UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549

FORM 10-Q

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

For the Quarterly Period Ended June 30, 2003

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



001-07530	WISCONSIN GAS COMPANY		39-0476515
		(A Wisconsin Corporation)
		231 West Michigan Street
		P.O. Box 2046
		Milwaukee, WI 53201
		(414) 221-2345

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that 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 ~~the~~by ~~number~~check ofmark ~~shares~~whether ~~outstanding~~the ofRegistrant ~~each~~is ofan ~~the~~accelerated ~~Registrant's~~filer ~~classes~~(as ofdefined ~~common~~in ~~stock~~Rule as12b-2 of the ~~latest~~Exchange ~~practicable~~Act). Yes ~~date~~[ ] No ~~(September 30, 2002):~~[X]

~~Common~~Indicate ~~Stock,~~the ~~$8.00~~number ~~Par~~of ~~Value~~shares 1outstanding of each of the Registrant's classes of common stock,~~125~~ ~~shares~~as ~~outstanding~~of the latest practicable date (June 30, 2003):

~~All Wisconsin Gas Company~~ Common Stock, is$8.00 ~~held~~Par ~~by WICOR~~Value, ~~Inc.~~1,125 ashares ~~wholly owned subsidiary of Wisconsin Energy Corporation~~outstanding

		WISCONSIN GAS COMPANY
		FORM 10-Q REPORT FOR THE QUARTER ENDED SEPTEMBER 30, 2002
		TABLE OF CONTENTS
Item			Page
	Introduction ...............................................................................................................................
	Part I -- Financial Information
1.	Financial Statements
	Condensed Income Statements .....................................................................
	Condensed Balance Sheets ............................................................................
	Condensed Statements of Cash Flows ..........................................................
	Notes to Condensed Financial Statements ....................................................
2.	Management's Discussion and Analysis of
	Financial Condition and Results of Operations ...................................................................
3.	Quantitative and Qualitative Disclosures About Market Risk ..................................................
4.	Controls and Procedures ...........................................................................................................
	Part II -- Other Information
1.	Legal Proceedings .....................................................................................................................
6.	Exhibits and Reports on Form 8-K ...........................................................................................
	Signatures ..................................................................................................................................
	Certifications .............................................................................................................................

All of the common stock of Wisconsin Gas Company is held by WICOR, Inc., a wholly-owned subsidiary of Wisconsin Energy Corporation.

		WISCONSIN GAS COMPANY


		FORM 10-Q REPORT FOR THE QUARTER ENDED JUNE 30, 2003



		TABLE OF CONTENTS
Item			Page

	Introduction ............................................................................................................................		3


	Part I -- Financial Information

1.	Financial Statements

	Condensed Income Statements ..........................................................................................		4

	Condensed Balance Sheets ................................................................................................		5

	Condensed Statements of Cash Flows ..............................................................................		6

	Notes to Condensed Financial Statements ........................................................................		7

2.	Management's Discussion and Analysis of
	Financial Condition and Results of Operations ................................................................		9

3.	Quantitative and Qualitative Disclosures About Market Risk ................................................		17

4.	Controls and Procedures ......................................................................................................		17

	Part II -- Other Information

1.	Legal Proceedings .................................................................................................................		17

5.	Other Information ..................................................................................................................		18

6.	Exhibits and Reports on Form 8-K .......................................................................................		18

	Signatures ..............................................................................................................................		20

2

INTRODUCTION

Wisconsin Gas Company ("Wisconsin Gas" or "the "Company"), a natural gas distribution public utility, is a Wisconsin corporation and a wholly-owned, indirect subsidiary of ~~WICOR, Inc. ("WICOR"), a diversified holding company. On April 26, 2000, a merger between~~ Wisconsin Energy Corporation ("Wisconsin Energy") ~~and WICOR was completed~~. ~~Upon completion of the merger, WICOR, Wisconsin Gas and WICOR's other subsidiaries became wholly-owned direct or indirect subsidiaries of Wisconsin Energy.~~

~~Subsequent to the merger,~~ Wisconsin Gas and Wisconsin Electric Power Company ("Wisconsin Electric"), another wholly-owned public utility subsidiary of Wisconsin Energy, have combined common functions~~. In~~ ~~April~~and ~~2002,~~operate ~~the two companies began doing business~~ under the trade name of "We Energies".

The unaudited interim financial statements presented in this Form 10-Q have been prepared by Wisconsin Gas pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Wisconsin Gas's financial statements should be read in conjunction with the financial statements and notes thereto included in Wisconsin Gas's ~~2001~~2002 Annual Report on Form 10-K.

PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
WISCONSIN GAS COMPANY
CONDENSED INCOME STATEMENTS
(Unaudited)
		Three Months Ended September 30		Nine Months Ended September 30
		Three Months Ended June 30			Six Months Ended June 30
		2002	2001	2002		2001
		2003	2002		2003		2002
		(Millions of Dollars)
Operating Revenues		$56121.86	$5794.24	~~$339.6~~	$437.9	~~$489.5~~	$282.8
Operating Expenses
	Cost of gas sold	3485.52	3457.39	~~205.8~~	315.3	~~354.7~~	171.3
	Other operation and maintenance	1928.14	1521.12	~~61.9~~	58.3	~~54.7~~	42.8
	Depreciation and amortization	9.45	108.43	~~28.5~~	19.1	~~31.3~~	19.1
	Goodwill amortization	-	2.9	-		8.7
	Property and revenue taxes	1.5	1.7		2.9		3.4
	Property and revenue taxes	1.6	1.6	5.0		4.5
Total Operating Expenses		124.6	89.1		395.6		236.6
Total Operating Expenses		64.6	64.3	301.2		453.9
Operating Income (Loss)		(3.0)	5.3		42.3		46.2
Operating Income (Loss)		(7.8)	(7.1)	38.4		35.6
Other Income (Deductions), net		0.1	(0.4)		0.1		(0.4)
Other Income (Deductions), net		(0.6)	0.3	(1.0)		0.4
Interest Expense		2.8	2.9		5.7		6.2
Interest Expense		2.9	3.7	9.1		11.9
Income (Loss) Before Income Taxes		(5.7)	2.0		36.7		39.6
Interest Expense - WICOR		-	1.7	-		11.6
Income Taxes		(2.3)	0.5		13.1		15.2
Total Interest Expense		2.9	5.4	9.1		23.5
Net Income (Loss)		($3.4)	$1.5		$23.6		$24.4
Income Before Income Taxes		(11.3)	(12.2)	28.3		12.5
		=====	=====		=====		=====
Income Taxes		(5.0)	(4.1)	10.2		7.6
The accompanying Notes to Condensed Financial Statements are an integral part of these financial statements.
Net Income (Loss)		($6.3)	($8.1)	$18.1		$4.9
		====	====	====		===
The accompanying Notes to Condensed Financial Statements are an integral part of these financial statements.

WISCONSIN GAS COMPANY
CONDENSED BALANCE SHEETS
			(Unaudited)
			September 30, 2002	December 31, 2001
			June 30, 2003	December 31, 2002
			(Millions of Dollars)
Assets
Property, Plant and Equipment			$~~954~~1,017.20	$~~960~~972.05
	Accumulated depreciation		(~~543~~568.97)	(~~539~~550.7)
		Net Property, Plant and Equipment	~~410~~448.3	~~420~~421.38
Current Assets
	Cash and cash equivalents		10.75	31.54
	Accounts receivable		44109.58	4483.39
	Accrued revenues		78.05	4560.23
	Gas in storage		67.5	63.4
	Materials, supplies and inventories		62.6	64.4
	Materials and supplies		5.4	6.2
	Deferred income taxes		22.6	16.1
	Deferred income taxes		6.6	8.7
	Prepayments and other		3.6	11.2
	Prepaid taxes		22.2	19.2
		Total Current Assets	207.6	237.3
	Other		0.9	1.0
		Total Current Assets	155.8	191.5
Deferred Charges and Other Assets
	Goodwill, net		441.9	441.9
	Prepaid pension costs		~~187~~179.30	~~178~~174.71
	Regulatory assets		3959.34	3657.28
	Other		4746.53	4246.51
		Total Deferred Charges and Other Assets	~~716~~726.06	~~699~~719.39
Total Assets			$1,~~282~~382.15	$1,~~311~~379.10
			======	======
Capitalization and Liabilities
Capitalization
	Common equity		$~~708~~750.07	$~~691~~726.01
	Long-term debt		~~150~~151.68	~~149~~151.30
		Total Capitalization	~~858~~902.65	~~840~~877.31
Current Liabilities
	Short-term debt		97128.20	~~128~~142.72
	Accounts payable		2961.50	3379.89
	Accounts payable - affiliated companies, net		18.8	22.1
	Refundable gas costs		21.9	3.5
	Refundable gas costs		-	0.2
	Other		11.0	12.0
	Other		12.0	13.2
		Total Current Liabilities	221.9	237.6
		Total Current Liabilities	157.5	198.0
Deferred Credits and Other Liabilities
	Regulatory liabilities		~~173~~162.15	~~186~~169.34
	Accumulated deferred income taxes		6367.26	5865.75
	Other		2928.70	2729.84
		Total Deferred Credits and Other Liabilities	~~266~~258.01	~~272~~264.83
Total Capitalization and Liabilities			$1,~~282~~382.15	$1,~~311~~379.10
			======	======
The accompanying Notes to Condensed Financial Statements are an integral part of these financial statements.

