have a minimum 14.12% planning reserve margin in place prior to the upcoming peak season. The Public Service Commission of Wisconsin (PSCW) guidelines to electric utilities in Wisconsin advise a minimum 18% planning reserve margin. The Michigan Public Service Commission (MPSC) has not provided guidelines in this area.

We had adequate capacity to meet all of our firm electric load obligations during 2003 and expect to have adequate capacity to meet all of our firm obligations during 2004. For additional information, see "Factors Affecting Results, Liquidity and Capital Resources" in Item 7. For additional information regarding our generation facilities, see "Utility Energy Segment" in Item 2.

Prior to 2003, the nation's electric utility industry had been following a trend towards restructuring and increased competition. However, given electric reliability problems experienced in the summer of 2003 and in the state of California in 2001 and 2002, which had previously restructured its electric industry framework, and the current status of restructuring initiatives in regulatory jurisdictions where we primarily do business, we do not expect significant electric deregulation in Wisconsin in the next five years. For additional information, see "Factors Affecting Results, Liquidity and Capital Resources" in Item 7.

The table below indicates our sources of electric energy supply, including net generation by fuel type, for the following years ended December 31:

Our net generation totaled 28.0 million megawatt hours during 2003 compared with 27.8 million megawatt hours during 2002 and 28.9 million megawatt hours during 2001. The decline in 2002 generation was primarily due to an increase in scheduled outages at Wisconsin Electric's generating facilities. When compared with the past three years, net generation as a percent of our total electric energy supply is expected to decrease during 2004 in large part due to the Port Washington unit retirements in anticipation of the construction of two natural gas-based generation facilities at the same site one of which is expected to become operational in 2005. Purchased power is expected to be the primary source of additional electric energy supply required to meet load growth in the next year.

The fuel costs for coal and nuclear generation are relatively stable as the fuel costs are under long-term contracts. Some of the coal contracts expire in the near future, and we may incur increases in coal prices, subject to market conditions. The costs for natural gas and purchased power, which is primarily natural gas-based, are more volatile.

Wisconsin Electric's installed capacity by fuel type for the years ended December 31, is shown below.

Coal Supply:   Wisconsin Electric diversifies the coal supply for its power plants by purchasing coal from mines in northern and central Appalachia as well as from various western mines. During 2004, 99% of Wisconsin Electric's projected coal requirements of 12.0 million tons will be under contracts which are not tied to 2004 market pricing fluctuations. Wisconsin Electric does not anticipate any problem in procuring its remaining 2004 coal requirements through short-term or spot purchases and inventory adjustments. Our coal-based generation consists of 7 operating plants with a dependable capability of approximately 3,560 megawatts.

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

As of the beginning of 2004, Wisconsin Electric had approximately a 118-day supply of coal in inventory at its coal-based facilities.

Coal Deliveries:   Approximately 75% of Wisconsin Electric's 2004 coal requirements are expected to be delivered by Wisconsin Electric-owned or leased unit trains. The unit trains will transport coal for the Oak Creek and Pleasant Prairie Power Plants from Wyoming mines. Coal from Pennsylvania and Colorado mines is also transported via rail to Lake Erie or Lake Michigan transfer docks and delivered to the Valley and Port Washington Power Plants by lake vessels. Coal from central Appalachia is shipped via rail to Lake Erie transfer docks and delivered to the Milwaukee County Power Plant by truck once it arrives by lake vessel in Milwaukee. Montana and Wyoming coal for Presque Isle Power Plant is transported via rail to Superior, Wisconsin, placed in dock storage and reloaded into lake vessels for plant delivery. Central Appalachia and Colorado coal bound for Presque Isle Power Plant is shipped via rail to Lake Erie and Lake Michigan (Chicago) coal transfer docks, respectiv ely, for lake vessel delivery to the plant.

Environmental Matters:   For information regarding emission restrictions, especially as they relate to coal-based generating facilities, see "Environmental Compliance".

Point Beach Nuclear Plant:   Wisconsin Electric owns two 518-megawatt electric generating units at Point Beach Nuclear Plant in Two Rivers, Wisconsin. The United States Nuclear Regulatory Commission (NRC) operating licenses for Point Beach expire in October 2010 for Unit 1 and in March 2013 for Unit 2. The Nuclear Management Company, LLC (NMC) filed an application with the NRC in February 2004 to renew the operating licenses for both of Wisconsin Electric's nuclear reactors for an additional 20 years. For additional information concerning Point Beach, see "Factors Affecting Results, Liquidity and Capital Resources" in Item 7 and "Note F -- Nuclear Operations" in the Notes to Consolidated Financial Statements in Item 8.

Nuclear Management Company:   NMC, owned by our affiliate WEC Nuclear Corporation and the affiliates of four other unaffiliated investor-owned utilities in the region, operates Point Beach. NMC provides services to eight nuclear generating units at six sites in the states of Wisconsin, Minnesota, Michigan, and Iowa with a total combined generating capacity of about 4,500 megawatts as of December 31, 2003. Wisconsin Electric continues to own Point Beach and retains exclusive rights to the energy generated by the plant as well as financial responsibility for the safe operation, maintenance and decommissioning of Point Beach. For further information, see "Factors Affecting Results, Liquidity and Capital Resources" in Item 7.

Nuclear Fuel Supply:   Wisconsin Electric purchases uranium concentrates (Yellowcake) and contracts for its conversion, enrichment and fabrication. Wisconsin Electric maintains title to the nuclear fuel until fabricated fuel

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

Conversion:   Wisconsin Electric has a long-term contract with a provider of uranium conversion services to supply 75% of the conversion requirements for the Point Beach reactors through 2004. Wisconsin Electric has an additional long-term conversion contract with a second conversion supplier to supply the remaining 25% of Wisconsin Electric's annual conversion requirements through 2004. Wisconsin Electric also has the option to utilize two NMC fleet contracts for conversion services to meet approximately 45 % of its conversion requirements through 2007. We are currently pursuing additional contracts for conversion services for Point Beach beyond our 2004 requirements.

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

Fabrication:   Fabrication of fuel assemblies from enriched uranium for Point Beach is covered under a contract with Westinghouse Electric Company, LLC for the balance of the plant's current operating licenses.

Used Fuel Storage & Disposal:   For information concerning used fuel storage and disposal issues, see "Factors Affecting Results, Liquidity and Capital Resources" in Item 7.

Nuclear Decommissioning:   Wisconsin Electric provides for costs associated with the eventual decommissioning of Point Beach through the use of an external trust fund. Payments to this fund, together with investment results, brought the balance in the fund at December 31, 2003 to approximately $674.4 million. For additional information regarding decommissioning, see "Note F -- Nuclear Operations" in the Notes to Consolidated Financial Statements in Item 8.

Nuclear Plant Insurance:   For information regarding nuclear plant insurance, see "Factors Affecting Results, Liquidity and Capital Resources" in Item 7 and "Note F - Nuclear Operations" in the Notes to Consolidated Financial Statements in Item 8.

Wisconsin Electric:   Wisconsin Electric's hydroelectric generating system consists of fourteen operating plants with a total installed capacity of approximately 89 megawatts and a dependable capability of approximately 57 megawatts. Of these fourteen plants, thirteen are licensed by the FERC. The fourteenth plant, with an installed generating capacity of approximately 2 megawatts, does not require a license. Of the thirteen licensed plants, twelve plants, representing a total of 85 megawatts of installed capacity, have long-term licenses from the FERC, and one plant, the Sturgeon project, will not be relicensed and is intended to be removed. Removal of the Sturgeon project has commenced and will continue over the next several years.

