Cover Table of Contents 2007 Highlights To Our Shareholders To Our Shareholders (2) To Our Shareholders (3) To Our Shareholders (4) New Energy Solutions at Work New Energy Solutions at Work (2) Putting Our Economy to Work Putting Our Economy to Work (2) Environmental Commitments that Work Environmental Commitments that Work (2) Community Connections at Work Community Connections at Work (2) Income Statements Cash Flow Statements Balance Sheets Capitalization Statements Five—Year Total Return Directors Officers Shareholder Information Corporate Profile Back Cover

Tapping the potential. Bioenergy research is gaining a strong foothold in Madison with the new Great Lakes Bioenergy Research Center. The University of Wisconsin-Madison earned a $125 million federal grant to fund the new center, which will research ways to convert plant matter into fuel for automobiles and power plants. MGE is one of the center’s corporate partners and was instrumental in helping UW-Madison secure the grant. The center may become a magnet in Madison for bioenergy companies.

Phyllis Wilhelm (left), MGE’s economic development director, and Molly Jahn, dean of the UW’s College of Agriculture and Life Sciences, collaborated to secure the bioenergy grant.

Healthy economy. Madison, with its wealth of high-tech and biotech companies, is well positioned to compete in the global economy of the 21st century. One important indicator is the growth of Madison’s gross domestic product (GDP), which is stronger than the state’s or nation’s. The GDP is a key instrument used to measure an economy. And, Madison’s success has not gone unnoticed. In 2007, Madison was named in the nation’s top 10 metro areas for income growth and in the top 15 metro areas for companies actively looking to expand or relocate their facilities.

Madison’s gross domestic product surpassed the state’s and nation’s from 2001 to 2005. The GDP measures the total market value of goods and services produced.

Locally grown. MGE's Shared Savings financing program is about to reach the $25 million mark after 15 years of helping grow local businesses. Firms can use a Shared Savings loan to finance energy efficiency improvements to their businesses. The companies pay off the financing with savings in their energy budgets. Businesses save energy and money, while MGE is able to help support the local economy. A recent loan to Eflexgroup.com, an innovator in the flexible spending account industry, helped the company relocate to a new, larger corporate facility.

Ric Joyner (left), COO of Eflexgroup.com, worked with Randy Popp, an MGE engineer, to secure a $200,000 loan for high-efficiency heating and cooling equipment.

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