WISCONSIN GAS COMPANY
CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
				Nine Months Ended September 30
					Six Months Ended June 30
				2002	2001
					2003	2002
				~~(Millions of Dollars)~~	(Millions of Dollars)
Operating Activities
Operations
	Net income			~~$18.1~~	$423.96	$24.4
	Reconciliation to cash
	Reconciliation to cash:
		Depreciation and amortization		~~30.0~~	4120.0	20.3
		Net pension and other
		Net pension and other postretirement
			postretirement benefit (income)	(6.9)	(9.2)
			benefit (income)		(3.7)	(6.6)
		Deferred income taxes and investment tax credits, net		~~5.7~~	(05.98)	(2.7)
		Change in:
			Accounts receivable and accrued revenues	38.0	121.8
			Receivables and accrued revenues		25.9	12.2
			Inventories	~~(3.3)~~	~~(19~~1.0)8	25.1
			Accounts payable	~~(7.6)~~	(6418.79)	(3.5)
			Deferred and accrued taxes	(3.0)	(13.5)
			Prepaid and accrued taxes		7.0	9.5
			Refundable gas costs	~~(0.2)~~	~~(35~~18.2)4	13.7
			Deferred regulatory liabilities	(13.3)	(13.9)
			Other assets and liabilities		(8.2)	(3.9)
		Other		(6.4)	3.2
Cash Provided by Operating Activities					60.1	88.5
Cash Provided by Operating Activities				51.1	14.5
Investing Activities
Investing Activities
	Capital expenditures				(44.5)	(16.7)
	Capital expenditures			(32.7)	(34.1)
	Proceeds from assets sales				-	12.0
	Proceeds from assets sales			12.2	-
	Other, net				(2.3)	(0.7)
	Other, net			(0.9)	1.0
Cash Used in Investing Activities					(46.8)	(5.4)
Cash Used in Investing Activities				(21.4)	(33.1)
Financing Activities
Financing Activities
	Change in short-term debt				(14.2)	(81.1)
	Change in short-term borrowings			(31.5)	13.3
Cash Used in Financing Activities					(14.2)	(81.1)
	Other			-	(0.1)
Change in Cash and Cash Equivalents					(0.9)	2.0
Cash Used in Financing Activities				(31.5)	13.2
Cash and Cash Equivalents at Beginning of Period					1.4	3.5
Change in Cash and Cash Equivalents				(1.8)	(5.4)
Cash and Cash Equivalents at End of Period					$0.5	$5.5
Cash and Cash Equivalents at Beginning of Period				3.5	6.0
					=====	=====
Cash and Cash Equivalents at End of Period				$1.7	$0.6
Supplemental Information - Cash Paid For
				===	===
	Interest (net of amount capitalized)				$5.6	$5.6
Supplemental Information - Cash Paid For
	Income taxes (net of refunds)				$12.6	$8.5
	Interest (net of amount capitalized)			$8.9	$23.0
The accompanying Notes to Condensed Financial Statements are an integral part of these financial statements.
	Income taxes (net of refunds)			$8.5	$23.9
The accompanying Notes to Condensed Financial Statements are an integral part of these financial statements.

WISCONSIN GAS COMPANY NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited)

1. GENERAL INFORMATION

The accompanying unaudited condensed financial statements for Wisconsin Gas Company should be read in conjunction with Item 8, Financial Statements and Supplementary Data, in Wisconsin Gas's 2001 Annual Report on Form 10-K. In the opinion of management, all adjustments, normal and recurring in nature or as otherwise disclosed, necessary to a fair statement of the results of operations, cash flows and financial position of Wisconsin Gas, have been included in the accompanying income statements, statements of cash flows and balance sheets. The results of operations for the three and nine month periods ended September 30, 2002 are not necessarily indicative, however, of the results which may be expected for the entire year 2002 because of seasonal and other factors.

Wisconsin Gas has modified certain financial statement presentations. Prior year financial statement amounts have been reclassified to conform to their current year presentation. These reclassifications had no effect on net income.

The accompanying unaudited condensed financial statements for Wisconsin Gas Company should be read in conjunction with Item 8, Financial Statements and Supplementary Data, in Wisconsin Gas' 2002 Annual Report on Form 10-K. In the opinion of management, all adjustments, normal and recurring in nature, necessary to a fair statement of the results of operations, cash flows and financial position of Wisconsin Gas, have been included 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, 2003 are not necessarily indicative of the results which may be expected for the entire fiscal year 2003 because of seasonal and other factors.

~~RECENT~~ 2. ACCOUNTING ~~PRONOUNCEMENTS~~POLICIES

3.		Business Combinations and Goodwill: The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets, effective January 1, 2002. Under SFAS 142, goodwill and other intangibles with indefinite lives are no longer subject to amortization. However, goodwill along with other intangibles are subject to new fair value-based rules for measuring impairment, and resulting write-downs, if any, are to be reflected as a change in accounting principle upon adoption and in operating expense in subsequent periods.
		Management estimated the fair value of the Company by considering public company trading multiples and merger and acquisition transaction multiples for similar companies. This evaluation utilized the information available in the circumstances, including reasonable and supportable assumptions. The Company has determined that there was no impairment to the recorded goodwill balance at the date of adoption of SFAS 142. The Company has elected to perform its annual impairment test as of August 31. There was no impairment to the recorded goodwill balance as of the annual impairment test date.
		The adoption of SFAS 142 by Wisconsin Gas on January 1, 2002 resulted in an increase in net income of $2.9 million and $8.7 million, for the three and nine month periods ended September 30, 2002, due to the elimination of goodwill amortization.
		The following table presents pro forma net income as if SFAS 142 had been adopted at the beginning of fiscal 2001.

Asset Retirement Obligations: The Company adopted Statement of Financial Accounting Standards ("SFAS") No. 143, Accounting for Asset Retirement Obligations, effective January 1, 2003. Under SFAS 143, entities are required to record the fair value of a legal liability for an asset retirement obligation in the period in which it is incurred. When a new liability is recorded the entity capitalizes the costs of the liability by increasing the carrying amount of the related long-lived asset. The liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related asset. At retirement, an entity settles the obligation for its recorded amount or incurs a gain or loss.

	Three Months Ended September 30		Nine Months Ended September 30
	2002	2001	2002	2001
Net Income (Loss) (Millions of Dollars)
Reported Net Income (Loss)	($6.3)	($8.1)	$18.1	$4.9
Pro forma Net Income (Loss)	($6.3)	($5.2)	$18.1	$13.6

As of June 30, 2003, Wisconsin Gas has not identified any asset retirement obligations. However, the Company collects removal costs in rates for certain assets that do not have associated legal asset retirement obligations. As of June 30, 2003, the Company estimates that it has approximately $167 million related to removal costs recorded in Accumulated Depreciation.

~~Asset~~Business ~~Retirement~~Combinations ~~Obligations~~and Goodwill: The InCompany ~~June~~accounts ~~2001,~~for ~~the~~goodwill ~~Financial~~and ~~Accounting~~other ~~Standards~~intangibles ~~Board~~under ~~issued~~ SFAS ~~143~~ 142, ~~Accounting~~Goodwill ~~for~~and ~~Asset~~Other ~~Retirement~~Intangible ~~Obligations~~Assets. Under SFAS ~~143~~ 142, ~~which~~goodwill isand ~~effective~~other ~~January~~intangibles 1,with ~~2003,~~indefinite ~~requires~~lives ~~entities~~are tonot ~~record~~subject ~~the~~to ~~fair value of a legal liability for an asset retirement obligation in the period in which it is incurred~~amortization. ~~When a new liability is recorded beginning in 2003~~ However, ~~the~~goodwill ~~entity~~and ~~will~~other ~~capitalize~~intangibles ~~the~~are ~~costs~~subject ofto ~~the~~fair ~~liability by increasing the carrying amount of the related long~~value-~~lived~~based ~~asset.~~rules ~~The~~for ~~liability~~measuring ~~is accreted to its present value each period~~impairment, and ~~the~~resulting ~~capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability~~write-downs, anif ~~entity settles the obligation for its recorded amount or incurs a gain or loss upon settlement. The Company expects to adopt SFAS 143 effective January 1~~any, 2003. The Company is performing a detailed assessment of the specific applicability and implications of SFAS 143. Any changes in expense due to differing assumptions between SFAS 143 and those currently required by the Public Service Commission of Wisconsin ("PSCW") are ~~not expected~~ to be ~~material~~reflected ~~and~~in ~~the~~operating ~~Company expects to defer the differences as regulatory assets or liabilities~~expense. ~~The Company has not yet determined the applicability of SFAS 143 to its financial statements.~~

~~ACCOUNTING~~The ~~FOR~~Company ~~BAD~~assesses ~~DEBTS~~its fair value by considering future discounted cash flows. This analysis is supplemented with a review of fair value based on public company trading multiples and merger and acquisition transaction multiples for similar companies. This evaluation utilizes the information available under the circumstances, including reasonable and supportable assumptions and projections. The Company performs its annual impairment test as of August 31.