Edison Sault:   Edison Sault's primary source of generation is its 30-megawatt hydroelectric generating plant located on the St. Marys River in Sault Ste. Marie, Michigan. The water for this facility is leased under a contract with the United States Army Corps of Engineers with tenure to December 31, 2050. However, the Secretary of the Army has the right to terminate the contract subsequent to December 2020. Edison Sault pays for all water taken from the St. Marys River at predetermined rates with a minimum annual payment of $0.1 million. The total flow of water taken out of Lake Superior, which in effect is the flow of water in the St. Marys River, is under the direction and control of the International Joint Commission, created by the Boundary Water Treaty of 1909 between the United States and Great Britain, now represented by Canada.

Hydroelectric generation is also purchased by Edison Sault under contract from the United States Army Corps of Engineers' hydroelectric generating plant located within the Soo Locks complex on the St. Marys River in Sault

Ste. Marie, Michigan. This 17 megawatt contract has a tenure to November 1, 2040 and cannot be terminated by the United States government prior to November 1, 2030.

Our natural gas-based generation consists of 4 operating plants with a dependable capability of approximately 1,157 megawatts. The Concord and Paris Combustion Turbine Power Plants, Germantown Unit 5 and the Oak Creek combustion turbine use natural gas as their primary fuel, with fuel oil as backup. Natural gas is also used for boiler ignition and flame stabilization purposes at the Pleasant Prairie and Oak Creek Power Plants. Gas for these plants is purchased on the spot market from gas marketers and/or producers and delivered on the local distribution system of Wisconsin Electric's gas operations. An interruptible balancing and storage agreement with ANR Pipeline is intended to facilitate the variable gas usage pattern of the combustion turbine plants.

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

Wisconsin Electric also has power purchase agreements with Alliant Energy Neenah, LLC (Alliant), a subsidiary of Alliant Energy Corporation and LSP-Whitewater, LP, a subsidiary of Cogentrix, Inc., both of which utilize natural gas as primary fuel and fuel oil as back-up fuel. LSP-Whitewater, LP is responsible for its own natural gas and fuel oil procurement for its Whitewater Cogeneration Facility. Wisconsin Electric procures and delivers fuel to Alliant's Neenah Energy Facility and receives the electric power produced, as discussed in "Purchase Power Commitments" below. Wisconsin Electric has another power purchase agreement with Calpine Corporation for peaking capacity from a Zion, Illinois facility which began commercial operation during the summer of 2002. Wisconsin Electric procures and delivers natural gas to the plant and receives the electric power produced, similar to the Alliant agreement.

During 2003, the PSCW approved a program for a two-year period allowing Wisconsin Electric to hedge up to 75% of its estimated monthly gas purchases for electric generation. Wisconsin Electric includes the costs of this risk management program in its fuel and purchased power costs.

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

Fuel oil is used for the combustion turbines at the Point Beach and Germantown Power Plants units 1-4. It is also used for boiler ignition and flame stabilization at the Presque Isle Power Plant, as backup for ignition at the Pleasant Prairie Power Plant and as a backup fuel for the natural gas-based turbines discussed above. The natural gas facilities burn oil only if natural gas is not available due to constraints on the natural gas pipeline and/or at the local gas distribution company that delivers gas to the plants. Fuel oil requirements are purchased under partnering agreements with suppliers that assist Wisconsin Electric with inventory tracking and oil market price trends.

Wisconsin Electric:   To meet a portion of its anticipated increase in future electric energy supply needs, Wisconsin Electric has entered into separate long-term power purchase contracts with LSP-Whitewater, LP, Alliant, Calpine Corporation and Ameren Energy Marketing Company.

The contract with LSP-Whitewater, LP, a subsidiary of Cogentrix, Inc., for 236 megawatts of firm capacity from the gas-based Whitewater Cogeneration Facility located in Whitewater, Wisconsin, does not include any minimum energy requirements.

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

Calpine Corporation's Zion, Illinois facility consists of three 150 MW gas turbine peaking units. Two units became commercial in 2002 and the third unit became commercial in 2003. All three units were under contract to Wisconsin Electric during 2003. Wisconsin Electric will also have the full 450 megawatts available for its use in 2004. This power purchase agreement is also a tolling agreement.

Ameren Energy Marketing's Elgin Energy Center, located in Elgin, Illinois, began commercial operation in fall 2002. It consists of four, 116 megawatt combustion turbine units, one of which will be under contract to Wisconsin Electric starting June 1, 2004. This agreement is also a tolling agreement and has a term of 5 years.

Wisconsin Electric currently expects to utilize new generating capacity identified in our Power the Future proposal, as well as purchase power commitments with independent power producers, to meet its electric demand load growth.

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

Edison Sault:   Edison Sault purchased 713.7 thousand megawatt hours or 79% of its energy supply during 2003 to meet its energy requirements, including 393.3 thousand megawatt hours from Wisconsin Electric.

Effective January 1, 2001, Edison Sault began purchasing additional capacity and energy from Wisconsin Electric under the terms of a joint operating agreement. Under the agreement, Edison Sault and Wisconsin Electric each retain the rights to any generation and purchased power contracts that were in place on July 1, 2000. Any additional capacity and energy needs of the two companies would be obtained on a joint basis and the costs shared.

American Transmission Company:   Effective January 1, 2001, we transferred all of the electric utility transmission assets of Wisconsin Electric and Edison Sault to American Transmission Company LLC (ATC) in exchange for ownership interests in this new company. Joining ATC is consistent with the FERC's Order No. 2000, designed to foster competition, efficiency and reliability in the electric industry.

ATC is owned and governed by the utilities that contributed facilities or capital in accordance with 1999 Wisconsin Act 9. At December 31, 2003, we owned approximately 39.4% of ATC.

ATC's sole business is to provide reliable, economic electric transmission service to all customers in a fair and equitable manner. Specifically, ATC plans, constructs, operates, maintains and expands transmission facilities it owns to provide for adequate and reliable transmission of electric power. ATC is expected to provide comparable service to all customers, including Wisconsin Electric and Edison Sault, and to support effective competition in energy markets without favoring any market participant. ATC is regulated by the FERC for all rate terms and conditions of service and is a transmission-owning member of the Midwest Independent Transmission System Operator, Inc. (Midwest ISO). As of February 1, 2002, operational control of ATC's transmission system was transferred to the Midwest ISO, and Wisconsin Electric is a non-transmission owning member and customer of the Midwest ISO.

Wisconsin Electric has contracted to provide, at cost, services required by ATC and which ATC is not able to provide itself at this time. Services include transmission line and substation operation and maintenance, engineering, project, real estate, environmental, supply chain, control center, accounting and miscellaneous services.

Midwest ISO:   In connection with its role as a FERC approved Regional Transmission Organization (RTO), the Midwest ISO is in the process of developing a bid-based energy market which is currently proposed to be implemented on December 1, 2004.

In the Midwest ISO, base transmission costs are currently being paid by load serving entities (LSEs) located in the service territories of each Midwest ISO transmission owner in proportion to the load served by the LSE versus the total load of the service territory. This "license plate" rate design is scheduled to be replaced after a six-year phase-in of rates in Midwest ISO.

Lost Revenue Charges:   The FERC permits transmission owning utilities that have not joined an RTO to propose a charge to recover revenues that would be lost as a result of RTO membership. These lost revenues result from FERC's requirement that, within an RTO and for transmission between the systems operated by the Midwest ISO and PJM Interconnection, LLC, entities that currently pay a transmission charge to move energy through or out of a neighboring transmission system will no longer pay this charge to the neighboring transmission system owner or operator upon the neighboring transmission system owner or operator joining an RTO.

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

Our Power the Future plan includes a commitment to significantly increase the amount of renewable energy generation we utilize beyond that required by Wisconsin law. Our target is to provide 5% of retail electric sales in Wisconsin from renewable energy resources by the year 2011. In addition, Wisconsin Electric has an "Energy For Tomorrow®" renewable energy program to promote additional usage by our customers of energy produced from renewable resources.

