Wisconsin Public Service Corp. building a 500-MW coal-fired electric generator

26 September 2002 – WPS Resources Corp.’s electric and natural gas subsidiary, Wisconsin Public Service Corp., intends to build a 500-MW coal-fired electric generator at its Weston Power Plant site near Wausau, Wisconsin.

The unit would be capable of generating enough energy to power about 200,000 homes. The project is expected to begin operating in 2008 and will cost between $650 million and $700 million.

Wisconsin Public Service expects to submit a Certificate of Public Convenience and Necessity (CPCN) application to the Public Service Commission of Wisconsin in late 2003 and anticipates receiving an order from the Public Service Commission in 2004, which would allow construction to begin later in 2004.

Precertification expenses are expected to total $12.6 million with $3.1 million expended in 2003 and $9.5 million expended in 2004. In addition, approximately $10 million in capital costs will be incurred in 2004 for early equipment commitments. The remaining additional capital costs will be incurred before completion of the project in 2008. Most of the precertification expense is expected to be recovered through rates.

The facility will be funded by a combination of internally generated funds, debt issues, and equity. WPS Resources will potentially need to issue additional common stock during this period to raise the necessary capital to fund the equity.

This plant is intended to meet the growing electrical demand of Wisconsin Public Service’s customers. Studies have indicated that Wisconsin Public Service’s customers are increasing their electric demand by approximately two to three percent per year. Not only is the population increasing, but individual customers are demanding more electricity. The average electric use by residential customers has risen about 20 percent in the last 10 years.

The new plant will assist in strengthening Wisconsin’s electrical system reliability and is part of WPS Resources’ plan to increase its generating capacity through its regulated and non-regulated subsidiaries. WPS Resources previously announced a plan to aid electric system reliability in Wisconsin through its regulated utility by increasing its ownership in the Kewaunee Nuclear Power Plant in 2001, purchasing the De Pere Energy Center in 2002, completing installation of an 83-megawatt electric generator at the Pulliam Power Plant in 2003, purchasing 150 megawatts of energy from Calpine in 2005, and completing installation of a new 500-megawatt coal unit in 2008.

WPS Resources also announced that its non-regulated subsidiary, WPS Power Development, Inc., would complete a 50-megawatt cogeneration project in Combined Locks, Wisconsin in 2002 and complete construction of a 200-megawatt coal-fired plant by 2007 that will be integrated with the 53-megawatt Stoneman Power Plant in Cassville, Wisconsin.

Construction of the new generator at Weston does not preclude the need for the 220-mile electric transmission line that will run from Wausau, Wisconsin to Duluth, Minnesota. New generation, an upgraded transmission system, and conservation are required to meet the future electrical needs of Wisconsin.

The new generator will be located on a 345-acre site on which several other units are currently operating.

Wisconsin Public Service will work with a number of regulatory agencies in gaining approval for the project, with the Public Service Commission of Wisconsin and the Wisconsin Department of Natural Resources taking the lead during the 12- to 18-month approval process.

The Public Service Commission will review the environmental and socioeconomic impacts of the proposed plant, prepare an environmental impact statement, and hold public and technical hearings. The Department of Natural Resources will require and grant all air, water, and environmental permits. Local zoning agencies and federal agencies will also be involved in the approval process.

About WPS Resources Corporation:

WPS Resources Corporation is a holding company for energy-related regulated and non-regulated subsidiaries. Its primary subsidiaries consist of Wisconsin Public Service Corporation, (a regulated electric and natural gas utility), Upper Peninsula Power Company (a regulated electric utility), WPS Energy Services, Inc. (a diversified nonregulated energy supply and services company), and WPS Power Development, Inc. (a non-regulated power development company).

About Wisconsin Public Service Corporation:

Wisconsin Public Service Corporation is an electric and natural gas utility serving northeast and north central Wisconsin and an adjacent portion of Michigan’s Upper Peninsula. A subsidiary of WPS Resources Corporation, Wisconsin Public Service serves approximately 400,000 electric customers and 300,000 natural gas customers.

About WPS Power Development, Inc.:

WPS Power Development, Inc. is a nonregulated power development subsidiary of WPS Resources Corporation. With a significant focus on the northeast quadrant of the United States, WPS Power Development develops, owns, and operates various nonregulated electric generation facilities and has a generating capacity of 932 megawatts. Areas of expertise include cogeneration, distributed generation, generation from renewables, and generation plant repowering projects.

Source: WPS Resources Corporation

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