Dear Customer:

Energy costs are escalating rapidly not only in the Fox Valley but elsewhere in the state and country. Along with increases in traditional heating fuels, the cost for electricity is also going up.

You may have noticed that the Power Cost Adjustment Clause (PCAC) portion of your bill has increased over the past few months. The PCAC is an adjustment that appears each and every month on your electric bill. The adjustment (it can be either positive or negative) reflects the actual costs of the production of electricity. Fluctuations in the PCAC are based on many factors including the cost of the various fuels required to generate electricity as well as the amount of electricity produced by Kaukauna Utilities hydro-electric generation. Producing more electricity from hydro-electric facilities on the Fox River helps to reduce the PCAC.

However, this past summer was hot and dry. Consequently, the amount of electricity generated by Kaukauna Utilities hydro-electric facilities has been lower than in past years. As a result, Kaukauna Utilities has had to purchase more energy from outside sources to meet the needs of our customers. Since those generating costs have gone up in the past few months, the PCAC has also gone up.

Kaukauna Utilities customers have enjoyed a long history of reasonable rates and reliable service. While costs have gone up, Kaukauna Utility customers still pay 30% less than customers served by neighboring utilities.

We are very concerned about the rising costs of electricity and will continue to work diligently to manage our expenses and remain a low cost energy provider. To help you manage your energy use, there are a number of conservation tips on the back of this letter. There is also additional conservation information on our website at www.kaukaunautilities.com. Please call us at 766-5721 if you have specific questions or concerns.

Sincerely,

Jeffery W. Feldt
General Manager