Power the Future. Customers Regulatory agencies Employees Community and political leaders Investors/stockholders News media

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1 10/12/09 Stakeholder Groups Wisconsin Energy Corporation (WEC) defines its key stakeholders as: Customers Regulatory agencies Employees Community and political leaders Investors/stockholders News media Key stakeholders are subdivided for example, residential, commercial and industrial customers, active and retired employees, and state and federal regulators. This helps the corporation communicate more effectively and develop and apply appropriate services, programs and policies for each group. Departments within the company are charged with managing the various stakeholder relationships. Stakeholder Consultation Approaches WEC consults stakeholders regularly using a variety of vehicles, including surveys, focus groups, community panels, corporate advisory panels, written communication, media communication, advertising, Web sites, intranet, management/union structures, private meetings and public presentations. Customer Satisfaction Surveys In 2008, We Energies continued its monthly customer satisfaction surveys, asking more than 1,200 business and residential customers who have completed a transaction with the company to report their overall satisfaction and other key satisfaction components. Nine transaction types are measured and tracked to determine satisfaction with We Energies as a result of interactions with the company. Results from these active customer surveys help measure progress in moving toward excellence in customer service, a key company goal. The results also help We Energies leadership prioritize projects and resources affecting performance, based on what customers identify as having greatest value and importance. The company achieved its 2008 goal of having more than 71 percent of customers rate their overall satisfaction with We Energies an 8, 9 or 10 (on a 10-point scale), and having more than 82 percent of customers rate their overall satisfaction with the transaction an 8, 9 or 10 (on a 10-point scale). Power the Future Power the Future is a comprehensive approach to address electricity supply and reliability issues for We Energies' customers in a way that considers both the economy and the environment. Power the Future expands power production to meet growing demand, reduces emissions of existing power plants and upgrades power delivery to help keep the lights on. The project is an example of multi-stakeholder collaboration. Early in the process, the company met with various stakeholders to share the plan and obtain input. While it was not possible to satisfy all issues, based on stakeholder feedback the plan was modified and improved. Going forward through the process, including construction of the new facilities, effort is made to keep communication lines open. Dinner meetings with local residents, employees and retirees provide information and answer questions. One-on-one visits inform and update residents, local and state officials, business customers, and labor and community groups throughout the process. Information also is provided through newsletters, media, , direct mail and Web sites. The Power the Future initiative succeeded so far due to involvement and support from neighbors, stockholders, local officials, state officials, business customers, represented labor, community groups, and active and retired employees. These stakeholders supported the project by testifying at public hearings, attending information meetings, writing letters and educating and informing the public.

2 We Energies Customer Satisfaction, 2008 Percent of Customers Rating an 8, 9 or 10 Percent st Qtr 2nd Qtr 3rd Qtr 4th Qtr We Energies Customer Satisfaction with Transaction, 2008 Percent of Customers Rating an 8, 9 or Percent st Qtr 2nd Qtr 3rd Qtr 4th Qtr We Energies also tracks its performance on a percentage of "satisfied customers," those who rate the company a 6-10 on a 10-point scale. For 2008, more than 88 percent of customers rated their overall satisfaction with We Energies a 6 or greater. For customers who had a transaction with the company, more than 92 percent rated their transaction satisfaction a 6 or greater. The company also conducts focus groups with residential and business customers periodically throughout the year on numerous topics, including price increases, communication methods, programs, etc. Edison Sault Electric Company conducts a customer satisfaction survey approximately every five years. The 2008 survey indicated an 89 percent favorable customer satisfaction rate and only a 1.3 percent unfavorable rate. Customer Concerns Key customer concerns continue to be energy prices, including natural gas price volatility and electric price increases. We Energies continues to monitor customers comments about these topics through customer satisfaction surveys and employee feedback. We Energies develops educational material to help customers better understand energy pricing and to provide tips to help them manage their energy costs. Internally, the company continues to emphasize financial discipline and cost control, while improving processes that increase customer satisfaction and reduce costs.

