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For Release: 06/30/2010

UPPCO Seeks Electric Rate Increase

Request is due to increased business costs

Ishpeming, MI – Upper Peninsula Power Company (UPPCO), a subsidiary of Integrys Energy Group (NYSE: TEG), today filed a request with the Michigan Public Service Commission to increase its overall electric base rates by 16.8 percent.

If approved as proposed, a typical residential customer (using 500 kilowatt-hours) in UPPCO's Integrated System would see a monthly increase of $16.60. Typical residential customers in Iron River would see an increase of about $18.85 monthly.

"We understand that our customers are already under stress by the poor economy and we've done and continue to do what we can to control costs internally," said UPPCO Vice President and General Manager Keith Moyle. "Despite those efforts, our existing rates no longer reflect today's costs to provide retail electric service." Moyle cited cost savings efforts such as a workforce reduction, the sale of renewable energy certificates, and efforts to avoid costly improvements at AuTrain and Cataract hydroelectric projects by selling the facilities.

Moyle explained that while other industries may choose to reduce the number of shifts or even close entire plants to reduce costs, UPPCO has fixed costs that are at much higher levels than other businesses. Those costs include maintaining and repairing the 3,300 miles of electric lines and poles, as well as other energy delivery facilities (electric substations and hydroelectric plants, for example) to ensure the safe and reliable energy that customers absolutely count on.

"We simply can't cut back on the activities that make sure the lights come on when the switch is turned," Moyle said.

Major factors in the need for the increase are:

If the MPSC does not consider the rate request by the end of 2010, UPPCO will self-implement rates (subject to refund) on January 1, 2011. UPPCO expects the MPSC to make its decision by June 2011.

More information regarding the rate request will be included with customers' August bills.

About Upper Peninsula Power Company

Upper Peninsula Power Company is an operating subsidiary of Integrys Energy Group, Inc. (NYSE: TEG), a holding company based in Chicago, IL. UPPCO serves approximately 53,000 electric customers in 10 of the 15 counties in Michigan's Upper Peninsula. The company owns nine hydroelectric generating facilities along with two combustion turbines. It has approximately 145 full-time employees and operates service centers in Escanaba, Houghton, Iron River, Ishpeming, Munising, and Ontonagon.

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