4.Financial ~~Prior~~Instruments towith ~~October~~Characteristics 1,of ~~2002,~~both ~~Wisconsin~~Liabilities ~~Gas~~and ~~accounted~~Equity: The ~~for~~Company ~~bad~~adopted ~~debt~~SFAS 150, ~~expense~~Accounting onfor anCertain ~~escrow~~Financial ~~basis~~Instruments aswith ~~prescribed~~Characteristics byof ~~the~~both ~~PSCW.~~Liabilities ~~Under~~and ~~escrow accounting~~Equity, ~~Wisconsin Gas expensed bad debts based~~ on ~~amounts~~July 1, ~~allowed in rates~~2003. ~~To the extent that actual bad debt expense differed from amounts allowed in rates~~ SFAS 150, ~~such~~which ~~difference~~ was ~~deferred~~issued asby athe ~~regulatory~~Financial ~~asset~~Accounting orStandards ~~liability.~~Board Asin ofMay ~~September 30~~2003, ~~2002,~~requires ~~Wisconsin~~an ~~Gas~~issuer ~~had a regulatory asset of $6.9 million related~~ to ~~deferred~~classify ~~bad~~outstanding ~~debt~~freestanding ~~expense.~~financial ~~Effective~~instruments ~~October~~within 1,its ~~2002,~~scope ~~the~~as ~~PSCW~~a ~~ordered~~liability ~~Wisconsin Gas to end escrow accounting~~ on aits ~~prospective~~balance ~~basis.~~sheets ~~Such~~even ~~order~~though isthe ~~expected~~instruments tohave ~~increase~~characteristics ~~volatility~~of ~~in bad debt expense~~equity. The ~~regulatory~~Company ~~asset~~identified ofno ~~$6.9~~financial ~~million~~instruments ~~will~~that befall ~~considered~~under ~~for~~the ~~recovery~~scope inof ~~Wisconsin Gas's next rate case~~SFAS 150.

~~COMMON~~ Variable ~~EQUITY~~Interest Entities: In January 2003, the Financial Accounting Standards Board issued Interpretation 46, Consolidation of Variable Interest Entities ("FIN 46"). This standard will require an enterprise that is the primary beneficiary of a variable interest entity to consolidate that entity. FIN 46 must be applied to any existing interests in variable interest entities beginning in the third quarter of 2003. The Company does not expect to consolidate any existing interests in unconsolidated entities as a result of FIN 46.

53. COMMON Comprehensive Income includes all changes in equity during a period except those resulting from investments by and distributions to owners. Wisconsin Gas had the following total Comprehensive Income during the nine month periods ended September 30, 2002 and 2001:EQUITY

	Nine Months Ended September 30
Comprehensive Income	2002	2001
	(Millions of Dollars)
Net Income	$18.1	$4.9
Other Comprehensive Income (Loss)
Unrealized Losses During the Period
on Derivatives Qualified as Hedges:
Unrealized losses due to cumulative
effect of change in accounting principle	-	3.0
Change in value	(1.5)	(2.1)
Reclassification to earnings	0.5	(0.7)
Total Other Comprehensive Income (Loss)	(1.0)	0.2
Total Comprehensive Income	$17.1	$5.1
	====	====

Comprehensive Income: Comprehensive Income includes all changes in equity during a period except those resulting from investments by and distributions to owners. Wisconsin Gas had the following total Comprehensive Income during the six months ended June 30, 2003 and 2002:

COMMITMENTS AND CONTINGENCIES

	Six Months Ended June 30
Comprehensive Income	2003	2002
	(Millions of Dollars)

Net Income	$23.6	$24.4
Other Comprehensive Income (Loss)
Hedging Gains (Losses)	0.9	(1.6)
Total Other Comprehensive Income (Loss)	0.9	(1.6)
Total Comprehensive Income	$24.5	$22.8
	===	===

6. Environmental Matters: The Company periodically reviews its exposure to environmental remediation costs as evidence becomes available indicating that its remediation liability has changed. Given current information, including the following, management believes that future costs in excess of the amounts accrued and/or disclosed on all presently known and quantifiable environmental contingencies will not be material to the Company's financial position or results of operations.
During 2000, the Company expanded a voluntary program of comprehensive environmental remediation planning for former manufactured gas plant sites. The Company has performed a preliminary assessment of two manufactured gas plant sites previously used by Wisconsin Gas as discussed below. The Company is working with the Wisconsin Department of Natural Resources in its investigation and remediation planning. At this time, the Company cannot estimate future remediation costs associated with these sites beyond those described below.
Manufactured Gas Plant Sites: The Company has completed remediation at one former manufactured gas plant site. The Company estimates that the future costs for detailed site investigation and future remediation costs for the one remaining site may range from $3-$5 million over the next ten years. This estimate is dependent upon several variables including, among other things, the extent of remediation, changes in technology and changes in regulation. As of September 30, 2002, the Company has established reserves of $3.5 million related to future remediation costs.
The PSCW has allowed Wisconsin utilities, including Wisconsin Gas, to defer the costs spent on the remediation of manufactured gas plant sites, and has allowed for such costs to be recovered in rates over five years. As such, the Company has recorded a regulatory asset for unrecovered remediation costs.
Guardian Lateral: In April 2002, Wisconsin Gas announced that construction of the 35-mile lateral to connect its distribution system to the Guardian Pipeline (the "Guardian Lateral") may be delayed until the spring of 2003 in order to obtain all permits and easements.
On August 30, 2002, Wisconsin Gas filed a request with the PSCW for approval of an increased cost estimate for the Guardian Lateral. The original cost estimate of $62 million has increased to approximately $83.5 million based on an in-service date in the fourth quarter of 2003.
Despite this cost increase, the Guardian Lateral project remains economically feasible, and provides substantial customer benefits in gas cost savings as well as critical additional pipeline capacity. Delay in construction of the lateral is not expected to affect the 2003 in-service date and availability of the Guardian Pipeline to Wisconsin Gas.
On August 24, 2001, Neighbors Standing United ("NSU"), a landowner group, filed petitions along with an individual landowner, for review of the PSCW order dated July 25, 2001, which approved Wisconsin Gas Company's application to construct and operate the Guardian Lateral. The petitioners allege, among other issues, that the final environmental impact statement ("FEIS") for this pipeline project did not meet legal requirements and that affected landowners' due process rights were not satisfied during the PSCW review process. After briefing of the issues and oral argument, the Jefferson County Circuit Court on October 4 and 14, 2002, rendered oral decisions denying the petitions for review and request for injunctive relief with one modification by the Court which narrowed the approved pipeline route corridor from 800 to 200 feet. A written Court Order confirming this bench decision is anticipated in November 2002.
These two petitioners also filed on February 21 and 22, 2002, respectively, petitions for review of a January 17, 2002, WDNR decision which concluded that the FEIS for the Guardian Pipeline and Guardian Lateral projects fully complied with the Wisconsin Environmental Policy Act. These petitions for review and associated proceedings have been stayed by the Jefferson County Circuit Court pending resolution of the proceedings for the court review of the PSCW's order.
4. GUARANTEES

~~ITEM~~Postemployment 2benefits: Postemployment benefits provided to former or inactive employees are recognized when an event occurs. The ~~MANAGEMENT'S~~estimated ~~DISCUSSION~~liability ~~AND~~for ~~ANALYSIS~~such OFbenefits ~~FINANCIAL~~has ~~CONDITION~~not ~~AND~~changed ~~RESULTS~~significantly OFfrom ~~OPERATIONS~~the $1.6 million accrual recorded by the Company as of December 31, 2002.

~~Cautionary~~5. COMMITMENTS ~~Factors:~~ AND CONTINGENCIES

~~RESULTS~~Environmental OFMatters: The ~~OPERATIONS~~Company --periodically ~~THREE~~reviews ~~MONTHS~~its ~~ENDED~~exposure ~~SEPTEMBER 30~~for remediation costs as evidence becomes available indicating that its remediation liability has changed. Given current information, ~~2002~~management believes that future costs in excess of the amounts accrued and/or disclosed on all presently known and quantifiable environmental contingencies will not be material to the Company's financial position or results of operations.