The public benefits legislation requires that retail energy providers supply a minimum of 0.5% of their Wisconsin retail electric sales from renewable energy increasing to 2.2% by the year 2011. We met this requirement for 2003. For more information about public benefits see "Regulation -- Utility Energy Segment" below.

Our gas utility business is highly seasonal due to the heating requirements of residential and commercial customers. Annual gas sales are also impacted by the variability of winter temperatures.

See "Consolidated Selected Utility Operating Data" in Item 6 for selected gas utility operating information by customer class during the period 1999 through 2003.

Wisconsin Gas:   For the year of 2003, Wisconsin Gas delivered a total of approximately 1,282.9 million therms, including customer-owned transported gas, a 4.2% increase compared with 2002. As of December 31, 2003, Wisconsin Gas was transporting gas for approximately 1,090 customers who purchased gas directly from other

The maximum daily send-out of Wisconsin Gas during 2003 was 859,532 dekatherms on January 22, 2003. A dekatherm is equivalent to ten therms or one million British thermal units.

Wisconsin Electric:   Total gas therms delivered by Wisconsin Electric, including customer-owned transported gas, were approximately 888.3 million therms during 2003, a 0.2% decrease compared with 2002. At December 31, 2003, Wisconsin Electric was transporting gas for approximately 370 customers who purchased gas directly from other suppliers. Transported gas accounted for approximately 35% of total volumes delivered by Wisconsin Electric during 2003, 38% during 2002 and 39% during 2001. Wisconsin Electric had approximately 428,700 gas customers at December 31, 2003, an increase of approximately 2.0% since December 31, 2002.

Wisconsin Electric's maximum daily send-out during 2003 was 718,046 dekatherms on January 22, 2003.

Sales to Large Gas Customers:   We provide gas utility service to a diversified base of industrial customers who are largely within our electric service territory. Major industries served include the paper, food products and fabricated metal products industries. Fuel used for Wisconsin Electric's electric energy supply represents our largest transportation customer.

Gas Deliveries Growth:   We currently forecast total therm deliveries of natural gas to grow at an annual rate of approximately 0.8% for the combined gas operations of Wisconsin Electric and Wisconsin Gas over the five-year period ending December 31, 2008. This forecast reflects a current year normalized sales level and assumes moderate growth in the economy of our gas utility service territories and normal weather.

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

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

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

Both Wisconsin Gas and the gas operations of Wisconsin Electric have been able to meet their contractual obligations with both their suppliers and their customers despite periods of severe cold and unseasonably warm weather.

Pipeline Capacity and Storage:   In addition to the Guardian pipeline that receives gas supply in the Joliet, Illinois market hub, the interstate pipelines serving Wisconsin originate in three major gas producing areas of North America: the Oklahoma and Texas basins, the Gulf of Mexico and western Canada. We have contracted for long-term firm capacity from each of these areas. This strategy reflects management's belief that overall supply security is enhanced by geographic diversification of the supply portfolios and that Canada represents an important long-term source of reliable, competitively-priced gas.

Because of the daily and seasonal variations in gas usage in Wisconsin, we have also contracted for substantial underground storage capacity, primarily in Michigan. Storage capacity enables us to manage significant changes in daily demand and to optimize our overall gas supply and capacity costs. We generally inject gas into storage during the spring and summer months and withdraw it in the winter months. As a result, we can contract for less long-line pipeline capacity than would otherwise be necessary, and can purchase gas on a more uniform daily basis from suppliers year-round. Each of these capabilities enables us to reduce our overall costs.

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

We hold firm daily transportation and storage capacity entitlements from pipelines and other service providers under long-term contracts.

Term Gas Supply:   On a combined basis, Wisconsin Gas and the gas operations of Wisconsin Electric currently have contracts for firm supplies with terms in excess of 30 days with 12 gas suppliers for gas acquired in the Chicago area hub and in the three producing areas discussed above. The pricing of the term contracts is based upon first of the month indices. Management believes that the volume of gas under contract is sufficient to meet our forecasted firm peak day demand.

Secondary Market Transactions:   Capacity release is a mechanism by which pipeline long-line and storage capacity and gas supplies under contract can be resold in the secondary market. Local distribution companies, like Wisconsin Gas and the gas operations of Wisconsin Electric, must contract for capacity and supply sufficient to meet the firm peak day demand of their customers. Peak or near peak demand days generally occur only a few times each year. Capacity release facilitates higher utilization of contracted capacity and supply during those times when the full contracted capacity and supply are not needed by the utility, helping to mitigate the fixed costs associated with maintaining peak levels of capacity and gas supply. Through pre-arranged agreements and day-to-day electronic bulletin board postings, interested parties can purchase this excess capacity and supply. The proceeds from these transactions are passed through to ratepayers, subject to the Wisconsin Elect ric and Wisconsin Gas gas cost incentive mechanisms pursuant to which the companies have an opportunity to share in the cost savings. See "Factors Affecting Results, Liquidity and Capital Resources -- Rates and Regulatory Matters" in Item 7 for information on the gas cost recovery mechanism and gas cost incentive mechanism. During 2003, we continued our active participation in the capacity release market.

Spot Market Gas Supply:   Wisconsin Gas and the gas operations of Wisconsin Electric expect to continue to make gas purchases in the 30-day spot market as price and other circumstances dictate. We have supply relationships with a number of sellers from whom we purchase spot gas.

Hedging Gas Supply Prices:   Wisconsin Gas and the gas operations of Wisconsin Electric have PSCW approval to hedge 50% of planned flowing gas and storage inventories supply using NYMEX based natural gas options. That approval allows both companies to pass 100% of the hedging costs (premiums and brokerage fees) and proceeds through their respective purchase gas adjustment mechanisms. Hedge targets (volumes) are provided annually to the PSCW as part of each company's five-year gas supply plan filing.

To the extent that opportunities develop and the companies' physical supply operating plans will support them, Wisconsin Gas and Wisconsin Electric also have PSCW approval to utilize NYMEX based natural gas derivatives to capture favorable forward market price differentials. That approval provides for 100% of the related proceeds to accrue to the companies' gas cost recovery (incentive) mechanisms.

Guardian Pipeline:   In March 1999, WICOR, Inc. (WICOR) announced the formation of a joint venture, Guardian Pipeline, L.L.C. (Guardian), to construct the Guardian interstate natural gas pipeline from the Joliet, Illinois market hub to southeastern Wisconsin. The Guardian pipeline is designed to serve the growing demand for natural gas in Wisconsin and Northern Illinois. WICOR, WPS Investments, LLC, an affiliate of WPS Resources Corporation, and an

affiliate of Northern Border Partners, LLP have equal co-ownership interests in Guardian. On March 14, 2001, the FERC issued a certificate of public convenience and necessity authorizing construction and operation of the Guardian pipeline.

Construction commenced on the Guardian pipeline in the spring of 2002. Currently, Guardian has firm precedent agreements to transport 88% of its 750,000 dekatherms per day pipeline design capacity. Guardian pipeline began commercial operation in early December 2002. Guardian has financed this project using $82 million of total capital contributions split equally among the three co-owners, the proceeds of a $170 million fixed rate, amortizing project term loan and a $10 million 3-year revolving credit agreement arranged in November 2001.

Wisconsin Gas has no ownership interest in Guardian. Wisconsin Gas has committed to purchase 650,000 dekatherms per day of capacity on the pipeline and construct a 35-mile lateral at a cost of approximately $97.5 million to connect its distribution system to the Guardian pipeline. Wisconsin Gas received final approval to construct and operate the lateral from the PSCW in an order dated July 25, 2001. Wisconsin Gas began taking delivery of gas supply from the Guardian pipeline in December 2002 through an interconnection point to its distribution system. With construction of the lateral completed in December 2003, Wisconsin Gas has access to its full contract capacity from the Guardian pipeline.