3 Significant fluctuations in natural gas prices on the open market over the last year have brought many challenges. We Energies continues to provide customers with information about natural gas pricing and the steps taken to control costs. The company also communicates ways to conserve energy and save money on natural gas and electric bills. Specific actions include: Expanding dialog with customers who inquire about billing issues to focus on specific ways they can save money. This includes sending out more than 272,000 information packets on energy efficiency and money-saving tips in Sending 31,663 energy reports to customers during 2008, detailing their personal energy usage over the previous 24 months and their average energy costs per day by month and year. The material also includes energy tips and information on programs to help customers reduce their energy costs. Promoting the We Energies Web site, which helps customers forecast future energy costs, understand appliance costs, see why their bill changes, get energy-saving tips, calculate their carbon footprint and compare prices. Providing customers with a variety of billing and payment options. Low-Income Customers We Energies has made strides to implement strategies for community involvement to strengthen our connections to our customers. We have worked closely with stakeholders including state government, community-based organizations, local government and energy groups to develop policies, as well as partner on events that better connect us to the communities we serve. In particular, We Energies recognizes the challenges faced by low-income customers in paying their energy bills. To address these growing challenges, We Energies worked with these stakeholders to launch a low-income pilot program in early 2005 in Milwaukee County, following review and approval by the Public Service Commission of Wisconsin. The program was expanded to Waukesha County in May The program targets low-income customers behind in bill payments with the goal to keep their energy services connected. Participants in the pilot program are required to: Make on time, affordable bill payments; Apply for and receive energy assistance; Accept available weatherization services; and Participate in financial management and energy conservation education. All We Energies customers in need, including those outside of Milwaukee and Waukesha counties, are encouraged to apply for energy assistance and home weatherization, consider billing options, and implement cost-saving and energy-efficiency tactics to reduce monthly costs. By working with customers and educating them on how to save money on their bills, and by establishing customized programs such as the low-income pilot, We Energies hopes to positively impact low-income customers needs. We Energies also works closely with the state of Wisconsin to design effective low-income programs. Credit and Collections We Energies works with all customers who have difficulty paying their energy bills, and takes many measures to communicate with them to help keep their service connected. Prior to the end of the annual April 15 moratorium on utility shut-offs, the company implements an outreach campaign that includes radio advertisements, bill messages, letters and outbound calls to remind customers to contact us to make payment arrangements and to apply for energy assistance if qualified. In 2008, the company placed more than 740,000 outbound calls to customers who were behind in payments. We Energies offers customers flexible payment arrangements and evaluates each individual customer situation including their communication and payment history with us. Flexibility may be reflected in timelines, the amount required for a down payment and the length of the payment plan. Our goal is to work with customers and come to agreements that will keep their energy services connected.

4 Business Customers We Energies improved communication with business customers in Businesses represent approximately 10 percent of the company s customers and more than 60 percent of its utility revenue. A reliable and affordable energy supply is essential to a profitable business operation, which is why the company partners with businesses to give them easy access to information. We Energies Business Contact Center is a one-stop shop serving the unique needs of business customers. The center expanded in 2005 and now provides specialized services to small businesses as well as large and mid-sized customers. Specially trained business consultants answer about 11,600 calls each month, respond to questions from business customers on billing and credit issues and provide recommendations on services and conservation targeted to their needs. As a means of enhancing customer satisfaction, We Energies has in the last few years focused on developing online self-service tools to help business customers better manage their energy accounts. Business Account Online is a secure, Web-based application allowing business customers to access and download their historical use and cost data, and forecast forward-looking energy budgets. About 6,200 user profiles and over 44,600 accounts are registered in Business Account Online. Another secure, self-service, online tool is Energy Analysis, which provides demand interval and other data to large business customers. Because Energy Analysis provides direct access to the electric meter, the user can make critical operating decisions in real time. More than 2,000 users and more than 4,400 active accounts are registered in Energy Analysis. Energy Analysis and Business Account Online are available 24 hours a day, 7 days a week. Business Energy Advisor is a self-service business customer resource launched on the We Energies Web site in mid-2006, offering more than 250 Web pages of guidance on purchasing, energy management, and operations and maintenance. General Customer Service We Energies makes it easy for customers to contact the company, offering a toll-free number and available 24 hours a day, 7 days a week, 365 days per year. The company works to resolve customer concerns, inform them about services and help them manage their energy use to enhance their satisfaction. The company also calls its customers to determine customer satisfaction. We Energies employees make thousands of We Care calls to customers who have experienced outages, had a new service or an automated meter installed, had an appointment with the company, received energy-saving information from a customer consultant, or recently moved to a new residence. Employees from across the company are involved, placing more than 521,000 calls in When a customer is not satisfied, the company takes steps to resolve the issues. Employees also are encouraged to report and resolve concerns of their family, friends and acquaintances through the Employee Customer Care Line and to elevate issues or service challenges that customers encounter. This feedback leads to customer contact to correct the issue and provide additional information, and it also helps better prioritize resources to improve customer satisfaction. We Energies has various programs and services to better meet customer needs: Energy Partners. Residential customers receive an annual bill credit ranging from $12 to $50 for allowing We Energies to cycle their air conditioners on and off during periods of peak demand. Approximately 28,000 customers participated in A major promotion effort is underway to add 30,000 new customers by the end of Time-of-Use. Residential customers may select this pricing option instead of the standard electric rate. Under Time-of-Use (TOU), energy costs significantly less than the standard kilowatt-hour rate during low-demand periods (evenings and weekends), and significantly more than the standard rate during periods of high demand. Customers can choose from three different TOU options with different levels of risk and reward. More than 97 percent of the more than 28,500 accounts on TOU rates are paying less than they would on our standard rate.