~~EARNINGS~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS

~~The~~Cautionary ~~net~~Factors: Certain ~~loss~~statements ~~recorded~~contained inherein ~~the~~are ~~third~~"Forward ~~quarter~~Looking Statements" within the meaning of ~~2002~~the ~~was~~Private $1Securities Litigation Reform Act of 1995.~~8 million~~ Forward Looking Statements may be identified by reference to a future period or ~~22.2%~~periods ~~less~~or ~~than~~by the ~~third~~use ~~quarter~~of forward looking terminology such as "may," "intends," "anticipates," "believes," "estimates," "expects," "forecasts," "objectives," "plans," "possible," "potential," "project" or similar terms or variations of ~~2001~~these terms. Actual results may differ materially from those set forth in Forward Looking Statements as a result of certain risks and uncertainties, ~~primarily~~including ~~reflecting~~but ~~reduced~~not ~~interest~~limited ~~expense~~to, changes in political and ~~the~~economic ~~elimination~~conditions, ofequity ~~goodwill~~and ~~amortization~~bond ~~effective~~market ~~January 1~~fluctuations, ~~2002~~varying weather conditions, governmental regulation and supervision, as well as other risks and uncertainties detailed from time to time in filings with the ~~adoption~~Securities ofand ~~SFAS 142~~Exchange Commission ("SEC") including factors described throughout this document and below in "Factors Affecting Results, Liquidity and Capital Resources".

RESULTS OF OPERATIONS -- THREE MONTHS ENDED JUNE 30, 2003

NET INCOME

Wisconsin Gas had a net loss of $3.4 million during the second quarter of 2003 compared with net income of $1.5 million during the second quarter of 2002, primarily reflecting a decline in operating income as a result of higher pension and benefit, bad debt, and depreciation and amortization expenses.

Operating Revenues, Gross Margin and Therm Deliveries

~~Traditionally the quarter ending September 30 has the lowest gross margin due to the lack of a heating load.~~ A comparison follows of the Company's operating revenues, gross margin and gas deliveries during the ~~third~~second quarter of ~~2002~~2003 with similar information for the ~~third~~second quarter of ~~2001~~2002 including favorable (better ("B")) or unfavorable (worse ("W")) variances. Gross margin is a better performance indicator ~~for the gas utility~~ than ~~changes in~~ revenues because changes in the cost of gas sold flow through to revenue under gas cost recovery mechanisms. Due ~~that~~primarily doto ~~not~~a ~~impact~~significant ~~gross~~increase ~~margin. As~~in ~~can~~the bedelivered ~~seen~~cost ~~below,~~of ~~gross~~natural ~~margin~~gas ~~declined~~between bythe ~~$0.5 million~~comparative asperiods, gas operating revenues ~~decreased~~increased by $027.32 million or 028.58% ~~and~~offset ~~purchased gas costs increased~~ by a $027.23 million or 047.62% increase in purchased gas costs.

	Three Months Ended September 30
	Three Months Ended June 30
Operations	~~2002~~2003	~~2001~~B (W)	~~% Change~~2002
	(Millions of Dollars)
Operating Revenues	$56121.86	$5727.12	(0$94.~~5%)~~4
Cost of Gas Sold	3485.52	34(27.3)	057.6%9
Gross Margin	$2236.34	($220.81)	(2$36.~~2%)~~5
	====	====
	===	===	===

For the three months ended ~~September~~June 30, ~~2002~~2003, gas ~~gross~~ margins decreased by ~~customer~~$0.1 million ~~class~~or ~~declined~~0.3% when compared to the three months ended ~~September~~June 30, ~~2001. As~~2002 ~~can~~primarily bereflecting ~~seen~~a inslight ~~the~~decline ~~table~~in ~~below, total~~ gas ~~sales~~deliveries ~~volumes~~to ~~for~~residential ~~the~~customers ~~third~~who ~~quarter~~contribute ofhigher ~~2002~~margins ~~decreased~~per ~~5.3%~~therm ~~compared~~than ~~with~~other ~~the~~customer ~~third quarter of 2001~~classes. ~~This~~The ~~decline~~following ~~was~~table ~~partially~~compares ~~offset~~Wisconsin byGas' ~~deliveries~~gross tomargin aand ~~higher~~natural ~~average~~gas ~~number~~therm ofdeliveries ~~customers,~~by ~~which~~customer ~~favorably~~class ~~impacted~~during the ~~fixed~~second ~~component~~quarter of ~~operating~~2003 ~~revenues~~with ~~that~~similar isinformation ~~not~~for ~~affected~~the bysecond ~~decreased~~quarter ~~volumes~~of 2002.

The following table compares gross margins and natural gas therm deliveries by customer class during the third quarter of 2002 with similar information for the third quarter of 2001.

		Gross Margin				Therm Deliveries
			Three Months Ended June 30			Three Months Ended June 30
Operations		2003		B (W)	2002	2003	B (W)	2002
		(Millions of Dollars)				(Millions)
Customer Class
Residential		$23.1		($0.2)	$23.3	74.6	(1.6)	76.2
Commercial/Industrial		5.9		-	5.9	41.6	(0.1)	41.7
Interruptible		0.3		-	0.3	4.3	(0.3)	4.6
Total Gas Sold		29.3		(0.2)	29.5	120.5	(2.0)	122.5
Transported Gas		5.3		(0.1)	5.4	103.4	1.5	101.9
Other-Operating		1.8		0.2	1.6	-	-	-
Total		$36.4		($0.1)	$36.5	223.9	(0.5)	224.4
		====		===	====	====	===	====

Weather -- Degree Days (a)
Heating (947 Normal)						1,158	94	1,064

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

Gross Margin Therm Deliveries
Three Months Ended September 30 Three Months Ended September 30
Operations 2002 2001 % Change 2002 2001 % Change
(Millions of Dollars) (Millions)
Customer Class
Residential $12.8 $13.4 (4.5%) 27.8 31.0 (10.3%)
Commercial/Industrial 3.2 3.3 (3.0%) 17.9 19.0 (5.8%)
Interruptible 0.3 0.2 50.0% 4.4 2.9 51.7%
Total Gas Sales 16.3 16.9 (3.6%) 50.1 52.9 (5.3%)
Transported Gas 4.7 4.6 2.2% 93.7 86.9 7.8%
Other-Operating 1.3 1.3 - - - -
Total Deliveries $22.3 $22.8 (2.2%) 143.8 139.8 2.9%
==== ==== ==== ====
Weather -- Degree Days (a)
Heating (150 Normal) 67 162 (58.6%)
(a) As measured at Mitchell International Airport in Milwaukee, Wisconsin. Normal degree days are based upon a twenty-year moving average.
As noted above, total gas sales volumes decreased by 5.3% during the third quarter of 2002. This decrease was partially offset by deliveries to a higher average number of customers. The therm delivery reduction was largely due to periods of warmer weather in the third quarter of 2002 compared with the same period in 2001 and classification changes between customer classes for several customers.
Other Items

Other Operation and Maintenance Expenses: Other operation and maintenance expenses increased by $7.2 million or 34.0% during the second quarter of 2003 when compared with the second quarter of 2002. The increase was primarily attributable to $3.4 million of increased bad debt expense and to increased pension and benefits costs in the amount of $2.2 million.

Depreciation, ~~Decommissioning~~ and Amortization: Depreciation and amortization expenses increased by $1.2 million or 14.5% during the second three months of 2003 primarily due to a higher base of depreciable assets between the comparative periods.

~~Goodwill~~RESULTS ~~Amortization:~~ OF OPERATIONS -- SIX MONTHS ENDED JUNE 30, 2003

~~Interest~~NET ~~Expense:~~INCOME

~~RESULTS~~Net OFincome ~~OPERATIONS~~for --the ~~NINE~~first ~~MONTHS~~six ~~ENDED~~months ~~SEPTEMBER~~of 2003 was $23.6 30million, slightly lower than net income of $24.4 million for the first six months of 2002, primarily because an increase in gross margin due to favorable weather conditions during the first quarter of 2003 was offset by higher employee pension and benefit costs and an increase in bad debt expense during the first half of 2003.

EARNINGS
The net income for Wisconsin Gas increased by $13.2 million to $18.1 million during the first nine months of 2002 when compared to the first nine months of 2001. This increase in net income primarily reflects lower interest expense of $14.4 million during the first nine months of 2002. In addition, amortization of goodwill was discontinued effective January 1, 2002 with the adoption of SFAS 142, resulting in an increase in net income of $8.7 million.
Operating Revenues, Gross Margin and Therm Deliveries

A comparison follows of the Company's operating revenues, gross margin and gas deliveries ~~follows~~during the first half of 2003 and the first half of 2002 including favorable (better ("B")) or unfavorable (worse ("W")) variances. 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. Due ~~that~~primarily doto ~~not~~a ~~impact~~significant ~~gross~~increase ~~margin. As~~in ~~can~~the bedelivered ~~seen~~cost ~~below,~~of natural gas ~~margins~~between ~~declined~~the bycomparative ~~$1.0 million~~periods, as gas operating revenues ~~declined~~increased by $~~149~~155.91 million or 3054.68% ~~between the first nine months of 2002 and the first nine months of 2001~~ offset by a $~~148~~144.90 million or 4284.01% ~~decrease~~increase in purchased gas costs.