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

Annual sales of steam fluctuate from year to year based upon system growth and variations in weather conditions. During 2003, the steam utility had $22.5 million of operating revenues from the sale of 3,073 million pounds of steam compared with $21.5 million of operating revenues from the sale of 3,001 million pounds of steam during 2002. As of December 31, 2003 and 2002, steam was used by approximately 460 and 470 customers, respectively, for processing, space heating, domestic hot water and humidification.

Water Utility Operations:   To leverage off of operational similarities with its natural gas business, Wisconsin Gas entered the water utility business in November 1998. As of December 31, 2003, the water utility served about 2,600 water customers in the suburban Milwaukee area compared with approximately 2,380 customers at December 31, 2002. Wisconsin Gas also provides contract services to local municipalities and businesses within its service territory for water system repair and maintenance. During 2003, the water utility had $1.8 million of operating revenues compared with $1.6 million of operating revenues during 2002.

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

Our manufacturing segment consists of WICOR Industries, LLC, an intermediary holding company. Its three primary subsidiaries: Sta-Rite, SHURflo and Hypro, were acquired as part of the April 2000 WICOR merger. For the year ended December 31, 2003, WICOR Industries had $746.1 million of operating revenues compared with $685.2 million of operating revenues during 2002. In February 2004, we announced that we had reached an agreement to sell this segment to Pentair, Inc. for $850 million and the assumption of approximately $25 million of debt. We expect the sale to close during the second or third quarter of 2004 following receipt of necessary government approvals. For further information about the sale see "Capital Resources" in Item 7.

Sta-Rite Industries, LLC:   Sta-Rite is organized under the laws of the state of Wisconsin and maintains its principal office and place of business in Delavan, Wisconsin. Sta-Rite is a manufacturer and marketer of pumps, tanks, water treatment products and fluid handling equipment for the water systems, agricultural, pool/spa and water treatment markets world wide. Sta-Rite's products are manufactured at 17 locations with facilities in the United States, Australia, Canada, China, Germany, India, Italy, Mexico and New Zealand and are sold through a world wide network of distributors, retailers and original equipment manufacturers.

SHURflo, LLC:   SHURflo is organized under the laws of the state of California and maintains its principal office and place of business in Cypress, California. SHURflo manufactures high performance pumps and fluid handling equipment for the beverage/food service, recreational vehicle, marine, industrial, and water treatment markets. Its products are manufactured in California and England. They are sold and distributed globally through original equipment manufacturers and a network of distributors.

Hypro, LLC:   Hypro is organized under the laws of the state of Delaware and maintains its principal office and place of business in New Brighton, Minnesota. Hypro manufactures pumps, accessories and pumping systems for agricultural, marine, industrial and fire fighting markets. Hypro's products are manufactured in Minnesota, Oregon and England and are sold to original equipment manufacturers, distributors and agricultural retailers.

Water products include jet, centrifugal, sump, submersible and submersible turbine water pumps, water storage and pressure tanks, water filters, pool and spa filters, pool heaters and pump and tank systems. These products pump, filter and store water used for drinking, cooking, washing and livestock watering and are used in private and public swimming pools, spas, hot tubs, jetted bathtubs and fountains. Our manufacturing businesses also produce large higher capacity water pumps used in agricultural and turf irrigation systems and in a wide variety of commercial, industrial and municipal fluids-handling applications.

High performance pumps, related fluids-handling products, accessories and pumping systems have applications in a variety of markets, including: (1) the food service industry, where gas-operated pumps are used for pumping soft drinks made from syrups, and electric motor driven pumps are used for water boost and drink dispensing; (2) the recreational vehicle and marine markets, where electric motor driven pumps are used for multiple applications including pumping potable water in travel trailers, motor homes, camping trailers and boats, and for other purposes including marine engine cooling, marine washdown, bilge and livewell pumping; (3) agricultural markets, for spraying fertilizers and pesticides on crops; (4) industrial markets, where applications include carpet cleaning machines for soil extraction, fire fighting and pressure cleaning applications and general industrial uses requiring fluid handling; and (5) the water purification industry, where electric motor driven pumps are use d to pressure reverse osmosis systems for water transfer.

Sales of pumps and water processing equipment are somewhat related to the season of the year as well as the level of activity in the housing construction industry and are sensitive to weather, interest rates, discretionary income and leisure and recreation spending. The markets for most water and industrial products are highly competitive, with price, service and product performance all being important competitive factors. We believe we are a leading producer of pumps for private water systems and swimming pools, spas, food service, recreational vehicle, agricultural spraying, marine engine cooling and foam proportioning systems for the fire fighting markets. Management believes we also rank among the larger producers of pool and spa filters and submersible turbine pumps. Brand names include "AquaTools," "Berkeley," "Edwards," "Fibredyne," "Flotec," "FoamPro," "Hydro-Flow," "Hypro," "Lurmark," "Nocchi," "Omnifilter," "Onga," "Park," "Rivaflo," "Sherwood," "SHURflo," "Simer," "Sta-Rite," "Tate-Western, " "Aermotor," "Diamond," "Ultra-Jet," and "VICO."

Domestic pumps and water products are sold and serviced primarily through a network of independent distributors, dealers, retailers and manufacturers' representatives serving the well drilling, hardware, plumbing, water treatment, pump installing, irrigation, pool and spa, food service, recreational vehicle, marine, industrial, commercial and do-it-yourself markets. Sales are also made on a private label basis to large customers in various water products markets and to original equipment manufacturers.

Backlog of orders for pumps and water products is not a significant indicator of future sales.

International operations are conducted primarily by international subsidiaries and export operations from the United States. Products are sold to markets in approximately 106 countries on six continents. Foreign manufacturing is carried out by Australian, Canadian, Chinese, English, German, Indian, Italian, Mexican and New Zealand operations. The products sold in international markets in some cases are similar to those sold in the United States, but in many instances have distinct features required for those markets. Product distribution channels are similar to those for domestic markets. Non-domestic operating revenues, including exports, were 29% of manufacturing segment sales during 2003 and 26% during 2002.

Raw materials essential to the manufacturing operations are available from various established sources in the United States and overseas. The principal raw materials needed for production of our primary lines of products include: cast iron, aluminum and bronze castings for pumps; copper wire, steel and aluminum for motors; stainless and carbon sheet steel, bar steel and tubing; plastic resins for injection molded components; and powdered metal components. Our manufacturing units also purchase from third-party suppliers completely assembled electric motors, plastic molded parts, elastomers for valves and diaphragms, components for electric motors, stamped and die-cast metal parts, and hardware and electrical components. Although our manufacturing subsidiaries own a number of patents and hold licenses for manufacturing rights under other patents, no one patent or group of patents is material to the success of our manufacturing businesses as a whole.

Our non-utility energy segment is involved in a variety of businesses including the ownership and operation of independent electric generating facilities and investment in other energy-related entities and assets.

During 2000, we performed a comprehensive review of our existing portfolio of businesses and began implementing a strategy of divesting many of our non-utility energy segment businesses, especially those outside of the Midwest region. As we implement our Power the Future strategy, management expects to grow the non-utility energy segment within the state of Wisconsin through our subsidiary We Power.

Since 2000, we have sold our interest in SkyGen Energy Holdings, LLC., FieldTech, Inc., our interest in Blythe Energy, LLC, our interest in Wisvest-Connecticut LLC, a 500 megawatt natural gas power island, and our interests in Kaztex Energy Management, Inc. and Blackhawk Energy Services, LLC.

