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

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 each 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 whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).    Yes [  ]    No [X]

Indicate the number of shares outstanding of each of the Registrant's classes of common stock as of the latest practicable date (June 30, 2004):

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

Wisconsin Electric Power Company (Wisconsin Electric), a wholly-owned subsidiary of Wisconsin Energy Corporation (Wisconsin Energy), was incorporated in the state of Wisconsin in 1896. We maintain our principal executive offices in Milwaukee, Wisconsin. Unless qualified by their context when used in this document, the terms the Company, Our, Us or We refer to Wisconsin Electric and its subsidiary.

We conduct our operations primarily in three operating segments: an electric utility segment, a natural gas utility segment and a steam utility segment. We serve approximately 1,072,000 electric customers in Wisconsin and the Upper Peninsula of Michigan, approximately 431,300 gas customers in Wisconsin and about 465 steam customers in metro Milwaukee, Wisconsin. For further financial information about our business segments, see Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 7 -- Segment Information in the Notes to Consolidated Condensed Financial Statements.

Wisconsin Energy is also the parent company of Wisconsin Gas LLC (Wisconsin Gas), a natural gas distribution utility, which serves customers throughout Wisconsin; Edison Sault Electric Company (Edison Sault), an electric utility which serves customers in the Upper Peninsula of Michigan; and W.E. Power, LLC (We Power), an unregulated company that was formed in 2001 to design, construct, own, finance and lease the new generating capacity included in Wisconsin Energy's Power the Future strategy. Wisconsin Electric and Wisconsin Gas have combined common functions and operate under the trade name of "We Energies".

Other:   Bostco LLC (Bostco) is our non-utility subsidiary that develops and invests in real estate. As of June 30, 2004, Bostco has $42.3 million of assets.

We have prepared the unaudited interim financial statements presented in this Form 10-Q pursuant to the rules and regulations of the Securities and Exchange Commission. We have condensed or omitted some information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles pursuant to these rules and regulations. Our financial statements should be read in conjunction with the financial statements and notes thereto included in our 2003 Annual Report on Form 10-K.

WISCONSIN ELECTRIC POWER COMPANY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

Our accompanying unaudited consolidated condensed financial statements should be read in conjunction with Item 8, Financial Statements and Supplementary Data, in our 2003 Annual Report on Form 10-K. In the opinion of management, we have included all adjustments, normal and recurring in nature, necessary to a fair presentation of the results of operations, cash flows and financial position in the accompanying income statements, statements of cash flows and balance sheets. The results of operations for the three and six months ended June 30, 2004 are not necessarily indicative of the results which may be expected for the entire fiscal year 2004 because of seasonal and other factors.

We have modified certain balance sheet and cash flow presentations. Prior year financial statement amounts have been reclassified to conform to their current year presentation.

Variable Interest Entities:   In January 2003, the Financial Accounting Standards Board (FASB) issued Interpretation 46, Consolidation of Variable Interest Entities (FIN 46). This standard requires an enterprise that is the primary beneficiary of a variable interest entity to consolidate that entity. We applied the Interpretation to any existing interests in variable interest entities beginning in the third quarter of 2003. In October 2003, the FASB deferred the adoption of FIN 46 for all entities commonly referred to as special-purpose entities to the first reporting period ending after December 15, 2003. In December 2003, the FASB issued FIN 46R, which revised FIN 46 and deferred the effective date for interests held in variable interest entities other than special purpose entities to financial statements for periods ending after March 15, 2004. We adopted FIN 46R in the first quarter of 2004.

We continue to evaluate our tolling and purchased power agreements with third parties on a quarterly basis. After making an exhaustive effort, we concluded that for three of these agreements, we are unable to obtain the information necessary to determine whether we or the entity that owns the facility is the variable interest entity's primary beneficiary. Pursuant to the terms of two of the three agreements, we deliver fuel to the entity's facilities and receive electric power. We pay the entity a "toll" to convert our fuel into the electric energy. The output of the facility is available for us to dispatch during the term of the respective agreement. In the other agreement we have rights to the firm capacity. We have approximately $771.4 million of required payments over the remaining term of these three agreements, which expire over the next 18 years. We believe the required payments will continue to be recoverable in rates. We account for one of these agreements as a capital lease.

