1. ATC Major Projects Update Flora Flygt, Director of System Planning Franc Fennessy, Manager of Local Relations Wisconsin Industrial Energy Group August 9, 2007 Madison, WI

2. 2 Access Initiative  Goal: Reduce delivered cost of energy to Wisconsin consumers by... –reducing system congestion –improving access to additional energy sources  Solution: Add an additional 345 kV circuit to the existing 345 kV line (W4) between Rockdale SS (Dane) and Paddock SS (Rock)  Project estimated costs (2010): –Preferred route: $132.7 million –Alternate route: $210.8 million

3. 3 Access: Net Present Value Benefits less Project Costs (2010) Paddock-Rockdale Analysis - NPV of Net Benefits (Costs) ($ Millions) Robust Economy No NALX -COL Robust Econom y High Retirements High Environmental Slow Growth Fuel Supply Disruption High Growth Wisconsin APC$341$299$574$82($62)$575$265 70% APC + 30% LLMP$529$455$950$132($47)$956$544 LLMP$968$819$1,826$249($12)$1,843$1,196 ATC Customer Benefit$409$356$710$104($56)$710$365 APC = Adjusted Production Costs LLMP = Load-weighted Locational Marginal Prices

4. 4 Access: Net Present Value Benefits less Project Costs (2010) Robust Economy Without Add’l EHV Robust Economy With Add’l EHV High Retires High Environment Slow Growth Fuel Supply Disruption High Growth Wisconsin

5. Dane County Projects Update

6. 6 Background  Dane County has experienced major economic growth in the last 25 years.  Three of Wisconsin’s top 5 fastest growing municipalities are in Dane County (Verona, Cottage Grove and Sun Prairie). (Includes municipalities with a population of 5,000 or more in 2005; data source: U.S. Census Bureau.)  Dane County’s electricity consumption is expected to continue to increase through year 2020.  System-reliability models indicate that new transmission lines will be needed in Dane County by 2008 and every few years thereafter to keep pace with this growing demand.  ATC proposed five projects to deal with this growth

7. 7 Public Outreach  Extensive outreach on all Dane County projects –Energy Initiative Study – supported a group of stakeholders and traditional interveners in review of Dane County’s transmission needs –Project communications, open houses –Ongoing consultation with regulatory agencies –Extensive media relations –Polling –Advertising

8. 8 Dane County Transmission Projects  North Madison-Huiskamp – approval 7/12/07  Femrite-Sprecher – in service  Fitchburg-Verona – application complete, pending hearings  Paddock-Rockdale – application complete, hearings set  Rockdale-West Middleton – routes announced in August

9. 9 North Madison-Huiskamp Project (aka “Waunakee Project”)  Controversy early in project –39 different parties, two intervenor groups –More than 100 public hearing witnesses –Calls for ‘independent’ study  Excerpts from PSCW oral discussion of decision: –“Ebert said this agenda item represents probably the most pressing reliability challenge he has seen since becoming Chairman.” –“Ebert said the [PSC] was formed 100 years ago and was created precisely to conduct that independent review.”

10. 10 Dane County 345 kV Project  Rockdale – West Middleton (Dane) –Resolves significant voltage and reliability issues in Madison area –Final routes were announced on August 1; PSCW filing in October 2007 –Considerable public involvement effort to date. Open houses this month –Underground options evaluated—will not be recommended by ATC –In-Service: 2013

11. 11 Other 345 kV Projects  Arrowhead – Weston –On schedule & budget for June 2008  Gardner Park - Central Wisconsin –WPS Weston 4 generator interconnection –Early in construction; in-service 2009  Morgan – Werner West –System enhancement project in NE Wisconsin –Early in Construction; in-service 2009

12. 12 Thanks! Questions? E-Mail: fflygt@atcllc.com ffennessy@atcllc.com Web: www.atcllc.com