2008 Environmental Responsibility Report

Transcription

1 your community energy company 2008 Environmental Responsibility Report Madison Gas and Electric Company

2 Table of contents Executive summary Maximizing environmental performance Working with partners Taking voluntary actions Tapping technology Controlling air emissions Global climate change Green Team Power Tomorrow: Conservation tips End Madison Gas and Electric (MGE) generates and distributes electricity to 136,000 customers in Dane County, Wis., and purchases and distributes natural gas to 140,000 customers in seven south-central and western Wisconsin counties. MGE is a regulated utility and the main subsidiary of MGE Energy. MGE s roots in the state capital of Madison date back more than 150 years. Web address Mailing address P.O. Box 1231 Madison, WI Location 133 S. Blair St. Madison, WI MGE Environmental Affairs environment@mge.com MGE Energy Shareholder Services investor@mgeenergy.com Forward-looking statements: This report includes forward-looking statements and estimates of future performance that may differ from actual results because of uncertainties and risks encountered in day-to-day business. 2

3 Executive summary A sustainable future is vital to all of us. Today s energy challenges require specific solutions for a cleaner tomorrow. At Madison Gas and Electric (MGE), we are developing those solutions. We are meeting today s challenge of balancing our customers increasing need for reliable, affordable energy while being responsible environmental stewards. Gary J. Wolter Chairman, President and Chief Executive Officer MGE Energy and MGE MGE has the highest green pricing participation rate of any investor-owned utility in the country. 10% of our residential customers purchase clean wind and solar energy. Green pricing program This year, MGE significantly expanded our green pricing program with new wind and solar energy. We are pleased that 10% of our residential customers signed up for the program. This is the highest participation rate of any investor-owned utility in the U.S. The one-cent-perkilowatt-hour premium is among the lowest green prices nationally. Many customers are buying enough green power to offset 100% of the carbon dioxide (CO2) emissions for their electricity use. MGE expanded wind capacity and launched a new solar-energy buyback program to meet this growing demand for renewable energy. We also offer energy workshops and other tools to help customers reduce their CO2 impacts. At MGE, we are dedicated to working with customers to improve our community s environmental footprint. Energy 2015 With our Energy 2015 plan, we made a commitment to ensure a balanced, economic energy supply and reduced emissions. Increasing renewable energy sources is one way we are achieving that goal. In 2008, we increased our wind capacity by more than 12 times from 11 to 137 megawatts with power from four new wind farms. We also are moving forward with Energy 2015 by: Replacing power from old coal units. Challenging customers to increase their commitment to conservation. Demonstrating new technologies that help the environment. Global climate change Many of our customers are concerned about global climate change. We share that concern and have developed a CO2 reduction plan. Under Energy 2015, MGE s CO2 impacts are projected to decline even though total system energy is estimated to increase. We project an 8% decrease for total CO2 emissions and a 10% decrease for CO2 rates from 2005 to We also are taking a stand at the state level on global climate change. MGE is a member of the Governor s Task Force on Global Warming. This diverse group of business, government, environmental and energy leaders submitted recommendations for keeping Wisconsin competitive and creating jobs while protecting the environment. Working together MGE has stepped up efforts to reduce environmental impacts. We encourage you to do more, too. For steps you can take now, look for the Power Tomorrow conservation tips at the end of this report. Together, we can power tomorrow by being more energy efficient today. 3