We account for asset retirement obligations under Statement of Financial Accounting Standards (SFAS) 143, Accounting for Asset Retirement Obligations. SFAS 143 primarily applies to the future decommissioning costs for our Point Beach Nuclear Plant (Point Beach).

SFAS 143 also applies to a smaller extent to several other utility assets, including the dismantlement of certain hydro facilities and the removal of certain coal handling equipment and water intake facilities located on lakebeds. We have not recorded any asset retirement obligations for the removal of the coal

The following table presents the change in our asset retirement obligations, which are included on the consolidated balance sheet in Deferred Credits and Other Liabilities.

Comprehensive Income:   Comprehensive income includes all changes in equity during a period except those resulting from investments by and distributions to owners. We had the following total comprehensive income during the six months ended June 30, 2004 and 2003:

The components of our net periodic pension and other post-retirement benefit costs for the three and six months ended June 30, 2004 and 2003 were as follows:

We previously disclosed that we expect to contribute $3.5 million to our qualified pension plans in September 2004. Any contribution in 2004 to other post-retirement benefit plans is expected to occur in December. Contributions to these post-retirement benefit plans are discretionary.

Employee Benefit Plans and Post-retirement Benefits:   In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Act) was signed into law. The Act introduced a prescription drug benefit program under Medicare as well as a federal subsidy to sponsors of retiree health care benefit plans. In the second quarter of 2004, the FASB issued FASB Staff Position (FSP) SFAS 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003.

We enter into various guarantees to provide financial and performance assurance to third parties. As of June 30, 2004, we had the following guarantees:

We guarantee the potential retrospective premiums that could be assessed under our nuclear insurance program.

Postemployment benefits:   Postemployment benefits provided to former or inactive employees are recognized when an event occurs. The estimated liability for such benefits as of June 30, 2004 was $12.2 million and $10.2 million as of December 31, 2003.

Summarized financial information concerning our reportable operating segments for the three and six month periods ended June 30, 2004 and 2003 is shown in the following table.

Environmental Matters:   We periodically review our exposure for remediation costs as evidence becomes available indicating that our remediation liability has changed. Based on current information, we believe that future costs in excess of the amounts accrued and/or disclosed on all presently known and quantifiable environmental contingencies will not be material to our financial position or results of operations.

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 Securities and Exchange Commission (SEC) including factors described throughout this d ocument and below in Factors Affecting Results, Liquidity and Capital Resources.

We had net income of $36.7 million for the second quarter of 2004, a decrease of $13.1 million or 26.3% from the second quarter of 2003. Net income declined primarily due to the timing of a scheduled refueling outage of Unit 1 at Point Beach Nuclear Plant (Point Beach). In April 2004, Point Beach Unit 1 shut down for its normal refueling outage, which is scheduled approximately every 18 months. The unit returned to service in June 2004. In 2003, we did not have a comparable refueling outage at Point Beach until the fourth quarter. For additional information concerning the outage at Point Beach, see Factors Affecting Results, Liquidity and Capital Resources -- Nuclear Operations. A more detailed analysis of our financial results follows.

The following table compares our electric utility operating revenues and megawatt-hour sales by customer class during the second quarter of 2004 with similar information for the second quarter of 2003 including favorable (better (B)) or unfavorable (worse (W)) variances.

During the second quarter of 2004, total electric utility operating revenues increased by $28.3 million or 6.0% when compared with 2003 primarily due to the impact of rate increases and growth in base business.

In May 2004, we received an order from the Public Service Commission of Wisconsin (PSCW) authorizing an annualized increase in electric rates of approximately $59 million to cover construction costs associated with Wisconsin Energy's Power the Future strategy. In October 2003, we also received a final rate order from the PSCW that authorized the recovery of an additional $6.1 million of annual fuel and purchased power costs. We realized approximately $10.0 million in additional revenues during the second quarter of 2004 as a result of the combination of these rate increases.

Our total electric megawatt-hour sales increased by 369.4 thousand megawatt-hours or 5.2% during 2004 compared with 2003. Residential sales were up 2.6% and small commercial/industrial sales were up 2.3%. A combination of growth in the number of customers and in higher weather-normalized use per customer drove these increases during the second quarter of 2004. Sales volumes to large commercial/industrial customers improved by 9.3% between the comparative periods most of which was attributable to our largest customers, two iron ore mines. Excluding these two mines, our total electric energy sales increased by 3.0% and sales volumes to the remaining large commercial/industrial customers improved by 3.3%.