	Nine Months Ended September 30
	Six Months Ended June 30
Operations	~~2002~~2003	~~2001~~B (W)	~~% Change~~2002
	(Millions of Dollars)
Operating Revenues	$~~339~~437.69	$~~489~~155.51	~~(30~~$282.~~6%)~~8
Cost of Gas Sold	~~205~~315.83	~~354~~(144.70)	~~(42~~171.~~0%)~~3
Gross Margin	$~~133~~122.86	$~~134~~11.81	(0$111.~~7%)~~5
	=====	=====
	====	====	====

Gas ~~operating~~margins ~~revenues~~increased ~~declined by~~ $~~149~~11.91 million or 3010.60% between the ~~first~~comparative ~~nine~~periods ~~months~~primarily ofdue ~~2002~~to ~~and the first nine months of 2001 offset by~~ a ~~$148.9 million~~favorable orweather-related ~~42.0%~~increase ~~decrease~~ in ~~purchased~~therm ~~gas~~deliveries, ~~costs. The~~especially ~~decline~~to inresidential ~~revenues~~customers ~~and~~who ~~cost~~are ofmore ~~gas~~weather ~~sold~~sensitive ~~were~~and ~~directly~~contribute ~~related~~higher tomargins aper ~~decline~~therm inthan ~~natural~~other ~~gas~~customer ~~prices~~classes. OnAs ameasured ~~year~~by toheating ~~date~~degree ~~basis~~days, the ~~weighted~~first ~~average~~half ~~cost~~ of ~~gas~~2003 ~~declined~~was ~~from $5~~15.763% ~~during~~colder ~~2001~~than tothe ~~$2.88~~first ~~during~~half of 2002~~. As~~ ~~noted~~and ~~above,~~12.0% ~~such~~colder ~~gas~~than ~~cost~~normal. The ~~decreases~~following dotable ~~not~~compares ~~affect~~Wisconsin ~~the~~Gas' gross margin ~~earned~~and onnatural ~~each~~gas therm ofdeliveries ~~gas~~by ~~delivered~~customer ~~due~~class toduring the ~~Company's~~first ~~gas~~half ~~cost~~of ~~recovery~~2003 ~~mechanisms~~with similar information for the first half of 2002.

The following table compares gross margins and natural gas therm deliveries by customer class during the first nine months of 2002 with similar information for the first nine months of 2001.

		Gross Margin				Therm Deliveries
			Six Months Ended June 30			Six Months Ended June 30
Operations		2003		B (W)	2002	2003	B (W)	2002
		(Millions of Dollars)				(Millions)
Customer Class
Residential		$81.9		$7.5	$74.4	314.9	34.1	280.8
Commercial/Industrial		22.6		2.7	19.9	177.9	23.8	154.1
Interruptible		0.8		0.1	0.7	11.6	1.1	10.5
Total Gas Sold		105.3		10.3	95.0	504.4	59.0	445.4
Transported Gas		13.8		0.4	13.4	261.4	15.7	245.7
Other-Operating		3.5		0.4	3.1	-	-	-
Total		$122.6		$11.1	$111.5	765.8	74.7	691.1
		====		===	====	====	===	====

Weather -- Degree Days (a)
Heating (4,202 Normal)						4,705	623	4,082

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

Gross Margin Therm Deliveries
Nine Months Ended September 30 Nine Months Ended September 30
Operations 2002 2001 % Change 2002 2001 % Change
(Millions of Dollars) (Millions)
Customer Class
Residential $87.2 $87.8 (0.7%) 308.6 312.8 (1.3%)
Commercial/Industrial 23.0 22.0 4.5% 172.0 163.6 5.1%
Interruptible 1.1 1.0 10.0% 14.9 12.5 19.2%
Total Gas Sales 111.3 110.8 0.5% 495.5 488.9 1.3%
Transported Gas 18.1 19.2 (5.7%) 339.4 337.9 0.4%
Other-Operating 4.4 4.8 (8.3%) - - -
Total Deliveries $133.8 $134.8 (0.7%) 834.9 826.8 1.0%
===== ===== ===== =====
Weather - Degree Days (a)
Heating (4,404 Normal) 4,149 4,404 (5.8%)
(a) As measured at Mitchell International Airport in Milwaukee, Wisconsin. Normal degree days are based upon a twenty-year moving average.
During the first nine months of 2002, total therm deliveries of natural gas increased by 1.0% but varied within customer classes. Volume deliveries for the residential class decreased by 1.3% and commercial customer classes increased by 5.1%. The impacts of periods of warmer than normal weather in the first quarter of 2002 were partially offset by the effects of unseasonably cool weather in the second quarter of 2002 and classification changes between customer classes for several customers.
Other Items

Other Operation and Maintenance Expenses: Other operation and maintenance expenses increased by $15.5 million or 36.2% during the first six months of 2003 when compared with the first six months of 2002. The increase was primarily attributable to $7.4 million of increased bad debt expense and to increased pension and benefits costs in the amount of $3.8 million.

Depreciation and Amortization:
Goodwill Amortization:
Other Income, Net:
Interest Expense:
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS

The following summarizes Wisconsin Gas's cash flows during the first ~~nine~~six months of ~~2002~~2003 and ~~2001~~2002:

	Nine Months Ended September 30
	Six Months Ended June 30
Wisconsin Gas Company	~~2002~~2003	~~2001~~2002
	(Millions of Dollars)
Cash Provided by (Used in)
Operating Activities	$5160.1	$1488.5
Investing Activities	($2146.48)	($335.14)
Financing Activities	($3114.52)	($1381.21)

Operating Activities

Cash provided by operating activities ~~increased~~decreased to $5160.1 million during the first ~~nine~~six months of ~~2002~~2003 compared with $1488.5 million during the same period in ~~2001~~2002. This ~~increase~~decline iswas due in large part to ~~lower natural gas prices during~~ the ~~first~~effect ~~nine~~on ~~months of 2002 which resulted in a decline in working capital needs. In addition, operating activities for~~ the ~~first~~cost ~~nine months~~ of ~~2002~~natural ~~increased~~gas inventories due to ~~increased~~higher ~~earnings~~per ~~and~~unit ~~lower~~gas ~~tax~~costs ~~and~~in ~~interest payments then for the first nine months of 2001~~2003.

Investing Activities

During the first ~~nine~~six months of ~~2002~~2003, Wisconsin Gas had ~~cash~~capital ~~outflows~~expenditures ~~from investing activities~~ of $2144.45 million, asan ~~compared~~increase toof $3327.18 million ~~during~~over the first ~~nine~~six months of ~~2001~~2002. This ~~decrease~~increase isreflects ~~directly~~higher capital expenditures related to athe Ixonia Lateral. In addition, Wisconsin Gas realized $12.20 million ~~increase~~during inthe ~~proceeds~~first ~~from~~half ~~asset~~of ~~sales in~~ 2002~~. For~~ from the ~~nine~~sale ~~months~~of ~~ended~~assets ~~September 30,~~that ~~2002~~did ~~and~~not ~~2001,~~recur ~~capital~~during ~~expenditures~~the ~~totaled~~first ~~$32.7 million~~half ~~and~~of ~~$34~~2003.~~1 million, respectively.~~

Financing Activities

During the ~~nine~~six months ended ~~September~~June 30, ~~2002~~2003, Wisconsin Gas used $3114.52 million ~~for~~to ~~financing~~reduce ~~activities~~short-term debt compared with $1381.21 million ~~of cash provided~~ during the first ~~nine~~six months of ~~2001~~2002. This change can be attributed to anthe ~~increase~~need infor ~~short-term~~more ~~debt~~capital ~~repayments~~as ~~between~~a ~~the~~result ~~first~~of ~~nine~~increased ~~months~~construction ofcosts ~~2002~~ and ~~2001 due~~ to ~~the~~increased ~~decrease~~costs inrelated ~~the~~to ~~cost of natural~~ gas ~~and resulting decline~~ in ~~working capital needs plus proceeds from asset sales~~storage.

CAPITAL RESOURCES AND REQUIREMENTS
Capital Resources

Cash requirements during the remaining ~~three~~six months of ~~2002~~2003 are expected to be met through a combination of internal sources of funds from operations, short-term borrowings and existing lines of credit supplemented, if necessary, through the sale of debt securities.