4 Maximizing environmental performance MGE s environmental approach Environmental responsibility is part of our core business. We have implemented many initiatives to improve environmental performance, diversify MGE s energy portfolio and minimize negative environmental impacts. Our obligation is to deliver reliable and affordable energy to customers while protecting the environment. We work to incorporate the environment into our daily decision-making and put it in the forefront when planning for our customers energy future. We believe it is important to listen to our customers. Our customers values are reflected in MGE s long-term energy planning. We held Community Energy Conversations with customers across our service area. It was an open exchange about energy planning and the environmental trade-offs. Our customers told us they want dependable energy at a reasonable price. They also expect us to be environmentally conscious in our energy operations. Searching for new opportunities MGE increased wind capacity more than 12 times from 11 to 137 megawatts with power from four new projects. These discussions helped form our Energy 2015 plan a balanced and strategic energy supply plan that relies on a diversified mix of fuels, puts a renewed emphasis on energy conservation and helps reduce our overall emission rates. MGE s Energy 2015 plan Increasing renewable energy sources and offering innovative pricing options. Our Energy 2015 plan called for growing wind resources by five to 10 times. In 2008, we surpassed that goal by increasing our wind capacity more than 12 times from 11 to 137 megawatts (MW). A portion of this renewable energy is included in our overall electric mix. The remainder supports our new green pricing program that allows customers to purchase renewable energy and offset greenhouse gas emissions from their electricity use. West Campus Cogeneration Facility As our Energy 2015 plan was being drafted, we brought the West Campus Cogeneration Facility online in This 150-MW natural gasfired power plant serves MGE customers with electricity and the UW- Madison campus with heating and cooling capacity. Through the efficiencies of cogeneration and state-of-the-art emission controls, it is one of the cleanest power plants in the Midwest. MGE seeks opportunities such as our West Campus Cogeneration Facility where we can pursue clean options and find ways to continuously improve our operations. The voluntary program quickly grew by more than nine times. 10% of our residential customers buy clean energy from our program, giving MGE the highest green pricing participation rate of any investorowned utility in the country. We also doubled the amount of solar energy from 150 to 300 kilowatts in our program that encourages the installation of solar energy systems on customers homes and businesses. 4

5 Replacing old coal power with new generation. By the end of 2011, we plan to discontinue burning coal at our Blount Generating Station in Madison. MGE is part owner of the power plant expansion by We Energies in Oak Creek, Wis. The additional generation units will use advanced environmental control technologies to dramatically reduce air emissions compared to older coal-fired plants. The first unit is scheduled to come online in 2009, the second in Challenging customers to increase their commitment to conservation. We completed two years of our innovative Power Tomorrow program that encourages customers to save energy and money while reducing their environmental footprints. Residential customers were invited to workshops where they received customized information to help them reduce their energy use. A second phase of workshops will be offered to business and natural gas-only residential customers. Putting it all together We expect the combination of significantly more wind energy, discontinuing coal burning at Blount and redoubling our energy efficiency efforts to result in a balanced and affordable energy supply while reducing air emission rates. In 2008, MGE increased wind capacity more than 12 times from 11 to 137 megawatts. Setting high standards Environmental Management System Our company is in the forefront by voluntarily implementing an Environmental Management System (EMS). A survey by the Edison Electric Institute showed about 50% of the responding utilities have a formal EMS and only 35% participate in an independent environmental audit program. Our EMS is the backbone of sound environmental practices. The EMS builds environmental accountability into our daily business operations by establishing annual goals and measuring performance with audits reviewed by senior management. The company focuses on employee training, specific procedures, checklists and communications. MGE s EMS is based primarily on the International Standards Organization s standard. 5

6 Working with partners At MGE, we believe in the power of working together. We form partnerships with government and community groups to improve our local environment. By pooling resources, we reach more people with messages of energy conservation and a cleaner tomorrow. Together, we work as a community to meet energy needs in an environmentally responsible way. For example: City of Madison: Mpowering Campaign MGE joined the City of Madison in the Mpowering Madison Campaign, an effort to reduce carbon dioxide (CO2) emissions in the city by 100,000 tons by Madison set a goal for city government to reduce its CO2 footprint by 25% and eliminate 15,000 tons of CO2. The city will work to cut energy use, purchase renewable energy and reduce emissions from its fleet of vehicles. The city also encourages residents to take action through a variety of means, including MGE s programs that give Offering more clean energy Clean Power Partners customers the tools to reduce their environmental footprints: Our green pricing program gives customers the option to purchase clean energy by paying a little extra on their monthly electric bills. A typical household (600 kwh/month) can offset the CO2 emissions from their home electricity use for about $6 extra per month. Fully subscribed, this expanded program eliminates 169,000 tons* of CO2 annually. options In 2008, MGE introduced a program to encourage homeowners and businesses to install solar photovoltaic systems and sell the energy from these systems back to MGE. In a few months, the program was fully subscribed for the first 150 kilowatts. MGE then doubled the amount of solar generation in the program to 300 kilowatts, making the opportunity available to more customers. The energy produced from a solar participant flows directly into MGE s distribution system. This renewable energy is part of MGE s Green Power Tomorrow program. MGE s Power Tomorrow program helps customers save energy and reduce emissions. This program begins with five easy steps to reduce energy use and provides in-depth information for customers who want to do even more. (See Power Tomorrow conservation tips at the end of this report.) * Based on a State of Wisconsin Focus on Energy 2004 study resulting in a statewide average system CO2 emission rate of 2.2 pounds per kilowatt-hour. MGE serves the Madison metropolitan area the seat of state government and home to the University of Wisconsin-Madison. 6

