Wisconsin-based Madison Gas and Electric Co. has agreed to purchase the Prairie du Chien area natural gas system from Wisconsin Electric/Wisconsin Gas (WE-WG) for $2.4 million, part of a plan announced by MGE in May, in which CEO Gary Wolter said it would invest in new gas and electric facilities through 2005 to keep pace with customer growth and ensure reliable service.

The purchase includes facilities in the city of Prairie du Chien, the villages of Eastman and Wauzeka and the towns of Bridgeport, Eastman and Wauzeka. They are all located in west central Wisconsin, with 3,500 residential and commercial customers. MGE already serves natural gas customers in the region.

“Adding this territory to our existing area operations makes financial sense for customers and shareholders,” said Wolter. MGE will continue a system enhancement project begun in 2000 by WE-WG, and will keep all of the employees who are part of operations in the area.

Another part of the transaction includes establishing a definitive gas service boundary agreement between the two companies within Dane County, WI. The agreement would allow the two Wisconsin-based companies to better plan facilities because the county is expected to remain one of the fastest growing in the state. The new boundary lines do not involve any customer transfer, and are located primarily through undeveloped land north of the Madison, WI city limits.

The sale requires Wisconsin Public Service Commission approval, and is expected to close in the fourth quarter. MGE provides electricity to about 126,000 customers in Dane County and also transports and distributes natural gas to 114,000 customers in seven Wisconsin counties. In May, Wolter told shareholders at the company’s annual meeting that MGE planned to invest about $45 million in new facilities for the next four years.

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