According to the state of Wisconsin 2001 Energy Policy Report, demand for electricity in the state of Wisconsin is currently expected to outstrip supply by 7,220 megawatts by 2016. In addition, Wisconsin Electric's customer load is growing at a rate of approximately 100 to 150 megawatts per year. In response, we created We Power in November 2001 to provide a part of the new generation to meet Wisconsin's future demand for electricity. We Power will design, construct, own, finance, and lease 2,320 megawatts of new generating capacity in the state of Wisconsin proposed as part of our Power the Future plan. We expect that two unaffiliated entities together will own approximately 17% or 204-megawatts of capacity in two coal units to be constructed in Oak Creek, Wisconsin, and We Power will own the remaining 2,120-megawatts of generating capacity. At December 31, 2003, We Power had $210.8 million of construction work in progress.

Power the Future will allow us to manage our fuel mix, by including new coal-based plants as well as natural gas-based plants. Without the Power the Future strategy, we anticipate that new generation in Wisconsin would most likely come from independent power producers constructing natural gas-based facilities. Due to natural gas price volatility, we believe it is not in the best interests of ratepayers to only build new natural gas-based generation. Coal prices historically have been more stable, and the fuel is much more plentiful. The creation of We Power provides

Wisvest was originally formed to develop, own and operate electric generating facilities and to invest in other energy-related entities. As a result of the change in corporate strategy to focus on our Power the Future strategy, Wisvest has discontinued its development activity. For the year ended December 31, 2003, Wisvest had $11.7 million of operating revenues compared with $166.6 million of operating revenues during 2002. We have divested, or are in the process of divesting, the majority of Wisvest's assets. On December 6, 2002, Wisvest completed the sale of its ownership interest in Wisvest-Connecticut, LLC, which included 1,056 megawatts of capacity in the state of Connecticut. These plants had originally been acquired in April 1999. During 2002 Wisvest-Connecticut had operating revenues of $155.7 million. In October 2003, Wisvest completed the sale of its investments in Kaztex Energy Management, Inc. and Blackhawk Energy Services, LLC, strategic energ y management services companies and sold the 500-megawatt (nominal) Siemens Westinghouse advanced technology natural gas power island it had originally purchased for potential development. As of December 31, 2003, Wisvest operations and investments included:

Calumet Energy Team, LLC:   Calumet Energy owns and operates a 308 megawatt natural gas-based peaking power plant in Chicago, Illinois. The total plant investment is $157 million and it began commercial operation in June 2002. Calumet has a ten-year capacity reservation agreement for 50 megawatts of plant capacity with Midwest Generation, LLC, supported by the City of Chicago. The remaining plant capacity is marketed as merchant power. The plant has experienced very limited demand for production during its period of operation in 2002 and 2003 due to excess capacity in the region and soft electricity market prices. For additional information on Calumet Energy see "Factors Affecting Results, Liquidity and Capital Resources" in Item 7.

Other:   We have an interest in a cogeneration facility in the state of Maine, through an equity investment in Androscoggin Energy LLC. We own Wisvest Thermal Energy Services, which provides chilled water services to the Milwaukee Regional Medical Center.

Minergy is engaged in the development and marketing of proprietary technologies designed to convert high volume industrial and municipal wastes into renewable energy and value-added products. Minergy's strategic focus is to license that technology and sell equipment to domestic and foreign operators or industrial/municipal users through its patented GlassPack process as a component of larger scale waste processing solutions. Management believes this licensing strategy will allow Minergy to recognize the economic benefits of its technology with limited capital requirements. For the year ended December 31, 2003, Minergy had $22.2 million of consolidated operating revenues compared with $16.6 million of consolidated operating revenues during 2002. Minergy's primary operations and investments include:

Minergy Neenah, LLC:   In 1998, Minergy Neenah, LLC opened a facility in Neenah, Wisconsin that recycles paper sludge from area paper mills using our patented Glass Aggregate technology into renewable energy and glass aggregate. The Glass Aggregate technology is a vitrification process that converts the organic fraction of a waste material into heat and also melts the inorganic fraction into an inert glass aggregate material. The plant also provides substantial environmental and economic benefits to the area by providing an alternative to landfilling paper sludge. Minergy intends to maintain ownership and operation of this facility.

GlassPack, LLC:   Minergy has designed, permitted and constructed a GlassPack demonstration facility in Winneconne, Wisconsin which utilizes our patented GlassPack technology. The GlassPack technology converts sludges, soils and sediments into renewable energy and glass aggregate. It is a smaller, less expensive, and environmentally cleaner version of the Neenah facility and is ideally suited for smaller wastewater treatment and industrial plants. Minergy has successfully processed numerous municipal wastewater and industrial sludges in the

Minergy Detroit, LLC:   In September 1999, the City Council of Detroit, Michigan awarded a 15-year contract to Minergy Detroit, LLC to recycle 500 to 600 dry tons per day of the city's wastewater solids into a glass aggregate product. The contract is contingent upon Minergy Detroit, LLC obtaining satisfactory financing, required construction and operating permits and the necessary construction agreements. To date, Minergy has been unable to negotiate satisfactory agreements. Minergy is pursuing a contract assignment or sale to third parties, to determine if the project will be developed. If no transfer is executed, Minergy has the contractual right to sell the land it currently owns for the project back to the Economic Development Commission of the City of Detroit in 2004 at cost.

Wispark develops and invests in real estate. From September 2000 through December 31, 2003, Wispark has reduced its overall holdings from $373.1 million to $159.5 million. Wispark will maintain its remaining portfolio for investment and potential sale. During the twelve months ended December 31, 2003, Wispark had $11.6 million of consolidated operating revenues compared with $18.2 million during 2002.

Wispark has developed several business parks primarily in southeastern Wisconsin. Wispark's flagship development, the 1,600-acre LakeView Corporate Park located near Kenosha, Wisconsin is home to more than 69 companies located in more than 8.3 million square feet of buildings that have been developed on property in excess of 899 acres. Many out-of-state firms have located in this park, creating a significant number of new jobs and growth in electricity and natural gas revenues.

Other non-utility subsidiaries primarily include:

Wisconsin Energy Capital Corporation:   Wisconsin Energy Capital Corporation engages in investing and financing activities. Activities include advances to affiliated companies and investments in financial instruments and in partnerships developing low- and moderate-income housing projects. Other investments may be made from time to time.

WEC Nuclear Corporation:   WEC Nuclear Corporation has a 20% ownership interest in NMC. Formed during the first quarter of 1999, NMC provides services to Wisconsin Electric in connection with Point Beach Nuclear Plant as well as to other unaffiliated companies with nuclear generating facilities. For additional information about NMC, see "Utility Energy Segment" above and "Factors Affecting Results, Liquidity and Capital Resources" in Item 7.

Witech Corporation:   Witech Corporation is a venture capital company operating in the state of Wisconsin. At December 31, 2003, Witech had investments in three companies. We continue to evaluate the Witech portfolio in connection with our announced strategy to focus on core investments. The investment values are insignificant to us.

WEC International, Inc.:   WEC International previously had two investments in joint ventures in the Netherlands involving waste treatment and by-product utilization activities which are currently in bankruptcy proceedings. The investments were insignificant to us.

Badger Service LLC:   Badger Service holds coal rights in Indiana. Estimates indicate that 40 million tons of coal could be recovered from this property with conventional mining techniques. However, there are no current plans to develop the property. Badger Service may sell or develop these rights in the future as conditions warrant.

Wisconsin Energy is an exempt holding company by order of the SEC under Section 3(a)(1) of the Public Utility Holding Company Act of 1935, as amended, and, accordingly, is exempt from that law's provisions other than with respect to certain acquisitions of securities of a public utility.