7 Dane County: Clean Air Coalition MGE is one of the founding members of the Dane County Clean Air Coalition, which works to address the major sources of air pollution in Dane County. This coalition consists of government groups, businesses and schools. Nationwide, transportation, industry and power plants are the largest contributors of ozone and particulates. The Dane County Clean Air Coalition encourages businesses and residents to take specific steps to reduce air emissions. MGE has committed to a variety of actions including using less coal on days when ozone levels are high. We also offer an employee incentive program to encourage carpooling and alternate transportation. State of Wisconsin: Global Warming MGE is a member of the Governor s Task Force on Global Warming that brings together prominent government, business and environmental leaders to examine global warming solutions in Wisconsin. After analyzing research and possible solutions, the task force produced a report on global warming. It outlines an aggressive strategy to help keep Wisconsin competitive and create new jobs while preserving the environment. The report, which was Creating smart Protecting our groundwater MGE made an unprecedented effort to mitigate potential impacts to our area s watershed when planning the West Campus Cogeneration Facility. We worked with water resource experts to draw up a comprehensive community water plan. The plant s water withdrawal is negligible on area lakes and waterways except during periods of severe drought when the lower Yahara River may be affected. Our comprehensive plan includes: Pumping groundwater from a well directly into the Yahara River to compensate for water used by plant operations during low-water periods. Collecting and infiltrating stormwater runoff to recharge the groundwater aquifer (photo below). submitted to Gov. Jim Doyle for review, includes more than 50 recommendations for the utility, transportation, agriculture, forestry and industry sectors. solutions MGE installed a groundwater recharge system near a pond at the Odana Hills Golf Course. The pond collects abundant stormwater runoff from the surrounding residential and commercial development. Pond water is filtered, pumped to higher ground and infiltrated into the soil in a specially engineered drain field. This water helps recharge the area s aquifer. MGE also has improved the pond s habitat with logs and a special nesting area for turtles, bat houses and native aquatic plants. Earlier, Wisconsin established renewable energy and energy efficiency standards that by 2015 should avoid 5.5 million tons of greenhouse gas. 7

8 Taking voluntary actions The utility industry is highly regulated especially the environmental aspects. MGE meets all current, applicable environmental regulations. However, we also look for opportunities to strategically go above and beyond compliance and voluntarily pursue cleaner options. Environmental Cooperative Agreement Since 2002, MGE has participated in an innovative approach to achieve superior environmental performance and regulatory compliance at its Blount Generating Station. MGE was one of the first participants in the Wisconsin Department of Natural Resources (DNR) Environmental Cooperative Agreement (ECA) program. In 2007, we continued our pledge to meet higher environmental standards and renewed that agreement through The ECA: Sets goals to reduce waste, improve air emissions and save natural resources. Does not relax any emission limits or environmental regulations. Encourages a more transparent and cooperative approach to environmental issues. Solicits active input from interested members of the community. MGE has made numerous improvements to its Blount Generating Station in the last decade to control coal dust, including a wall around the coal yard and installing an enclosed coal conveyor system. MGE s Blount Generating Station is the first power plant in Wisconsin to receive ISO certification. ISO certification Blount is the first power plant in Wisconsin to receive ISO certification. ISO certification is an internationally recognized standard for environmental management systems. Earning ISO certification underscores our commitment to environmental stewardship in everyday actions. Sound environmental management is a good business practice that improves efficiencies and reduces environmental risk. Blount earned certification following an independent, third-party audit in 2004 and has been recertified following another audit in

