November 30, 2007

MADISON - The Citizens Utility Board contends that ratepayers should not pay for mistakes associated with the $100 million cooling system for the Oak Creek power plant, currently under construction by We Energies.

Yesterday, a state administrative law judge ruled that the permit issued by the Wisconsin Department of Natural Resources for the plant's cooling system, which extends nearly two miles into Lake Michigan, needs to be modified to meet tougher environmental standards. If the cooling system is unable to meet the environmental standards of the modified permit, We Energies will have to make major changes to the cooling system, potentially adding $200 million in costs to construct cooling towers.

CUB contends that ratepayers should not be forced to pay more for the cooling system than what We Energies' projected when the utility received permission in 2003 from the Public Service Commission of Wisconsin to build the power plant.

As a part of its request to increase electric rates by 7% in 2008, currently pending at the PSC, We Energies is requesting $19 million to pay for continued construction of the cooling system. CUB contends that the cost of any additional construction on the cooling system should be at the risk of utility shareholders, given the great uncertainty caused by yesterday's ruling.

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The Citizens Utility Board of Wisconsin is a member-supported nonprofit organization that advocates for reliable and affordable utility service and that represents the interests of residential, farm, and small business customers of electric, natural gas, and telecommunication utilities before regulatory agencies and the courts.