~~The~~Depending ~~Company~~upon ~~has~~market ~~access~~conditions ~~to outside capital markets~~ and ~~has~~other ~~been~~factors ~~able~~including toreceipt ~~generate~~of ~~funds~~required ~~internally~~regulatory ~~and~~approvals, ~~externally to meet its capital requirements.~~ Wisconsin Gas's ~~ability~~anticipates toissuing ~~attract~~$100 million ~~the~~of ~~necessary~~unsecured ~~financial~~long-term ~~capital~~debt atduring ~~reasonable terms is critical to~~ the ~~Company's~~fourth ~~overall~~quarter ~~strategic plan~~of 2003. ~~Wisconsin Gas believes that it has adequate capacity to fund its operations for the foreseeable future through its borrowing arrangements and internally generated cash.~~

OnThe ~~September 30,~~Company ~~2002,~~has access to outside capital markets and has been able to generate funds internally and externally to meet its capital requirements. Wisconsin Gas' ~~had~~ability ~~approximately~~to ~~$190 million~~attract ofthe ~~available~~necessary ~~unused~~financial ~~lines~~capital ofat ~~bank~~reasonable ~~back-up~~terms ~~credit~~is ~~facilities~~critical to the Company's overall strategic plan. The Company ~~had~~believes ~~approximately~~that ~~$97.2 million~~it ofhas ~~total~~adequate ~~short-term~~capacity ~~debt~~to ~~outstanding~~fund onits ~~such~~operations ~~date~~for the foreseeable future through its borrowing arrangements and internally generated cash.

~~The~~On ~~Company~~June 30, ~~reviews~~2003, ~~its~~Wisconsin ~~bank~~Gas ~~back-up~~had ~~credit~~approximately ~~facility~~$200.0 million ~~needs~~of onavailable anunused ~~ongoing~~lines ~~basis~~of ~~and~~bank ~~expects~~back-up tocredit befacilities. The ~~able~~Company tohad ~~maintain~~approximately ~~adequate~~$128.0 million ~~credit~~of ~~facilities~~total toshort-term ~~support~~debt ~~its~~outstanding ~~operations~~on such date.

~~On December 12, 2001,~~ Wisconsin Gas ~~entered~~reviews ~~into~~its ~~an unsecured 364 day $190 million~~ bank back-up credit facility ~~that~~needs ~~replaced~~on ~~individual~~an ~~bank~~ongoing ~~lines~~basis ofand ~~credit~~expects ~~that~~to ~~were~~be ~~expiring.~~able ~~The~~to maintain adequate credit ~~facility~~facilities ~~may~~to besupport ~~extended~~its ~~for~~operations. The anfollowing ~~additional~~table ~~364 days,~~summarizes ~~subject~~such tofacilities ~~lender~~at ~~agreement.~~June 30, 2003:

The following table shows Wisconsin Gas's capitalization structure at September 30, 2002 and at December 31, 2001:

Total Facility	Drawn	Credit Available	Facility Maturity	Facility Term
(Millions of Dollars)

$200.0	$ -	$200.0	Jun-2004	364 day

Capitalization Structure	September 30, 2002		December 31, 2001
	(Millions of Dollars)
Common Equity	$708.0	74.1%	$691.0	71.3%
Long-Term Debt (including
current maturities)	150.6	15.7%	149.3	15.4%
Short-Term Debt	97.2	10.2%	128.7	13.3%
Total	$955.8	100.0%	$969.0	100.0%
	=====	=====	=====	=====

On June 25, 2003, Wisconsin Gas entered into an unsecured 364 day $200 million bank back-up credit facility to replace a $185 million credit facility that was scheduled to expire on December 10, 2003. The credit facility may be extended for an additional 364 days, subject to lender agreement.

~~Access to capital markets at a reasonable cost is determined in large part by credit quality.~~ The following table ~~summarizes~~shows ~~the current ratings of the debt securities of~~ Wisconsin Gas' bycapitalization ~~Standard &~~structure ~~Poors~~at ~~Corporation ("S&P")~~June 30, ~~Moody's~~2003 ~~Investors Service ("Moody's")~~ and ~~Fitch.~~at December 31, 2002:

	S&P	Moody's	Fitch
Capitalization Structure	June 30, 2003		December 31, 2002
Wisconsin Gas Company
	(Millions of Dollars)
Commercial Paper	A-1	P-1	F1+
Common Equity	$750.7	72.9%	$726.1	71.2%
Unsecured Senior Debt	A	Aa2	AA-
Long-Term Debt	151.8	14.7%	151.0	14.8%
Short-Term Debt	128.0	12.4%	142.2	14.0%
Total	$1,030.5	100.0%	$1,019.3	100.0%
	=====	====	=====	====

SAccess to capital markets at a reasonable cost is determined in large part by credit quality. The following table summarizes the current ratings of the debt securities of Wisconsin Gas by Standard &P Poor's Ratings Services ("S&P"), Moody's ~~and~~Investors ~~Fitch~~Service ("Moody's") ~~current~~and ~~outlook~~Fitch ~~for~~Ratings ~~Wisconsin Gas is Stable~~("Fitch").

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

	S&P	Moody's	Fitch
Wisconsin Gas Company
Commercial Paper	A-2	P-1	F1+
Unsecured Senior Debt	A-	Aa2	AA-

In February 2003, Moody's placed under review for possible downgrade Wisconsin Gas' long-term security rating and confirmed the commercial paper rating.

S&P and Fitch's current outlook for Wisconsin Gas is stable.

Wisconsin Gas believes these security ratings should provide a significant degree of flexibility in obtaining funds on competitive terms. However, these security ratings reflect the views of the rating agencies only. An explanation of the significance of these ratings may be obtained from each rating agency. Such ratings are not a recommendation to buy, sell or hold securities, but rather an indication of creditworthiness. Any rating can be revised upward or downward or withdrawn at any time by a rating

agency if it decides that the circumstances warrant the change. Each rating should be evaluated independently of any other rating.

Capital Requirements

Capital requirements during the remainder of ~~2002~~2003 are expected to be principally for capital expenditures ~~and for short-term debt retirements~~. Wisconsin Gas's ~~2002~~2003 annual capital expenditure ~~forecast~~budget is approximately $65113 million.

~~Pension~~Financial ~~Investments~~Instruments: Wisconsin Gas is a party to various financial instruments with off-balance sheet risk as a part of its normal course of business, which may include, from time to time, financial guarantees and letters of credit which support construction projects, commodity contracts and other payment obligations. As of June 30, 2003, the Company's estimated maximum exposure under such agreements is zero.

Contractual Obligations/Commercial Commitments: The Company's ~~has~~total ~~received~~contractual ~~projections~~obligations ~~from~~and ~~its~~other ~~actuaries~~commercial ~~which~~commitments ~~indicate~~as ~~that~~of ~~the~~June 30, ~~Company~~2003 ~~may~~decreased ~~have~~compared towith ~~record a minimum pension liability as of~~ December 31, 2002 ifdue ~~the pension assets continue~~ to ~~have~~customary ~~negative~~periodic ~~returns~~payments, inalong ~~2002~~with ~~and~~reductions ~~the~~during ~~Company chooses not to make a contribution to~~ the ~~pension~~first ~~plan. The~~six ~~minimum~~months ~~pension~~of ~~liability~~2003 ~~would result~~ in aobligations ~~non-cash~~and ~~charge~~commitments tomade ~~shareholders'~~in ~~equity which, if~~ the ~~annual~~ordinary ~~losses~~course onof ~~pension assets are 10% to 20%, could be between $105 million to $145 million after tax during 2002~~business.

Alternatively, the Company could make a contribution to the plan by December 31, 2002 which would eliminate the underfunded status of the plan. The net cash outflows, if the annual losses on pension assets are 10% to 20%, could be between $30 million to $100 million after tax, again, dependent upon the annual losses on the plan assets.
The Company is currently evaluating whether it will fund the pension plan or take the non-cash charge to shareholders' equity.
Financial Instruments:
Contractual Obligations/Commercial Commitments:
FACTORS AFFECTING RESULTS, LIQUDITY AND CAPITAL RESOURCES
UTILITY RATES AND REGULATORY MATTERS

~~Accounting~~Limited ~~for~~Rate ~~Bad~~Adjustment ~~Debts~~Request: Under the conditions of the Public Service Commission of Wisconsin's ("PSCW") Order authorizing Wisconsin Energy's acquisition of WICOR, Inc., the Company is authorized to seek rate reviews with the PSCW during a five-year rate restriction period that began January 1, 2001 limited to changes in revenue requirements as a result of:

~~Guardian~~Governmental ~~Lateral:~~ mandates;
Abnormal levels of capital additions required to maintain or improve reliable electric service; and
Major gas lateral projects associated with approved natural gas pipeline construction projects.

On July 2, 2003, Wisconsin Gas filed an application with the PSCW for $26.2 million (3.9%) of rate adjustments for anticipated 2004 revenue deficiencies associated with (1) increased costs linked to changes in Wisconsin's public benefits legislation, and (2) costs for construction of the Ixonia Lateral further described below. The Company anticipates an order from the PSCW on this request in early 2004.

Request for Deferral of Uncollectible Accounts Receivable: Due to a combination of unusually high natural gas prices, the soft economy within its utility service territories, and limited governmental assistance available to low-income customers, the Company has seen a significant increase in uncollectible accounts receivable. Because of this, the Company sent a letter to the PSCW on July 23, 2003 requesting authority to defer for future rate recovery all bad debt expenses incurred during 2003 in excess of amounts included in current utility rates. The Company estimates such amount to be $7.2 million during 2003. In the letter, the Company stated its intention to suggest a mechanism for recovery of these costs, and to prevent such circumstances from recurring in the future. It is unknown when the PSCW will rule on this request.