Non-Utility Asset Cap:   In October 1999, the Wisconsin State Legislature passed amendments to the non-utility asset cap provisions of Wisconsin's public utility holding company law as part of the 1999-2001 biennial state budget, 1999 Wisconsin Act 9. As a result, we remain subject to certain restrictions that have the potential of limiting diversification into non-utility activities. Under the amended public utility holding company law, the sum of certain assets of all non-utility affiliates in a holding company system may not exceed 25% of the assets of all public utility affiliates. However, among other items, the amended law exempts energy-related assets and assets, like Minergy's, used for providing environmental engineering services and for processing waste materials from being counted against the asset cap provided that they are employed in qualifying businesses. In addition, the amended law also exempts the manufacture, distribution or sale of certain products of WICOR Industries used for filtration, pumping water or other fluids, processing or heating water, handling fluids or other related activities. As a result of these exemptions, our non-utility assets are significantly below the non-utility asset cap as of December 31, 2003.

Under our Power the Future plan, the $2.5 billion estimated cost of constructing 2,120 megawatts of new generating facilities to be owned by We Power is expected to qualify as energy projects under the amended non-utility asset cap and therefore would be entirely exempt from the definition of "non-utility" property for this purpose. The remaining cost of our Power the Future plan represents investments in new and existing energy distribution system assets and upgrades to existing generation assets and has no impact on the amount of non-utility assets under the non-utility asset cap test.

For us to qualify for the amended non-utility asset cap rules, all of our public utility affiliates were required to irrevocably transfer their electric transmission facilities and rights of way in the state of Wisconsin to ATC. As described in further detail under "Utility Energy Segment" above and in "Factors Affecting Results, Liquidity and Capital Resources" in Item 7, Wisconsin Electric and Edison Sault transferred their electric transmission system assets to ATC effective January 1, 2001.

Wisconsin Electric is an exempt holding company under Section 3(a)(1) of the Public Utility Holding Company Act of 1935, as amended, and Rule 2 thereunder and, accordingly, is exempt from that law's provisions other than with respect to certain acquisitions of securities of a public utility. For information on how rates are set for our regulated entities see "Rates and Regulatory Matters" in Item 7.

Wisconsin Electric and Wisconsin Gas are subject to the regulation of the PSCW as to retail electric, gas, steam and water rates in the state of Wisconsin, standards of service, issuance of securities, construction of certain new facilities, transactions with affiliates, billing practices and various other matters. Wisconsin Electric is subject to regulation of the PSCW as to certain levels of short-term debt obligations. Wisconsin Electric and Edison Sault are both subject to the regulation of the MPSC as to the various matters associated with retail electric service in the state of Michigan as noted above except as to issuance of securities, construction of certain new facilities, levels of short-term debt obligations and advance approval of transactions with affiliates. Wisconsin Electric's hydroelectric facilities are regulated by the FERC. Wisconsin Electric and Edison Sault are subject to regulation of the FERC with respect to wholesale power service and accounting. Edison Sault is subject to r egulation of the FERC with respect to the issuance of certain securities.

The following table compares the source of our utility energy segment operating revenues by regulatory jurisdiction for each of the three years in the period ended December 31, 2003.

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

Operation and construction relating to Wisconsin Electric's Point Beach Nuclear Plant are subject to regulation by the NRC. Total flow of water to Edison Sault's hydroelectric generating plant is under the control of the International Joint Commission, created by the Boundary Water Treaty of 1909 between the United States and Great Britain, now represented by Canada. The operations of Wisconsin Electric, Wisconsin Gas and Edison Sault are also subject to regulations, where applicable, of the United States Environmental Protection Agency (EPA), the Wisconsin Department of Natural Resources, the Michigan Department of Natural Resources and the Michigan Department of Environmental Quality.

Electric Reliability Legislation:   In 1998, the Wisconsin State Legislature passed and the Governor of Wisconsin signed into law 1997 Wisconsin Act 204, intended to address concerns with electric reliability in the state of Wisconsin. 1997 Wisconsin Act 204 included new requirements concerning market power which utilities and their affiliates must meet in order to construct generating facilities. The requirements apply to electric utility facilities in excess of 100 megawatts.

Public Benefits:   Public benefits legislation was included in 1999 Wisconsin Act 9. The law created new funding which is adjusted annually to be collected by all electric utilities and remitted to the Wisconsin Department of Administration. The law also required utilities to continue to collect the funds at existing levels for low-income, conservation and environmental research and development programs and to transfer the funds for these programs to the Department of Administration. We implemented this change in October 2000. The utilities' traditional role of providing these programs has shifted to the Department of Administration, which administers the funds for a statewide public benefits program.

This law also requires that retail energy providers supply 0.5% of their Wisconsin retail electric sales from renewable energy, which we did in 2003, with the required minimum percentage increasing to 2.2% by the year 2011.

Calumet Energy Team, LLC is an exempt wholesale generator pursuant to Section 32 of the Public Utility Holding Company Act of 1935, as amended. Calumet's operations are subject to regulation of the FERC with respect to wholesale power service and to regulations, where applicable, of the EPA and the Illinois Department of Environmental Protection.

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

Utility Energy Segment:   Compliance with federal, state and local environmental protection requirements resulted in capital expenditures by Wisconsin Electric of approximately $15 million in 2003 compared with $77 million in 2002. Expenditures incurred during 2003 primarily included costs associated with the installation of pollution abatement facilities at Wisconsin Electric's power plants. These expenditures at Wisconsin Electric are expected to approximate $105 million during 2004, reflecting nitrogen oxide (NO_x) and other pollution control equipment needed to comply with various rules promulgated by the EPA.

Operation, maintenance and depreciation expenses for Wisconsin Electric's fly ash removal equipment and other environmental protection systems are estimated to have been approximately $51 million during 2003 and $46 million during 2002.

We provide for the disposal of non-ash related solid wastes and hazardous wastes through licensed independent contractors, but federal statutory provisions impose joint and several liability on the generators of waste for certain cleanup costs. Currently there are no active cases.

Giddings and Lewis, Inc./City of West Allis Lawsuit:    For information about this matter, see "Note S -- Commitments and Contingencies" in the Notes to Consolidated Financial Statements in Item 8.

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

Lakeside Property:   During 2001, Wisconsin Electric completed an investigation of property that was used primarily for coal storage, fuel oil transport and coal ash disposal in support of the former Lakeside Power Plant in St. Francis, Wisconsin. Excavation and utilization of residual coal at the site, slope stabilization and cover construction have been completed. Currently, discussion is taking place with neighbors and other interested parties to determine ultimate use of the remediated property and some other adjacent land also owned by us. Future costs for remediation of this site are estimated to be approximately $2.8 million.

Oak Creek North Landfill:   Groundwater impairments at this landfill, located in the City of Oak Creek, Wisconsin, prompted Wisconsin Electric to investigate, during 1998, the condition of the existing cover and other conditions at the site. Surface water drainage improvements were implemented at this site during 1999 and 2000, which are expected to eliminate ash contact with water and remove unwanted ponding of water near monitoring systems. Future costs for remediation are estimated to be approximately $3.5 million and involve reconfiguration of the site and construction of a new cap, which will be accomplished as a part of site upgrades needed to facilitate construction of the new power plants.

We are reviewing and addressing environmental conditions at a number of former manufactured gas plant sites. See "Note S -- Commitments and Contingencies" in the Notes to Consolidated Financial Statements in Item 8.

The 1990 amendments to the Federal Clean Air Act mandate significant nationwide reductions in air emissions. The most significant sections of this law applicable to the country's electric utilities are the acid rain and nonattainment provisions. The acid rain provisions limit SO₂ and NO_x emissions in phases. Phase I became effective in 1995 and Phase II became effective during the year 2000. We have met the requirements of Phase I. The Phase II requirements are having a minimal impact on our utilities because of existing cost effective compliance strategies and previous actions taken.

