Press Release

For Immediate Release                                             Page 1 of 2

Contact: Jim Cooper, Key Accounts & Marketing Mgr.,
                Traverse City Light & Power
                Phone: (231) 932-4560 or E-mail: jcooper@tclp.org
Contact: Phil Callighan, Sr. Account Executive, Knorr Marketing
                Phone: (231) 947-9707, ext. 207; Mobile: (231) 342-7590 
                or E-mail: philc@knorrmarketing.com

(Traverse City, Michigan) Last Monday night (12-19-05), the City Commission of Traverse City approved a special election for February 28, 2006 that would permit Traverse City Light & Power to pool functional control of its transmission system. If approved by voters, this move could generate up to one million dollars annually in new revenue for Traverse City Light & Power (www.tclp.org) and help contain rising energy costs. Special election costs to the city will be reimbursed by L&P. 
   The ballot seeks permission for Light & Power (L&P) to expand its agreements with the Midwest Independent Transmission System Operator (MISO) to include pooling the functional control of L&P's transmission system with MISO. Legal counsel for L&P advised that a special city election was needed to comply with the City Charter. MISO is a non-profit, organization that serves the electrical transmission needs of much of the Midwest by managing a regional electrical grid.
   After electricity markets were deregulated in the 1990s, Independent System Operators, like MISO, were created to impartially oversee regional power systems to ensure their reliable operation and foster their expansion. MISO buys and sells the

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Page Two: Special Election Win in February Could Help L&P Customers

transmission of electrical power on a wholesale basis to a pool of electrical companies, including L&P. 
   "This is a forward-looking ballot proposal," said Linda Johnson, chairman of the L&P Board of Directors. Presently, we have agreements in place with MISO to buy electrical transmission from them. This ballot proposal seeks the opportunity to make our transmission system available to MISO, if and when MISO requests them sometime in the future, to maintain the regional electrical grid in this area. In return, MISO will reimburse Light & Power for what MISO considers the annual revenue requirement for maintaining our transmission facilities.
   If MISO is permitted to control L&P transmission, MISO might also insist that L&P upgrade its transmission facilities. While this would result in an expense for L&P, L&P would recoup its cost over a number of years from MISO due to the fact that any increase in L&P's transmission assets will also increase MISO's reimbursement to L&P. 
   "The benefit is that MISO's use of our transmission facilities could potentially generate an annual reimbursement upwards of a millions dollars to L&P," said Johnson. "More importantly, this added revenue will help contain the rising energy costs L&P faces and provide reinvestment for energy resources."
   Traverse City Light & Power (www.tclp.org) is a community-owned, community focused municipal utility that offers energy at low rates in the region to over 10,000 customers in Traverse City, and parts of Blair, East Bay, Elmwood, Garfield, Peninsula and Paradise townships.

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