Co-Gen Power Plant Message from Kristine Euclide, general counsel for MGE, September 28, 2003

Co-Gen Power Plant Messages from Kristine Euclide, general counsel for MGE
Regent Neighborhood Association | Madison, WI

September 28, 2003
Hello Everyone--

We have heard that some people are expressing concern about the viability of the various MOU's entered in connection with the MGE/UW cogen facility in light of the PSCW's oral decision of last week. Let me reassure you that MGE and the UW-Madison intend to fully honor all of the MOU committments.

In the PSC's oral comments last week, each of the Commissioners applauded the thoughtful, cooperative approach used here and the resulting MOUs. Some went so far as to note that this is precisely the kind of approach the PSC should encourage. However, in their oral decision, the Commissioners did not make the MOU's an explicit condition of the WCCF's approval, noting that this was more a matter for the parties themselves and not something that the PSC wanted to enforce. Nor did they include all of the MOU's associated costs in the project's initial CPCN-approved costs.

The purpose of this memo is to put to rest any concerns about the continued validity of the MOU's. Although I already knew what the answer would be, I again checked with Gary Wolter and Alan Fish on this. As MGE and the UW-Madison have said from the beginning--we will live up to the commitments made in the MOU's. We specifically did NOT make the MOU provisions contingent upon inclusion in the CPCN order because we didn't think that was the right way to approach these commitments to the community. We look forward to working with all of you.

If you have any questions or concerns, feel free to contact me, Don Peterson or Bob Stoffs. Thanks.

October 11, 2003
Some of you may have now seen the PSC's Final Decision approving the WCCF which was approved and mailed yesterday. Obviously, we are pleased that the Order has been issued. As you know, the Commissioners commented very favorably on the MOU's during their open meeting discussion on 9/18 but declined to approve the agreements as conditions in the CPCN because they were viewed more as private agreements among the parties. The written Order notes that the MOU's are essentially private contracts that do not require Commission approval. The Order does not "approve" the MOU's as part of the CPCN order essentially because the PSC did not see the need to place itself in the role of the enforcer of these private agreements. This is all consistent with our previous discussions on the MOU's--they are valid binding legal contracts among private parties and although we agreed to seek to have them included in the PSC order as an added enforcement option, it was not necessary to do so in order for them to be legally binding on the parties. There is some language in the written final decision regarding the MOU's that might arguably be interpreted by some to say that the MOU's are not enforceable at all, unless approved by the Commission. We believe, and have already confirmed with PSC legal counsel, that such an interpretation would be incorrect. In fact, the Order acknowledges specifically at the top of page 23 that the MOU's do not require Commission approval.

As we have said before, we intend to honor fully the commitments we made.