Ixonia Lateral: In April 2003, Wisconsin Gas started construction on the 35-mile Ixonia Lateral, which will connect the Wisconsin Gas distribution system to the Guardian Pipeline. The Ixonia Lateral is expected to provide substantial gas cost savings as well as critical additional pipeline capacity. Wisconsin Gas expects to complete and place the Ixonia Lateral in service in time to allow Wisconsin Gas to access its full contract capacity from Guardian Pipeline in the fourth quarter of 2003. In the event that the Ixonia Lateral is not completed prior to November 2003, Wisconsin Gas would incur additional operating costs for gas to be delivered into its service territory.

On August 24, 2001, Neighbors Standing United, a landowner group, and an individual landowner, filed petitions for review of the PSCW order dated July 25, 2001, which approved Wisconsin Gas' application to construct and operate the Ixonia Lateral. The Jefferson County Circuit Court on November 5, 2002 rendered a decision denying the petitions for review of the PSCW order and request for injunctive relief with one modification by the Court which narrowed the approved pipeline corridor from 800 to 200 feet. In December 2002, the landowner filed a notice of appeal of the Court decision to the Wisconsin Court of Appeals. On June 24, 2003, the Wisconsin Court of Appeals dismissed the landowner's appeal of the Circuit Court decision.

Power the Future - Port Washington: Associated with construction of the Port Washington Generating Station under Wisconsin Energy's Power the Future strategy, Wisconsin Gas received a Certificate of Public Convenience and Necessity ("CPCN") from the PSCW in January 2003 authorizing construction of a 16.8 mile gas lateral that will connect the plant to the ANR Pipeline. It will also improve reliability for the natural gas distribution system in the area. The Company received a Chapter 30 wetland permit from the Wisconsin Department of Natural Resources ("WDNR") on July 3, 2003 approving construction of this lateral. The WDNR permitted construction of substantially the entire lateral consistent with the planned route previously approved by the PSCW, with certain exceptions. The Company has modified the planned route pursuant to the WDNR's request and will submit a request to the PSCW, if necessary, for re-approval of the modified route. Including the requested changes, the Company estimates the total cost of the project to be $39.5 million, subject to PSCW approval. Construction of the lateral is scheduled to begin in spring 2004 and to be completed by late 2004.

CAUTIONARY FACTORS

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

Factors affecting utility operations, such as unusual weather conditions; catastrophic weather-related or terrorism-related damage; unplanned maintenance or repairs; unanticipated changes in gas supply or water supply costs or availability due to higher demand, shortages, transportation problems or other developments; nonperformance by natural gas suppliers under existing gas supply contracts; ~~environmental incidents;~~ gas pipeline system constraints; unanticipated organizational structure or key personnel changes; collective bargaining agreements with union employees or work stoppages; inflation rates; or demographic and economic factors affecting utility service territories or operating environment.

Regulatory factors, such as unanticipated changes in rate-setting policies or procedures; unanticipated changes in regulatory accounting policies and practices; industry restructuring initiatives; distribution system ~~operation~~ and/or administration initiatives; recovery of costs of previous investments made under traditional regulation; recovery of costs associated with adoption of changed accounting standards; required changes in facilities or operations to reduce the risks or impacts of potential terrorist activities; required approvals for new construction; or changes in the regulations from the WDNR related to the siting approval process for new pipeline construction.

Unexpected difficulties or unanticipated effects of the qualified five-year ~~electric and~~ gas rate freeze ordered by the Public Service Commission of Wisconsin as a condition of its approval in 2000 of the merger of Wisconsin Energy Corporation and WICOR, Inc.

The ~~increasing~~changing ~~competitiveness of the~~ gas utility environment as market-based forces replace strict industry regulation and other competitors enter the gas markets resulting in increased wholesale and retail competition.

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

Changes in social attitudes regarding the utility ~~industry~~industries.

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

The cost and other effects of legal and administrative proceedings, settlements, investigations and claims, and changes in those matters.

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

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

Authoritative generally accepted accounting principle or policy changes, ~~such as adoption of SFAS 142, Goodwill and Other Intangible Assets; and SFAS 143, Accounting for Asset Retirement Obligations;~~ from such standard setting bodies as the Financial Accounting Standards Board and the Securities and Exchange Commission.

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

Other business or investment considerations ~~including market risks and other significant risks~~ that may be disclosed from time to time in Wisconsin Gas's Securities and Exchange Commission filings or in other publicly disseminated written documents.

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

*****

For certain other information which may impact Wisconsin Gas's future financial condition or results of operations, see Item 1, Financial Statements -- "Notes to Condensed Financial Statements," in Part I of this report as well as Item 1, Legal Proceedings, in Part II of this report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For information concerning market risk exposures, see Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations -- "Factors Affecting Results, Liquidity and Capital Resources -- Market Risks and Other Significant Risks," in Part II of Wisconsin Gas's ~~2001~~2002 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

InDisclosure ~~order~~Controls toand ~~ensure~~Procedures: The ~~that the information the~~ Company's ~~must~~management, ~~disclose in its filings~~ with the ~~Securities~~participation ~~and~~of ~~Exchange Commission is recorded, processed, summarized and reported on a timely basis,~~ the Company ~~has formalized its disclosure controls and procedures. The Company~~'s ~~principal~~Chief ~~executive~~Executive ~~officer~~Officer and ~~principal~~Chief ~~financial~~Financial ~~officer~~Officer, ~~have~~has ~~reviewed~~evaluated ~~and~~the ~~evaluated~~effectiveness of the Company's disclosure controls and procedures (as such term is defined in Rules 13a-1415(ce) and 15d-1415(ce) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of athe ~~date~~end ~~within~~of ~~90 days prior to~~ the ~~filing~~period ~~date~~covered ofby this report ~~(the "Evaluation Date")~~. Based on such evaluation, ~~such~~the ~~officers~~Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the ~~Evaluation~~end ~~Date~~of such period, the Company's disclosure controls and procedures are effective in ~~bringing~~recording, toprocessing, ~~their~~summarizing ~~attention~~and reporting, on a timely basis, ~~material~~ information ~~relating~~required to ~~the~~be ~~Company~~disclosed ~~required~~by tothe beCompany ~~included~~ in the ~~Company's~~reports ~~periodic~~that ~~filings~~it files or submits under the Exchange Act.

~~Since~~Internal ~~the~~Control ~~Evaluation~~Over ~~Date,~~Financial ~~there~~Reporting: There have not been any ~~significant~~ changes in the Company's internal ~~controls~~control ofover ~~the~~financial ~~Company,~~reporting or(as such term is defined in ~~other~~Rules 13a-15(f) ~~factors~~and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this report relates that ~~could~~have ~~significantly~~materially ~~affect~~affected, ~~these~~or ~~controls~~are ~~subsequent~~reasonably likely to materially affect, the ~~Evaluation~~Company's ~~Date~~internal control over financial reporting.

PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The following should be read in conjunction with Item 3, Legal Proceedings, in Part I of Wisconsin Gas's ~~2001~~2002 Annual Report on Form 10-K and Item 1, Legal Proceedings, in Part II of Wisconsin Gas's Quarterly Report on Form 10-Q for the period ended March 31, ~~2002~~2003.

In addition to those legal proceedings discussed in its reports to the SEC, the Company is currently, and from time to time, subject to claims and suits arising in the ordinary course of business. Although the results of such legal proceedings cannot be predicted with certainty, the Company's management, after consultation with legal counsel, believes that the ultimate resolution of these proceedings will not have a material adverse effect on the financial statements of the Company.

ENVIRONMENTAL MATTERS

~~See~~Columbia ~~"Environmental~~Propane ~~Matters"~~Lawsuit: In 1999, Wisconsin Gas was sued by Columbia Propane LP in ~~Note 6~~the Circuit Court of Wood County, Wisconsin for an estimated $5 million in ~~Item~~clean up costs related to a manufactured gas plant site in Marshfield, Wisconsin. The gas plant was owned and operated by People's Gas until 1960 when Wisconsin Gas acquired the assets of People's Gas subject to the terms of an Asset Purchase Agreement. In 11962, ~~Financial~~Wisconsin ~~Statements~~Gas --sold ~~"Notes~~the site to ~~Condensed~~Columbia ~~Financial~~Propane. Columbia ~~Statements"~~Propane asserted in ~~Part~~the Ilawsuit that Wisconsin Gas stood in the shoes of ~~this~~People's ~~report~~Gas ~~which~~and iswas ~~incorporated~~liable byfor ~~reference~~environmental ~~herein,~~liabilities. Wisconsin Gas contested the liability and filed a motion for summary judgment contending that as a ~~discussion~~matter of ~~matters~~law ~~related~~it was not liable for the clean up costs. The judge granted Wisconsin Gas' motion for summary judgment and dismissed the complaint, but on December 28, 2001, the Wisconsin Court of Appeals reversed the trial court and remanded the matter back for trial on the issue as to ~~certain~~whether ~~manufactured~~the ~~gas~~parties ~~plant~~intended ~~sites~~tort liability to be assumed by Wisconsin Gas under the terms of the Asset Purchase Agreement. In April 2002, the Wisconsin Supreme Court granted a Petition for Review filed by Wisconsin Gas, and oral arguments were held on January 15, 2003. On May 13, 2003, the Wisconsin Supreme Court reversed the Court of Appeals' decision. The Supreme Court determined that the trial court correctly dismissed the lawsuit against Wisconsin Gas.

