E - Kimberly
Cogeneration Equipment
In conjunction
with the proposed construction of an electric cogeneration facility
in Kimberly, Wisconsin, Wisconsin Electric purchased certain generating
equipment. Following a change in the status of the original project
and an extensive review of other potential uses, Wisvest Corporation
agreed to acquire and use the equipment in a joint independent power
project. As a result, Wisconsin Electric recorded a $30.0 million impairment
charge in the fourth quarter of 1997 which was included in the Other
Income and Deductions - Other line of the Condensed Consolidated Income
Statement.
In a related matter,
Wisconsin Electric and Wisconsin International Electric Power, Ltd.
reached a settlement during the fourth quarter of 1999 of litigation
brought by Wisconsin International Electric Power, Ltd. against Wisconsin
Electric, claiming that Wisconsin Electric had breached contractual
duties allegedly owed to the plaintiff relating to the development of
an electric generating plant at Subic Bay in the Philippines utilizing
the equipment. While Wisconsin Electric does not believe that it breached
any contractual duties allegedly owed to the plantiff, Wisconsin Electric
paid Wisconsin International Electric Power, Ltd. $18 million ($10.8
million after tax or $0.09 per share) in November 1999 to settle the
case, and the plaintiff's claims were dismissed with prejudice.
