Madison Gas and Electric Co. to Purchase Prairie du Chien Gas System from Wisconsin Electric/Wisconsin Gas.

Business Editors

PRAIRIE DU CHIEN, WIS.--(BUSINESS WIRE)--June 20, 2001

Madison Gas and Electric Co. (MGE) and Wisconsin Electric/Wisconsin Gas (WE-WG) announced today that MGE has agreed to purchase the Prairie du Chien area natural gas system from WE-WG for approximately $2.4 million.

The purchase includes facilities in the city of Prairie du Chien, the villages of Eastman and Wauzeka, and the towns of Bridgeport, Eastman, Prairie du Chien and Wauzeka, all located in west central Wisconsin within Crawford County. Approximately 3,500 residential and commercial customers are part of the transfer. MGE currently serves natural gas customers in Crawford County.

"Adding this territory to our existing area operations makes financial sense for customers and shareholders," said Gary Wolter, MGE president and chief executive officer. "This transaction will allow both companies to optimize their current assets and resources and improve service to their customers."

MGE will continue a system enhancement project started last year by WE-WG, and will retain all employees who are part of the operations in Crawford County.

Another part of the transaction includes establishing a definitive gas service boundary agreement between the two companies within Dane County. The agreement will allow the companies to better plan facilities as Dane County is expected to remain one of the fastest-growing counties in the state. The new boundary lines do not involve transfer of any customers and are located primarily through undeveloped land north of the Madison city limits.

"We are pleased to be able to enter into this agreement because we believe it benefits the customers of both companies," said Richard Grigg, president and chief operating officer of WE-WG. "The agreement will help both companies better focus resources to serve the people of Dane County, which is one of the fastest growing areas of the state."

The sale is subject to satisfactory completion of due diligence investigation, usual closing conditions and requires Public Service Commission of Wisconsin approval. The transaction is expected to close in the fourth quarter of 2001.

MGE began serving gas to city of Madison more than 100 years ago, providing street lighting to the Capitol Square. The gas utility operations of WE-WG are the predecessor companies of businesses that have served the gas-energy needs of customers in the state of Wisconsin for almost 150 years.

Madison Gas and Electric Company is a public utility that generates, transmits and distributes electricity to 125,000 customers in Dane County. The company also transports and distributes natural gas to 112,000 customers in seven south-central and western Wisconsin counties. MGE has served the Madison area since 1896.

Wisconsin Electric and Wisconsin Gas, the Milwaukee-based utility subsidiaries of Wisconsin Energy Corp. (NYSE: WEC), serve more than one million electric and more than 960,000 natural gas customers throughout Wisconsin and Michigan's Upper Peninsula. Visit our utilities' Web sites at www.WisconsinElectric.com and www.WisconsinGas.com. Learn about Wisconsin Energy Corp. by visiting www.WisconsinEnergy.com.