Cool early summer weather negatively impacted electric sales during the second quarters of 2004 and 2003. As measured by cooling degree days, the second quarter of 2004 was 50% colder than normal, with similar results during the second quarter of 2003, limiting cooling load sales to residential customers who are more weather sensitive and contribute higher margins than other customer classes. As a result, we estimate that our electric operating revenues were approximately $14.1 million lower during the second quarter of 2004 than we would have expected under normal weather conditions. The trend of cooler than normal summer weather continued into July 2004.

Fuel and Purchased Power expenses increased by $14.3 million or 10.5% when compared to the second quarter of 2003. This increase is related to the 5.2% increase in our megawatt-hour sales, the impact of

We estimate that our under recovery of fuel and purchased power costs was approximately $6 million more during the second quarter of 2004 as compared with the same period in 2003. In June 2004, we filed a request with the PSCW to raise Wisconsin retail electric rates by $36.1 million annually to recover higher forecasted fuel and purchased power costs. In July 2004, the PSCW authorized an interim fuel rate increase for $36.1 million subject to refund when the PSCW completes its review of our request, anticipated in the fourth quarter of 2004. For further information, see Factors Affecting Results, Liquidity and Capital Resources -- Rates and Regulatory Matters.

A comparison follows of our gas utility operating revenues, gross margin and gas deliveries during the second quarter of 2004 with similar information for the second quarter of 2003. Gross margin is a better performance indicator than revenues because changes in the cost of gas sold flow through to revenue under gas cost recovery mechanisms. Gas operating revenues decreased by $9.1 million or 10.2% due primarily to a decrease in therm deliveries between the comparative periods combined with a $3.2 million or 5.5% decrease in purchased gas costs.

For the three months ended June 30, 2004, gas margins decreased by $5.9 million or 19.0% when compared to the three months ended June 30, 2003 due primarily to recognition of $3.8 million of gas cost incentive revenues during the second quarter of 2003 under our gas cost recovery mechanisms. No incentive revenues were recognized in the second quarter of 2004. We estimate that a weather-related 8.8% reduction in therm deliveries lowered our gas margin by another $1.8 million between the comparative periods. As measured by heating degree days, the second quarter of 2004 was 16.8% warmer than the same period during 2003.

The following table compares our gas utility gross margin and natural gas therm deliveries by customer class during the second quarter of 2004 with similar information for the second quarter of 2003.

Other operation and maintenance expenses increased by $27.1 million or 14.2% during the second quarter of 2004 compared with the second quarter of 2003, primarily due to the scheduled outage of Point Beach Unit 1. Nuclear expenses were up $21.0 million between the comparative periods. We did not have a similar outage at Point Beach until the fourth quarter of 2003. We incurred approximately $4.6 million less in maintenance costs for our coal-fired generating facilities as a result of the timing of scheduled outages between 2003 and 2004.

During the second quarter of 2004, we recognized $8.3 million of expenses associated with the Port Washington lease. An electric rate increase authorized by the PSCW in May 2004 for Power the Future construction costs offset this increase in expenses. In addition, employee pension and benefit costs increased $6.4 million between the comparative periods, and we recovered $5.8 million less during the second quarter of 2004 than during the second quarter of 2003 in the settlement of claims that we made in connection with the Giddings & Lewis/City of West Allis litigation. Our bad debt expenses were $4.9 million lower during the second quarter of 2004 because we received authority from the PSCW in June 2004 to defer residential bad debt costs incurred during 2004 in excess of amounts included in current utility rates. We did not receive similar authority from the PSCW to defer 2003 bad debt costs until the fourth quarter. For more information regarding the deferral of bad debt costs, see Factors Affecting Results, Liquidity and Capital Resources -- Utility Rates and Regulatory Matters.

Depreciation, Decommissioning and Amortization expenses increased by $1.1 million or 1.6% during the second quarter of 2004 due to a higher base of depreciable assets between the comparative periods.

