Partnering for the Future WIEG Meeting September 16, 2010.

Partnering for the Future

WIEG Meeting

September 16, 2010

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Agenda

Key Account Program-Model/Service Review Major Results/Findings

What’s New

Challenges

Opportunities

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Key Account ProgramModel/Service Review

Initiative was sponsored by Senior Management Used external resource with cross-industry

expertise in customer service 18 – month initiative

Process Review Best Practice Research Discussions with Top Quartile Utilities TQS Survey Results Identification of Gaps

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Key Account ProgramMajor Results/Findings

Single/Primary Point of Contact

Responsible for the entire customer relationship

Number of customers assigned to each Account Manager varied, but We Energies was too high

Utilization of Business Call Centers

Outage Reporting – provide options

Management Reporting

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What’s NewRedefined Key Accounts Program

Redefined Key Accounts Defined customer selection criteria Focus on Commercial/Industrial customers Reduced number of assigned customers Realigned support for Government accounts

Redefined Roles/Responsibilities Developed Customer Service Model for C&I –

Account Manager is Primary Point of Contact Integrates Key Account Managers, Customer

Operations and Customer Service – “Team Concept”

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What’s NewJointly Developed Customer Plans

Conduct joint planning sessions on an annual basis – implementing over an 18 month period

Results of the meeting are documented and agreed to by customer Identify key areas of focus Level and frequency of communication Method of outage notification

Periodic updates between customer and Account Manager

What’s NewExecutive Partnership Program

“To enhance our relationships with key customers through a

partnership with We Energies’ Senior Executives”

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What’s NewExecutive Partnership Program Overview

Implemented in 2009

20 customers participate in the program, approximately $250M in annual revenue

7 Executives

Evaluate and grow the program as appropriate

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What’s NewExecutive Partnership Program Objectives

Establish and foster executive level relationship

Core focus is to listen

Help manage complex/unique customer issues as needed

Enhance our understanding of the customer’s business

Ensure we are using every means at our disposal to help support their business

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What’s NewCustomer Activity Report

Weekly report from Account Management group to Executives and Sr. Management

Promotes visibility & awareness

Drives alignment throughout the company

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ChallengesEconomy improving slightly

Improved economic activity in second quarter

Continued strength in iron ore mining, specialty steel and paper production

Rising electricity use in other sectors – most notably metal fabrication, rubber and plastic products, transportation equipment and health care

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ChallengesRebound clearly underway

Electricity use by large commercial and industrial customers

2010 % DifferenceCompared to 2009

April 782 GWh +12.6%

May 832 GWh +15.5%

June 845 GWh +14.8%

Second Quarter

2,459 GWh +14.3%

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ChallengesIndustrial demand still below 2008 levels Electricity use by large commercial and industrial

customers

2010 % DifferenceCompared to 2008

April 782 GWh -12.5%

May 832 GWh -10.7%

June 845 GWh -10.1%

Second Quarter

2,459 GWh -11.1%

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ChallengesPB Credit

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ChallengesPoint Beach Credit – Key Accounts

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Electric Fuel Cost RecoveryWI Jurisdiction

Electric fuel case for 2010 was filed on Feb. 19 Interim relief on March 25 Wisconsin jurisdictional increase of $60.5 Final review expected by year end.

Limited reopening of fuel rates for 2011 filed September 3 Additional $38.4 million increase

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Monitored Fuel Costs vs. Revenue

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

2006 2007 2008 2009 2010

$(00

0) Monitored Fuel CostWisconsin Jurisdiction

Wisconsin RetailSales Revenue

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OpportunitiesNew Fuel Rules

New fuel rules sent to legislature on August 30, 2010 +/-2% dead band, or +/- $16 million in 2011

Escrow costs outside the dead band

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OpportunitiesAct 141

We Energies customers contribute 1.2%, approximately $45M on an annual basis

PSC can request additional funding through the Joint Finance Committee

If Joint Committee on Finance does not request a hearing within 10 days of receipt of request (90 days to conduct hearing), increase in funding is automatically approved

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OpportunitiesSpecial Contract Overview

Statute requirements Customer must receive market benefits Customer must take market risk Utility customers that are not subject to the rate must not be

harmed Utility shareholders must not be harmed

Special Contract Design Customer pays normal tariff for “historical” load Customer pays marginal cost for incremental load

PSCW approval required Strict adherence of statute Economic Benefit

Jobs New Load

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Questions