Madison, Wis., May 23, 2006—MGE Energy, Inc. (Nasdaq: MGEE) today turned the spotlight on energy conservation when Chairman, President and CEO Gary Wolter announced the new "Power Tomorrow" program during the 2006 MGE Energy Annual Meeting.

Power Tomorrow will challenge Madison Gas and Electric (MGE) customers to commit to greater energy efficiency by taking simple but powerful steps that will result in significant energy savings.

For example, Wolter said, if all MGE residential customers replace one standard 60-watt lightbulb with a 15-watt compact fluorescent lightbulb, which provides equivalent light, we will save enough electricity to power 1,800 homes annually.

In June, all MGE customers will receive a Power Tomorrow booklet detailing five energy-saving steps they can put into use immediately. MGE also will encourage customers to visit mge.com for more energy-saving ideas.

Then in September, MGE will launch workshops where customers can learn more in-depth energy-saving measures and ask MGE energy experts specific questions. MGE will hold dozens of the workshops over the next two years. All MGE residential customers will be invited.

Conservation, additional renewable energy sources and power from new generating units are key components of MGE's "Energy 2015 Plan." This comprehensive and balanced plan will meet customers' energy needs for the next 10 years. MGE introduced Energy 2015 in January.

"Reducing energy demand helps customers save money and improves the environment," Wolter said. "For years, MGE has worked with customers to reduce energy use, saving about 100 megawatts over the past 20 years—the equivalent of a small power plant."

Shareholders attending the meeting received three compact fluorescent lightbulbs.

Also at the meeting today, MGE Energy shareholders reelected directors John Nevin, H. Lee Swanson and Gary Wolter.

MGE Energy is a public utility holding company. Its principal subsidiary, MGE, generates and distributes electricity to nearly 136,000 customers in Dane County, Wisconsin, and purchases and distributes natural gas to more than 137,000 customers in seven south-central and western Wisconsin counties. MGE has served the Madison area since 1896.

2006 MGE Energy
Annual Shareholders' Meeting
Fact Sheet

Providing reliable energy

• MGE's Energy 2015 lays out a comprehensive energy plan for the next 10 years. It calls for increased energy conservation, growing MGE's renewable energy base by five to 10 times, discontinuing coal generation at the Blount Street power plant and adding new cleaner-coal generation.
• MGE Energy, Inc., invested in the cleaner-coal Oak Creek power plants being built by We Energies. Last year, MGE Energy made its first payment of $24.4 million toward its 8.33% share in the plants. MGE's share is 100 megawatts (MW)—the first 50 MW projected to be on-line in 2009 and the second 50 MW in 2010.
• The West Campus Cogeneration Facility, jointly owned by MGE Energy and UW-Madison, was completed on time and on budget in 2005. This new natural gas-fired plant uses the efficiency of cogeneration to produce 150 MW for MGE customers and steam heat and chilled-water air-conditioning for the growing UW-Madison campus.

Producing solid financial results

• MGE Energy reported 2006 first-quarter net income of $11.5 million, or 56 cents per share, compared to $8.2 million, or 40 cents per share, last year and $13.8 million, or 75 cents per share, for the three months ended March 31, 2004.
• MGE Energy's 30 consecutive years of increasing dividends places it on the Mergent Dividend Achievers List. Mergent Inc. also includes MGE Energy in its Dividends Achievers 50 Index, an investment fund designed to track the "top 50 highest yielding dividend paying companies" in the United States. The company has paid annual dividends since 1909.
• MGE tops the Standard and Poor's (S&P) bond rating list of integrated electric, gas and combination utilities. MGE is the only combination utility out of 106 in the country to receive the AA- rating. S&P rated MGE above average for financial strength, management and regulator support.
• MGE Energy's five-year (2000-2005) cumulative return with dividends reinvested surpasses major indexes (Edison Electric Institute and Russell 2000). A $100 investment in 2000 increased to $188 in 2005