9 Mercury: reduce and recycle In 2008, the DNR adopted a new mercury reduction rule. The rule requires coal-fired power plants to cut mercury emissions by 90% by Or power plants could choose to reduce NOx and SO2 emissions beyond current regulations and achieve the mercury reductions by MGE is concerned about mercury. The company is committed to reducing and minimizing mercury use and emissions throughout company operations (see page 12). MGE was the first utility in the nation to install mercuryfree encoders in meters on customers businesses and homes. The meter manufacturer developed the mercury-free encoders at the urging of MGE. The encoders allow us to read meters electronically. MGE offers a thermostatrecycling program. Customers can drop off mercury thermostats at MGE. We then send the thermostats to a recycler to ensure the mercury does not enter the waste stream. We have recycled more than 180 thermostats and more than 1.6 pounds of mercury. MGE implemented a mercury inventory and removal plan at Blount beginning in Because this is an older power plant, Making extra efforts Voluntary emission reductions MGE recognizes its responsibility to aggressively prevent pollution, minimize waste and improve our environment. We go beyond compliance where sound science and cost-effective technologies permit. The table lists emission reductions above and beyond state and federal air quality requirements for nitrogen oxides (NOx), sulfur dioxides (SO2), particulate matter (PM), carbon dioxide (CO2) and mercury. MGE voluntary emission reductions NOx SO2 PM Mercury CO2 (tons) (tons) (tons) (pounds) (tons) , , , , , , , , , ,514 Total 9,472 2, ,295 control equipment at Blount contained mercury. We removed more than 1,000 pounds of mercury, the majority of which was recycled. We systematically remove devices with mercury during planned maintenance. Stormwater runoff MGE installed an innovative stormwater filtration system to trap contaminants that normally run off paved surfaces during rainstorms. The filtration system effectively captures water runoff from a one-acre parking lot on MGE property. The U.S. Geological Survey found the system captured about 70% of the sediments and solids during a study from November 2005 to August The system also reduced petroleum compounds by 48%, phosphorus by 36%, copper by 23% and zinc by 8%. The U.S. Geological Survey, DNR and others continue to track the performance of this system. Removing contamination from stormwater runoff helps reduce toxins that degrade water quality and nutrients that promote weed and algae growth in lakes and rivers. 9

10 Tapping technology MGE has long supported pilot projects that demonstrate renewable technology options. Testing new technologies helps us develop future energy solutions for the community and educate customers about them. Geothermal heat pump MGE installed a geothermal heat pump to handle the heating and air-conditioning needs at Madison s new Lussier Community Education Center. The unit extracts the earth s moderate temperature and pumps it into the building for an expected energy savings of 30%. MGE s plug-in hybrid electric vehicle features an automated monitoring device that tracks fuel efficiency, electricity use and engine function. This data is communicated directly to the federal Department of Energy Idaho National Laboratory and allows MGE to participate in and learn from a national study of plug-in hybrid vehicle technologies. Urban wind turbine MGE is checking the feasibility of using an urban wind turbine to provide renewable energy for customers. A public park in Fitchburg is home to the 10-kilowatt turbine, which is one of only a few urban turbines in the country. It is comprised of a 12-foot rotating helix that sits on a 30-foot pole. The urban turbine will generate enough clean energy to power about three homes annually. This type of urban wind technology has been used in Europe for many years. MGE s project is the first of its kind in Wisconsin. Plug-in vehicle MGE is testing its first plug-in hybrid electric vehicle. The car is charged by plugging into a standard household electrical outlet. It can travel about 30 miles before engaging the gasoline fuel system. This technology could play a major role in the future. Hydrogen energy Funded by MGE, Virent Energy Systems of Madison launched the world s first demonstration project that converts corn, soybeans and other plant by-products into hydrogen and other fuels to power electric generators. The project showcased the use of renewable biomass to produce carbon-neutral fuels for a distributed power system. Energy from Virent s project fed into MGE s grid and provided enough electricity to serve about five typical homes. Carbon sequestration Before heightened public interest in global warming, MGE funded a three-year project to study the potential for prairie grasses to offset carbon dioxide (CO2) emissions from power plants. This study was instrumental in helping determine how land-use practices could be used as part of a carbon-credit program. MGE s urban wind turbine stands 42 feet tall. This project will help determine the viability and cost effectiveness of using wind turbines in urban settings to supply electricity to businesses and homes. 10

