For Release: 12/16/2009

UPPCO to Increase Retail Base Rates in January

Houghton, MI - The Michigan Public Service Commission (MPSC) has approved a rate increase for Upper Peninsula Power Company (UPPCO). Overall, the company's retail base rates will increase approximately 7.0% beginning January 1, 2010.

While the net effect of the rate increase on customers will vary by rate classification, the average residential customer in UPPCO's Integrated System using 500 kilowatt-hours of electricity per month will see an increase of approximately $7.33 per month. An average residential customer in UPPCO's Iron River System using 500 kilowatt-hours a month will see an increase of approximately $8.42. The effect on business customers will vary by usage and rate classification.

Increased business costs are the primary reasons for the increase, including:

UPPCO also received approval to recoup 80% of bad debt charges that exceed those already included in customer rates. The company agreed to return 80% of any unused bad debt expenses, as well.

In addition, the Monthly Customer Charge that was included on electric bills will now be a Daily Customer Charge, which will help UPPCO more accurately bill customers for a partial month of service.

"It's been three years since our last base rate increase," said Keith Moyle, UPPCO Vice President & General Manager. "We know that our customers are already stressed by the poor economy, so we did what we could to control costs internally. Despite our efforts, our previous rates did not reflect today's costs to provide retail electric service."

UPPCO customers will learn more about the proposed rates in their January bills and online at www.uppco.com.

Helping You Manage Energy Use and Costs Controlling your use is one way to lower electric bills, and UPPCO has suggestions on its Web site that may help. Visit Saving Energy at www.uppco.com for tools and information to help you understand your electric usage and find ways to manage it.

UPPCO also offers a Budget Billing payment plan that helps keep electric bills manageable all year by dividing your bill into 12 equal payments. You can enroll in Budget Billing online at www.uppco.com or by calling 800-562-7680.

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