5 Advanced Meter Technology. The company is deploying advanced technology in residential meters that provides daily read information via a radio network. Total deployment of 1.6 million meters is nearly completed, with remaining project worked completed by early Bill. Company bills, sent via mail or Internet, are the most consistent means of communicating with customers. The bill shows a simple chart and table comparing energy use, costs and weather from the current month to the same month last year. Bills may trigger calls or letters to customers when something unusual is detected prior to mailing. Bills also include inserts to educate customers about safety, pricing, service options, money-saving tips and more. To assist in payment, the company offers numerous billing options: Spreading energy charges more evenly over 12 months through Budget Bill. Paying via mail, payment centers, credit/debit card automatic debit or online. Choosing a convenient due date (upon request with certain limitations). Setting up a pay plan for old balances, while keeping current on new charges. Paying a fixed amount for residential natural gas for 12 months regardless of weather or natural gas market price variations through Rely-a-Bill. Unlike budget billing, Rely-a-Bill has no mid-year adjustment and no end-of-year balance. Evaluation shows company satisfaction is higher among participants. Cookie Book. We Energies distributed 150,000 copies of the holiday cookie recipe book to customers in This book marked the 80 th anniversary of the first book that printed back in Employee Engagement Employee engagement is a key component of the company s continued success. Numerous studies testify to the importance of properly skilled, knowledgeable employees who feel valued and challenged in their jobs. WEC first partnered with the Gallup organization in 2004 to measure how much employees feel valued and to what degree they are engaged in their work activities. Listed below is a summary of the results of the current and past year s Gallup Q 12 survey. Year Grand Mean Increase Percentile of Utilities Database Response Rate Engaged vs. Disengaged Employees %.13% 68 th 91% 3.92: %.04% 60 th 86% 2.67: %.19% >50 th 83% 2.38: %.29% 50 th 83% 1.41: % N/A 28 th 78% 0.55:1 Since 2003, We Energies has conducted an annual employee business climate survey to determine employees perceptions of the tone at the top and attitudes toward compliance with the Code of Business Conduct. Investors/Stockholders WEC s Annual Report, provided to all stockholders, includes an overview of company results and operations. WEC s Annual Meeting, held at a location convenient to a large number of stockholders and available via webcast, allows questions and comments. Proxy mailings provide an opportunity to vote on board candidates and other proposals via Internet, telephone or written proxy card. Stockholder Hotline, dedicated address and Web site allow questions and comments. Secure Web site allows account inquiries and transaction functions. Meetings are conducted with institutional investors and presentations are made to analysts. Quarterly conference calls with analysts and portfolio managers hosted by the chairman, president and CEO, chief financial officer and other key corporate officers can be monitored by the news media and general public on phone or online. Presentation materials also are available online. Corporate Governance: Investor Relations: Corporate Responsibility Web site:

6 Regulatory Agencies Subject to the ex parté restrictions imposed by the respective agencies, WEC representatives communicate regularly with the various state and federal organizations that regulate its utility businesses. Communication includes face-to-face meetings, telephone calls, s and other written communication. In cases where a particular proposal is being debated before a regulatory agency, WEC representatives provide public testimony, answer questions and make public presentations. To facilitate the prompt and favorable review of its filings by regulatory agencies (including the Public Service Commission of Wisconsin, the Michigan Public Service Commission and the Federal Energy Regulatory Commission), regulatory and governmental affairs employees at WEC: Maintain advocacy offices in Madison, Wisconsin; Lansing, Michigan; and Washington, D.C. to facilitate prompt and accurate communication on issues affecting the company. Interact with staff to help build understanding and consensus on issues affecting the company. Work collaboratively with constituent groups on issues of mutual concern. Participate in joint utility planning and working groups to review national, regional and state-specific issues and activities that may affect the electric and natural gas businesses. Provide guidance to the company's business units on the impact of legislation, regulation and the regulatory process on proposed projects, products and initiatives. Assist business units in developing proposals to support business goals. Manage all corporate interaction with the agencies to ensure consistency and clarity. Community and Political Leaders WEC representatives work with community and political leaders primarily in Wisconsin and Michigan but also in Washington D.C. Many employees serve on the boards of directors of external organizations and work with community and political leaders on special committee assignments. These interactions provide WEC with important guidance and feedback on its programs, policies and initiatives, and help it to better understand the political and community context in which it does business. News Media Representatives from the company s communications department interact daily with the news media on behalf of WEC and its subsidiaries. Positive, open relationships with local, regional, state and national news media are essential to achieving the company s goals. The media relations team is responsible for planning and managing the corporation's interactions with electronic, print, broadcast and trade media. This includes: Providing timely and accurate information to the news media 24 hours a day, every day. Writing news releases, arranging interviews and visits, and organizing news conferences. Developing and coordinating positions on industry and corporate issues. Serving as spokespersons for WEC and its subsidiaries. Developing, implementing and evaluating media strategies. Coordinating editorial board meetings with selected media. Information Provided to Stakeholders WEC uses stakeholder consultations and interactions to tailor customer service offerings, refine key messages and strategies for initiatives and programs, improve internal processes and practices, and develop plans for the future. Employee feedback helps focus and improve communication with employees. WEC also recognizes employees as important communicators to customers. All messages provided to customers are made available to employees through the corporate intranet and print publications. In addition, Corporate Communications uses topical summaries to educate employees on key issues affecting the company to equip them to communicate more effectively.