Ozone nonattainment rules implemented by the state of Wisconsin and ozone transport rules implemented by the state of Michigan, both under authority of the Federal Clean Air Act, will limit NO_x emissions in phases ending in 2007.

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

Our Power the Future strategy provides a plan to meet our growing demand for electricity while using environmentally friendly equipment. Under Power the Future, we plan to build four new generating units, a total of 2,320 megawatts of capacity, at a total cost of approximately $2.8 billion (in year of occurrence dollars). When the plants are completed we expect to own approximately 1,090-megawatts of new natural gas-based generation and 1,030-megawatts of new coal-based generation. We plan to build the two coal units at the site of Wisconsin Electric's existing Oak Creek Power Plant. We anticipate that two unaffiliated entities together will own approximately 204-megawatts or 17% of these two units. The Oak Creek units will use a supercritical pulverized coal design and state-of-the-art emission controls. The other two natural gas-based units are being constructed at Wisconsin Electric's existing Port Washington Power Plant site, where older, less efficient c oal-based units installed before 1950 are being retired. Implementation of our Power the Future plan also provides for upgrades to existing power plants and modernization to increase efficiency and reduce emissions. As a result of the use of the latest emission reduction technologies on the new units, and the installation of equipment to reduce emissions on certain of our existing coal-based units, the plan results in a significant reduction in SO2, NOx and mercury emissions. In addition to the positive environmental attributes of the generation technologies, the plan involves an increased commitment to conservation and renewable fuels, as well as a commitment to address greenhouse gas issues. For further information about our Power the Future strategy, see "Non-Utility Energy Segment" above as well as "Corporate Developments" in Item 7.

Research and Development:   Wisconsin Electric had immaterial research and development expenditures in the last three years, primarily for improvement of service and abatement of air and water pollution by the electric utility operations. During the last three years, our manufacturing segment incurred immaterial research and development expenditures for the development of new or improved products. Research and development activities include work done by employees, consultants and contractors, plus sponsorship of research by industry associations.

Employees:   At December 31, 2003, we had the following number of individuals employed:

The employees represented under labor agreements were with the following bargaining units as of December 31, 2003.

Effective January 1, 2001, Wisconsin Electric and Edison Sault exited the electric transmission business by contributing all of their transmission assets to ATC in exchange for equity interests in this new company. For further information, see "Electric Utility Operations" in Item 1.

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

As of December 31, 2003, Wisconsin Electric operated approximately 21,900 pole-miles of overhead distribution lines and 19,800 miles of underground distribution cable as well as approximately 345 distribution substations and 260,200 line transformers.

As of December 31, 2003, Wisconsin Electric's gas distribution system included approximately 8,800 miles of mains connected at 22 gate stations to the pipeline transmission systems of ANR Pipeline Company, Guardian, Natural Gas Pipeline Company of America, Northern Natural Pipeline Company and Great Lakes Transmission

As of December 31, 2003, the combined steam systems supplied by the Valley and Milwaukee County Power Plants consisted of approximately 43 miles of both high pressure and low pressure steam piping, 9 miles of walkable tunnels and other pressure regulating equipment.

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

Wisconsin Gas:   Wisconsin Gas owns a distribution system which, on December 31, 2003, included approximately 10,300 miles of distribution and transmission mains. Wisconsin Gas' distribution system consists almost entirely of plastic and coated steel pipe. Wisconsin Gas owns office buildings in certain communities in which it serves, gas regulating and metering stations, peaking facilities and its major service centers, including garage and warehouse facilities.

Where distribution mains and services occupy private property, Wisconsin Gas in some, but not all, instances has obtained consents, permits or easements for these installations from the apparent owners or those in possession, generally without an examination of title.

Edison Sault:   Edison Sault's primary source of electric energy is its 30 megawatt hydroelectric generating plant on the St. Marys River in Sault Ste. Marie, Michigan. In addition, Edison Sault owns and operates a 4.8 megawatt diesel-based peaking power plant.

Edison Sault maintains approximately 847 miles of primary distribution lines and renders service to its customers through approximately 9,636 line transformers.

Wisvest Corporation:   Wisvest owns a chilled water production and distribution facility located in Milwaukee County, Wisconsin. Calumet Energy Team LLC owns a 308-megawatt peaking power plant in Chicago, Illinois. Wisvest-Connecticut, LLC owned two fossil-fueled power plants in the state of Connecticut: the Bridgeport Harbor Station and the New Haven Harbor Station. The Wisvest-Connecticut units were sold in December 2002.

We Power:   We Power commenced construction of the first unit of the Port Washington Generating Station in July 2003. At December 31, 2003 Port Washington plant construction work in progress totaled $176.1 million. We Power also reported as construction work in progress $34.7 million of capitalized design, regulatory approval and permitting costs related to the coal units proposed on the site of our Oak Creek Power Plant.

Our manufacturing segment, which will be sold to Pentair, Inc. upon the closing of the sale agreement announced in February 2004, has manufacturing or assembly facilities located in California (4), Minnesota, Nebraska, New Hampshire, Oregon, Wisconsin, Australia, Canada, China, England, Germany, India, Italy (3), Mexico (2) and New Zealand. These plants contain more than 1,772,000 square feet of floor space. In addition, through our manufacturing business, we own or lease sales/distribution facilities in the United States (11), in Australia (5), in Mexico (3), (2) each in Canada, Italy, New Zealand, and England and (1) each in China, France, Germany, India, and Russia. These facilities contain more than 548,000 square feet of floor space. Some of the distribution locations are attached to the manufacturing locations.

Wispark LLC:    As of December 31, 2003, Wispark properties included the following commercial and industrial parks in the state of Wisconsin: LakeView Corporate Park located near Kenosha; Business Park of Kenosha and

Minergy Corp.:   Minergy owns a Glass Aggregate facility located in Neenah, Wisconsin and a GlassPack facility in Winneconne, Wisconsin.

Other:   Badger Service LLC holds rights to coal in an area of 8,594 acres in Knox County, Indiana.

We are subject to federal, state and certain local laws and regulations governing the environmental aspects of our operations. Management believes that, perhaps with immaterial exceptions, our existing facilities are in compliance with applicable environmental requirements.

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

Giddings & Lewis, Inc./City of West Allis Lawsuit:   See "Note S -- Commitments and Contingencies" in the Notes to Consolidated Financial Statements in Item 8 for matters related to the settlement of a lawsuit alleging that Wisconsin Electric had placed contaminated wastes at two sites in the City of West Allis, Wisconsin.

See "Factors Affecting Results, Liquidity and Capital Resources" in Item 7 for information concerning rate matters in the jurisdictions where Wisconsin Electric, Wisconsin Gas and Edison Sault do business.

Lorenzo Peterson vs. Sta-Rite:   As previously reported, on September 4, 2001, a lawsuit was commenced against Sta-Rite Industries in the Circuit Court of the Eleventh Judicial Circuit in Miami-Dade County, Florida. Lorenzo Peterson, a minor, was seeking damages for the personal injuries he sustained when he was trapped under water after placing his hand in the main drain on the bottom of a pool. Trial commenced on July 21, 2003 and on August 1, 2003 the jury returned a verdict against Sta-Rite in the amount of $104.4 million in compensatory damages. Counsel for the plaintiff filed a motion requesting further proceedings before the court to determine whether punitive damages should also be assessed against Sta-Rite. The Court denied this motion on September 23, 2003 finding that the case on its merits did not warrant punitive damages. On October 14, 2003 the court denied Sta-Rite's post-verdict motions challenging the jury's ve rdict. Sta-Rite has appealed the jury verdict. In any event, we believe we have adequate insurance to cover the compensatory damages.