11 S o l a r p r o j e c t s Solar path MGE recently provided solar-powered lights along a new bike/ foot path in Madison. The 9.25-kilowatt solar system features five-foot-by-five-foot solar panels that sit atop 37 light poles. This is one of the largest solar lighting installations in the country. Four PV modules are mounted on the roof of MGE s solar trailer. They produce about 2.2 kilowatt-hours of AC power daily. Clean Power Partners Installing a PV system on your home or business can be expensive. MGE is helping with a program that offers a higher electric buyback rate. Customers are paid for every kilowatt-hour delivered to MGE s electric grid. The power generated is part of our new green pricing program. PV on wheels MGE put a new mobile solar trailer on display at local events in 2008 to teach people about photovoltaic (PV) systems. Two types of PV systems are mounted on the trailer roof. They charge batteries that power equipment for demonstrations. Laptop computers and flat-screen monitors inside the trailer display the solar system s operation and other information for specific audiences. When not in use, the trailer is parked in the sun and connected to MGE s electric grid. Solar in schools MGE installed and operates different types of solar PV systems on the 10 high schools in our electric service area. These PV units feed data into monitoring equipment so we can study system performance and economics. Using a solar curriculum that we helped create, teachers and students can compare and contrast their school s PV equipment to other systems. MGE s energy experts increased their knowledge about solar energy through these systems. Solar shade MGE installed a solar PV demonstration project on the shade canopy for the toddlers sandbox area at Madison s Goodman Swimming Pool. The system produces enough electricity to run two ice cream freezers and an ice machine at the pool for the entire summer. This solarproduced energy eliminates about 5,700 pounds of CO2 emissions annually that would otherwise be produced by fossil fuelpowered generation. Solar water heating MGE and the City of Madison installed a solar water-heating project at a local fire station. When occupants use hot water, live data reporting is available on Solar-powered lights from MGE along this path offset more than 10,000 pounds of CO2 annually. 11

12 Controlling air emissions Regulated emission rates Nitrogen oxide (lbs./mwh) Sulfur dioxide (lbs./mwh) Particulate matter (lbs./mwh) Mercury (lbs./mwh) These graphs show emission rates from MGE s owned generation. MGE meets all current, applicable environmental regulations and looks for opportunities to go beyond regulations when possible. We work to reduce air emissions by exploring new technologies, improving equipment efficiencies and diversifying our generation mix. MGE has reduced its emission rates while generating more electricity to meet customers needs. MGE s owned generation capacity consists of approximately 370 megawatts (MW) of natural gas, 345 MW of coal, 50 MW of ultra-low sulfur diesel fuel (used primarily for backup generation) and 41 MW of wind. The company also purchases power through contracts and on the regional MISO energy market. We make strategic adjustments to our generation fleet to improve air emissions and increase efficiency. For example, burner improvements at the Blount Generating Station increase efficiencies and better control nitrogen oxides (NOx). Blount s NOx emission rates dropped more than 12% since installation in MGE owns a portion of the coalfired Columbia Energy Center where NOx emissions have been reduced by more than 54% in the last five years through a series of upgrades and improved combustion processes. To modernize our generation fleet, we brought two new natural gas-fired plants online the Marinette Peaking Unit in 2000 and the West Campus Cogeneration Facility in In their class, they are among the cleanest and most efficient power plants in the Midwest. We also plan to discontinue burning coal at Blount, which is older and less efficient, and are investing in other generation sources. Alternate and renewable energy Alternate and renewable energy are part of our electric mix including landfill gas, a pre-consumer waste of paper and plastic burned at Blount, solar photovoltaic and wind. MGE recently doubled the amount of solar energy in our solar buyback program, making this opportunity available to more customers. In 2008, we increased our wind power capacity by more than 12 times with power from four new wind farms. MGE has reduced its emission rates while generating more electricity to meet customers needs. 12

