Wisconsin Public Power Inc.: To Purchase Portion of Elm Road Generating Station in Oak Creek

Contact:
Neil Palmer, 262-821-5088
Therese Novotny, 414-217-1233
npalmer1@tds.net

Madison, Wis. – September 30, 2005 – Wisconsin Public Power Inc. (WPPI) gave notice today that it is exercising its option to purchase an 8.33% ownership interest in Units 1 and 2 of the Elm Road Generating Station (ERGS) and associated common facilities being constructed in Oak Creek, Wisconsin, by Wisconsin Energy Corp. The projected total cost of this project for WPPI will be approximately $239 million including capitalized interest.

Acquisition of an ownership interest in the Elm Road facility will help WPPI meet its future need for generation that will run around the clock to meet a growing demand for electricity in its 40 member communities.

“The Elm Road purchase is our best choice for long-term price stability,” said Roy Thilly, president and CEO of WPPI. “This project gives us an opportunity to achieve the economies of scale through ownership of portions of large baseload power plants and will help WPPI maintain competitive and stable rates for the long term.”

WPPI considered several alternatives for supplying baseload capacity and the ERGS purchase was the least expensive option. Other alternatives analyzed included building and owning a smaller coal-fired plant, constructing a gas-fired combined-cycle plant and purchasing more power from other utilities. All of those options had higher projected future costs.

“Through the power of joint action, our 40 member communities will benefit from power generated on a large scale at a modern, efficient facility,” said John Andler, chairman of the WPPI Board of Directors and superintendent of Columbus Water & Light. “The ability to participate in this project is only possible through joint action. Working together, our member communities are doing what would not be possible for them if we acted individually.”

The scheduled commercial operation date for Unit 1 is September 29, 2009, and for Unit 2, September 29, 2010.

“Current low interest rates provide an opportune time to invest in this generation,” said Thilly. “The Elm Road project will help WPPI maintain a diversified portfolio of resources and fuel mix and to reduce its future reliance on natural gas as a fuel source. Coal is a more reliable, stable and low-cost fuel than natural gas for operating generation 24 hours a day, seven days a week.”

The Elm Road project consists of two 615-megawatt generating units that are much cleaner than existing Wisconsin coal plants. The site includes more than 1,000 acres adjacent to Lake Michigan.