Other income, net increased by $1.2 million in the second quarter of 2004 compared to the second quarter of 2003. This increase is primarily due to a $3.2 million civil penalty that we agreed to pay in the second quarter of 2003 pursuant to the terms of an EPA consent decree partially offset by lower equity - related Allowance for Funds Used During Construction (AFUDC) due to a lower average

Total financing costs decreased by $1.5 million in the three months ended June 30, 2004 compared to the same period in 2003. This decrease primarily reflects the replacement of higher cost long-term debt outstanding during 2003 with lower cost borrowings outstanding during 2004.

For the second quarter of 2004, our effective tax rate was 37.0% compared with a 35.3% rate during the second quarter of 2003. This increase in the effective income tax rate was due primarily to a reduction in the amount of Federal and State rehabilitation and housing credits from 2003 to 2004.

We had net income of $116.7 million for the first six months of 2004, a decrease of $8.5 million or 6.8% from the first six months of 2003. Net income declined primarily due to the timing of a scheduled refueling outage of Point Beach Unit 1. This scheduled refueling outage occurred during the second quarter of 2004. In 2003, we did not have a comparable outage at Point Beach until the fourth quarter. For additional information concerning the outage at Point Beach, see Factors Affecting Results, Liquidity and Capital Resources -- Nuclear Operations. A more detailed analysis of our financial results follows.

The following table compares our electric utility operating revenues and megawatt-hour sales by customer class during the first six months of 2004 with similar information for the first six months of 2003 including favorable (better (B)) or unfavorable (worse (W)) variances.

During the first six months of 2004, total electric utility operating revenues increased by $57.6 million or 6.1% when compared with 2003 primarily due to the impact of rate increases and growth in base business.

In May 2004, we received an order from the PSCW authorizing an annualized increase in electric rates of approximately $59 million to cover construction costs associated with Wisconsin Energy's Power the Future strategy. In March 2003, we received an interim increase in rates of $55.1 million annually to recover increases in fuel and purchased power costs. In October 2003, we also received a final rate order from the PSCW that authorized the recovery of an additional $6.1 million of annual fuel and purchased power costs. We received approximately $23.2 million in additional revenues during the first half of 2004 as a result of these rate increases.

Our total electric megawatt-hour sales increased by 628.0 thousand megawatt-hours or 4.3% during 2004 compared with 2003. Residential sales were up 2.3% and small commercial/industrial sales were up 1.6%. A combination of growth in the number of customers and higher weather-normalized usage per customer drove these increases during the first six months of 2004. Sales volumes to large commercial/industrial customers improved by 5.1% between the comparative periods most of which is attributable to our largest customers, two iron ore mines. Excluding these two mines, our total electric energy sales increased by 3.3% and sales volumes to the remaining large commercial/industrial customers improved by 2.3%. Sales for resale to other utilities, the Resale-Utilities customer class, increased 31.8% between the periods due to an increased demand for wholesale power. However, these sales result in very small margins.

Warm winter weather as compared to 2003 and cool early summer weather negatively impacted electric sales during the first six months of 2004. As measured by heating degree days, the first six months of 2004 were 8.0% warmer than the same period in 2003 reducing heating load. As measured by cooling degree days, the second quarter of 2004 was 50% colder than normal, with similar results in the second quarter of 2003, limiting cooling load sales to residential customers who are more weather sensitive and contribute higher margins than other customer classes. As a result, electric operating revenues were approximately $12.4 million lower during the first half of 2004 than we would have expected under normal weather conditions.

Fuel and Purchased Power expenses increased by $19.4 million or 7.1% when compared to the first six months of 2003. This increase is related to the 4.3% increase in our megawatt-hour sales and to higher coal and purchased capacity costs. Higher availability of several of our coal-fired generating units during the first half of 2004 offset the impact on fuel and purchased power costs of the scheduled outage of Point Beach Unit 1 during the second quarter of 2004.

A comparison follows of our gas utility operating revenues, gross margin and gas deliveries during the first six months of 2004 with similar information for the first six months of 2003. Gross margin is a better performance indicator than revenues because changes in the cost of gas sold flow through to revenue under gas cost recovery mechanisms. Gas operating revenues decreased by $15.3 million or 4.8% due primarily to a weather-related decrease in the therm deliveries between the comparative periods combined with a $5.7 million or 2.6% decrease in purchased gas costs.