13 MGE is making investments in emission controls, discontinuing coal burning at Blount and bringing new generation online. Production from wind (MWh) 243,477 Future regulations MGE uses an environmental risk analysis to follow regulatory issues and plan for the future. An Environmental Management System database assists us in identifying and tracking regulations to ensure compliance with all measuring and reporting requirements. Another system identifies new or revised environmental requirements. Regulations for air emissions are constantly evolving. Plans for more stringent rules are under way at both the federal and state levels. However, it often takes time for new regulations to be finalized and approved. By taking a proactive approach, MGE is well positioned to respond to future regulations. We are making investments in emission controls, discontinuing coal burning at Blount and bringing new generation online. Recent additions of wind power and our expanded solar program will help us comply with future rules. 21, projected Wind power production increased significantly in 2008 with the addition of four new wind farms contributing to MGE s generation mix. Production from landfill gas (MWh) 12,766 23,295 MGE is scheduled to receive energy from the new Oak Creek power plant expansion beginning in This cleaner coal facility will be equipped with the most advanced emission-control technology available projected Producing electricity from methane gas at landfills offsets coal use and reduces the impact of methane, which is about 22 times more potent as a greenhouse gas than carbon dioxide. MGE purchases electricity produced from landfill gas enough to serve over 2,600 homes in our service area annually. 13

14 Global climate change Public concern over global climate change has led to a push for laws and rules to regulate greenhouse gas (GHG) emissions. Some states and regions have enacted GHG regulations. In Wisconsin, the Governor s Task Force on Global Warming recommended an action plan to help keep Wisconsin competitive and create new jobs while preserving the environment. MGE developed a carbon dioxide (CO2) reduction plan in anticipation of possible future GHG regulations. MGE s Energy 2015 plan emphasizes renewable energy, energy efficiency and new cleaner generation three strategies that reduce GHG emissions. Under Energy 2015, MGE s CO2 impacts are projected to decline even though total We project an 8% decrease for total CO2 emissions and a 10% decrease for CO2 rates from 2005 to system energy is estimated to increase. We project an 8% decrease for total CO2 emissions and a 10% decrease for CO2 rates from 2005 to Planning and analysis MGE applies the same careful approach and environmental risk analysis to possible future GHG emissions that the company uses for other emissions. When making generation decisions, MGE s economic analysis already includes a possible projected carbon tax to help ensure its decisions are financially sound whether or not CO2 is regulated in the future. Wisconsin has a strong regulatory system that helps protect customers and utility investors. The Public Service Commission of Wisconsin makes a thorough, independent review of all investment decisions by the state s utilities. MGE s response to any future GHG regulations will fall under the purview of the commission. Should MGE incur additional costs to comply with GHG regulations, we would work with the commission to meet those regulations and set costs to be in full compliance. Projected CO2 emission rate (lbs. per kilowatt-hour) Projected CO2 emissions (in million tons) CO2 emissions are calculated from generating units owned by MGE, power purchase agreements and all power projected to be purchased on the regional Midwest ISO market from unspecified sources. The market purchase emission rate is based on a seven-state regional average CO2 emission profile from all power produced in Wisconsin and the surrounding Midwest states. 14

15 A strong commitment to renewable energy helps MGE reach its environmental goals. Developing technologies In the United States, power plants account for about one-third of CO2 emissions. Transportation accounts for approximately another third and the remaining third comes from commercial, industrial and residential sources. MGE supports the development of new technologies and greater fuel efficiencies to help reduce GHGs across all sectors. There are no large-scale commercially proven technologies to capture CO2 emissions from existing coal-fired power plants. However, the electric utility industry is developing and testing new technologies to reduce CO2 emissions from coal-fired power plants. The U.S. Department of Energy will help fund efforts to further develop carbon capture and storage technologies at multiple Integrated Gasification Combined Cycle (IGCC) plants. IGCC plants offer a cost-effective, precombustion option for removing CO2 from gasified coal. IGCC plants must be newly constructed to use this technology. Additionally, a pilot project in Wisconsin is testing a new, post-combustion carbon-capture system that could be used at existing coal-fired plants. Capturing CO2 is the first step. Next, the gas must be sequestered to keep it from entering the atmosphere. The MGE Foundation funded UW-Madison research examining the potential of planting switchgrass to sequester CO2. Landfills are the largest source of methane emissions in the U.S. accounting for 34%, according to the Environmental Protection Agency. Methane is the second-biggest contributor to climate change behind carbon dioxide from human activities. MGE developed a pilot landfill gas generation project and steadily increased the amount of electricity generated from methane produced at local landfills. (See page 13.) MGE is already addressing GHG emissions through voluntary actions. We will continue to monitor our environmental footprint and proposed GHG regulations so we are prepared to take additional, appropriate actions. We recognize our responsibility to aggressively control emissions, minimize waste and improve our environment. We support the development of new technologies and greater fuel efficiencies to help reduce GHGs across all sectors. 15

