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June 29, 2005

Badger Hydro Project

The Old Badger/New Badger and Rapide Croche Hydro Electric Plants are currently licensed under the same Federal Energy Regulatory Commission (FERC) license. The current license expires 12/31/2018.

Kaukauna Utilities (KU) has determined through various studies and inspections that the Old Badger Plant is deteriorating to the extent that major renovations are required. The New Badger Plant is in slightly better condition but also needs major renovation.

Eight (8) options were reviewed and analyzed to determine the most cost effective solution. The options ranged from rehabilitation of both plants, to shutting down the plants, to four (4) replacement options. After detailed economical analysis of the eight (8) options, the option to construct a new facility with two (2) 3.5 MW Horizontal Turbines proved to be the most economical option for KU. Regardless of what option was chosen for the hydro upgrade, the current power canal also needs major repairs. This was also a major factor.

The project is currently moving forward, following the FERC licensing process. The first step, applying for an accelerated license, was completed in January of 2005. FERC approval was received in May of 2005. The next step is the submittal of the Initial Consultation package (ICP) to FERC and 35 other governmental agencies and local jurisdictions. The ICP was issued on May 17, 2005. A Public Meeting was held on June 28, 2005, as required, to discuss the project in an Open Meeting. All comments on the ICP are due by August 27, 2005. At that time, the comments will be organized and meetings held with commenting parties to address concerns, perform studies, and resolve issues. This process could take up to two (2) years, depending on how many studies are requested.

After all issues are addressed to the satisfaction of FERC, a new license for the new power plant will be issued. Design and construction will commence at that time. Project completion is currently scheduled for 2010.