Madison Gas and Electric: Required to defer planned generator retirement at Blount Street power plant

Company reiterates plan to discontinue coal use

Madison Gas and Electric (MGE) has received notification from the Midwest Independent System Operator (Midwest ISO) that in order to meet national electric system reliability standards, MGE will need to keep its Blount Station available at full capacity until Midwest ISO declares the 90 megawatts (MW) MGE desires to retire are no longer needed for system reliability. The company said the announcement does not affect its plans to stop burning coal at Blount.

As part of its Energy 2015 Plan, MGE announced its intention to retire the oldest, least-efficient part of its Blount Street power plant by 2011. The equipment slated for retirement represents 90 out of 190 MWs of the plant’s full capacity. The remaining 100 MWs of the plant would remain in operation. MGE also announced that it would discontinue coal-burning at Blount and transition to burning only natural gas by the end of 2011 for the remaining 100 MWs of capacity.

To comply with the Midwest ISO directive, MGE will suspend its plans for retiring 90 MWs of generation equipment at Blount. However, consistent with its original Energy 2015 Plan, the company will still transition from burning coal to burning only natural gas at Blount by the end of 2011. “MGE made a commitment to the community and the neighborhood to discontinue burning coal in downtown Madison. MGE will keep that commitment even though Midwest ISO’s directive has changed one aspect of our original plan,” said Scott Neitzel, Vice President of Energy Supply. After 2011, the entire plant will be operated exclusively on natural gas.

Midwest ISO is a regional transmission organization that ensures open-access transmission service and operates the high-voltage transmission system throughout the Midwest and parts of Canada. Midwest ISO has overall operating and planning responsibility for the transmission system to maintain electric reliability, while balancing the consumption, transmission and generation needs across the grid.

MGE generates and distributes electricity to 137,000 customers in Dane County, Wis., and purchases and distributes natural gas to 141,000 customers in seven south-central and western Wisconsin counties. MGE’s parent company is MGE Energy (Nasdaq: MGEE). The company’s roots in the Madison area date back more than 150 years.

Contact:

Steve Kraus

Manager – Media Relations

608-252-7907

[email protected]