16 MGE s Green Team At MGE, every employee is a member of the MGE Green Team and has a responsibility to the environment while at work. Employees understand that their individual actions in day-to-day operations can improve our environment. MGE s Green Team Leaders represent departments across the company. Working with our Environmental Affairs department, the Green Team Leaders meet regularly and work together to ensure compliance with regulations and our Environmental Management System. Our Green Team Leaders help MGE incorporate environmental principles across the company. Green Team Leaders include (left to right) Steve Beversdorf, Gas Systems Engineering/Production; Song Ge, Internal Audit; Jean Stephens, Electric Transmission and Distribution; Jeanne Burns-Frank, Safety and Environmental Affairs; C. Ray Phillips, Energy Production; Laura Coleman, Safety and Environmental Affairs; David Crary, Materials Management; Tim Gleiter, System Engineering; and Dave Hastings, Service and Metering. MGE s Environmental Policy Reduce impacts Exceed compliance Educate employees Improve continuously Communicate and work with others Madison Gas and Electric Company P.O. Box 1231 Madison, WI This report is printed on recycled paper manufactured with wind power.

17 Conservation tips Help our environment by conserving energy Many of our customers practice conservation. Over the past two decades, MGE has helped customers save more than 100 megawatts of electricity the equivalent of a small power plant. Still, energy use is growing in our service area. Our economy is healthy. More homes and businesses are springing up here. Energy use per customer is growing as well. MGE s Energy 2015 plan to meet customers energy needs counts on a greater customer commitment to conservation. Through our Power Tomorrow initiative, MGE is educating and encouraging customers to become more energy efficient. Customers concerned about global climate change can take action through their energy use. If all MGE customers took the following steps, we could save significant carbon dioxide (CO2) emissions and power. Take the first steps What can you do? Begin with the easy things. Take these Starting 5 Steps. 1. Take control of your thermostat. For every degree of change for eight hours, you can reduce energy use and save on your heating and cooling costs by 1%. Save even more with greater or longer temperature changes. Annual savings all customers 35 million pounds of CO2. Power for 2,400 homes. 2. Switch to compact fluorescent bulbs. Switching five frequently used lights from standard incandescent bulbs to compact fluorescent bulbs saves two-thirds or more of the electricity needed to power these lights. If they are used at least four hours each day, this is a savings of about $40 in the first year. Annual savings all customers 130 million pounds of CO2. Power for 8,800 homes. the power of working together

18 3. Wash your laundry in cold water. Using cold water for washing eliminates the energy used to heat the 7 to 10 gallons of hot water needed per load and saves you money between 10 and 20 cents per load. On average, customers launder about 7.5 loads per week. Annual savings all customers 123 million pounds of CO2. Power for 3,300 homes. 4. Turn off the juice when not in use. One of the easiest ways to reduce energy consumption is to get in the habit of turning things off when you finish using them. If no one is watching that TV, turn it off. If no one is in a room, shut off the lights. Unplug that second refrigerator or freezer when not needed and save $5 to $15 per month. Annual savings all customers 39 million pounds of CO2. Power for 2,600 homes. 5. Look for the ENERGY STAR label. When shopping for new appliances and equipment, choose those with an ENERGY STAR label. Depending on the type of equipment, ENERGY STAR models can save 10% to 50% of the power used by a standard model. If, over the next few years, you replace all your appliances with ENERGY STAR appliances, your individual savings could be about $320 in annual energy costs. Annual savings all customers 550 million pounds of CO2. Power for 30,800 homes. Take the next step If you have already taken the Starting 5 Steps, thank you. Please visit MGE s Web site or contact our energy experts to learn more steps you can take. AskExperts@mge.com (608) or Work with your neighbors It may be easier and more effective to take a comprehensive look at your lifestyle and energy choices with help from your friends. MGE cosponsors a neighborhood program called EnAct. It teaches participants how to save energy and improve their environmental footprint through changes in water, food and transportation use. EnAct teams have saved the amount of CO2 nearly 13,000 trees would absorb in a year. Visit enactwi.org. Madison Gas and Electric Co. printed on recycled paper manufactured with wind power