Used Nuclear Fuel Storage and Removal:   See "Factors Affecting Results, Liquidity and Capital Resources" in Item 7 for information concerning the United States Department of Energy's breach of a contract with Wisconsin Electric that required the Department of Energy to begin permanently removing used nuclear fuel from Point Beach Nuclear Plant by January 31, 1998.

Stray Voltage:   In recent years, several actions by dairy farmers have been commenced or claims made against Wisconsin Electric for loss of milk production and other damages to livestock allegedly caused by stray voltage resulting from the operation of its electrical system. One such action is currently pending. The claims made against Wisconsin Electric in this case are not expected to have a material adverse effect on our financial statements.

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

On June 25, 2003, the Wisconsin Supreme Court upheld a Court of Appeals decision that affirmed a jury's verdict against Wisconsin Electric awarding $1.2 million to the plaintiffs in a stray voltage lawsuit. The Wisconsin Supreme Court rejected the argument that if a utility company's measurement of stray voltage is below the PSCW "level of concern," such company cannot be found negligent in stray voltage cases. The Supreme Court decision held that PSCW regulations regarding stray voltage were only minimum standards to be considered by a jury in stray voltage litigation. However, the Supreme Court remanded back to the trial court its requirement imposed on Wisconsin Electric to replace a cable with an ungrounded distribution line.

On February 26, 2004, a Wisconsin jury awarded $850,000 to a dairy farmer who alleged that Wisconsin Electric's distribution system caused damages to his livestock. Wisconsin Electric intends to appeal this decision.

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

No matters were submitted to a vote of our security holders during the fourth quarter of 2003.

The names, ages at December 31, 2003 and positions of our executive officers are listed below along with their business experience during the past five years. All officers are appointed until they resign, die or are removed pursuant to the Bylaws. There are no family relationships among these officers, nor is there any agreement or understanding between any officer and any other person pursuant to which the officer was selected.

Richard A. Abdoo, Chairman of the Board and Chief Executive Officer of Wisconsin Energy and Chairman of the Board of Wisconsin Electric and Wisconsin Gas, has indicated his intention to retire from all officer and director positions with Wisconsin Energy and its subsidiaries, and to retire as an employee, effective as of April 30, 2004. Gale E. Klappa, currently President of Wisconsin Energy and President and Chief Executive Officer of Wisconsin Electric and Wisconsin Gas, has been appointed to the officer positions held by Mr. Abdoo. Accordingly, effective as of May 1, 2004, Mr. Klappa will hold the titles of Chairman of the Board, President and Chief Executive Officer of Wisconsin Energy, Wisconsin Electric and Wisconsin Gas.

In addition, James C. Donnelly has indicated his intention to retire from all officer and director positions with Wisconsin Energy and its subsidiaries, and to retire as an employee of WICOR Industries, effective as of May 1, 2004.

Richard A. Abdoo.  Age 59.

• Wisconsin Energy Corporation -- Chairman of the Board and Chief Executive Officer since 1991. President from 1991 to April 2003. Director since 1988.
• Wisconsin Electric Power Company -- Chairman of the Board since 1990. Chief Executive Officer from 1990 to July 2003. Director since 1989.
• Wisconsin Gas Company -- Chairman of the Board and Director since 2000.

Charles R. Cole.  Age 57.

• Wisconsin Electric Power Company -- Senior Vice President since 2001. Vice President of Distribution Operations from August 1999 to December 2000.
• Kansas City Power & Light -- Vice President of Customer Services from 1995 to 1999. Kansas City Power & Light is a regulated provider of electricity owned by Great Plains Energy.

Stephen P. Dickson.  Age 43.

• Wisconsin Energy Corporation -- Controller since 2000.
• Wisconsin Electric Power Company -- Controller since 2000.
• Wisconsin Gas Company -- Controller since 1998.

James C. Donnelly.  Age 58.

• WICOR Industries, LLC -- President and Chief Executive Officer since 2000.
• WICOR, Inc. -- Vice President since 1992.
• Sta-Rite Industries, LLC -- President and Chief Executive Officer since 1994.

Gale E. Klappa.  Age 53.

• Wisconsin Energy Corporation -- President since April 2003. Director since December 2003.
• Wisconsin Electric Power Company -- President and Chief Executive Officer since August 2003. Director since December 2003.
• Wisconsin Gas Company -- President and Chief Executive Officer since August 2003. Director since December 2003.
• Southern Company -- Executive Vice President, Chief Financial Officer and Treasurer from March 2001 to April 2003. Chief Strategic Officer from October 1999 to March 2001. Southern Company is a public utility holding company serving the southeastern United States.
• Southern Energy, Inc. (now Mirant Corporation) -- President of the North American Group and Senior Vice President from December 1998 to October 1999. Mirant is a multi-national energy company that produces and sells electricity.

Frederick D. Kuester.  Age 53.

• Wisconsin Electric Power Company -- Chief Operating Officer since October 2003.
• Mirant Corporation -- Senior Vice President of International from 2001 to October 2003 and Chief Executive Officer of Mirant Asia-Pacific Limited from 1999 to October 2003. Mirant is a multi-national energy company that produces and sells electricity. Mirant Corporation and certain of its subsidiaries voluntarily filed for bankruptcy in July 2003. Other than certain Canadian subsidiaries, none of Mirant's international subsidiaries filed for bankruptcy.

Allen L. Leverett.  Age 37.

• Wisconsin Energy Corporation -- Chief Financial Officer since July 2003.
• Wisconsin Electric Power Company -- Chief Financial Officer since July 2003.
• Wisconsin Gas Company -- Chief Financial Officer since July 2003.
• Georgia Power Company -- Executive Vice President, Treasurer, and Chief Financial Officer from May 2002 to July 2003. Assistant Treasurer from 2000 to 2002. Georgia Power Company is a utility affiliate of Southern Company which is a public utility holding company serving the southeastern United States.


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• Southern Company Services -- Vice President and Treasurer from 2000 to 2002. Vice President of Financial Planning and Analysis from 1997 to 2000. Southern Company Services is also an affiliate of Southern Company.

Larry Salustro.  Age 56.

• Wisconsin Energy Corporation -- Senior Vice President and General Counsel since 2000.
• Wisconsin Electric Power Company -- Senior Vice President and General Counsel since 2000. Vice President --Legal, Regulatory and Governmental Affairs from 1997 to 2000.
• Wisconsin Gas Company-- Senior Vice President and General Counsel since 2000.

Certain executive officers also hold offices in our non-utility subsidiaries.

As of December 31, 2003, based upon the number of Wisconsin Energy Corporation stockholder accounts (including accounts in our dividend reinvestment and stock purchase plan), we had 61,400 registered stockholders.

Our common stock is listed on the New York Stock Exchange. The ticker symbol is "WEC". Daily trading prices and volume can be found in the "NYSE Composite" section of most major newspapers, usually abbreviated as WI Engy.

Common Stock Dividends of Wisconsin Energy:   Cash dividends on our common stock, as declared by the board of directors, are normally paid on or about the first day of March, June, September and December. We review our dividend policy on a regular basis. Subject to any regulatory restrictions or other limitations on the payment of dividends, future dividends will be at the discretion of the Board of Directors and will depend upon, among other factors, earnings, financial condition and other requirements.

On February 4, 2004, our Board of Directors announced that it increased our common stock quarterly dividend rate by 5%, to $0.21 per share. With the increase, the new annual dividend rate will be $0.84 per share. In addition, the Board announced that it has established a goal of increasing the annual dividend at a rate of approximately half of the expected rate of growth in earnings, subject to the factors referred to above.