UTILITY RATES AND REGULATORY MATTERS

~~Guardian~~See ~~Lateral:~~ Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations - "Factors Affecting Results, Liquidity and Capital Resources" in Part I of this report for information concerning Wisconsin Gas rate matters.

ITEM 5. OTHER INFORMATION

Gale E. Klappa, President of Wisconsin Energy Corporation, was elected President and Chief Executive Officer of Wisconsin Gas Company on July 31, 2003. Mr. Klappa succeeds Richard R. Grigg as President of Wisconsin Gas and assumes the title of Chief Executive Officer of Wisconsin Gas from Richard A. Abdoo.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

a.	EXHIBITS

The following Exhibits are filed with or incorporated by reference in this Form 10-Q report:

Exhibit No.

99	Additional Exhibits
12	Statements re Computation of Ratios
99.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
12.1	Statement of Computation of Ratio of Earnings to Fixed Charges.
99.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~Certain~~Exhibit compensatory plans, contracts or arrangements in which directors or executive officers of Wisconsin Gas Company participate are not filed as Wisconsin Gas Company exhibits in reliance on the exclusion in Item 601(b)(10)(iii)(B)(6) of Regulation S-K. Wisconsin Gas Company is an indirect wholly-owned subsidiary of Wisconsin Energy Corporation, Commission File No. ~~001-09057, and such compensatory plans, contracts or arrangements are filed as exhibits to Wisconsin Energy Corporation's periodic reports under the Securities Exchange Act of 1934.~~

31	Rule 13a-14(a) / 15d-14(a) Certifications

31.1	Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2	Certification Pursuant to Rule 13a-14(a) or 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32	Section 1350 Certifications

32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

	Certain compensatory plans, contracts or arrangements in which directors or executive officers of Wisconsin Gas Company participate are not filed as Wisconsin Gas Company exhibits in reliance on the exclusion in Item 601(b)(10)(iii)(C)(6) of Regulation S-K. Wisconsin Gas Company is an indirect wholly-owned subsidiary of Wisconsin Energy Corporation, Commission File No. 001-09057, and such compensatory plans, contracts or arrangements are filed as exhibits to Wisconsin Energy Corporation's periodic reports under the Securities Exchange Act of 1934.

b.	REPORTS ON FORM 8-K

A Current Report on Form 8-K, dated as of ~~July~~April 328, ~~2002,~~2003 was filed by Wisconsin Gas on ~~July~~April 828, ~~2002~~2003 to report that Paul Donovan, Executive Vice President and Chief Financial Officer for Wisconsin Energy Corporation, Wisconsin Electric Power Company and Wisconsin Gas ~~had~~Company, ~~dismissed~~has ~~Arthur~~decided ~~Andersen LLP~~to retire in early 2004 relinquishing as ~~its~~of ~~independent~~June 30, ~~accountants~~2003 ~~and~~all ~~engaged~~positions ~~the~~he ~~firm~~has ofheld ~~Deloitte~~with &Wisconsin ~~Touche LLP~~Energy toand ~~audit~~its subsidiaries and will remain with the ~~books~~Company ~~and~~as ~~records~~a ofspecial ~~Wisconsin~~advisor ~~Gas~~to ~~for~~the ~~2002~~Chief Executive Officer until his retirement.

NoA ~~other~~Current ~~reports~~Report on Form 8-K ~~were~~dated as of June 20, 2003 was filed by Wisconsin Gas ~~during~~on June 20, 2003, with a copy of the ~~quarter~~press ~~ended~~release ~~September 30~~announcing that Allen L. Leverett was named Chief Financial Officer of Wisconsin Energy Corporation, ~~2002~~ Wisconsin Electric Power Company and Wisconsin Gas Company effective July 1, 2003.

No other reports on Form 8-K were filed by Wisconsin Gas during the quarter ended June 30, 2003.

A Current Report on Form 8-K dated as of July 25, 2003 was filed by Wisconsin Gas on July 25, 2003 to report that Richard R. Grigg has decided to retire effective March 1, 2004 relinquishing as of July 31, 2003 the titles of President of Wisconsin Electric Power Company and President and Chief Operating Officer of Wisconsin Gas Company and all directorships with Wisconsin Energy and its subsidiaries, remaining as Executive Vice President of Wisconsin Energy and Chief Operating Officer of Wisconsin Electric Power Company.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~registrant~~Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	WISCONSIN GAS COMPANY
	(Registrant)
	/s/STEPHEN P. DICKSON
Date: November 5, 2002	Stephen P. Dickson, Controller, Chief Accounting Officer and duly authorized officer
Date: August 6, 2003	Stephen P. Dickson, Controller, Chief Accounting Officer and duly authorized officer

CERTIFICATIONS

I, Richard Abdoo, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Wisconsin Gas Company;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;

4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date:	November 5, 2002
	/s/RICHARD A. ABDOO
	Chief Executive Officer

I, Paul Donovan, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Wisconsin Gas Company;

b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and

c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and

Date:	November 5, 2002
	/s/PAUL DONOVAN
	Chief Financial Officer

6.	Environmental Matters: The Company periodically reviews its exposure to environmental remediation costs as evidence becomes available indicating that its remediation liability has changed. Given current information, including the following, management believes that future costs in excess of the amounts accrued and/or disclosed on all presently known and quantifiable environmental contingencies will not be material to the Company's financial position or results of operations.
	During 2000, the Company expanded a voluntary program of comprehensive environmental remediation planning for former manufactured gas plant sites. The Company has performed a preliminary assessment of two manufactured gas plant sites previously used by Wisconsin Gas as discussed below. The Company is working with the Wisconsin Department of Natural Resources in its investigation and remediation planning. At this time, the Company cannot estimate future remediation costs associated with these sites beyond those described below.
	Manufactured Gas Plant Sites: The Company has completed remediation at one former manufactured gas plant site. The Company estimates that the future costs for detailed site investigation and future remediation costs for the one remaining site may range from $3-$5 million over the next ten years. This estimate is dependent upon several variables including, among other things, the extent of remediation, changes in technology and changes in regulation. As of September 30, 2002, the Company has established reserves of $3.5 million related to future remediation costs.
	The PSCW has allowed Wisconsin utilities, including Wisconsin Gas, to defer the costs spent on the remediation of manufactured gas plant sites, and has allowed for such costs to be recovered in rates over five years. As such, the Company has recorded a regulatory asset for unrecovered remediation costs.
	Guardian Lateral: In April 2002, Wisconsin Gas announced that construction of the 35-mile lateral to connect its distribution system to the Guardian Pipeline (the "Guardian Lateral") may be delayed until the spring of 2003 in order to obtain all permits and easements.
	On August 30, 2002, Wisconsin Gas filed a request with the PSCW for approval of an increased cost estimate for the Guardian Lateral. The original cost estimate of $62 million has increased to approximately $83.5 million based on an in-service date in the fourth quarter of 2003.
	Despite this cost increase, the Guardian Lateral project remains economically feasible, and provides substantial customer benefits in gas cost savings as well as critical additional pipeline capacity. Delay in construction of the lateral is not expected to affect the 2003 in-service date and availability of the Guardian Pipeline to Wisconsin Gas.
	On August 24, 2001, Neighbors Standing United ("NSU"), a landowner group, filed petitions along with an individual landowner, for review of the PSCW order dated July 25, 2001, which approved Wisconsin Gas Company's application to construct and operate the Guardian Lateral. The petitioners allege, among other issues, that the final environmental impact statement ("FEIS") for this pipeline project did not meet legal requirements and that affected landowners' due process rights were not satisfied during the PSCW review process. After briefing of the issues and oral argument, the Jefferson County Circuit Court on October 4 and 14, 2002, rendered oral decisions denying the petitions for review and request for injunctive relief with one modification by the Court which narrowed the approved pipeline route corridor from 800 to 200 feet. A written Court Order confirming this bench decision is anticipated in November 2002.
	These two petitioners also filed on February 21 and 22, 2002, respectively, petitions for review of a January 17, 2002, WDNR decision which concluded that the FEIS for the Guardian Pipeline and Guardian Lateral projects fully complied with the Wisconsin Environmental Policy Act. These petitions for review and associated proceedings have been stayed by the Jefferson County Circuit Court pending resolution of the proceedings for the court review of the PSCW's order.

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